As filed with the Securities and
Exchange Commission on November 19, 1996 REGISTRATION NO.
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
---------------
BIG FOOT FINANCIAL CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ILLINOIS 36-4108480
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER
ORGANIZATION) IDENTIFICATION NO.)
1190 RFD
LONG GROVE, ILLINOIS 60047
(847) 634-2100
(ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)
---------------
FAIRFIELD SAVINGS BANK PROFIT SHARING AND SAVINGS PLAN
(FULL TITLE OF THE PLAN)
---------------
George M. Briody
President
Big Foot Financial Corp.
1190 RFD
Long Grove, Illinois 60047
(847) 634-2100
Copy to:
W. Edward Bright, Esq.
Thacher Proffitt & Wood
Two World Trade Center - 39th Floor
New York, New York 10048
(212) 912-7400
(NAME AND ADDRESS, INCLUDING ZIP CODE, TELEPHONE NUMBER AND AREA CODE,
OF AGENT FOR SERVICE)
---------------
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
=================================================================================================================================
Title of Securities to be Registered Amount to be Registered(1) Proposed Maximum Offering Proposed Maximum
Price Per Share (2) Aggregate Offering Price (2)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock, $0.01 par value 200,000 shares $10 $2,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
Plan Participation Interests(3) -- -- --
=================================================================================================================================
</TABLE>
==============================================================
Title of Securities to be Registered Amount of
Registration Fee
- --------------------------------------------------------------
Common Stock, $0.01 par value $606.06
- --------------------------------------------------------------
Plan Participation Interests(3) --
==============================================================
(1) Based on the estimated number of shares of common stock of Big Foot
Financial Corp. ("Big Foot") under the Fairfield Savings Bank Profit
Sharing and Savings Plan ("Plan") which might be purchased with the
current assets of the Plan and the projected contributions to the Plan
through December 31, 1999.
(2) Estimated solely for purpose of calculating the registration fee in
accordance with Rule 457(h) of the Securities Act of 1933, as amended
(the "Securities Act") pursuant to which shares of common stock of Big
Foot offered pursuant to the Plan are deemed to be offered at $10 per
share, the price at which shares of Big Foot common stock are being
offered to the public pursuant to the Registration Statement of Big
Foot on Form S-1, Registration No. 333-12083.
(3) In addition, pursuant to Rule 416(c) under the Securities Act, this
registration statement also covers an indeterminate amount of interests
to be offered pursuant to the employee benefit plan described herein.
- --------------------------------------------------------------------------------
<PAGE>
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.
Note: The documents containing the information specified in
this Part I will be sent or given to employees as specified by Rule 428(b)(1).
Such documents need not be filed with the Commission either as part of this
registration statement or as prospectuses or prospectus supplements pursuant to
Rule 424. These documents and the documents incorporated by reference in this
registration statement pursuant to Item 3 of Part II of this form, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act of 1933, as amended ("Securities Act").
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents and information heretofore filed with
the Commission by Big Foot Financial Corp. (the "Registrant") are incorporated
by reference in this registration statement:
(1) the Registrant's Registration Statement on Form S-1 filed on
September 16, 1996, Registration No. 333-12083, and Amendment
No. 1 thereto; and
(2) the description of the Registrant's Common Stock (the "Common
Stock") contained in the Registrant's Registration Statement
on Form 8-A filed on October 4, 1996.
All documents filed by the Registrant pursuant to Sections 13,
14, or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act")
subsequent to the date hereof and prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold are incorporated herein by
reference, and such documents shall be deemed to be a part hereof from the date
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
<PAGE>
The Registrant will provide without charge to each person to
whom this Prospectus is delivered, upon request of any such person, a copy of
any or all of the foregoing documents incorporated herein by reference (other
than exhibits to such documents). Written requests shall be directed to Timothy
L. McCue, Vice President and Chief Financial Officer, Big Foot Financial Corp.,
1190 RFD, Long Grove, Illinois 60047. Telephone requests may be directed to
(847) 634-2100.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The directors and officers of the Registrant are entitled to
indemnification to the fullest extent permitted by the Business Corporation Act
of the State of Illinois. The following is an extract from Article X of the
Certificate of Incorporation of the Registrant concerning indemnification of
director and officers:
SECTION 1. ACTIONS, SUITS OR PROCEEDINGS OTHER THAN
BY OR IN THE RIGHT OF THE CORPORATION. To the fullest extent permitted
by the Business Corporation Act of the State of Illinois, the
Corporation shall indemnify any person who is or was or has agreed to
become a director or officer of the Corporation who was or is made a
party to or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he or she is or
was or has agreed to become a director or officer of the Corporation,
or, is or was serving or has agreed to serve at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action alleged to have been taken or omitted in such
capacity, and the Corporation may indemnify any other person who is or
was or has agreed to become an employee or agent of the Corporation who
was or is made a party to or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation) by reason of the fact that he or
she is or was or has agreed to become an employee or agent of the
Corporation, or is or was serving or has agreed to serve at the request
of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
-2-
<PAGE>
enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, against costs, charges, expenses (including
attorneys' fees and expenses), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her or on his or
her behalf in connection with such action, suit or proceeding and any
appeal therefrom, if he or she acted in good faith and in a manner he
or she reasonably believed to be in, or not opposed to, the best
interests of the Corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her conduct
was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement or conviction, or upon a plea of NOLO
CONTENDERE or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he or she reasonably believed to be in, or not opposed to, the
best interests of the Corporation and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful. Notwithstanding anything contained in this
Article X, the Corporation shall not be obligated to indemnify any
director or officer in connection with an action, suit or proceeding,
or part thereof, initiated by such person against the Corporation
unless such action, suit or proceeding, or part thereof, was authorized
or consented to by the Board of Directors.
SECTION 2. ACTIONS OR SUITS BY OR IN THE RIGHT OF THE
CORPORATION. To the fullest extent permitted by the Business
Corporation Act of the State of Illinois, the Corporation shall
indemnify any person who is or was or has agreed to become a director
or officer of the Corporation who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit
by or in the right of the Corporation to procure a judgment in its
favor by reason of the fact that he or she is or was or has agreed to
become a director or officer of the Corporation, or is was serving or
has agreed to serve at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or by reason of any action alleged
to have been taken or omitted in such capacity, and the Corporation may
indemnify any other person who is or was or has agreed to become an
employee or agent of the Corporation who was or is made a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he or she is or was or
has agreed to become an employee or agent of the Corporation, or is was
serving or has agreed to serve at the request of the Corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of
any action alleged to have been taken or omitted in such capacity,
against costs, charges and expenses (including attorneys' fees and
expenses) actually and reasonably incurred by him or her or on his or
her behalf in connection with the defense or settlement of such action
or suit and any appeal therefrom, if he or she acted in good faith and
in a manner he or she reasonably believed to be in, or not opposed to,
the best interests of the Corporation, except no indemnification shall
be made in respect of any claim, issue or matter as to which such
person shall
-3-
<PAGE>
have been adjudged to be liable to the Corporation unless and only to
the extent that the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of such
liability but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such costs, charges
and expenses which such court shall deem proper. Notwithstanding
anything contained in this Article X, the Corporation shall not be
obligated to indemnify any director or officer in connection with an
action or suit, or part thereof, initiated by such person against the
Corporation unless such action or suit, or part thereof, was authorized
or consented to by the Board of Directors.
SECTION 3. INDEMNIFICATION FOR COSTS, CHARGES AND
EXPENSES OF A SUCCESSFUL PARTY. To the extent that a director, officer,
employee or agent of the Corporation has been successful, on the merits
or otherwise (including, without limitation, the dismissal of an action
without prejudice), in defense of any action, suit or proceeding
referred to in Section 1 or 2 of this Article X, or in defense of any
claim, issue or matter therein, such person shall be indemnified
against all costs, charges and expenses (including attorneys' fees and
expenses) actually and reasonably incurred by such person or on such
person's behalf in connection therewith.
SECTION 4. INDEMNIFICATION FOR EXPENSES OF A WITNESS.
To the extent that any person who is or was or has agreed to become a
director or officer of the Corporation is made a witness to any action,
suit or proceeding to which he or she is not a party by reason of the
fact that he or she was, is or has agreed to become a director or
officer of the Corporation, or is or was serving or has agreed to serve
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, at the request
of the Corporation, such person shall be indemnified against all costs,
charges and expenses actually and reasonably incurred by such person or
on such person's behalf in connection therewith.
To the extent that any person who is or was or has
agreed to become an employee or agent of the Corporation is made a
witness to any action, suit or proceeding to which he or she is not a
party by reason of the fact that he or she was, is or has agreed to
become an employee or agent of the Corporation, or is or was serving or
has agreed to serve as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, at the request of the Corporation, such person may be
indemnified against all costs, charges and expenses actually and
reasonably incurred by such person or on such person's behalf in
connection therewith.
SECTION 5. DETERMINATION OF RIGHT TO INDEMNIFICATION.
Any indemnification under Section 1 or 2 of this Article X (unless
ordered by a court) shall be made, if at all, by the Corporation only
as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or
-4-
<PAGE>
agent is proper under the circumstances because he or she has met the
applicable standard of conduct set forth in Section 1 or 2 of this
Article X. Any indemnification under Section 4 of this Article X
(unless ordered by a court) shall be made, if at all, by the
Corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee
or agent is proper under the circumstances. Such determinations shall
be made by (a) a majority vote of directors who were not parties to
such action, suit or proceeding even though less than a quorum of the
Board of Directors or (b) if there are no such directors, or if such
directors so direct, by independent counsel in a written opinion or (c)
by the shareholders of the Corporation. To obtain indemnification under
this Article X, any person referred to in Section 1, 2, 3 or 4 of this
Article X shall submit to the Corporation a written request, including
therewith such documents as are reasonably available to such person and
are reasonably necessary to determine whether and to what extent such
person is entitled to indemnification.
SECTION 6. ADVANCEMENT OF COSTS, CHARGES AND
EXPENSES. Costs, charges and expenses (including attorneys' fees and
expenses) incurred by or on behalf of a director or officer in
defending a civil or criminal action, suit or proceeding referred to in
Section 1 or 2 of this Article X shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding;
PROVIDED, HOWEVER, that the payment of such costs, charges and expenses
incurred by or on behalf of a director or officer in advance of the
final disposition of such action, suit or proceeding shall be made only
upon receipt of a written undertaking, by or on behalf of the director
or officer to repay all amounts so advanced in the event that it shall
ultimately be determined that such director or officer is not entitled
to be indemnified by the Corporation as authorized in this Article X or
by law. No security shall be required for such undertaking and such
undertaking shall be accepted without reference to the recipient's
financial ability to make repayment. The majority of the directors who
were not parties to such action, suit or proceeding may, upon approval
of such director or officer of the Corporation, authorize the
Corporation's counsel to represent such person, in any action, suit or
proceeding, whether or not the Corporation is a party to such action,
suit or proceeding.
SECTION 7. PROCEDURE FOR INDEMNIFICATION. Any
indemnification under Section 1, 2, 3 or 4 of this Article X or
advancement of costs, charges and expenses under Section 6 of this
Article X shall be made promptly, and in any event within sixty (60)
days (except indemnification to be determined by shareholders which
will be determined at the next annual meeting of shareholders), upon
the written request of the director or officer. The right to
indemnification or advancement of expenses as granted by this Article X
shall be enforceable by the director, officer, employee or agent in any
court of competent jurisdiction in the State of Illinois in the event
the Corporation denies such request, in whole or in part, or if no
disposition of such request is made within sixty (60) days of the
request. Such person's costs, charges and expenses incurred in
connection with
-5-
<PAGE>
successfully establishing his or her right to indemnification or
advancement, to the extent successful, in any such action shall also be
indemnified by the Corporation. It shall be a defense to any such
action (other than an action brought to enforce a claim for the
advancement of costs, charges and expenses under Section 6 of this
Article X where the required undertaking, if any, has been received by
the Corporation) that the claimant has not met the standard of conduct
set forth in Section 1 or 2 of this Article X, but the burden of
proving such defense shall be on the Corporation. Neither the failure
of the Corporation (including its directors, its independent counsel
and its shareholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is
proper in the circumstances because he or she has met the applicable
standard of conduct set forth in Section 1 or 2 of this Article X, nor
the fact that there has been an actual determination by the Corporation
(including its directors, its independent counsel and its shareholders)
that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
SECTION 8. SETTLEMENT. The Corporation shall not be
obligated to reimburse the costs, charges and expenses of any
settlement to which it has not agreed. If, in any action, suit or
proceeding (including any appeal) within the scope of Section 1 or 2 of
this Article X, the person to be indemnified shall have unreasonably
failed to enter into a settlement thereof offered or assented to by the
opposing party or parties in such action, suit or proceeding, then,
notwithstanding any other provision of this Article X, the
indemnification obligation of the Corporation to such person in
connection with such action, suit or proceeding shall not exceed the
total of the amount at which settlement could have been made and the
expenses incurred by or on behalf of such person prior to the time such
settlement could reasonably have been effected.
SECTION 9. OTHER RIGHTS; CONTINUATION OF RIGHT TO
INDEMNIFICATION; INDIVIDUAL CONTRACTS. The indemnification and
advancement of costs, charges and expenses provided by or granted
pursuant to this Article X shall not be deemed exclusive of any other
rights to which any person seeking indemnification or advancement of
costs, charges and expenses may be entitled under law (common or
statutory) or any Bylaw, agreement, policy of indemnification insurance
or vote of shareholders or directors or otherwise, both as to action in
his or her official capacity and as to action in any other capacity
while holding office, and shall continue as to any person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the legatees, heirs, distributees, executors and
administrators of any such person. Nothing contained in this Article X
shall be deemed to prohibit the Corporation from entering into, and the
Corporation is specifically authorized to enter into, agreements with
directors, officers, employees and agents providing indemnification
rights and procedures different from those set forth herein. All rights
to indemnification under this Article X shall be deemed to be a
contract between the Corporation and each director, officer, employee
or agent of the Corporation who
-6-
<PAGE>
serves or served in such capacity (or is was serving or has agreed to
serve at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise) at any time while this Article X is in
effect.
SECTION 10. SAVINGS CLAUSE. If this Article X or any
portion shall be invalidated on any ground by any court of competent
jurisdiction, the Corporation shall nevertheless indemnify each
director or officer, and may indemnify each employee or agent, of the
Corporation as to any costs, charges, expenses (including attorneys'
fees and expenses), judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (including an action by or in
the right of the Corporation), to the full extent permitted by any
applicable portion of this Article X that shall not have been
invalidated and to the fullest extent permitted by applicable law.
SECTION 11. INSURANCE. The Corporation may purchase
and maintain insurance, at its expense, to protect itself and any
person who is or was a director, officer, employee or agent of the
Corporation or is was serving or has agreed to serve at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against any costs, charges or expenses, liability or loss incurred by
such person in any such capacity, or arising out of such person's
status as such, whether or not the Corporation would have the power to
indemnify such person against such costs, charges or expenses,
liability or loss under the Articles of Incorporation or applicable
law; PROVIDED, HOWEVER, that such insurance is available on acceptable
terms as determined by a vote of the Board of Directors. To the extent
that any director, officer, employee or agent is reimbursed by an
insurance company under an indemnification insurance policy for any
costs, charges, expenses (including attorneys' fees and expenses),
judgments, fines and amounts paid in settlement to the fullest extent
permitted by any applicable portion of this Article X, the Bylaws, any
agreement, the policy of indemnification insurance or otherwise, the
Corporation shall not be obligated to reimburse the person to be
indemnified in connection with such proceeding.
The Registrant expects to purchase directors' and officers'
liability insurance coverage for all directors and officers of the Registrant
and its subsidiaries.
Under employment agreements to be entered into between the
Registrant and each of its Named Executive Officers, the Registrant shall cause
each such executive to be covered by and named as an insured under any policy or
contract of insurance obtained by it to insure its directors and officers
against personal liability for acts or omissions in connection with service as
an officer or director of the Registrant or service in other capacities at the
request of the Registrant. Such coverage will last for the term of the
employment agreement and six years thereafter.
-7-
<PAGE>
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Registrant pursuant to the foregoing provisions, the Registrant has been
informed, that in the opinion of the Commission, such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
4.1 Fairfield Savings Bank Profit Sharing and Savings
Plan, as amended and restated effective August 1,
1989, as further amended.
4.2 Trust Agreement dated December 29, 1977 by and
between Fairfield Savings Bank, F.S.B. and George M.
Briody, F. Gregory Opelka and Eugene W. Pilawski.
4.3 Articles of Incorporation of the Registrant,
incorporated by reference to the Registrant's
Registration Statement on Form S-1, filed on
September 16, 1996, as amended (Registration No.
333-12083).
4.4 By-Laws of the Registrant, incorporated by reference
to the Registrant's Registration Statement on Form
S-1, filed on September 16, 1996, as amended
(Registration No. 333-12083).
5. Opinion of Thacher Proffitt & Wood, counsel for
the Registrant, as to the legality of the securities
being registered.
23.1 Consent of Thacher Proffitt & Wood (included in
Exhibit 5 hereof).
23.2 Consent of KPMG Peat Marwick LLP.
ITEM 9. UNDERTAKINGS.
A. QUALIFICATION OF PLAN. The undersigned Registrant has submitted the
Plan and any amendment thereto to the Internal Revenue Service ("IRS") in a
timely manner and has made or will make all changes required by the IRS in order
to qualify the Plan under section 401(a) of the Internal Revenue Code of 1986.
B. RULE 415 OFFERING. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
-8-
<PAGE>
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to 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 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining liability under the
Securities Act of 1933, 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.
C. FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY
REFERENCE. 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.
D. INCORPORATED ANNUAL AND QUARTERLY REPORTS. The undersigned
registrant hereby undertakes to deliver or cause to be delivered with the
prospectus, to each person to whom the prospectus is sent or given, the latest
annual report to security holders that is incorporated by reference in the
prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3
or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim
financial information required to be presented by Article 3 of Regulation S-X
are not set forth in the prospectus, to deliver, or cause to be delivered to
each person to whom the prospectus is sent or given, the latest quarterly report
that is specifically incorporated by reference in the prospectus to provide such
interim financial information.
E. FILING OF REGISTRATION ON FORM S-8. 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 foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of
the Commission such indemnification is against public policy as
-9-
<PAGE>
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 for 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.
-10-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Long Grove, State of Illinois on the 15th day of
October, 1996.
Big Foot Financial Corp.
(Registrant)
By: /s/ George M. Briody
-----------------------------
George M. Briody
President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ George M. Briody President (Principal Executive October 15, 1996
- --------------------------- Officer) and Director
George M. Briody
/s/ F. Gregory Opelka Executive Vice President and October 15, 1996
- --------------------------- Director
F. Gregory Opelka
/s/ Timothy L. McCue Vice President and Chief Financial October 15, 1996
- --------------------------- Officer (Principal Financial and
Timothy L. McCue Accounting Officer)
/s/ Maurice F. Leahy Director October 15, 1996
- ---------------------------
Maurice F. Leahy
/s/ Eugene W. Pilawski Director October 15, 1996
- ---------------------------
Eugene W. Pilawski
/s/ Joseph J. Nimrod Director October 15, 1996
- ---------------------------
Joseph J. Nimrod
/s/ Walter E. Powers, M.D. Director October 15, 1996
- ---------------------------
Walter E. Powers, M.D.
/s/ William B. O'Connell Director October 15, 1996
- ---------------------------
William B. O'Connell
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of
1933, the trustees (or other persons who administer the employee benefit plan)
have duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Long Grove, State of
Illinois, on October 15, 1996.
Fairfield Savings Bank Profit Sharing and
Savings Plan (Registrant)
By: /s/ George M. Briody
----------------------------------
George M. Briody, Trustee
By: /s/ F. Gregory Opelka
----------------------------------
F. Gregory Opelka, Trustee
By: /s/ Timothy L. McCue
----------------------------------
Timothy L. McCue, Trustee
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION PAGE NO.
- ------ ----------- --------
4.1 Fairfield Savings Bank Profit Sharing and Savings Plan, as
amended..............................................................
4.2 Trust Agreement dated December 29, 1977 by and between
Fairfield Savings Bank, F.S.B. and George M. Briody,
F. Gregory Opelka and Eugene W. Pilawski.............................
4.3 Articles of Incorporation of the Registrant,
incorporated by reference to the Registrant's Registration
Statement on Form S-1, filed on September 16, 1996, as
amended (Registration No. 333-12083).................................
4.4 By-Laws of the Registrant, incorporated by
reference to the Registrant's Registration Statement on
Form S-1, filed on September 16, 1996, as amended
(Registration No. 333-12083..........................................
5. Opinion of Thacher Proffitt & Wood, counsel for the
Registrant, as to the legality of the securities being
registered...........................................................
23.1 Consent of Thacher Proffitt & Wood (included in Exhibit 5
hereof)..............................................................
23.2 Consent of KPMG Peat Marwick LLP.....................................
-13-
FAIRFIELD SAVINGS BANK
----------------------
PROFIT SHARING AND SAVINGS PLAN
-------------------------------
(As amended and restated effective August 1, 1989)
Kirkland & Ellis
Chicago
<PAGE>
CERTIFICATE
I, Barbara J. Urban, Secretary of Fairfield Savings Bank,
hereby certify that the attached document is a correct copy of Fairfield Savings
Bank Profit Sharing and Savings Plan, as amended and restated effective August
1, 1989, and as in effect on the date hereof.
Dated this 2nd day of March , 1993.
By
---------------------------------
Secretary as Aforesaid
(Corporate Seal)
<PAGE>
FAIRFIELD SAVINGS BANK
----------------------
PROFIT SHARING AND SAVINGS PLAN
-------------------------------
(As amended and restated effective August 1, 1989)
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C>
ARTICLE 1....................................................................................................... 1
Introduction........................................................................................... 1
Purpose of the Plan, Effective Date........................................................... 1
Plan Administrator, Plan Year................................................................. 1
The Trust..................................................................................... 1
The Employers................................................................................. 2
Supplements................................................................................... 3
Plan Benefits For Participants Who Terminated Employment Prior to
August 1, 1989....................................................................... 3
ARTICLE 2....................................................................................................... 3
Plan Participation..................................................................................... 3
Eligibility................................................................................... 3
Eligibility Service........................................................................... 4
Hours of Service.............................................................................. 4
Leave of Absence.............................................................................. 6
Notice of Participation....................................................................... 6
ARTICLE 3....................................................................................................... 6
Participant Contributions.............................................................................. 6
Salary Deferral Contributions................................................................. 6
Voluntary Contributions....................................................................... 7
Form of Participant Contributions............................................................. 8
Variation, Discontinuance and Resumption of Participant Contributions......................... 8
Earnings ..................................................................................... 9
Rollover Contributions........................................................................ 10
Transferred Benefits.......................................................................... 11
Restricted Participation with Respect to Rollover Contributions and
Transferred Benefits................................................................. 11
ARTICLE 4....................................................................................................... 12
Employers' Contributions............................................................................... 12
Employers' Contributions...................................................................... 12
<PAGE>
<S> <C>
Payment of Employers' Contributions........................................................... 12
Verification of Employers' Contributions...................................................... 13
ARTICLE 5....................................................................................................... 13
Plan Accounting and Investment Funds................................................................... 13
Participant Account Balances.................................................................. 13
Investment or Account Balances................................................................ 14
Investment Funds.............................................................................. 15
Investment Directions......................................................................... 16
Manner of Making Investment Directions........................................................ 16
Directed Investment Election at Age 60........................................................ 16
Plan Expenses................................................................................. 18
Accounting Dates.............................................................................. 18
Date of Crediting Contributions and Forfeitures............................................... 18
Allocation of Employer Contributions and Forfeitures.......................................... 19
Adjustment of Participants' Accounts.......................................................... 20
Statement of Accounts......................................................................... 21
ARTICLE 6....................................................................................................... 21
Top-Heavy Plan Rules................................................................................... 21
Key Employees................................................................................. 21
Top-Heavy Plan................................................................................ 22
Aggregation Groups............................................................................ 23
Special Top-Heavy Vesting Schedule............................................................ 24
Minimum Contributions and Benefits............................................................ 25
ARTICLE 7....................................................................................................... 25
Distribution of Account Balances....................................................................... 25
Retirement, Death or Disability............................................................... 25
Resignation or Dismissal...................................................................... 26
Forfeitures................................................................................... 28
Methods of Benefit Payment.................................................................... 28
Selection of Time and Manner of Benefit Payment............................................... 29
Limitations on Time of Benefit Payment........................................................ 30
Designated Beneficiaries...................................................................... 31
Payment to Substitute Beneficiaries........................................................... 31
Payment With Respect to Incapacitated Participants or Beneficiaries........................... 33
Final Court Orders............................................................................ 33
ARTICLE 8....................................................................................................... 33
Withdrawals and Loans During Employment................................................................ 33
Withdrawals From Voluntary Contribution Account, Rollover Account,
and Employer Contribution Account.................................................... 33
Hardship Withdrawals.......................................................................... 34
ii
<PAGE>
<S> <C>
Withdrawals After Age 59-1/2 or Permanent Disability.......................................... 35
Complete Withdrawal of Participant's Account After Age 60..................................... 35
Loans to Participants......................................................................... 36
No Representation Regarding Tax Effect of Withdrawals or Loans................................ 38
ARTICLE 9....................................................................................................... 38
Reemployment........................................................................................... 38
Rehired Employee or Participant............................................................... 38
Reinstatement of Forfeitures.................................................................. 39
ARTICLE 10...................................................................................................... 40
Maximum Contributions.................................................................................. 40
Contribution Limitations...................................................................... 40
Participant Covered by Defined Contribution Plan.............................................. 41
Participant Covered by Defined Contribution Plan and Defined Benefit
Plan................................................................................. 42
Distribution of Excess Deferrals.............................................................. 44
Highly Compensated Employee................................................................... 44
Limitations on Elective Contributions......................................................... 46
Limitation on Employee and Matching Contributions............................................. 49
Multiple Use Limitation....................................................................... 53
ARTICLE 11...................................................................................................... 54
Plan Administrator..................................................................................... 54
Plan Administrator's Duties................................................................... 54
Action by Plan Administrator.................................................................. 55
Information Required for Plan Administration.................................................. 55
Decision of Plan Administrator Final.......................................................... 56
Review of Benefit Determinations.............................................................. 56
Uniform Rules................................................................................. 57
Plan Administrator's Expenses................................................................. 57
Interested Plan Administrator................................................................. 57
Resignation or Removal of Plan Administrative Committee Members............................... 57
Indemnification............................................................................... 58
ARTICLE 12...................................................................................................... 58
Relating to the Employers.............................................................................. 58
Action by Employers........................................................................... 58
Additional Employers.......................................................................... 58
Restrictions on Reversions.................................................................... 59
ARTICLE 13...................................................................................................... 59
Amendment, Termination or Plan Merger.................................................................. 59
Amendment..................................................................................... 59
iii
<PAGE>
<S> <C>
Termination................................................................................... 60
Plan Merger................................................................................... 61
Continuation by a Successor or Purchaser...................................................... 61
Notice to Participants of Amendments, Terminations or Plan Mergers............................ 62
Vesting and Distribution on Termination....................................................... 62
ARTICLE 14...................................................................................................... 62
General Provisions..................................................................................... 62
Examination of Plan Documents................................................................. 62
Notices ..................................................................................... 62
Nonalienation of Plan Benefits................................................................ 63
No Employment Guarantee....................................................................... 63
Participant Litigation........................................................................ 63
Successors.................................................................................... 64
Adequacy of Evidence.......................................................................... 64
Gender and Number............................................................................. 65
Waiver of Notice.............................................................................. 65
Applicable Law................................................................................ 65
Severability.................................................................................. 65
Fiduciary Responsibilities.................................................................... 65
</TABLE>
iv
<PAGE>
FAIRFIELD SAVINGS BANK
----------------------
PROFIT SHARING AND SAVINGS PLAN
-------------------------------
(As amended and restated effective August 1, 1989)
ARTICLE 1
---------
Introduction
------------
1.1 PURPOSE OF THE PLAN, EFFECTIVE DATE. The Fairfield Savings
Bank Profit Sharing and Savings Plan (the "plan") as maintained by the Fairfield
Savings Bank (the "Bank") constitutes an amendment, restatement and continuation
of such plan, effective as of August 1, 1989 (the "effective date"). The name of
the plan prior to the effective date was the Fairfield Savings and Loan
Association Thrift Incentive and Profit Sharing Plan. The plan is maintained by
the Bank and other related companies which adopt the plan with the Bank's
consent in order to stimulate interest, initiative, and increased efficiency
among plan participants; to encourage plan participants to set aside funds for
retirement; to share with plan participants the economic benefits produced by
their efforts; and to assist in providing plan participants with retirement
benefits.
1.2 PLAN ADMINISTRATOR, PLAN YEAR. The plan is administered by
a plan committee (the "plan administrator") whose members shall be appointed by
the Board of Directors of the Bank. Article 11 describes certain powers, duties
and responsibilities of the plan administrator with respect to the
administration of the plan. The plan is administered on the basis of a plan year
which begins each year on August 1 and ends on the next following July 31.
1.3 THE TRUST. The assets of the plan are held and invested by
one or more trustees (the "trustee") and may be held and invested by one or more
investment managers or insurance institutions acting and appointed for such
purposes in accordance with one or more
1
<PAGE>
trust agreements (the "trust") which implement and form a part of the plan.
Reference to the trust fund shall include all assets including any insurance
policies held by the trustee, investment managers, and insurance institutions in
accordance with the trust and this plan.
1.4 THE EMPLOYERS. With the consent of the Bank, the plan may
be adopted in accordance with the provisions of section 12.2 by any subsidiary
of the Bank or any related company for the benefit of its eligible employees.
For this purpose, a "subsidiary" means any corporation more than 50 percent of
the voting stock of which is directly or indirectly owned by the Bank and a
"related company" means any corporation (other than the Bank and its
subsidiaries) more than 50 percent of the voting stock of which is directly or
indirectly owned by any corporation or any person or group of persons who
directly or indirectly own more than 50 percent of the voting stock of the Bank.
The Bank and its subsidiaries and related companies that adopt the plan are
referred to herein collectively as the "employers" and individually as an
"employer". The term "Fairfield Companies" includes the employers and all
subsidiaries and related companies that have not adopted the plan (and each such
corporation is sometimes referred to herein individually as a "Fairfield
Company"). Any corporation which is not an employer under the plan and which
does not qualify as a subsidiary or related company, but is a member of a
controlled group of corporations (within the meaning of Section 1563(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), determined without
regard to Sections 1563(a)(4) and 1563(e)(3)(C) thereof) which contains an
employer under the plan or a member of an affiliated service group (as defined
in Section 414(m) of the Code) which contains an employer under the plan shall,
for purposes of the plan, be considered as a subsidiary or related company that
has not adopted the plan.
2
<PAGE>
1.5 SUPPLEMENTS. From time to time supplements may by
amendment be attached to and form a part of this plan and shall be given the
same effect that such provision would have if it was incorporated within the
basic text or the plan. Such supplements may modify or supplement the provisions
of the plan as they apply to particular groups of employees or groups of
participants, shall specify the persons affected by such supplements and shall
supersede the other provisions of the plan to the extent necessary to eliminate
inconsistencies between the plan provisions and the provisions of such
supplements.
1.6 PLAN BENEFITS FOR PARTICIPANTS WHO TERMINATED EMPLOYMENT
PRIOR TO AUGUST 1, 1989. To the extent permitted by law, the benefits provided
hereunder with respect to any participant who retired or whose employment
terminated prior to August 1, 1989, will, except as otherwise specifically
provided herein, be governed in all respects by the terms of the plan as in
effect on the date of the participant's retirement or other termination of
employment.
ARTICLE 2
---------
PLAN PARTICIPATION
------------------
2.1 ELIGIBILITY. Each employee of an employer who was a
participant in the plan immediately prior to the effective date shall continue
to participate in the plan on and after the effective date in accordance with
the terms of the plan until such employee's participation ceases in accordance
with the plan. Each other employee of an employer will become a participant in
the plan as of the later of the effective date, or the August 1 or February l
coincident with or next following date he meets both of the following
requirements:
(a) He is a "covered employee" (that is, he is a
member of a group of employees of an employer to which the
plan has been and continues to be extended by his employer
either unilaterally or by collective bargaining); and
3
<PAGE>
(b) He has completed one year or eligibility service
(as defined in section 2.2).
2.2 ELIGIBILITY SERVICE. An employee of an employer shall be
credited with one year of eligibility service if he completes 1,000 or more
hours of service (as defined in section 2.3) in the twelve consecutive month
period commencing on the date his last period of employment with the Fairfield
Companies commenced or an anniversary of such date.
2.3 HOURS OF SERVICE. An "hour of service" as used in the plan
means:
(a) Each hour for which an employee is directly or
indirectly compensated or entitled to be compensated for his
performance of duties for any Fairfield Company as an employee
(with each overtime hour being taken into account as if it
were a normal work hour);
(b) Each hour for which an employee is directly or
indirectly compensated or entitled to be compensated by a
Fairfield Company with respect to a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacitation (including disability),
layoff, military duty or leave of absence (as defined in
section 2.4); provided, however, that not more than 501 hours
of service shall be credited to an employee on account of any
single continuous period during which he performs no duties
and an employee shall not be credited with hours of service
under this subsection for any period during which he performs
no duties (i) if such employee's compensation for such period
is in the form of payments made or due under a plan maintained
solely for the purpose of complying with applicable worker's
compensation, unemployment compensation or state disability
insurance laws, (ii) if such employee's compensation for such
period constitutes reimbursement for medical or medically
related expenses incurred by the employee, or (iii) if such
employee's compensation for such period is paid to the
employee while on maternity or paternity leave of absence (as
described in section 2.4(b) below), provided credit for such
period is granted in accordance with subsection (c) below; and
(c) Each other hour required by federal law to be
counted as an "hour of service," including (i) each such hour
for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by a Fairfield Company, and (ii)
each such hour for which an employee is on maternity or
paternity leave of absence, but only for purposes of
preventing the employees from incurring a one-year
break-in-service; provided, however, that not more than 501
hours of service shall be credited for payments of back pay,
to the extent that such back
4
<PAGE>
pay is awarded for a period of time during which the employee
did not or would not have performed duties as an employee, and
not more than 501 hours of service shall be credited by reason
of a maternity or paternity leave of absence.
Compensated hours described in subsection (b) above shall be determined by
multiplying the number of scheduled work days during the applicable period for
which the employee is compensated by the number of hours in the average
scheduled work day (based on the scheduled work week for his job classification
then in effect, provided, however, that in the case of an employee without a
regular work schedule, such hours shall be computed on the basis of a 40 hour
work week). Hours described in subsection (c) above for employees on maternity
or paternity leave of absence shall be determined in the same manner as
compensated hours. In determining hours of service, hours shall be credited for
the period in which such duties were performed (regardless of when payment is
due) or for which such compensation was paid and for this purpose the rules for
crediting hours of service set forth in Section 2530.200b-2 of the Department of
Labor regulations are hereby incorporated by reference; provided that hours of
service credited under subsection (c) above for a maternity or paternity leave
of absence shall be credited to the year in which such maternity or paternity
leave begins if such hours are required to prevent a break in service from
occurring in such year, or if not so required in that year, such hours shall be
credited in the immediately following year. In construing the foregoing
provisions of this section, ambiguities shall be resolved in favor of crediting
employees with hours of service.
5
<PAGE>
2.4 LEAVE OF ABSENCE. A "leave or absence" as used in the plan
means:
(a) A leave of absence required by law or granted by
a Fairfield Company on account of service in military or
governmental branches described in any applicable statute
granting reemployment rights to employees who enter such
branches, or any other military or governmental branch
designated by a Fairfield Company;
(b) A leave or absence for any period the employee is
absent from work by reason of the employee's pregnancy, the
birth of the child of the employee, the placement of a child
with the employee in connection with the adoption of the child
by the employee or the caring for the child for a period
beginning immediately after such birth or placement; and
(c) Any other absence from active employment with a
Fairfield Company that is approved by such Fairfield Company
and not treated by it as a termination of employment.
Leaves of absence granted by a Fairfield Company will be governed by rules
uniformly applied to all employees of that Fairfield Company similarly situated.
2.5 NOTICE OF PARTICIPATION. Each employee will be notified of
the date he becomes a plan participant, and each participant and other person
receiving benefits under the plan will be furnished with a copy of a summary
plan description.
ARTICLE 3
---------
PARTICIPANT CONTRIBUTIONS
-------------------------
3.1 SALARY DEFERRAL CONTRIBUTIONS. Subject to the conditions
and limitations of this Article 3 and Article 10, for each plan year each active
participant may elect to defer receipt of his compensation in an amount equal to
not less than one percent nor more than fifteen percent (or such lower maximum
percentage as determined by the plan administrator for any plan year), of his
earnings for such plan year and his employer shall, in accordance with
subsection 4.1(b), contribute the amount of such salary deferral to the plan as
a salary deferral
6
<PAGE>
contribution. Notwithstanding any provision contained herein to the contrary a
participant's aggregate salary deferral contributions to this plan and to any
other plan maintained by a Fairfield Company in which such participant
participates may not exceed $7,000 (or such other maximum amount as may be
permitted from time to time by the Secretary of the Treasury or the Secretary's
delegate or by law) in any calendar year. Salary deferral contributions elected
and made on behalf of a participant for a plan year which are not less than one
percent or in excess of six percent of his earnings for such plan year shall be
considered his "basic salary deferral contributions" which are eligible for the
employer matching contributions under subsection 4.1(a); provided, however, that
if the participant elects to make a voluntary contribution pursuant to section
3.2, his basic salary deferral contribution and voluntary contribution that will
be subject to the employer matching contribution shall not exceed six percent of
his earnings for such plan year. The salary deferral contributions made on
behalf of a participant and the earnings thereon shall be fully vested and
nonforfeitable at all times. Each participant shall initially elect a rate of
salary deferral contributions by filing a written election with the plan
administrator on such forms, in such manner and at such times a plan
administrator shall require. Completion of such election form shall evidence the
participant's authorization of his employer to reduce his compensation and
accordingly his agreement (until subsequently modified by such participant as
permitted by section 3.4) to have salary deferral contributions made on his
behalf at his chosen rate.
3.2 VOLUNTARY CONTRIBUTIONS. In addition to, or in lieu of,
the salary deferral contributions permitted under section 3.1, any participant
may elect to make voluntary contribu- tions in an amount of not less than one
percent nor more than sixteen percent of the participant's
7
<PAGE>
earnings for such plan year; provided, however, no participant may make
contributions equal to or in excess of the amount which will cause the
limitation of Article 10 to be exceeded. The employer matching contribution (as
set forth in subsection 4.1(a) will only be applied to basic salary deferral
contributions and voluntary contributions that in the aggregate do not exceed
six percent of the participant's earnings for such plan year.
3.3 FORM OF PARTICIPANT CONTRIBUTIONS. All participant salary
deferral contributions and voluntary contributions shall be made by payroll
deduction (or periodically corresponding to payroll deduction) or by any other
method approved by the plan administrator. The plan administrator may adopt
appropriate regulations, procedures or forms pertaining to participant
contributions. Participant contributions shall be paid to the trust as soon as
practicable after the date made or deducted.
3.4 VARIATION, DISCONTINUANCE AND RESUMPTION OF PARTICIPANT
CONTRIBUTIONS. Effective as of any payroll period which commences at least 30
days (or such other time period as specified by the plan administrator)
following receipt by the plan administrator of an election form satisfactory to
the plan administrator for this purpose, a participant eligible to make salary
deferral contributions and voluntary contributions may revise the rate that such
contributions are made by payroll deduction. A participant may elect to
discontinue making all such contributions as of any regularly scheduled payday
of his employer by filing an election form with the plan administrator at least
ten regularly scheduled work days of his employer prior to such payday. A
participant who has discontinued making some or all contributions hereunder may
resume making such contributions by filing an election form with the plan
administrator at least 30 days (or such other time period as specified by the
plan administrator) prior to the payroll period as
8
<PAGE>
of which date such contributions shall resume. Any elections made in accordance
with this section shall be made on a form provided by the plan administrator for
such purposes and shall be signed by the participant.
3.5 EARNINGS. For purposes of the plan, a participant's
"earnings" means such participant's compensation for services rendered to the
employers as a covered employee, but excluding bonuses and overtime pay and the
following:
(a) Any amounts contributed by the employers for the
participant's benefit to this plan or any other profit
sharing, pension, stock bonus or other retirement or benefit
plan maintained by the employers; provided, however, any
amounts contributed under a salary reduction arrangement under
Sections 125 or 401(k) of the Code shall be considered as
earnings;
(b) Any reimbursements for travel expenses,
relocation allowances, educational assistance allowances and
awards or other special allowances, and any amounts included
in taxable income under any group insurance program;
(c) Any severance pay paid as a result of the
participant's termination of employment;
(d) Any compensation paid or payable to the
participant, or to any governmental body or agency on account
of the participant, under the terms of any state, federal or
foreign law requiring the payment of such compensation because
of the participant's voluntary or involuntary termination of
employment with any Fairfield Company; and
(e) Any compensation pale or payable to the
participant which is in excess of $200,000 (or such other
amount as may be determined from time to time by the Secretary
of Treasury or his delegate or by law). In determining a
participant's earnings for purposes of the foregoing
limitation in any plan year, the family aggregation rules
under Section 414(q)(6) of the Code shall apply, except that
in applying such rules, the term "family" shall include only
the spouse of the participant and any lineal descendants of
the participant who have not attained age 19 before the end of
the plan year for which earnings are being determined. If, as
a result of the application of such rules the adjusted
$200,000 limitation is exceeded, then the limitation shall be
prorated among the affected individuals in proportion to each
such individual's compensation as determined under this
section prior to the application of this limitation.
9
<PAGE>
Unless otherwise provided, for purposes or the limitations set forth in Article
10, a participant's compensation shall mean the remuneration (both cash and non
cash) for which the employer is required to report to the participant for the
plan year ("Box 10 Compensation"), plus amounts contributed pursuant to a salary
reduction agreement under Sections 125 or 401(k) of the Code.
3.6 ROLLOVER CONTRIBUTIONS. The plan administrator may, in its
discretion permit any covered employee to make a qualifying rollover
contribution to the plan. A "qualifying rollover contribution" means the
contribution to the plan by an employee of:
(i) A portion or all of a qualifying total
distribution (as defined in Section 402(a)(5)(E)(i) of the
Code); provided, however, that the portion, if any, of a
qualifying total distribution consisting of nondeductible
employee contributions may not be contributed to the plan; or
(ii) a rollover contribution (as defined in Section
408(d)(3) of the Code).
A qualifying rollover contribution to be made by a covered
employee must be made to the trust, in care of the plan administrator, by not
later than the sixtieth day following the day upon which the employee received
the qualifying total distribution or rollover contribution with respect to which
the qualifying rollover contribution is to be made. The plan administrator shall
refuse to permit the contribution to the plan of property other than money (and
shall require instead that the property be sold and the proceeds contributed).
If an employee makes a qualifying rollover contribution on a date other than an
accounting date (as defined in section 5.8), a segregated account shall be
established on such date on his behalf until the next accounting date under the
plan to reflect the income, losses, appreciation and depreciation attributable
thereto until such accounting date. A participant's qualifying rollover
contribution
10
<PAGE>
shall be credited to the participant's rollover account (as defined in
subsection 5.1(f)) as of the accounting date coincident with or next following
the date the contribution is made.
3.7 TRANSFERRED BENEFITS. If a covered employee had previously
participated in any other qualified pension, profit sharing, stock bonus or
other retirement or employee benefit plan and such other plan permits the
transfer to this plan of the vested portion of the covered employee's benefits
under such other plan, and if so directed by the plan administrator in its
discretion, the trustee shall accept a transfer of cash to this plan equal to
the vested benefits of such employee under such other plan which are being
transferred to this plan. No amounts shall be transferred to this plan from any
other plan if the accrued benefit payable to the employee under such other plan
must be provided in the form of a qualified joint and survivor annuity or if a
qualified preretirement survivor annuity must be provided to the surviving
spouse of such employee with respect to such accrued benefit. If the date on
which such transfer is received by the trustee is not an accounting date, a
segregated account shall be established on such date on behalf of the covered
employee until the next accounting date under the plan to reflect the income,
losses, appreciation and depreciation attributable thereto until such accounting
date. The participants transferred benefits (as adjusted to reflect the
investment experience of a segregated account, if initially credited to a
segregated account) shall be credited to his rollover account as of the
accounting date coincident with or next following the date the transfer is made.
3.8 RESTRICTED PARTICIPATION WITH RESPECT TO ROLLOVER
CONTRIBUTIONS AND TRANSFERRED BENEFITS. For purposes of the plan, a participant
with respect to whom a qualifying rollover contribution or a transfer of
benefits is made in accordance with section 3.6 or 3.7,
11
<PAGE>
respectively, shall not be eligible to make salary deferral contributions or
voluntary contributions or have matching employer contributions made on his
behalf before becoming a participant for all purposes of the plan in accordance
with sections 2.1.
ARTICLE 4
---------
EMPLOYERS' CONTRIBUTIONS
------------------------
4.1 EMPLOYERS' CONTRIBUTIONS. Each plan year beginning on or
after the effective date and subject to the conditions and limitations of this
Article 4 and Article 10, each employer will make a contribution under the plan
for each active participant employed by it during that plan year in an amount
equal to the sum of the following:
(a) EMPLOYER MATCHING CONTRIBUTIONS. With respect to
each participant who elects to make basic salary deferral
contributions or voluntary contributions, or both, to the
plan, the employers shall make a matching contribution, on
behalf of each such participant equal to 25 percent of the
amount of basic salary deferral contributions and voluntary
contributions which such participant has made up to a maximum
matching contribution of 1.50 percent of a participant's
compensation (i.e., aggregate contributions not in excess of
six percent of the participant's earnings). The employer
matching contribution shall first be applied to the basic
salary deferral contribution and then to the voluntary
contribution to the extent such basic salary deferral
contribution does not exceed six percent of the participant's
earnings for such plan year.
(b) SALARY DEFERRAL CONTRIBUTIONS. 100 percent of the
salary deferral contribution (as defined in section 3.1,
including the participant's basic salary deferral
contribution) elected by the participant for that plan year.
(c) BASIC PROFIT SHARING CONTRIBUTION. An amount
equal to two percent of each participant's earnings for that
plan year.
(d) DISCRETIONARY PROFIT SHARING CONTRIBUTION. An
amount as the Bank shall determine, if any.
4.2 PAYMENT OF EMPLOYERS' CONTRIBUTIONS. Each employers'
contribution under the plan to be made in accordance with section 4.1 above for
any plan year shall be paid to the
12
<PAGE>
trust (as described in section 1.3) implementing the plan, without interest, no
later than the time for filing the employer's federal income tax return,
(including any extensions) for the taxable year in which such plan year ends.
4.3 VERIFICATION OF EMPLOYERS' CONTRIBUTIONS. The certificate
of an independent accountant selected by the Bank as to the correctness of any
amounts or calculations relating to the employers' contributions under the plan
for any plan year shall be conclusive on all persons.
ARTICLE 5
---------
PLAN ACCOUNTING AND INVESTMENT FUNDS
------------------------------------
5.1 PARTICIPANT ACCOUNT BALANCES. The plan administrator will
establish and maintain the following separate accounts with respect to plan
participants:
(a) SALARY DEFERRAL CONTRIBUTION ACCOUNT. A "salary
deferral contribution account" shall be maintained on behalf
of each participant. With respect to any plan participant,
this account shall represent the amount of salary deferral
contributions made on the participant's behalf and the
earnings, expenses, appreciation and depreciation attributable
to such contributions under the plan.
(b) EMPLOYER MATCHING CONTRIBUTION ACCOUNT. An
"employer contribution account" shall be maintained on behalf
of each participant. With respect to any plan participant,
this account shall represent the portion of an employer's
matching contributions and any forfeitures which are allocated
for his benefit and the earnings, expenses, appreciation and
depreciation attributable to such contributions under the
plan.
(c) DISCRETIONARY PROFIT SHARING CONTRIBUTION
ACCOUNT. A "discretionary profit sharing contribution account"
shall be maintained and behalf of each participant. With
respect to any plan participant, this account shall represent
the portion of the discretionary profit sharing contributions
and any forfeitures which are allocated for his benefit and
the earnings, expenses, appreciation and depreciation
attributable to such contributions under the plan.
(d) BASIC PROFIT SHARING CONTRIBUTION ACCOUNT. A
"basic profit sharing contribution account" shall be
maintained on behalf of each participant. With respect to any
plan participant, this account shall represent the portion of
the basic profit sharing contributions and any forfeitures
which are allocated for his
13
<PAGE>
benefit and the earnings, expenses, appreciation and
depreciation attributable to such contributions under the
plan.
(e) VOLUNTARY CONTRIBUTION ACCOUNT. A "voluntary
contribution account" shall be maintained on behalf of each
participant. With respect to any plan participant, this
account shall represent the amount of such participant's
voluntary contributions and the earnings, expenses,
appreciation and depreciation attributable to such
contributions under the plan. This account shall also include
all amounts held under the Thrift Contribution Account as
provided under the plan prior to the effective date.
(f) ROLLOVER ACCOUNT. A "rollover account" shall be
maintained on behalf of a plan participant whose prior
benefits under another plan described in Section 401(a) of the
Code are transferred to the trustee for the subsequent payment
of such amounts in accordance with this plan. The trustee may
accept such rollover amounts on behalf of a participant only
with the authorization of the plan administrator.
The maintenance of separate account balances shall not require physical
segregation of plan assets with respect to each account balance. The accounts
maintained hereunder represent the participants' interests in the plan and trust
and are intended as bookkeeping account records to assist the plan administrator
and the trustee in the administration of this plan. The plan administrator may
maintain such other accounts in the name of participants as it considers
desirable. Any reference to a participant's "accounts" or "account balances"
shall refer to all of the accounts maintained in the participant's name under
the plan. Participants shall at all times have 100 percent vested and
nonforfeitable interests in their salary deferral contribution account,
voluntary contribution account and rollover account and shall have vested and
nonforfeitable interests in the employer matching contribution account,
discretionary profit sharing account and basic profit sharing contribution
account only as provided in the plan.
5.2 INVESTMENT OR ACCOUNT BALANCES. The trustee, the
investment manager and any insurance institution responsible for investment of
trust assets shall be permitted to
14
<PAGE>
commingle the assets of the trust for purposes of investment with the assets of
other plans or trusts which are intended to qualify for a federal tax exemption
under Sections 401(a) and 501(a) of the Code. Any documents which are required
to be incorporated in the plan and the trust to permit such commingled
investments are hereby so incorporated. Except to the extent required by section
5.3, segregated investment of plan and trust assets shall not be required with
respect to any one or more plan participants. Each account invested in a
particular investment fund shall represent an undivided interest in such
investment fund which corresponds to the balance of such account.
5.3 INVESTMENT FUNDS. From time to time the Bank may cause the
trustee or an investment manager to establish one or more investment funds for
the investment and reinvestment of plan assets. The continued availability of
any investment fund is necessarily conditioned upon the terms and conditions of
investment management agreements and other investment arrangements. While the
Bank may arrange with the trustee and investment managers for the establishment
of investment funds, the continued availability of these funds cannot be
assured, nor is it possible to assure that the arrangements or the investment
funds managed by a particular investment manager or by the trustee will continue
to be available on the same or similar terms. The Bank may, in its discretion,
direct the establishment of additional investment funds or may terminate any
investment fund as it deems appropriate and in the best interest of plan
participants. Participant loans shall constitute aggregated investments on
behalf of the participant to whom such loans are made and shall not be reflected
in any investment fund. Except as provided in this section and sections 5.4, 5.5
and 5.6 participants' accounts shall be invested in any one or more investment
funds as determined by the trustee.
15
<PAGE>
5.4 INVESTMENT DIRECTIONS. Each participant, in accordance
with rules promulgated by the plan administrator and uniformly applied to all
participants, may, but need not, direct the investment of a portion or all of
his accounts in any of the investment funds as provided by the Bank by
completing an investment direction in the manner required by the plan
administrator. In the investment direction, the participant shall instruct the
trustee to invest a specified percentage of the portions of the participant's
accounts which are subject to such directions. It shall be the responsibility of
the plan administrator to accumulate, aggregate and transmit to the trustee all
such investment directions.
5.5 MANNER OF MAKING INVESTMENT DIRECTIONS. All investment
directions shall be in writing on forms prescribed by the plan administrator.
The forms shall be signed by the participant making the direction and shall be
delivered to the plan administrator. All investment directions shall continue in
force until changed or revoked by the participant issuing the direction.
Investment directions shall be made, changed or revoked at such times as may be
permitted by the plan administrator and shall be implemented as soon as
practicable. If a participant fails to file a timely direction with respect to
the investment of all or part of the portion of his account that is subject to
his investment directions (determined in accordance with section 5.4), the
portion over which the participant has not directed the investment shall be
invested in such manner as may be directed by the trustee.
5.6 DIRECTED INVESTMENT ELECTION AT AGE 60. Any participant
who has attained age 60 may elect to have all or any portion of his accounts
converted to cash based upon the fair market value of his accounts as determined
by the trustee and to have such cash amount invested in one or more of the
following directed investments:
16
<PAGE>
(a) A savings account or accounts at one or more
banks or savings and loan associations, including the banking
department of a bank acting as trustee, as selected by the
Bank.
(b) A fund invested in obligations of the federal
government and debt securities rated A or better by Moody's or
Standard & Poor's Investor's Service as selected by the Bank.
(c) A fund invested in commercial paper, certificates
of deposit (including those issued by a bank acting as
trustee) or any common, collective or commingled trust fund or
pooled investment fund maintained by a bank or trust company
(including a bank or trust company acting as Trustee), as
selected by the Bank.
The plan administrator may, in its discretion, direct the establishment of
additional investment funds or may terminate any investment fund as it deems
appropriate and in the best interest of participants. Each participant's account
invested in a particular investment fund described in (b) or (c) above shall
represent an undivided interest in such investment fund which corresponds to the
balance of such account. Directed investment elections shall be made by eligible
participants in accordance with rules promulgated by the plan administrator and
uniformly applied to all participants and shall become effective as of the first
day of the calendar quarter which is at least 30 days following the date the
election is filed in writing with the plan administrator. All investment
directions shall continue in force until changed or revoked by the participant
issuing the direction. Directed investment elections may be made, changed or
revoked at such times as may be permitted by the plan administrator except that
no other directed investment change may be made until twelve full calendar
months have elapsed in which no directed investment change has been made by such
participant and amounts subject to a directed investment election shall be
appropriately adjusted to reflect each such accounts respective share of
interest in the savings accounts or other directed investment fund described
above based on the portion of each such
17
<PAGE>
account invested in such savings account or other directed investment fund and
the period or periods since the last accounting date during which the account
was so invested.
5.7 PLAN EXPENSES. All costs and expenses incurred in
connection with the general administration of the plan and trust shall, to the
extent not paid by the Bank, be allocated among the investment funds in the
proportion in which the amount invested in each such fund bears to the amount
invested in all funds as of the accounting date preceding the day of allocation,
provided that all costs and expenses directly identifiable to one fund shall be
allocated to that fund.
5.8 ACCOUNTING DATES. The last day of each fiscal quarter
ending with the months of October, January, April and July shall be an
"accounting date" as of which all account balances shall be adjusted in
accordance with section 5.11. The date of any termination or partial termination
of the plan, the date of any merger or consolidation of this plan with any other
plan, and any other date selected by the plan administrator or the trustee for
such purposes shall be designated as an "interim accounting date" as of which
all account balances shall be adjusted in accordance with section 5.11. The
three-month period (or shorter period in the event of an interim accounting
date) ending on each accounting date is sometimes referred to herein as an
"accounting period".
5.9 DATE OF CREDITING CONTRIBUTIONS AND FORFEITURES. All
employer contributions and participant contributions made for any plan year will
be considered to have been made in cash and will be credited to the proper
participants' accounts on the accounting date which coincides with the end of
the plan year, regardless of when such contributions are actually paid to the
trust; provided, that if the trustee or an investment manager with respect to
18
<PAGE>
an investment fund maintains participants' accounts and credits contributions
received more frequently than monthly, contributions invested in that investment
fund will be considered made and will be credited as provided in accordance with
the accounting rules in effect with respect to that investment fund. Each
forfeiture arising in any plan year (as described in section 7.3) shall be
allocated to reinstate the forfeitures of any reemployed participant (as
described in section 9.2). To the extent there are any amounts in excess of the
amount necessary for reinstating the forfeitures of reemployed participants for
any plan year, such excess forfeitures shall be allocated to participant
accounts in accordance with section 5.10.
5.10 ALLOCATION OF EMPLOYER CONTRIBUTIONS AND FORFEITURES.
Employer contributions and forfeitures shall be allocated as of the end of each
plan year among the employer matching contribution account, discretionary profit
sharing contribution account and basic profit sharing contribution account of
plan participants who (a) are employed by the employer on such date and has
completed at least 1000 hours of service during such plan year or (b) were
employed during that plan year but who, prior to the end of the plan year, died,
retired or became permanently disabled, (as defined in section 7.1). The
employer matching contributions, discretionary profit sharing contributions,
basic profit sharing contributions, and forfeitures shall be allocated to each
such participant account, for all participants entitled to share in employer
matching contributions, discretionary profit sharing contributions and basic
profit sharing contributions under the first sentence of this section, pro rata
in the proportion which each such participant's earnings for the plan year bears
to the total earnings for such year of all such participants.
19
<PAGE>
5.11 ADJUSTMENT OF PARTICIPANTS' ACCOUNTS. As of each
accounting date (including any interim accounting date), the plan administrator
shall adjust the account balances of plan participants to reflect payments and
withdrawals of benefits, adjustments in the values of the trust fund and of the
investment funds, if any, and employers' and participants' contributions, as
follows:
(a) FIRST, all payments, withdrawals and transfers of
benefits made since the last preceding accounting date that
have not been charged previously shall be charged to the
proper accounts;
(b) NEXT, the accounts of each participant shall be
credited with his pro rata share of any increase, or charged
with his pro rata share of any decrease, since the next
preceding accounting date in the value of the adjusted net
worth (as defined below) of the trust or each investment fund
(excluding the value of a participant's directed investment
under section 5.6), if any, in the trust in which he has an
interest as of that date (after taking into account any
charges in accordance with subsection (a) next above);
(c) NEXT, the employers' matching contributions,
discretionary profit sharing contributions, basic profit
sharing contributions, forfeitures, salary deferral
contributions, participant contributions (including rollover
contributions and transferred benefits), if any, and any loan
repayment made by the participant that are to be credited as
of that date shall be credited to the proper participants'
accounts;
(d) FINALLY, the accounts of each participant, who
have made a directed investment election in accordance with
section 5.6, shall be credited with his pro rata share of any
increase, or charged with his pro rata share of any decrease,
since the next preceding accounting date of the value of each
directed investment fund, if any, in the trust in which he has
an interest as of that date.
The "adjusted net worth" of the trust or an investment fund as of any date means
the then net worth of the trust fund or the investment fund as determined by the
trustee or the investment manager or insurance company with custody of that
investment fund in accordance with the provisions of the applicable agreement
with the trustee or the investment manager or insurance company, less an amount
equal to the sum of any employers' contributions and participants'
20
<PAGE>
contributions (including rollover contributions and transferred benefits) held
in that fund but not yet credited to the accounts of participants.
5.12 STATEMENT OF ACCOUNTS. As soon as practicable after the
last day of each plan year, and at such other times as the plan administrator
considers desirable, each participant will be furnished with a statement
reflecting the condition of his accounts as of that date. No participant, except
a member of the plan administrative committee, shall have the right to inspect
the records reflecting the accounts of any other participant.
ARTICLE 6
---------
TOP-HEAVY PLAN RULES
--------------------
6.1 KEY EMPLOYEES. An employee or former employee shall be a
"key employee" for any plan year if during such plan year or during any of the
four preceding plan years the employee is:
(a) An officer of an employer having an annual
compensation greater than 150 percent of the amount in effect
under Section 415(c)(1)(A) of the Code for any such plan year;
(b) One of the ten employees of an employer having
annual compensation from an employer of more than the
limitation in effect under Section 415(c)(1)(A) of the Code
and owning (or considered as owning within the meaning of
Section 318 of the Code) both more than 1/2 percent interest
and the largest interests in the employer;
(c) Any person who owns (or is considered as owning
within the meaning of Section 318 of the Code) more than five
percent of the outstanding stock of the employer or stock
possessing more than five percent of the total combined voting
power of all the employer's stock; or
(d) Any person having annual compensation in excess
of $150,000 who owns (or is considered as owning within the
meaning of Section 318 of the Code) more than one percent of
the outstanding stock of the employer or stock possessing more
than one percent of the total combined voting power of all the
employer's stock.
21
<PAGE>
For purposes of subsection (a) above, if the number of officers exceeds 50, only
the 50 officers with the highest compensation shall be considered key employees
and if the number of officers is less than 50, the number of officers considered
key employees shall not exceed the greater of three such officers or ten percent
of all employees. For purposes or subsections (c) and (d) above, Section
318(a)(2)(C) of the Code shall be applied by substituting "five percent" for the
reference to "50 percent" therein and the rules of Section 414(b), (c) and (m)
of the Code shall not apply for determining ownership in the employer. The term
"employer" includes all corporations which are members of a controlled group of
corporations which includes the company under Section 414(b) of the Code, all
trades or businesses (whether or not incorporated) which are under common
control with the company under Section 414(c) of the Code and any service or
other organization which is a member of an affiliated service group with the
company under Section 414(m) of the Code. The beneficiary of a key employee
shall be considered a key employee.
6.2 TOP-HEAVY PLAN. The plan will be considered a "top-heavy
plan" for any plan year if, as of the last day of the preceding plan year (the
last day of the initial plan year, in the case of that year) (the "determination
date"), the sum of (i) the aggregate of the accounts of all key employees under
the plan and all other defined contribution plans in an aggregation group of
plans (as described in section 6.3 below), and (ii) the present value of the
aggregate cumulative accrued benefits for key employees under all defined
benefit plans in an aggregation group of plans, exceeds 60 percent of such sum
determined for all participants under all such plans, excluding participants who
are former key employees. For purposes of making the determination described
above, accounts in a defined contribution plan and benefits under a
22
<PAGE>
defined benefit plan shall be valued as of the accounting date coincident with
the determination date. There shall be included in the determination of a
participant's accounts and accrued benefit under such plans any amounts
distributed to such participant during the preceding five-year period.
Notwithstanding the foregoing, if any individual has not performed services for
the Fairfield Companies at any time during the five-year period ending on the
determination date, any account of such individual (and the accrued benefit for
such individual) shall not be included for purposes of this section.
Furthermore, a rollover contribution initiated by a participant and made to any
plan in an aggregation group of plans shall not be taken into account for
purposes of determining whether the plan is a top-heavy plan.
6.3 AGGREGATION GROUPS. All employer plans in a required
aggregation group of plans shall be considered to be top-heavy plans if either
the required or permissive aggregation group of plans is determined to be
top-heavy under section 6.2 above. If the required or permissive aggregation
group of plans is not a top-heavy group, no employer plans in the group shall be
considered to be top-heavy plans. A "required aggregation group of plans" shall
include each employer plan (whether or not terminated) in which a key employee
participates and any other employer plan which enables any plan in which a key
employee participates to meet the coverage and nondiscrimination requirements of
Sections 401(a)(4) or 410 of the Code. A "permissive aggregation group of plans"
shall include all plans in the required aggregation group plus any other
employer plans which satisfy the requirements of Sections 401(a)(4) and 410 of
the Code when considered together with the required aggregation group of plans.
23
<PAGE>
6.4 SPECIAL TOP-HEAVY VESTING SCHEDULE. Notwithstanding the
provisions of section 6.2, for purposes of determining a participant's vested
and nonforfeitable interest, if any, in his or her employer contribution
accounts when the plan is considered a top-heavy plan, a participant shall vest
in accordance with the following table based on years of vesting service (as
defined in section 7.2):
If the Participant's
Number of Full Years His Vested and
of Vesting Service Nonforfeitable
Equals: Interest Shall Be:
------------------ -----------------
Less than 1 0%
1 10%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
In the event the vesting schedule provided in section 7.2 is amended, or changed
on account of the plan becoming or ceasing to be a top-heavy plan, any
participant who has completed at least three years of service may elect to have
his or her vested and nonforfeitable interest in his or her employer
contribution account computed under the plan without regard to such amendment or
change by notifying the plan administrator in writing within the election period
hereinafter described. The election period shall begin on the date such
amendment is adopted or the date such change is effective, as the case may be,
and shall end no earlier than the latest of the following dates: (i) the date
which is 60 days after the day such amendment is adopted; (ii) the date which is
60 days after the day such amendment or change becomes effective; or (iii) the
date which is 60 days after the day the participant is given written notice of
such amendment or
24
<PAGE>
change by the plan administrator. Any election made pursuant to this section 9.4
shall be irrevocable.
6.5 MINIMUM CONTRIBUTIONS AND BENEFITS. Notwithstanding the
provisions of section 4.1 above, for each plan year for which the plan is
considered a top-heavy plan, the amount contributed by an employer in accordance
with section 4.1 (except for 4.1(b)) for each participant (whether active or
inactive) shall not be less than the lesser of (i) three percent of the
participant's total earnings for that year, or (ii) the highest percentage of
earnings (disregarding earnings in excess of $200,000 or such other maximum
amount as may be permitted from time to time by the Secretary of the Treasury or
the Secretary's delegate or by law) contributed by such employer for such plan
year on behalf of a key employee; provided, however, that in the case of an
employee covered under this plan and a defined benefit plan maintained by the
Fairfield Companies, for each plan year for which this plan and such defined
benefit plans are considered top-heavy plans, if such employee receives the
top-heavy minimum contribution specified in such defined benefit plan, such
employee need not receive the minimum contribution specified in this section.
ARTICLE 7
---------
DISTRIBUTION OF ACCOUNT BALANCES
--------------------------------
7.1 RETIREMENT, DEATH OR DISABILITY. If a participant's
employment with the Fairfield Companies is terminated by reason of his death,
retirement after he has attained 65 years of age, retirement after he has
attained age 55 years and completed 7 years of service ("early retirement"), or
permanent disability (as determined by a physician selected by his employer),
the balance in his accounts as at the accounting date coincident with or next
25
<PAGE>
following his termination date (after all adjustments required under the plan as
of that date have been made, but subject to any further adjustments required
under the plan prior to complete distribution of his accounts) along with any
contributions made previously by or on behalf of such participant but not
credited to his accounts, shall be fully vested and nonforfeitable and shall be
distributable to the participant or, in the event of the participant's death, to
his beneficiary, in accordance with section 7.6. "Permanent disability" means a
disability caused by bodily injury, disease, or mental condition which prevents
the participant from engaging in any occupation for remuneration or profit
which, in the opinion of the plan administrator, is likely to persist for the
balance of the participant's life; provided, however, that if the participant is
entitled to receive disability insurance benefits under the Social Security Act,
the participant shall be deemed permanently disabled.
7.2 RESIGNATION OR DISMISSAL. If a participant resigns or is
dismissed from the employ of the Fairfield Companies before his attainment of
age 65, before he elects early retirement and before his death or permanent
disability, the balances of his salary deferral contribution account, voluntary
contribution account, rollover account, if any, and his vested and
nonforfeitable interest in his employer matching contribution account,
discretionary profit sharing account, and basic profit sharing account, as of
the accounting date coincident with or next following the date of his
termination of employment (after all adjustments required under the plan as of
that date have been made, but subject to any further adjustments required under
the plan prior to complete distribution of his accounts), along with any
contributions made by him previously, but not credited to his participant
contribution accounts or rollover account, shall be distributable to him in
accordance with section 7.4. A participant's vested and nonforfeitable
26
<PAGE>
interest in his employer matching contribution account, his discretionary profit
sharing account, and his basic profit sharing account shall be the product of
the balance of those accounts and the vested percentage determined in accordance
with the following table based upon the participant's years of vesting service:
If the Participant's
Number of Full Years His Vested and
of Vesting Service Nonforfeitable
Equals: Interest Shall Be:
------------------ -----------------
Less than 1 0%
1 0%
2 0%
3 20%
4 40%
5 60%
6 80%
7 or more 100%
Notwithstanding the foregoing, the vested interest of a participant who was a
participant as of August 1, 1991 shall be determined based on the following
table:
If the Participant's
Number of Full Years His Vested and
of Vesting Service Nonforfeitable
Equals: Interest Shall Be:
------------------ ------------------
Less than 1 0%
1 55%
2 60%
3 65%
4 70%
5 75%
6 80%
7 or more 100%
For purposes of this Article, an employee shall be credited with a "year of
vesting service" for every plan year in which he has completed 1000 or more
hours of service (as defined in section
27
<PAGE>
2.3) with the Fairfield Companies; provided, however, if a participant is not
credited with 1000 hours of service in the plan year he meets the eligibility
requirements he will be credited with one year of vesting service for such plan
year.
7.3 FORFEITURES. If a participant resigns or is dismissed from
the employ of the Fairfield Companies before he completes seven years of vesting
service (and before attaining age 65, becoming permanently disabled or dying),
his employer matching contribution account, discretionary profit sharing
contribution account and basic profit sharing contribution account to the extent
they are not vested shall be a "forfeiture". A forfeiture shall be treated the
same as other participants' accounts (subject to adjustment under section 5.11
above) until the last day of the plan year in which the participant with respect
to whom the forfeiture arose terminated his employment. As of that day, the
forfeiture shall be used to reinstate the forfeitures of reemployed participants
as described in section 9.2 and to the extent there are any forfeitures in
excess of the amounts necessary to fully reinstate forfeitures for that plan
year, the excess forfeitures shall be allocated among and credited to the
accounts of other participants in accordance with section 5.10. If the
participant with respect to whom a forfeiture arose is reemployed by a Fairfield
Company before he incurs five consecutive one-year breaks in service, the
forfeiture shall be reinstated as provided in section 9.2. A "one-year break in
service" shall occur on the last day of any plan year in which a terminated
employee or participant does not complete more than 500 hours of service.
7.4 METHODS OF BENEFIT PAYMENT. A participant's account
balances which are distributable under sections 7.1 and 7.2 shall be paid to or
for the benefit of the participant in one of the following methods:
28
<PAGE>
(a) SINGLE SUM PAYMENT. A participant's account
balances may be paid to or for the benefit of the participant
in a single sum.
(b) INSTALLMENTS. A participant's account balances
may be paid in the form of substantially equal annual or more
frequent installment payments, provided that such installment
payments shall not be payable over a period of time in excess
of the maximum installment period described below.
(c) OTHER. A participant's account balances may be
paid in a combination of a single sum and installments.
A "maximum installment period" shall equal the longer of the participant's life
expectancy or the joint and last survivor life expectancy of the participant and
his designated beneficiary, if greater. The installment form of benefit payment
shall be designed so that the present value of the amount to be paid over the
participant's life expectancy is at least 50 percent of the value of the
participant's account balances on the date of benefit commencement unless the
participant's designated beneficiary is his spouse. Notwithstanding the
preceding sentence, the account balances of a participant who dies prior to his
date of benefit commencement will be distributed to the participant's
beneficiary within five years of the participant's date of death, or, if
distributions commence within one year following the date of the participant's
death, over a period not longer than the life expectancy of the participant's
designated beneficiary. Benefits may be distributed in cash or in kind, as
determined by the trustee, provided that property distributed in kind must be
distributed at fair market value as determined by the trustee. The plan
administrator may establish a minimum amount of any installments under
subsection (b) above.
7.5 SELECTION OF TIME AND MANNER OF BENEFIT PAYMENT. A
participant shall be entitled to select the manner in which the account balances
to his credit at the time of benefit commencement, or at the time of his death,
will be distributable. If a participant fails to select
29
<PAGE>
a manner of payment of his benefits during the participant's lifetime within 60
days after receiving notification from the plan administrator of the
participant's rights to select a method of payment under this section, then the
plan administrator may select the method of distribution of the participant's
benefits during the participant's lifetime. If the participant fails to select a
method of payment of his account balances remaining to be distributed as of his
death to the participant's beneficiary, then such beneficiary shall receive such
benefits in a single sum unless the beneficiary elects to receive such benefits
in installments within 60 days following the later of the death of the
participant or the date the plan administrator determines the identity of such
beneficiary. An election made in accordance with this section may be revoked or
superseded by a new section made by the participant or the beneficiary, as the
case may be, provided that any revocation or modification of a prior election
shall be subject to approval by the plan administrator. Elections in accordance
with this section regarding benefit payments shall be completed and filed with
the plan administrator on such forms, in such manner, and at such times as the
plan administrator shall require. The plan administrator shall notify the
trustee of the time and manner of payment of a participant's benefits hereunder.
7.6 LIMITATIONS ON TIME OF BENEFIT PAYMENT. Notwithstanding
anything contained in this Article 7 to the contrary,
(a) Payment of a participant's benefits under the
plan shall commence not later than 60 days after the end of
the plan year in which occurs the latest following events
occurs (i) the participant's attainment of age 65 years, (ii)
the fifth anniversary of the date when the participant last
began to participate in the plan or (iii) the participant's
termination of employment with an employer;
(b) In no event shall payment of a participant's
account balances commence later than April 1 of the calendar
year following the calendar year in which the participant
attained age 70-1/2;
30
<PAGE>
(c) It a participant's vested account balances exceed
$3,500 no amount shall be distributable to the participant
prior to the date the participant attains age 65 without the
participant's written consent; and
(d) It distribution of a participant's accounts has
not commenced prior to such participant's death, then the
participant's accounts shall be distributed within five years
of the date of death.
7.7 DESIGNATED BENEFICIARIES. A participant may from time to
time designate a beneficiary or beneficiaries to whom the participant's benefits
will be distributed in the event of the participant's death prior to complete
payment of his benefits under the plan. A participant may designate contingent
or successive beneficiaries and may name individuals, legal persons or entities,
trusts, estates, trustees or other legal representatives as beneficiaries. A
beneficiary designation properly completed and filed will cancel all such
designations filed earlier. Notwithstanding the foregoing or any beneficiary
designation filed by a participant, if a participant is married at the date of
his death, the participant's surviving spouse will be his designated beneficiary
for all purposes of the plan unless the surviving spouse consents in writing to
the participant's designation of another beneficiary. Beneficiary designations
must be completed and filed with the plan administrator during the participant's
lifetime, however, his surviving spouse may consent to a designation after his
death. The consent of a surviving spouse to the participant's designation of
another beneficiary must be a writing, must acknowledge the effect of such
designation, and must be witnessed by a plan representative or a notary public.
7.8 PAYMENT TO SUBSTITUTE BENEFICIARIES. If benefits remain to
be paid with respect to a plan participant at a time when the plan administrator
is unable to locate the participant, or his beneficiary or beneficiaries
designated in accordance with section 6.7, or following the death of the
participant and such beneficiaries, and if the participant failed to
31
<PAGE>
designate one or more other beneficiaries in the manner described in section
7.7, then the plan administrator shall cause the benefits for such participant
to be distributed or paid to the person or persons who can be located and agree
to accept such amounts within the applicable priority classification set forth
below. Participants and designated beneficiaries are required to maintain a
current post office address on file with the plan administrator by notifying the
plan administrator of such address in care of the employer. A substitute
beneficiary will not be determined under this section with respect to a missing
participant or missing designated beneficiary unless the participant or
designated beneficiaries, as the case may be, have failed to claim the
participant's account balances or notify the plan administrator of their
whereabouts within three years after the plan administrator notifies such
participant or beneficiaries at their last post office addresses filed with the
plan administrator. Such notice shall describe the amounts to which the
participant or the beneficiaries are entitled and shall describe the
substitution procedures of this section. In disposing of a participant's
benefits in accordance with this section, the plan administrator shall cause the
participant's benefits to be distributed in accordance with the following
priority classifications:
(a) FIRST PRIORITY. A participant's benefits, in the
case of a missing plan participant, will first be distributed
to the participant's designated beneficiary or beneficiaries.
(b) SECOND PRIORITY. A participant's benefits will
next be distributed or paid to the participant's spouse if the
whereabouts of such spouse is known.
(c) THIRD PRIORITY. The participant's benefits will
next be applied by the payment of the participant's account
balances to one or more of the participant's relatives by
blood, marriage or adoption in such proportions as the plan
administrator decides.
(d) FOURTH PRIORITY. After unsuccessful attempts have
been made by the plan administrator to locate persons
described in the priority categories set forth
32
<PAGE>
above, the benefits of the participant or of any beneficiary
will be disposed of in any manner permitted by law which the
plan administrator considers to be fair and equitable.
7.9 PAYMENT WITH RESPECT TO INCAPACITATED PARTICIPANTS OR
BENEFICIARIES. If any person entitled to benefits under the plan is under a
legal disability or in the plan administrator's opinion is incapacitated in any
way so as to be unable to manage his financial affairs, the plan administrator
may direct the payment of such benefits to such person's legal representative or
to a relative or friend of such person for such person's benefit, or the plan
administrator may direct the application of such benefits to the benefit of such
person. Payments made in accordance with this section shall discharge all
liabilities for such payments under the plan.
7.10 FINAL COURT ORDERS. Notwithstanding the other provisions
of this Article 7, if the trustee is required by a final court order to
distribute the benefits of a participant other than in the manner required under
the plan, then the trustee shall cause the participant's benefits to be
distributed in a manner consistent with such final court order. The trustee
shall not be required to comply with the requirements of a final court order in
an action in which the trustee, the plan administrator, the plan or the trust
was not a party, except to the extent such order is a qualified domestic
relations order (as defined in Section 414(p) of the Code).
ARTICLE 8
---------
WITHDRAWALS AND LOANS DURING EMPLOYMENT
---------------------------------------
8.1 WITHDRAWALS FROM VOLUNTARY CONTRIBUTION ACCOUNT, ROLLOVER
ACCOUNT, AND EMPLOYER CONTRIBUTION ACCOUNT. Effective as of the last day of any
plan year quarter which commences at least 60 days (or such other time period as
specified by the plan administrator) following receipt by the plan administrator
of an election form satisfactory to the plan
33
<PAGE>
administrator for this purpose, a participant may elect to withdraw all or any
portion of his voluntary contribution account, rollover account or the vested
portion of his employer contribution account. Payment of each withdrawal shall
be made following the end of a reasonable period of time for processing such
withdrawal.
8.2 HARDSHIP WITHDRAWALS. Effective as of the last day of any
plan year quarter which commences at least 60 days (or such other time period as
specified by the plan administrator) following receipt by the plan administrator
of an election form satisfactory to the plan administrator for this purpose and
except as provided in section 8.3, a participant, other than a former employee,
who is experiencing a financial hardship may request a withdrawal of all or any
portion of the lesser of his salary deferral contributions account or his salary
deferral contributions (but not earnings thereon). The plan administrator will
have discretion to grant or deny any such requests for hardship withdrawals,
subject to the following:
(i) Each request for financial hardship must describe
the hardship for which the withdrawal is requested.
(ii) A withdrawal shall be considered on account of
financial hardship if it is necessary in light of the
participant's immediate and heavy financial need as describe
in (A) below and it is necessary to satisfy such financial
need, as described in (B) below.
(A) A withdrawal will be on account of
immediate and heavy financial need only if it is on
account of (I) medical expenses incurred by the
participant or the participant's spouse or
dependents; (II) purchase (excluding mortgage
payments) of a principal residence for the
participant; (III) payment of tuition of the next
twelve months of post-secondary education for the
participant or the participant's spouse, children or
dependents; (IV) the need to prevent the eviction of
the participant from the participant's principal
residence or the foreclosure on the mortgage of the
participant's principal residence; (V) such other
purpose deemed by the plan administrator to
constitute immediate and heavy financial need; or
(VI) such other purpose deemed by the Commissioner of
the Internal Revenue Service to constitute immediate
and heavy financial need.
34
<PAGE>
(B) A withdrawal will be necessary to
satisfy the financial need described in (A) above
only if (I) the withdrawal does not exceed the amount
necessary to meet such financial needs; and (II) the
participant has obtained all distributions, other
than hardship withdrawals, under all plans maintained
by the Fairfield Companies.
(iii) In the event that the plan administrator grants
a participant's request for a hardship withdrawal from any of
his accounts other than his rollover account, such participant
shall not be permitted to make salary deferral contributions
under the plan until the first day of the first payroll period
following twelve months from the date of withdrawal.
(iv) Notwithstanding the provisions of section 3.1,
the aggregate salary deferral contributions to the plan and to
any other plan maintained by the Fairfield Companies for the
calendar year immediately following the calendar year in which
the participant receives the hardship withdrawal from any of
his accounts other than his rollover account shall not exceed
the excess of (A) the maximum amount specified in section 3.1
for such year over (B) the amount of such participant's salary
deferral contributions to this plan and to any other plan
maintained by the Fairfield Companies in the calendar year in
which the participant receives the hardship withdrawal.
8.3 WITHDRAWALS AFTER AGE 59-1/2 OR PERMANENT DISABILITY. A
participant who is still employed by or considered employed by the Fairfield
Companies and who has attained age 59-1/2 or has incurred a permanent disability
(as defined in section 7.1) may request a withdrawal of all or any portion of
his salary deferral contribution account for any reasons by filing a written
request with the plan administrator pursuant to section 8.2. Such request must
be made on the appropriate form and according to procedures adopted by the plan
administrator. Such withdrawals shall be made at the discretion of the plan
administrator.
8.4 COMPLETE WITHDRAWAL OF PARTICIPANT'S ACCOUNT AFTER AGE 60.
A participant who is still employed by or considered employed by the Fairfield
Companies and who has elected to have his entire account segregated into a
separate directed investment account in accordance with section 5.6 may request
a one-time withdrawal of the entire balance to the credit
35
<PAGE>
of his account (as such phrase is defined for purposes of Section 402(e) of the
Code) for any reason by filing a written request with the plan administrator at
least 30 days prior to such withdrawal. Contributions attributable to services
performed before the withdrawal date and earnings on the withdrawal which are
credited to the participant's account after the withdrawal date may, at the
election of the participant, be distributed once determined. A withdrawal
pursuant to this section shall not limit the participant's participation under
the plan or his right to any employer contributions.
8.5 LOANS TO PARTICIPANTS. While it is the primary purpose of
the plan to provide funds for participants when they leave the Fairfield
Companies, it is recognized under some circumstances it would be in the best
interests of participants to permit loans to be made to them. Accordingly,
effective as of the date that the plan administrator determines, the plan
administrator may direct that a loan be made to a participant, other than a
former employee, as of an accounting date, subject to the following:
(a) Each request for a loan under this section must
be by written application to the plan administrator at least
30 days in advance (or by such other date as the plan
administrator may require) on such form as the plan
administrator may require.
(b) Each loan must be evidenced by a note in a form
furnished by the plan administrator and must be secured by a
pledge of 50 percent of the participant's vested account
balances as of the accounting date immediately preceding the
date as of which the loan is made.
(c) The principal amount of each loan, when added to
any other outstanding loan balances of a participant under the
plan and all other plans of the Fairfield Companies, may not
exceed the lesser of $50,000 (reduced by the highest
outstanding balance of loans from the plan during the one-year
period ending on the day before the date the new loan is made)
or 50 percent of the participant's vested account balances as
of the accounting date immediately preceding the date as of
which the loan is made.
36
<PAGE>
(d) Each loan will be for a term not exceeding five
years; provided that the term of a loan may be for more than a
period of five years where the loan is used to acquire any
dwelling unit which within a reasonable time is to be used as
a principal residence of the participant.
(e) Each loan will bear interest at a reasonable rate
(commensurate with the prevailing rate charged by persons in
the business of making loans under similar circumstances)
established by the plan administrator in a uniform and
nondiscriminatory manner (but not less than five percent nor
greater than the maximum rate permitted by law), and must be
amortized in level payments, made through regular payroll
deductions (or by any other method permitted by the plan
administrator), made not less frequently than quarterly, over
the life of the loan.
(f) Each note evidencing a loan to a participant
shall be held on the participant's behalf and shall be
considered an investment of such participant's accounts.
Accordingly, principal and interest payments on the note shall
be credited to such accounts on the participant's behalf.
(g) Upon default, the plan may foreclose on the loan
at the earliest opportunity permitted by law and the loan will
be treated as a taxable distribution at such time. During the
period, if any, between the date of the event constituting
default and the date of foreclosure, interest on the loan will
continue to accrue and shall be charged to the participant's
account. The distribution of a participant's canceled note to
him (or to his beneficiary in the event of his death) shall be
considered as a payment for purposes of the plan. The
following events will constitute default on a loan:
(i) the failure to make an installment
payment on the payday on which it becomes due;
(ii) any other person (other than the plan
trustee) acquires an interest in the participant's
account except as otherwise required by law;
(iii) the participant dies or becomes
legally incompetent;
(iv) bankruptcy or insolvency proceedings
are instituted by or against the participant; or
(v) the participant's employment with the
Fairfield Companies is terminated for any reason,
including retirement, disability, resignation or
discharge.
In the event of (iii) or (v) above, there shall be no default
if, immediately upon the occurrence of (iii) or (v), the participant
(or his estate or legal representative, as the
37
<PAGE>
case may be) pays the remaining balance of the loan together with
accrued interest thereon. Notwithstanding anything in this section 8.5
to the contrary, in the event of (v) above there shall be no default if
the participant continues to be a party in interest (as defined in
Section 3(14) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) following his termination of employment.
(h) The plan administrator may establish such other
rules and regulations (which shall be uniformly applicable to
all participants similarly situated) as it may deem necessary
regarding the granting of loans, including loan fees (which
may be charged directly to the participant or to the
participant's account).
8.6 NO REPRESENTATION REGARDING TAX EFFECT OF WITHDRAWALS OR
LOANS. Neither an employer, the plan administrator, the trustee, nor any other
person shall be construed as representing the tax effects of any withdrawals or
loans in accordance with this Article 8. It shall be the responsibility of
participants requesting withdrawals or loans to consider the tax effects of such
withdrawals or loans requested by such participant.
ARTICLE 9
---------
REEMPLOYMENT
------------
9.1 REHIRED EMPLOYEE OR PARTICIPANT. If an employee or
participant terminates his employment with the Fairfield Companies and is
subsequently rehired before incurring a one-year break in service, his prior
years of vesting service shall be reinstated for purposes of sections 6.4 and
7.2. If an employee or a participant terminates his employment with the
Fairfield Companies and is subsequently reemployed by a Fairfield Company, his
prior years of vesting service for purposes of sections 6.4 and 7.2 shall be
reinstated after he has completed one year of vesting service. However, in no
event shall years of service occurring after a participant incurs five
consecutive one-year breaks in service (as defined in section 7.3) be used to
determine the vested and nonforfeitable interest of a participant in his
employer matching
38
<PAGE>
contribution account, discretionary profit sharing contribution account and
basic profit sharing contribution account as of his prior termination of
employment which has become a forfeiture. With respect to any employee whose
initial severance from service date is on or after January 1, 1991, if such
employee incurs a break-in-service and is subsequently reemployed by the
Fairfield Companies, and if the number of his or her consecutive one-year
breaks-in-service (as defined in Section 7.3) equals or exceeds the greater of
five or the number of his or her years of service prior to his or her initial
severance from service date, such employee's service prior to his or her initial
severance from service date shall be disregarded for purposes of determining his
or her years of service. A rehired employee shall become a participant as of the
date he meets the requirements of sections 2.1 and 2.5. A rehired participant
shall again become a participant as of his date of rehire and shall again become
eligible to make salary deferral contributions and voluntary contributions as of
the pay period next following his date of rehire.
9.2 REINSTATEMENT OF FORFEITURES. If a participant whose
employment had terminated because of resignation or dismissal is reemployed by a
Fairfield Company so that he does not incur five consecutive one-year breaks in
service (as defined in section 7.3), the amount of any forfeiture which resulted
from his prior resignation or dismissal shall be reinstated out of forfeitures
arising in the year of the participant's reemployment or, if such forfeitures
are insufficient for this purpose, out of a special employer contribution to his
basic profit sharing contribution account as of the accounting date coincident
with or next following his date of rehire. If such participant subsequently
resigns or is dismissed from the employ of the Fairfield Companies and the
participant is not entitled to the full balance in his basic profit sharing
39
<PAGE>
contribution account, the amount to be distributed in accordance with Article 7
will be determined in accordance with the following, notwithstanding the
provisions of section 7.2:
(a) First, the amount of the distribution, if any,
previously received by the participant from his basic profit
sharing contribution account because of his prior resignation
or dismissal shall be added to the balance in his basic profit
sharing contribution account as of the accounting date
coincident with or next following the date of his subsequent
termination of employment.
(b) Next, the amount determined under subsection (a)
above shall be multiplied by the applicable vesting percentage
applicable to the participant at his subsequent termination of
employment under section 7.2.
(c) Finally, the amount determined under subsection
(b) above shall be reduced by the amount of the distribution
previously received by the participant from his employer
contribution accounts because of his prior resignation or
dismissal.
ARTICLE 10
----------
MAXIMUM CONTRIBUTIONS
---------------------
10.1 CONTRIBUTION LIMITATIONS. Section 415 of the Code imposes
certain limitations on the amount of contributions that may be allocated to a
participant under a defined contribution plan (as defined in Section 414(i) of
the Code) maintained by his employer. If a participant in a defined contribution
plan maintained by his employer also is a participant in a defined benefit plan
(as defined in Section 414(j) of the Code) maintained by such employer, Section
415 of the Code imposes certain combined limitations as to the aggregate amount
of contributions and benefits that may be provided for the participant under
both types of plans. This plan is a defined contribution plan and, therefore,
each participant in the plan shall be subject to the maximum contribution and
benefit limitations set forth in section 10.2 or section 10.3, if applicable,
irrespective of any other provisions of the plan. For purposes of Section 415 of
the Code and this Article 10, the "limitation year" with respect to this plan is
the plan year,
40
<PAGE>
and a participant's "total compensation" means, with respect to any plan year,
the total compensation paid to the participant during that year for services
rendered to the Fairfield Companies as an employee that is subject to
withholding for federal income tax purposes (before taking into account any
withholding exemptions), but excluding any noncash compensation and any
compensation deferred beyond the participant's termination of employment. In
applying the limitations set forth in sections 10.2 and 10.3, reference to the
plan shall mean the plan and all other defined contribution plans (whether or
not terminated) maintained by the Fairfield Companies and reference to a defined
benefit plan maintained by the Fairfield Companies shall mean that plan and all
other defined benefit plans (whether or not terminated) maintained by the
Fairfield Companies.
10.2 PARTICIPANT COVERED BY DEFINED CONTRIBUTION PLAN. If a
participant in the plan is not covered by a defined benefit plan maintained by
the Fairfield Companies, the annual addition (as defined below) which is
allocated to his accounts under this plan and under any related defined
contribution plans maintained by the Fairfield Companies shall not exceed the
lesser of $30,000 (or, if greater, one-fourth of the defined benefit dollar
limitation set forth in Section 415(b)(1) of the Code, as adjusted pursuant to
Section 415(d) thereof for such year), (the "defined contribution dollar
limitation") or 25 percent of the participant's local compensation for such
limitation year. In applying the preceding limitation, the annual addition to a
participant's accounts under any such related defined contribution plan will be
limited before the annual addition to his account under this plan is limited.
Any excess contributions resulting from the allocation of forfeitures, a
reasonable error in estimating a participant's annual earnings or such other
limited facts and circumstances as the Commissioner of the Internal Revenue
Service may
41
<PAGE>
prescribe and not allocable to a participant's accounts under the plan by reason
of the limitations on additions under Section 415 of the Code shall be disposed
of as follows:
(a) Any nondeductible voluntary contributions or
elective deferrals (including earnings thereon) to the extent
they would reduce the excess amount shall be returned to the
participant;
(b) If after the application of subsection (a) above
an excess amount still exists, and if the participant is
covered by the plan at the end of the limitation year, the
excess amount shall be used to reduce employer contributions
for such participant in the next limitation year, and each
succeeding year if necessary; and
(c) It after the application of subsection (a) above
an excess amount still exists and the participant is not
covered by the plan at the end of the limitation year, the
excess amount shall be held unallocated in a suspense account
and the suspense account shall be applied to reduce future
employer contributions for all remaining participants in the
next limitation year, and each succeeding limitation year if
necessary.
A participant's "annual addition" for any plan year means the
sum for that year of the following:
(i) EMPLOYER CONTRIBUTIONS. Employer contributions
(including salary deferral contributions) credited to the
participant's accounts under this plan and under any related
defined contribution plans;
(ii) FORFEITURES. Forfeitures credited to the
participant's accounts under this plan or under any related
defined contribution plans; and
(iii) PARTICIPANT VOLUNTARY CONTRIBUTIONS. The amount
of the participant's voluntary contributions to any related
defined contribution or defined benefit plan (determined
without regard to rollover contributions, if any).
(iv) CERTAIN MEDICAL EXPENSES FOR KEY EMPLOYEES. The
amounts attributable to medical benefits allocated to an
account of a key employee, as described in section 419A(d) of
the Code.
10.3 PARTICIPANT COVERED BY DEFINED CONTRIBUTION PLAN AND
DEFINED BENEFIT PLAN. If a participant in the plan also is a participant in a
defined benefit plan maintained by the Fairfield Companies, the contributions
made on behalf of the participant and the benefits payable
42
<PAGE>
to the participant shall be determined in a manner consistent with Section 415
of the Code, as follows:
(a) DEFINED CONTRIBUTION FRACTION. A fraction shall
be determined, the numerator of which shall be the
participant's annual additions under all related defined
contribution plans for each limitation year (determined in
accordance with the plan provisions as in effect for such
year), and the denominator of which shall be the aggregate of
the "defined contribution limitation amounts" in effect for
each year of the participant's employment by the employers.
The "defined contribution limitation amount" for any
limitation year shall be the lesser of (i) 1.25 multiplied by
the dollar limitation in effect under Section 415(c)(1)(A) of
the Code for such year, provided that in any year in which the
plan would be a top-heavy plan if 90 percent were substituted
for 60 percent in section 6.2, 1.0 shall be substituted for
1.25, or (ii) 1.4 multiplied by 25 percent of the
participant's total compensation for such year. The numerator
of this fraction shall be adjusted in accordance with
applicable regulations to preserve the participant's benefits
accrued as of the close of the last limitation year beginning
before December 31, 1986.
(b) DEFINED BENEFIT FRACTION. A fraction shall also
be determined, the numerator of which shall be the benefits
accrued or payable to or for such participant under the
related defined benefit plans as of the end of the limitation
year, and the denominator of which shall be the "defined
benefit limitation amount" in effect for that year. The
"defined benefit limitation amount" for any limitation year
shall be the lesser of (i) 1.25 multiplied by the dollar
limitation in effect under section 415(b) (1) (A) of the Code
for such year, provided that in any year in which the plan
would be a top-heavy plan if 90 percent were substituted for
60 percent in section 6.2, 1.0 shall be substituted for 1.25,
or (ii) 1.4 multiplied by 100 percent of the participant's
average annual total compensation for the three consecutive
plan years during which the participant actively participated
in such a plan and in which the participant's aggregate total
compensation was the greatest; provided that such amount shall
be appropriately adjusted if necessary as provided in section
415(b) of the Code.
(c) COMBINED LIMITATION. The contributions under this
plan and under any related defined contribution plans and the
benefits under all related defined benefit plans will be
adjusted to the extent necessary (by first adjusting the
benefits and contributions under such other plans) so that the
sum of the fractions determined with respect to any
participant in accordance with subsections (a) and (b) above
will not exceed 1.0 (or such other applicable maximum amount
permitted by law).
43
<PAGE>
10.4 DISTRIBUTION OF EXCESS DEFERRALS. If, not later than the
March 1 next following the end of a calendar year, a participant notifies the
plan administrator that the participant has made salary deferral contributions
to this plan and one or more other plans (whether maintained by a Fairfield
Company or an unrelated company) in excess of $7,000 (or such other maximum
amount as may be permitted by law for such calendar year) during such calendar
year, and further notifies the plan administrator of the amount of such excess
allocated to this plan, such excess amount shall be paid to such participant
(along with any income or loss allocable thereto) as soon as practicable
following such notification, but in any event by the April 15 following the
calendar year with respect to which such excess deferrals were made. A
participant is deemed to notify the plan administrator of such excess that
arises by taking into account only those elective contributions made to this
plan and any other plans of the Bank.
10.5 HIGHLY COMPENSATED EMPLOYEE. The term highly compensated
employee includes highly compensated active employees and highly compensated
former employees. A highly compensated active employee includes any employee who
performs service for the employer during the determination year and who, during
the look-back year (i) received compensation from the employer in excess of
$75,000 (as adjusted pursuant to Section 415(d) of the Code), (ii) received
compensation from the employer in excess of $50,000 (as adjusted pursuant to
Section 415(d) of the Code) and was a member of the top-paid group for such
year, or (iii) was an officer of the employer and received compensation during
such year that is greater than 50 percent of the dollar limitation in effect
under Section 415(b)(1)(A) of the Code. The term highly compensated employee
also includes (A) employees who are both described in the preceding sentence if
the term "determination year" is substituted for the term "look-back
44
<PAGE>
year" and the employee is one of the 100 employees who received the most
compensation from the employer during the determination year, and (B) employees
who are 5 percent owners at any time during the look-back year or determination
year. If no officer has satisfied the compensation requirement of (iii) above
during either a determination year or look-back year, the highest paid officer
for such year shall be treated as a highly compensated employee. For this
purpose, the determination year shall be the plan year. The look-back year shall
be the twelve-month period immediately preceding the determination year. A
highly compensated former employee includes any employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the employer during the determination year, and was a
highly compensated active employee for either the separation year or any
determination year ending on or after the employee's 55th birthday. If an
employee is, during a determination year or look-back year, a family member of
either a 5 percent owner who is an active or former employee or a highly
compensated employee who is one of the 10 most highly compensated employees
ranked on the basis of compensation paid by the employer during such year, then
the family member and the 5 percent owner or top-ten highly compensated employee
shall be aggregated (the "family group"). In such case, the family member and 5
percent owner or top-ten highly compensated employee shall be treated as a
single employee receiving compensation and plan contributions or benefits equal
to the sum of such compensation and contributions or benefits of the family
member and 5 percent owner or top-ten highly compensated employee. For purposes
of this section, family member includes the spouse, lineal ascendants and
descendants of the employee or former employee and the spouses of such lineal
ascendants and descendants. The determination of who is a highly compensated
employee,
45
<PAGE>
including the determinations of the number and identity of employees in the
top-paid group, the top 100 employees, the number of employees treated as
officers and the compensation that is considered, will be made in accordance
with Section 414(q) of the Code and the regulations thereunder.
10.6 LIMITATIONS ON ELECTIVE CONTRIBUTIONS. Elective
contributions shall be subject to the following nondiscrimination standards and
shall be adjusted, as provided below, to the extent necessary to comply with the
limitations set forth in Section 401(k) of the Code and the regulations
thereunder. For purposes of this section, the term "elective contribution" shall
mean any employer contribution made to the plan that (i) is subject to a cash or
deferred arrangement (as defined in Section 1.401(k)-l(a)(3) of the Treasury
regulations) and (ii) is immediately nonforfeitable. The salary deferral
contributions made pursuant to section 3.1 are elective contributions for
purposes of this section. The employer shall maintain records demonstrating
compliance with this section.
(a) ACTUAL DEFERRAL PERCENTAGE LIMITATION. In any
plan year, the actual deferral percentage for the group of
participants who are highly compensated employees may not
exceed the greater of the following:
(i) the actual deferral percentage or the group of
participants who are not highly compensated employees (the
"non-highly compensated group") multiplied by 1.25, or
(ii) the lesser of the actual deferral percentage for
the non-highly compensated group multiplied by two or the
actual deferral percentage of the non-highly compensated group
plus two percentage points.
(b) ACTUAL DEFERRAL PERCENTAGE. The actual deferral
percentage for a specified group of participants for any plan
year shall be the average of the ratios (computed, to the
nearest one-hundredth of one percent, separately for each
participant in such group) of the elective contributions, and
amounts treated as elective contributions, for such
participant for such year to the participant's compensation
(as defined at Section 414(s) of the Code, as modified by
Section
46
<PAGE>
414(s)(2) thereof) taken into account for such plan year
during which the participant was an eligible employee. For
purposes of this section the following additional rules shall
apply:
(i) An elective contribution shall be taken into
account only if it relates to compensation that either (A)
would have been received by the participant in the plan year
but for the deferral election or (B) is attributable to
services performed by the participant in the plan year and
would have been received by the participant within 2 1/2
months after the close of the plan year but for the deferral
election. An elective contribution that does not meet the
foregoing requirements will not be tested under Section 403(k)
of the Code but must separately satisfy Section 401(a)(4) of
the Code for the plan year of allocation as if it was the only
nonelective employer contribution for the year.
(ii) As provided in applicable Treasury regulations,
for purposes of determining the actual deferral percentage of
a family group (as defined in section 10.5), the family group
shall be treated as one highly compensated employee and the
actual deferral percentage for the family group shall be
determined by combining the compensation and elective
contributions of all eligible family members.
(iii) In the event this plan satisfies the
requirement of Sections 401(k), 401(a)(4) or 410(b) of the
Code only if aggregated with one or more other plans, or if
one or more other plans satisfy the requirements of such
sections of the Code only if aggregated with this plan, then
this section shall be applied by determining the actual
deferral percentage of employees as if all such plans were a
single plan. In accordance with applicable Treasury
regulations, plans of the employers may be aggregated in order
to satisfy Section 401(k) of the Code but only if such plans
as aggregated satisfy the requirement of Section 410(b) of the
Code and provided that each plan has the same plan year.
(iv) Except as provided in applicable Treasury
regulations, the actual deferral percentage of a highly
compensated employee will be determined by treating all cash
or deferred arrangements of the employer (or an entity that is
required to be aggregated with the employer under Sections
414(b), (c), (m) or (o) of the Code) under which the highly
compensated employee is eligible as a single arrangement. If
the cash or deferral arrangements have different plan years,
all such arrangements ending with or within the same calendar
year will be treated as a single arrangement.
(v) At the discretion of the plan administrator, and
in accordance with applicable Treasury regulations, any
employer contributions or matching contributions credited on a
participant's behalf in the plan year which meet the
withdrawal restrictions and vesting requirements of Sections
401(k)(2)(B) and (C)
47
<PAGE>
of the Code ("qualified nonelective contributions" and
"qualified matching contributions," respectively) may be added
to the participant's elective contributions in computing the
participant's actual deferral percentage; provided, that the
employer contributions and matching contributions made to the
plan for such year satisfy the requirements of Section
401(a)(4) of the Code with and without the inclusion of the
qualified nonelective contributions and qualified matching
contributions used to satisfy this section. Qualified
nonelective contributions and qualified matching contributions
which are used to satisfy this section cannot be taken into
account to satisfy the requirement of section 10.7.
(vi) Elective contributions treated as matching
contributions under section 10.7 shall not be included in the
determination of a participant's actual deferral percentage.
(c) EXCESS CONTRIBUTIONS. If in any plan year the
actual deferral percentage for the highly compensated group
does not satisfy one of the tests in subsection (a) above, the
plan administrator shall reduce the elective contributions of
some or all of the participants in the highly compensated
group until one of the tests is satisfied. Such reduction
shall be made in accordance with Section 1.401-l(f)(2) of the
Treasury regulations by reducing the actual deferral
percentage for the highly compensated employee with the
highest percentage to the extent required to enable the plan
to satisfy the actual deferral percentage test or cause such
highly compensated employee's actual deferral percentage to
equal the percentage for the highly compensated employee with
the next highest actual deferral percentage. This procedure
shall be repeated until the plan satisfies the actual deferral
percentage test set forth herein. The portion of any
participant's elective contribution which is reduced pursuant
to this procedure shall be referred to as the "excess
contributions." Excess contributions shall be allocated among
the family group (as defined in section 10.5) members in
proportion to the elective contribution of each family member
that is combined in determining the actual deferral
percentage.
(d) DISTRIBUTION OF EXCESS CONTRIBUTIONS. If in any
plan year the elective contributions of one or more of the
participants who are highly compensated employees must be
reduced in accordance with subsection (c) above, the plan
administrator shall distribute the amount of the excess
contributions, plus the income allocable thereto, as soon as
practicable following the determination of such excess but in
any event by the last day of the plan year following the end
of the plan year in which the excess contributions were made.
Under Section 4979 of the Code a ten percent tax is imposed on
the employer for any such excess contributions which are
distributed more than 2 1/2 months after the last day of the
plan year in which the excess contributions were made. A
distribution of the excess contributions may be made without
regard to any notice or consent otherwise required under the
plan. The income or loss allocable to such excess
48
<PAGE>
contributions shall be determined by multiplying the income or
loss allocable to the elective contributions (and, if
applicable, amounts treated as elective contributions for
purposes of the participant's deferral percentage) for the
plan year by a fraction. The numerator of the fraction is the
excess contributions for the plan year. The denominator is
equal to (i) the total account balance of the participant
attributable to elective contributions (and amounts treated as
such for purposes of the actual deferral percentage) as of the
beginning of the plan year, plus (ii) the participant's
elective contributions (and amounts treated as such for
purposes of the actual deferral percentage) for the plan year.
The amount of excess contributions distributed under this
subsection for a plan year shall be reduced by any excess
deferrals previously distributed for the employee's taxable
year ending with or within the plan year. Excess contributions
shall be treated as annual additions for purposes of Section
415 of the Code.
10.7 LIMITATION ON EMPLOYEE AND MATCHING CONTRIBUTIONS.
Employee and matching contributions shall be subject to the following
nondiscrimination standards and such amounts shall be adjusted, as provided
below, to the extent necessary to comply with the limitations set forth in
Section 401(m) of the Code and the regulations thereunder. The term "employee
contributions" shall include any mandatory or voluntary contribution to the plan
that is treated as an after-tax employee contribution and is allocated to a
separate account to which earnings and losses are allocated. The voluntary
contributions set forth in section 3.2 are employee contributions for purposes
of this section. The term "matching contributions" means any employer
contribution made to the plan on account of an elective contribution or employee
contribution, and any forfeitures that are allocated to the participant on the
basis of employee contributions, matching contributions or elective
contributions. The employer matching contributions set forth in section 4.1(a)
are matching contributions for purposes of this section. The employer shall
maintain records demonstrating compliance with this section.
(a) CONTRIBUTION PERCENTAGE LIMITATIONS. In any plan
year, the contribution percentage for the group of
participants who are highly compensated employees may not
exceed the greater of the following:
49
<PAGE>
(i) the actual contribution percentage of the group
of participants who are not highly compensated employees (the
"non-highly compensated group") multiplied by 1.25, or
(ii) the lesser of the contribution percentage for
the non-highly compensated group multiplied by two or the
contribution percentage of the non-highly compensated group
plus two percentage points.
(b) CONTRIBUTION PERCENTAGE. The contribution
percentage of a specified group of participants shall be the
average of the contribution percentages (computed separately,
to the nearest one-hundredth of one percent) for each
participant in the group. The contribution percentage for each
participant shall equal the sum of the employee and matching
contributions allocated to the participant's account for the
plan year (excluding qualified matching contributions which
are used to satisfy the actual deferral percentage limitation
in accordance with section 10.6) and the qualified
non-elective and elective contributions treated as matching
contributions for the plan year, divided by the participants'
compensation (as defined in Section 414(s) of the Code, as
modified by Section 414(s)(2) thereof) taken into account for
such plan year during which the participant was an eligible
employee. For purposes of this section, the following
additional rules shall apply:
(i) A matching contribution will be taken into
account for purposes of this section for a given plan year
only if (A) it is made on account of the participant's
elective or employee contributions for that plan year, (B) it
is allocated to the participant's account during that plan
year and (C) it is paid to the trust by the end of the twelfth
month following the close of that plan year. A matching
contribution that does not meet the foregoing requirements
will not be tested under Section 401(m) of the Code but must
separately satisfy Section 401(a)(4) of the Code for the plan
year of allocation as if it were the only employer allocation
for that plan year. An employee contribution will be taken
into account for purposes of this section only if such
contribution is paid to the trust during the plan year or paid
to an agent of the plan and transmitted to the trust within a
reasonable period after the end of the plan year.
(ii) As provided in applicable Treasury regulations,
for purposes of determining the contribution percentage of the
family group (as defined in section 10.5), the family group
shall be treated as one highly compensated employee and the
contribution percentage for the family group shall be
determined by combining the compensation, employee
contributions and matching contributions (and amounts treated
as matching contributions) of all eligible family members.
(iii) In the event this plan satisfies the
requirement of Sections 401(m), 401(a)(4) or 410(b) of the
Code only if aggregated with one or more other plans,
50
<PAGE>
or if one or more other plans satisfy the requirements of such
sections of the Code only if aggregated with this plan, then
this section shall be applied by determining the contribution
percentage of employees as if all such plans were a single
plan. In accordance with applicable Treasury regulations,
plans of the employers may be aggregated in order to satisfy
Section 401(m) of the Code but only if such plans as
aggregated satisfy the requirement of Section 410(b) of the
Code and provided that each plan has the same plan year.
(iv) Except as provided in applicable Treasury
regulations, the contribution percentage of a highly
compensated employee who is eligible to participate in more
than one plan of the employer in which employee or matching
contributions are made will be determined by treating all the
plans of the employer (or an entity that is required to be
aggregated with the employer under Sections 414(b), (c), (m)
or (o) of the Code) in which the highly compensated employee
is eligible as a single plan. If the highly compensated
employee participates in two or more plans that have different
plan years, all such plans ending with or within the same
calendar year will be treated as a single plan.
(v) At the discretion of the plan administrator, and
in accordance with applicable Treasury regulations, any
qualified nonelective contributions (as defined in Section
1.401(k)-l(g)(13)(ii)) of the Treasury regulations and
elective contributions made for such plan year may be taken
into account in computing the participant's contribution
percentage; provided, that the qualified nonelective
contributions satisfy the requirements of Section 401(a)(4) of
the Code both with and without inclusion of such contributions
used to satisfy the requirements of this section, and provided
further, that the elective contributions satisfy the
requirements of section 401(k)(3) of the code both with and
without the inclusion of contributions used to satisfy the
requirements of this section. Elective contributions and
qualified nonelective contributions which are used to satisfy
this section cannot be taken into account to satisfy the
requirement of section 10.6.
(vi) Matching contributions treated as elective
contributions under section 10.6 shall not be included in the
determination of a participant's contribution percentage.
(c) EXCESS AGGREGATE CONTRIBUTIONS. If in any plan
year the contribution percentage for the highly compensated
group does not satisfy one of the tests in subsection (a)
above, the plan administrator shall reduce the employee
contributions and matching contributions of some or all of the
participants in the highly compensated group until one of the
tests is satisfied. Such reductions shall be made in
accordance with Section 1.401(m)-l(e)(2) of the Treasury
regulations by reducing the contribution percentage for the
highly compensated employee with the highest percentage to the
extent required to enable this plan to satisfy the
contribution percentage test or cause such highly compensated
employees'
51
<PAGE>
contribution percentage to equal the percentage for the highly
compensated employee with the next highest contribution
percentage. This procedure shall be repeated until the plan
satisfies the contribution percentage test set forth herein.
The amounts so reduced shall be referred to as the "excess
aggregate contributions". (If there are employee and matching
contributions, the employee contributions shall be reduced
first to the level of such contributions which are matched. If
the test is not satisfied by reducing the employee
contributions, then the matching contributions and any
unreduced employee contributions shall be reduced in tandem.)
The determination of excess aggregate contributions will be
made after first determining the excess deferral amount and
the excess contribution amount. Excess aggregate contributions
shall be allocated among the family group (as defined in
section 10.5) members in proportion to the employee and
matching contributions of each family member that is combined
in determining the contribution percentage.
(d) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
Except as provided below, if in any plan year the employee or
matching contributions of one or more of the participants in
the highly compensated group must be reduced in accordance
with subsection (c) above, the plan administrator shall
distribute the amount of the excess aggregate contributions,
plus the income allocable thereto, as soon as practicable
following the determination of such excess but in any event by
the last day of the plan year following the end of the plan
year for which such contributions were made. Under Section
4979 of the Code a ten percent tax is imposed on the employer
for any such excess aggregate contribution which are
distributed after more than 2 1/2 months after the last day of
the plan year for which such contributions were made. In the
event the participant is not fully vested in the excess
aggregate contribution, the non-vested portion of such excess
aggregate contribution shall be forfeited by the participant
and shall be allocated among the participants who had matching
contributions credited on their behalf during the plan year
and whose matching contributions were not reduced. Such
allocation shall be in accordance with the ratio each such
participant's matching contributions for the plan year bears
to the total amount of matching contributions made by all the
participants whose matching contributions were not reduced. A
distribution of the excess aggregate contribution may be made
without regard to any notice or consent otherwise required by
the plan. Excess aggregate contributions, including forfeited
matching contributions, are treated as employer contributions
for purposes of Sections 404 and 415 of the Code. The income
or loss allocable to such excess aggregate contributions shall
be determined by multiplying the income or loss allocable to
the participant's employee and matching contributions (and
amounts, if any, treated as such for purposes of the
contribution percentage, but excluding such matching
contributions used in the actual deferral percentage test for
the plan year) by a fraction. The numerator of the fraction is
the excess aggregate contributions for the plan year. The
denominator is equal to (i) the total account balance of the
participant attributed
52
<PAGE>
to employee and matching contributions as of the beginning of
the plan year, plus (ii) the employee and matching
contributions (and amounts, if any, treated as such for
purposes of the contribution percentage, but excluding such
matching contributions used in the actual deferral percentage
test for the plan year).
10.8. MULTIPLE USE LIMITATION. Notwithstanding the limitations
required by sections 10.6 and 10.7, a participant's elective contributions,
employee contributions and matching contributions may be limited under this
section in order to prevent "multiple use" under Sections 401(k) and 401(m) of
the Code, as set forth below. The multiple use limitation shall apply if the sum
of the actual deferral percentage and contribution percentage for the group of
highly compensated employees exceeds the "aggregate limit". The aggregate limit
shall be the greater of (i) and (ii) below:
(i) the sum of (A) 1.25 times the greater of the
actual deferral percentage or the contribution percentage for
non-highly compensated employees and (B) two percentage points
plus the lesser of the actual deferral percentage or the
contribution percentage for non-highly compensated employees
(which amount shall not exceed twice the lesser of such
percentages),
(ii) the sum of (A) 1.25 times the lesser of the
actual deferral percentage or the contribution percentage for
non-highly compensated employees and (B) two percentage points
plus the greater of the actual deferral percentage or the
contribution percentage for non-highly compensated employees
(which amount shall not exceed twice the greater of such
percentages).
The application of the multiple use limitation shall be made
in accordance with Section 1.401(m)-2 of the Treasury regulations. If the
multiple use limitation applies, then the actual deferral percentage or
contribution percentage of the highly compensated employees shall be reduced (in
the manner described in sections 10.6 or 10.7) until such limit shall be
satisfied. Alternatively, the employer may satisfy the multiple use limitation
by making qualified nonelective contributions to plan participants in accordance
with applicable Treasury regulations.
53
<PAGE>
ARTICLE 11
----------
PLAN ADMINISTRATOR
------------------
11.1 PLAN ADMINISTRATOR'S DUTIES. As provided in section 1.2,
a committee appointed by the Bank is responsible for the administration of the
plan. Except as otherwise specifically provided and in addition to the powers,
rights and duties specifically given to the plan administrator elsewhere in the
plan, the plan administrator shall have the following powers, rights and duties:
(a) To construe and interpret the plan, to decide all
questions of plan eligibility, to determine the amount, manner
and time of payment of any benefits under the plan, and to
remedy ambiguities, inconsistencies or omissions.
(b) To adopt such rules of procedure as may be
necessary for the efficient administration of the plan and as
are consistent with its terms and such rules.
(c) To make determinations as to the right of any
person to a benefit, to afford any person dissatisfied with
such determination the right to a hearing thereon, and to
direct payments or distributions from the trust in accordance
with the provisions of the plan.
(d) To furnish the employers with such information as
may be required by them for tax or other purposes in
connection with the plan.
(e) To enroll participants in the plan, to distribute
and receive plan administration forms, and to comply with all
applicable governmental reporting and disclosure requirements.
(f) To employ agents, attorneys, accountants,
actuaries or other persons (who also may be employed by the
employers, the trustee, or any investment manager or managers)
and to allocate or delegate to them such powers, rights and
duties as the plan administrator considers necessary or
advisable to properly carry out the administration of the
plan, provided that any such allocation or delegation and the
acceptance thereof must be in writing.
(g) To report to the directors or the Bank or to such
person or persons as the directors of the Bank designate as to
the administration of the plan, any significant problems which
have developed in connection with the administration
54
<PAGE>
of the plan and any recommendations which the plan
administrator may have as to the amendment of the plan or the
modification of plan administration.
11.2 ACTION BY PLAN ADMINISTRATOR. During a period in which
two or more plan administrative committee members are acting, any action by the
plan administrator will be subject to the following provisions:
(a) The committee may act by meeting (including a
meeting from different locations by telephone conference) or
by document signed without meeting, and documents may be
signed through the use of a single document or concurrent
documents.
(b) A committee member by writing may delegate part
or all of his rights, powers, duties and discretion to any
other committee member, with such other committee member's
consent.
(c) The committee shall act by a majority decision,
which action shall be as effective as if such action had been
taken by all members of the committee; provided that by
majority action one or more committee members or other persons
may be authorized to act with respect to particular matters on
behalf of all committee members.
(d) If there is an equal division among the committee
members with respect to any questions, a disinterested party
may be selected by a majority vote to decide the matter. Any
decision by such disinterested party will be binding.
(e) The certificate of the secretary of the committee
or the majority of the committee members that the committee
has taken or authorized any action shall be conclusive in
favor or any person relying on such certificate.
(f) Except as required by law, no member of the
committee shall be liable or responsible for an act or
omission of other committee members in which the former has
not concurred.
11.3 INFORMATION REQUIRED FOR PLAN ADMINISTRATION. The
employers shall furnish the plan administrator with such data and information as
the plan administrator considers necessary or desirable to perform its duties
with respect to plan administration. The records of an employer as to an
employee's or participant's period or periods of employment, termination
55
<PAGE>
of employment and the reason therefor, leaves of absence, reemployment, and
compensation will be conclusive on all persons unless determined to the plan
administrator's satisfaction to be incorrect. Participants and other persons
entitled to benefits under the plan also shall furnish the plan administrator
with such evidence, data or information as the plan administrator considers
necessary or desirable for the plan administrator to perform his duties with
respect to plan administration.
11.4 DECISION OF PLAN ADMINISTRATOR FINAL. Subject to
applicable law and the provision of section 11.5, any interpretation of the
provisions of the plan and any decision on any matter within the discretion of
the plan administrator made by the plan administrator in good faith shall be
binding on all persons. A misstatement or other mistake or fact shall be
corrected when it becomes known, and the plan administrator shall make such
adjustment on account thereof as the plan administrator considers equitable and
practicable.
11.5 REVIEW OF BENEFIT DETERMINATIONS. If a claim for benefits
made by a participant or his beneficiary is denied, the plan administrator
shall, within 90 days (or 180 days if special circumstances require an extension
of time) after the claim is made, furnish the person making the claim with a
written notice specifying the reasons for the denial. Such notice shall also
refer to the pertinent plan provisions on which the denial is based, describe
any additional material or information necessary for properly completing the
claim and explain why such material or information is necessary, and explain the
plan's claim review procedures. If requested in writing, the plan administrator
shall afford each claimant whose claim has been denied a full and fair review of
the plan administrator's decision and, within 60 days (120 days if special
circumstances require additional time) of the request for reconsideration of the
denied
56
<PAGE>
claim, the plan administrator shall notify the claimant in writing of the plan
administrator's final decision.
11.6 UNIFORM RULES. The plan administrator shall perform his
duties with respect to plan administration on a reasonable and nondiscriminatory
basis and shall apply uniform rules to all participants similarly situated.
11.7 PLAN ADMINISTRATOR'S EXPENSES. All costs, charges and
expenses reasonably incurred by the plan administrator which are not paid by the
trust fund will be paid by the employers in such portions as the Bank shall
direct; provided no compensation will be paid to a committee member as such.
11.8 INTERESTED PLAN ADMINISTRATOR. If a member of the plan
committee is also a participant in the plan, he may not decide or determine any
matter or question concerning his benefits unless such decision or determination
could be made by him under the plan if he were not a committee member.
11.9 RESIGNATION OR REMOVAL OF PLAN ADMINISTRATIVE COMMITTEE
MEMBERS. A member of the committee may be removed by the Bank at any time by ten
days' prior notice to him and the other members of the committee. A member of
the committee may resign at any time by giving ten days' prior written notice to
the Bank and the other members of the committee. The Bank may fill any vacancy
in the membership of the committee; provided, however, that if a vacancy reduces
the membership of the committee to less than three, such vacancy shall be filled
as soon as practicable. The Bank shall give prompt written notice thereof to the
other members of the committee. Until any such vacancy is filled, the remaining
members may exercise all of the powers, rights and duties conferred on the plan
administrator.
57
<PAGE>
11.10 INDEMNIFICATION. To the extent permitted by law, no
person (including a trustee, any present or former plan administrative committee
member, and any present or former director, officer or employee of any employer)
shall be personally liable for any act done or omitted to be done in good faith
in the administration of the plan or the investment of the trust fund. To the
extent permitted by law, each present or former director, officer or employee of
any employer to whom the plan administrator or an employer has delegated any
portion of its responsibilities under the plan and each present or former plan
administrative committee member shall be indemnified and saved harmless by the
employers (to the extent not indemnified or saved harmless under any liability
insurance or other indemnification arrangement with respect to the plan) from
and against any and all claims of liability to which they are subjected by
reason of any act done or omitted to be done in good faith in connection with
the administration of the plan or the investment of the trust fund, including
all expenses reasonably incurred in their defense if the employers fail to
provide such defense.
ARTICLE 12
----------
RELATING TO THE EMPLOYERS
-------------------------
12.1 ACTION BY EMPLOYERS. Any action required or permitted of
an employer under the plan shall be by resolution of its Board of Directors or
by a duly authorized committee of its Board of Directors, or by a person or
persons authorized by resolution of its Board of Directors or such committee.
12.2 ADDITIONAL EMPLOYERS. Any subsidiary or other related
company that is not an employer may adopt the plan and become an employer
thereunder by filing with the trustee and the plan administrator a certified
copy of a resolution of the Board of Directors of the
58
<PAGE>
subsidiary or other related company providing for its adoption of the plan and a
certified copy of a resolution of the directors of the Bank consenting to such
adoption.
12.3 RESTRICTIONS ON REVERSIONS. The employers shall have no
tight, title or interest in the assets of the plan, nor will any part of the
assets of the plan at any time revert or be repaid to an employer, directly or
indirectly, except as follows:
(a) If the Internal Revenue Service initially
determines that the plan, as applied to any employer, does not
meet the requirements of a "qualified plan" under Section
401(a) of the Code, the assets of the plan attributable to
contributions made by that employer under the plan shall be
returned to that employer within one year of the date of
denial of qualification of the plan as applied to that
employer.
(b) If a contribution or a portion of a contribution
is made by an employer as a result of a mistake of fact, such
contribution or portion of a contribution shall not be
considered to have been contributed under the plan by that
employer and, after having been reduced by any losses of the
trust fund allocable thereto, shall be returned to that
employer within one year of the date the amount is contributed
under the plan.
(c) Each contribution made by an employer is
conditioned upon the continued qualification of the plan and
the deductibility of such contribution as an expense for
federal income tax purposes and, therefore, to the extent that
a contribution is made by an employer under the plan for a
period for which the plan is not a qualified plan or the
deduction for a contribution made by the employer is
disallowed, then such contribution or portion of a
contribution, after having been reduced by any losses of the
trust fund allocable thereto, shall be returned to that
employer within one year of the date of determination of the
nonqualified status of the plan or the date of disallowance of
the deduction.
ARTICLE 13
----------
AMENDMENT, TERMINATION OR PLAN MERGER
-------------------------------------
13.1 AMENDMENT. While the employers expect and intend to
continue the plan, the Bank must necessarily reserve and hereby does reserve the
right, subject to section 12.3, to amend the plan from time to time, except as
follows:
59
<PAGE>
(a) The duties and liabilities of the plan
administrator cannot be changed substantially without its
consent; and
(b) No amendment shall reduce the value of a
participant's benefits to less than the amount he would be
entitled to receive if he had resigned from the employ of all
of the Fairfield Companies on the day of the amendment.
The foregoing provisions of this section shall be subject to any applicable
collective bargaining agreements, provided that the Bank may amend the plan at
any time to the extent necessary in order that the plan shall meet the
requirements of a "qualified plan" under Section 401(a) of the Code and any
other requirements of applicable law.
13.2 TERMINATION. The plan will terminate as to all employers
on any date specified by the Bank if advance written notice of the termination
is given to the plan administrator and any other employers. The plan will
terminate as to an individual employer on the first to occur of the following:
(a) The date it is terminated by that employer, if
ten days' advance written notice of the termination is given
to the company, the plan administrator and the other
employers.
(b) The date that employer is judicially declared
bankrupt or insolvent.
(c) The dissolution, merger, consolidation or
reorganization of that employer, or the sale by that employer
of all or substantially all of its assets, except that:
(i) In any such event arrangements may be
made with the consent of the Bank whereby the plan will be
continued by any successor to that employer or any purchaser
of all or substantially all of its assets without a
termination thereof, in which case the successor or purchaser
will be substituted for that employer under the plan; and
(ii) If any employer is merged, dissolved or
in any way reorganized into, or consolidated with, any other
employer, the plan as applied to the former employer will
automatically continue in effect without a termination
thereof.
60
<PAGE>
Notwithstanding the foregoing, if any of the events described above should occur
but some or all of the participants employed by an employer are transferred to
employment with one or more of the other employers coincident with or
immediately after the occurrence of such event, the plan as applied to those
participants will automatically continue in effect without a termination
thereof. The foregoing provisions of this section shall be subject to any
applicable collective bargaining agreements.
13.3 PLAN MERGER. In no event shall there be any merger or
consolidation of the plan with, or transfer of assets or liabilities to, any
other plan unless each participant in the plan would (if the plan then
terminated) received a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit the participant would
have been entitled to receive immediately before the merger, consolidation or
transfer (if the plan had then terminated).
13.4 CONTINUATION BY A SUCCESSOR OR PURCHASER. Notwithstanding
section 13.2, the plan and the trust shall not terminate in the event of
dissolution, merger, consolidation or reorganization of an employer or sale by
an employer of its entire assets or substantially all of its assets if
arrangements are made in writing between the employer and any successor to the
employer or purchaser of all or substantially all of its assets whereby such
successor or purchaser will continue the plan and the trust. If such
arrangements are made, then such successor or purchaser shall be substituted for
the employer under the plan and the trust agreement.
61
<PAGE>
13.5 NOTICE TO PARTICIPANTS OF AMENDMENTS, TERMINATIONS OR
PLAN MERGERS. Participants affected thereby shall be notified by the Bank within
a reasonable time following any amendment, termination, plan merger, or
consolidation.
13.6 VESTING AND DISTRIBUTION ON TERMINATION. The date of any
termination or partial termination as respects all employers (and, at the
discretion of the Bank, on a termination or partial termination of the plan as
respects any employer that does not result in the termination or partial
termination of the plan as respects all employers), will be an "interim
accounting date", and the benefits of each participant affected by such
termination or partial termination will be fully vested and will be payable to
such participant in a lump sum as soon as practicable unless other arrangements
are previously made pursuant to the provisions of Article 7.
ARTICLE 14
----------
GENERAL PROVISIONS
------------------
14.1 EXAMINATION OF PLAN DOCUMENTS. Copies of the plan and any
amendments thereto will be on file at the principal office of each employer
where they may be examined by any participant or any other person entitled to
benefits under the plan.
14.2 NOTICES. A notice mailed to a participant or beneficiary
at his last address filed with the plan administrator in care of the Bank will
be binding on the participant or beneficiary for all purposes of the plan. Any
notice or document relating to the plan required to be given to or filed with
the plan administrator or any employer shall be considered as given or filed if
delivered or mailed by registered or certified mail, postage prepaid, to the
plan administrator, in care of the Bank, at Old McHenry Road, Box 1190 RFD, Long
Grove, Illinois, 60047.
62
<PAGE>
14.3 NONALIENATION OF PLAN BENEFITS. The rights or interests
of any participant or any participant's beneficiaries to any benefits or future
payments hereunder shall not be subject to attachment or garnishment or other
legal process by any creditor of any such participant or beneficiary, nor shall
any such participant or beneficiary have any right to alienate, anticipate,
commute, pledge, encumber or assign any of the benefits or rights which he may
expect to receive, contingently or otherwise under this plan except as may be
required by the tax withholding provisions of the Internal Revenue Code or of a
state's income tax act or pursuant to a qualified domestic relations order, as
defined in Section 414(p) of the Internal Revenue Code.
14.4 NO EMPLOYMENT GUARANTEE. None or the establishment of the
plan, modification thereof, the creation of any fund or account, or the payment
of any benefits shall be construed as giving to any participant or other person
any legal or equitable right against the employers, the plan administrator or
trustee, except as herein provided. Under no circumstances shall the terms of
employment of any participant be modified or in any way affected hereby. The
maintenance of this plan shall not constitute a contract of employment, and
participation in the plan will not give any participant a right to be retained
in the employ of the employers. None of the employers, the plan administrator or
the trustee in any way guarantees any assets of the plan from loss or
depreciation or any payment to any person. The liability of the plan
administrator or any employer as to any payment or distribution of benefits
under the plan is limited to the available assets of the trust fund.
14.5 PARTICIPANT LITIGATION. In any action or proceeding
regarding the plan assets or any property constituting a portion or all thereof
or regarding the administration of the
63
<PAGE>
plan, employees or former employees of the employers or their beneficiaries or
any other persons having or claiming to have an interest in this plan shall not
be necessary parties and shall not be entitled to any notice or process. Any
final judgment which is not appealed or appealable and may be entered in any
such action or proceeding shall be binding and conclusive on the parties hereto
and all persons having or claiming to have any interest in this plan. To the
extent permitted by law, if a legal action is begun against the employers, the
plan administrator or the trustee by or on behalf of any person, and such action
results adversely to such person, or if a legal action arises because of
conflicting claims to a participant's or other person's benefits, the costs to
the employers, the plan administrator or the trustee of defending the action
will be charged to the sums, if any, which were involved in the action or were
payable to the participant or other person concerned. To the extent permitted by
applicable law, acceptance of participation in this plan shall constitute a
release of the employers, the plan administrator and the trustee and their
agents from any and all liability and obligation not involving willful
misconduct or gross neglect.
14.6 SUCCESSORS. The plan and the trust will be binding on all
persons entitled to benefits hereunder and their respective heirs and legal
representatives, and on the plan administrator and the trustee and their
successors.
14.7 ADEQUACY OF EVIDENCE. Evidence which is required of
anyone under the plan shall be executed or presented by the proper individuals
or parties and may be in the form of certificates, affidavits, documents or
other information which the plan administrator, the trustee, the employers or
other persons acting on such evidence considers pertinent and reliable.
64
<PAGE>
14.8 GENDER AND NUMBER. Words denoting the masculine gender
shall include the feminine and neuter genders and the singular shall include the
plural and the plural shall include the singular wherever required by the
context.
14.9 WAIVER OF NOTICE. Any notice required under the plan may
be waived by the person entitled to notice.
14.10 APPLICABLE LAW. The plan and the trust shall be
construed in accordance with the provisions of ERISA and other applicable
federal laws. To the extent not inconsistent with such laws, this plan shall be
construed in accordance with the laws of the state of Illinois.
14.11 SEVERABILITY. If any provision of the plan shall be held
illegal or invalid for any reason, such illegal or invalid provision shall not
affect the remaining provisions of the plan, and the plan shall be construed and
enforced as if such illegal or invalid provisions had never been contained in
the plan.
14.12 FIDUCIARY RESPONSIBILITIES. It is specifically intended
that all provisions of the plan shall be applied so that all fiduciaries with
respect to the plan shall be required to meet the prudence and other
requirements and responsibilities of applicable law to the extent such
requirements of responsibilities apply to them. No provisions of the plan are
intended to relieve a fiduciary from any responsibility, obligation, duty or
liability imposed by applicable law. In general, a fiduciary shall discharge his
duties with respect to the plan solely in the interests of participants and
other persons entitled to benefits under the plan and with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of like character and with like aims.
65
<PAGE>
FIRST AMENDMENT
---------------
TO THE
------
FAIRFIELD SAVINGS BANK
----------------------
PROFIT SHARING AND SAVINGS PLAN
-------------------------------
WHEREAS, Fairfield Savings Bank (the "Bank") maintains the
Fairfield Savings Bank Profit Sharing and Savings Plan (the "plan"); and
WHEREAS, amendment of the plan is now considered desirable to
add the direct rollover language that is now required by law.
NOW, THEREFORE, by virtue and in exercise of the power
reserved to the Bank under the plan, and pursuant to the authority delegated to
the undersigned by the Board of Directors of the Bank, the plan be and hereby is
amended effective as of January 1, 1993 by adding the following section 7.11 to
the plan.
"7.11 DIRECT ROLLOVER OF ELIGIBLE ROLLOVER DISTRIBUTIONS. This
Section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the plan to the
contrary that would otherwise limit a distributee's election
under this Section, a distributee may elect, at the time and
in the manner prescribed by the plan administrator, to have
any portion of an eligible rollover distribution paid directly
to an eligible retirement plan specified by the distributee in
a direct rollover.
An 'eligible rollover distribution' is any
distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of
a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint
life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years
or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion
of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
An 'eligible retirement plan' is an individual
retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the
Code, or a qualified trust described in section 401(a) of the
Code, that accepts the
66
<PAGE>
distributee's eligible rollover distribution. However, in the
case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
A 'distributee' includes an employee or former
employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section
414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
A 'direct rollover' is a payment by the plan to the
eligible retirement plan specified by the distributee."
IN WITNESS WHEREOF, Fairfield Savings Bank has caused this
amendment to be executed on its behalf by its duly authorized officer this ____
day of _____________, 1993.
FAIRFIELD SAVINGS BANK
By
---------------------------
Its
--------------------------
ATTEST:
By
---------------------------
Its
--------------------------
67
<PAGE>
SECOND AMENDMENT OF
FAIRFIELD SAVINGS BANK
PROFIT SHARING AND SAVINGS PLAN
(AS AMENDED AND RESTATED EFFECTIVE AUGUST 1, 1989)
--------------------------------------------------
WHEREAS, Fairfield Savings Bank (the "company") maintains the
Fairfield Savings Bank Profit Sharing and Savings Plan (the "plan"); and
WHEREAS, effective August 1, 1994, amendment to the plan is
now considered desirable to allow participants who have attained age 55 to elect
to direct investment under paragraph 5.6 in increments of 25% of the value of
the participants account; and
WHEREAS, effective January 1, 1994, amendment to the plan is
now considered desirable to reflect recent changes in compensation limitations
now required by law; and
WHEREAS, amendment to the plan is now considered desirable to
clarify that commissions are included in the meaning of earnings under the plan;
NOW, THEREFORE, by virtue and in exercise of the power
reserved to the company by Section 13.1 of the plan and pursuant to the
authority delegated to the undersigned officer of the company by its Board of
Directors, the plan be and hereby is amended in the following particulars:
1. By replacing the first sentence of Section 5.6 with the
following, effective as of August 1, 1994:
"5.6 DIRECTED INVESTMENT ELECTION AT AGE 55. Any participant
who has attained age 55 may elect to have all or a portion,
specified in multiples of 25 percent, of his accounts
converted to cash based upon the fair market value of his
accounts as determined by the trustee and to have such cash
amount invested in one or more of the following directed
investments:"
68
<PAGE>
2. By substituting "$150,000" for "$200,000" where it appears
in Section 3.5(e) and Section 6.5, effective as of January 1, 1994.
3. By adding the phrase ", including commissions," after the
word compensation in the first sentence of Section 3.5.
IN WITNESS WHEREOF, Fairfield Savings Bank has caused this
amendment to be executed on its behalf by its duly authorized officer this ____
day of __________, 1994.
FAIRFIELD SAVINGS BANK
By:
-------------------------
Its:
------------------------
69
<PAGE>
AMENDMENT NUMBER THREE
TO
THE FAIRFIELD SAVINGS BANK PROFIT SHARING AND SAVINGS PLAN
Pursuant to Section 13.1 of The Fairfield Savings Bank Profit Sharing and
Savings Plan ("Plan"), the Plan is amended as follows, effective as of November
18, 1996:
1. ARTICLE 4 - Section 4.1 of the Plan shall be amended in its entirety to
read as follows:
4.1 EMPLOYERS' CONTRIBUTIONS. (a) SALARY DEFERRAL
CONTRIBUTIONS. As soon as practicable after each payroll period, but in
any event within the time prescribed by law or regulation, each
employer shall deliver to the trustee 100 percent of the salary
deferral contributions (as defined in section 3.1, including the
participant's basic salary deferral contribution) elected by the
participant for that payroll period
(b) Each plan year beginning on or after the
effective date and subject to the conditions and limitations of this
Article 4 and Article 10, each employer will make a contribution under
the plan for each active participant employed by it during that plan
year in an amount equal to the sum of the following:
(i) EMPLOYER MATCHING CONTRIBUTIONS. With respect to
each participant who elects to make basic salary deferral contributions
or voluntary contributions,
70
<PAGE>
-71-
or both, to the plan, the employers shall make a matching
contribution, on behalf of each such participant equal to 25
percent of the amount of basic salary deferral contributions
and voluntary contributions which such participant has made up
to a maximum matching contribution of 1.50 percent of a
participant's compensation (i.e., aggregate contributions not
in excess of six percent of the participant's earnings). The
employer matching contribution shall first be applied to the
basic salary deferral contribution and then to the voluntary
contribution to the extent such basic salary deferral
contribution does not exceed six percent of the participant's
earnings for such plan year.
(ii) BASIC PROFIT SHARING CONTRIBUTION. For Plan
Years beginning before August 1, 1996, an amount equal to two
percent of each participant's earnings for that plan year; for
the Plan Year beginning August 1, 1996, an amount equal to 2%
of each participant's earnings for the period beginning August
1, 1996 and ending December 31, 1996; and for the period
beginning January 1, 1997 and ending July 31, 1997 and for
Plan Years beginning after August 1, 1996, none.
(iii) DISCRETIONARY PROFIT SHARING CONTRIBUTION. An
amount as the Bank shall determine, if any.
2. ARTICLE 5 - Section 5.3 of the Plan shall be amended in its entirety to
read as follows:
5.3 INVESTMENT FUNDS. (a) From time to time the Bank
may cause the trustee or an investment manager to establish one or more
investment funds for the investment and reinvestment of plan assets.
The continued availability of any investment fund is necessarily
conditioned upon the terms and conditions of investment management
agreements and other investment arrangements. While the Bank may
arrange with the trustee and investment managers for the establishment
of investment funds, the continued availability of these funds cannot
be assured, nor is it possible to assure that the arrangements or the
investment funds managed by a particular investment manager or by the
trustee will continue to be available on the same or similar terms. The
Bank may, in its discretion, direct the establishment of additional
investment funds or may terminate any investment fund as it deems
appropriate and in the best interest of plan participants. Participant
loans shall constitute aggregated investments on behalf of the
participant to whom such loans are made and shall not be reflected in
any investment fund. Except as provided in this section and sections
5.4, 5.5 and 5.6 participants' accounts shall be invested in any one or
more investment funds as determined by the trustee.
(b) SHARE INVESTMENT ACCOUNT. Effective as of
November 18, the Bank shall make available for investment of plan
assets a Employer Stock Fund, which shall be an investment fund
comprised primarily of Shares and fractional Shares. "Shares" for all
purposes of the Plan means shares and any fraction thereof of common
stock of Big Foot Financial Corp.
3. ARTICLE 5 - Article 5 shall be amended by adding new Sections 5.13,
5.14, 5.15, 5.16 and 5.17 to read as follows:
71
<PAGE>
-72-
5.13 INVESTMENT OF MATCHING CONTRIBUTIONS
Notwithstanding anything in this Plan to the contrary,
commencing , 1996, the Bank may, in its discretion, make all or part of
the Employer Matching Contributions in the form of Shares provided such
determination is made by resolution of its Board of Directors in
advance of the period to which the contribution relates. In the event
that all or a portion of the Employer Matching Contribution is made in
the form of Shares, such Shares shall be invested in the Employer Stock
Fund. Each employer may, in its sole and absolute discretion by
resolution of its board of directors, direct that the portion of the
Employer Matching Contribution made in the form of cash be one hundred
percent (100%) invested in the Employer Stock Fund applied to purchase
Shares.
5.14 VOTING RIGHTS
Each person with an interest in the Employer Stock Fund on the
applicable record date shall have the right to participate in the
decision as to how to exercise the voting rights appurtenant to the
Shares held in the Employer Stock Fund by completing and filing a
written direction with an independent third party ("Tabulator") on a
timely basis. The Tabulator shall direct the trustee to cast
affirmative votes equal to the product of (a) the total number of
Shares held in the Employer Stock Fund multiplied by (b) a fraction,
the numerator of which is the aggregate value of the interests in the
Employer Stock Fund of all persons directing that an affirmative vote
be cast, and the denominator of which is the aggregate value of the
interests in the Employer Stock Fund of all persons directing that an
affirmative vote or a negative vote be cast. Negative votes shall be
cast with respect to the remaining Shares held in the Employer Stock
Fund.
5.15 TENDER RIGHTS
Each person with an interest in the Employer Stock Fund on the
applicable record date shall have the right to participate in the
decision as to how to respond to a tender offer for Shares by
completing and filing a written direction with the Tabulator on a
timely basis. The Tabulator shall direct the trustee to tender a number
of Shares equal to the product of (a) the total number of Shares held
in the Employer Stock Fund multiplied by (b) fraction, the numerator of
which is the aggregate value of the interests in the Employer Stock
Fund of all persons directing that such Shares be delivered in response
to such tender offer, and the denominator of which is the aggregate
value of the interests in the Employer Stock Fund of all persons
directing that such Shares be delivered or that the delivery of such
Shares be withheld. Delivery of the remaining Shares held in the
Employer Stock Fund shall be withheld.
5.16 DISSENTERS' RIGHTS
Each person with an interest in the Employer Stock Fund on the
applicable record date shall have the right to participate in the
decision as to whether to exercise the dissenters' rights appurtenant
to Shares held in the Employer Stock Fund by completing and filing a
written direction with the Tabulator on a timely basis. The Tabulator
shall direct the trustee to exercise dissenters' rights with respect to
a number of Shares equal
72
<PAGE>
-73-
to the product of (a) the total number of Shares held in the Employer
Stock Fund multiplied by (b) a fraction, the numerator of which is the
aggregate value of the interests in the Employer Stock Fund of all
persons directing that the dissenters' rights appurtenant to which
Shares be exercised, and the denominator of which is the aggregate
value of all of the interests in the Employer Stock Fund. Dissenters'
rights shall not be exercised with respect to the remaining Shares held
in the Employer Stock Fund.
5.17 DIVIDEND REINVESTMENT
Dividends paid with respect to Shares held in the Employer
Stock Fund shall be reinvested in the Employer Stock Fund.
4. ARTICLE 7 - Article 7 shall be amended by adding a new Section 7.11 to
read in its entirety as follows:
7.11 MANNER OF PAYMENT OF WITHDRAWALS AND DISTRIBUTIONS FROM THE
EMPLOYER STOCK FUND
Withdrawals from the Employer Stock Fund shall be made to
Participants in cash.
Distributions from the Employer Stock Fund shall be made to
participants and beneficiaries in cash, unless the participant or
beneficiary elects that such distributions may be made wholly or
partially in Shares. If the participant or beneficiary elects that such
distributions may be made wholly or partially in Shares, subject to
such terms and conditions as may be established from time to time, the
number of Shares to be distributed shall be equal to the maximum number
of whole Shares that may be acquired with the amount to be distributed
in Shares, based upon the fair market value of a Share determined as of
the date of payment. An amount of money equal to any remaining amount
of the payment that is less than the fair market value of a whole Share
shall be distributed in cash. For purposes of this Section 7.11, the
fair market value of a Share shall be determined on a uniform and
nondiscriminatory basis in such manner as the Committee may, in its
discretion, prescribe.
5. ARTICLE 10 - Section 10.2 shall be amended by adding the following new
language at the end thereof:
A participant's "annual addition" also includes any employer
contributions for such limitation year to a qualified employee stock
ownership plan maintained by the employer and allocated to the
participant's individual account under such plan, plus such
participant's allocable portion of any employer contribution for such
limitation year to a qualified employee stock ownership plan maintained
by the employer and applied to the payment of principal and interest on
a securities acquisition loan obtained by such plan. Notwithstanding
the foregoing, if, for any limitation year, the aggregate amount of
employer contributions to such an employee stock ownership plan
allocable to individuals who are highly compensated employees for such
limitation year does not exceed one-third of the total of all employer
contributions to such plan for such limitation year, then that
73
<PAGE>
-74-
portion, if any, of any employer contributions that is applied to the
payment of interest on a securities acquisition loan shall not be
included as an annual addition. In determining whether more than
one-third of the employer contributions for a limitation year would be
allocable to the highly compensated employees, any amount allocable to
a family member (within the meaning of Section 414(q)(6)(B) of the
Code) of a highly compensated employee who is either a five percent
owner or one of the ten highly compensated employees with the highest
total compensation, shall be treated as an allocation to such highly
compensated employee. In no event shall the value of any securities
purchased under a qualified employee stock ownership plan with a
securities acquisition loan, any dividends or other earnings thereon,
any proceeds from the sale thereof or any portion of the value of the
foregoing be included as an annual addition.
74
TRUST AGREEMENT
BETWEEN
FAIRFIELD SAVINGS AND LOAN ASSOCIATION
AND
GEORGE M. BRIODY, JR., F. GREGORY OPELKA AND EUGENE W. PILAWSKI
THIS TRUST AGREEMENT made this 29th day of December, 1977, by
and between Fairfield Savings and Loan Association, an Illinois corporation
(hereinafter called the "Association"), and George M. Briody, Jr., F. Gregory
Opelka and Eugene W. Pilawski, (hereinafter collectively called the "Trustee").
W I T N E S S E T H:
WHEREAS, by an agreement dated July 30, 1971, the Association
and the Trustee entered into an agreement establishing the Fairfield Savings and
Loan Association Thrift Incentive and Profit Sharing Plan and Trust, which
agreement as amended is now in full force and effect; and
WHEREAS, by resolution of its Board of Directors adopted
December 13, 1977, the Association adopted as a separate document the restated
Fairfield Savings and Loan Association Thrift Incentive and Profit Sharing Plan;
and
<PAGE>
WHEREAS, The Association desires to restate as a separate
document the Trust provisions implementing the Fairfield Savings and Loan
Association Thrift Incentive and Profit Sharing Plan; and
WHEREAS, by resolution of the Board of Directors of the
Association adopted December 13, 1977, the Board of Directors approved the Trust
Agreement as hereinafter set forth;
NOW, THEREFORE, the Association and the Trustee agree as
follows:
ARTICLE 1
ESTABLISHMENT OF TRUST
----------------------
SECTION 1.1 This Trust shall be known as the "Fairfield
Savings and Loan Association Thrift Incentive and Profit Sharing Trust"
(hereinafter referred to as the "Trust") and shall implement the Fairfield
Savings and Loan Association Thrift Incentive and Profit Sharing Plan (the
"Plan"), a plan which is qualified under Section 401(a) of the Internal Revenue
Code of 1954 and which has been established by the Association.
The terms used in this Trust Agreement which are defined in
the Plan shall have the same meanings as in the Plan, unless the context clearly
indicates otherwise. A copy of the Plan and of each amendment thereof shall be
furnished to the Trustee for convenience of reference.
SECTION 1.2 The Association may adopt or establish one or more
other trusts for the purpose of implementing the Plan and, upon so doing, shall
notify the Trustee in writing of the establishment of such other trusts and
shall certify to the Trustee in writing that such other
-2-
<PAGE>
trusts are qualified under Section 401(a) of the Internal Revenue Code of 1954,
as heretofore or hereafter amended, whereupon the Trustee:
(a) Shall transfer and pay over to the trustee of any such
other trust such cash and other property as the Association shall from
time to time direct in writing;
(b) Shall receive and hold as a part of the Trust Fund such
cash and other property as may from time to time be delivered to it by
the trustee of any such other trust; and
(c) May, in determining its proposed investments and sales for
the purpose of achieving adequate diversification, take into
consideration the nature and value of the assets held by such other
trust or trusts to the extent reported to it by the trustee or trustees
thereof or by the Association.
For the purpose of this paragraph, an insurance or annuity contract issued for
the purposes of funding benefits under the Plan shall be considered to be a
trust established for the purpose of implementing the Plan.
ARTICLE 2
---------
TRUSTEE
-------
SECTION 2.1 The trust assets shall be managed by the Trustee,
and such successor corporate or individual trustees as shall be appointed from
time to time by the Association. If more than one individual is appointed to
serve as trustee, the consent of a majority of the trustees then acting shall be
required. If two individuals are appointed, the unanimous action of both
trustees shall be required. An individual trustee who is a participant in the
Plan shall not be deemed a trustee with respect to any action required with
respect to his benefits as a participant in the Plan.
-3-
<PAGE>
SECTION 2.2 The Trustee agrees to accept the trust pursuant to
the terms and conditions of this agreement as the same may be from time to time
amended. The Trustee shall receive the contributions of the Association,
Employees and Participants required or permitted under the Plan. All such
contributions, together with the income therefrom, shall constitute the trust
assets which shall be held, managed, and administered in trust pursuant to the
terms of this agreement.
The Trustee shall have no right or duty to inquire into the
correctness of the amount of any contribution or contributions and shall be
accountable only for funds actually received by it.
SECTION 2.3 Each of the individual trustees, whether or not
then in office, shall be held harmless and indemnified by the Association
against all claims and liabilities and all expenses reasonably incurred or
imposed upon him in connection with or resulting from any action, suit or
proceeding, or settlement or compromise thereof approved by the Association, to
which he may be made a party by reason of any action or alleged action, either
of omission or commission, performed by him while acting as Trustee, except in
relation to matters as to which recovery shall be had against him by reason of a
final adjudication in such action, suit or proceeding finding him guilty of
willful misconduct or lack of good faith.
ARTICLE 3
---------
RETIREMENT COMMITTEE
--------------------
SECTION 3.1 The Plan shall be administered by a Retirement
Committee consisting of such persons who are appointed from time to time by the
Board of Directors of the
-4-
<PAGE>
Association to serve on the Retirement Committee (hereinafter referred to as the
"Committee"). An officer of the Association shall certify to the Trustee the
names of the original members of the Committee and, thereafter, any change in
its membership.
SECTION 3.2 The action of a majority of the members of the
Committee at the time acting hereunder, and any instrument executed by a
majority of such members of the Committee, shall be considered the action or
instrument of the Committee. Action may be taken by the Committee at a meeting
or in writing without a meeting.
The decision of the Committee in matters within its
jurisdiction shall be final, binding and conclusive upon the Association and the
Trustee and upon each employee, participant, former participant, beneficiary,
and every other person or party interested or concerned.
The Committee may authorize any one or more of its members to
execute any document or documents on behalf of the Committee, in which event the
Committee shall notify the Trustee in writing of such action and of the name or
names of its member or members so designated. The Trustee thereafter may accept
and rely upon any document executed by such member or members as representing
action by the Committee, until the Committee shall file with the Trustee a
written revocation of such designation.
SECTION 3.3 If one or more individuals have been appointed to
serve as Trustee hereunder, the individual trustee or trustees shall perform the
functions assigned to the Committee hereunder and shall administer the Plan in
accordance with its terms.
-5-
<PAGE>
ARTICLE 4
---------
CONTRIBUTIONS TO THE TRUST FUND
-------------------------------
SECTION 4.1 The Trustee shall receive from time to time such
amounts in cash or other property acceptable to the Trustee as the Association
shall certify to be:
(a) contributions of the Association or participants pursuant
to the Plan;
(b) qualified rollover contributions made pursuant to the
Plan;
(c) amounts transferred from another qualified plan pursuant
to the employment by the Association of one or more persons whose
interest in such plan became transferable by reason of their employment
by the Association; or
(d) any other amounts properly receivable by the Trustee under
the provisions of the Plan and applicable law.
SECTION 4.2 The Trustee shall be under no obligation to
collect any such contributions or to see to their validity, and all
responsibility for the determination of the amount, timing and types of payments
made to the Trustee, and for the establishment of a funding policy consistent
with the objectives of the Plan, shall be upon the Association or its designee.
All such contributions so received and all proceeds, investments, reinvestments
and income thereof in the Trustee's possession, including assets held in an
investment manager account, (hereinafter called the "Trust Fund") may be
commingled and shall be held, invested and, with all disbursements therefrom,
accounted for by the Trustee as provided in Article 8.
ARTICLE 5
---------
PAYMENTS FROM THE TRUST FUND
----------------------------
SECTION 5.1 Payments shall be made from the Trust Fund by the
Trustee to or for the account of such persons, in such manner, at such times,
and in such amounts as the
-6-
<PAGE>
Committee may from time to time direct. All such directions by the Committee to
the Trustee shall be in writing, and the Trustee shall be fully protected in
making payments from the Trust Fund in accordance with such written directions
and shall have no responsibility to see to the application of such payments or
to ascertain whether such directions comply with the terms of the Plan. The
Trustee shall not be liable for its acts with respect to payments from the Trust
Fund when following such written directions, or for its failure to act in the
absence of such written directions, nor shall it be liable or responsible for
any payment made by it in good faith and in the exercise of reasonable care
without knowledge of the changed conditions or status of the payee.
SECTION 5.2 If any check for a payment directed to be made
from the Trust Fund which has been mailed by regular United States mail to the
last address of the payee furnished by the Association is returned to the
Trustee unclaimed, the Trustee shall notify the Association and shall not make
any further payments to such payee until it receives further instructions from
the Association. The Association, after taking such action as it shall deem
appropriate with regard to the payee of said unclaimed payment, may direct the
Trustee to cancel and disregard its direction to make said payment.
SECTION 5.3 The Trustee may withhold all or any part of any
payment required to be made hereunder as it may deem necessary and proper to
protect the Trustee or the Trust Fund against any liability or claim on account
of any estate, inheritance, income or other tax, and the Trustee may discharge
any such liability with any part or all of any such payment so withheld,
provided that at least ten (10) days prior to discharging any such liability
with any amount so withheld, the Trustee shall notify the Association in writing
of its intent to do so.
-7-
<PAGE>
ARTICLE 6
---------
INVESTMENT OF THE TRUST FUND
----------------------------
SECTION 6.1 The Association may at any time and from time to
time appoint one or more investment managers to manage and control all or any
part of the assets of the Trust Fund and the Association shall notify the
Trustee in writing of any such appointment or appointments and shall certify to
the Trustee that it has authority to make such appointment or appointments.
SECTION 6.2 The Association may, in its sole discretion and
from time to time, direct the Trustee to, and the Trustee shall, if so directed
in writing by the Association, segregate any portion of the Trust Fund held by
it into one or more separate accounts to be known as investment manager
accounts. The Association shall appoint in writing an investment manager for
each such account and shall contemporaneously give written notice of said
appointment to the Trustee in accordance with the terms of Section 6.1. Such
investment manager shall have full discretion and authority to invest, reinvest
or dispose of the assets of the Trust Fund in the investment manager account.
The investment manager may directly place orders for the purchase or sale of
securities and may effect transactions directly for its investment manager
account, provided that the Trustee shall nevertheless retain custody of the
assets comprising said account. The Trustee shall follow the directions of the
investment manager with respect to the trust property allocated to the account
of such investment manager in exercising the powers granted by the provisions of
Section 7.1 hereof and shall be under no duty to question or make inquiries as
to any action or direction of any investment manager taken as provided herein,
or as to any failure of an investment manager to take such action or to give
-8-
<PAGE>
such directions, nor shall it have any right or duty to review the securities
held in any investment manager account or to make any suggestions to the
investment manager or the Association with respect to the investment,
reinvestment, or other disposition of trust property held in any investment
manager account. If a Bank is appointed investment manager of an investment
manager account, such investment manager is specifically authorized to deposit
any part or all of the money and property of such account in any common trust
fund, group trust, pooled fund or other commingled investment fund maintained by
such Bank for trust investment purposes, to be held and administered by said
investment manager pursuant to all the terms and conditions of the instrument
governing such common trust fund, group trust, pooled fund, or commingled
investment fund which are hereby incorporated by reference and made a part
hereof.
SECTION 6.3 The Association, by written notice to the Trustee,
may at any time terminate the authority of an investment manager to direct the
investment of the account of such investment manager, in which event the
Association shall either appoint a successor investment manager in accordance
with the provisions of Section 6.1 or direct that the portion of the Trust Fund
then held in such investment manager account shall no longer be so segregated,
whereupon the same shall be returned to the unsegregated portion of the Trust
Fund. Until receipt of such written notice, the Trustee shall be fully protected
in relying upon the latest prior written notice of appointment of an investment
manager.
-9-
<PAGE>
ARTICLE 7
---------
POWERS AND DUTIES OF THE TRUSTEE
--------------------------------
SECTION 7.1 In addition to the powers and discretions
conferred upon the Trustee by any other provisions of this agreement, but
subject to the requirements of ERISA and to the provisions of Article 6 hereof,
the Trustee, whether acting in its sole discretion or pursuant to the
instructions of an investment manager, shall have all the usual powers conferred
by law on trustees; and in addition thereto, the Trustee shall have the
following express powers with respect to the Trust Fund:
(a) To make investments and reinvestments in whatever form of
investment the Trustee may see fit (except that the Trustee shall have no
discretion with respect to the making of any investment as to which it is
subject to the direction of an investment manager) and from time to time to hold
funds uninvested, and in making and holding investments the Trustee will not be
restricted to those investments which are authorized by the law of the State of
Illinois for the investment of trust funds.
(b) With respect to the assets of the Trust Fund which are
managed by the Trustee acting in its sole and absolute discretion the Trustee is
further authorized and empowered to invest and reinvest all or any part of such
assets through the medium of any common, collective or commingled trust fund
maintained by any bank or banks as the same may heretofore have been or may
hereafter be established or amended, including any such common, collective or
commingled trust fund which is qualified under the provisions of Section 401(a)
of the Internal Revenue Code of 1954 as heretofore or hereafter amended, and
during the period of time that an investment through any such medium shall
exist, to the extent of the participation
-10-
<PAGE>
of the Trust Fund, the Declaration of Trust of each such common, collective or
commingled trust fund shall constitute a part of this Agreement. With respect to
the investment manager account portion of the Trust Fund, an investment manager
of such account may in writing authorize the Trustee to invest, in the Trustee's
sole discretion, any specified amount of cash of such account in short-term
interest bearing obligations, either directly or by investment collectively with
other assets, including but not limited to, investment in any common, collective
or commingled trust fund maintained by any bank or banks for investment in
short-term interest bearing obligations, and during the period of time that an
investment through the medium of such a common, collective or commingled trust
fund shall exist, to the extent of the participation of the Trust Fund, the
Declaration of Trust of such common, collective or commingled trust fund shall
constitute a part of this agreement.
(c) To retain, to exchange for any other property, to sell in
any manner and at any time, to divide, subdivide, partition, mortgage, improve,
alter, remodel, repair and develop in any manner any property, real or personal,
to lease such property for any period of time, and to grant options to sell or
lease any such property, without regard to restrictions and without the approval
of any court.
(d) To vote stock held by the Trust Fund personally or by
proxy and to delegate the Trustee's powers and discretions with respect to such
stock to such proxy.
(e) To exercise subscription, conversion and other rights and
options and to make payments from the Trust Fund in connection therewith.
(f) To take any action and to abstain from taking any action,
with respect to any reorganization, consolidation, merger, dissolution,
recapitalization, refinancing and any other
-11-
<PAGE>
plan or change affecting any property constituting a part of the Trust Fund, and
in connection therewith to delegate its discretionary powers and to pay
assessments, subscriptions and other charges from the Trust Fund.
(g) In any manner, and to any extent, to waive, modify,
reduce, compromise, release, settle and extend the time of payment of any claim
of whatsoever nature in favor of or against the Trustee or all or any part of
the Trust Fund.
(h) To make executory contracts and to grant options for any
purposes, and to make such contracts and options binding on the trust and
enforceable against any property of the Trust Fund.
(i) Upon any terms to borrow money from any person (other than
the Trustee in its individual capacity or any other party in interest, except as
may be authorized by ERISA), and to pledge assets of the Trust Fund as security
for repayment of any such loan.
(j) To employ agents, experts and counsel and to delegate
discretionary powers to, and reasonably rely upon information and advice
furnished by, such agents, experts and counsel.
(k) From time to time to register any property in the name of
its nominee or in its own name or to hold it unregistered or in such form that
title shall pass by delivery.
(l) At the direction of the Association to purchase life
insurance and annuity contracts; provided, however, that the purchase and
delivery of any such insurance or annuity contract shall be in final settlement
of all the rights of a participant in the Plan with respect to the Trust Fund.
-12-
<PAGE>
(m) To hold all or any part of the Trust Fund in cash and
without obligation to pay or earn interest thereon.
(n) To hold assets in time or demand deposits (including
deposits in accounts maintained by the Trustee in its individual capacity).
SECTION 7.2 The Trustee, in the exercise and performance of
its powers and duties hereunder, shall act at all times with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of like character and with like aims and in accordance
with such other specific requirements of ERISA as are applicable to the Trustee.
SECTION 7.3 As of each Valuation Date the Trustee shall
determine the fair market value of the Trust Fund and shall notify the
Association in writing of the fair market value as so determined within thirty
(30) days thereof. The fair market value of such fund shall be the fair market
value of all securities and other assets then held in such fund, including all
income received since the last valuation. In determining fair market value, the
Trustee may rely upon any information that it believes to be reliable including
reports of sales and of bid and asked prices of issues listed on an exchange as
disclosed in newspapers of general circulation or in generally recognized
financial services, quotations with respect to unlisted issues as supplied by
any reputable broker or investment bank or from any other source that the
Trustee believes to be reliable, or the Trustee may make any such determination
based upon its own analysis of such records or reports of any company issuing
such stock or other securities as are made available to it. The Trustee shall be
entitled to rely conclusively upon information which it believes to be
-13-
<PAGE>
reliable, and the Trustee's determination with respect to fair market value
shall be final and conclusive upon all persons.
SECTION 7.4 The Trustee shall have no duties whatsoever except
as are specifically set forth as such in this Agreement, and no implied covenant
or obligation will be read into this Agreement against the Trustee.
ARTICLE 8
---------
ACCOUNTS OF THE TRUSTEE
-----------------------
SECTION 8.1 The Trustee will keep accurate and detailed
accounts of all investments, receipts, disbursements, distributions and other
transactions, including transactions which are directed by an investment
manager. Such accounts will be open to inspection and audit by the Association
or any authorized representative thereof at all reasonable times during business
days.
SECTION 8.2 Within one hundred twenty (120) days following the
close of each fiscal year of the trust, or after the close of each such other
accounting period as may be agreed upon by the Trustee and the Association, and
within thirty (30) days after the resignation or removal of the Trustee, unless
waived in writing by the Association, the Trustee will deliver to the
Association an account listing the investments of the Trust Fund and any
uninvested cash balance thereof and setting forth all receipts, disbursements,
distributions and other transactions respecting the Trust Fund not included in
any such previous account. Any such account, when approved by the Association
will be binding on the Association and the Trustee will thereby be released and
discharged from any liability or accountability to the Association with respect
to
-14-
<PAGE>
all matters set forth therein. Omission by the Association to object in writing
to any specific items in any such account within thirty (30) days after its
delivery to the Association will constitute approval of such account by the
Association. No other accounts or reports shall be required to be given to the
Association except as stated herein or except as otherwise agreed to in writing
by the Trustee. Subject to the provisions of ERISA, the Trustee shall not be
required to file, and no participant or his beneficiary shall have any right to
compel, any accounting, judicial or otherwise, by the Trustee.
ARTICLE 9
---------
ADMINISTRATIVE PROVISIONS
-------------------------
SECTION 9.1 Any action required or permitted to be taken by
the Association hereunder shall be taken by the Retirement Committee duly
appointed by the Association's Board of Directors pursuant to the terms of the
Plan (the "Committee") or by any officer of the Association duly authorized by
the Board of Directors. The Secretary of the Association shall certify to the
Trustee the names of the members of the Committee and thereafter any change in
the membership of the Committee. The Committee shall be the "Named Fiduciary" as
required by ERISA.
SECTION 9.2 The Trustee may rely upon the authenticity, truth
and accuracy of, and will be fully protected in acting upon:
(a) Any notice, direction, certification, approval or other
writing of the Association, if evidenced by an instrument signed in the name of
the Association by any duly authorized officer thereof.
-15-
<PAGE>
(b) Any notice, direction, certification, approval or other
writing of the Committee if evidenced by an instrument signed in the name of
said Committee by any one or more of its members.
(c) Any copy of a resolution of the Board of Directors of the
Association, if certified by the Secretary or an Assistant Secretary of the
Association under its corporate seal.
(d) Any notice, direction, certification, other writing or
oral instruction of any investment manager appointed by the Association received
by the Trustee and believed by it to be genuine and to be sent by such
investment manager.
SECTION 9.3 Except when paid by the Association, the Trustee
is authorized to pay out of the Trust Fund: (a) all broker fees and transfer tax
expenses and other expenses incurred in connection with the sale or purchase of
investments; (b) all real and personal property taxes, income taxes and other
taxes of any kind at any time levied or assessed under any present or future law
upon, or with respect to, the Trust Fund or any property included in the Trust
Fund; and (c) any investment manager's compensation and all other expenses of
administering the trust unless promptly paid by the Association to such
investment manager. The Trustee shall not be responsible for determining the
reasonableness of any compensation, direct or indirect, agreed to be paid to any
investment manager by the Association.
SECTION 9.4 The Trustee shall receive no compensation, but
shall be reimbursed for all reasonable expenses incurred by them in the
administration of the Trust Fund.
SECTION 9.5 No person dealing with the Trustee shall be
obliged to see to the application of any property paid or delivered to the
Trustee or to inquire into the expediency or
-16-
<PAGE>
propriety of any transaction or the Trustee's authority to consummate the same,
except as may specifically be required of such person under ERISA.
SECTION 9.6 Ownership of the assets comprising the Trust Fund
shall be in the Trustee. The rights or interest of any participant or his
beneficiaries to any benefits or future payments hereunder or under the
provisions of the Plan shall not be subject to attachment or garnishment or
other legal process by any creditor of any such participant or beneficiary, nor
shall any such participant or beneficiary have any right to alienate,
anticipate, commute, pledge, encumber, or assign any of the benefits or payments
which he may expect to receive, contingently or otherwise, under the Plan or
this Agreement.
SECTION 9.7 This Agreement and the Plan are designated by the
Association as constituting parts of one or more Plans which have been
established for the exclusive benefit of the participants or their
beneficiaries, and the Trust under this Agreement is intended to be a qualified
trust under Section 401 of the Internal Revenue Code of 1954, as heretofore or
hereafter amended, and to satisfy the provisions of ERISA. Subject to such
designation and qualification, this Agreement and the Trust created hereby shall
be regulated and construed by and in accordance with ERISA and, to the extent
not inconsistent therewith, the laws of the State of Illinois, except that the
right of the Association to enter into this Agreement and to exercise any of the
powers granted to or exercised by it hereunder shall be determined under the law
of the state in which the Association is incorporated.
SECTION 9.8 Communications to the Trustee shall be deemed
sufficiently made if sent by mail addressed to the Trustee at Milwaukee, North
and Damen, Chicago, Illinois 60647. Communications to the Association will be
deemed sufficiently made if sent by mail addressed
-17-
<PAGE>
to the Committee, in care of the Association, at Milwaukee, North and Damen,
Chicago, Illinois 60647.
SECTION 9.9 In case of any court proceedings involving the
Trustee or the Trust Fund, only the Trustee and the Association shall be
necessary parties thereunder and no one participating in the Plan shall be
entitled to any notice or process.
SECTION 9.10 Except as otherwise provided herein below, the
Association assumes no obligation or responsibility for any act or failure to
act of the Trustee. The Trustee shall have no obligation or responsibility as
respects any action required by this Agreement to be taken by the Association or
by any employee or former employee of the Association. Neither the Trustee nor
the Association shall be obliged to inquire into or be responsible for any
action or failure to act of the other.
The Trustee shall not be responsible for the administration or
operation of the Plan, except with regard to the investment and reinvestment of
the assets held in the Trust Fund, which are subject to its management and
control, and all such responsibility, other than with regard to the investment
and reinvestment of such assets, shall be upon the Association or its properly
delegated agent. The Trustee shall not be liable for the acts or omissions of
any investment manager appointed hereunder and shall be under no duty or
obligation to invest or otherwise manage any assets of the Trust Fund which are
subject to the management of such investment manager. The Association agrees to
indemnify and hold the Trustee harmless and defend the Trustee against any
claims caused by its action pursuant to instructions from the Association, the
Committee or an investment manager appointed hereunder, or, if the Trustee
-18-
<PAGE>
may not act except upon the receipt of such instructions, by its failure to act
in the absence of such instructions.
SECTION 9.11 It shall be impossible, at any time prior to
satisfaction of all liabilities with respect to participants and their
beneficiaries, for any part of the principal or income of the Trust Fund to be
used for, or diverted to, purposes other than for the exclusive benefit of
participants and their beneficiaries, provided, however, if excess unallocated
company contributions exist upon Plan termination, this section shall not
prohibit the return of such excess contributions to the Association. Payments
made by the Trustee in accordance with Section 9.3 of this Agreement, will not
be deemed to be used for, or diverted to, any such other purpose. Payments made
by the Trustee in accordance with Article 5 of this Agreement will, in every
instance, be deemed to comply with the provisions of this section.
ARTICLE 10
----------
RESIGNATION OR REMOVAL OF TRUSTEE
---------------------------------
SECTION 10.1 Any trustee may be removed by the Association
upon (30) days' notice in writing delivered to the trustee. A trustee may resign
as of the end of any month upon thirty (30) days' notice in writing to the
Association.
SECTION 10.2 In the event of the resignation or removal of the
Trustee, a successor trustee may be appointed by the Association by instrument
in writing delivered to the successor trustee and by the acceptance in writing
of such appointment by such successor trustee. Notice of any such appointment
shall be given by the Association to the retiring trustee, and the successor
trustee shall deliver to the Association and to the retiring trustee a copy of
its written
-19-
<PAGE>
acceptance of such appointment. If no appointment of a successor trustee is made
by the Association within a reasonable time after the resignation or removal of
the retiring trustee, any court of competent jurisdiction may appoint a
successor trustee after giving such notice, if any, to the Association, and the
retiring trustee as such court may deem proper and suitable.
SECTION 10.3 In the event of the resignation or removal of a
trustee, the retiring trustee, or its successors and assigns, shall file with
the Association a final account to which the provisions of Section 8.2 of this
Agreement regarding accounts shall apply.
SECTION 10.4 Any successor trustee shall succeed to all the
right, title and estate of the retiring trustee, and the retiring trustee shall
deliver the property comprising the Trust Fund to the successor trustee together
with all such instruments of transfer, conveyance, assignment and further
assurance as the successor trustee may reasonably require.
ARTICLE 11
----------
AMENDMENT AND TERMINATION OF THE TRUST
--------------------------------------
SECTION 11.1 Subject to the provisions of ERISA and of Section
9.11 hereof, this Trust Agreement may be amended at any time upon the approval
of the Board of Directors of the Association, provided that no amendment shall
increase the duties or obligations of the Trustee without the Trustee's consent.
Any amendment shall be in writing and shall become effective, subject to the
Trustee's consent if required, when delivered to the Trustee. The Secretary or
any Assistant Secretary of the Association, pursuant to authorization of the
Board of Directors of the Association, will promptly certify to the Trustee all
amendments to the Plan.
-20-
<PAGE>
SECTION 11.2 This Trust may be terminated at any time by the
Association by written instrument delivered to the Trustee. Upon such a
termination, the Trust Fund shall be paid out by the Trustee as directed by the
Association in writing and in accordance with the terms of ERISA. Any such
termination of the trust and any such direction by the Association shall be
subject to the provisions of Section 9.11 of this Agreement.
ARTICLE 12
----------
MISCELLANEOUS
-------------
SECTION 12.1 Nothing contained in this Agreement shall be
deemed to constitute a contract between the Association and any employee of the
Association.
SECTION 12.2 Any corporation to which substantially all of the
business and assets of the Trustee may be transferred, shall be deemed
automatically to be continuing as Trustee.
SECTION 12.3 This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be the original, and all of such
counterparts shall together constitute one and the same document.
SECTION 12.4 The headings of Articles of this Agreement are
for convenience of reference only and shall have no substantive effect on the
provisions of this Agreement.
SECTION 12.5 Any notice required hereunder may be waived by
the person entitled thereto.
-21-
<PAGE>
IN WITNESS WHEREOF, this Agreement is being executed as of the
day and year first above written.
FAIRFIELD SAVINGS AND LOAN
ASSOCIATION
By /s/ George M. Briody, Jr.
-----------------------------
President
ATTEST:
/s/ June Hamilton
- -----------------
Secretary
/s/ George M. Briody, Jr.
-----------------------------
George M. Briody, Jr., Trustee
/s/ F. Gregory Opelka
-----------------------------
F. Geogory Opelka, Trustee
/s/ Eugene W. Pilawski
-----------------------------
Eugene W. Pilawski, Trustee
-22-
Thacher Proffitt & Wood
Two World Trade Center
New York, New York 10048
WRITER'S DIRECT DIAL
(212) 912-7435
November 18, 1996
Big Foot Financial Corp.
1190 RFD
Long Grove, Illinois 60047-7304
Re: Fairfield Savings Bank Profit Sharing and Savings Plan
------------------------------------------------------
Dear Sirs:
We have acted as counsel for Big Foot Financial Corp., an
Illinois corporation ("Corporation"), in connection with the filing of a
registration statement on Form S-8 under the Securities Act of 1933, as amended
("Registration Statement") with respect to 200,000 shares of its common stock,
par value $.01 per share ("Shares"), which may be issued to participants in the
Fairfield Saving Bank Profit Sharing and Savings Plan ("Plan") and with respect
to participation interests in the Plan ("Plan Interests"). In rendering the
opinion set forth below, we do not express any opinion concerning law other than
the federal law of the United States and the corporate law of the state of
Illinois.
We have examined originals or copies, certified or otherwise
identified, of such documents, corporate records and other instruments as we
have deemed necessary or advisable for purposes of this opinion. As to matters
of fact, we have examined and relied upon the Plan and, where we have deemed
appropriate, representations or certificates of officers of the Corporation or
public officials. We have assumed the authenticity of all documents submitted to
us as originals, the genuineness of all signatures, the legal capacity of
natural persons and the conformity to the originals of all documents submitted
to us as copies.
Based on the foregoing, we are of the opinion that the Shares and
Plan Interests which are being registered pursuant to the Registration Statement
have been duly authorized and, when issued and paid for in accordance with the
terms of the Plan, such Shares and Plan Interests will be validly issued, fully
paid and non-assessable.
<PAGE>
Big Foot Financial Corp.
November 18, 1996 Page 2.
In rendering the opinion set forth above, we have not passed upon
and do not purport to pass upon the application of "doing business" or
securities or "blue-sky" laws of any jurisdiction (except federal securities
law).
This opinion is given solely for the benefit of the Corporation
and purchasers of shares and interests under the Plan, and no other person or
entity is entitled to rely hereon without express written consent.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
THACHER PROFFITT & WOOD
By: /s/ W. Edward Bright
---------------------
W. Edward Bright
[LETTERHEAD OF KPMG PEAT MARWICK LLP]
ACCOUNTANT'S CONSENT
--------------------
BIG FOOT FINANCIAL CORP.
We consent to the incorporation by reference in the Registration Statement
(dated November 18, 1996) on Form S-8 of our report dated August 16, 1996
relating to the financial statements of FAIRFIELD SAVINGS BANK, F.S.B. as of
July 31, 1994, 1995 and 1996, and for the years then ended, which report is
included in the Registration Statement on Form S-1 filed by Big Foot Financial
Corp. (Registration No. 333-12083) and incorporated herein.
KPMG PEAT MARWICK LLP
Chicago, Illinois
November 18, 1996
