As filed with the Securities and Exchange Commission on March 31, 2000
--------------
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
PROVIDIAN FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
-------------------
Delaware 94-2933952
(State of incorporation) (IRS Employer Identification No.)
-------------------
201 Mission Street
San Francisco, California 94105
(415) 543-0404
(Address and telephone number of Principal Executive Offices)
Providian Financial Corporation 401(k) Plan
(Full title of the plan)
--------------
Shailesh J. Mehta
Chief Executive Officer
Providian Financial Corporation
201 Mission Street
San Francisco, California 94105
(415) 543-0404
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------
Copies to:
Ellen Richey, Esq.
Vice Chairman, General Counsel and Secretary
Providian Financial Corporation
201 Mission Street
San Francisco, California 94105
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================== =================== ============================= ============================= ==============
Title of securities to be Amount to be Proposed maximum Proposed maximum Amount of
registered registered(1) offering price per share(2) aggregate offering price(2) registration
fee
- ------------------------------------ ------------------- ----------------------------- ----------------------------- --------------
<S> <C> <C> <C> <C>
Common Stock (par value $0.01) and
participation interests in the 2,000,000 shares $81.50 $163,000,000 $43,032.00
Providian Financial Corporation
401(k) Plan (3)
</TABLE>
(1) The shares of Common Stock of Providian Financial Corporation (the
"Registrant") being registered consist of shares to be acquired by the
Trustee pursuant to the Plan for the benefit of participants or as matching
contributions and shares deposited by Providian Financial Corporation with
the Trustee as matching contributions.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) and (h) of the Securities Act of
1933, as amended (the "Securities Act"). The price per share and the
aggregate offering price are based on the average of the high and the low
prices of Registrant's Common Stock on March 29, 2000, as reported on the
New York Stock Exchange.
(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 or sold pursuant to the Plan described herein.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Registrant with the Securities
and Exchange Commission are incorporated by reference into this Registration
Statement:
1. The Registrant's latest annual report on Form 10-K for the fiscal
year ended December 31, 1999, filed pursuant to Section 13(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
2. The Registrant's Current Reports on Form 8-K dated March 26, 1999
May 19, 1999, November 1, 1999 and February 3, 2000, filed pursuant to Section
13(a) of the Exchange Act.
3. The Registrant's Quarterly Report on Form 10-Q for the quarters
ended March 31, 1999, June 30, 1999, and September 30, 1999, filed pursuant to
Section 13(a) of the Exchange Act;
4. All other reports filed pursuant to Sections 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by the annual report
referred to in (1) above.
5. The description of the Registrant's common stock which is
contained in a Registration Statement on Form 10 filed April 17, 1997, and a
Registration Statement on Form 8-A filed September 2, 1997, to register such
securities under Section 12 of the Exchange Act, including an amendment on Form
8-A/A filed March 26, 1999, and any other amendment or report filed for the
purpose of updating such description.
All reports and other documents subsequently filed by the Registrant
or the Providian Financial Corporation 401(k) Plan pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part of this Registration Statement
from the date of the filing of such reports and documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Ellen Richey, Vice Chairman, General Counsel and Secretary of the
Registrant, acted as counsel for the Registrant in connection with the
Registration Statement and opined on the validity of the shares to be issued and
sold by the Registrant pursuant hereto. As of March 13, 2000 Ms. Richey owned
beneficially 144,405 shares of the Registrant's common stock, including shares
issuable upon exercise of employee stock options within 60 days.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL") permits a
corporation to indemnify its directors, officers, employees and other agents in
terms sufficiently broad to permit indemnification (including reimbursement for
expenses) under certain circumstances for liabilities arising under the
Securities Act. The Registrant's Bylaws contain provisions covering
indemnification of directors, officers, employees and other agents against
certain liabilities and expenses incurred as a result of proceedings involving
such persons in their capacities as directors, officers, employees or agents,
including proceedings under the Securities Act or the Exchange Act.
The Registrant's Certificate of Incorporation provides for the
indemnification of directors to the fullest extent not prohibited by the DGCL
and authorizes the indemnification by the Registrant of officers, employees and
other agents as set forth in the DGCL.
In addition, the Registrant has obtained directors' and officers'
liability insurance.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
Exhibit
4.1 Providian Financial Corporation 401(k) Plan and all amendments to such
Plan.
4.2 Trust Agreement with respect to the trust forming part of the
Providian Financial Corporation 401(k) Plan.
5.1 Opinion of General Counsel, Providian Financial Corporation.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of General Counsel, Providian Financial Corporation. Reference
is made to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to the signature pages.
UNDERTAKING PURSUANT TO ITEM 8(b). The Registrant undertakes to have the Plan
and all amendments to the Plan submitted to the Internal Revenue Service in a
timely manner and to make all changes required by the Internal Revenue Service
in order to maintain the qualification of the Plan under section 401 of the
Code.
ITEM 9. UNDERTAKINGS
1. The undersigned Registrant hereby undertakes:
a. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
i. To include any prospectus required by section 10(a)(3) of
the Securities Act;
ii. To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective 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)(i) and (a)(ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to section 13 or
section 15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.
b. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
c. 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.
2. 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 Section 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 herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is 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.
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Francisco, State of California, on
March 31, 2000.
- --------
PROVIDIAN FINANCIAL CORPORATION
By /s/ Shailesh J. Mehta
---------------------------
Shailesh J. Mehta
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Ellen Richey his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent, or her substitutes or substitute, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Shailesh J. Mehta Chairman, President and March 31, 2000
- ------------------------ Chief Executive Officer
Shailesh J. Mehta and Director
(Principal Executive Officer)
/s/ David J. Petrini Executive Vice President and March 31, 2000
- ------------------------ Chief Financial Officer
David J. Petrini (Principal Financial Officer)
/s/ Daniel Sanford Senior Vice President March 31, 2000
- ------------------------ and Controller
Daniel Sanford (Principal Accounting Officer)
/s/ Christina L. Darwall Director March 31, 2000
- ------------------------
Christina L. Darwall
/s/ James V. Elliott Director March 31, 2000
- ------------------------
James V. Elliott
/s/ Lyle Everingham Director March 31, 2000
- ------------------------
Lyle Everingham
/s/ J. David Grissom Director March 31, 2000
- ------------------------
J. David Grissom
/s/ F. Warren McFarlan, D.B.A. Director March 31, 2000
- ------------------------
F. Warren McFarlan, D.B.A.
/s/ Larry D. Thompson Director March 31, 2000
- ------------------------
Larry D. Thompson
/s/ Ruth M. Owades Director March 31, 2000
- ------------------------
Ruth M. Owades
/s/ John L. Weinberg Director March 31, 2000
- ------------------------
John L. Weinberg
The Plan. Pursuant to the requirements of the Securities Act, Providian
Financial Corporation, the administrator of the Plan, has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Francisco, State of California, on
March 31, 2000.
- --------------
PROVIDIAN FINANCIAL CORPORATION 401(K) PLAN
By: /s/ F. Warren McFarlan
------------------------------------
F. Warren McFarlan, D.B.A.
Title: Human Resources Committee Member
EXHIBIT INDEX
Exhibit
4.1 Providian Financial Corporation 401(k) Plan and all amendments to such
Plan.
4.2 Trust Agreement with respect to the trust forming part of the
Providian Financial Corporation 401(k) Plan.
5.1 Opinion of General Counsel, Providian Financial Corporation.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of General Counsel, Providian Financial Corporation. Reference
is made to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to the signature pages.
EXHIBIT 4.1
FIRST DEPOSIT CORPORATION 401(k) PLAN
(Amended and Restated as of January 1, 1992)
TABLE OF CONTENT
article 1 Introduction.................................................1
article 2 Definitions..................................................1
2.1 "Account"....................................................1
2.2 "Actual Contribution Percentage".............................1
2.3 "Actual Deferral Percentage".................................1
2.4 "Affiliate"..................................................1
2.5 "Annual Additions"...........................................2
2.6 "Beneficiary"................................................2
2.7 "Board"......................................................2
2.8 "Break in Service"...........................................2
2.9 "Code".......................................................2
2.10 "Committee"..................................................2
2.11 "Company"....................................................2
2.12 "Company Stock"..............................................2
2.13 "Compensation"...............................................2
2.14 "Contribution Rate"..........................................4
2.15 "Deferral Rate"..............................................5
2.16 "Defined Benefit Plan Fraction"..............................5
2.17 "Defined Contribution Plan Fraction".........................6
2.18 "Disability".................................................6
2.19 "Early Retirement"...........................................6
2.20 "Effective Date".............................................6
2.21 "Eligible Employee"..........................................6
2.22 "Employee"...................................................7
2.23 "Employer"...................................................7
2.24 "Employer Contributions".....................................7
2.25 "Employer Matching Contributions"............................7
2.26 "Employer Matching Contributions Account"....................7
2.27 "Employment Commencement Date"...............................7
2.28 "Entry Date".................................................7
2.29 "ERISA"......................................................7
2.30 "Excess Aggregate Contributions".............................8
2.31 "Excess Contributions".......................................8
2.32 "Excess Elective Deferrals"..................................8
2.33 "First Flex Credits".........................................9
2.34 "First Flex Plan"............................................9
2.35 "Five-Year Break in Service".................................9
2.36 "Forfeiture".................................................9
2.37 "401(k) Account".............................................9
2.38 "401(k) Agreement"...........................................9
2.39 "401(k) Contributions".......................................9
2.40 "Hardship"...................................................9
2.41 "Highly Compensated Employee"................................9
2.42 "Hour of Service"...........................................11
2.43 "Investment Fund"...........................................11
2.44 "Investment Manager"........................................11
2.45 "Limitation Year"...........................................12
2.46 "Non-Highly Compensated Employee"...........................12
2.47 "Normal Retirement Age".....................................12
2.48 "Participant"...............................................12
2.49 "Period of Service".........................................12
2.50 "Period of Severance".......................................12
2.51 "Plan"......................................................12
2.52 "Plan Year".................................................12
2.53 "Profit Sharing Contributions"..............................13
2.54 "Profit Sharing Contributions Account"......................13
2.55 "Qualified Matching Contributions"..........................13
2.56 "Qualified Matching Contributions Account"..................13
2.57 "Qualified Nonelective Contributions".......................13
2.58 "Qualified Nonelective Contributions Account"...............13
2.59 "Reemployment Commencement Date"............................13
2.60 "Required Beginning Date"...................................13
2.61 "Review Panel"..............................................13
2.62 "Rollover Account"..........................................14
2.63 "Rollover Contribution".....................................14
2.64 "Salary"....................................................14
2.65 "Severance from Service Date"...............................15
2.66 "Trust".....................................................15
2.67 "Trust Agreement"...........................................15
2.68 "Trustee"...................................................15
2.69 "Valuation Date"............................................15
2.70 "Voluntary Contributions"...................................15
2.71 "Voluntary Contributions Account"...........................15
2.72 "Year of Service"...........................................15
article 3 eligibility and participation...............................16
3.1 Eligibility to Become a Participant.........................16
3.2 Participation in 401(k) Contributions.......................16
3.4 Reestablishing Eligible Employee Status and Plan Reentry....16
3.5 Termination of Participation................................16
3.6 No Maximum Age..............................................17
article 4 Contributions...............................................17
4.1 401(k) Contributions........................................17
4.2 Voluntary Contributions.....................................19
4.3 401(k) Agreement............................................19
4.4 Employer Contributions......................................20
(a) Profit Sharing Contributions............................20
(b) Employer Matching Contributions.........................20
4.5 Qualified Nonelective Contributions.........................20
4.6 Qualified Matching Contributions.............................21
4.7 Time of Payment.............................................21
4.8 Rollover Contributions......................................21
4.9 Nondiscrimination Requirements..............................22
(a) Actual Deferral Percentage Test.........................22
(b) Correction Methods to Meet Actual Deferral
Percentage Test.........................................23
(c) Special Rules for Actual Deferral Percentage
Limit Testing...........................................23
(d) Actual Contribution Percentage Test.....................25
(e) Correction Methods to Meet Actual Contribution
Percentage Test.........................................25
(f) Special Rules for Actual Contribution Percentage
Limit Testing...........................................26
(g) Prevention of Multiple Use..............................27
4.10 Reversion of Contributions..................................28
4.11 Other Limitations on Contributions..........................28
article 5 Participants'Accounts.......................................30
5.1 Individual Accounts.........................................30
5.2 Revaluation of the Trust....................................30
5.3 Statements..................................................31
5.4 Allocation of Investment Income.............................31
article 6 Investment of Participant's Accounts........................31
6.1 Investment Control..........................................31
6.2 Selection of Investment Funds...............................31
6.3 Investment of Accounts......................................31
6.4 Change of Investment Election as to Future Contributions....32
6.5 Transfers Between Investment Funds..........................32
article 7 Vesting.....................................................32
7.1 Fully Vested Subaccounts....................................32
7.2 Vesting of the Profit Sharing Contributions Account.........32
7.3 Vesting of the Employer Matching Contributions Account......33
7.4 Change in Vesting Schedule..................................33
7.5 Forfeitures.................................................33
7.6 Vesting on Reemployment.....................................35
article 8 Plan distributions..........................................35
8.1 Events Permitting Distribution..............................35
8.2 Applicable Distribution and Withdrawal Provisions...........36
8.3 Time of Distribution to Participant.........................36
8.4 Time of Distribution of Death Benefits......................37
8.5 Latest Time of Distribution.................................37
8.6 Small Benefits: Immediate Payment..........................37
8.7 Form of Distribution to Participant.........................37
8.8 Qualified Joint and Survivor Annuity Provisions.............38
(a) Waiver of Qualified Joint and Survivor Annuity..........38
(b) Notice and Explanation Requirements.....................39
(c) Definition of Annuity Starting Date.....................39
8.9 Qualified Preretirement Survivor Annuity Provisions.........39
(a) Qualified Preretirement Survivor Annuity................39
(b) Waiver of Qualified Preretirement Survivor Annuity......40
(c) Notice and Explanation Requirements.....................40
(d) Alternative Forms of Death Benefit......................40
8.10 Distribution of Death Benefit...............................41
8.11 Beneficiary Designation; Spousal Consent Rights.............41
8.12 Minimum Required Distributions; Incorporation
of Regulations..............................................42
8.13 Direct Rollover.............................................43
8.14 Withholding on Distributions................................44
8.15 Deferred Distribution.......................................44
8.16 Determination of Account Balance............................44
8.17 Reemployment of Participants Receiving Payments.............44
8.18 No Liability................................................44
article 9 Withdrawals While Employed..................................45
9.1 Withdrawals From Voluntary Contributions Account............45
9.2 Withdrawals From Rollover Account...........................45
9.3 Withdrawals From 401(k) Account.............................45
9.4 Withdrawals from Profit Sharing Contributions Account
and Employer Matching Contributions Account.................45
9.5 Company Consent.............................................45
9.6 Hardship Withdrawal Rules...................................45
9.7 Frequency and Source of Withdrawals.........................47
9.8 Payment of Withdrawals......................................47
9.9 Valuation Date..............................................47
article 10 Loans from the plan.........................................47
10.1 Eligibility for Loans.......................................47
10.2 Amount of Loans.............................................47
10.3 Aggregate Loan Limitation...................................48
10.4 Loan Requirements...........................................48
10.5 Loan Policy.................................................48
10.6 Segregated Investment.......................................49
article 11 Funding Policy And Method...................................49
11.1 Contributions...............................................49
11.2 Expenses of the Plan........................................49
11.3 Cash Requirements...........................................49
11.4 Independent Accountant......................................49
article 12 Fiduciary Responsibilities And Plan Administration..........50
12.1 Plan Sponsor and Plan Administrator.........................50
12.2 Administrative Responsibilities.............................50
12.3 Management of Plan Assets...................................50
12.4 Trustee and Investment Managers.............................50
12.5 Delegation of Fiduciary Responsibilities....................51
12.6 Service in Several Fiduciary Capacities.....................51
12.7 Appointment of the Committee................................51
12.8 Indemnification.............................................52
article 13 Claims Procedures...........................................52
13.1 Application for Benefits....................................52
13.2 Denial of Application.......................................52
13.3 Review Panel................................................52
13.4 Request for Review..........................................52
13.5 Decision on Review..........................................53
13.6 Rules and Interpretations...................................53
13.7 Exhaustion of Remedies......................................53
article 14 Amendment or discontinuance of the plan.....................53
14.1 Amendments..................................................53
14.2 Merger, Consolidation or Transfer...........................53
14.3 Right to Terminate Plan.....................................54
14.4 Employer's Rights and Obligations Upon Plan Termination.....54
14.5 Participants'Rights Upon Plan Termination...................54
article 15 Top-Heavy Provisions........................................54
15.1 Top-Heavy Plan Defined......................................54
15.2 Other Definitions...........................................55
15.3 Top-Heavy Accrual Rules.....................................56
15.4 Impact on Contribution Limitations..........................57
article 16 General Provisions..........................................57
16.1 No Implied Employment Contract..............................57
16.2 Benefits Not Assignable.....................................57
16.3 Qualified Domestic Relations Order..........................58
16.4 Payments of Benefits to Infants or Incompetents.............58
16.5 Unclaimed Benefits..........................................58
16.6 Source of Benefits..........................................58
16.7 Forms of Plan Communications................................58
16.8 IRS Qualification...........................................59
16.9 Construction of Plan........................................59
16.10 Governing Law...............................................59
16.11 Severability................................................59
article 17 Execution...................................................59
FIRST DEPOSIT CORPORATION 401(k) PLAN
(Amended and Restated as of January 1, 1992)
Article 1
Introduction
The First Deposit Corporation 401(k) Plan is amended and restated in its
entirety effective as of January 1, 1992, except as provided elsewhere in the
Plan.
The Plan as amended and restated is intended to qualify as a profit-sharing plan
under Sections 401(a) and 501 of the Code, with a cash or deferred arrangement
intended to qualify under Section 401(k) of the Code. Notwithstanding the
foregoing, contributions to the Plan shall be determined without regard to
profits of the Employer or any Affiliate of the Employer. This Plan shall be
maintained for the exclusive benefit of the Participants and their
Beneficiaries.
The Plan is intended to be an "eligible individual account plan" as defined in
Section 407(d)(3)(A) of ERISA. Accordingly, the Trustee is authorized to invest
and hold up to one hundred percent of the assets of the Trust established
pursuant to the Plan in Company Stock.
The Plan was originally effective on January 1, 1986 and was subsequently
amended and restated effective as of January 1, 1987.
Article 2
Definitions
The following terms when used in the Plan shall have the meanings specified
below. Words in the masculine, feminine and neuter gender shall be deemed to
include the other, and words in the singular shall include the plural and vice
versa, unless a different meaning is plainly required by the context:
2.1 "Account" means, to the extent applicable to a Participant, the
aggregate of the separate accounts and subaccounts maintained under the Plan and
held by the Trustee for the benefit of a Participant, as described in Articles 5
and 6.
2.2 "Actual Contribution Percentage" means the average of the Contribution
Rates (calculated separately for each Eligible Employee) of the Eligible
Employees in a group.
2.3 "Actual Deferral Percentage" means the average of the Deferral Rates
(calculated separately for each Eligible Employee) of the Eligible Employees in
a group.
2.4 "Affiliate" means any corporation or other trade or business (whether
or not incorporated) that, together with the Employer, is a member of a
"controlled group of corporations" or is under "common control" as defined in
Section 414(b) or 414(c) of the Code, respectively, is a member of an
"affiliated service group" as defined in Section 414(m) of the Code, or is
required to be treated as a single employer pursuant to regulations under
Section 414(o) of the Code, but only to the extent provided in any such
regulations. An entity shall be considered an Affiliate only with respect to
periods during which the relationship described above exists.
2.5 "Annual Additions" means, to the extent applicable under the Plan, the
sum of the following amounts credited to a Participant's Account for any
Limitation Year:
(a) 401(k) Contributions;
(b) Employer Contributions;
(c) Voluntary Contributions;
(d) Qualified Matching Contributions;
(e) Qualified Nonelective Contributions;
(f) Allocated Forfeitures; and
(g) Amounts described in Sections 415(l)(1) and 419A(d)(2) of the
Code.
Notwithstanding the foregoing, Excess Elective Deferrals that are distributed in
accordance with Subsection 4.1(d) of the Plan are not Annual Additions. However,
Excess Contributions and Excess Aggregate Contributions that are distributed (or
in the case of Excess Aggregate Contributions, that are forfeited) in accordance
with Paragraphs 4.9(b)(1) and (e)(1) of the Plan, respectively, are Annual
Additions.
2.6 "Beneficiary" means the person or persons entitled under Section 8.11
to receive any Plan benefit payable pursuant to Section 8.10 following the death
of a Participant.
2.7 "Board" means the Board of Directors of the Company, as constituted
from time to time.
2.8 "Break in Service" means, for purposes of eligibility and vesting, any
one year Period of Severance.
2.9 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.10 "Committee" means the 401(k) Plan Committee referred to in Section
12.7(a), if appointed as provided in Section 12.7.
2.11 "Company" means First Deposit Corporation and any successor thereto.
2.12 "Company Stock" means common stock of Capital Holding Corporation.
2.13 "Compensation" means for a Plan Year an Eligible Employee's
(a) wages, salaries, fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with the
Employer or any Affiliate to the extent that the amounts are includable in gross
income (including, but not limited to, commissions paid salespersons,
compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips, bonuses, fringe benefits and reimbursements or
other expense allowances under a nonaccountable plan (as described in Treasury
Regulations Section 1.62-2(c))).
Subsection (a) includes foreign earned income (as defined in Section 911(b) of
the Code), whether or not excludable from gross income under Section 911 of the
Code. The amount in Subsection (a) shall be determined without regard to the
exclusions from gross income under Sections 931 and 933 of the Code.
(b) However, the following items shall be excluded from Compensation:
(1) contributions made by the Employer to a plan of deferred
compensation to the extent that, before the application of the limitations of
Section 415 of the Code to that plan (including this Plan), the contributions
are excludable from the Employee's gross income for the taxable year in which
contributed;
(2) Employer contributions made on behalf of the Employee under a
simplified employee pension described in Section 408(k) of the Code for the
taxable year in which contributed;
(3) Distributions from a plan of deferred compensation (including
this Plan), regardless of whether such amounts are includable in the gross
income of the Employee when distributed, provided that any amounts received by
an Employee pursuant to an unfunded nonqualified plan, other than the First
Deposit Equity Unit Plan and the First Deposit Equity Unit Purchase Option,
shall be considered as Compensation for the year in which the amounts are
includable in the gross income of the Employee;
(4) amounts realized from the exercise of a nonqualified stock
option or amounts realized under Section 83(a) of the Code when restricted stock
(or property) held by an Employee either becomes freely transferable or is no
longer subject to a substantial risk of forfeiture (within the meaning of
Section 83 of the Code and the regulations thereunder);
(5) amounts realized from the sale, exchange or other disposition
of stock acquired through the exercise of a qualified or incentive stock option;
and
(6) other amounts that receive special tax benefits, such as
premiums for group-term life insurance (but only to the extent that the premiums
are excludable from the gross income of the Employee), or contributions made by
the Employer (whether or not under a salary reduction agreement) toward the
purchase of an annuity contract described in Section 403(b) of the Code (whether
or not such contributions are excludable from the gross income of the Employee).
Notwithstanding the foregoing, for purposes of determining whether an individual
is a Highly Compensated Employee or a Key Employee, Compensation shall be
determined without regard to Sections 125, 402(e)(3) (prior to January 1, 1993,
402(a)(8)), and 402(h)(1) of the Code, and in the case of employer contributions
made pursuant to a salary reduction agreement, without regard to Section 403(b)
of the Code. For purposes of calculating an Eligible Employee's Contribution
Rate or Deferral Rate and allocating Profit Sharing Contributions and Qualified
Nonelective Contributions under Article 4 (but not for purposes of the
limitations contained in Section 4.11), Compensation shall include: (i) 401(k)
Contributions, (ii) other elective contributions that are made by the Employer
or an Affiliate on behalf of its Employees that are not includable in gross
income under Sections 125 (prior to January 1, 1994, Compensation shall exclude
First Flex Credits that are used to purchase insurance benefits pursuant to the
terms of the First Flex Plan), 402(e)(3) (prior to January 1, 1993, 402(a)(8)),
402(h), and 403(b) of the Code, (iii) Compensation deferred under an eligible
deferred compensation plan within the meaning of Section 457(b) of the Code
(deferred compensation plans of state and local governments and tax-exempt
organizations), and (iv) employee contributions (under governmental plans)
described in Section 414(h)(2) of the Code that are picked up by the employing
unit and thus are treated as employer contributions.
Compensation of an Eligible Employee taken into account for determining all
benefits provided under the Plan for any Plan Year shall not exceed $200,000, as
adjusted for cost-of-living increases at the same time and in the same manner as
under Section 415(d) of the Code (effective for Plan Years beginning after
December 31, 1993, $150,000 as adjusted in the manner permitted under Section
401(a)(17) of the Code). If the period for determining Compensation used in
calculating an Eligible Employee's allocation for a Plan Year is a short Plan
Year (i.e., shorter than twelve (12) months), the annual Compensation limit is
an amount equal to the otherwise applicable annual Compensation limit multiplied
by the fraction, the numerator of which is the number of months in the short
Plan Year, and the denominator of which is twelve (12). In determining the
Compensation of an Eligible Employee for purposes of this limitation, the family
aggregation rules of 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
Eligible Employee and any lineal descendants of the Eligible Employee who have
not attained age 19 before the close of the year. If, in complying with Section
414(q)(6) of the Code, the $200,000 (effective for Plan Years beginning after
December 31, 1993, $150,000) limitation (as adjusted) is exceeded, then the
$200,000 (effective for Plan Years beginning after December 31, 1993, $150,000)
limitation shall be prorated among the affected individuals in proportion to
each individual's Compensation as determined under this Section 2.13 prior to
the application of the $200,000 (effective for Plan Years beginning after
December 31, 1993, $150,000) limitation.
2.14 "Contribution Rate" means the rate (expressed as a percentage to the
nearest one hundredth of one percent) determined by dividing:
(a) The aggregate amount of any Employer Matching Contributions,
Voluntary Contributions and Qualified Matching Contributions (to the extent not
taken into account in determining the Eligible Employee's Deferral Rate for
purposes of the Actual Deferral Percentage test under Subsection 4.9(a)) made
under the Plan on behalf of an Eligible Employee for the Plan Year; by
(b) The Eligible Employee's Compensation for the Plan Year.
The amount in Subsection (a) above shall not include any Employer Matching
Contributions and Qualified Matching Contributions that are forfeited as Excess
Aggregate Contributions, or because the 401(k) Contributions to which they
relate are treated as an Excess Contribution, Excess Elective Deferral or Excess
Aggregate Contribution. The Compensation of an Eligible Employee taken into
account in Subsection (b) above shall include the Compensation of the Eligible
Employee during the portion of the Plan Year during which he or she was not
eligible to participate in the Plan.
In computing the Contribution Rate, the Company may elect to include in the
amount in Subsection (a) above:
(1) All or a portion of the 401(k) Contributions for such
Employees;
(2) All or a portion of the Qualified Nonelective Contributions
for such Employees; or
(3) All or a portion of any contributions (including, if
applicable, any Employer Contributions) that constitute "qualified nonelective
contributions" (as defined in Section 401(m)(4)(C) of the Code) or "elective
deferrals" (as defined in Section 401(m)(4)(B) of the Code) made to the Plan or
any other plan of the Employer or any Affiliate of the Employer;
provided, however, that the 401(k) Contributions, including those taken into
account hereunder, satisfy the nondiscrimination test under Subsection 4.9(a).
Any such election shall be subject to the requirements of and shall be made in
accordance with any regulations applicable under Section 401(m) of the Code.
2.15 "Deferral Rate" means the rate (expressed as a percentage to the
nearest one hundredth of one percent) determined by dividing:
(a) The aggregate amount of the Eligible Employee's 401(k)
Contributions, if any, for the Plan Year; by
(b) The Eligible Employee's Compensation for such Plan Year.
The Compensation of an Eligible Employee taken into account in Subsection (b)
above shall include the Compensation of the Eligible Employee during the portion
of the Plan Year during which he or she was not eligible to participate in the
Plan.
In computing the Deferral Rate, the Employer may elect to include in the amount
in Subsection (a) above:
(1) All or a portion of the Qualified Matching Contributions made
on behalf of such Eligible Employees;
(2) All or a portion of the Qualified Nonelective Contributions
made on behalf of such Eligible Employees; or
(3) All or a portion of any contributions (including, if
applicable, any Employer Contributions) that constitute "qualified nonelective
contributions" (as defined in Section 401(m)(4)(C) of the Code) or "matching
contributions" described in Section 401(k)(3)(D)(ii)(I) of the Code (generally
known as "qualified matching contributions") made to the Plan or any other plan
of the Employer or any Affiliate of the Employer.
Any such election shall be subject to the requirements of and shall be in
accordance with regulations applicable under Section 401(k) of the Code.
2.16 "Defined Benefit Plan Fraction" means, for any Limitation Year, a
fraction, the numerator of which is the Participant's projected annual
retirement income benefit under all the defined benefit plans (whether or not
terminated) maintained by the Employer or any Affiliate of the Employer
determined as of the end of the Limitation Year, and the denominator of which is
the lesser of:
(a) The product of 1.25 multiplied by $90,000 (which dollar amount
shall be automatically adjusted for increases in the cost of living, if any, in
accordance with regulations or other pronouncements issued by the Secretary of
the Treasury or Commissioner of Internal Revenue, for such calendar year, under
the authority granted by Section 415(d) of the Code); or
(b) The product of 1.4 multiplied by one hundred percent (100%) of the
Participant's average annual Compensation for the three (3) consecutive calendar
years during which he or she received his or her greatest aggregate compensation
from the Company and during which he or she was a Participant in the Plan.
The limitations under Subsection (a) shall be adjusted in the case of annual
retirement income benefits which do not exceed $10,000 for the Limitation Year
and for Participants with Years of Service of less than ten (10) years, to the
extent provided in Sections 415(b)(4) and (5) of the Code.
2.17 "Defined Contribution Plan Fraction" means, for any Limitation Year, a
fraction, the numerator of which is the sum of the Annual Additions to the
Participant's accounts under all the defined contribution plans maintained by
the Employer or any Affiliate of the Employer (whether or not terminated) for
the current and all prior Limitation Years, and the denominator of which is the
sum of the maximum aggregate amounts for the current and all prior Limitation
Years of service with the Employer or any Affiliate of the Employer (regardless
of whether a defined contribution plan was maintained by the Employer). The
maximum aggregate amount in any Limitation Year is the lesser of one hundred
twenty-five percent (125%) of the dollar limitation in effect under Section
415(c)(1)(A) of the Code or thirty-five percent (35%) of the Participant's
Compensation for such year.
2.18 "Disability" means the total and permanent inability to meet the
requirements of the Participant's customary employment which can be expected to
last for a continuous period of not less than twelve (12) months. The Disability
of a Participant shall be determined by the Company in its sole discretion, in
accordance with uniform principles consistently applied, upon the basis of such
evidence as the Company deems necessary and advisable.
2.19 "Early Retirement" means the date on which a Participant attains age
fifty-five (55) and has completed ten (10) Years of Service.
2.20 "Effective Date" of the Plan as amended and restated means January 1,
1992.
2.21 "Eligible Employee" means any Employee, except any Employee who is:
(a) Regularly scheduled to work less than twenty (20) hours per week
and who has not completed one thousand (1,000) Hours of Service during a
computation period (the initial computation period shall be the twelve-month
period beginning on the Employee's Employment Commencement Date and, after such
initial period, subsequent computation periods shall be the Plan Year, beginning
with the Plan Year within which the initial computation period ends);
(b) A nonresident alien who received no earned income (within the
meaning of Section 911(b) of the Code) from the Employer that constitutes income
from sources within the United States (within the meaning of Section 861(a)(3)
of the Code);
(c) A member of a collective bargaining unit covered under a
collective bargaining agreement, unless such agreement expressly provides for
coverage of such bargaining unit members in the Plan; provided, however, that if
such an Employee later becomes an Eligible Employee, all of his or her prior
service with the Employer or an Affiliate of the Employer shall be credited
immediately; or
(d) Either hired through an employment agency or is a leased employee
(within the meaning of Section 414(n) of the Code).
An individual's status as an Eligible Employee shall be determined by the
Employer pursuant to the foregoing provisions, and such determination shall be
conclusive and binding on all persons.
2.22 "Employee" means an individual who is employed by the Employer in the
status of "employee" as that term is used in Section 3121(d)(1) or (2) of the
Code or is a leased employee (as defined in Section 414(n) of the Code), unless
such leased employee is covered by a plan of the leasing organization that meets
the requirements of Section 414(n)(5)(B) of the Code and leased employees
constitute no more than twenty percent (20%) of the Employer's Employees who are
Non-Highly Compensated Employees. Notwithstanding the foregoing, "Employee"
shall not include any individual performing services solely through an
employment or leasing agency except to the extent required under Section 414(n)
of the Code.
2.23 "Employer" means the Company, First Deposit National Bank, First
Deposit National Credit Card Bank, First Deposit National Corporation, First
Deposit Service Corporation, and any other Affiliate of the Company that, with
the approval of the Company and subject to such conditions as the Company may
impose, adopts this Plan, and any successor or successors of any of them.
2.24 "Employer Contributions" means any Employer Matching Contributions or
Profit Sharing Contributions made by the Employer pursuant to Section 4.4.
2.25 "Employer Matching Contributions" means contributions to the Plan by
the Employer made under Subsection 4.4(b) on behalf of a Participant on account
of such Participant's 401(k) Contributions.
2.26 "Employer Matching Contributions Account" means the account (including
any subaccounts) into which Employer Matching Contributions, if any, and
investment gains and losses thereon shall be credited.
2.27 "Employment Commencement Date" means the date on which an Employee
first performs an Hour of Service for the Employer, including service performed
prior to the Effective Date.
2.28 "Entry Date" means each January 1, April 1, July 1, and October 1.
2.29 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
2.30 "Excess Aggregate Contributions" means, for each Plan Year, the excess
of:
(a) The aggregate amount of Employer Matching Contributions, Qualified
Matching Contributions, 401(k) Contributions, and Qualified Nonelective
Contributions actually taken into account in computing the Actual Contribution
Percentage for Eligible Employees who are Highly Compensated Employees for such
Plan Year, over
(b) The maximum amount of such contributions permitted under the
Actual Contribution Percentage test under Subsection 4.9(d).
The amount of Excess Aggregate Contributions for Eligible Employees who are
Highly Compensated Employees shall be determined by first reducing the
contributions of the Highly Compensated Employee(s) having the highest
Contribution Rate by such amounts so as to cause the Plan to satisfy such Actual
Contribution Percentage test or to lower such Eligible Employee's Contribution
Rate to that of the Highly Compensated Employee(s) with the next highest
Contribution Rate, whichever occurs first. Such process shall continue, as
necessary, with respect to the Highly Compensated Employee(s) with the next
highest Contribution Rate until such Actual Contribution Percentage test is met.
Excess Aggregate Contributions shall be allocated to Eligible Employees who are
subject to the family member aggregation rules of Section 414(q)(6) of the Code
in the manner prescribed by appropriate regulations.
2.31 "Excess Contributions" means, for each Plan Year, the excess of:
(a) The aggregate amount of 401(k) Contributions, Qualified
Nonelective Contributions, and Qualified Matching Contributions actually taken
into account in computing the Actual Deferral Percentage for Highly Compensated
Employees for such Plan Year, over
(b) The maximum amount of such contributions permitted by the Actual
Deferral Percentage test under Subsection 4.9(a).
The amount of Excess Contributions for Eligible Employees who are Highly
Compensated Employees shall be determined by first reducing the contributions of
the Highly Compensated Employee(s) having the highest Deferral Rate by such
amounts so as to cause the Plan to satisfy such Actual Deferral Percentage test
or to lower such Eligible Employee's Deferral Rate to that of the Highly
Compensated Employee(s) with the next highest Deferral Rate, whichever occurs
first. Such process shall continue, as necessary, with respect to the Highly
Compensated Employee(s) with the next highest Deferral Rate until such Actual
Deferral Percentage test is met. Excess Contributions shall be allocated to
Highly Compensated Employees who are subject to the family member aggregation
rules of Section 414(q) of the Code in the manner prescribed by applicable
regulations.
2.32 "Excess Elective Deferrals" means, for a taxable year of a
Participant, the amount by which the total of such Participant's 401(k)
Contributions under this Plan and any other elective deferrals (as defined in
Section 402(g)(3) of the Code) under all other plans, contracts or arrangements
in which the Participant is eligible to participate (whether or not maintained
by the Employer or any Affiliate of the Employer) exceeds $7,000, and therefore
are includable in his or her gross income under Section 402(g) of the Code. Such
$7,000 amount shall be adjusted for cost-of-living increases at the same time
and in the same manner as under Section 415(d) of the Code.
2.33 "First Flex Credits" means the amount contributed by the Employer to
the First Flex Plan that may be used to pay for various employee benefits
provided for under the terms of the First Flex Plan.
2.34 "First Flex Plan" means the First Deposit Corporation First Flex Plan,
as amended from time to time.
2.35 "Five-Year Break in Service" means five consecutive one-year Periods
of Severance.
2.36 "Forfeiture" means the portion of a Participant's Profit Sharing
Contributions Account and Employer Matching Contributions Account which is not
payable to the Participant or his or her Beneficiary because of such
Participant's termination of employment before full vesting or excess Annual
Additions reallocated in accordance with Section 4.11.
2.37 "401(k) Account" means the account into which 401(k) Contributions,
Qualified Matching Contributions, or Qualified Nonelective Contributions made on
behalf of a Participant pursuant to Article 4, and earnings on those
contributions, shall be credited, except to the extent that the Company
determines, in accordance with Sections 4.5 or 4.6 to cause Qualified
Nonelective Contributions or Qualified Matching Contributions to be allocated to
a separate subaccount for each Participant instead of allocating such
contributions to the 401(k) Accounts of Participants.
2.38 "401(k) Agreement" means the agreement between the Employer and an
Employee to reduce the Employee's Salary as provided for in Article 4.
2.39 "401(k) Contributions" means contributions to the Plan by the Employer
that are made pursuant to the election of a Participant pursuant to a 401(k)
Agreement under Section 4.1, in lieu of Salary payable to the Participant, or
that are made pursuant to the Participant's election to allocate First Flex
Credits to the Plan (to the extent permitted under the terms of the First Flex
Plan).
2.40 "Hardship" means the immediate and heavy financial need of a
Participant, as determined in a uniform and nondiscriminatory basis by the
Company in accordance with Section 9.6 and as may be further clarified by rules
or regulations issued by the Secretary of the Treasury or the Internal Revenue
Service.
2.41 "Highly Compensated Employee" shall have the meaning given under
Section 414(q) of the Code and regulations thereunder. In determining whether an
Employee is a Highly Compensated Employee, all employers that are aggregated
under Section 414(b), (c), (m) or (o) of the Code shall be treated as a single
employer. Unless otherwise provided by regulations, Highly Compensated Employee
with respect to a given Plan Year shall mean any Employee if such Employee:
(a) At any time during the Lookback Year or Determination Year was a
five percent (5%) owner of the Employer within the meaning of Section
416(i)(1)(B)(i) of the Code;
(b) During the Lookback Year:
(1) Received Compensation in excess of $75,000 (as adjusted for
cost-of-living increases at the same time and in the same manner as under
Section 415(d) of the Code);
(2) Received Compensation in excess of $50,000 (as adjusted for
cost-of-living increases at the same time and in the same manner as under
Section 415(d) of the Code) and was in the group consisting of the top twenty
percent (20%) of employees of the Employer and all Affiliates of the Employer
when ranked on the basis of Compensation paid during the Lookback Year; or
(3) Received Compensation greater than fifty percent (50%) of the
limit in effect for the Plan Year under Section 415(b)(1)(A) of the Code and was
an officer within the meaning of regulations applicable under Section
416(i)(1)(A)(i) of the Code; provided that, for purposes of this definition, no
more than fifty (50) employees (or, if lesser, the greater of three (3)
employees or ten percent (10%) of the employees) shall be treated as officers
and provided further that, if no officer has satisfied the compensation
requirement in this Paragraph (3), the highest paid officer shall qualify as a
Highly Compensated Employee; or
(c) During the Determination Year, is described in Paragraph (b)(1),
(2) or (3) above and was one of the one hundred (100) employees of the Employer
and all Affiliates of the Employer receiving the highest Compensation in the
Determination Year.
The "Lookback Year" is the twelve (12) month period preceding the beginning of
the Plan Year and the "Determination Year" is the Plan Year.
For purposes of determining the size of the group consisting of the top twenty
percent (20%) of employees when ranked on the basis of Compensation, as referred
to in Paragraph (b)(2), or the number of officers, as referred to in Paragraph
(b)(3), the following employees shall be excluded:
(A) Employees who have not completed six (6) months of service;
(B) Employees who normally work less than 17 1/2 hours per week;
(C) Employees who normally work not more than six (6) months
during any year;
(D) Employees who have not attained age twenty-one (21);
(E) Except to the extent provided in regulations, Employees who
are included in a unit of employees covered by a collective bargaining agreement
between employee representatives and the Employer; and
(F) Non-resident aliens with no United States source income.
In addition to the foregoing, a Highly Compensated Employee for a Plan Year
includes any Employee who separated from service (or who was deemed to have
separated under applicable regulations) prior to the Plan Year, performs no
service for the Employer during the Plan Year, and was a Highly Compensated
Employee for either the Determination Year during which he or she separated from
service or any Determination Year ending on or after the Employee's 55th
birthday.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top twenty percent
(20%) of Employees when ranked on the basis of Compensation, the 100 Employees
receiving the highest Compensation, the number of Employees treated as officers
and the Compensation that is considered, shall be made in accordance with
Section 414(q) of the Code and the regulations thereunder.
2.42 "Hour of Service" means:
(a) Each hour for which an Employee is directly or indirectly paid or
entitled to payment for the performance of duties for the Employer or an
Affiliate of the Employer during the applicable computation period;
(b) Each hour for which an Employee is directly or indirectly entitled
to payment on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity, disability, layoff, jury duty, military
duty or leave of absence. Notwithstanding the foregoing however, no more than
501 Hours of Service shall be credited to an Employee on account of any single
continuous period in which the Employee performs no duties. Hours of Service
shall not be counted where such payment is made or is due:
(1) Under a plan maintained solely for the purpose of complyin
with applicable workers' compensation, unemployment or disability insurance law;
or
(2) Solely to reimburse an Employee for medical or
medically-related expenses; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer or an Affiliate of the
Employer. These hours shall be credited to the computation period(s) to which
the award or agreement for back pay pertains rather than to the computation
period in which the award, agreement or payment is made; provided, however, that
the limits under Subsection (b) above are applicable and that an Employee shall
not be entitled to additional Hours of Service under this Subsection (c) for the
same Hours of Service credited under Subsection (a) or (b) above.
Hours of Service shall be credited to the Employee for the periods specified
above in accordance with Department of Labor Regulations Sections 2530.200b-2
and -3, the provisions of which are incorporated herein by this reference.
2.43 "Investment Fund" means, to the extent applicable, one or more of the
investment funds referred to in Article 6 in which the assets of the Trust are
invested.
2.44 "Investment Manager" means any fiduciary (other than a Trustee or
named fiduciary as specified in Article 12) who:
(a) Has the power to manage, acquire or dispose of any asset of the
Trust;
(b) Is
(1) Registered as an investment adviser under the Investment
Advisers Act of 1940;
(2) A "bank," as defined in such Act; or
(3) An insurance company qualified to perform services described
in Subsection (a) above under the laws of more than one state; and
(c) Has acknowledged in writing that such person is a fiduciary with
respect to the Plan.
2.45 "Limitation Year" means the Plan Year.
2.46 "Non-Highly Compensated Employee" with respect to a given Plan Year
means any Employee who is not a Highly Compensated Employee for such Plan Year.
2.47 "Normal Retirement Age" means the date on which a Participant attains
age sixty-five (65).
2.48 "Participant" means an Eligible Employee, whether or not he or she has
elected to make 401(k) Contributions, who has become a Participant in the Plan
in accordance with Section 3.1 or a former Eligible Employee who has an Account
under the Plan.
2.49 "Period of Service" means a period of time beginning on the Employment
Commencement Date or Reemployment Commencement Date, as the case may be, and
ending on the Severance from Service Date. If an Employee ceases service and
subsequently returns to service within twelve (12) months, the Period of
Severance, if any, shall be included in computing the Employee's Period of
Service for purposes of vesting and eligibility.
All Periods of Service with the Employer, an Affiliate, Pacific Bank, and CG
Marketing shall be aggregated for vesting and eligibility purposes. In
aggregating any nonsuccessive Periods of Service for a reemployed Employee, 12
months of service (30 days shall equal one month, for purposes of aggregating
fractional months) or 365 days shall equal a one year Period of Service. Any
Period of Service that, after such aggregation, is less than 12 months or 365
days shall be disregarded in calculating an Employee's vested benefit.
2.50 "Period of Severance" means a period of time commencing on the
Severance from Service Date and ending on the date on which the Employee again
performs an Hour of Service for the Employer. Notwithstanding the preceding
sentence, if an Employee is absent from employment as a result of the Employee's
pregnancy, birth of the Employee's child, placement of a child for adoption by
the Employee, or caring for the child for a period beginning on such birth or
placement, and if such absence extends beyond the first anniversary of the date
such absence began, (i) the Period of Severance shall begin on the second
anniversary of the date such absence began and (ii) the period between the first
and second anniversaries of the date such absence began shall not be included as
a Period of Service or as a Period of Severance.
2.51 "Plan" means the First Deposit Corporation 401(k) Plan (formerly known
as the Deferred Profit Sharing Plan for Employees of First Deposit Corporation
and Its Affiliates), as set forth herein and as amended from time to time.
2.52 "Plan Year" means the twelve-consecutive month period commencing each
January 1 and ending the following December 31.
2.53 "Profit Sharing Contributions" means the amount, if any, contributed
to the Plan by the Employer under Subsection 4.4(a).
2.54 "Profit Sharing Contributions Account" means the account (including
any subaccounts) into which Profit Sharing Contributions, if any, and investment
gains and losses thereon shall be credited.
2.55 "Qualified Matching Contributions" means contributions to the Plan by
the Employer made under Section 4.6, provided that any such contributions shall
be subject to the distribution limitations and nonforfeitability requirements of
Section 401(k)(2)(B) and (C) of the Code.
2.56 "Qualified Matching Contributions Account" means the account
(including any subaccounts) into which Qualified Matching Contributions, if any,
and investment gains and losses thereon shall be credited.
2.57 "Qualified Nonelective Contributions" means contributions to the Plan
by the Employer made under Section 4.5, provided that a Participant may not
elect to receive any such contributions in cash until distributed from the Plan
and that such contributions shall be subject to the distribution limitations and
nonforfeitability requirements of Section 401(k)(2)(B) and (C) of the Code.
2.58 "Qualified Nonelective Contributions Account" means the account
(including any subaccounts) into which Qualified Nonelective Contributions, if
any, and investment gains and losses thereon shall be credited.
2.59 "Reemployment Commencement Date" means the first date, following a
Break in Service, on which the Employee again performs an Hour of Service for
the Employer.
2.60 "Required Beginning Date" means:
(a) In the case of a Participant who attained age 70 1/2 before
January 1, 1988 and who is not a "five percent owner" (within the meaning of
Section 416(i)(1)(B)(i) of the Code), April 1 of the calendar year following the
later of (i) the calendar year in which the Participant attains age 70 1/2 or
(ii) the calendar year in which the Participant retires; and
(b) In the case of a "five percent owner" (within the meaning of
Section 416(i)(1)(B)(i) of the Code) or a Participant who attains age 70 1/2
after December 31, 1987, April 1 of the calendar year following the calendar
year in which the Participant attains age 70 1/2, whether or not he or she is
still an Employee; provided, however, that the Required Beginning Date for a
Participant who is not a five percent owner and who attains age 70 1/2 in 1988
shall be April 1, 1990. If the Participant became a "five percent owner" after
the calendar year in which he or she attains age 70 1/2, then his or her
Required Beginning Date shall be no later than April 1 of the calendar year
following the year in which he or she becomes a "five percent owner."
2.61 "Review Panel" means the committee, if any, appointed by the Company
to review appeals of denied claims under the Plan pursuant to Section 13.3.
2.62 "Rollover Account" means the account credited with Rollover
Contributions under Section 4.8.
2.63 "Rollover Contribution" means a contribution to the Plan of an amount
described in (i) Sections 402(c) (prior to January 1, 1993, Section 402(a)(5))
or 403(a)(4) of the Code, relating to certain distributions from an employees'
trust or employee annuity described in Sections 401(a) or 403(a) of the Code,
respectively, or (ii) Section 408(d)(3)(A)(ii) of the Code, relating to certain
distributions from an individual retirement account or an individual retirement
annuity. Further, for the purposes of this Plan, a Rollover Contribution shall
include direct trustee-to-trustee transfers (within the meaning of Section
401(a)(31) of the Code) from other qualified plans made on or after January 1,
1993 and direct or indirect plan-to-plan transfers from other qualified plans or
from the custodian of a conduit individual retirement arrangement, provided that
the trust or custodial account from which the funds are being transferred
permits such a transfer to be made.
2.64 "Salary" means an Eligible Employee's Compensation (as defined in
Section 2.13), except that
(a) Salary shall include all of the following amounts:
(1) 401(k) Contributions (for purposes of limiting 401(k)
Contributions and Voluntary Contributions, First Flex Credits allocated to the
Plan pursuant to the terms of the First Flex Plan shall be excluded); and
(2) other elective contributions that are made by the Employer or
an Affiliate on behalf of its Employees that are not includable in gross income
under Sections 125 and 402(e)(3) (prior to January 1, 1993, 402(a)(8)) of the
Code.
(b) Salary shall exclude:
(1) Effective January 1, 1993, awards paid under the First
Deposit Long-Term Incentive Plan (prior to January 1, 1993, only awards deferred
are excluded);
(2) Effective January 1, 1993, severance payments;
(3) Effective January 1, 1993, amounts paid or reimbursed by the
Employer for moving expenses incurred by an Eligible Employee to the extent that
the amounts are includable in gross income;
(4) Premiums for group-term life insurance that are includable in
gross income;
(5) Effective January 1, 1993, car allowances;
(6) Short-term or long-term disability payments;
(7) Effective January 1, 1993, payments of accrued vacation and
sabbatical upon termination of employment (such payments shall be included if
the termination is due to the Eligible Employee's subsequent employment with an
Affiliate);
(8) First Flex Credits (for purposes of limiting Employer
Matching Contributions, only First Flex Credits used to purchase insurance
benefits on a pre-tax basis pursuant to the terms of the First Flex Plan shall
be excluded);
(9) Effective January 1, 1993, employee referral awards; and
(10) Effective January 1, 1993, cash dividends paid with respect
to restricted Company Stock.
Notwithstanding the foregoing, an Eligible Employee may elect to exclude his or
her December bonus or Management Incentive Plan award from the definition of
Salary.
2.65 "Severance from Service Date" shall mean the date on which the earlier
of the following events occurs:
(a) the Employee quits, is discharged, retires or dies; or
(b) the first anniversary of the first date of a period in which the
Employee remains absent from service (with or without pay) with the Employer for
any reason other than a quit, retirement, discharge or death, such as vacation,
holiday, sickness, disability, leave or absence or layoff.
If an Employee does not resume employment upon the expiration of a leave of
absence and such leave is not extended by the Employer, for purposes hereof, the
Employee shall be deemed to have been discharged as of the date such leave of
absence expired.
2.66 "Trust" means all such money or other property that is held by the
Trustee pursuant to the terms of the Trust Agreement.
2.67 "Trust Agreement" means the trust agreement entered into between the
Company and a trustee for the purpose of funding benefits under the Plan, or any
successor trust agreement.
2.68 "Trustee" means the trustee or any successor thereto acting as such
pursuant to Section 12.4 and the terms of the Trust Agreement.
2.69 "Valuation Date" means the date on which assets of the Trust are
valued, which shall be the last day of each month (prior to October 1, 1992,
daily) or such other date or dates the Company may elect to determine the fair
market value of the Trust and make an allocation of income, gain or loss thereon
as provided in Section 5.2.
2.70 "Voluntary Contributions" means after-tax contributions to the Plan by
a Participant made under Section 4.2, in lieu of Salary payable to the
Participant.
2.71 "Voluntary Contributions Account" means the account (including any
subaccounts) into which Voluntary Contributions, if any, and investment gains
and losses thereon shall be credited.
2.72 "Year of Service" means, for purposes of vesting and eligibility for
Profit Sharing Contributions, a twelve-month Period of Service.
Article 3
Eligibility And Participation
3.1 Eligibility to Become a Participant.
(a) Each Eligible Employee who has entered the Plan prior to the
Effective Date shall continue to participate, and each other Eligible Employee
shall be entitled to become a Participant in the Plan on the first day of the
month next following his or her Employment Commencement Date, provided that he
or she is an Eligible Employee on such date.
(b) For purposes of receiving any Profit Sharing Contributions, an
Eligible Employee will become a Participant in the Plan on the first day of the
month during which he or she completes a Year of Service.
3.2 Participation in 401(k) Contributions. To participate for purposes of
making 401(k) Contributions, an Eligible Employee must have entered into a
401(k) Agreement, in the form as may be prescribed by the Company, authorizing
the reduction of his or her Salary in amounts that will be contributed to the
Plan as 401(k) Contributions on his or her behalf by the Employer.
3.3 Suspension of Participation.
(a) A Participant shall be suspended from active participation in the
Plan for any period during which the Participant:
(1) Is on a leave of absence without pay or
(2) Does not qualify as an Eligible Employee but remains a
Participant.
(b) A Participant shall make no 401(k) Contributions with respect to
any period of suspended participation under Subsection 3.3(a) above, nor shall a
suspended Participant receive any allocation of Employer Contributions,
Qualified Nonelective Contributions, Qualified Matching Contributions, or
Forfeitures for any such period. In addition, a Participant's 401(k)
Contributions shall be suspended or limited in the manner and for the period
prescribed under Section 9.6 in the case of a Hardship withdrawal from the Plan.
A suspended Participant, however, shall continue to share in the income, gains,
losses and expenses of the investments held in his or her Account.
3.4 Reestablishing Eligible Employee Status and Plan Reentry. If a former
Eligible Employee who previously terminated employment with the Employer
subsequently is reemployed by the Employer he or she shall again be eligible to
participate in the Plan immediately on reemployment.
3.5 Termination of Participation. An Employee who becomes a Participant
shall cease to be a Participant as of the date on which no further benefits
under the Plan are payable to him or her.
3.6 No Maximum Age. Participation in the Plan shall not be discontinued or
limited in any way, and the allocation of contributions shall not be decreased,
because of a Participant's attainment of any age.
Article 4
Contributions
4.1 401(k) Contributions.
(a) Subject to the limitations established by this Article 4, the
Employer shall make 401(k) Contributions on an Eligible Employee's behalf in an
amount equal to the amount of Salary that the Eligible Employee has elected to
defer pursuant to the Eligible Employee's 401(k) Agreement plus the amount of an
Eligible Employee's First Flex Credits allocated to the Plan (to the extent
permitted under the terms of the First Flex Plan). Each Eligible Employee may
elect to have the Employer contribute to the Plan from two percent (2%) to a
maximum of thirteen percent (13%) (prior to January 1, 1993, fifteen percent
(15%)) of such Eligible Employee's Salary for the Plan Year in accordance with
such uniform and nondiscriminatory rules and procedures as the Company may
establish. Such contribution shall include any First Flex Credits allocated to
the Plan by the Eligible Employee.
(b) Notwithstanding the provisions of Subsection 4.1(a) above, in
order for the Plan to comply with the requirements of Section 401(k), 402(g) and
415 of the Code (see Subsections 4.1(c) and 4.9(a) and Section 4.11 of the Plan,
respectively), at any time in a Plan Year, the Company (in its sole discretion)
may, by notifying the affected Eligible Employees in writing, reduce the rate of
401(k) Contributions to be made on behalf of an Eligible Employee for the
remainder of that Plan Year, or the Company may require that all 401(k)
Contributions to be made on behalf of an Eligible Employee be discontinued for
the remainder of that Plan Year. Such a reduction or discontinuance may be
applied selectively to individual Eligible Employees or to a particular class of
Eligible Employees, as the Company may determine in its sole discretion. Upon
the close of the Plan Year or such earlier date as the Company may determine,
any reduction or discontinuance in 401(k) Contributions shall automatically
cease until the Company again determines that such a reduction or discontinuance
of 401(k) Contributions is required. Any such reduction or discontinuance shall
be prospective only as to pay periods commencing after notice to the affected
Eligible Employees, and shall not result in discrimination in favor of Highly
Compensated Employees in any manner prohibited by Section 401(a)(4) of the Code
or regulations applicable thereunder. Any amounts that would have been
contributed to the Plan in the absence of a reduction or discontinuance pursuant
to this Subsection 4.1(b) shall be paid in cash to the affected Eligible
Employees in the same manner in which such amounts otherwise are payable as
Salary in the absence of any election of 401(k) Contributions.
(c) The total of the 401(k) Contributions under this Plan and any
other elective deferrals (as defined in Section 402(g)(3) of the Code) under all
other plans, contracts or arrangements of the Employer or any Affiliate of the
Employer for any Participant during any taxable year of the Participant shall
not exceed $7,000 or such other amount in effect under Section 402(g)(1) of the
Code, as adjusted for increases in the cost of living for the calendar year in
which the Participant's taxable year begins. To the extent 401(k) Contributions
are distributed or returned to a Participant as excess Annual Additions pursuant
to Section 4.11 of the Plan, such distributed or returned amounts shall be
disregarded for purposes of the limitation described in this Subsection 4.1(c).
(d) In the event a Participant has any Excess Elective Deferrals for
any taxable year of such Participant, whether or not the limitation in
Subsection 4.1(c) has been exceeded for such taxable year, such Excess Elective
Deferrals may be distributed to the Participant from the Plan in accordance with
either of Subsections (1) or (2) below (or a combination thereof, as
applicable):
(1) The Company may cause the Excess Elective Deferrals to be
distributed to the Participant during the taxable year of the Participant in
which the Excess Elective Deferrals occur if the following conditions are
satisfied:
(A) The Participant designates the distribution as Excess
Elective Deferrals; provided, however, to the extent the Participant's Excess
Elective Deferrals are attributable only to 401(k) Contributions under this Plan
and any other elective deferrals (as defined in Section 402(g)(3) of the Code)
under all other plans, contracts or arrangements maintained by the Employer or
any Affiliate of the Employer, the Participant shall be deemed to have
designated the distribution as Excess Elective Deferrals;
(B) Such distribution is made after the date on which the
Excess Elective Deferrals were received by the Plan; and
(C) The Plan designates the distribution as a distribution
of Excess Elective Deferrals.
(2) If any amount of Excess Elective Deferrals is included in the
gross income of a Participant for federal income tax purposes for any taxable
year of such Participant, the Participant, not later than the first March 1
following the close of such taxable year, may notify the Company of the amount
of such Excess Elective Deferrals that the Participant designates as having been
received by the Plan; provided, however, to the extent the Participant's Excess
Elective Deferrals are attributable only to 401(k) Contributions under this Plan
and any other elective deferrals (as defined in Section 402(g)(3) of the Code)
under all other plans, contracts or arrangements maintained by the Employer or
any Affiliate of the Employer, the Participant shall be deemed to have notified
the Plan and designated the amount of the Excess Elective Deferrals. In the
event notice of Excess Elective Deferrals is given or deemed given in accordance
with the foregoing provision, the Company shall cause there to be distributed to
the Participant not later than the first April 15 following the close of such
taxable year of the Participant the amount so designated, plus any income and
minus any loss allocable thereto for such taxable year of the Participant. The
amount of any income or loss to be allocated to Excess Elective Deferrals under
this Paragraph (2) shall be determined by multiplying the income or loss for the
taxable year allocable to 401(k) Contributions by a fraction. The numerator of
the fraction is the Excess Elective Deferrals for the taxable year. The
denominator of the fraction is equal to the sum of (i) the Participant's 401(k)
Account balance determined as of the beginning of the taxable year and (ii) the
Participant's 401(k) Contributions for the taxable year.
Any designation of Excess Elective Deferrals made by a Participant under
Paragraph (1) or (2) above shall be in writing, and, if the Excess Elective
Deferrals are attributable in part to elective deferrals made for the taxable
year to any plan, contract or arrangement not maintained by the Employer or any
Affiliate of the Employer, the Participant shall certify to the Company or
otherwise provide such information as the Company may reasonably require in
order to establish that the amount designated constitutes Excess Elective
Deferrals. The amount of Excess Elective Deferrals that may be distributed under
this Subsection 4.1(d) with respect to a Participant for a taxable year shall be
reduced by any Excess Contributions previously distributed in accordance with
Subsection 4.9(b) for the Plan Year beginning with or within the Participant's
taxable year. In no event may a Participant receive as a corrective distribution
under this Subsection 4.1(d) an amount in excess of the Participant's total
401(k) Contributions for the taxable year. Notwithstanding any other provision
in the Plan, the consent of a Participant or his or her spouse shall not be
required for a distribution of Excess Elective Deferrals and allocable income.
(e) Any decrease in the 401(k) Contributions for an Eligible Employee
resulting from the distribution of Excess Elective Deferrals also shall be
effective for purposes of determining the amount of Employer Matching
Contributions and Qualified Matching Contributions to be made for the Eligible
Employee's benefit under Subsection 4.4(b) and Section 4.6.
(f) A Participant's 401(k) Contributions shall be credited to his or
her 401(k) Account. However, for Federal tax purposes (and wherever permitted,
for state tax purposes), 401(k) Contributions shall be deemed to be
contributions to the Plan by the Employer, and a Participant's 401(k) Agreement
shall constitute an election to have his or her taxable compensation reduced by
the amount of all such 401(k) Contributions. 401(k) Contributions shall be made
in accordance with Plan rules and are subject to the limitations set forth in
this Article 4.
4.2 Voluntary Contributions. The Employer shall make Voluntary
Contributions on an Eligible Employee's behalf in an amount equal to the amount
of Salary that the Eligible Employee has elected to contribute pursuant to the
Eligible Employee's 401(k) Agreement. However, no Voluntary Contributions shall
be made under the Plan for the period from January 1, 1993 through April 30,
1993. Each Eligible Employee may make Voluntary Contributions to the Plan in an
amount from two percent (2%) to a maximum of six percent (6%) of such Eligible
Employee's Salary for the Plan Year in accordance with such uniform and
nondiscriminatory rules and procedures as the Company may establish.
Notwithstanding the previous sentence, an Eligible Employee's election to
contribute 401(k) Contributions and Voluntary Contributions for a Plan Year
shall not exceed thirteen percent (13%) (prior to January 1, 1993, fifteen
percent (15%)) of such Eligible Employee's Salary for the Plan Year.
4.3 401(k) Agreement.
(a) 401(k) Contributions and/or Voluntary Contributions shall be
authorized by a Participant in writing pursuant to a 401(k) Agreement. The
401(k) Agreement shall provide that a Participant's Salary shall be reduced by
any whole number percentage or whole dollar amount; provided, however, that the
amount of the reduction does not exceed the limitations set forth in this
Article 4.
(b) A Participant may elect to suspend his or her 401(k) Contributions
and/or Voluntary Contributions at any time by filing a notice on the prescribed
form with the Employer. Any such election shall be effective as soon as is
reasonably practical following receipt of such notice by the Employer. By giving
the Employer reasonable notice in the manner and at the time prescribed by the
Employer, a Participant who has suspended 401(k) Contributions and/or Voluntary
Contributions may recommence making 401(k) Contributions and/or Voluntary
Contributions as of any Entry Date after the date on which 401(k) Contributions
and/or Voluntary Contributions were suspended.
(c) A Participant may elect to change the amount of his or her 401(k)
Contributions and/or Voluntary Contributions no more than once each quarter
effective as of the first Entry Date following receipt by the Employer of the
Participant's revised election form. Any such change must be made in the manner
and at the time prescribed by the Employer.
(d) The Employer shall forward all 401(k) Contributions and/or
Voluntary Contributions to the Trustee for investment in the Trust, as provided
for in Article 6, as soon as reasonably feasible after such amounts would have
been paid to the Participants if not withheld from the Participants' Salary, but
in any event no later than ninety (90) days after the date such amounts would
have been paid as Salary.
4.4 Employer Contributions.
(a) Profit Sharing Contributions. For any Plan Year, the Employer may
make Profit Sharing Contributions in any amount as may be determined by the
Employer in its sole discretion. Such contributions, if any, shall be made in
the form of cash and shall be allocated as of the last day of the Plan Year to
the Profit Sharing Contributions Accounts of all Eligible Employees who have
completed one Year of Service in accordance with Subsection 3.1(b) and are
employed during such Plan Year in the proportion that the Compensation of each
such Eligible Employee for the Plan Year bears to the total Compensation for all
such Eligible Employees for such Plan Year. Notwithstanding the foregoing
sentence, Employees of the Company shall not be eligible to receive a Profit
Sharing Contribution. In addition, the Company shall have the discretion to
exclude Employees of any Affiliate of the Company from receiving Profit Sharing
Contributions, so long as such exclusion does not result in discrimination in
favor of Highly Compensated Employees in any manner prohibited by Section
401(a)(4) of the Code or the regulations applicable thereunder. For purposes of
allocating such Profit Sharing Contributions for any Plan Year based on an
Eligible Employee's Compensation, only Compensation attributable to periods in
such Plan Year during which such Employee was a Participant shall be taken into
account.
(b) Employer Matching Contributions. For any Plan Year, the Employer
may make Employer Matching Contributions in any amount as may be determined by
the Employer, in its sole discretion. Such contributions, if any, may be made in
the form of Company Stock or cash that shall be used to purchase Company Stock
(or a combination thereof) and shall be allocated as of each payroll period
during the Plan Year to the Employer Matching Contributions Accounts of all
Eligible Employees who have made 401(k) Contributions and/or Voluntary
Contributions for the payroll period in the proportion that each such Eligible
Employee's 401(k) Contributions and/or Voluntary Contributions for the payroll
period bears to the total 401(k) Contributions and/or Voluntary Contributions
for all Eligible Employees for such payroll period. The Employer may uniformly
limit for all Eligible Employees, or just for those Eligible Employees who are
Highly Compensated Employees, the amount of 401(k) Contributions and/or
Voluntary Contributions that are taken into account for purposes of allocating
Employer Matching Contributions.
4.5 Qualified Nonelective Contributions. For any Plan Year, the Employer
may make Qualified Nonelective Contributions in any amount as may be determined
by the Employer in its sole discretion. Such contributions, if any, shall be
made in the form of cash and shall be allocated as of the last day of the Plan
Year to the 401(k) Accounts of all Eligible Employees who are employed as of the
last day of the Plan Year in the proportion that the Compensation of each such
Eligible Employee for the Plan Year bears to the total Compensation for all such
Eligible Employees for such Plan Year, provided that the Employer may determine
that allocations of Qualified Nonelective Contributions shall be limited to
individual Eligible Employees who are Non-Highly Compensated Employees or to all
Eligible Employees who are Non-Highly Compensated Employees, as the Employer may
determine in its sole discretion. For purposes of allocating Qualified
Nonelective Contributions for any Plan Year based on an Employee's Compensation,
only Compensation attributable to periods in such Plan Year during which such
Employee was an Eligible Employee shall be taken into account.
If the Company so determines, it may cause Qualified Nonelective Contributions
to be allocated to a separate Qualified Nonelective Contributions Account for
each Participant established for the purpose of receiving and holding such
contributions instead of allocating such contributions to the 401(k) Accounts of
Participants. Such contributions shall meet the requirements of Section
401(m)(4)(C) of the Code and regulations applicable thereunder.
4.6 Qualified Matching Contributions. For any Plan Year, the Employer may
make Qualified Matching Contributions in any amount as may be determined by the
Employer, in its sole discretion. Such contributions, if any, shall be made in
the form of cash and shall be allocated as of the last day of the Plan Year to
the 401(k) Accounts of all Eligible Employees who have made 401(k) Contributions
and/or Voluntary Contributions for the Plan Year, and who are employed as of the
last day of the Plan Year, in the proportion that each such Eligible Employee's
401(k) Contributions and/or Voluntary Contributions for the Plan Year bears to
the total 401(k) Contributions and/or Voluntary Contributions for all Eligible
Employees for such Plan Year, provided that the Employer may limit allocations
of Qualified Matching Contributions to individual Eligible Employees who are
Non-Highly Compensated Employees or to all Eligible Employees who are Non-Highly
Compensated Employees.
If the Company so determines, it may cause Qualified Matching Contributions to
be allocated to a separate Qualified Matching Contributions Account for each
Participant established for the purpose of receiving and holding such
contributions instead of allocating such contributions to the 401(k) Accounts of
Participants.
4.7 Time of Payment. All Employer Contributions, Qualified Nonelective
Contributions, and Qualified Matching Contributions shall be paid to the
Trustee, in one or more installments, not later than the final date for filing
the Employer's Federal income tax return for the fiscal year of the Employer
within which or with which occurs the end of the Plan Year for which such
contributions are made, including extensions of time granted for such filing.
4.8 Rollover Contributions.
(a) An Eligible Employee, whether or not he or she has reached an
Entry Date or elected to make 401(k) Contributions, may make a Rollover
Contribution subject to the approval of the Company and in accordance with
procedures approved by the Company. Upon such a Rollover Contribution by an
Eligible Employee who has not yet otherwise become a Participant, his or her
Rollover Account shall represent his or her sole interest in the Plan.
(b) A Rollover Contribution (other than in the case of a direct
trustee-to-trustee transfer (within the meaning of Section 401(a)(31) of the
Code) made on or after January 1, 1993 or a plan-to-plan transfer) shall be made
within sixty (60) days of distribution (or such longer time as may be permitted
by regulations), and shall exclude any amounts contributed by the Eligible
Employee to the plan, annuity or other arrangement from which the Rollover
Contribution is derived. In no event may an Eligible Employee make a Rollover
Contribution (including as a result of a plan-to-plan transfer) that would cause
the Plan to be a direct or indirect transferee, within the meaning of Section
401(a)(11)(B)(iii)(III) of the Code and any regulations or rulings thereunder,
of a plan described in Section 401(a)(11)(B)(i) or (ii) of the Code.
(c) A Rollover Contribution shall be made only in the form of money.
In the event of a Rollover Contribution that is derived from a distribution to
the Eligible Employee of property other than money from a plan, trust or annuity
described in Sections 401(a) or 403(a) of the Code (but not from an individual
retirement account or annuity described in Section 408(a) or (b) of the Code),
the Rollover Contribution shall be made in an amount of money equal to the
proceeds from the bona fide sale of all or a portion of such property. In no
event may a Rollover Contribution be made with respect to a distribution of
property other than money from an individual retirement account or annuity
described in Section 408(a) or (b) of the Code or from a plan, trust or annuity
described in Sections 401(a) or 403(a) of the Code to the extent of such
property that is retained by the Eligible Employee.
(d) An Eligible Employee may be required to furnish evidence
satisfactory to the Company that the amount of a proposed Rollover Contribution
meets all of the foregoing requirements. When made, the Eligible Employee's
Rollover Contribution shall be credited to such Eligible Employee's Rollover
Account as of the date such contribution is received. A Rollover Contribution
shall not be considered a contribution by the Employer, and an Eligible
Employee's Rollover Account shall be fully vested at all times.
4.9 Nondiscrimination Requirements.
(a) Actual Deferral Percentage Test. In no event shall the Actual
Deferral Percentage for Eligible Employees who are Highly Compensated Employees
exceed with respect to any Plan Year the greater of (1) or (2) as follows:
(1) One hundred twenty-five percent (125%) of the Actual Deferral
Percentage for Eligible Employees who are Non-Highly Compensated Employees or
(2) The lesser of (i) two hundred percent (200%) of the Actual
Deferral Percentage for Eligible Employees who are Non-Highly Compensated
Employees, (ii) the Actual Deferral Percentage for Eligible Employees who are
Non-Highly Compensated Employees plus two (2) percentage points, or (iii) the
highest amount which, when taking into account the Actual Deferral Percentage
for Eligible Employees who are Non-Highly Compensated Employees and the Actual
Contribution Percentages for Highly Compensated Employees and Non-Highly
Compensated Employees, respectively, would not cause the "aggregate limit"
(within the meaning of Treasury Regulations Section 1.401(m)-2(b)(3)) to be
exceeded, in accordance with the provisions of Subsection 4.9(g) below.
(b) Correction Methods to Meet Actual Deferral Percentage Test. In the
event that for any Plan Year the Actual Deferral Percentage for Eligible
Employees who are Highly Compensated Employees otherwise would not meet either
of the tests set forth above, as required by Section 401(k)(3)(A) of the Code,
then the Employer shall elect one of the following methods (or any combination
thereof) of meeting one of those tests:
(1) Excess Contributions may be recharacterized as Voluntary
Contributions for the Plan Year for any Highly Compensated Employees to whose
Accounts Excess Contributions were allocated for the Plan Year. Such
recharacterized amounts, when added to the Voluntary Contributions, if any,
actually made by such Highly Compensated Employee during the Plan Year pursuant
to Section 4.2, shall not exceed the maximum amount of Voluntary Contributions
that such Highly Compensated Employee is otherwise permitted to make under the
Plan for such Plan Year. Recharacterization must be made within 2 1/2 months
after the close of the Plan Year.
(2) Excess Contributions, plus any income and minus any loss
allocable thereto for such Plan Year, may be distributed after the end of the
Plan Year and within twelve (12) months after the close of such Plan Year to the
Highly Compensated Employees to whose Accounts such Excess Contributions were
allocated for the Plan Year. If Excess Contributions are distributed more than 2
1/2 months after the last day of the Plan Year in which such amounts arose, a
ten percent (10%) excise tax will be imposed on the Employer with respect to
such amounts as provided in Section 4979 of the Code. The amount of any income
or loss to be allocated to Excess Contributions under this Paragraph (2) shall
be determined by multiplying the income or loss for the Plan Year allocable to
401(k) Contributions and contributions treated as 401(k) Contributions by a
fraction. The numerator of the fraction is the Excess Contributions for the Plan
Year. The denominator of the fraction is equal to the sum of (i) the
Participant's 401(k) Account balance determined as of the beginning of the Plan
Year and (ii) the Participant's 401(k) Contributions and any Qualified
Nonelective Contributions or Qualified Matching Contributions treated as 401(k)
Contributions for the Plan Year. Notwithstanding any other provision in the
Plan, the consent of a Participant or his or her spouse shall not be required
for a distribution of Excess Contributions and allocable income.
(3) In its discretion, the Employer may make Qualified
Nonelective Contributions or Qualified Matching Contributions on behalf of
Non-Highly Compensated Employees pursuant to Sections 4.5 or 4.6 in amounts
sufficient to meet the Actual Deferral Percentage test when taking such
contributions into account to the extent permitted under the Plan and
regulations under Section 401(k) of the Code.
(c) Special Rules for Actual Deferral Percentage Limit Testing.
(1) For purposes of the Actual Deferral Percentage test, the
Deferral Rate of any Eligible Employee who is a Highly Compensated Employee for
the Plan Year and who is eligible to have 401(k) Contributions or any other
employer contributions described in Section 401(k)(3)(D) of the Code allocated
to his or her accounts under two or more cash or deferred arrangements described
in Section 401(k) of the Code that are maintained by the Employer or an
Affiliate shall be determined as if all 401(k) Contributions and any such other
employer contributions were made under a single cash or deferred arrangement. If
a Highly Compensated Employee participates in two or more cash or deferred
arrangements described in Section 401(k) of the Code that have different plan
years, all such arrangements that have plan years ending with or within the same
calendar year shall be treated as a single arrangement.
(2) In the event that this Plan satisfies the requirements 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 4.9
shall be applied by determining the Actual Deferral Percentage of Eligible
Employees as if all such plans were a single plan. Plans may be aggregated in
order to satisfy Section 401(k) of the Code only if they have the same Plan
Year.
(3) For purposes of determining the Deferral Rate of an Eligible
Employee who is a five percent (5%) owner of the Employer (within the meaning of
Section 416(i)(1)(B)(i) of the Code) or one of the ten (10) most highly paid
Highly Compensated Employees for the Plan Year, the 401(k) Contributions and
Compensation of such Eligible Employee shall include the 401(k) Contributions
and Compensation for the Plan Year of any of the members of his or her family
who also are Eligible Employees. Such family members shall be disregarded as
separate Employees in determining the Actual Deferral Percentage both for
Eligible Employees who are Non-Highly Compensated Employees and for Eligible
Employees who are Highly Compensated Employees. For this purpose, family members
shall be an Eligible Employee's spouse and lineal ascendants or descendants and
the spouses of such lineal ascendants or descendants.
(4) In order to be taken into account for purposes of the Actual
Deferral Percentage test for a Plan Year, 401(k) Contributions must be allocated
to the Employee's Account as of a date within such Plan Year. For this purpose,
401(k) Contributions will not be considered to be allocated as of a date within
a Plan Year unless (i) the allocation is not contingent on the Employee's
participation in the Plan or performance of services on any date subsequent to
that date and (ii) such 401(k) Contributions are made before the end of the
twelve-month period immediately following such Plan Year.
(5) 401(k) Contributions will be taken into account under the
Actual Deferral Percentage test for a Plan Year only if they relate to
Compensation that either would have been received by the Eligible Employee in
the Plan Year (but for his or her 401(k) Agreement) or attributable to services
performed by the Eligible Employee in the Plan Year and would have been received
by the Eligible Employee within 2 1/2 months after the close of the Plan Year
(but for his or her 401(k) Agreement).
(6) Any decrease in the 401(k) Contributions for an Eligible
Employee resulting from the distribution of Excess Contributions also shall be
effective for purposes of determining the amount of Employer Matching
Contributions or Qualified Matching Contributions to be made for the Eligible
Employee's benefit under Subsection 4.4(b) and Section 4.6, as the case may be.
(7) To the extent 401(k) Contributions are distributed or
returned to a Participant as excess Annual Additions pursuant to Section 4.11 of
the Plan, such amounts shall be disregarded for purposes of determining the
Deferral Rate of a Participant.
(8) To the extent 401(k) Contributions are taken into account in
determining an Eligible Employee's Contribution Rate for purposes of the Actual
Contribution Percentage test under Subsection 4.9(d), such amounts shall be
disregarded for purposes of determining the Deferral Rate.
(9) Excess Elective Deferrals of a Non-Highly Compensated
Employee that are calculated by taking into account only 401(k) Contributions
under this Plan and any other plan maintained by the Employer and that are
distributed to such Non-Highly Compensated Employee pursuant to Subsection
4.1(d) of the Plan shall be disregarded for purposes of determining the Deferral
Rate of such Non-Highly Compensated Employee.
(10) For purposes of Subsection 4.9(a), Eligible Employee shall
include any Employee who would be eligible to make 401(k) Contributions to the
Plan but for a suspension due to a withdrawal, a loan, an election not to
participate in the Plan, or the inability of the Employee to receive additional
Annual Additions because of the limits imposed by Section 415(c)(1) or 415(e) of
the Code.
(11) The Company shall maintain such records as are necessary to
demonstrate compliance with the requirements of Subsection 4.9(a), including the
extent to which Qualified Nonelective Contributions and Qualified Matching
Contributions are taken into account for purposes of determining an Eligible
Employee's Deferral Rate.
(d) Actual Contribution Percentage Test. In no event shall the Actual
Contribution Percentage for Eligible Employees who are Highly Compensated
Employees exceed with respect to any Plan Year the greater of (1) or (2) as
follows:
(1) One hundred twenty-five percent (125%) of the Actual
Contribution Percentage for Eligible Employees who are Non-Highly Compensated
Employees or
(2) The lesser of (i) two hundred percent (200%) of the Actual
Contribution Percentage for Eligible Employees who are Non-Highly Compensated
Employees or (ii) the Actual Contribution Percentage for Eligible Employees who
are Non-Highly Compensated Employees plus two (2) percentage points.
(e) Correction Methods to Meet Actual Contribution Percentage Test. In
the event that for any Plan Year the Actual Contribution Percentage for Eligible
Employees who are Highly Compensated Employees otherwise would not meet either
of the tests set forth above, as required by Section 401(m)(2) of the Code, then
the Employer shall elect one of the following methods (or any combination
thereof) of meeting one of those tests:
(1) Excess Aggregate Contributions, plus any income and minus any
loss allocable thereto for such Plan Year, may be forfeited, if forfeitable, or,
if not forfeitable, distributed after the end of the Plan Year and within twelve
(12) months after the close of such Plan Year to the Highly Compensated
Employees to whose Accounts such Excess Aggregate Contributions were allocated
for the Plan Year. If Excess Aggregate Contributions are distributed more than 2
1/2 months after the last day of the Plan Year in which such amounts arose, a
ten percent (10%) excise tax will be imposed on the Employer with respect to
such amounts as provided in Section 4979 of the Code. The amount of any income
or loss to be allocated to Excess Aggregate Contributions under this Paragraph
(1) shall be determined by multiplying the income or loss for the Plan Year
allocable to the Employer Matching Contributions, Voluntary Contributions,
Qualified Matching Contributions and contributions treated as Employer Matching
Contributions by a fraction. The numerator of the fraction is the Excess
Aggregate Contributions for the Plan Year. The denominator of the fraction is
equal to the sum of (i) the Participant's Employer Matching Contributions
Account balance, Voluntary Contributions Account balance and Qualified Matching
Contributions Account balance determined as of the beginning of the Plan Year
and (ii) the Participant's Employer Matching Contributions, Voluntary
Contributions, Qualified Matching Contributions and any Qualified Nonelective
Contributions or 401(k) Contributions treated as Employer Matching Contributions
for the Plan Year. Notwithstanding any other provision in the Plan, the consent
of a Participant or his or her spouse shall not be required for a distribution
of Excess Aggregate Contributions and allocable income.
(2) In its discretion, the Employer may make Qualified
Nonelective Contributions or Qualified Matching Contributions on behalf of
Non-Highly Compensated Employees pursuant to Sections 4.5 or 4.6 in amounts
sufficient to meet the Actual Contribution Percentage test when taking such
contributions into account to the extent permitted under the Plan and
regulations under Section 401(m) of the Code.
(f) Special Rules for Actual Contribution Percentage Limit Testing.
(1) For purposes of the Actual Contribution Percentage test, the
Contribution Rate for any Eligible Employee who is a Highly Compensated Employee
for the Plan Year and who is eligible to have Employer Matching Contributions,
Voluntary Contributions, Qualified Matching Contributions or any other matching
contributions described in Section 401(m)(4)(A) of the Code allocated to his or
her accounts under two or more plans described in Section 401(a) of the Code
that are maintained by the Employer or an Affiliate shall be determined as if
all Employer Matching Contributions, Voluntary Contributions, Qualified Matching
Contributions and any such other matching contributions were made under a single
plan. If a Highly Compensated Employee participates in two or more plans to
which are made contributions described in Section 401(m)(4)(A) of the Code that
have different plan years, all such plans that have plan years ending with or
within the same calendar year shall be treated as a single plan.
(2) In the event that this Plan satisfies the requirements of
Sections 401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or
more 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 4.9
shall be applied by determining the Contribution Rate of Eligible Employees as
if all such plans were a single plan. Plans may be aggregated in order to
satisfy Section 401(m) of the Code only if they have the same plan year.
(3) For purposes of determining the Contribution Rate of an
Eligible Employee who is a five percent (5%) owner of the Employer (within the
meaning of Section 416(i)(1)(B)(i) of the Code) or one of the ten (10) most
highly paid Highly Compensated Employees for the Plan Year, the Employer
Matching Contributions, Voluntary Contributions, Qualified Matching
Contributions, and Compensation of such Eligible Employee shall include the
Employer Matching Contributions, Voluntary Contributions, Qualified Matching
Contributions, and Compensation for the Plan Year of any of the members of his
or her family who also are Eligible Employees. Such family members shall be
disregarded as separate employees in determining the Contribution Rate both for
Eligible Employees who are Non-Highly Compensated Employees and for Eligible
Employees who are Highly Compensated Employees. For this purpose, family members
shall be an Eligible Employee's spouse and lineal ascendants or descendants and
the spouse of such lineal ascendants or descendants.
(4) In order to be taken into account for purposes of the Actual
Contribution Percentage test for a Plan Year, Employer Matching Contributions
and Qualified Matching Contributions must (i) be allocated to the Eligible
Employee's Account as of a date within the Plan Year under other provisions of
the Plan, (ii) be made on account of the Eligible Employee's 401(k)
Contributions and/or Voluntary Contributions for the Plan Year and (iii) be made
before the end of the twelve-month period immediately following the Plan Year
and Voluntary Contributions must be made to the Trust within the Plan Year (a
payment by an Eligible Employee to an agent of the Plan shall be treated as a
contribution to the Trust at the time of payment to the agent if the funds paid
are transferred to the Trust within a reasonable period after the payment to the
agent).
(5) To the extent Voluntary Contributions are distributed or
returned to an Eligible Employee as excess Annual Additions pursuant to Section
4.11 of the Plan, such amounts shall be disregarded for purposes of determining
the Participant's Contribution Rate. Employer Matching Contributions, Voluntary
Contributions, and Qualified Matching Contributions that are forfeited as Excess
Aggregate Contributions pursuant to Subsection 4.9(e) or because the 401(k)
Contributions to which they relate are treated as Excess Contributions, Excess
Elective Deferrals or Excess Aggregate Contributions shall not be taken into
account for purposes of the Actual Contribution Percentage test.
(6) To the extent Qualified Matching Contributions are taken into
account in determining an Eligible Employee's Deferral Rate for purposes of the
Actual Deferral Percentage test under Subsection 4.9(a), such amounts shall be
disregarded for purposes of determining the Contribution Rate.
(7) For purposes of Subsection 4.9(d), Eligible Employee shall
include any Employee who would be eligible to make 401(k) Contributions and
Voluntary Contributions to the Plan and thus receive Employer Matching
Contributions and Qualified Matching Contributions but for a suspension due to a
withdrawal, a loan, an election not to participate in the Plan, or the inability
of the Eligible Employee to receive additional Annual Additions because of the
limits imposed by Section 415(c)(1) or 415(e) of the Code.
(8) The Company shall maintain such records as are necessary to
demonstrate compliance with the requirements of Subsection 4.9(d), including the
extent to which 401(k) Contributions and Qualified Nonelective Contributions are
taken into account for purposes of determining an Eligible Employee's
Contribution Rate.
(g) Prevention of Multiple Use. Notwithstanding any other provisions
of the Plan to the contrary, in no event shall the sum of the Actual Deferral
Percentage and the Actual Contribution Percentage for Eligible Employees who are
Highly Compensated Employees exceed with respect to any Plan Year the "aggregate
limit," as that term is defined in Treasury Regulations Section 1.401(m)-2(b)(3)
(relating to the multiple use of the alternative limitations contained in
Sections 401(k)(3)(A)(ii)(II) and 401(m)(2)(A)(ii) of the Code, respectively).
However, the aggregate limit will not be considered to have been exceeded in any
Plan Year if either the Actual Deferral Percentage or the Actual Contribution
Percentage of the Eligible Employees who are Highly Compensated Employees does
not exceed 1.25 multiplied by the Actual Deferral Percentage or Actual
Contribution Percentage, as the case may be, of the Eligible Employees who are
Non-Highly Compensated Employees. If, after application of the provisions in
Subsections 4.9(b) and (e) above, such aggregate limit would be exceeded for any
Plan Year, then either the Actual Deferral Percentage of Highly Compensated
Employees for such Plan Year shall be reduced or the Company shall make
Qualified Nonelective Contributions pursuant to Section 4.5 so that the
aggregate limit is not exceeded. The amount of any reduction of the Actual
Deferral Percentage for Highly Compensated Employees under this Subsection
4.9(g) shall be determined in the same manner as the amount of any Excess
Contributions is determined, as specified in Section 2.31, and such reduction
shall be treated as Excess Contributions for purposes of the Plan. For purposes
of this Subsection 4.9(g), the provisions of Treasury Regulations Section
1.401(m)-2 are incorporated by reference herein.
4.10 Reversion of Contributions. Except as provided in this Section 4.10 or
as provided in Section 4.11 in the case of the termination of the Plan, the
assets of the Plan shall never inure to the benefit of the Employer, and shall
be held for the exclusive purposes of providing benefits to Participants and/or
their Beneficiaries, and for defraying the expenses of administering the Plan.
(a) In the case of a contribution which is made by virtue of a mistake
of fact, this Section 4.10 shall not prohibit the return of such contribution to
the Employer within one (1) year after the payment of the contribution.
(b) If a contribution is conditioned upon initial qualification of the
Plan under Section 401(a) of the Code, or any successor provision thereto, and
if the Plan does not so qualify, then this Section 4.10 shall not prohibit the
return of such contribution to the Employer within one (1) year after the date
of denial of initial qualification of the Plan, but only if the application for
the qualification is made by the time prescribed by law for filing the
Employer's return for the taxable year in which the Plan is adopted, or such
later date as the Secretary of the Treasury may prescribe.
(c) If a contribution is conditioned upon the deductibility of the
contribution under Section 404 of the Code, or any successor provision thereto,
then to the extent the deduction of such contribution is disallowed, this
Section 4.10 shall not prohibit the return of such contribution (to the extent
disallowed) to the Employer within one (1) year after such disallowance of the
deduction.
4.11 Other Limitations on Contributions.
(a) In no event shall the Annual Additions allocated to any
Participant's Account in any Limitation Year exceed the lesser of (1) or (2) as
follows:
(1) Twenty-five percent (25%) of the Participant's Compensation
for the Limitation Year; or
(2) $30,000 (or, if greater, 1/4 of the defined benefit dollar
limit then in effect under Section 415(b)(1)(A) of the Code, as adjusted
annually under Section 415(d) of the Code for increases in the cost of living).
(b) If, as a result of (i) the allocation of Forfeitures, (ii) a
reasonable error in estimating a Participant's Compensation, (iii) a reasonable
error in determining the amount of 401(k) Contributions that may be made with
respect to any Participant under the limits of Section 415 of the Code or (iv)
other limited facts and circumstances that the Commissioner of Internal Revenue
finds justify the availability of the relief provisions specified in this
Section 4.11, allocations of Annual Additions would exceed the limitation of
Subsection 4.11(a) with respect to any Participant, first the Participant's
Voluntary Contributions for the Limitation Year, plus any income allocable
thereto for such Limitation Year, then the Participant's 401(k) Contributions,
plus any income allocable thereto, for the Limitation Year shall be distributed
to the Participant to the extent that the distributions would reduce the excess
Annual Additions allocated to the Participant's Account. If excess Annual
Additions remain for any Participant after available Voluntary Contributions and
401(k) Contributions have been distributed, the excess Annual Additions shall be
credited to a suspense account for the Limitation Year and used to reduce
Employer Contributions for the next Limitation Year (and succeeding Limitation
Years, as necessary) for all Eligible Employees.
(c) Any suspense account established under Subsection (b) shall be
maintained in accordance with the following special rules:
(1) The balance in the suspense account shall be allocated and
reallocated (except to the extent limited by Subsection 4.11(a)) on the next
succeeding allocation date for allocation of contributions. The entire amount so
allocated from the suspense account, including any gains, income or losses
credited to the suspense account in accordance with Paragraph (2) below, shall
be considered as Annual Additions as of the date allocated.
(2) Investment gains, income or losses shall be allocated to the
suspense account.
(3) No further Employer Contributions may be made under the Plan
until the suspense account is exhausted.
(4) In the event of termination of the Plan, the suspense account
shall be allocated and reallocated to the Accounts of all Eligible Employees in
the manner prescribed in Subsections 4.11(b) and (c) up to the limits of
Subsection 4.11(a) determined without regard to Compensation paid after the date
of Plan termination. Any remaining amount of said suspense account that cannot
be so reallocated shall be repaid to the Employer.
(d) If a Participant has been a participant in a qualified defined benefit
plan (as defined in Section 414(j) of the Code) maintained by the Employer or
any Affiliate, in no event shall an Eligible Employee be entitled to receive a
benefit in an amount which would cause the sum of the Defined Benefit Plan
Fraction and the Defined Contribution Plan Fraction to exceed 1.0 for any
Limitation Year. In the event such sum of the Defined Benefit Plan Fraction and
the Defined Contribution Plan Fraction would otherwise exceed 1.0 for any Plan
Year, the projected annual retirement income benefit under the Defined Benefit
Plan Fraction shall be limited, to the extent necessary, to reduce such Defined
Benefit Plan Fraction so that the sum of the two fractions hereunder does not
exceed the foregoing 1.0 limitation.
(e) Notwithstanding other provisions of this Section 4.11 to the contrary,
the otherwise permissible Annual Additions for any Eligible Employee under this
Plan may be further reduced to the extent necessary, as determined by the
Company, to prevent disqualification of the Plan under Section 415 of the Code,
which imposes additional limitations on the benefits payable to Eligible
Employees who also may be participating in certain other tax-qualified pension,
profit sharing, savings or stock bonus plans. The Company shall advise affected
Eligible Employees of any additional limitation on their Annual Additions
required by the preceding sentence.
Article 5
Participants' Accounts
5.1 Individual Accounts. The Company, or the Trustee if the Company so
determines and the Trustee agrees, shall maintain, or cause to be maintained, an
Account for each Participant, which shall consist of the following subaccounts,
as applicable: a 401(k) Account, a Profit Sharing Contribution Account, an
Employer Matching Contributions Account, a Voluntary Contributions Account, a
Rollover Account, and such other separate subaccounts, if any, as the Company
may determine to establish pursuant to Sections 4.5 or 4.6. The Company shall
also maintain, or cause to be maintained, on behalf of each Participant, a
separate accounting of each Participant's Account, including contributions,
transfers, withdrawals, earnings, losses and expenses attributable thereto.
5.2 Revaluation of the Trust. As of each Valuation Date, the Company shall
cause to be determined the fair market value of all assets of the Trust, giving
effect to (i) earnings, (ii) gains and losses and (iii) appreciation or
depreciation whether or not realized. The method of valuation shall be
determined by the Trustee and shall be followed with reasonable consistency from
year to year. The aggregate amount credited to the Accounts of all Participants
having Accounts in the Trust shall be adjusted as of each Valuation Date so as
to be equal to the value of all assets in the Trust on such date. Such
adjustment shall be made by allocating to the Account of each Participant, as of
the Valuation Date and prior to the allocation of contributions and Forfeitures
for the Plan Year or such other valuation period, that proportion of the net
change in fair market value of all assets as is equal to the proportion that the
value of each such Account bears to the value of all such Accounts as of the
immediately preceding Valuation Date, after making such adjustments as may be
appropriate to reflect contributions, loans or distributions which were made
subsequent to the preceding Valuation Date.
The Company may at any other time it deems appropriate under the circumstances
secure a determination of the fair market value of the Trust as a whole, of one
or more of the separate Investment Funds established under Article 6, or one or
more of the separate subaccounts maintained for a Participant. In such event,
the Company may make a determination as of such date of the income, gain or loss
on any such respective funds since the preceding Valuation Date. If the
allocation of such income, gain or loss will produce a significant change in the
value of Participants' Accounts, and if such valuation shall affect a
distribution, then in the discretion of the Company such date may thereupon be
deemed a Valuation Date, and the Company shall allocate such income, gain or
loss to the Accounts of Participants in the manner provided in the preceding
paragraph.
5.3 Statements. At least once in each Plan Year, the Company shall cause to
be furnished to each Participant a statement showing the values of his or her
Account pursuant to this Article 5 as of a Valuation Date occurring in such Plan
Year or the preceding Plan Year.
5.4 Allocation of Investment Income. Each Participant's Account shall be
revalued on each Valuation Date to reflect any investment income, gains, losses
and expenses allocable to such Account as well as any adjustments for
contributions to or distributions, loans or withdrawals from such Account.
Article 6
Investment Of Participant's Accounts
6.1 Investment Control.
(a) A Participant shall have the right to direct the investment of his
or her 401(k) Account, Voluntary Contributions Account, and Rollover Account or
a specified portion thereof in accordance with Section 6.3 among such Investment
Funds as are selected by the Company.
(b) The Company shall have investment authority and responsibility for
Participants' Profit Sharing Contributions Accounts. Participants' Employer
Matching Contributions Accounts shall be invested in Company Stock. Participants
do not have the right to direct the investment of their Profit Sharing
Contributions Accounts and Employee Matching Contributions Accounts under the
Plan.
6.2 Selection of Investment Funds. The Company shall have the authority to
select and withdraw, in its sole discretion, one or more Investment Funds for
the investment of Participants' 401(k) Accounts, Voluntary Contributions
Accounts, and Rollover Accounts upon prior written notice to Participants.
6.3 Investment of Accounts.
(a) If the Company selects more than one Investment Fund pursuant to
Section 6.2, each Participant may make an investment election, in accordance
with such rules as may be established by the Company, which shall be applied in
a uniform and nondiscriminatory manner.
(b) Each Participant who directs the investment of his or her 401(k)
Account, Voluntary Contributions Account, and Rollover Account is solely
responsible for the selection of his or her investment options. The Trustee, the
Company, and the officers, supervisors and other employees of any such entity
are not authorized to advise a Participant as to the manner in which his or her
401(k) Account, Voluntary Contributions Account, and Rollover Account shall be
invested. The fact that an Investment Fund is available to a Participant for
investment under the Plan shall not be construed as a recommendation for
investment in that Investment Fund. In the event no election is made by a
Participant, such amounts available for his or her election will be invested by
the Trustee in a balanced fund or similar investment.
6.4 Change of Investment Election as to Future Contributions. The Company
shall prescribe, on a uniform and nondiscriminatory basis, the timing and
frequency with which changes in investment elections as to future contributions
are permitted. The Company may establish and communicate to all Participants
procedures under which a Participant may elect to change his or her investment
election under Section 6.3 as to future contributions by the use of a telephone
exchange system maintained by the Investment Funds for such purposes, subject to
such restrictions as may be established by the Investment Fund.
6.5 Transfers Between Investment Funds. The Company shall prescribe, on a
uniform and nondiscriminatory basis, the timing and frequency with which
Participants may elect to transfer amounts already allocated to their 401(k)
Account, Voluntary Contributions Account, and Rollover Accounts between
available Investment Funds. The Company may establish and communicate to all
Participants procedures under which Participants may indicate their elections
regarding transfers between Investment Funds by giving instructions directly to
the manager or managers of any such funds, subject to such reasonable conditions
and limitations as to the timing and frequency of such instructions by a
Participant as the Company from time to time may prescribe on a uniform and
nondiscriminatory basis. Such procedures shall specify (i) a reasonable method
for providing such instructions to the fund managers (which may include
telephonic instructions) designed to ensure the proper implementation of a
Participant's instructions and otherwise to protect the interests of
Participants, and (ii) the frequency with which such transfers may be made
(which may be as frequently as daily) in accordance with new instructions of the
Participant.
Article 7
Vesting
7.1 Fully Vested Subaccounts. A Participant shall at all times have a one
hundred percent (100%) nonforfeitable interest in his or her 401(k) Account,
Qualified Nonelective Contributions Account, Qualified Matching Contributions
Account, Rollover Account, and Voluntary Contributions Account, as applicable.
7.2 Vesting of the Profit Sharing Contributions Account.
(a) If a Participant's employment with the Employer is terminated
before his or her Early Retirement or Normal Retirement Age for any reason other
than Disability or death, in addition to the amounts credited to the subaccounts
identified in Section 7.1, the Participant shall be entitled to an amount equal
to the "vested percentage" of his or her Profit Sharing Contributions Account.
Such vested percentage shall be determined based on the Participant's Years of
Service for vesting purposes in accordance with the following schedule:
Vested
Years of Service Percentage
---------------- ----------
Less than 3 0%
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
(b) In all events, a Participant's Profit Sharing Contributions
Account shall be fully vested upon termination of his or her employment with the
Employer on or after attainment of his or her Early Retirement or Normal
Retirement Age or by reason of Disability or death.
7.3 Vesting of the Employer Matching Contributions Account.
(a) If a Participant's employment with the Employer is terminated
before his or her Early Retirement or Normal Retirement Age for any reason other
than Disability or death, in addition to the amounts credited to the Accounts
identified in Sections 7.1 and 7.2, the Participant shall be entitled to an
amount equal to the "vested percentage" of his or her Employer Matching
Contributions Account. Such vested percentage shall be determined in accordance
with the following schedule:
Vested
Years of Service Percentage
---------------- ----------
Less than 3 0%
3 but less than 4 50%
4 or more 100%
(b) In all events, a Participant's Employer Matching Contributions
Account shall be fully vested upon termination of his or her employment with the
Employer on or after attainment of his or her Early Retirement or Normal
Retirement Age or by reason of Disability or death.
7.4 Change in Vesting Schedule. Notwithstanding any other provision of the
Plan to the contrary, in the event that either of the vesting schedules set
forth in Subsections 7.2(a) and 7.3(a) is amended by the Company, any
Participant with at least three (3) Years of Service) for vesting purposes at
the time such amendment first becomes effective shall be permitted to elect,
within a reasonable period after the adoption of such amendment, to have the
vested and nonforfeitable portion of his or her Accounts calculated without
regard to such amendment. In the event that the use of the vesting schedule
prior to amendment would under all circumstances provide a Participant with
vested and nonforfeitable benefits in his or her Accounts that are equal to or
greater than the amount of such benefits after applying the amended vesting
schedule, the Participant shall be deemed to have elected the use of the vesting
schedule prior to amendment for purposes of calculating the vested and
nonforfeitable portion of his or her Accounts. The period during which the
election may be made shall commence with the date the amendment is adopted and
shall end on the latest of (i) sixty (60) days after the amendment is adopted,
(ii) sixty (60) days after the amendment becomes effective, or (iii) sixty (60)
days after the Participant is issued written notice of the amendment by the
Company.
7.5 Forfeitures.
(a) Any remainder of a terminated Participant's Profit Sharing
Contributions Account or Employer Matching Contributions Account that is not
vested in accordance with the foregoing vesting schedules shall be retained in
such Accounts and forfeited at the earlier of the following dates: (i) if the
Participant receives any distribution out of the Participant's Accounts, the
date of such distribution, or (ii) if the Participant does not receive a
distribution out of the Participant's Accounts, the date on which the
Participant incurs a Five Year Break in Service.
(b) Amounts forfeited under Subsection 7.5(a) shall be applied first
to restore the Account balances of any Participants entitled to such restoration
under Subsection (c) below. Remaining Forfeiture amounts, if any, shall then be
used to:
(1) Reduce any subsequent Employer Matching Contributions and
shall be allocated to the Employer Matching Contributions Accounts of
Participants in accordance with the provisions of Subsection 4.4(b) to the
extent such Forfeitures are attributable to Employer Matching Contributions; and
(2) Reduce any subsequent Profit Sharing Contributions and shall
be allocated to the Profit Sharing Contributions Accounts of Participants in
accordance with the provisions of Subsection 4.4(a) to the extent such
Forfeitures are attributable to Profit Sharing Contributions..
(c) If a previously terminated Participant is reemployed by the
Employer prior to incurring a Five Year Break in Service and if the nonvested
portion of his or her Accounts has been forfeited pursuant to Subsection 7.5(a),
an amount equal to the value of the forfeited portion of the Participant's
Profit Sharing Contributions Account and Employer Matching Contributions Account
shall be restored to his or her Account in full as of the Participant's
Reemployment Commencement Date without adjustment for any gains or losses
occurring subsequent to the time of the prior forfeiture. Such restoration shall
be made out of then available Forfeitures of the nonvested portions of the
Accounts of other Participants in accordance with Subsection 7.5(b), if any, or
by a special contribution from the Employer to the extent that Forfeitures then
available are insufficient. The amount restored pursuant to this Subsection (c)
and the remaining balance of the Participant's undistributed vested interest in
his or her Profit Sharing Contributions Account and Employer Matching
Contributions Account, if any, shall be maintained as a separate Profit Sharing
Contributions Account and Employer Matching Contribution Account. Such separate
Accounts shall share in the allocation of gain or loss pursuant to Section 5.2,
but shall not share in allocations pursuant to Article 4.4. A Participant's
vested interest in such separate Profit Sharing Contributions Account and
Employer Matching Contribution Account shall thereafter be determined by
applying the following formula:
Vested interest = P(AB + (R X D))minus (R X D).
For purposes of applying the formula, P is the vested percentage, in accordance
with Subsections 7.2(a) and 7.3(a) at the date of determination; AB is the
relevant Account balance at the date of determination; D is the amount of the
distribution previously made; and R is the ratio of the relevant Account balance
at the date of determination to the Account balance immediately following the
preceding distribution.
7.6 Vesting on Reemployment.
(a) Except as provided in Subsection (d) of this Section 7.6, if a
Participant or former Participant is reemployed after a one year Period of
Severance (including a Five Year Break in Service), he or she shall receive
credit for any Period of Service completed prior to his or her date of
reemployment for the purpose of computing his or her vested percentage after his
or her date of reemployment in his or her Profit Sharing Contributions Account
and Employer Matching Contributions Account balance related to his or her
employment after his or her one year Period of Severance.
(b) If a Participant or former Participant is reemployed after a one
year Period of Severance but before incurring a Five Year Break in Service, that
Participant's employment after his or her one year Period of Severance shall be
taken into account, together with his or her employment before his or her one
year Period of Severance, for purposes of computing his or her vested percentage
in his or her Profit Sharing Contributions Account and Employer Matching
Contributions Account balance with respect to his or her participation before
such one year Period of Severance.
(c) If a Participant or former Participant is reemployed after
incurring a Five Year Break in Service, no amounts shall be reinstated to his or
her Profit Sharing Contributions Account and Employer Matching Contributions
Account under Section 7.5(c), and no Period of Service after such Five Year
Break in Service shall be taken into account in determining the vested
percentage in his or her Profit Sharing Contributions Account and Employer
Matching Contributions Account balance accrued before such Five Year Break in
Service. The undistributed vested amount of a Participant's Profit Sharing
Contributions Account and Employer Matching Contributions Account, if any, which
accrued prior to the Participant's Five Year Break in Service shall be held as a
separate Profit Sharing Contributions Account and Employer Matching
Contributions Account, as appropriate. Such separate subaccount shall be fully
vested and shall share in allocation of gain or loss pursuant to Section 5.2 but
shall not share in allocations pursuant to Article 4.
(d) If a Participant or former Participant who had no vested interest
in his or her Profit Sharing Contributions Account and Employer Matching
Contributions Account at the time of his or her termination of employment is
reemployed by the Employer after a Period of Severance of one year or longer,
the Participant's Period of Service before such one year Period of Severance
shall be disregarded for vesting purposes if the Period of Severance equals or
exceeds the greater of five (5) consecutive years or the aggregate Periods of
Service, whether or not consecutive, completed before such Period of Severance.
Article 8
Plan distributions
8.1 Events Permitting Distribution. Except as otherwise provided in Section
16.3, distribution of the balance credited to a Participant's Account may be
made only under the following circumstances:
(a) Upon termination of the Participant's employment for any reason;
(b) In-service withdrawals to the extent permitted in Article 9;
(c) Upon termination of the Plan, if the Employer does not maintain a
successor defined contribution plan (other than an employee stock ownership plan
as defined in Section 4975(e) or 409 of the Code or a simplified employee
pension plan as defined in Section 408(k) of the Code) and the Participant's
distribution is made in the form of a lump sum;
(d) Upon the sale, to an entity that is not an Affiliate, of
substantially all of the assets used by the Employer in a trade or business in
which the Participant is employed, if the Participant's distribution is made in
the form of a lump sum, the Employer continues to maintain the Plan following
such sale, and the Participant continues employment with the purchaser of such
assets; or
(e) Upon the sale, to an entity that is not an Affiliate, of the
interest of the Employer or an Affiliate in a subsidiary in which the
Participant is employed, if the Participant's distribution is made in the form
of a lump sum, the Employer continues to maintain the Plan following such sale,
and the Participant continues employment with such subsidiary.
8.2 Applicable Distribution and Withdrawal Provisions. A Participant who is
an Employee may not receive any distributions from the Plan prior to his or her
termination of employment or the termination of the Plan except (i) to the
extent permitted under Article 9 as a withdrawal or (ii) as required under
Section 8.5 (relating to the latest time for distributions). Following a
Participant's termination of employment, distribution of his or her benefit
shall be made as provided below in this Article 8.
8.3 Time of Distribution to Participant.
(a) Except as provided in Sections 8.4, 8.5, and 8.6, and unless a
Participant elects otherwise, the distribution of a Participant's benefit under
Section 8.7 shall occur or commence not later than sixty (60) days after the
close of the Plan Year in which occurs the later of (i) the Participant's
attainment of his or her Normal Retirement Age or (ii) the Participant's
termination of employment.
(b) If the value of a Participant's entire vested benefit exceeds
$3,500, no distribution to such Participant shall occur or commence before the
Participant has attained the later of Normal Retirement Age or age sixty-two
(62), unless an earlier distribution is elected by the Participant in accordance
with Subsection (c) below. For this purpose, if the Participant's vested benefit
at the time of any distribution exceeded $3,500, the value of his or her vested
benefit at all times thereafter will be deemed to exceed $3,500.
(c) The Company shall provide a Participant with the notices required
by Section 402(f) of the Code and Treasury Regulation Section 1.411(a)-11(c) no
less than thirty (30) days and no more than ninety (90) days before receipt or
commencement of the distribution. A Participant may elect to receive or commence
receipt of his or her benefit at any reasonable time after termination of
employment. Such an election must be made in writing not more than ninety (90)
days and not less than thirty (30) days before the date requested by the
Participant for the distribution to occur or commence. If a distribution is one
to which Sections 401(a)(11) and 417 of the Code do not apply, such distribution
may be made or commence less than thirty (30) days after the notice required
under Treasury Regulation Section 1.411(a)-11(c) is given, provided that:
(1) The Company clearly informs the Participant that the
Participant has a right to a period of at least thirty (30) days after receiving
the notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and
(2) The Participant, after receiving the notice, affirmatively
elects a distribution.
8.4 Time of Distribution of Death Benefits. The distribution of a
Participant's death benefit shall be made in accordance with Section 8.10.
8.5 Latest Time of Distribution. Notwithstanding any other provision of
this Plan, the distribution of a Participant's benefit shall occur or commence
under this Article 8 no later than the Participant's Required Beginning Date,
whether or not the Participant's employment has terminated. If the Participant
continues to participate in the Plan after his or her Required Beginning Date,
distribution of any additional Plan benefit with respect to which distribution
had not occurred or commenced as of the Required Beginning Date shall occur or
commence under Section 8.7 during each calendar year following a calendar year
in which such an additional benefit is accrued.
8.6 Small Benefits: Immediate Payment. Notwithstanding any other provision
of this Article 8, if the value of a Participant's entire vested benefit is
$3,500 or less, then the benefit shall be paid to such Participant (or, in the
case of his or her death, to the Beneficiary) in a single lump sum in cash as
soon as practical following the Participant's termination of employment (unless
an earlier distribution is required by Section 8.5). For this purpose, if the
Participant's vested benefit at the time of any distribution exceeded $3,500,
the value of his or her vested benefit at all times thereafter will be deemed to
exceed $3,500.
8.7 Form of Distribution to Participant. A Participant's benefit shall be
distributed in whichever of the following forms he or she elects:
(a) A lump sum in cash.
(b) Annual cash installments payable over the life of the Participant
(or the lives of the Participant and his or her Beneficiary) or over a period
certain not exceeding the Participant's life expectancy (or the joint life
expectancy of the Participant and the Participant's Beneficiary). Life
expectancies shall not be recalculated annually, unless the Participant (or, in
the case of his or her death, the Participant's spouse) elects otherwise. During
the installment period, the remaining Account balance shall be credited with a
share of gains, losses, income and expenses of the Trust in accordance with
Section 5.2, and the investment election procedures described in Article 6 shall
remain available to such Participant. The amount of each installment shall be
determined by dividing the remaining Account balance by the number of remaining
installments. With the Company's consent, the distribution of all or part of the
remaining Account balance may be accelerated at the Participant's request.
(c) A life annuity providing the Participant with a monthly retirement
benefit during his or her lifetime, ceasing with the last payment due
immediately preceding his or her date of death.
(d) A year certain and life annuity providing the Participant with a
monthly retirement benefit during his or her lifetime with the guarantee that
one hundred twenty (120) monthly retirement benefit payments will be paid to
either the Participant or his or her Beneficiary. If this form is elected and
the Participant dies prior to the receipt of all of the guaranteed monthly
payments, the balance of the guaranteed monthly payments will be paid to the
Participant's designated Beneficiary and will continue until the total of the
guaranteed number of monthly payments have been made to the Participant and his
or her Beneficiary. The first such payment to the Beneficiary shall be due and
payable as of the first day of the month following the Participant's death. In
the event there is no designated Beneficiary living at the death of the
Participant, the balance of the guaranteed monthly payments which otherwise
would have become payable to the Participant's designated Beneficiary shall be
commuted to a single sum and shall be paid to the Participant's Beneficiary
determined in accordance with Subsection 8.10(a) in the absence of a designated
Beneficiary.
(e) A qualified joint and survivor annuity that provides the
Participant with a monthly retirement benefit during his or her lifetime with
payments made to the Participant's spouse after the Participant's death that are
equal to fifty percent (50%) or one hundred percent (100%), as elected by the
Participant, of the amount of the monthly benefit payable to the Participant
during his or her life.
If a form of benefit has not been elected by the time for a Participant's
distribution to occur under Section 8.3 or 8.5, the Participant shall be deemed
to have elected a lump sum in cash.
8.8 Qualified Joint and Survivor Annuity Provisions. If a Participant
elects one of the forms of distribution set forth in Subsection 8.7(c), (d) or
(e) and the Participant is married, the Participant's benefit shall be paid in
the form of a qualified joint and survivor annuity and the following rules shall
apply:
(a) Waiver of Qualified Joint and Survivor Annuity.
(1) Not more than ninety (90) days before the annuity starting
date, a Participant may elect to waive the applicable qualified joint and
survivor annuity form of benefit and to receive payment instead in one of the
alternative forms specified in Section 8.7. If the Participant elects one of the
alternative benefit forms described in Section 8.7, the Participant also may
designate a Beneficiary other than his or her spouse to receive any benefits
payable following the Participant's death. A Participant may revoke any election
previously made under this Subsection (a) and may make a new election hereunder
any number of times before the annuity starting date. A Participant's election
or revocation under this Subsection (a) shall be in writing.
(2) An election to waive the qualified joint and survivor annuit
shall not be valid unless the Participant has received the notice and
explanation described in Subsection (b) below and the spouse of the Participant
consents in writing to such election in a manner that satisfies the spousal
consent requirements set forth in Subsection 8.11(b), provided that the
Participant's election also must designate a specific alternative form of
benefit (as well as a Beneficiary) that may not be changed without further
spousal consent (unless expressly permitted by the spouse's consent or a prior
consent). Spousal consent is not required in order for a Participant to revoke
an election to waive the qualified joint and survivor annuity. In the event an
election is revoked, the qualified joint and survivor annuity form of benefit
shall apply, unless and until a new election to waive such benefit is made,
subject to the spousal consent requirements set forth herein.
(b) Notice and Explanation Requirements. Not more than ninety (90) and
not less than thirty (30) days before the annuity starting date, the Company
shall notify the Participant in writing of his or her right to elect to waive
the applicable qualified joint and survivor annuity form of benefit. Such
written notification shall include:
(1) An explanation of the terms and conditions of the applicable
qualified joint and survivor annuity, including the circumstances under which it
will be provided if no election is made to waive such form of benefit;
(2) A statement of the Participant's right to make an election to
waive the qualified joint and survivor annuity and an explanation of the effect
of such an election;
(3) A statement of the Participant's right to revoke an election
to waive the qualified joint and survivor annuity and an explanation of the
effect of such a revocation;
(4) A statement of the right of the Participant's spouse to
consent to the Participant's election to waive the qualified joint and survivor
annuity and to the Participant's designation of an alternative form of benefit
or Beneficiary;
(5) A general explanation of the relative financial impact of an
election to waive the qualified joint and survivor annuity; and
(6) A statement regarding the availability of the additional
information described below in this Subsection (b).
Within thirty (30) days after receipt of a timely written request from the
Participant for additional information, the Company shall provide the
Participant with a written explanation, in nontechnical language, of the terms
and conditions of the alternative forms of benefit available under the Plan and
the financial effect (in terms of dollars per monthly payment) upon the
Participant's monthly benefit in case of an election to waive the qualified
joint and survivor annuity and receive an alternative form of benefit.
(c) Definition of Annuity Starting Date. The term "annuity starting
date" shall mean the first day of the first period for which an amount is
payable as an annuity or, in the case of a benefit not payable as an annuity,
the date of distribution of the benefit.
8.9 Qualified Preretirement Survivor Annuity Provisions. If a Participant
elects one of the forms of distribution set forth in Subsections 8.7(c), (d) and
(e), the following rules shall apply:
(a) Qualified Preretirement Survivor Annuity. If the Participant dies
before the annuity starting date (as defined in Subsection 8.8(c) above) and if
he or she is married at the time of his or her death, the balance in his or her
Account shall be applied toward the purchase of a qualified preretirement
survivor annuity described below, unless, prior to his or her death, the
Participant elected to waive such form of benefit and designated an alternative
form of death benefit or Beneficiary in the manner provided in Subsection (b)
below. If the Participant dies before the annuity starting date and if he or she
is not married at the time of his or her death, the balance in his or her
Account shall be distributed to his or her Beneficiary in accordance with
Section 8.10.
The qualified preretirement survivor annuity shall consist of an immediate life
annuity which provides the spouse with a monthly retirement benefit during his
or her lifetime, the actuarial equivalent of which is one hundred percent (100%)
of the Participant's vested Account balance (adjusted for any outstanding loans)
as of the date of the Participant's death, ceasing with the last payment due
immediately preceding his or her date of death.
(b) Waiver of Qualified Preretirement Survivor Annuity.
(1) On or after the first day of the Plan Year in which the
Participant attains age thirty-five (35), the Participant may elect to waive the
qualified preretirement survivor annuity form of death benefit and designate a
Beneficiary other than his or her spouse to receive the balance in his or her
Account in the event of his or her death prior to the annuity starting date, in
accordance with Subsection (d) below. In the case of a Participant whose
employment terminates prior to the first day of the Plan Year in which he or she
attains age thirty-five (35), an election may be made at any time following such
termination of employment to waive the qualified preretirement survivor annuity
with respect to his or her Account attributable to service prior to such
termination. The Participant may revoke any election previously made under this
Subsection (b) and may make a new election hereunder any number of times before
the annuity starting date or the Participant's earlier death. The Participant's
election or revocation under this Subsection (b) shall be in writing.
(2) An election to waive the qualified preretirement survivor
annuity shall not be valid unless the Participant has received the notice and
explanation described in Subsection (c) below and the spouse of the Participant
consents in writing to such election in a manner that satisfies the spousal
consent requirements set forth in Subsection 8.11(b). Spousal consent is not
required in order for the Participant to revoke an election to waive the
qualified preretirement survivor annuity. In the event an election is revoked,
the qualified preretirement survivor annuity form of benefit shall again apply,
unless and until a new election to waive such benefit is made, subject to the
spousal consent requirements set forth herein.
(c) Notice and Explanation Requirements. The Company shall notify the
Participant in writing of his or her right to waive the qualified preretirement
survivor annuity form of benefit. Such notification shall contain an explanation
and such other information with respect to the qualified preretirement survivor
annuity which is comparable to that required under Subsection 8.8(b) with
respect to the qualified joint and survivor annuity. Such written notice and
explanation shall be provided to each Participant within whichever of the
following periods ends last:
(1) The period beginning on the first day of the Plan Year in
which the Participant attains age thirty-two (32) and ending with the close of
the Plan Year preceding the Plan Year in which the Participant attains age
thirty-five (35).
(2) The period beginning one (1) year before and ending one (1 )
year after the time such individual became a Participant.
(3) In the case of a Participant whose employment terminates
prior to attaining age thirty-five (35), the period beginning one (1) year
before and ending one (1) year after such termination of employment.
(4) The period beginning one (1) year before and ending one (1)
year after Sections 8.8 and 8.9 apply to the Participant.
(d) Alternative Forms of Death Benefit. The death benefit payable
under this Section 8.9 to the Beneficiary of a married Participant who has
validly waived the qualified preretirement survivor annuity or to the
Beneficiary of an unmarried Participant shall be paid in accordance with Section
8.10.
8.10 Distribution of Death Benefit. If a Participant dies before receiving
his or her entire benefit, such Participant's Beneficiary shall be entitled to
receive such benefit (or the undistributed portion thereof) after filing the
prescribed claim form with the Company. Subject to the provisions of Sections
8.6 and 8.12, the Beneficiary's distribution shall be made as follows:
(a) This Subsection 8.10(a) shall apply only in the event that a
Participant elected to receive his or her benefit in installments or annuity
payments under Section 8.7 and then dies after the installment or annuity
payments have commenced but before such payments are completed. Subject to the
requirements of Subsection 8.12(c), the remaining installments or annuity
payments of such Participant's benefit ordinarily shall be paid to his or her
Beneficiary in accordance with the predetermined distribution schedule
originally established for him or her by the Company. However, a Beneficiary may
make a written request, subject to the Company's consent, to accelerate the
distribution of any or all unpaid installments to which such Beneficiary is
entitled.
(b) This Subsection 8.10(b) shall apply in the event that a
Participant dies before his or her benefit is distributed and Subsection (a)
above does not apply. A Beneficiary may receive the Participant's benefit in any
of the forms of distribution set forth in Section 8.7 as he or she elects. If a
Beneficiary does not elect a form of distribution, the Participant's benefit
shall be paid to his or her Beneficiary in the form of a single lump sum in
cash, and the distribution shall be made as soon as reasonably practical after
the Participant's death. However, in no event shall the lump sum distribution be
made later than five (5) years after the Participant's death.
8.11 Beneficiary Designation; Spousal Consent Rights.
(a) A Participant's Beneficiary shall be the person(s) so designated
by such Participant. If the Participant has not made an effective designation of
a Beneficiary or if the designated Beneficiary is not living when a distribution
is to be made, then (i) the surviving spouse of the deceased Participant shall
be the Beneficiary, if then living, or (ii) if none, the then living children of
the deceased Participant shall be the Beneficiaries in equal shares, or (iii) if
none, the then living parents of the deceased Participant shall be the
Beneficiaries in equal shares, or (iv) if none, the then living brothers and/or
sisters of the deceased Participant shall be the Beneficiaries in equal shares,
or (v) if none, the estate of the Participant shall be the Beneficiary. The
Participant may change his or her designation of a Beneficiary from time to
time. Any designation of a Beneficiary (or an amendment or revocation thereof)
shall be effective only if it is made in writing on the prescribed form and is
received by the Employer prior to the Participant's death.
(b) The designation by a married Participant of a primary Beneficiary
other than his or her surviving spouse shall not be valid unless such
designation (i) includes the written consent of the surviving spouse that
acknowledges the effect of such designation and is witnessed by either a Plan
representative or a notary public, and (ii) names a specific Beneficiary that
may not be changed without further spousal consent (unless the consent or a
prior consent expressly permits designations by the Participant without any
requirement of further consent by the spouse). Such consent shall be effective
only as to the spouse who signs the consent and, once given, may not be revoked
by such spouse. Notwithstanding the foregoing, such spousal consent shall not be
required if it is established to the satisfaction of a Plan representative that
the required consent cannot be obtained because there is no spouse, because the
Participant is legally separated from or has been abandoned by the spouse (and
the Participant has a court order to that effect), because the spouse cannot be
located, or because of other circumstances that are deemed acceptable under
applicable Treasury Regulations. If a Participant's spouse is legally
incompetent to give consent, the spouse's legal guardian may do so, even if such
guardian is the Participant. A designation of Beneficiary made by a Participant
and consented to by his or her spouse may be revoked by the Participant in
writing without the consent of the spouse at any time prior to the time his or
her benefit is distributed or commences. Any new election must comply with the
requirements of this Subsection (b).
(c) The Company may require such proof of death and such evidence of
the right of any person to receive payment under Section 8.10 as the Company may
deem advisable. The Company's determination of the right under this Section 8.11
of any person to receive payment shall be final and conclusive upon all persons.
8.12 Minimum Required Distributions; Incorporation of Regulations.
(a) All distributions under the Plan shall comply with Section
401(a)(9) of the Code and the regulations promulgated thereunder, including
Treasury Regulations Section 1.401(a)(9)-2, and the provisions of the Plan
reflecting Section 401(a)(9) of the Code (including Section 8.5 and this Section
8.12) shall override any other provisions of the Plan that are inconsistent
therewith.
(b) All distributions shall be payable in accordance with Treasury
regulations over the life of the Participant (or the lives of the Participant
and his or her designated Beneficiary) or over a period not extending beyond the
life expectancy of the Participant (or the joint life and last survivor
expectancy of the Participant and his or her designated Beneficiary). The
present value of the payments to be made to the Participant during the
Participant's life expectancy shall be no less than is required under the
"incidental death benefit" rule of Section 401(a)(9)(G) of the Code and the
regulations thereunder.
(c) Notwithstanding anything in the Plan to the contrary, if a
Participant dies before the distribution of his or her benefits has been made or
commenced, the Participant's entire benefit shall be distributed by December 31
of the calendar year containing the fifth (5th) anniversary of the date of his
or her death; provided that any portion of the benefit which is payable to a
designated Beneficiary may be distributed (i) over the life of (or over a period
not extending beyond the life expectancy of) such Beneficiary, (ii) beginning
not later than one year after the date of the Participant's death or, if such
Beneficiary is the Participant's surviving spouse, beginning not later than the
date on which the Participant would have attained age 70 1/2. If the spouse dies
before distributions begin, the spouse shall be treated as the Participant for
purposes of these provisions.
(d) Notwithstanding anything in the Plan to the contrary, if a
Participant dies after distribution of his or her benefits has commenced, the
remaining portion of the benefit will be distributed at least as rapidly as
under the method of distribution in effect at the date of such Participant's
death.
(e) For purposes of Subsections (c) and (d) above, distribution of a
Participant's benefits are treated as having commenced on the Participant's
Required Beginning Date, even though payments may actually have been made before
that date.
(f) For purposes of this Section 8.12 and to the extent permitted by
law, any amount paid to a Participant's child shall be treated as if it had been
paid to the Participant's surviving spouse if such amount will become payable to
the surviving spouse upon such child reaching the age of majority (or other
designated event permitted by law).
8.13 Direct Rollover.
(a) Effective January 1, 1993, notwithstanding any provision of the
Plan to the contrary that would otherwise limit a distributee's election under
this Section 8.13, a distributee may elect, at the time and in the manner
prescribed by the Company and in accordance with the regulations promulgated
under Section 402(c) of the Code, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
(b) For purposes of this Section 8.13 and Section 8.14:
(1) "Eligible retirement plan" means an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity (other than an endowment contract) described in Section 408(b) of the
Code, a qualified trust described in Section 401(a) of the Code, or an annuity
plan described in Section 403(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or an individual retirement annuity.
(2) "Eligible rollover distribution" means any distribution, in a
form permitted under Section 8.7 of the Plan, of all or any portion of the
balance to the credit of the distributee, except that the following
distributions shall not be eligible rollover distributions: (i) any distribution
that is one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the distributee
and the distributee's designated beneficiary, or for a specified period of ten
(10) years or more, (ii) any distribution required under Section 8.5 and (iii)
the portion of any distribution that is not includable in gross income.
(3) "Distributee" means 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.
(4) "Direct rollover" means a payment by the Plan to the eligible
retirement plan specified by the distributee.
8.14 Withholding on Distributions. Distributions under this Plan shall be
subject to Federal income tax withholding to the extent prescribed by Section
3405 of the Code. Effective January 1, 1993, in accordance with Section 3405(c)
of the Code and the regulations thereunder, if a Participant elects to receive a
distribution of any portion of an eligible rollover distribution rather than
have such distribution transferred directly to an eligible retirement plan in
accordance with Section 8.13, the Company shall withhold or cause to be withheld
from such distribution an amount equal to twenty percent (20%) of such
distribution.
8.15 Deferred Distribution. The Accounts of Participants who have
terminated employment and have not yet received the entire value of their vested
Plan benefit may be charged with their proportionate shares of the
administrative expenses of the relevant Investment Funds and with their shares
of any per Participant fees charged by a third party administrator.
8.16 Determination of Account Balance. Whenever a Participant or his or her
Beneficiary is entitled to receive a distribution of the entire amount or a
percentage of his or her Account balance, the amount of such Account balance
shall be determined as of the Valuation Date immediately preceding the date of
distribution, as adjusted for contributions and withdrawals made after such
Valuation Date.
8.17 Reemployment of Participants Receiving Payments. In the event that a
Participant who is receiving installment or annuity payments under this Article
8, which are payable as a result of the Participant attaining Normal Retirement
Age or the Participant's Disability, is reemployed by the Employer, such
Participant shall continue to receive payments from his or her Account in
accordance with the method of payment in effect prior to his or her reemployment
unless such method is changed. Payments shall be drawn from his or her entire
Account, including any contributions allocated to his or her Account after his
or her reemployment.
8.18 No Liability. Any payment to any Participant, or to his or her legal
representative or Beneficiary, in accordance with the provisions of the Plan,
shall to the extent thereof be in full satisfaction of all claims for benefits
hereunder against the fiduciaries of the Plan, including the Employer and the
Trustee, any of whom may require such Participant, legal representative or
Beneficiary, as a condition precedent to such payment, to execute a receipt
therefor in such form as shall be determined by the fiduciary requesting such
receipt. The Employer does not guarantee the Plan, the Participants, former
Participants or their legal representatives or Beneficiaries against loss of or
depreciation in value of any right or benefit that any of them may acquire under
the terms of the Plan. All of the benefits payable hereunder shall be paid or
provided for solely from the Trust, and the Employer does not assume any
liability or responsibility therefor.
Article 9
Withdrawals While Employed
9.1 Withdrawals From Voluntary Contributions Account. A Participant who has
made Voluntary Contributions and who is an Employee may make a withdrawal from
his or her Voluntary Contributions Account once per Plan Year.
9.2 Withdrawals From Rollover Account. Subject to the limitation contained
in Section 9.7, a Participant who has made a Rollover Contribution and who is an
Employee may make a withdrawal from his or her Rollover Account at any time. The
amount that may be withdrawn under this Section 9.2 shall not exceed the balance
credited to the Participant's Rollover Account. Notwithstanding the foregoing
provisions of this Section 9.2, to the extent required by applicable rules or
regulations in order to maintain the qualification of the Plan or a plan from
which assets are transferred to the Plan, the withdrawal of any portion of a
Participant's Rollover Account that is attributable to a plan-to-plan transfer
to the Plan from another qualified plan shall be subject to any additional
limitation imposed on the amounts so transferred by the transferor plan
immediately prior to such transfer.
9.3 Withdrawals From 401(k) Account. A Participant who is an Employee may
make a withdrawal from his or her 401(k) Account if:
(a) He or she has attained age fifty-nine and one-half (59 1/2) or
(b) Subject to the restrictions of Section 9.6, he or she is eligible
for a Hardship withdrawal.
9.4 Withdrawals from Profit Sharing Contributions Account and Employer
Matching Contributions Account. A Participant who is an Employee may make a
withdrawal from the vested portion of his or her Profit Sharing Contributions
Account and Employer Matching Contributions Account if he or she has attained
age fifty-nine and one-half (59 1/2). The amount that may be withdrawn under
this Section 9.4 shall not exceed the vested portion of the balance credited to
the Participant's Profit Sharing Contributions Account and Employer Matching
Contributions Account.
9.5 Company Consent. The Company, in its sole discretion, may withhold its
consent to any withdrawal under this Article 9, and the Company may consent only
to the withdrawal of a part of the amount requested by the Participant. The
Company shall act upon requests for withdrawals in a uniform and
nondiscriminatory manner, based on written, objective criteria and consistent
with the requirements of Section 401(a), Section 401(k), Section 401(m) and
related provisions of the Code.
9.6 Hardship Withdrawal Rules.
(a) A Hardship withdrawal must be made on account of an immediate and
heavy financial need of the Participant arising solely from one or more of the
following:
(1) Costs directly related to the construction or purchase
(excluding mortgage payments) of the Participant's principal residence;
(2) Expenses for medical care described in Section 213(d) of the
Code which (i) were previously incurred by the Participant or the Participant's
spouse or dependent (as defined in Section 152 of the Code) or (ii) are
necessary for such persons to obtain such medical care;
(3) Payment of tuition and related educational fees for the next
twelve (12) months of post-secondary education for the Participant or his or her
spouse, child or dependent (as defined in Section 152 of the Code);
(4) Payment of amounts necessary to prevent the eviction of the
Participant from his or her principal residence or the foreclosure of the
mortgage on the Participant's principal residence; or
(5) Any other financial need that has been identified as a deemed
immediate and heavy financial need in a ruling of general applicability issued
under the authority of the Commissioner of the Internal Revenue Service.
(b) A Hardship withdrawal must be necessary to satisfy the financia
need of the Participant. In order to qualify for a Hardship withdrawal:
(1) The amount of the Hardship withdrawal must not exceed the
amount of the immediate and heavy financial need of the Participant. The amount
of the immediate and heavy financial need may include any amounts necessary to
pay any federal, state or local income taxes or penalties reasonably anticipated
to result from the distribution of the Hardship withdrawal.
(2) The Participant must have obtained all distributions, other
than Hardship withdrawals, and all nontaxable loans currently available under
all plans maintained by the Employer, unless obtaining such loan would increase
the Participant's Hardship.
(3) Upon receipt of a Hardship withdrawal, the Participant shall
be suspended from making 401(k) Contributions to the Plan or elective
contributions to any other plan maintained by the Employer or an Affiliate
(including qualified and nonqualified plans, but excluding health or welfare
benefit plans) for twelve (12) months following the receipt of the Hardship
withdrawal.
(4) Upon receipt of a Hardship withdrawal, the Participant may
not make 401(k) Contributions to the Plan or elective contributions to any other
plan maintained by the Employer or an Affiliate for the Participant's taxable
year immediately following the year of the Hardship withdrawal in excess of the
applicable limit under Section 402(g) of the Code for such following year, less
the amount of such Participant's 401(k) Contributions to the Plan and elective
contributions to any other plan maintained by the Employer or an Affiliate for
the year of the Hardship withdrawal.
(c) The Company's determination of an immediate and heavy financial
need of the Participant, the amount required to satisfy such need and the
Participant's lack of other resources reasonably available to meet such need
shall be made in a uniform and nondiscriminatory manner with respect to all
Participants.
(d) Notwithstanding any other provision of this Article 9, a
Participant shall not be permitted to make a Hardship withdrawal of any
Qualified Nonelective Contributions or Qualified Matching Contributions or of
any earnings on such contributions credited to his or her Account, unless such
Qualified Nonelective Contributions or Qualified Matching Contributions and any
earnings on such contributions were credited to his or her Account as of
December 31, 1988.
(e) Hardship withdrawals from a Participant's 401(k) Account under
this Article 9 shall be limited to an amount equal to the Participant's total
401(k) Contributions under the Plan, determined as of the date of the
withdrawal, reduced by the amount of any previous Hardship withdrawals.
Notwithstanding the foregoing, earnings credited to a Participant's 401(k)
Account as of December 31, 1988 which are attributable to 401(k) Contributions
may also be withdrawn.
(f) In order to qualify for a Hardship withdrawal, the Participant
must submit a properly completed withdrawal request form in accordance with
procedures established by the Company.
9.7 Frequency and Source of Withdrawals. A Participant shall not be
permitted to make more than one withdrawal under this Article 9 in any Plan
Year; provided, however, that withdrawals made at the same time shall be
considered a single withdrawal. Withdrawals shall be paid from the affected
Account and subaccounts. If more than one Investment Fund is available to pay
the withdrawal, the withdrawal shall be made pro rata from the Investment
Fund(s); provided, however, that a Hardship withdrawal shall be made only after
the maximum amount available without demonstrating a Hardship has been
withdrawn.
9.8 Payment of Withdrawals. A Participant may request a withdrawal by
filing the prescribed withdrawal request form with the Company. A withdrawal
shall be paid as soon as reasonably practical after the date on which the
Company receives the prescribed withdrawal form (subject to the Company's
consent). Withdrawals shall be paid only in a single lump sum payment in cash.
9.9 Valuation Date. For purposes of this Article 9, the value of a
Participant's Account and the vested percentage of any subaccounts shall be
determined as of the Valuation Date coinciding with or following the date of the
withdrawal request.
Article 10
Loans from the plan
10.1 Eligibility for Loans. Upon written approval of the Company, a
Participant who is an Employee or a Participant who is an employee of an
Affiliate may obtain a cash loan from the Plan as provided in this Article 10.
Notwithstanding the foregoing, to the extent required under applicable
Department of Labor regulations, a Participant who is not an Employee but
otherwise is a "party in interest" (within the meaning of Section 3(14) of
ERISA) also shall be eligible to receive a loan under the terms of this Article
10.
10.2 Amount of Loans.
(a) The minimum amount of a Participant's loan shall be $1,000.
(b) The maximum amount of a loan shall be the lesser of (i) 50% of the
sum of the Participant's 401(k) Account, Rollover Account, and Voluntary
Contributions Account balances or (ii) the amount determined under Section 10.3.
(c) For purposes of this Section 10.2, a Participant's Account balance
shall be determined as of the Valuation Date coinciding with or following the
date of the loan request.
10.3 Aggregate Loan Limitation. No loan shall be granted under the Plan if
it would cause the aggregate balance of all loans that a Participant thereafter
has outstanding under this Plan or under any other qualified plan maintained by
the Employer or any Affiliate to exceed the lesser of:
(a) $50,000, less the amount by which such aggregate balance has been
reduced through repayments during the period of twelve (12) months ending on the
day before such loan is made; or
(b) The greater of (i) $10,000 or (ii) 50% of the vested portion of
all accounts of the Participant under this Plan or under any other qualified
plan maintained by the Employer or any Affiliate.
10.4 Loan Requirements. Loans to Participants shall be made on such terms
and conditions as the Company may determine in its sole discretion, provided
that loans shall:
(a) Be available to all Participants on a reasonably equivalent basis;
(b) Other than by operation of the limitations contained in Section
10.2, not be made available to Highly Compensated Employees in an amount greater
than the amount made available to other Employees;
(c) Bear a reasonable rate of interest;
(d) Provide for level amortization over its term with payments at
quarterly or more frequent intervals, as determined by the Company;
(e) Provide for repayment in full on or before the earlier of (i) the
date when the Participant ceases to be an Employee, or a reasonable time
thereafter, or (ii) the date five (5) years after the loan is made (or the date
ten (10) years after the loan is made if the loan is used to acquire a dwelling
unit that, within a reasonable period of time, is to be used as the principal
residence of the Participant); and
(f) Be adequately secured.
10.5 Loan Policy. The terms and conditions of any loans made from the Plan
shall be set forth in a "Loan Policy" that shall be adopted by the Company as a
part of the Plan, and which hereby are incorporated in this Plan by reference.
Such Loan Policy may be amended from time to time by the Company, and shall
provide, among other things:
(a) The identity of the person or positions authorized to administer
the loan program established pursuant to this Article 10;
(b) The procedure for applying for loans;
(c) The basis on which loans will be approved or denied;
(d) Limitations (if any) on the types and amount of loans that are
available under the Plan;
(e) The procedure for determining a reasonable rate of interest that
will be charged on loans;
(f) The types of collateral that may secure a Participant's loan; and
(g) The events constituting default and the steps that will be taken
to preserve Plan assets in the event of such default.
10.6 Segregated Investment. A loan to a Participant under this Article 10
shall be a segregated investment of the Account and applicable subaccount of
such Participant made at the Participant's direction. Principal and interest
payments on a Participant's loan shall be allocated to such Participant's
Account. Any loss caused by nonpayment or other default on a Participant's loan
obligations shall be borne solely by such Participant's Account, and neither the
Company nor the Trustee, nor any employee of any of the foregoing, shall be
liable for any such loss.
Article 11
Funding Policy And Method
11.1 Contributions. The Company shall cause the participating Employers to
make Profit Sharing Contributions, Employer Matching Contributions, Qualified
Nonelective Contributions, and Qualified Matching Contributions to the Plan, as
provided in Article 4. The Company shall also make arrangements for the
collection of 401(k) Contributions, Voluntary Contributions and Rollover
Contributions, as provided in Article 4.
11.2 Expenses of the Plan. The participating Employers shall pay all
expenses of the Plan, except such expenses as are paid out of the Trust pursuant
to the terms of the Trust Agreement entered into with the Trustee.
11.3 Cash Requirements. From time to time, the Company shall estimate the
benefits, withdrawals, loans and administrative expenses to be paid out of the
Trust during the period for which such estimate is made and shall also estimate
the contributions to be made to the Plan during such period by Participants and
by (or on behalf of) the participating Employers. The Company shall inform the
Trustee and each Investment Manager appointed under Section 12.3, if any, of the
estimated cash needs of, and contributions to, the Plan during the periods for
which such estimates are made. Such estimates shall be made on an annual,
quarterly, monthly or other basis, as the Company shall determine.
11.4 Independent Accountant. The Company shall engage an independent
qualified public accountant to conduct such examination and to express such
opinion as may be required by Section 103(a)(3) of ERISA, if any. The Company
may remove and discharge the person so engaged, but in such event the Company
shall engage a successor independent qualified public accountant to perform such
examination and to express such opinion, if required.
Article 12
Fiduciary Responsibilities And Plan Administration
12.1 Plan Sponsor and Plan Administrator. The Company is the "plan sponsor"
and the "plan administrator" of the Plan, as such terms are used in ERISA and
the Code.
12.2 Administrative Responsibilities. The Company shall be the named
fiduciary that has the authority to control and manage the operation and
administration of the Plan in the Company's sole discretion subject to the terms
of the Plan. The Company shall make such rules, interpretations and computations
and take such other actions to administer the Plan as the Company may deem
appropriate in its sole discretion. The rules, interpretations, computations and
other actions of the Company shall be binding and conclusive on all persons. In
administering the Plan, the Company shall act in a nondiscriminatory manner to
the extent required by Section 401(a) and related provisions of the Code and
shall at all times discharge its duties with respect to the Plan in accordance
with the standards set forth in Section 404(a)(1) of ERISA.
12.3 Management of Plan Assets. The Company shall be a named fiduciary with
respect to control and management of the assets of the Plan, but only to the
extent that it shall have the authority (i) to appoint one or more Trustees to
hold the assets of the Plan and to enter into an agreement with each Trustee it
appoints, (ii) to select Investment Funds in which Plan assets may be invested,
(iii) to appoint one or more Investment Managers for any assets of the Plan and
to enter into an investment management agreement with each Investment Manager it
appoints, (iv) to direct the investment of any Plan assets not assigned to an
Investment Manager or not invested in one or more Investment Funds at the
direction of Participants in accordance with Article 6, (v) to remove any
Trustee or Investment Manager it appointed and (vi) to direct the Trustee to
enter into a custodial agreement with a bank or trust company pursuant to which
such bank or trust company is to have custody of Plan assets as an agent of the
Trust. Each Investment Manager so appointed shall acknowledge in writing that it
is a fiduciary with respect to the Plan.
12.4 Trustee and Investment Managers. The Trustee shall have the exclusive
authority and discretion to control and manage the Plan assets held by it,
except to the extent that (i) the Company directs how such assets shall be
invested, (ii) the Company allocates the authority to manage such assets to one
or more Investment Managers, (iii) the Plan prescribes how such assets shall be
invested or (iv) Participants are permitted to direct the investment of their
Accounts pursuant to Article 6. Each Investment Manager appointed under Section
12.3 shall have the exclusive authority to manage, including the power to
acquire and dispose of, the Plan assets assigned to it by the Company except to
the extent that the Plan prescribes how such assets shall be invested (including
at the direction of Participants in accordance with Article 6). The Trustee and
any Investment Manager shall be solely responsible for diversifying the
investments, in accordance with Section 404(a)(1)(C) of ERISA, of the Plan
assets assigned to them by the Company, except to the extent that the Company
directs or the Plan prescribes how such assets shall be invested (including at
the direction of Participants in accordance with Article 6).
12.5 Delegation of Fiduciary Responsibilities. The Company may engage such
attorneys, actuaries, accountants, consultants or other persons to render advice
or to perform services with regard to any of its responsibilities under the Plan
as it shall determine to be necessary or appropriate. The Company may designate
by written instrument (signed by both parties) one or more actuaries,
accountants or consultants as fiduciaries to carry out, where appropriate,
fiduciary responsibilities of the Company. The Company shall not allocate or
delegate to any other person any of its duties and responsibilities under the
Plan. The duties and responsibilities of the Company under the Plan shall be
carried out by the directors, officers and employees of the Company (or a
Committee thereof appointed in accordance with Section 12.7), acting on behalf
and in the name of the Company in their capacities as directors, officers and
employees and not as individual fiduciaries. Except as provided in Section 13.3
(regarding the appointment of a Review Panel), the Company is specifically
prohibited from designating any director, officer or employee of the Company as
a fiduciary and from allocating or delegating to any such person any of its
fiduciary responsibilities.
12.6 Service in Several Fiduciary Capacities. Nothing herein shall prohibit
any person or group of persons from serving in more than one fiduciary capacity
with respect to the Plan.
12.7 Appointment of the Committee. The Company may appoint a Committee to
act on its behalf in carrying out the Company's fiduciary duties under the Plan.
If the Company appoints a Committee, as provided in this Section 12.7, the
following rules shall apply:
(a) The Committee shall be known as the 401(k) Plan Committee.
(b) The Committee shall consist of at least three (3) persons
appointed from time to time by the Company who may be Employees and who shall
serve at the pleasure of the Company without compensation, unless otherwise
determined by the Company. The Company shall certify to the Trustee the members
of the Committee.
(c) The Committee shall act by agreement of a majority of its members,
either by vote at a meeting or in writing without a meeting. By such action, it
may authorize one or more members to execute documents on its behalf, perform
other fiduciary and ministerial duties and direct the Trustee in the performance
of its duties hereunder on behalf of the Committee. The Trustee, upon written
notification of such authorization, shall accept and rely upon such documents
until notified in writing that the authorization has been revoked by the
Committee. The Trustee shall not be deemed to be on notice of any change in the
membership of the Committee unless notified in writing. A member of the
Committee, who is also a Participant hereunder, shall not vote or act upon any
matter relating solely to himself or herself. In the event of a deadlock or
other situation which prevents agreement of a majority of the Committee members,
the matter shall be decided by the Company.
(d) The Committee shall keep such written records as it shall deem
necessary or proper, which records shall be open to inspection by the Company.
The Committee shall obtain from the Trustee regular reports with respect to the
current value of the assets held in the Trust, in such form as is acceptable to
the Committee. The Committee shall keep on file a copy of this Plan and the
Trust Agreement, including any subsequent amendments, all annual and interim
reports of the Trustee and the latest annual report, summary of the annual
report, and summary plan description required under Title I of ERISA for
examination by Participants during business hours.
12.8 Indemnification. The Company agrees to indemnify and reimburse, to the
fullest extent permitted by law, members of the Committee, directors, officers
and employees acting for the Company, and all such former members, directors,
officers and employees, for any and all expenses, liabilities or losses,
including attorneys' fees, arising out of any act or omission relating to the
rendition of services for or the management and administration of the Plan,
other than such expenses, liabilities and costs as may result from the bad
faith, criminal acts or willful misconduct of such persons or to the extent such
indemnification is specifically prohibited by ERISA.
Article 13
Claims Procedures
13.1 Application for Benefits. Applications for benefits and inquiries
concerning the Plan (or concerning present or future rights to benefits under
the Plan) shall be submitted to the Company in writing. An application for
benefits shall be submitted on the prescribed form and shall be signed by the
Participant or, in the case of a benefit payable after his or her death, by his
or her Beneficiary.
13.2 Denial of Application. In the event that an application for benefits
is denied in whole or in part, the Company shall notify the applicant in writing
of the denial and of the right to a review of the denial. The written notice
shall set forth, in a manner calculated to be understood by the applicant,
specific reasons for the denial, specific references to the provisions of the
Plan on which the denial is based, a description of any information or material
necessary for the applicant to perfect the application, an explanation of why
the material is necessary, and an explanation of the review procedure under the
Plan. The written notice shall be given to the applicant within a reasonable
period of time (not more than ninety (90) days) after the Company received the
application, unless special circumstances require further time for processing
and the applicant is advised of the extension. In no event shall the notice be
given more than one hundred eighty (180) days after the Company received the
application.
13.3 Review Panel. The Company may from time to time appoint a Review Panel
that may consist of one (1) or more individuals who may, but need not, be
Employees. If no such Review Panel is named, the Company shall be deemed to be
the Review Panel for purposes of this Article 13. The Review Panel shall be the
named fiduciary that has the authority to act with respect to any appeal from a
denial of benefits or a determination of benefit rights.
13.4 Request for Review. An applicant whose application for benefits was
denied in whole or in part, or the applicant's duly authorized representative,
may appeal from the denial by submitting to the Review Panel a request for a
review of the application within sixty (60) days after receiving written notice
of the denial from the Company. The Company shall provide the applicant or his
or her representative an opportunity to review pertinent materials, other than
legally privileged documents, in preparing the request for a review. The request
for a review shall be in writing and addressed to the Review Panel. The request
for a review shall set forth all of the grounds on which it is based, all facts
in support of the request, and any other matters that the applicant deems
pertinent. The Review Panel may require the applicant to submit such additional
facts, documents or other material as it may deem necessary or appropriate in
making its review.
13.5 Decision on Review. The Review Panel shall act on each request for a
review within sixty (60) days after receipt, unless special circumstances
require further time for processing and the applicant is advised of the
extension. In no event shall the decision on review be rendered more than one
hundred twenty (120) days after the Review Panel received the request for a
review. The Review Panel shall give prompt written notice of its decision to the
applicant and to the Company. In the event that the Review Panel confirms the
denial of the application for benefits in whole or in part, the notice shall set
forth, in a manner calculated to be understood by the applicant, the specific
reasons for the decision and specific references to the provisions of the Plan
on which the decision is based.
13.6 Rules and Interpretations. The Review Panel shall adopt such rules,
procedures and interpretations of the Plan as it deems necessary or appropriate
in carrying out its responsibilities under this Article 13.
13.7 Exhaustion of Remedies. No legal action for benefits under the Plan
shall be brought unless and until the claimant (i) has submitted a written
application for benefits in accordance with Section 13.1, (ii) has been notified
by the Company that the application is denied, (iii) has filed a written request
for a review of the application in accordance with Section 13.4 and (iv) has
been notified in writing that the Review Panel has affirmed the denial of the
application; provided, however, that legal action may be brought after the
Company or the Review Panel has failed to take any action on the claim within
the time prescribed by Sections 13.2 and 13.5, respectively.
Article 14
Amendment or discontinuance of the plan
14.1 Amendments. The Company reserves the right to amend (retroactively or
prospectively) any or all of the provisions of the Plan at any time in any
manner that it may deem advisable; provided, however, that no such amendment
shall make it possible for any of the corpus or income of the Trust to be used
for, or diverted to, purposes other than the exclusive benefit of Participants
and their Beneficiaries under the Plan, nor shall any such amendment make it
possible to deprive any Participant of a previously accrued benefit, except to
the extent permitted by Section 412(c)(8) of the Code. Any such amendment to the
Plan may be adopted by one or more officers of the Company acting on behalf of
the Company; provided, however, that any amendment to the Plan which would
increase the contributions (other than 401(k) Contributions) that an Employer
would be obligated to make to the Plan must be approved by the Board.
14.2 Merger, Consolidation or Transfer. In the event of any merger or
consolidation with, or transfer of assets or liabilities to, any other plan, the
benefit that each Participant would be entitled to receive if the Plan were to
terminate immediately after the merger, consolidation or transfer shall not be
less than the benefit that he or she would have been entitled to receive if the
Plan had terminated immediately before the merger, consolidation or transfer. In
the event a Participant's benefits are transferred to another qualified plan
maintained by the Employer or any Affiliate of the Employer, if such transfer
would result in the elimination or reduction of any benefits protected under
Section 411(d)(6) of the Code, such transfer of benefits shall be conditioned
upon a voluntary, fully informed election by the Participant to transfer such
Participant's benefits to such other qualified plan in accordance with
regulations under Section 411(d)(6) of the Code.
14.3 Right to Terminate Plan. The Company reserves the right to discontinue
the Plan at any time with respect to any or all Employers. Any Employer shall
have the power to discontinue the Plan at any time with respect to such
Employer.
14.4 Employer's Rights and Obligations Upon Plan Termination. Any other
provision of the Plan to the contrary notwithstanding, upon any termination of
the Plan, the Employer shall have no obligation or liability whatsoever to make
any further payments (including any Employer Matching Contributions payable
prior to such termination) to the Trustee for benefits under the Plan. Neither
the Trustee nor any Participant, Employee or Beneficiary shall have any right to
compel the Employer to make any payment after the termination of the Plan.
14.5 Participants' Rights Upon Plan Termination. If the Plan is terminated
or partially terminated, or if contributions are completely discontinued, then
each Participant who then is an Employee and who is directly affected by such
event shall have a one hundred percent (100%) vested interest in his or her
Account (including all subaccounts), without regard to his or her Period of
Service.
Article 15
Top-Heavy Provisions
15.1 Top-Heavy Plan Defined. Notwithstanding any other provision of this
Plan to the contrary, this Article 15 shall apply if the Plan is a "Top-Heavy
Plan" as defined herein. The Plan shall be a Top-Heavy Plan in a Plan Year if,
as of the "Determination Date" (as defined in Section 15.2), the aggregate
Account balances of "Key Employees" (as defined in Section 15.2) under the Plan
exceeds sixty percent (60%) of the aggregate Account balances under the Plan of
all Employees, but excluding the Account balances of former Key Employees.
For purposes of this Article 15, an Employee's Account balance is the sum of (i)
his or her Account balance as of the most recent Valuation Date within the
twelve (12) month period ending on the Determination Date, (ii) any
contributions allocated to his or her Account after the Valuation Date and on or
before the Determination Date, and (iii) the aggregate distributions (including
distributions made on account of death and distributions from any terminated
qualified retirement plan previously maintained by the Employer that would be
included in the "Required Aggregation Group" (as defined in Section 15.2) if not
terminated) made with respect to such Employee during the five-year period
ending on the Determination Date and not reflected in the value of his or her
Account as of the most recent Valuation Date.
In determining whether this Plan is a Top-Heavy Plan, all employers that are
aggregated under Section 414(b), (c), (m) or (o) of the Code shall be treated as
a single employer. In addition, all plans that are part of the Required
Aggregation Group shall be treated as a single plan.
Notwithstanding the foregoing provisions of this Section 15.1, the following
shall not be taken into consideration when determining an Employee's Account
balance, except to the extent provided by regulations:
(a) Any Rollover Contribution (or similar transfer) initiated by the
Employee to this Plan (see Section 416(g)(4)(A) of the Code);
(b) The Account balance of any individual who has not performed
services for the Employer at any time during the five-year period ending on the
Determination Date (see Section 416(g)(4)(E) of the Code).
15.2 Other Definitions. For purposes of this Article 15, the following
terms shall have the following meanings:
(a) "Compensation", as used in this Article 15, shall have the same
meaning given that term in Section 2.13.
(b) "Determination Date" means the last day of the preceding Plan
Year.
(c) "Employee" means (i) a current Employee or (ii) a former Employee
who was credited with an Hour of Service during the Plan Year containing the
Determination Date or any of the four (4) preceding Plan Years.
(d) "Key Employee" means an Employee, a former Employee, or the
Beneficiary under the Plan of a former Employee who, in the Plan Year containing
the Determination Date, or any of the four (4) preceding Plan Years, is:
(1) An officer of the Employer having an annual Compensation
greater than fifty percent (50%) of the amount in effect under Section
415(b)(1)(A) of the Code for any such Plan Year. Not more than fifty (50)
Employees or, if less, the greater of three (3) Employees or ten percent (10%)
of the Employees shall be considered as officers for purposes of this paragraph.
(2) One of the ten (10) Employees owning (or considered as owning
within the meaning of Section 318 of the Code) the largest interest in the
Employer, which is more than one-half percent (.5%) ownership interest in value,
and whose Compensation exceeds the maximum dollar limitation under Section
415(c)(1)(A) of the Code as in effect for the calendar year in which the
Determination Date falls.
(3) A five percent (5%) owner of the Employer.
(4) A one percent (1%) owner of the Employer having an annual
Compensation from the Employer of more than $150,000.
Whether an Employee is a five percent (5%) owner or a one percent (1%) owner
shall be determined in accordance with Section 416(i)(1)(B) of the Code.
(e) "Non-Key Employee" means any Employee who is not a Key Employee o
any Beneficiary under the Plan of a former Employee who was not a Key Employee.
(f) "Required Aggregation Group" means:
(1) Each stock bonus, pension or profit sharing plan of the
Employer in which a Key Employee participates and which is intended to qualify
under Section 401(a) of the Code; and
(2) Each other such stock bonus, pension or profit sharing plan
of an Employer which enables any plan in which a Key Employee participates to
meet the requirements of Section 401(a)(4) or Section 410 of the Code.
15.3 Top-Heavy Accrual Rules. If the Plan is a Top-Heavy Plan in a Plan
Year, the following rules shall apply:
(a) the aggregate Profit Sharing Contributions, Qualified Nonelective
Contributions, Qualified Matching Contributions, and Forfeitures allocated to
each "Eligible Non-Key Employee" (as defined below) shall not be less than the
lesser of the following percentages of the Eligible Non-Key Employee's
Compensation for the Plan Year:
(1) Three percent (3%) or, if the Employer has a defined benefit
plan which designates this Plan to satisfy the requirements for a minimum
contribution or benefit under Section 416 of the Code, five percent (5%); or
(2) The highest percentage of Compensation provided in the form
of all contributions under the Plan (including 401(k) Contributions and Employer
Matching Contributions) on behalf of any Key Employee for the Plan Year,
including if that percentage is zero, zero percent (0%).
For purposes of this Section 15.3, "Eligible Non-Key Employee" shall mean a
Non-Key Employee who is an Eligible Employee and who has not separated from
service at the end of the Plan Year, regardless of (i) whether he or she has
completed less than 1,000 Hours of Service during the Plan Year, (ii) his or her
level of Compensation, or (iii) whether he or she has declined to make any
401(k) Contributions.
(b) a Participant's vested interest in his or her Profit Sharing
Contributions Account shall be the percentage determined under the vesting
schedule contained in Subsection 7.2(a) or the percentage determined under the
vesting schedule set forth below, whichever is greater:
Vested
Years of Service Percentage
---------------- ----------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
(c) a Participant's vested interest in his or her Employee Matching
Contributions Account shall be the percentage determined under the vesting
schedule contained in Subsection 7.3(a) or the percentage determined under the
vesting schedule set forth below, whichever is greater:
Vested
Years of Service Percentage
---------------- ----------
Less than 3 0%
3 or more 100%
However, for any Plan Year which (i) occurs subsequent to a Plan Year in which
this Plan was determined to be Top-Heavy and (ii) in which the Plan is not
determined to be Top-Heavy, the vesting schedules contained in Subsections
7.2(a) and 7.3(a) shall again be effective except that the vested percentages of
any Participant shall not be reduced thereby and any Participant with three (3)
or more Years of Service shall have the right to select the vesting schedules
under which his or her vested Account balance will be determined.
15.4 Impact on Contribution Limitations. For any Plan Year during which the
Plan is a Top-Heavy Plan, the number "1.0" shall be substituted for the number
"1.25" wherever it appears in Section 415(e)(2)(B) and (3)(B) of the Code and
Sections 2.16 and 2.17 of this Plan.
Article 16
General Provisions
16.1 No Implied Employment Contract. The adoption and maintenance of the
Plan shall not be deemed to be a contract of employment between an Employer and
any Employee. Accordingly, the Plan shall not be deemed (i) to give any Employee
or other person any right to be retained in the employ of an Employer nor (ii)
to interfere with the right of an Employer to discharge any Employee or other
person at any time and for any reason, which right is hereby reserved.
16.2 Benefits Not Assignable. Except as otherwise provided in Article 10 or
as provided in Section 414(p) of the Code with respect to qualified domestic
relations orders, or as otherwise provided under Section 401(a)(13) of the Code,
no interest, whether vested or not, of a Participant or Beneficiary in the Plan,
no Account balance nor distribution or payment under the Plan to any Participant
or Beneficiary shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, whether voluntary or
involuntary, and any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber or charge the same shall be void; nor shall any distribution or
payment in any way be liable for or subject to the debts, contracts,
liabilities, engagements or torts of any Participant or Beneficiary. If any
Participant or Beneficiary has been adjudicated a bankrupt or has purported to
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any
distribution or payment, voluntarily or involuntarily, then the Company, in its
discretion, may direct the Trustee to hold or apply the distribution or payment
or any part thereof to or for the benefit of such Participant or Beneficiary in
such manner as the Company shall direct.
16.3 Qualified Domestic Relations Order. In accordance with Section 414(p)
of the Code, the Company shall establish reasonable written procedures to
determine the qualified status of domestic relations orders received with
respect to Participants and to administer distributions to alternate payees
under such qualified domestic relations orders. Notwithstanding any other
provision of the Plan, benefits under the Plan that are the subject of a
qualified domestic relations order may be distributed to any alternate payee in
compliance with the provisions of such qualified domestic relations order,
without regard to whether the Participant to whose benefits the qualified
domestic relations order relates has terminated employment with an Employer or
has reached "earliest retirement age," as that term is defined in Section 414(p)
of the Code. Any payment to an alternate payee, or to his or her legal
representative or beneficiary, pursuant to the terms of a qualified domestic
relations order, shall be in full satisfaction of all claims under such order
against the Trustee or an Employer, any of who may require such alternate payee,
or his or her legal representative or beneficiary, to execute a receipt
therefore in such form as shall be determined by the Trustee or an Employer, as
the case may be.
16.4 Payments of Benefits to Infants or Incompetents. If the Company
determines that any person entitled to payments under the Plan is an infant or
is incompetent by reason of a physical or mental disability, then it may cause
all payments thereafter becoming due to such person to be made to any other
person for his or her benefit, without responsibility for the application of
amounts so paid. Payments made pursuant to this provision shall completely
discharge an Employer and the Trustee.
16.5 Unclaimed Benefits. If any benefit would be distributable under the
Plan but the Company is unable, after reasonable and diligent effort, to locate
the Participant or Beneficiary to whom the distribution is payable for three (3)
consecutive Plan Years, then the Participant's Account may be closed after the
third consecutive Plan Year during which such distribution is payable but the
Participant or Beneficiary cannot be found. The amount of the unpaid benefit
shall be reallocated as determined by the Company, unless mandatory provisions
of applicable escheat laws require another application, in which event such
benefit shall be applied as such laws require. If, however, the Participant or
Beneficiary subsequently makes a proper claim to the Company for any benefit
that was reallocated and that was not lost by escheat, then such benefit
(without income, gains or other adjustment) shall be restored to the
Participant's Account from a special contribution made by the Employer for this
purpose. The benefit shall thereafter be distributable in accordance with the
terms of the Plan. Notification by certified or registered mail to the last
known address of the Participant or Beneficiary will be deemed a reasonable and
diligent effort to locate such person.
16.6 Source of Benefits. The Trust shall be the sole source of benefits
under the Plan, and each Participant, Beneficiary or other person who claims the
right to any payment or benefit under the Plan shall only be entitled to look to
the Trust for such payment or benefit and shall not have any right, claim or
demand therefor against an Employer or any officer or director of an Employer.
16.7 Forms of Plan Communications. All communications from a Participant or
Beneficiary with regard to the Plan shall become effective only when made in
writing and filed with the Company. If the Company has adopted prescribed forms
for any communications, such communications shall be effective only if filed on
such forms.
16.8 IRS Qualification. The Employer intends that the Plan (including the
Trust Agreement forming a part thereof) shall be a qualified defined
contribution plan for the exclusive benefit of Employees and their
Beneficiaries, as provided in Sections 401(a), 401(k) and 501(a) of the Code.
16.9 Construction of Plan. Any gender, where appearing in the Plan, shall
be deemed to include the other gender, the singular shall include the plural,
and the plural shall include the singular, unless the context otherwise
requires. Titles are for reference only. In the event of a conflict between a
title and the text of the Plan, the text of the Plan shall control. In the event
of a conflict between the text of the Plan and any summary, description or other
information regarding the Plan, the text of the Plan shall control.
16.10 Governing Law. The provisions of the Plan shall be construed,
administered and governed according to ERISA and, to the extent not superseded
by ERISA, the laws of the State of California.
16.11 Severability. If any provision of the Plan shall be held by a court
of competent jurisdiction to be invalid or unenforceable, the remaining
provisions of the Plan shall continue to be fully effective.
Article 17
Execution
To record the amendment and restatement of the Plan to read as set forth
herein, effective as of January 1, 1992, the Company has caused its authorized
officer to execute this document this 15th day of March, 1994.
---- -----
FIRST DEPOSIT CORPORATION
By: /s/ Mary L. Stumpo
-------------------------
Printed Name: Mary L. Stumpo
Title: Vice President H.R.
<PAGE>
FIRST AMENDMENT TO THE
FIRST DEPOSIT CORPORATION 401(k) PLAN
WHEREAS, First Deposit Corporation (the "Company") amended and restated
the First Deposit Corporation 401(k) Plan (the "Plan"), effective January 1,
1992;
WHEREAS, the Plan received a favorable determination letter from the
Internal Revenue Service ("IRS") on May 24, 1995;
WHEREAS, in order to rely on such determination letter the IRS has
requested that various amendments to the Plan be adopted; and
WHEREAS, the Company may amend the Plan pursuant to Section 14.1
thereof.
NOW, THEREFORE, effective January 1, 1992, unless otherwise noted, the
Plan is amended as follows:
1. Effective September 1, 1994, Section 2.11 of the Plan shall be amended
to read as follows:
"Company" means Providian Bancorp, Inc. and any successor thereto.
2. Effective May 11, 1994, Section 2.12 of the Plan shall be amended to
read as follows:
"Company Stock" means common stock of Providian Corporation.
3. Effective January 1, 1994, the second sentence of the second to last
paragraph of Section 2.13 of the Plan shall be amended to read as
follows:
For purposes of allocating Profit Sharing Contributions and Qualified
Nonelective Contributions under Article 4 (but not for purposes of the
limitations contained in Section 4.11), Compensation shall include: (i)
401(k) Contributions, (ii) other elective contributions that are made
by the Employer or an Affiliate on behalf of its Employees that are not
includable in gross income under Sections 125 (prior to January 1,
1994, Compensation shall exclude First Flex Credits that are used to
purchase insurance benefits pursuant to the terms of the First Flex
Plan), 402(e)(3) (prior to January 1, 1993, 402(a)(8)), 402(h), and
403(b) of the Code, (iii) Compensation deferred under an eligible
deferred compensation plan within the meaning of Section 457(b) of the
Code (deferred compensation plans of state and local governments and
tax-exempt organizations), and (iv) employee contributions (under
governmental plans) described in Section 414(h)(2) of the Code that are
picked up by the employing unit and thus are treated as employer
contributions.
4. Effective September 1, 1994, Section 2.23 of the Plan shall be amended
to read as follows:
"Employer" means the Company, First Deposit National Bank, First
Deposit National Credit Card Bank (effective January 1, 1995, Providian
National Bank), Providian National Bancorp, First Deposit Service
Corporation, and any other Affiliate of the Company that, with the
approval of the Company and subject to such conditions as the Company
may impose, adopts this Plan, and any successor or successors of any of
them.
5. Effective January 1, 1995, Section 2.34 of the Plan shall be amended to
read as follows:
"First Flex Plan" means the Providian Bancorp, Inc. First Flex Plan, as
amended from time to time.
6. Effective January 1, 1994, the second paragraph of Section 2.41
defining "Highly Compensated Employee" shall be amended to read as
follows:
Unless the Company elects otherwise in accordance with applicable
regulations, the "Lookback Year" is the twelve (12) month period
immediately preceding the beginning of the Plan Year for which the
determination of who is a Highly Compensated Employee is being made and
the "Determination Year" is such Plan Year. If the Company so elects,
the Lookback Year shall instead be the calendar year ending with or
within the Plan Year and the Determination Year shall be the portion
(if any) of such Plan Year extending beyond such calendar year. If the
Company makes such an election and if the Plan Year is other than the
calendar year, the calculation with respect to who are Highly
Compensated Employees in the Determination Year shall be adjusted
pursuant to applicable regulations.
7. Effective September 1, 1994, Section 2.51 of the Plan shall be amended
to read as follows:
"Plan" means the Providian Bancorp, Inc. 401(k) Plan, as set forth
herein and as amended from time to time.
8. The second sentence of the last paragraph of Subsection 4.1(d) of the
Plan shall be amended to read as follows:
The amount of Excess Elective Deferrals that may be distributed under
this Subsection 4.1(d) with respect to a Participant for a taxable year
shall be reduced by any Excess Contributions previously distributed or
recharacterized in accordance with Subsection 4.9(b) for the Plan Year
beginning with or within the Participant's taxable year.
9. A new Paragraph 4.9(c)(12) shall be added to the Plan as follows:
(12) The amount of Excess Contributions that may be distributed or
recharacterized under Subsection 4.9(b) with respect to a Participant
for a Plan Year shall be reduced by any Excess Elective Deferrals
previously distributed in accordance with Subsection 4.1(d) for the
Participant's taxable year ending with or within the Plan Year.
10. A new Paragraph 4.9(c)(13) shall be added to the Plan as follows:
(13) Excess Contributions that are recharacterized as Voluntary
Contributions under Paragraph 4.9(b)(1) shall continue to be treated as
401(k) Contributions for purposes of in-service withdrawals under
Article 9.
11. A new Paragraph 4.9(f)(9) shall be added to the Plan as follows:
(9) The amount of Excess Aggregate Contributions with respect to a
Participant for a Plan Year shall be calculated after determining the
Excess Contributions to be recharacterized as Voluntary Contributions
for such Plan Year under Paragraph 4.9(b)(1).
12. A new Paragraph 4.9(f)(10) shall be added to the Plan as follows:
(10) Excess Aggregate Contributions to be distributed under Paragraph
4.9(e)(1) shall be made first from unmatched Voluntary Contributions,
if any, then from matched Voluntary Contributions and their related
Matching Contributions, if any, and then from Matching Contributions
related to 401(k) Contributions.
Executed this 15 day of June, 1995.
-- ----
PROVIDIAN BANCORP, INC.
By: /s/ Mary L. Stumpo
------------------
Mary L. Stumpo
Vice President
Human Resources
<PAGE>
SECOND AMENDMENT TO THE
PROVIDIAN BANCORP, INC. 401(K) PLAN
WHEREAS, Providian Bancorp, Inc. (the "Company") maintains the Providian
Bancorp, Inc. 401(k) Plan (the "Plan"), as amended and restated effective
January 1, 1992;
WHEREAS, the Company wishes to amend the Plan in order to change the method for
determining a participant's account balance under the Plan with respect to
distributions from the Plan; and
WHEREAS, the Company may amend the Plan pursuant to Section 14.1 thereof.
NOW, THEREFORE, effective August 1, 1995, the Plan is amended as follows:
1. Section 8.16 of the Plan shall be amended to read as follows:
Determination of Account Balance. Whenever a Participant or his or her
Beneficiary is entitled to receive a distribution of the entire amount
or a percentage of his or her Account balance, the amount of such
Account balance shall be determined as of the Valuation Date coinciding
with or following the date of the distribution request.
Executed this day of July, 1995.
--- ----
PROVIDIAN BANCORP, INC.
By: /s/ Mary L. Stumpo
------------------
Mary L. Stumpo
Vice President
Human Resources
<PAGE>
THIRD AMENDMENT TO THE
PROVIDIAN BANCORP, INC. 401(k) PLAN
WHEREAS, Providian Bancorp, Inc. (the "Company") amended and restated the
Providian Bancorp, Inc. 401(k) Plan (the "Plan"), effective January 1, 1992;
WHEREAS, the Plan received a favorable determination letter from the Internal
Revenue Service ("IRS") on May 24, 1995;
WHEREAS, the Company may amend the Plan pursuant to Section 14.1 thereof.
NOW, THEREFORE, effective January 1, 1996, unless otherwise noted, the Plan is
amended as follows:
1. Effective April 1, 1996, Section 3.1(a) of the Plan shall be amended to
read as follows:
(a) Each Eligible Employee who has entered into the Plan prior to the
Effective Date shall continue to participate, and each other Eligible
Employee shall be entitled to become a Participant in the Plan on the day
following the end of the first complete pay cycle next following his or her
Employment Commencement Date, provided that he or she is an Eligible
Employee on such date.
2. Section 4.1(a) of the Plan shall be amended to read as follows:
(a) Subject to the limitations established by this Article 4, the Employer
shall make 401(k) Contributions on an Eligible Employee's behalf in an
amount equal to the amount of Salary that the Eligible Employee has elected
to defer pursuant to the Eligible Employee's 401(k) Agreement plus the
amount of an Eligible Employee's First Flex Credits allocated to the Plan
(to the extent permitted under the terms of the First Flex Plan). Each
Eligible Employee may elect to have the Employer contribute to the Plan
from zero percent (0%) to a maximum of thirteen percent (13%) (prior to
January 1, 1993, fifteen percent (15%)) of such Eligible Employee's Salary
for the Plan Year in accordance with such uniform and nondiscriminatory
rules and procedures as the Company may establish. Such contribution shall
include any First Flex Credits allocated to the Plan by the Eligible
Employee.
3. Section 4.2 of the Plan shall be amended to read as follows:
Voluntary Contributions. The Employer shall make Voluntary Contributions on
an Eligible Employee's behalf in an amount equal to the amount of Salary
that the Eligible Employee has elected to contribute pursuant to the
Eligible Employee's 401(k) Agreement. However, no Voluntary Contributions
shall be made under the Plan for the period from January 1, 1993 through
April 30, 1993. Each Eligible Employee may make Voluntary Contributions to
the Plan in an amount from zero percent (0%) to a maximum of six percent
(6%) of such Eligible Employee's Salary for the Plan Year in accordance
with such uniform and nondiscriminatory rules and procedures as the Company
may establish. Not withstanding the previous sentence, an Eligible
Employee's election to contribute 401(k) Contributions and Voluntary
Contributions for a Plan Year shall not exceed thirteen percent (13%)
(prior to January 1, 1993, fifteen percent (15%)) of such Eligible
Employee's Salary for the Plan Year.
4. Section 9.7 of the Plan shall be amended to read as follows:
Frequency and Source of Withdrawals. A Participant shall not be permitted
to make more than five withdrawals under this Article 9 in any Plan Year.
Withdrawals shall be paid from the affected Account and subaccounts. If
more than one Investment Fund is available to pay the withdrawal, the
withdrawal shall be made pro rata from the Investment Fund(s); provided,
however, that a Hardship withdrawal shall be made only after the maximum
amount available without demonstrating a Hardship has been withdrawn.
5. Section 11.2 of the Plan shall be amended to read as follows:
Expenses of the Plan. The participating Employers shall pay all expenses of
the Plan, except such expenses as are paid out of the trust pursuant to the
terms of the Trust Agreement entered into with the Trustee, and as are
deducted from Participants' Accounts in order to pay for administrative
services pursuant to a services agreement entered into with a third party
provider of administrative or recordkeeping services.
Executed this 31 day of Dec., 1995.
-- ----
PROVIDIAN BANCORP, INC.
By: /s/ Mary L. Stumpo
-------------------
Mary L. Stumpo
Vice President
Human Resources
<PAGE>
FOURTH AMENDMENT TO THE
PROVIDIAN BANCORP, INC. 401(k) PLAN
WHEREAS, Providian Corporation has spun off its wholly-owned subsidiary
Providian Bancorp, Inc.;
WHEREAS, Providian Bancorp, Inc. has changed its name to Providian Financial
Corporation (the "Company");
WHEREAS, the Company maintains the Providian Bancorp, Inc. 401(k) Plan (the
"Plan"), which it last restated effective as of January 1, 1992, and has since
amended three times; and
WHEREAS, the Company wishes to amend the Plan to reflect the Company's new name
(and new names of other adopting employers), and to permit participants to
self-direct the investment of their Profit Sharing Contributions Accounts;
NOW, THERFORE, the Plan is amended as follows:
1. Effective as of June 10, 1997, the name "Providian Financial Corporation"
is substituted for "Providian Bancorp, Inc." each time the latter name
appears.
2. Effective as of June 10, 1997, Section 2.11 is amended to read as follows:
2.11 "Company" means Providian Financial Corporation and any successor
thereto.
3. Effective as of June 10, 1997, Section 2.12 is amended to read as follows:
2.12 "Company Stock" means common stock of the Company.
4. Effective as of January 1, 1996, Section 2.23 is amended to read as
follows:
2.23 "Employer" means the Company, First Deposit National Bank,
Providian National Bank (formerly, First Deposit National Credit Card
Bank), Providian National Bancorp, First Deposit Service Corporation,
Providian Credit Services, Inc., and any other Affiliate of the Company
that, with the approval of the Company and subject to such conditions as
the Company may impose, adopts this Plan, and any successor or successors
of any of them.
5. Effective as of June 30, 1997, Section 2.23 is amended to read as follows:
2.23 "Employer" means the Company, First Deposit National Bank,
Providian National Bank (formerly, First Deposit National Credit Card
Bank), Providian Bancorp Services (formerly, Providian National Bancorp),
First Deposit Service Corporation, Providian Bank (formerly, Providian
Credit Services, Inc.), and any other Affiliate of the Company that, with
the approval of the Company and subject to such conditions as the Company
may impose, adopts this Plan, and any successor or successors of any of
them.
6. Effective as of June 10, 1997, Section 2.51 is amended to read as follows:
2.51 "Plan" means the Providian Financial Corporation 401(k) Plan
(formerly known as the Providian Bancorp, Inc. 401(k) Plan, the First
Deposit Corporation 401(k) Plan and the Deferred Profit Sharing Plan for
Employees of First Deposit Corporation and its Affiliates), as set forth
herein and as from time to time amended.
7. Effective as of July 1, 1997, Section 6.1 is amended to read as follows:
6.1 Investment Control.
(a) A Participant shall have the right to direct the investment of his
or her 401(k) Account, Profit Sharing Contributions Account, Voluntary
Contributions Account, and Rollover Account or a specified portion thereof
in accordance with Section 6.3 among such Investment Funds as are selected
by the Company.
(b) Participant's Employer Matching Contributions Accounts shall be
invested in Company Stock. Participants do not have the right to direct the
investment of their Employee Matching Contributions Accounts under the
Plan.
8. Effective as of July 1, 1997, Section 6.2 is amended to read as follows:
6.2 Selection of Investment Funds. The Company shall have the
authority to select and withdraw, in its sole discretion, one or more
Investment Funds for the investment of Participants' 401(k) Accounts,
Profit Sharing Contributions Accounts, Voluntary Contributions Accounts,
and Rollover Accounts upon prior written notice to Participants.
9. Effective as of July 1, 1997, Section 6.3(b) is amended to read as follows:
(b) Each Participant who directs the investment of his or her 401(k)
Account, Profit Sharing Contributions Account, Voluntary Contributions
Account, and Rollover Account is solely responsible for the selection of
his or her investment options. The Trustee, the Company, and the officers,
supervisors, and other employees of any such entity are not authorized to
advise a Participant as to the manner in which his or her 401(k) Account,
Profit Sharing Contributions Account, Voluntary Contributions Account, and
Rollover Account shall be invested. The fact that an Investment Fund is
available to a Participant for investment under the Plan shall not be
construed as a recommendation for investment in that Investment Fund. In
the event no election is made by a Participant, such amounts available for
his or her election will be invested by the Trustee in a balanced fund or
similar investment.
10. Effective as of July 1, 1997, the first sentence of Section 6.5 is amended
to read as follows:
The Company shall prescribe, on a uniform and nondiscriminatory basis, the
timing and frequency with which Participants may elect to transfer amounts
already allocated to their 401(k) Account, Profit Sharing Contributions
Account, Voluntary Contributions Account, and Rollover Accounts between
available Investment Funds.
Executed this 31 day of October, 1997.
-- -------
PROVIDIAN FINANCIAL CORPORATION
By /s/ John H. Rogers
----------------------------
<PAGE>
FIFTH AMENDMENT TO THE
PROVIDIAN FINANCIAL CORPORATION 401(k) PLAN
WHEREAS, the Company maintains the Providian Financial Corporation 401(k) Plan
(the "Plan"), which it last restated effective as of January 1, 1992, and has
since amended four times; and
WHEREAS, the Company wishes to modify and clarify the Plan's eligibility rules.
NOW, THEREFORE, Plan is amended as follows:
1. Effective as of January 1, 1992, Section 2.28 is deleted in its entirety.
2. Effective as of April 1, 1998, Section 3.1(a) is amended to read as
follows:
(a) Each Eligible Employee who has entered into the Plan prior to the
Effective Date shall continue to participate, and each other Eligible
Employee shall be entitled to become a Participant in the Plan on the first
day of the third calendar month that follows his or her Employment
Commencement Date, provided that he or she is an Eligible Employee on such
date.
Executed this 10 day of October, 1998.
-- -------
PROVIDIAN FINANCIAL CORPORATION
By: /s/ David J. Petrini
----------------------------
EXHIBIT 4.2
TRUST AGREEMENT
Between
-----------------------------------------------------------------------
PROVIDIAN FINANCIAL CORPORATION
And
FIDELITY MANAGEMENT TRUST COMPANY
-----------------------------------------------------------------------
PROVIDIAN FINANCIAL CORPORATION 401(k) PLAN TRUST
Dated as of February 1, 2000
<PAGE>
TABLE OF CONTENTS
Section Page
1 Trust.....................................................................2
2 Exclusive Benefit and Reversion of Sponsor Contributions..................2
3 Disbursements.............................................................2
(a) Directions from Administrator
(b) Limitations
(a) Administrator Directed Disbursements
(b) Participant Withdrawal Requests
(c) Limitations
4 Investment of Trust.......................................................3
(a) Selection of Investment Options
(b) Available Investment Options
(c) Participant Direction
(d) Mutual Funds
(e) Sponsor Stock
(f) Participant Loans
(g) BrokerageLink
(h) Guaranteed Investment Contracts
(i) Participation in Collective Investment Funds
(j) Outside Managed Collective Investment Funds
(k) Outside Managed Separate Investment Funds
(l) Strategy Funds
(m) Reliance of Trustee on Directions
(n) Trustee Powers
5 Recordkeeping and Administrative Services to Be Performed................24
(a) General
(b) Accounts
(c) Inspection and Audit
(d) Effect of Plan Amendment
(e) Returns, Reports and Information
6 Compensation and Expenses................................................25
7 Directions and Indemnification...........................................25
(a) Identity of Administrator and Named Fiduciary
(b) Directions from Administrator
(c) Directions from Named Fiduciary
(d) Co-Fiduciary Liability
(e) Indemnification
(f) Survival
-i-
<PAGE>
TABLE OF CONTENTS
(Continued)
Section Page
8 Resignation or Removal of Trustee........................................27
(a) Resignation
(b) Removal
9 Successor Trustee........................................................27
(a) Appointment
(b) Acceptance
(c) Corporate Action
10 Termination..............................................................27
11 Resignation, Removal, and Termination Notices............................27
12 Duration.................................................................27
13 Amendment or Modification................................................28
14 Electronic Services.....................................................28
15 General..................................................................29
(a) Performance by Trustee, its Agents or Affiliates
(b) Entire Agreement
(c) Waiver
(d) Successors and Assigns
(e) Partial Invalidity
(f) Section Headings
16 Governing Law............................................................30
(a) Massachusetts Law Controls
(b) Trust Agreement Controls
Schedules
A. Administrative Services
B. Fee Schedule
C. Investment Options
D. Administrator's Authorization Letter
E. Named Fiduciary's Authorization Letter
F. IRS Determination Letter or Opinion of Counsel
G. Existing GICs
H. Exchange Guidelines
I. Operational Guidelines for Non-Fidelity Mutual Funds
J. Securities that may not be purchased under BrokerageLink
K. BrokerageLink Administrative Procedures
L. Operating Procedures for Participant Loans for Purchase of
Primary Residence
-ii-
<PAGE>
TRUST AGREEMENT, dated as of the first day of February, 2000, between
PROVIDIAN FINANCIAL CORPORATION a California corporation, having an office at
201 Mission Street, San Francisco, California 94105 (the "Sponsor"), and
FIDELITY MANAGEMENT TRUST COMPANY, a Massachusetts trust company, having an
office at 82 Devonshire Street, Boston, Massachusetts 02109 (the "Trustee").
WITNESSETH:
WHEREAS, the Sponsor is the sponsor of the Providian Financial
Corporation 401(k) Plan (the "Plan"); and
WHEREAS, the Sponsor wishes to establish a trust to hold and invest
Plan assets under the Plan for the exclusive benefit of participants in the Plan
and their beneficiaries; and
WHEREAS, the Sponsor (the "Named Fiduciary") is the named fiduciary of
the Plan (within the meaning of section 402(a) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")); and
WHEREAS, the Trustee is willing to hold and invest the aforesaid Plan
assets in trust among several investment options selected by the Named
Fiduciary; and
WHEREAS, the Sponsor wishes to have the Trustee perform certain
ministerial recordkeeping and administrative functions under the Plan; and
WHEREAS, the Sponsor (the "Administrator") is the administrator of the
Plan (within the meaning of section 3(16)(A) of ERISA); and
WHEREAS, the Trustee is willing to perform recordkeeping and
administrative services for the Plan if the services are ministerial in nature
and are provided within a framework of plan provisions, guidelines and
interpretations conveyed in writing to the Trustee by the Administrator.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements set forth below, the Sponsor and the Trustee
agree as follows:
Section 1. Trust. The Sponsor hereby establishes the Providian Financial
Corporation 401(k) Plan Trust (the "Trust") with the Trustee. The Trust shall
consist of an initial contribution of money or other property acceptable to the
Trustee in its sole discretion, made by the Sponsor or transferred from a
previous trustee under the Plan, such additional sums of money and Sponsor Stock
(hereinafter defined) as shall from time to time be delivered to the Trustee
under the Plan, all investments made therewith and proceeds thereof, and all
earnings and profits thereon, less the payments that are made by the Trustee as
provided herein. The Trustee hereby accepts the Trust on the terms and
conditions set forth in this Agreement. In accepting this Trust, the Trustee
shall be accountable for the assets received by it, subject to the terms and
conditions of this Agreement.
Section 2. Exclusive Benefit and Reversion of Sponsor Contributions. Except as
provided under applicable law, no part of the Trust may be used for, or diverted
to, purposes other than the exclusive benefit of the participants in the Plan or
their beneficiaries or the reasonable expenses of Plan administration.
Section 3. Disbursements.
(a) Administrator-Directed Disbursements. The Trustee shall make
disbursements in the amounts and in the manner that the Administrator directs
from time to time in writing. The Trustee shall have no responsibility to
ascertain such direction's compliance with the terms of the Plan (except to the
extent the terms of the Plan have been communicated to the Trustee in writing)
or of any applicable law or the direction's effect for tax purposes or
otherwise; nor shall the Trustee have any responsibility to see to the
application of any disbursement.
(b) Participant Withdrawal Requests. The Sponsor hereby directs that,
pursuant to the Plan, a participant withdrawal request (in-service or full
withdrawal) may be made by the participant by telephone or such other electronic
means as may be agreed to from time to time by the Sponsor and Trustee, and the
Trustee shall process such request only after the identity of the participant is
verified by use of a personal identification number ("PIN") and social security
number. The Trustee shall process such withdrawal in accordance with written
guidelines provided by the Sponsor and documented in the Plan Administrative
Manual. In the case of a hardship withdrawal request, the Trustee shall forward
the withdrawal document to the participant for execution and submission for
approval to the Administrator. The Administrator shall have the responsibility
for approving the withdrawal and instructing the Trustee to send the proceeds to
the Administrator or to the participant if so directed by the Administrator.
(c) Limitations. The Trustee shall not be required to make any
disbursement in excess of the net realizable value of the assets of the Trust at
the time of the disbursement. The Trustee shall make cash disbursements in
accordance with the applicable source and fund withdrawal hierarchy as
documented in the Plan Administrative Manual, unless the Administrator has
provided a written direction to the contrary.
Section 4. Investment of Trust.
(a) Selection of Investment Options. The Trustee shall have no
responsibility for the selection of investment options under the Trust and shall
not render investment advice to any person in connection with the selection of
such options.
(b) Available Investment Options. The Named Fiduciary shall direct the
Trustee as to the investment options in which the Trust shall be invested during
the period beginning on the date of the initial transfer of assets to the Trust
and ending on the date of the completion of the reconciliation of participant
records ("Recordkeeping Reconciliation Period"), and the investment options in
which Plan participants may invest following the Recordkeeping Reconciliation
Period. The Named Fiduciary may determine to offer as investment options only:
(i) securities issued by the investment companies advised by Fidelity Management
& Research Company ("Fidelity Mutual Funds") and certain securities issued by
investment companies not advised by Fidelity Management & Research Company
("Non-Fidelity Mutual Funds") (collectively, "Mutual Funds"), (ii) equity
securities issued by the Sponsor or an affiliate which are publicly-traded and
which are "qualifying employer securities" within the meaning of section
407(d)(5) of ERISA ("Sponsor Stock"), and (iii) notes evidencing loans to Plan
participants in accordance with the terms of the Plan.
The investment options initially selected by the Named Fiduciary are
identified on Schedules "A" and "C" attached hereto. The Named Fiduciary may add
additional investment options with the consent of the Trustee and upon mutual
amendment of this Trust Agreement and the Schedules thereto to reflect such
additions.
(c) Participant Direction. As authorized under the Plan, each Plan
participant shall direct the Trustee in which investment option(s) to invest the
assets in the participant's individual accounts. Such directions may be made by
Plan participants by use of the telephone exchange system, the internet or in
such other manner as may be agreed upon from time to time by the Sponsor and the
Trustee, maintained for such purposes by the Trustee or its agent, in accordance
with written Exchange Guidelines attached hereto as Schedule "G". In the event
that the Trustee fails to receive a proper direction, the assets shall be
invested in the investment option set forth for such purpose on Schedule "C",
until the Trustee receives a proper direction.
(d) Mutual Funds. The Named Fiduciary hereby acknowledges that it has
received from the Trustee a copy of the prospectus for each Fidelity Mutual Fund
selected by the Named Fiduciary as a Plan investment option or short-term
investment fund. All transactions involving Non-Fidelity Mutual Funds shall be
done in accordance with the Operational Guidelines attached hereto as Schedule
"H". Trust investments in Mutual Funds shall be subject to the following
limitations:
(i) Execution of Purchases and Sales. Purchases and sales of
Mutual Funds (other than for exchanges) shall be made on the date on which the
Trustee receives from the Administrator in good order all information,
documentation and wire transfer of funds (if applicable) necessary to accurately
effect such transactions. Exchanges of Mutual Funds shall be made in accordance
with the Exchange Guidelines attached hereto as Schedule "G".
(ii) Voting. At the time of mailing of notice of each annual
or special stockholders' meeting of any Mutual Fund, the Trustee shall send a
copy of the notice and all proxy solicitation materials to each Plan participant
who has shares of the Mutual Fund credited to the participant's accounts,
together with a voting direction form for return to the Trustee or its designee.
The participant shall have the right to direct the Trustee as to the manner in
which the Trustee is to vote the shares credited to the participant's accounts
(both vested and unvested). The Trustee shall vote the shares as directed by the
participant. The Trustee shall not vote shares for which it has received no
directions from the participant.
During the Recordkeeping Reconciliation Period, the Named Fiduciary
shall have the right to direct the Trustee as to the manner in which the Trustee
is to vote the shares of the Mutual Funds in the Trust. Following the
Recordkeeping Reconciliation Period the Named Fiduciary shall continue to have
the right to direct the Trustee as to the manner in which the Trustee is to vote
the Mutual Funds shares held in a short-term liquidity reserve for a unitized
investment option.
With respect to all rights other than the right to vote, the Trustee
shall follow the directions of the participant and if no such directions are
received, the directions of the Named Fiduciary. The Trustee shall have no
further duty to solicit directions from participants or the Named Fiduciary.
(e) Sponsor Stock. Trust investments in Sponsor Stock shall be made via
the Providian Stock Fund (the "Stock Fund"). Dividends received on shares of
Sponsor Stock shall be reinvested in additional shares of Sponsor Stock and
allocated to participants' accounts. Trust investments in Sponsor Stock shall be
subject to the following limitations:
(i) Acquisition Limit. Pursuant to the Plan, the Trust
may be invested in Sponsor Stock to the extent necessary to comply with
investment directions under this Agreement.
(ii) Fiduciary Duty of Named Fiduciary. The Named Fiduciary
shall continually monitor the suitability under the fiduciary duty rules of
section 404(a)(1) of ERISA (as modified by section 404(a)(2) of ERISA) of
acquiring and holding Sponsor Stock. The Trustee shall not be liable for any
loss, or expense, which arises from the directions of the Named Fiduciary with
respect to the acquisition and holding of Sponsor Stock, unless it is clear on
their face that the actions to be taken under those directions would be
prohibited by the foregoing fiduciary duty rules or would be contrary to the
terms of this Agreement.
Each participant with an interest in Sponsor Stock (or, in the event of the
participant's death, his beneficiary) is, for purposes of this Section 4(e)(ii),
hereby designated as a "named fiduciary" (within the meaning of Section
403(a)(1) of ERISA), with respect to a pro rata portion of (i) the shares of
Sponsor Stock held which are allocated to other participants' accounts but as to
which directions are not timely received by the Trustee, (ii) the shares of
Sponsor Stock not allocated to participants' accounts, and (iii) allocated
shares not purchased at the direction of participants, and such participant (or
beneficiary) shall have the right to direct the Trustee in writing as to the
manner in which the Trustee is to vote such shares.
(iii) Execution of Purchases and Sales.
(A) Purchases and sales of Sponsor Stock (other
than for exchanges) shall be made on the open market on the date on which the
Trustee receives from the Administrator in good order all information,
documentation, and wire transfer of funds (if applicable), necessary to
accurately effect such transactions. Exchanges of Sponsor Stock shall be made in
accordance with the Exchange Guidelines attached hereto as Schedule "G". Such
general rules shall not apply in the following circumstances:
(1) If the Trustee is unable to purchase
or sell the total number of shares required to be purchased or sold on such day
as a result of market conditions; or
(2) If the Trustee is prohibited by the
Securities and Exchange Commission, the New York Stock Exchange, or any other
regulatory body from purchasing or selling any or all of the shares required to
be purchased or sold on such day.
In the event of the occurrence of the circumstances described in (1) or (2)
above, the Trustee shall purchase or sell such shares as soon as possible
thereafter and shall determine the price of such purchases or sales to be the
average purchase or sales price of all such shares purchased or sold,
respectively. The Trustee may follow directions from the Named Fiduciary to
deviate from the above purchase and sale procedures provided that such direction
is made in writing by the Named Fiduciary.
(B) Purchases and Sales from or to Sponsor. If
directed by the Sponsor in writing prior to the trading date, the Trustee may
purchase or sell Sponsor Stock from or to the Sponsor if the purchase or sale is
for adequate consideration (within the meaning of section 3(18) of ERISA) and no
commission is charged. If Sponsor contributions (employer) or contributions made
by the Sponsor on behalf of the participants (employee) under the Plan are to be
invested in Sponsor Stock, the Sponsor may transfer Sponsor Stock in lieu of
cash to the Trust. In either case, the number of shares to be transferred will
be determined by dividing the total amount of Sponsor Stock to be purchased or
sold by the 4:00 p.m. NYSE closing price of the Sponsor Stock on the trading
date.
(C) Use of an Affiliated Broker. The Named
Fiduciary hereby directs the Trustee to use Fidelity Capital Markets ("Capital
Markets") to provide brokerage services in connection with any purchase or sale
of Sponsor Stock in accordance with directions from Plan participants. Capital
Markets shall execute such directions directly or through its affiliate,
National Financial Services Company ("NFSC"). The provision of brokerage
services shall be subject to the following:
(1) As consideration for such brokerage
services, the Named Fiduciary agrees that Capital Markets shall be entitled to
remuneration under this authorization provision in the amount of five cents
($.05) commission on each share of Sponsor Stock up to 10,000 shares in a
singular transaction, four cents ($.04) commission on each share of Sponsor
Stock from 10,001 to 20,000 shares in a singular transaction, and three and
one-half cents ($.035) commission on each share of Sponsor Stock in excess of
20,000 shares in a singular transaction. Any change in such remuneration may be
made only by a signed agreement between Sponsor and Trustee.
(2) The Trustee will provide the Sponsor
with the following: a description of Capital Markets' brokerage placement
practices and a form by which the Sponsor may terminate this direction to use a
broker affiliated with the Trustee. The Trustee will provide the Sponsor with
this termination form annually, as well as quarterly and annual reports which
summarize all securities transaction-related charges incurred by the Plan.
(3) Any successor organization of Capital
Markets, through reorganization, consolidation, merger or similar transactions,
shall, upon consummation of such transaction, become the successor broker in
accordance with the terms of this authorization provision.
(4) The Trustee and Capital Markets shall
continue to rely on this direction provision until notified to the contrary. The
Sponsor reserves the right to terminate this direction upon written notice to
Capital Markets (or its successor) and the Trustee, in accordance with Section
11 of this Agreement.
(iv) Securities Law Reports. The Administrator shall be
responsible for filing all reports required under Federal or state securities
laws with respect to the Trust's ownership of Sponsor Stock, including, without
limitation, any reports required under section 13 or 16 of the Securities
Exchange Act of 1934, and shall immediately notify the Trustee in writing of any
requirement to stop purchases or sales of Sponsor Stock pending the filing of
any report. The Trustee shall provide to the Administrator such information on
the Trust's ownership of Sponsor Stock as the Administrator may reasonably
request in order to comply with Federal or state securities laws.
(v) Voting and Tender Offers. Notwithstanding any other
provision of this Agreement the provisions of this Section shall govern the
voting and tendering of Sponsor Stock. The Sponsor shall pay for all printing,
mailing, tabulation and other costs associated with the voting and tendering of
Sponsor Stock. The Trustee, after consultation with the Sponsor, shall prepare
the necessary documents associated with the voting and tendering of Sponsor
Stock.
(A) Voting.
(1) When the issuer of Sponsor Stock
prepares for any annual or special meeting, the Sponsor shall notify the Trustee
at least thirty (30) days in advance of the intended record date and shall cause
a copy of all proxy solicitation materials to be sent to the Trustee. If
requested by the Trustee the Sponsor shall certify to the Trustee that the
aforementioned materials represents the same information distributed to
shareholders of Sponsor Stock. Based on these materials the Trustee shall
prepare a voting instruction form and shall provide a copy of all proxy
solicitation materials to be sent to each Plan participant with an interest in
Sponsor Stock held in the Trust, together with the foregoing voting instruction
form to be returned to the Trustee or its designee. The form shall show the
number of full and fractional shares of Sponsor Stock credited to the
participant's accounts.
(2) Each participant with an interest in the
Sponsor Stock held in the Trust shall have the right to direct the Trustee as to
the manner in which the Trustee is to vote that number of shares of Sponsor
Stock credited to the participant's accounts (both vested and unvested).
Directions from a participant to the Trustee concerning the voting of Sponsor
Stock shall be communicated in writing, or other means as agreed upon by the
Trustee and the Sponsor. These directions shall be held in confidence by the
Trustee and shall not be divulged to the Sponsor, or any officer or employee
thereof, or any other person except to the extent that the consequences of such
directions are reflected in reports regularly communicated to any such person in
the ordinary course of the performance of the Trustee's services hereunder. Upon
its receipt of the directions, the Trustee shall vote the shares of Sponsor
Stock as directed by the participant. Except as otherwise required by law, the
Trustee shall not vote shares of Sponsor Stock credited to a participant's
account for which it has received no directions from the participant.
(3) Except as otherwise required by law, the
Trustee shall vote that number of shares of Sponsor Stock not credited to
participants' accounts in the same proportion on each issue as it votes those
shares credited to participants' accounts for which it received voting
directions from participants.
(B) Tender Offers
(1) Upon commencement of a tender offer for
any securities held in the Trust that are Sponsor Stock, the Sponsor shall
timely notify the Trustee in advance of the intended tender date and shall cause
a copy of all materials to be sent to the Trustee. The Sponsor shall certify to
the Trustee that the aforementioned materials represent the same information
distributed to shareholders of Sponsor Stock. Based on these materials and after
consultation with the Sponsor, the Trustee shall prepare a tender instruction
form and shall provide a copy of all tender materials to be sent to each plan
participant with an interest in the Stock Fund, together with the foregoing
tender instruction form, to be returned to the Trustee or its designee. The
tender instruction form shall show the number of full and fractional shares of
Sponsor Stock credited to the participants account (both vested and unvested).
(2) Each participant with an interest in the
Stock Fund shall have the right to direct the Trustee to tender or not to tender
some or all of the shares of Sponsor Stock credited to the participant's
accounts (both vested and unvested). Directions from a participant to the
Trustee concerning the tender of Sponsor Stock shall be communicated in writing,
or such other means as is agreed upon by the Trustee and the Sponsor. These
directions shall be held in confidence by the Trustee and shall not be divulged
to the Sponsor, or any officer or employee thereof, or any other person except
to the extent that the consequences of such directions are reflected in reports
regularly communicated to any such persons in the ordinary course of the
performance of the Trustee's services hereunder. The Trustee shall tender or not
tender shares of Sponsor Stock as directed by the participant. Except as
otherwise required by law, the Trustee shall not tender shares of Sponsor Stock
credited to a participant's accounts for which it has received no directions
from the participant.
(3) Except as otherwise required by law, the
Trustee shall tender that number of shares of Sponsor Stock not credited to
participants' accounts in the same proportion as the total number of shares of
Sponsor Stock credited to participants' accounts for which it received
instructions from Participants.
(4) A participant who has directed the
Trustee to tender some or all of the shares of Sponsor Stock credited to the
participant's accounts may, at any time prior to the tender offer withdrawal
date, direct the Trustee to withdraw some or all of the tendered shares, and the
Trustee shall withdraw the directed number of shares from the tender offer prior
to the tender offer withdrawal deadline. Prior to the withdrawal deadline, if
any shares of Sponsor Stock not credited to participants' accounts have been
tendered, the Trustee shall redetermine the number of shares of Sponsor Stock
that would be tendered under Section 4(e)(v)(B)(3) if the date of the foregoing
withdrawal were the date of determination, and withdraw from the tender offer
the number of shares of Sponsor Stock not credited to participants' accounts
necessary to reduce the amount of tendered Sponsor Stock not credited to
participants' accounts to the amount so redetermined. A participant shall not be
limited as to the number of directions to tender or withdraw that the
participant may give to the Trustee.
(5) A direction by a participant to the
Trustee to tender shares of Sponsor Stock credited to the participant's accounts
shall not be considered a written election under the Plan by the participant to
withdraw, or have distributed, any or all of his withdrawable shares. The
Trustee shall credit to each account of the participant from which the tendered
shares were taken the proceeds received by the Trustee in exchange for the
shares of Sponsor Stock tendered from that account. Pending receipt of
directions (through the Administrator) from the participant or the Named
Fiduciary, as provided in the Plan, as to which of the remaining investment
options the proceeds should be invested in, the Trustee shall invest the
proceeds in the investment option described in Schedule "C".
(vi) General. With respect to all rights other
than the right to vote, the right to tender, and the right to withdraw shares
previously tendered, in the case of Sponsor Stock credited to a participant's
accounts, the Trustee shall follow the directions of the participant and if no
such directions are received, the directions of the Named Fiduciary. The Trustee
shall have no duty to solicit directions from participants. With respect to all
rights other than the right to vote and the right to tender, in the case of
Sponsor Stock not credited to participants' accounts, the Trustee shall follow
the directions of the Named Fiduciary.
(vii) Conversion. All provisions in this Section
4(e) shall also apply to any securities received as a result of a conversion of
Sponsor Stock.
(f) Participant Loans for the Purchase of a Primary Residence. The
Administrator shall act as the Trustee's agent for the purpose of holding all
trust investments in participant loan notes and related documentation and as
such shall (i) hold physical custody of and keep safe the notes and other loan
documents, (ii) separately account for repayments of such loans and clearly
identify such assets as Plan assets, (iii) collect and remit all principal and
interest payments to the Trustee, and (iv) cancel and surrender the notes and
other loan documentation when a loan has been paid in full. To originate a
participant loan, the Plan participant shall direct the Trustee as to the type
of loan to be made from the participant's individual account. Such directions
shall be made by Plan participants by use of the system maintained for such
purpose by the Trustee or its agent. The Trustee shall determine, based on the
current value of the participant's account, the amount available for the loan.
Based on the interest rate supplied by the Sponsor in accordance with the terms
of the Plan, the Trustee shall advise the participant of such interest rate, as
well as the installment payment amounts. The Trustee shall forward the loan
document to the participant for execution and submission for approval to the
Administrator. The Administrator shall have the responsibility for approving the
loan and instructing the Trustee to send the loan proceeds to the Administrator
or to the participant if so directed by the Administrator. In all cases,
approval or disapproval by the Administrator shall be made within thirty (30)
days of the participant's initial request (the origination date).
(g) All Other Participant Loans. The Administrator shall act as the
Trustee's agent for participant loans and as such shall (i) separately account
for repayments of such loans and clearly identify such assets as Plan assets and
(ii) collect and remit all principal and interest payments to the Trustee. To
originate a participant loan, the Plan participant shall direct the Trustee as
to the term and amount of the loan to be made from the participant's individual
account. Such directions shall be made by Plan participants by use of the system
maintained for such purpose by the Trustee or its agent. The Trustee shall
determine, based on the current value of the participant's account on the date
of the request and any guidelines provided by the Sponsor, the amount available
for the loan. Based on the interest rate supplied by the Sponsor in accordance
with the terms of the Plan, the Trustee shall advise the participant of such
interest rate, as well as the installment payment amounts. The Trustee shall
distribute the Participant loan agreement and truth-in-lending disclosure with
the proceeds check to the participant. To facilitate recordkeeping, the Trustee
may destroy the original of any proceeds check made in connection with a loan to
a participant under the Plan, provided that the Trustee or its agent first
creates a duplicate by a photographic or optical scanning or other process
yielding a reasonable facsimile of the promissory note and the Plan
participant's signature thereon, which duplicate may be reduced or enlarged in
size from the actual size of the original promissory note.
(h) Reliance of Trustee on Directions.
(i) The Trustee shall not be liable for any loss or expense
which arises from any participant's exercise or non-exercise of rights under
this Section 4 over the assets in the participant's accounts.
(ii) The Trustee shall not be liable for any loss or expense,
which arises from the Named Fiduciary's exercise or non-exercise of rights under
this Section 4, unless it was clear on their face that the actions to be taken
under the Named Fiduciary's directions were prohibited by the fiduciary duty
rules of section 404(a) of ERISA or were contrary to the terms of the Plan as
communicated in writing to the Trustee.
(i) Trustee Powers. The Trustee shall have the following powers
and authority:
(i) Subject to paragraphs (b) and (c) of this Section 4, to
sell, exchange, convey, transfer, or otherwise dispose of any property held in
the Trust, by private contract or at public auction. No person dealing with the
Trustee shall be bound to see to the application of the purchase money or other
property delivered to the Trustee or to inquire into the validity, expediency,
or propriety of any such sale or other disposition.
(ii) To cause any securities or other property held as part of
the Trust to be registered in the Trustee's own name, in the name of one or more
of its nominees, or in the Trustee's account with the Depository Trust Company
of New York and to hold any investments in bearer form, but the books and
records of the Trustee shall at all times show that all such investments are
part of the Trust.
(iii) To keep that portion of the Trust in cash or cash
balances as the Named Fiduciary or Administrator may, from time to time, deem to
be in the best interest of the Trust.
(iv) To make, execute, acknowledge, and deliver any and all
documents of transfer or conveyance and to carry out the powers herein granted.
(v) To borrow funds from a bank not affiliated with the
Trustee in order to provide sufficient liquidity to process Plan transactions in
a timely fashion; provided that the cost of such borrowing shall be allocated in
a reasonable fashion to the investment fund(s) in need of liquidity.
(vi) To settle, compromise, or submit to arbitration any
claims, debts, or damages due to or arising from the Trust; to commence or
defend suits or legal or administrative proceedings; to represent the Trust in
all suits and legal and administrative hearings; and to pay all reasonable
expenses arising from any such action, from the Trust if not paid by the
Sponsor.
(vii) To employ legal, accounting, clerical, and other
assistance as may be required in carrying out the provisions of this Agreement
and to pay their reasonable expenses and compensation from the Trust if not paid
by the Sponsor.
(viii) To invest all or any part of the assets of the Trust in
GICs and short term investments (including interest bearing accounts with the
Trustee or money market mutual funds advised by affiliates of the Trustee) and
in any collective investment trust or group trust, including any collective
investment trust or group trust maintained by the Trustee, which then provides
for the pooling of the assets of plans described in Section 401(a) and exempt
from tax under Section 501(a) of the Internal Revenue Code ("Code"), or any
comparable provisions of any future legislation that amends, supplements, or
supersedes those sections, provided that such collective investment trust or
group trust is exempt from tax under the Code or regulations or rulings issued
by the Internal Revenue Service. The provisions of the document governing such
collective investment trusts or group trusts, as it may be amended from time to
time, shall govern any investment therein and are hereby made a part of this
Trust Agreement.
(ix) To do all other acts, although not specifically mentioned
herein, as the Trustee may deem necessary to carry out any of the foregoing
powers and the purposes of the Trust.
Section 5. Recordkeeping and Administrative Services to Be Performed.
(a) General. The Trustee shall perform those recordkeeping and
administrative functions described in Schedule "A" attached hereto. These
recordkeeping and administrative functions shall be performed within the
framework of the Administrator's written directions regarding the Plan's
provisions, guidelines and interpretations.
(b) Accounts. The Trustee shall keep accurate accounts of all
investments, receipts, disbursements, and other transactions hereunder, and
shall report the value of the assets held in the Trust as of the last day of
each fiscal quarter of the Plan and, if not on the last day of a fiscal quarter,
the date on which the Trustee resigns or is removed as provided in Section 8 of
this Agreement or is terminated as provided in Section 10 (the "Reporting
Date"). Within thirty (30) days following each Reporting Date or within sixty
(60) days in the case of a Reporting Date caused by the resignation or removal
of the Trustee, or the termination of this Agreement, the Trustee shall file
with the Administrator a written account setting forth all investments,
receipts, disbursements, and other transactions effected by the Trustee between
the Reporting Date and the prior Reporting Date, and setting forth the value of
the Trust as of the Reporting Date. Except as otherwise required under ERISA,
upon the expiration of twelve (12) months from the date of filing such account,
the Trustee shall have no liability or further accountability with respect to
the propriety of its acts or transactions shown in such account, except with
respect to such acts or transactions as to which a written objection shall have
been filed with the Trustee within such twelve (12) month period.
(c) Inspection and Audit. All records generated by the Trustee in
accordance with paragraphs (a) and (b) shall be open to inspection and audit,
during the Trustee's regular business hours prior to the termination of this
Agreement, by the Administrator or any person designated by the Administrator.
Upon the resignation or removal of the Trustee or the termination of this
Agreement, the Trustee shall provide to the Administrator, at no expense to the
Sponsor, in the format regularly provided to the Administrator, a statement of
each participant's accounts as of the resignation, removal, or termination, and
the Trustee shall provide to the Administrator or the Plan's new recordkeeper
such further records as are reasonable, at the Sponsor's expense.
(d) Effect of Plan Amendment. A confirmation of the current qualified
status of the Plan is attached hereto as Schedule "F". The Trustee's provision
of the recordkeeping and administrative services set forth in this Section 5
shall be conditioned on the Sponsor delivering to the Trustee a copy of any
amendment to the Plan as soon as administratively feasible following the
amendment's adoption, with, if requested, an IRS determination letter or an
opinion of counsel substantially in the form of Schedule "F" covering such
amendment, and on the Administrator providing the Trustee on a timely basis with
all the information the Administrator deems necessary for the Trustee to perform
the recordkeeping and administrative services and such other information as the
Trustee may reasonably request.
(e) Returns, Reports and Information. Except as set forth on Schedule
"A", the Administrator shall be responsible for the preparation and filing of
all returns, reports, and information required of the Trust or Plan by law. The
Trustee shall provide the Administrator with such information as the
Administrator may reasonably request to make these filings. The Administrator
shall also be responsible for making any disclosures to Participants required by
law, except such disclosure as may be required under federal or state
truth-in-lending laws with regard to Participant loans, which shall be provided
by the Trustee.
Section 6. Compensation and Expenses. Sponsor shall pay to Trustee the fees for
services in accordance with Schedule "B". Fees for services are specifically
outlined in Schedule "B" and are based on all of the assumptions identified
therein. To reflect increased operating costs, Trustee may once each calendar
year, amend Schedule B without the Sponsor's consent upon ninety (90) days prior
notice to the Sponsor.
All reasonable expenses of plan administration as shown on Schedule "B"
attached hereto, as amended from time to time, shall be a charge against and
paid from the appropriate plan participants' accounts, except to the extent such
amounts are paid by the Plan Sponsor in a timely manner.
All expenses of the Trustee relating directly to the acquisition and
disposition of investments constituting part of the Trust, and all taxes of any
kind whatsoever that may be levied or assessed under existing or future laws
upon or in respect of the Trust or the income thereof, shall be a charge against
and paid from the appropriate Participants' accounts.
Section 7. Directions and Indemnification.
(a) Identity of Administrator and Named Fiduciary. The Trustee shall be
fully protected in relying on the fact that the Named Fiduciary and the
Administrator under the Plan are the individuals or persons named as such above
or such other individuals or persons as the Sponsor may notify the Trustee in
writing.
(b) Directions from Administrator. Whenever the Administrator provides
a direction to the Trustee, the Trustee shall not be liable for any loss or
expense arising from the direction (i) if the direction is contained in a
writing (or is oral and immediately confirmed in a writing) signed by any
individual whose name and signature have been submitted (and not withdrawn) in
writing to the Trustee by the Administrator in the form attached hereto as
Schedule "D", and (ii) if the Trustee reasonably believes the signature of the
individual to be genuine, unless it is clear on the direction's face that the
actions to be taken under the direction would be prohibited by the fiduciary
duty rules of Section 404(a) of ERISA or would be contrary to the terms of this
Agreement. For purposes of this Section, such direction may also be made by any
individual whose name and signature have been submitted (and not withdrawn) in
writing to the Trustee by the Administrator in the form attached hereto as
Schedule "D" via electronic data transfer (EDT) or other electronic means in
accordance with procedures agreed to by the Administrator and the Trustee;
provided, however, that the Trustee shall be fully protected in relying on such
direction as if it were a direction made in writing by the Administrator.
(c) Directions from Named Fiduciary. Whenever the Named Fiduciary or
Sponsor provides a direction to the Trustee, the Trustee shall not be liable for
any loss or expense arising from the direction (i) if the direction is contained
in a writing (or is oral and immediately confirmed in a writing) signed by any
individual whose name and signature have been submitted (and not withdrawn) in
writing to the Trustee by the Named Fiduciary in the form attached hereto as
Schedule "E" and (ii) if the Trustee reasonably believes the signature of the
individual to be genuine, unless it is clear on the direction's face that the
actions to be taken under the direction would be prohibited by the fiduciary
duty rules of Section 404(a) of ERISA or would be contrary to the terms of this
Agreement. Such direction may also be made by any individual whose name and
signature have been submitted (and not withdrawn) in writing to the Trustee by
the Administrator in the form attached hereto as Schedule "E" via EDT or other
electronic means in accordance with procedures agreed to by the Named Fiduciary
and the Trustee; provided, however, that the Trustee shall be fully protected in
relying on such direction as if it were a direction made in writing by the Named
Fiduciary.
(d) Co-Fiduciary Liability. In any other case, the Trustee shall not be
liable for any loss or expense arising from any act or omission of another
fiduciary under the Plan except as provided in section 405(a) of ERISA.
(e) Indemnification. The Sponsor shall indemnify the Trustee against,
and hold the Trustee harmless from, any and all loss, damage, penalty,
liability, cost, and expense, including without limitation, reasonable
attorneys' fees and disbursements, that may be incurred by, imposed upon, or
asserted against the Trustee by reason of any claim, regulatory proceeding, or
litigation arising from any act done or omitted to be done by any individual or
person with respect to the Plan or Trust, excepting only any and all loss, etc.,
arising from the Trustee's negligence or bad faith.
(f) Survival. The provisions of this Section 7 shall survive the
termination of this Agreement.
Section 8. Resignation or Removal of Trustee.
(a) Resignation. The Trustee may resign at any time upon sixty (60)
days' notice in writing to the Sponsor, unless a shorter period of notice is
agreed upon by the Sponsor.
(b) Removal. The Sponsor may remove the Trustee at any time upon sixty
(60) days' notice in writing to the Trustee, unless a shorter period of notice
is agreed upon by the Trustee.
Section 9. Successor Trustee.
(a) Appointment. If the office of Trustee becomes vacant for any
reason, the Sponsor may in writing appoint a successor trustee under this
Agreement. The successor trustee shall have all of the rights, powers,
privileges, obligations, duties, liabilities, and immunities granted to the
Trustee under this Agreement. The successor trustee and predecessor trustee
shall not be liable for the acts or omissions of the other with respect to the
Trust.
(b) Acceptance. When the successor trustee accepts its appointment
under this Agreement, title to and possession of the Trust assets shall
immediately vest in the successor trustee without any further action on the part
of the predecessor trustee. The predecessor trustee shall execute all
instruments and do all acts that reasonably may be necessary or reasonably may
be requested in writing by the Sponsor or the successor trustee to vest title to
all Trust assets in the successor trustee or to deliver all Trust assets to the
successor trustee.
(c) Corporate Action. Any successor of the Trustee or successor
trustee, through sale or transfer of the business or trust department of the
Trustee or successor trustee, or through reorganization, consolidation, or
merger, or any similar transaction, shall, upon consummation of the transaction,
become the successor trustee under this Agreement.
Section 10. Termination. This Agreement may be terminated at any time by the
Sponsor upon sixty (60) days' notice in writing to the Trustee. On the date of
the termination of this Agreement, the Trustee shall forthwith transfer and
deliver to such individual or entity as the Sponsor shall designate, all cash
and assets then constituting the Trust. If, by the termination date, the Sponsor
has not notified the Trustee in writing as to whom the assets and cash are to be
transferred and delivered, the Trustee may bring an appropriate action or
proceeding for leave to deposit the assets and cash in a court of competent
jurisdiction. The Trustee shall be reimbursed by the Sponsor for all costs and
expenses of the action or proceeding including, without limitation, reasonable
attorneys' fees and disbursements.
Section 11. Resignation, Removal, and Termination Notices. All notices of
resignation, removal, or termination under this Agreement must be in writing and
mailed to the party to which the notice is being given by certified or
registered mail, return receipt requested, to the Sponsor c/o Plan
Administrator, Providian Financial Group, 201 Mission Street, San Francisco, CA
94105, and to the Trustee c/o Legal Department, ERISA Group, Fidelity
Investments, 82 Devonshire Street, Boston, Massachusetts 02109, or to such other
addresses as the parties have notified each other of in the foregoing manner.
Section 12. Duration. This Trust shall continue in effect without limit as to
time, subject, however, to the provisions of this
Agreement relating to amendment, modification, and termination thereof.
Section 13. Amendment or Modification. This Agreement may be amended or
modified at any time and from time to time only by an instrument executed by
both the Sponsor and the Trustee.
Section 14. Electronic Services.
(a) The Trustee may provide communications and services via electronic
medium ("Electronic Services"), including, but not limited to, Fidelity Plan
Sponsor WebStation, Client Intranet, Client e-mail, interactive software
products or any other information provided in an electronic format. The Sponsor,
its agents and employees agree to keep confidential and not publish, copy,
broadcast, retransmit, reproduce, commercially exploit or otherwise
redisseminate the data, information, software or services without the Trustee's
written consent.
(b) The Sponsor shall be responsible for installing and maintaining all
Electronic Services on its computer network and/or Intranet upon receipt in a
manner so that the information provided via the Electronic Service will appear
in the same form and content as it appears on the form of delivery, and for any
programming required to accomplish the installation. Materials provided for the
Sponsor's Intranet web sites shall be installed by the Sponsor and shall be
clearly identified as originating from Trustee. The Sponsor shall promptly
remove Electronic Services from its computer network and/or Intranet, or replace
the Electronic Service with an updated service provided by the Trustee, upon
written notification (including written notification via facsimile) by the
Trustee.
(c) All Electronic Services shall be provided to the Sponsor without
any express or implied legal warranties or acceptance of legal liability by the
Trustee relative to the use of material or Electronic Services by the Sponsor.
No rights are conveyed to any property, intellectual or tangible, associated
with the contents of the Electronic Services and related material.
(d) To the extent that any Electronic Services utilize Internet
services to transport data or communications, the Trustee will take, and the
Sponsor agrees to follow, reasonable security precautions; however, the Trustee
disclaims any liability for interception of any such data or communications. The
Trustee shall not be responsible for, and makes no warranties regarding access,
speed or availability of Internet or network services. The Trustee shall not be
responsible for any loss or damage related to or resulting from any changes or
modifications to the electronic material after delivering it to the Sponsor.
Section 15. General.
(a) Performance by Trustee, its Agents or Affiliates. The Sponsor
acknowledges and authorizes that the services to be provided under this
Agreement shall be provided by the Trustee, its agents or affiliates, including
Fidelity Investments Institutional Operations Company, Inc. or its successor,
and that certain of such services may be provided pursuant to one or more other
contractual agreements or relationships.
(b) Entire Agreement. This Agreement together with the schedules
attached hereto, which are hereby incorporated herein, contains all of the terms
agreed upon between the parties with respect to the subject matter hereof.
(c) Waiver. No waiver by either party of any failure or refusal to
comply with an obligation hereunder shall be deemed a waiver of any other or
subsequent failure or refusal to so comply.
(d) Successors and Assigns. The stipulations in this Agreement
shall inure to the benefit of, and shall bind, the successors and assigns of the
respective parties.
(e) Partial Invalidity. If any term or provision of this Agreement or
the application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
(f) Section Headings. The headings of the various sections and
subsections of this Agreement have been inserted only for the purposes of
convenience and are not part of this Agreement and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Agreement.
Section 16. Governing Law.
(a) Controlling Law. The validity, construction, effect and
administration of this Agreement shall be governed by and interpreted in
accordance with the laws of the Commonwealth of Massachusetts to the extent they
govern the activities of the Trustee and otherwise in accordance with the laws
of California, except to the extent those laws are superseded under section 514
of ERISA.
(b) Trust Agreement Controls. The Trustee is not a party to the
Plan, and in the event of any conflict between the provisions of the Plan and
the provisions of this Agreement, the provisions of this Agreement shall
control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
PROVIDIAN FINANCIAL CORPORATION
Attest: By:
--------------------- ----------------------------
Secretary
Name:
----------------------------
Title:
----------------------------
Date:
----------------------------
FIDELITY MANAGEMENT TRUST COMPANY
Attest: By:
--------------------- ----------------------------
Assistant Clerk
Name:
----------------------------
Title:
----------------------------
Date:
----------------------------
<PAGE>
Schedule "A"
ADMINISTRATIVE SERVICES
Administration
* Establishment and maintenance of participant account and election percentages.
* Maintenance of the following Plan investment options:
o Providian Stock
o Fidelity Balanced Fund
o Fidelity Blue Chip Growth Fund
o Fidelity Diversified International Fund
o Fidelity Equity Income Fund
o Fidelity Freedom 2000 Fund
o Fidelity Freedom 2010 Fund
o Fidelity Freedom 2020 Fund
o Fidelity Freedom 2030 Fund
o Fidelity Freedom Income Fund
o Fidelity Low-Priced Stock Fund
o Fidelity Money Market Trust: Retirement Money Market Portfolio
o Spartan U.S. Equity Index Fund
o Alger Small Cap Fund
o Domini Social Equity Index
o PIMCO Total Return Fund - Administrative Class
o Templeton World Fund
* Maintenance of the following money classifications:
o Pre-Tax Contributions
o After-Tax Contributions
o Rollover
o Employer Matching Contributions
o Retirement Contributions
o Flex Credits
* The Trustee will provide the recordkeeping and administrative services set
forth on this Schedule "A" or as otherwise agreed to in writing between
Sponsor and Trustee.
A) Participant Telephone Services
1. Participant service representatives are available each business day
from 8:30 a.m. ET - 8:00 p.m. in the participant's time zone in the
continental United States to provide toll free telephone service for
participant inquiries and transactions.
2. Through the automated voice response system and on-line account access
via the World Wide Web, participants also have virtually 24 hour
account inquiry and transaction capabilities.
3. For security purposes, all calls are recorded and maintained by the
Trustee for not less than five (5) years. In addition, several levels
of security are available including the verification of a Personal
Identification Number (PIN) and/or any other indicative data resident
on the system.
4. The following telephone services are available:
o Enroll new participants via telephone; provide confirmation of
enrollment within five (5) calendar days of the request.
o Provide Plan investment option information.
o Provide and maintain information and explanations about Plan
provisions.
o Respond to requests for literature.
o Allow participants to change their deferral and after-tax
percentages and provide updates via EDT for the Sponsor to apply
to its payrolls accordingly.
o Maintain and process changes to participants' contribution
allocations for all money sources.
o Process exchanges (transfers) between investment options on a
daily basis.
o Process hardship withdrawal requests as approved and directed by
the Sponsor.
o Process in-service and full withdrawal requests according to
written direction provided by the Sponsor.
o Consult with participants on various loan scenarios and generate
all documentation.
o Process loan requests according to written direction provided by
the Sponsor.
B) Plan Accounting
1. Process consolidated payroll contributions according to the Sponsor's
payroll frequency via EDT, consolidated magnetic tape or diskette. The
data format will be provided by Trustee.
2. Maintain and update employee data necessary to support plan
administration. The data will be submitted according to payroll
frequency.
3. Provide daily Plan and participant level accounting for all Plan
investment options.
4. Provide daily Plan and participant level accounting for all money
classifications for the Plan.
5. Audit and reconcile the Plan and participant accounts daily.
6. Reconcile and process participant withdrawal requests and
distributions as approved and directed by the Sponsor. All requests
are paid based on the current market values of participants' accounts,
not advanced or estimated values. A distribution report will accompany
each check.
7. Track individual participant loans; process loan withdrawals;
re-invest loan repayments; and prepare and deliver comprehensive
reports to the Sponsor to assist in the administration of participant
loans.
8. Maintain and process changes to participants' deferral percentage and
prospective and existing investment mix elections.
C) Participant Reporting
1. Mail confirmation to participants of all participant initiated
transactions within three to five calendar days of the transaction.
Records of participant initiated transactions are held on Trustee's
electronic systems indefinitely.
2. Prepare and mail via first class to each Plan participant a quarterly
detailed participant statement reflecting all activity for the period.
Statements will be mailed not later than twenty (20) calendar days
after the end of each month in the absence of unusual circumstances.
3. Mail required 402(f) notification for distribution from the Plan. This
notice advises participants of the tax consequences of their Plan
distributions.
D) Plan Reporting
1. Prepare, reconcile and deliver a monthly Trial Balance Report
presenting all money classes and investments. This report is based on
the market value as of the last business day of the month. The report
will be delivered not later than twenty (20) calendar days after the
end of each month in the absence of unusual circumstances.
2. Prepare, reconcile and deliver a Quarterly Administrative Report
presenting both on a participant and a total Plan basis all money
classes, investment positions and a summary of all activity of the
participant and Plan as of the last business day of the quarter. The
report will be delivered not later than twenty (20) calendar days
after the end of each quarter in the absence of unusual circumstances.
E) Government Reporting
1. Process year-end tax reports for participants - 1099R, as well as
preparation of Form 5500 in accordance with the procedures set forth
in Schedule "A-1" attached hereto.
F) Communication & Education Services
1. Trustee designs, produces and distributes a customized comprehensive
communications program for employees. The program may include
multimedia informational materials, investment education and planning
materials, access to Fidelity's homepage on the Internet and STAGES
magazine. Additional fees for such services as mutually agreed upon
between Sponsor and Trustee.
2. Fidelity Portfolio Planner (SM), is an internet-based educational
service for participants that generates target asset allocations and
recommended model portfolios customized to investment options in your
Plan(s) based upon methodology provided by Strategic Advisers, Inc.,
an affiliate of the Trustee. The Sponsor acknowledges that it has
received the ADV Part II for Strategic Advisers, Inc. more than 48
hours prior to executing the Trust Agreement.
G) Other
1. Perform non-discrimination limitation testing upon request. In order
to obtain this service, the client shall be required to provide the
information identified in the Fidelity Discrimination Testing Package
Guidelines. Any fees and restrictions associated with this testing
service shall be addressed in such Guidelines.
2. Monitor and process required minimum distribution amounts ("MRD") as
follows: the Trustee will notify the MRD participant and, upon
notification from the MRD participant, will use the MRD participant's
information to process the distribution. If the MRD participant does
not respond to the Trustee's notification, the Sponsor directs the
Trustee to automatically begin the required distribution for the
participant.
3. The Fidelity Participant Recordkeeping System is available on-line to
the Sponsor via the Plan Sponsor Webstation ("PSW"). PSW is a
graphical, Windows-based application that provides current plan and
participant-level information, including indicative data, account
balances, activity and history.
4. De Minimis Distributions: After a participant terminates employment
and is eligible for a distribution, Fidelity will determine whether
the vested account balance exceeds $5,000, exceeded $5,000 at any
prior distribution or in-service withdrawal date in the account
history at Fidelity, or exceeds $5,000 at the end of the warning
period (at least 30 days, but not more than 70 days, from the
determination date). If not, Fidelity will process a mandatory and
immediate cashout, subject only to the requirement to offer a rollover
opportunity. The $5,000 threshold will increase or decrease as the IRS
may from time to time amend this threshold in Internal Revenue Code
Section 411(a)(11).
5. Roll-In Processing. The Trustee shall process the qualification of
rollover contributions to the Trust. The procedures for qualifying a
rollover are directed by the Sponsor and the Trustee shall accept or
deny each rollover based upon the Plan's written criteria and any
written guidelines provided by the Administrator and documented in the
Plan Administrative Manual, or, if none, as set forth below:
To process a rollover request the participant must obtain the
signature from the distributing plan, trustee or custodian, on the
designated form, certifying that the monies distributed originally
came from a qualified plan and have not been commingled with any
non-eligible money. If a signature cannot be obtained a signed letter
from the distributing plan, trustee or custodian on it's Company
letterhead will also be acceptable.
Requests that do not meet the specified criteria will be returned to
the participant with further explanation as to why the request cannot
be processed. If the Sponsor or the Trustee determine that a request
is not a valid rollover, the full amount of the requested rollover
will be distributed to the participant.
PROVIDIAN FINANCIAL FIDELITY MANAGEMENT
CORPORATION COMPANY
By: By:
---------------------------- -------------------------------
Date Vice President Date
<PAGE>
Schedule "A-1"
FORM 5500 SERVICE
Effective for Form 5500s and Summary Annual Reports ("SARs") prepared for plan
year ending December 31, 2000 and thereafter, Fidelity agrees to provide its
Signature Ready Form 5500 Service ("Service"), in accordance with the following:
1. The Sponsor hereby agrees to:
a. Use Fidelity's Non Discrimination Testing Services, which will be
performed pursuant to a separate Non Discrimination Testing Services
Agreement;
b. Prior to the commencement of the Service, provide Fidelity with a copy
of the most recent Form 5500 filed with the Internal Revenue Service
("IRS") and a copy of any prior year's return and/or independent auditor's
report, as requested by Fidelity;
c. Provide Fidelity with complete and accurate plan data in the required
format, including a completed plan questionnaire ("Questionnaire") as soon
as possible after the plan year end;
d. In the event that Fidelity has not received all data required to
complete a Form 5500 within three and one half (3 1/2) months after the
plan year end, the Sponsor hereby authorizes Fidelity to prepare and
execute IRS Form 5558 (Application for Extension) on behalf of the Plan
Administrator and file Form 5558 with the IRS in order to obtain an
extension of the filing deadline;
e. Review, sign and mail the Form 5500 prepared by Fidelity to the IRS in a
timely manner;
f. In instances where the Sponsor is responsible for distributing SARs,
distribute or have distributed SARs to participants
and beneficiaries in a timely manner; and
g. Elect the Service prior to the last day of the plan year for which the
Form 5500 would be required.
2. Fidelity hereby agrees to:
a. Provide the Sponsor with the Questionnaire within one and one-half (1
1/2) months after the plan year end. Fidelity shall have no responsibility
for verifying the authenticity or accuracy of the data submitted by the
Sponsor to Fidelity on the Questionnaire;
b. File Form 5558 to request an extension of time to file Form 5500 if all
required data is not received from the Sponsor within three and one half (3
1/2) months after the plan year end, as specified above. If the requested
information is not received at least two and one half (2 1/2) months prior
to the filing deadline, Fidelity will provide the Sponsor with the Form
5500 that has been completed to date. The Sponsor will be responsible for
supplying the missing information and completing the Form 5500 for filing
with the IRS. Fidelity shall not be held responsible for any late fees or
penalties caused by the Sponsor's delay, in the event that Fidelity does
not receive the required information at least two and one half (2 1/2)
months prior to the filing deadline,
c. Provide the Sponsor with signature ready Form 5500s at least ten (10)
days prior to the required filing date and SARs at least ten (10) days
prior to the required mailing date;
d. In instances where Fidelity is responsible for distributing SARs,
distribute or have distributed such SARs to participants and beneficiaries
in a timely manner; and
e. Respond to inquiries from the IRS received by the Sponsor, related to
any Form 5500 prepared by Fidelity.
3. Any fees related to this service are set out on Schedule "B" to the
Agreement to which this schedule is attached.
PROVIDIAN FINANCIAL FIDELITY MANAGEMENT TRUST
CORPORATION COMPANY
By: By:
-------------------------- -------------------------------
Date Vice President Date
<PAGE>
Schedule "B"
FEE SCHEDULE
Annual Participant Fee: Fee waived.
Enrollments by Phone: Fee waived.
Loan Fee: Establishment fee of
$35.00 per loan account;
annual fee of $15.00 per
loan account.
Minimum Required Distribution: $25.00 per participant
per MRD Withdrawal.
In-Service Withdrawals by Phone: $20.00 per withdrawal.
Plan Sponsor Webstation (PSW): Three User I.D.'s
provided free of charge.
Each additional I.D.,
$500.00 per year.
Return of Excess Contribution Fee: $25.00 per participant,
one-time charge per
calculation and check
generation.
Non-Fidelity Mutual Funds: Non-Fidelity Mutual Fund
vendors shall pay
service fees directly to
Fidelity Institutional
Retirement Services
Company equal to a
percentage (generally 25
or 35 basis points) of
plan assets invested in
such Non-Fidelity
Mutual Funds.
- - Other Fees: separate charges for optional non-discrimination testing,
extraordinary expenses resulting from large numbers of simultaneous manual
transactions, from errors not caused by Fidelity, reports not contemplated
in this Agreement, corporate actions, or the provision of communications
materials in hard copy which are also accessible to participants via
electronic services in the event that the provision of such material in
hard copy would result in an additional expense deemed to be material. The
Administrator may direct Trustee to withdraw reasonable administrative fees
from the Trust by written direction to the Trustee.
Trustee Fee
To the extent that assets are invested in Sponsor Stock, 0.10% of such
assets in the Trust payable pro rata quarterly on the basis of such assets
as of the calendar quarter's last valuation date, but no less than $10,000
nor more than $35,000 per year.
<PAGE>
Note: These fees have been negotiated and accepted based on the following Plan
characteristics: current Plan assets of $127.9 million, current participation of
5,300 participants, current stock assets of $49.1 million, total Fidelity
actively managed Mutual Fund assets of $49.7 million, total Fidelity
non-actively managed Mutual Fund assets of $5.4 million, total Non-Fidelity
Mutual Fund assets of $23.7 million, and projected net cash flows of $15.1
million per year. Fees will be subject to revision if these Plan characteristics
change significantly by either falling below or exceeding current or projected
levels. Fees also have been based on the use of up to 17 investment options, and
such fees will be subject to revision if additional investment options are
added.
PROVIDIAN FINANCIAL FIDELITY MANAGEMENT TRUST
CORPORATION COMPANY
By: By:
--------------------------- ------------------------------
Date Vice President Date
<PAGE>
Schedule "C"
INVESTMENT OPTIONS
In accordance with Section 4(b), the Named Fiduciary hereby directs the
Trustee that participants' individual accounts may be invested in the following
investment options:
o Providian Stock
o Fidelity Balanced Fund
o Fidelity Blue Chip Growth Fund
o Fidelity Diversified International Fund
o Fidelity Equity Income Fund
o Fidelity Freedom 2000 Fund
o Fidelity Freedom 2010 Fund
o Fidelity Freedom 2020 Fund
o Fidelity Freedom 2030 Fund
o Fidelity Freedom Income Fund
o Fidelity Low-Priced Stock Fund
o Fidelity Money Market Trust: Retirement Money Market Portfolio
o Spartan U.S. Equity Index Fund
o Alger Small Cap Fund
o Domini Social Equity Index
o PIMCO Total Return Fund - Administrative Class
o Templeton World Fund
The named Fiduciary hereby directs that the investment option referred
to in Section 4(c) and Section 4(e)(vi)(B)(5) shall be Fidelity Money Market
Trust: Retirement Money Market Portfolio.
PROVIDIAN FINANCIAL CORPORATION
By
---------------------------
Date
<PAGE>
Schedule "D"
[Administrator's Letterhead]
[Date]
Ms. Carolyn Redden
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street- MM3H
Boston, Massachusetts 02109
[Name of Plan]
*** NOTE: This schedule should contain names and signatures for
ALL individuals who will be providing directions to Fidelity
representatives in connection with the Plan.
Fidelity representatives will be unable to accept directions from
any individual whose name does not appear on this schedule.***
Dear Ms. Redden:
This letter is sent to you in accordance with Section 7(b) of the Trust
Agreement, dated as of [date], between [name of Plan Sponsor] and Fidelity
Management Trust Company. [I or We] hereby designate [name of individual], [name
of individual], and [name of individual], as the individuals who may provide
directions on behalf of the administrator upon which Fidelity Management Trust
Company shall be fully protected in relying. Only one such individual need
provide any direction. The signature of each designated individual is set forth
below and certified to be such.
You may rely upon each designation and certification set forth in this
letter until [I or we] deliver to you written notice of the termination of
authority of a designated individual.
Very truly yours,
[ADMINISTRATOR]
By
[signature of designated individual]
- -----------------------------------
[name of designated individual]
[signature of designated individual]
- -----------------------------------
[name of designated individual]
[signature of designated individual]
- -----------------------------------
[name of designated individual]
<PAGE>
Schedule "E"
[Named Fiduciary's Letterhead]
[Date]
Ms. Carolyn Redden
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street - MM3H
Boston, Massachusetts 02109
[Name of Plan]
Dear Ms. Redden:
This letter is sent to you in accordance with Section 7(c) of the Trust
Agreement, dated as of [date], between [name of Plan Sponsor] and Fidelity
Management Trust Company. [I or We] hereby designate [name of individual], [name
of individual], and [name of individual], as the individuals who may provide
directions on behalf of the named fiduciary upon which Fidelity Management Trust
Company shall be fully protected in relying. Only one such individual need
provide any direction. The signature of each designated individual is set forth
below and certified to be such.
You may rely upon each designation and certification set forth in this
letter until [I or we] deliver to you written notice of the termination of
authority of a designated individual.
Very truly yours,
[NAMED FIDUCIARY]
By
[signature of designated individual]
- -----------------------------------
[name of designated individual]
[signature of designated individual]
- -----------------------------------
[name of designated individual]
[signature of designated individual]
- -----------------------------------
[name of designated individual]
<PAGE>
Schedule "F"
[Law Firm Letterhead]
**Note: May substitute the Plan's IRS determination letter if the letter is no
more that two years old.
Ms. Carolyn Redden
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street - MM3H
Boston, MA 02109
[Name of Plan]
Dear Ms. Redden
In accordance with your request, this letter sets forth our opinion
with respect to the qualified status under section 401(a) of the Internal
Revenue Code of 1986 (including amendments made by the Employee Retirement
Income Security Act of 1974) (the "Code"), of the [name of plan], as amended to
the date of this letter (the "Plan").
The material facts regarding the Plan as we understand them are as
follows. The most recent favorable determination letter as to the Plan's
qualified status under section 401(a) of the Code was issued by the [location of
Key District] District Director of the Internal Revenue Service and was dated
[date] (copy enclosed). The version of the Plan submitted by [name of company]
(the "Company") for the District Director's review in connection with this
determination letter did not contain amendments made effective as of [date].
These amendments, among other matters, [brief description of amendments].
[Subsequent amendments were made on [date] to amend the provisions dealing with
[brief description of amendments].]
The Company has informed us that it intends to submit the Plan to the
[location of Key District] District Director of the Internal Revenue Service and
to request from him a favorable determination letter as to the Plan's qualified
status under section 401(a) of the Code. The Company may have to make some
modifications to the Plan at the request of the Internal Revenue Service in
order to obtain this favorable determination letter, but we do not expect any of
these modifications to be material. The Company has informed us that it will
make these modifications.
Based on the foregoing statements of the Company and our review of the
provisions of the Plan, it is our opinion that the Internal Revenue Service will
issue a favorable determination letter as to the qualified status of the Plan,
as modified at the request of the Internal Revenue Service, under section 401(a)
of the Code, subject to the customary condition that continued qualification of
the Plan, as modified, will depend on its effect in operation.
[Furthermore, in that the assets are in part invested in common stock
issued by the Company or an affiliate, it is our opinion that the Plan is an
"eligible individual account plan" (as defined under Section 407(d)(3) of ERISA)
and that the shares of common stock of the Company held and to be purchased
under the Plan are "qualifying employer securities" (as
<PAGE>
defined under Section 407(d)(5) of ERISA). Finally, it is our opinion that
interests in the Plan are not required to be registered under the Securities Act
of 1933, as amended, or, if such registration is required, that such interests
are effectively registered under said Act.]
Sincerely,
[name of law firm]
By [signature]
----------------
[name of partner]
<PAGE>
Schedule "G"
EXCHANGE GUIDELINES
The following exchange guidelines are currently employed by Fidelity Investments
Institutional Operations Company, Inc. (FIIOC).
Exchange hours, via a Fidelity participant service representative, are 8:30 a.m.
(ET) 8:00 p.m. in the participant's time zone in the continental United States
on each business day. A "business day" is any day on which the New York Stock
Exchange (NYSE) is open.
Exchanges via Voice Response System ("VRS") and the internet ("NetBenefits") may
be made virtually 24 hours a day.
FIIOC reserves the right to change these exchange guidelines at its discretion.
Note: The NYSE's normal closing time is 4:00 p.m. (ET); in the event the NYSE
alters its closing time, all references below to 4:00 p.m. (ET) shall mean the
NYSE closing time as altered.
Mutual Funds
Exchanges Between Mutual Funds
Participants may call on any business day to exchange between the
mutual funds. If the request is confirmed before 4:00 p.m. (ET), it
will receive that day's trade date. Requests confirmed after 4:00 p.m.
(ET) will be processed on a next business day basis.
Sponsor Stock
I. Exchanges from Mutual Funds into Sponsor Stock
No exchanges from Mutual Funds into Sponsor Stock are permitted.
II. Exchanges from Sponsor Stock into Mutual Funds
Participants who wish to exchange out of Sponsor Stock into mutual
funds may call on any business day. Calls received after 4:00 p.m. (ET)
will be processed as if received on the following business day.
The Sponsor Stock is sold on the business day following the call. The
subsequent purchase into mutual fund shares will take place three (3)
business days later (call date plus 4) to allow for settlement of the
stock trade at the custodian and the corresponding transfer of assets
to Fidelity. The mutual fund shares will appear in the participant's
account on the following business day (call date plus 5).
PROVIDIAN FINANCIAL CORPORATION
By
----------------------------
Date
<PAGE>
Schedule "H"
OPERATIONAL GUIDELINES FOR NON-FIDELITY MUTUAL FUNDS
Pricing
By 7:00 p.m. Eastern Time ("ET") each Business Day, the Non-Fidelity Mutual
Fund Vendor (Fund Vendor) will input the following information ("Price
Information") into the Fidelity Participant Recordkeeping System ("FPRS")
via the remote access price screen that Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC"), an affiliate of the Trustee, has
provided to the Fund Vendor: (1) the net asset value for each Fund at the
Close of Trading, (2) the change in each Fund's net asset value from the
Close of Trading on the prior Business Day, and (3) in the case of an
income fund or funds, the daily accrual for interest rate factor ("mil
rate"). FIIOC must receive Price Information each Business Day (a "Business
Day" is any day the New York Stock Exchange is open). If on any Business
Day the Fund Vendor does not provide such Price Information to FIIOC, FIIOC
shall pend all associated transaction activity in the Fidelity Participant
Recordkeeping System ("FPRS") until the relevant Price Information is made
available by Fund Vendor.
Trade Activity and Wire Transfers
By 7:00 a.m. ET each Business Day following Trade Date ("Trade Date plus
One"), FIIOC will provide, via facsimile, to the Fund Vendor a consolidated
report of net purchase or net redemption activity that occurred in each of
the Funds up to 4:00 p.m. ET on the prior Business Day. The report will
reflect the dollar amount of assets and shares to be invested or withdrawn
for each Fund. FIIOC will transmit this report to the Fund Vendor each
Business Day, regardless of processing activity. In the event that data
contained in the 7:00 a.m. ET facsimile transmission represents estimated
trade activity, FIIOC shall provide a final facsimile to the Fund Vendor by
no later than 9:00 a.m. ET. Any resulting adjustments shall be processed by
the Fund Vendor at the net asset value for the prior Business Day.
The Fund Vendor shall send via regular mail to FIIOC transaction confirms
for all daily activity in each of the Funds. The Fund Vendor shall also
send via regular mail to FIIOC, by no later than the fifth Business Day
following calendar month close, a monthly statement for each Fund. FIIOC
agrees to notify the Fund Vendor of any balance discrepancies within twenty
(20) Business Days of receipt of the monthly statement.
For purposes of wire transfers, FIIOC shall transmit a daily wire for
aggregate purchase activity and the Fund Vendor shall transmit a daily wire
for aggregate redemption activity, in each case including all activity
across all Funds occurring on the same day.
Prospectus Delivery
FIIOC shall be responsible for the timely delivery of Fund prospectuses and
periodic Fund reports ("Required Materials") to Plan participants, and
shall retain the services of a third-party vendor to handle such mailings.
The Fund Vendor shall be responsible for all materials and production
costs, and hereby agrees to provide the Required Materials to the
third-party vendor selected by FIIOC. The Fund Vendor shall bear the costs
of mailing annual Fund reports to Plan participants. FIIOC shall bear the
costs of mailing prospectuses to Plan participants.
Proxies
The Fund Vendor shall be responsible for all costs associated with the
production of proxy materials. FIIOC shall retain the services of a
third-party vendor to handle proxy solicitation mailings and vote
tabulation. Expenses associated with such services shall be billed directly
to the Fund Vendor by the third-party vendor.
Participant Communications
The Fund Vendor shall provide internally-prepared fund descriptive
information approved by the Funds' legal counsel for use by FIIOC in its
written participant communication materials. FIIOC shall utilize historical
performance data obtained from third-party vendors (currently Morningstar,
Inc., FACTSET Research Systems and Lipper Analytical Services) in telephone
conversations with plan participants and in quarterly participant
statements. The Sponsor hereby consents to FIIOC's use of such materials
and acknowledges that FIIOC is not responsible for the accuracy of such
third-party information. FIIOC shall seek the approval of the Fund Vendor
prior to retaining any other third-party vendor to render such data or
materials under this Agreement.
Compensation
FIIOC shall be entitled to fees as set forth in a separate agreement with
the Fund Vendor.
EXHIBIT 5.1
[Providian Financial Corporation
letterhead]
March 31, 2000
Securities and Exchange Commission
Division of Corporate Finance
Washington, D. C. 20549
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
I am General Counsel of Providian Financial Corporation, a Delaware
corporation (the "Company"). This opinion is being delivered to you in
connection with the registration under the Securities Act of 1933, as amended
(the "Act"), of the shares of the Company's Common Stock, par value $0.01 per
share (the "Common Stock"), issuable under the Providian Financial Corporation
401(k) Plan (the "Plan"). I am a member of the Bar of the State of California.
I am generally familiar with the properties and affairs of the Company
(including the Plan). I have also examined those records of the Company I deemed
necessary for the purpose of this opinion. On that basis, I am of the opinion
that the two million (2,000,000) shares of Common Stock of the Company, when
issued pursuant to the terms of the Plan, will be validly issued, fully paid and
nonassessable shares of the Company's Common Stock.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 relating to the Plan.
Very truly yours,
/s/ Ellen Richey
Ellen Richey
General Counsel
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the Providian Financial Corporation 401(k) Plan of our
report dated January 20, 2000, except as to Note 24, as to which date is
February 29, 2000, with respect to the consolidated financial statements of
Providian Financial Corporation incorporated by reference in its Annual Report
on Form 10-K for the year ended December 31, 1999.
/s/ Ernst & Young LLP
San Francisco, California
March 30, 2000
