As filed with the Securities and Exchange Commission on June 28, 1999.
Registration No. 333-_______________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
First Kansas Financial Corporation
---------------------------------------------------
(Exact name of registrant as specified in its charter)
Kansas 48-1198888
- -------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 Main Street
Osawatomie, Kansas 66064
(913) 755-3033
--------------
(Address of principal executive offices)
First Kansas Federal Savings Association
Employees' Savings & Profit Sharing Plan and Trust
---------------------
(Full Title of the Plan)
Richard Fisch, Esq.
Evan M. Seigel, Esq.
Malizia Spidi & Fisch, PC
1301 K Street, N.W.
Suite 700 East
Washington, D.C. 20005
(202) 434-4660
------------------------
(Name, address and telephone number of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
======================== ====================== ====================== ====================== ======================
Title of Proposed Maximum Proposed Maximum Amount of
Securities to Amount to be Offering Price Per Offering Price Registration
be Registered(1) Registered(2) Share(3) (4) Fee
- ---------------- -------------------- -------------------- -------------------- ------------------
Common Stock
$0.10 par value
per share 22,858 $10.50 $240,009 $66.72
======================== ====================== ====================== ====================== ======================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the First Kansas Federal
Savings Association Employees' Savings & Profit Sharing Plan and Trust
(the "Plan"), as described herein.
(2) Estimates the maximum number of shares expected to be issued under the
Plan assuming that all employer and employee contributions to the Plan
are used to purchase shares of Common Stock of First Kansas Financial
Corporation (the "Company"), together with an indeterminate number of
shares which may be necessary to adjust the number of additional shares
of Common Stock reserved for issuance pursuant to the Plan and being
registered herein, as the result of a stock split, stock dividend,
reclassification, recapitalization, or similar adjustment(s) of the
Common Stock of the Company.
(3) Estimated solely for the purpose of calculating the registration fee
and calculated pursuant to Rule 457(c) based on the average of the high
and low prices of the Common Stock reported in the Nasdaq National
Market System on June 24, 1999.
(4) Estimated based on (2) and (3) above.
This Registration Statement shall become effective automatically upon
the date of filing, in accordance with Section 8(a) of the Securities Act of
1933.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information. *
- -------
Item 2. Registrant Information and Employee Plan Annual Information. *
- -------
*This Registration Statement relates to the registration of 22,858
shares of Common Stock, $0.10 par value per share, of First Kansas Financial
Corporation (the "Company") reserved for issuance and delivery under the First
Kansas Federal Savings Association Employees' Savings & Profit Sharing Plan and
Trust (the "Plan"). Documents containing the information required by Part I of
this Registration Statement will be sent or given to participants in the Plan as
specified by Rule 428(b)(1). Such documents are not filed with the Securities
and Exchange Commission (the "Commission") either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424, in
reliance on Rule 428.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
- -------
The Company became subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") on April 16, 1998 and,
accordingly, files periodic reports and other information with the Commission.
Reports, proxy statements and other information concerning the Company filed
with the Commission may be inspected and copies may be obtained (at prescribed
rates) at the Commission's Public Reference Section, Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549.
The following documents filed by the Company are incorporated in this
Registration Statement by reference:
(a) The Company's Registration Statement on Form SB-2 (No. 333-48093)
filed with the Commission on March 17, 1998 and amendments thereto;
(b) The Company's Annual Report on Form 10-KSB for the year ended
December 31, 1998, as filed with the Commission;
(c) The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1999, as filed with the Commission;
(d) The Company's Definitive Proxy Statement related to the 1999 Annual
Meeting of stockholders as filed with the Commission;
(e) The Company's Definitive Proxy Statement related to the special
meeting of stockholders held on February 2, 1999, as filed with the Commission;
and
- 2 -
<PAGE>
(f) The description of the Company's securities as contained in the
Company's Registration Statement on Form 8-A, as filed with the Commission on
April 16, 1998.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14, and 15(d) of the 1934 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 in this Registration Statement and to be a part
hereof from the date of filing of such documents.
Item 4. Description of Securities.
- -------
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
- -------
Not Applicable.
Item 6. Indemnification of Directors and Officers.
- -------
Section 17-6305 of the Kansas General Corporation Code describes those
circumstances under which directors, officers, employees and agents may be
insured or indemnified against liability which they may incur in their
capacities as such.
Provisions regarding indemnification of directors, officers, employees
or agents of the Company are contained in Article 18 of the Company's Articles
of Incorporation.
Under a directors' and officers' liability insurance policy, directors
and officers of the Company are insured against certain liabilities, including
certain liabilities under the Securities Act of 1933, as amended.
The Registrant believes that these provisions assist the Registrant in,
among other things, attracting and retaining qualified persons to serve the
Registrant and its subsidiary. However, a result of such provisions could be to
increase the expenses of the Registrant and effectively reduce the ability of
stockholders to sue on behalf of the Registrant because certain suits could be
barred or amounts that might otherwise be obtained on behalf of the Registrant
could be required to be repaid by the Registrant to an indemnified party.
The Company may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee, or agent of the Company or is or
was serving at the request of the Company as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust, or other
enterprise against any liability asserted against the person and incurred by the
person in any such capacity or arising out of his status as such, whether or not
the Company would have the power to indemnify the person against such liability
under the provisions of the Articles of Incorporation.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("1933 Act") may be permitted to directors, officers, or persons
controlling the Company pursuant to the foregoing
- 3 -
<PAGE>
provisions, the Company has been informed that in the opinion of the Commission
such indemnification is against public policy as expressed in the 1933 Act and
is therefore unenforceable.
Item 7. Exemption from Registration Claimed.
- -------
Not Applicable.
Item 8. Exhibits.
- -------
For a list of all exhibits filed or included as part of this
Registration Statement, see "Index to Exhibits" at the end of this Registration
Statement.
In lieu of an opinion of counsel concerning the Plan's compliance with
the requirements of ERISA, the Company hereby undertakes that it has submitted
the Plan and any amendment thereto to the Internal Revenue Service ("IRS") in a
timely manner and will make all changes required by the IRS in order to qualify
the Plan.
Item 9. Undertakings.
- -------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement;
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
provided however, that paragraphs (a)(1)(i) and (a)(1)(ii) do no apply if the
registration statement is on Form S-3, Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
- 4 -
<PAGE>
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 1933 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 expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
- 5 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Osawatomie in the State of Kansas, as of June 28,
1999.
FIRST KANSAS FINANCIAL CORPORATION
By: /s/ Larry V. Bailey
-------------------------------------
Larry V. Bailey
President and Chief Executive Officer
(Duly Authorized Representative)
POWER OF ATTORNEY
We, the undersigned directors and officers of First Kansas Financial
Corporation, do hereby severally constitute and appoint Larry V. Bailey as our
true and lawful attorney and agent, to do any and all things and acts in our
names in the capacities indicated below and to execute any and all instruments
for us and in our names in the capacities indicated below which said Larry V.
Bailey may deem necessary or advisable to enable First Kansas Financial
Corporation, to comply with the Securities Act of 1933, as amended, and any
rules, regulations and requirements of the Securities and Exchange Commission,
in connection with the Registration Statement on Form S-8 relating to the
offering of the Company's Common Stock, including specifically, but not limited
to, power and authority to sign, for any of us in our names in the capacities
indicated below, the Registration Statement and any and all amendments
(including post-effective amendments) thereto; and we hereby ratify and confirm
all that said Larry V. Bailey shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated as of the date indicated.
/s/ William R. Butler, Jr. /s/ J. Darcy Domoney
- -------------------------------------- ----------------------------
William R. Butler, Jr. J. Darcy Domoney
Director Chairman
Date: June 28,1999 Date: June 28,1999
/s/ Roger L. Coltrin /s/ James E. Breckenridge
- -------------------------------------- ----------------------------
Roger L. Coltrin James E. Breckenridge
Director Director
Date: June 28,1999 Date: June 28,1999
<PAGE>
/s/ Larry V. Bailey /s/ Donald V. Meyer
- -------------------------------------- ---------------------------
Larry V. Bailey Donald V. Meyer
Director, President, CEO and CFO Director
Date: June 28,1999 Date: June 28,1999
/s/ James J. Caseart
- --------------------------------------
James J. Caseart
Vice President and Treasurer
(Principal Accounting Officer)
Date: June 28,1999
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
undersigned trustee of the First Kansas Federal Savings Association Employees'
Savings & Profit Sharing Plan and Trust has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on this 28th day of
June, 1999.
Trustee for the First Kansas Federal Savings Association
Employees' Savings & Profit Sharing Plan
and Trust
The Bank of New York
By Chad Kanhai
-----------------------------------------------
Its Assistant Vice President
-----------------------------------------------
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
- ------- -----------
4.1 First Kansas Federal Savings Association Employees' Savings and Profit
Sharing Plan and Trust Basic Plan Document
4.2 First Kansas Federal Savings Association Employees' Savings and Profit
Sharing Plan and Trust Adoption Agreement
4.3 Summary Plan Description of the Plan
4.4 Trust Document for the Plan
5.1 Favorable determination letter dated June 26, 1998, confirming that the
Plan is qualified under Section 401 of the Internal Revenue Code of 1986,
as amended
23.1 Consent of KPMG LLP
EXHIBIT 4.1
First Kansas Federal Savings Association Employees'
Savings & Profit Sharing Plan and Trust Basic Plan Document
<PAGE>
PENTEGRA SERVICES, INC.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
BASIC PLAN DOCUMENT
7/16/97
<PAGE>
TABLE OF CONTENTS
ARTICLE I PURPOSE AND DEFINITIONS
ARTICLE II PARTICIPATION AND MEMBERSHIP
ARTICLE III CONTRIBUTIONS
ARTICLE IV INVESTMENT OF CONTRIBUTIONS
ARTICLE V MEMBERS' ACCOUNTS, UNITS AND VALUATION
ARTICLE VI VESTING OF UNITS
ARTICLE VII WITHDRAWALS AND DISTRIBUTIONS
ARTICLE VIII LOAN PROGRAM
ARTICLE IX ADMINISTRATION OF PLAN AND ALLOCATION OF RESPONSIBILITIES
ARTICLE X MISCELLANEOUS PROVISIONS
ARTICLE XI AMENDMENT AND TERMINATION
TRUSTS ESTABLISHED UNDER THE PLAN
<PAGE>
ARTICLE I
PURPOSE AND DEFINITIONS
Section 1.1
This Plan and Trust, as evidenced hereby, and the applicable Adoption Agreement
and Trust Agreement(s), are designed and intended to qualify in form as a
qualified profit sharing plan and trust under the applicable provisions of the
Internal Revenue Code of 1986, as now in effect or hereafter amended, or any
other applicable provisions of law including, without limitation, the Employee
Retirement Income Security Act of 1974, as amended.
Section 1.2
The following words and phrases as used in this Plan shall have the following
meanings:
(A) "Account" means the Plan account established and maintained in
respect of each Member pursuant to Article V, including the Member's
after-tax amounts, 401(k) amounts, Employer matching, basic,
supplemental and qualified nonelective contribution amounts, rollover
amounts and profit sharing amounts, as elected by the Employer.
(B) "Adoption Agreement" means the separate document by which the
Employer has adopted the Plan and specified certain of the terms and
provisions hereof. If any term, provision or definition contained in
the Adoption Agreement is inconsistent with any term, provision or
definition contained herein, the one set forth in the Adoption
Agreement shall govern. The Adoption Agreement shall be incorporated
into and form an integral part of the Plan.
(C) "Beneficiary" means the person or persons designated to receive any
amount payable under the Plan upon the death of a Member. Such
designation may be made or changed only by the Member on a form
provided by, and filed with, the Third Party Adminstrator prior to
his death. If the Member is not survived by a Spouse and if no
Beneficiary is designated, or if the designated Beneficiary
predeceases the Member, then any such amount payable shall be paid to
such Member's estate upon his death.
(D) "Board" means the Board of Directors of the Employer adopting the Plan.
(E) "Break in Service" means a Plan Year during which an individual has
not completed more than 500 Hours of Employment, as determined by the
Plan Administrator in accordance with the IRS Regulations. Solely for
purposes of determining whether a Break in Service has occurred, an
individual shall be credited with the Hours of Employment which such
individual would have completed but for a maternity or paternity
absence, as determined by the Plan
1
<PAGE>
Administrator in accordance with this Paragraph, the Code and the
applicable regulations issued by the DOL and the IRS; provided,
however, that the total Hours of Employment so credited shall not
exceed 501 and the individual timely provides the Plan Administrator
with such information as it may require. Hours of Employment
credited for a maternity or paternity absence shall be credited
entirely (i) in the Plan Year in which the absence began if such
Hours of Employment are necessary to prevent a Break in Service in
such year, or (ii) in the following Plan Year. For purposes of this
Paragraph, maternity or paternity absence shall mean an absence from
work by reason of the individual's pregnancy, the birth of the
individual's child or the placement of a child with the individual
in connection with the adoption of the child by such individual, or
for purposes of caring for a child for the period immediately
following such birth or placement.
(F) "Code" means the Internal Revenue Code of 1986, as now in effect or
as hereafter amended. All citations to sections of the Code are to
such sections as they may from time to time be amended or renumbered.
(G) "Commencement Date" means the date on which an Employer begins to
participate in the Plan.
(H) "Contribution Determination Period" means the Plan Year, fiscal year,
or calendar or fiscal quarter, as elected by an Employer, upon which
eligibility for and the maximum permissible amount of any Profit
Sharing contribution, as defined in Article III, is determined.
Notwithstanding the foregoing, for purposes of Article VI,
Contribution Determination Period means the Plan Year.
(I) "Disability" means a Member's disability as defined in Article VII,
Section 7.4.
(J) "DOL" means the United States Department of Labor.
(K) "Employee" means any person in the Employment of, and who receives
compensation from, the Employer, and any leased employee within the
meaning of Section 414(n)(2) of the Code. Notwithstanding the
foregoing, if such leased employees constitute less than twenty
percent (20%) of the Employer's nonhighly compensated work force
within the meaning of Section 414(n)(5)(C)(ii) of the Code, such
leased employees are not Employees if they are covered by a plan
meeting the requirements of Section 414(n)(5)(B) of the Code.
(L) "Employer" means the proprietorship, partnership or corporation named
in the Adoption Agreement and any corporation which, together
therewith, constitutes an affiliated service group, any corporation
which, together therewith, constitutes a controlled group of
2
<PAGE>
corporations as defined in Section 1563 of the Code, and any other
trade or business (whether incorporated or not) which, together
therewith, are under common control as defined in Section 414(c) of
the Code, which have adopted the Plan.
(M) "Employment" means service with an Employer or with any domestic
subsidiary affiliated or associated with an Employer which is a
member of the same controlled group of corporations (within the
meaning of Section 1563(a) of the Code). In accordance with DOL
Regulations (Sections 2530.200-2(b) and (c)), service includes (a)
periods of vacation, (b) periods of layoff, (c) periods of absence
authorized by an Employer for sickness, temporary disability or
personal reasons and (d) if and to the extent required by the
Military Selective Service Act as amended, or any other federal law,
service in the Armed Forces of the United States.
(N) "Enrollment Date" means the date on which an Employee becomes a
Member as provided under Article II.
(O) "ERISA" means the Employee Retirement Income Security Act of 1974,
as now in effect or as hereafte r amended.
(P) "Fiduciary" means any person who (i) exercises any discretionary
authority or control with respect to the management of the Plan or
control with respect to the management or disposition of the assets
thereof, (ii) renders any investment advice for a fee or other
compensation, direct or indirect, with respect to any moneys or
other property of the Plan, or has any discretionary authority or
responsibility to do so, or (iii) has any discretionary authority or
responsibility in the administration of the Plan, including any
other persons (other than trustees) designated by any Named
Fiduciary to carry out fiduciary responsibilities, except to the
extent otherwise provided by ERISA.
(Q) "Highly Compensated Employee" or "Highly Compensated Member" means
an Employee or Member who is employed during the determination year
and who during the look-back year: (i) received compensation from
the Employer in excess of $75,000 (as adjusted pursuant to Section
415(d) of the Code); (ii) received compensation from the Employer in
excess of $50,000 (as adjusted pursuant to Section 415(d) of the
Code) and was a member of the top-paid group for such year as
defined in Section 414(q) of the Code; or (iii) was an officer of
the Employer and received compensation during such year that is
greater than 50 percent of the dollar limitation in effect under
Section 415(b)(1)(A) of the Code. The term Highly Compensated
Employee also includes: (i) employees who are both described in the
preceding sentence if the term "determination year" is substituted
for the term "look-back year" and are among the 100 employees who
received the most compensation from the Employer during the
determination year; and (ii) employees who are
3
<PAGE>
5 percent owners at any time during the look-back year or
determination year.
If no officer has satisfied the compensation requirement of (iii)
above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a Highly
Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding
the determination year.
If an Employee is, during a determination year or look-back year, a
family member of either a 5 percent owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10 most
highly compensated Employees ranked on the basis of compensation paid
by the Employer during such year, then the family member and the 5
percent owner or top-ten Highly Compensated Employee shall be
aggregated. In such case, the family member and 5 percent owner or
top-ten Highly Compensated Employee shall be treated as a single
Employee receiving compensation and plan contributions or benefits
equal to the sum of such compensation and contributions or benefits
of the family member and 5 percent owner or top-ten Highly
Compensated Employee. For purposes of this Paragraph, family member
includes the spouse, lineal ascendants and descendants of the
Employee or former Employee and the spouses of such lineal ascendants
and descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the
top-paid group, the top 100 Employees, the number of Employees
treated as officers and the compensation that is considered, will be
made in accordance with Section 414(q) of the Code and the IRS
Regulations thereunder.
(R) "Hour of Employment" means each hour during which an Employee
performs service (or is treated as performing service as required by
law) for the Employer and, except in the case of military service,
for which he is directly or indirectly paid, or entitled to payment,
by the Employer (including any back pay irrespective of mitigation of
damages), all as determined in accordance with applicable DOL
Regulations.
(S) "Investment Manager" means any Fiduciary other than a Trustee or
Named Fiduciary who (i) has the power to manage, acquire or dispose
of any asset of the Plan; (ii) is (a) registered as an investment
advisor under the Investment Advisors Act of 1940; (b) is a bank, as
defined in such Act, or (c) is an insurance company qualified to
perform the services described in clause (i) hereof under the laws
of more than one state of the United States; and (iii) has
acknowledged in writing that he is a Fiduciary with respect to the
Plan.
(T) "IRS" means the United States Internal Revenue Service.
4
<PAGE>
(U) "Leave of Absence" means an absence authorized by an Employee's
Employer and approved by the Plan Administrator, on a uniform basis,
in accordance with Article X.
(V) "Member" means an Employee enrolled in the membership of the Plan
under Article II.
(W) "Month" means any calendar month.
(X) "Named Fiduciary" means the Fiduciary or Fiduciaries named herein or
in the Adoption Agreement who jointly or severally have the
authority to control and manage the operation and administration of
the Plan.
(Y) "Normal Retirement Age" means the Member's sixty-fifth (65th)
birthday unless otherwise specified in the Adoption Agreement.
(Z) "Plan" means the Employees' Savings & Profit Sharing Plan as
evidenced by this document, the applicable Adoption Agreement and
all subsequent amendments thereto.
(AA) "Plan Administrator" means the Named Fiduciary or, as designated by
such Named Fiduciary and approved by the Board in accordance with
Article IX, any officer or Employee of the Employer.
(BB) "Plan Year" means a consecutive 12-month period ending December 31
unless otherwise specified in the Adoption Agreement.
(CC) "Regulations" means the applicable regulations issued under the
Code, ERISA or other applicable law, by the IRS, the DOL or any
other governmental authority and any proposed or temporary
regulations or rules promulgated by such authorities pending the
issuance of such regulations.
(DD) "Salary" means regular basic monthly salary or wages, exclusive of
special payments such as overtime, bonuses, fees, deferred
compensation (other than pre-tax elective deferrals pursuant to a
Member's election under Article III), severance payments, and
contributions by the Employer under this or any other plan (other
than before-tax contributions made on behalf of a Member under a
Code Section 125 cafeteria plan, unless the Employer specifically
elects to exclude such contributions). Commissions shall be included
at the Employer's option within such limits, if any, as may be set
by the Employer in the Adoption Agreement and applied uniformly to
all its commissioned Employees. In addition, Salary may also
include, at the Employer's option, special payments such as (i)
overtime or (ii) overtime plus bonuses. As an alternative to the
foregoing definition, at the Employer's option, Salary
5
<PAGE>
may be defined to include total taxable compensation reported on the
Member's IRS Form W-2, plus deferrals, if any, pursuant to Section
401(k) of the Code and pursuant to Section 125 of the Code (unless
the Employer specifically elects to exclude such Section 125
deferrals), but excluding compensation deferred from previous years.
In no event may a Member's Salary for any Plan Year exceed for
purposes of the Plan $150,000 (adjusted for cost of living to the
extent permitted by the Code and the IRS Regulations).
(EE) "Social Security Taxable Wage Base" means the contribution and
benefit base attributable to the OASDI portion of Social Security
employment taxes under Section 230 of the Social Security Act (42
U.S.C. ss.430) in effect on the first day of each Plan Year.
(FF) "Spouse" or "Surviving Spouse" means the individual to whom a Member
or former Member was married on the date such Member withdraws his
Account, or if such Member has not withdrawn his Account, the
individual to whom the Member or former Member was married on the
date of his death.
(GG) "Third Party Administrator" or "TPA" means Pentegra Services, Inc., a
non-fiduciary provider of administrative services appointed and
directed by the Plan Administrator or the Named Fiduciary either
jointly or severally.
(HH) "Trust" means the Trust or Trusts established and maintained pursuant
to the terms and provisions of this document and any separately
maintained Trust Agreement or Agreements.
(II) "Trustee" generally means the person, persons or other entities
designated by the Employer or its Board as the Trustee or Trustees
hereof and specified as such in the Adoption Agreement and any
separately maintained Trust Agreement or Agreements.
(JJ) "Trust Agreement" means the separate document by which the Employer
or its Board has appointed a Trustee of the Plan, specified the terms
and conditions of such appointment and any fees associated therewith.
(KK) "Trust Fund" means the Trust Fund or Funds established by the Trust
Agreement or Agreements.
(LL) "Unit" means the unit of measure described in Article V of a Member's
proportionate interest in the available Investment Funds (as defined
in Article IV).
(MM) "Valuation Date" means any business day of any month for the Trustee,
except that in the event the underlying portfolio(s) of any
Investment Fund cannot be valued on such date, the Valuation Date for
such Investment Fund shall be the next subsequent date on which the
6
<PAGE>
underlying portfolio(s) can be valued. Valuations shall be made as of
the close of business on such Valuation Date(s).
(NN) "Year of Employment" means a 12-month period of Employment.
(OO) "Year of Service" means any Plan Year during which an individual
completed at least 1,000 Hours of Employment, or satisfied any
alternative requirement, as determined by the Plan Administrator in
accordance with any applicable Regulations issued by the DOL and the
IRS.
Section 1.3
The masculine pronoun wherever used shall include the feminine pronoun.
7
<PAGE>
ARTICLE II
PARTICIPATION AND MEMBERSHIP
Section 2.1 Eligibility Requirements
------------------------
The Employer may establish as a requirement for eligibility in the Plan (i) the
completion of any number of months not to exceed 12 consecutive months, or (ii)
the completion of one or two 12- consecutive-month periods, and/or (iii) if the
Employer so elects, it may adopt a minimum age requirement of age 21. Such
election shall be made and reflected on the Adoption Agreement. Notwithstanding
the foregoing, in the case of an Employer that adopts the 401(k) feature under
Section 3.9, the eligibility requirements under such feature shall not exceed
the period described in clause (i) above, and, at the election of the Employer,
attainment of age 21 as described in clause (iii) above.
Where an Employer designates a one or two 12-consecutive-month eligibility
waiting period, an Employee must complete at least 1,000 Hours of Employment
during each 12-consecutive-month period (measured from his date of Employment
and each anniversary thereafter). Where an Employer designates an eligibility
waiting period of less than 12 months, an Employee must, for purposes of
eligibility, complete a required number of hours (measured from his date of
Employment and each anniversary thereafter) which is arrived at by multiplying
the number of months of the eligibility waiting period requirement by 83 1/3.
Section 2.2 Exclusion of Certain Employees
------------------------------
To the extent provided in the Adoption Agreement, the following Employees may be
excluded from participation in the Plan:
(i) Employees not meeting the age and service requirements;
(ii) Employees who are included in a unit of Employees covered by a
collective bargaining agreement between the Employee representatives and
one or more Employers if there is evidence that retirement benefits were
the subject of good faith bargaining between such Employee
representatives and such Employer(s). For this purpose, the term
"Employee representative" does not include any organization where more
than one-half of the membership is comprised of owners, officers and
executives of the Employer;
(iii) Employees who are nonresident aliens and who receive no earned income
from the Employer which constitutes income from sources within the
United States; and
8
<PAGE>
(iv) Employees described in Section 2.4 or included in any other ineligible
job classifications set forth in the Adoption Agreement.
Section 2.3 Waiver of Eligibility Requirements
----------------------------------
The Employer, at its election, may waive the eligibility requirement(s) for
participation specified above for (i) all Employees, or (ii) all those employed
on or up to 12 months after its Commencement Date under the Plan. Subject to the
requirements of the Code, the eligibility waiting period shall be deemed to have
been satisfied for an Employee who was previously a Member of the Plan.
All Employees whose Employment commences after the expiration date of the
Employer's waiver of the eligibility requirement(s), if any, shall be enrolled
in the Plan in accordance with the eligibility requirement(s) specified in the
Adoption Agreement.
Section 2.4 Exclusion of Non-salaried Employees
-----------------------------------
The Employer, at its election, may exclude non-salaried (hourly paid) Employees
from participation in the Plan, regardless of the number of Hours of Employment
such Employees complete in any Plan Year. Notwithstanding the foregoing, for
purposes of this Section and all purposes under the Plan, a non-salaried
Employee that is hired following the adoption date of the Plan by the Employer,
but prior to the adoption of this exclusion by the Employer, shall continue to
be deemed to be an Employee and will continue to receive benefits on the same
basis as a salaried Member, despite classification as a non-salaried Employee.
Section 2.5 Commencement of Participation
-----------------------------
Every eligible Employee (other than non-salaried or such other Employees who, at
the election of the Employer, are excluded from participation) shall commence
participation in the Plan on the later of:
(1) The Employer's Commencement Date, or
(2) The first day of the month or calendar quarter (as designated by
the Employer in the Adoption Agreement) coinciding with or next
following his satisfaction of the eligibility requirements as
specified in the Adoption Agreement.
The date that participation commences shall be hereinafter referred to as his
Enrollment Date. Notwithstanding the above, no Employee shall under any
circumstances become a Member unless and until his enrollment application is
filed with, and accepted by, the Plan Administrator. The Plan Administrator
shall notify each Employee of his eligibility for membership in the Plan and
shall furnish him with an enrollment application in order that he may elect to
make or receive contributions on his
9
<PAGE>
behalf under Article III at the earliest possible date consonant with this
Article.
If an Employee fails to complete the enrollment form furnished to him, the Plan
Administrator shall do so on his behalf. In the event the Plan Administrator
processes the enrollment form on behalf of the Employee, the Employee shall be
deemed to have elected not to make any contributions and/or elective deferrals
under the Plan, if applicable.
Section 2.6 Termination of Participation
----------------------------
Membership under all features and provisions of the Plan shall terminate upon
the earlier of (a) a Member's termination of Employment and payment to him of
his entire vested interest, or (b) his death.
10
<PAGE>
ARTICLE III
CONTRIBUTIONS
Section 3.1 Contributions by Members
------------------------
If the Adoption Agreement so provides, each Member may elect to make
non-deductible, after-tax contributions under the Plan, based on increments of
1% of his Salary, provided the amount thereof, when aggregated with the amount
of any pre-tax effective deferrals, does not exceed the limit established by the
Employer in the Adoption Agreement. All such after-tax contributions shall be
separately accounted for, nonforfeitable and distributed with and in addition to
any other benefit to which the Member is entitled hereunder. A Member may change
his contribution rate as designated in the Adoption Agreement, but reduced or
suspended contributions may not subsequently be made up.
Section 3.2 Elective Deferrals by Members
-----------------------------
If the Adoption Agreement so provides, each Member may elect to make pre-tax
elective deferrals (401(k) deferrals) under the Plan, based on increments of 1%
of his Salary, provided the amount thereof, when aggregated with the amount of
any after-tax contributions, does not exceed the limit established by the
Employer in the Adoption Agreement. All such 401(k) deferrals shall be
separately accounted for, nonforfeitable and distributed under the terms and
conditions described under Article VII with and in addition to any other benefit
to which the Member is entitled hereunder. A Member may change his 401(k)
deferral rate or suspend his 401(k) deferrals as designated in the Adoption
Agreement, but reduced or suspended deferrals may not subsequently be made up.
Notwithstanding any other provision of the Plan, no Member may make 401(k)
deferrals during any Plan Year in excess of $7,000 multiplied by the adjustment
factor as provided by the Secretary of the Treasury. The adjustment factor shall
mean the cost of living adjustment factor prescribed by the Secretary of the
Treasury under Section 402(g)(5) of the Code for years beginning after December
31, 1987, as applied to such items and in such manner as the Secretary shall
provide. In the event that the aggregate amount of such 401(k) deferrals for a
Member exceeds the limitation in the previous sentence, the amount of such
excess, increased by any income and decreased by any losses attributable
thereto, shall be refunded to such Member no later than the April 15 of the Plan
Year following the Plan Year for which the 401(k) deferrals were made. If Member
also participates, in any Plan Year, in any other plans subject to the
limitations set forth in Section 402(g) of the Code and has made excess 401(k)
deferrals under this Plan when combined with the other plans subject to such
limits, to the extent the Member, in writing submitted to the TPA no later than
the March 1 of the Plan Year following the Plan Year for which the 401(k)
deferrals were made, designates any 401(k) deferrals under this Plan as excess
deferrals, the amount of such designated excess, increased by
11
<PAGE>
any income and decreased by any losses attributable thereto, shall be refunded
to the Member no later than the April 15 of the Plan Year following the Plan
Year for which the 401(k) deferrals were made.
Section 3.3 Transfer of Funds and Rollover Contributions by Members
-------------------------------------------------------
Each Member may elect to make, directly or indirectly, a rollover contribution
to the Plan of amounts held on his behalf in (i) an employee benefit plan
qualified under Section 401(a) of the Code, or (ii) an individual retirement
account or annuity as described in Section 408(d)(3) of the Code. All such
amounts shall be certified in form and substance satisfactory to the Plan
Administrator by the Member as being all or part of an "eligible rollover
distribution" or a "rollover contribution" within the meaning of Section
402(c)(4) or Section 408(d)(3), respectively, of the Code. Such rollover
amounts, along with the earnings related thereto, will be accounted for
separately from any other amounts in the Member's Account. A Member shall have a
non-
forfeitable vested interest in all such rollover amounts.
The Employer may, at its option, permit Employees who have not satisfied the
eligibility requirements designated in the Adoption Agreement to make a rollover
contribution to the Plan.
The Trustee of the Plan may also accept a direct transfer of funds, which meets
the requirements of Section 1.411(d)-4 of the IRS Regulations, from a plan which
the Trustee reasonably believes to be qualified under Section 401(a) of the Code
in which an Employee was, is, or will become, as the case may be, a participant.
If the funds so directly transferred are transferred from a retirement plan
subject to Code Section 401(a)(11), then such funds shall be accounted for
separately and any subsequent distribution of those funds, and earnings thereon,
shall be subject to the provisions of Section 7.3 which are applicable when an
Employer elects to provide an annuity option under the Plan.
Section 3.4 Employer Contributions - General
--------------------------------
The Employer may elect to make regular or discretionary contributions under the
Plan. Such Employer contributions may be in the form of (i) matching
contributions, (ii) basic contributions, and/or (iii) profit sharing
contributions as designated by the Employer in the Adoption Agreement and/or (i)
supplemental contributions and/or (ii) qualified nonelective contributions as
permitted under the Plan. Each such contribution type shall be separately
accounted for by the TPA.
12
<PAGE>
Section 3.5 Employer Matching Contributions
-------------------------------
The Employer may elect to make regular matching contributions under the Plan.
Such matching contributions on behalf of any Member shall be conditioned upon
the Member making after-tax contributions under Section 3.1 and/or 401(k)
deferrals under Sections 3.2 and 3.9.
If so adopted, the Employer shall contribute under the Plan on behalf of each of
its Members an amount equal to a percentage (as specified by the Employer in the
Adoption Agreement) of the Member's after-tax contributions and/or 401(k)
deferrals not in excess of a maximum percentage as specified by the Employer in
the Adoption Agreement (in increments of 1%) of his Salary. The percentage
elected by the Employer shall be based on 1% increments not to exceed 200% or in
accordance with one of the schedules of matching contribution formulas listed
below, and must be uniformly applicable to all Members.
Years of Employment Matching %
------------------- ----------
Formula Step 1 Less than 3 50%
At least 3 but less than 5 75%
5 or more 100%
Formula Step 2 Less than 3 100%
At least 3 but less than 5 150%
5 or more 200%
Section 3.6 Employer Basic Contributions
----------------------------
The Employer may elect to make regular basic contributions under the Plan. Such
basic contribu- tions on behalf of any Member shall not be conditioned upon the
Member making after-tax contributions and/or (401(k) deferrals under this
Article III. If so adopted, the Employer shall contribute monthly under the Plan
on behalf of each Member (as specified by the Employer in the Adoption
Agreement) an amount equal to a percentage not to exceed 15% (as specified by
the Employer in the Adoption Agreement) in increments of 1% of the Member's
Salary for such month. The percentage elected by the Employer shall be uniformly
applicable to all Members. The Employer may elect to restrict the allocation of
such basic contribution to those Members who were employed with the Employer on
the last day of the month for which the basic contribution is made.
Section 3.7 Supplemental Contributions by Employer
--------------------------------------
An Employer may, at its option, make a supplemental contribution under Formula
(1) or (2) below:
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<PAGE>
Formula(1) A uniform percentage (as specified by the Employer) of each Member's
contributions which were received by the Plan during the Plan Year
with respect to which the supplemental contribution relates. If the
Employer elects to make such a supplemental contribution, it shall
be made on or before the last day of the second month in the Plan
Year following the Plan Year described in the preceding sentence on
behalf of all those Members who were employed with the Employer on
the last working day of the Plan Year with respect to which the
supplemental contribution relates.
Formula(2) A uniform dollar amount per Member or a uniform percentage of each
Member's Salary for the Plan Year (or, at the election of the
Employer, the Employer's fiscal year) to which the supplemental
contribution relates. If the Employer elects to make such a
supplemental contribution, it shall be made on or before the last
day of the second month in the Plan Year (or the fiscal year)
following the Plan Year (or the fiscal year) described in the
preceding sentence on behalf of all those Members who were employed
with the Employer on the last working day of the Plan Year (or the
fiscal year) to which the supplemental contribution relates. The
percentage contributed under this Formula (2) shall be limited in
accordance with the Employer's matching formula and basic
contribution rate, if any, under this Article such that the sum of
the Employer's Formula (2) supplemental contribution plus all other
Employer contributions under this Article shall not exceed 15% of
Salary for such year.
Section 3.8 The Profit Sharing Feature
--------------------------
An Employer may, at its option, adopt the Profit Sharing Feature as described
herein, subject to any other provisions of the Plan, where applicable. This
Feature may be adopted either in lieu of, or in addition to, any other Plan
Feature contained in this Article III. The Profit Sharing Feature is designed to
provide the Employer a means by which to provide discretionary contributions on
behalf of Employees eligible under the Plan.
If this Profit Sharing Feature is adopted, the Employer may contribute on behalf
of each of its eligible Members, on an annual (or at the election of the
Employer, quarterly) basis for any Plan Year or fiscal year of the Employer (as
the Employer shall elect), a discretionary amount not to exceed the maximum
amount allowable as a deduction to the Employer under the provisions of Section
404 of the Code, and further subject to the provisions of Article X.
Any such profit sharing contribution must be received by the Trustee on or
before the last business day of the second month following the close of the
Contribution Determination Period on behalf of all those Members who are
entitled to an allocation of such profit sharing contribution as set forth in
the
14
<PAGE>
Adoption Agreement. For purposes of making the allocations described in this
paragraph, a Member who is on a Type 1 non-military Leave of Absence (as defined
in Sections 1.2(U) and 10.8(B)(1)) or a Type 4 military Leave of Absence (as
defined in Sections 1.2(U) and 10.8(B)(4)) shall be treated as if he were a
Member who was an Employee in Employment on the last day of such Contribution
Determination Period.
Profit sharing contributions shall be allocated to each Member's Account for the
Contribution Determination Period at the election of the Employer, in accordance
with one of the following options:
Profit Sharing Formula 1 -
In the same ratio as each Member's Salary during such
Contribution Determination Period bears to the total of
such Salary of all Members.
Profit Sharing Formula 2 -
In the same ratio as each Member's Salary for the
portion of the Contribution Determination Period during
which the Member satisfied the Employer's eligibility
requirement(s) bears to the total of such Salary of all
Members.
The Employer may integrate the Profit Sharing Feature with Social Security in
accordance with the following provision. The annual (or quarterly, if
applicable) profit sharing contributions for any Contribution Determination
Period (which period shall include, for the purposes of the following maximum
integration levels provided hereunder where the Employer has elected quarterly
allocations of contributions, the four quarters of a Plan Year or fiscal year)
shall be allocated to each Member's Account at the election of the Employer, in
accordance with one of the following options:
Profit Sharing Formula 3-
In a uniform percentage (as specified by the Employer in
the Adoption Agreement) of each Member's Salary during
the Contribution Determination Period up to the Social
Security Taxable Wage Base for such Contribution
Determination Period (the "Base Contribution
Percentage"), plus a uniform percentage (as specified by
the Employer in the Adoption Agreement) of each Member's
Salary for the Contribution Determination Period in
excess of the Social Security Taxable Wage Base for such
Contribution Determination Period (the "Excess
Contribution Percentage").
Profit Sharing Formula 4-
In a uniform percentage (as specified by the Employer in
the Adoption Agreement) of each Member's Salary for the
portion of the Contribution Determination Period during
which the Member satisfied the Employer's eligibility
requirement(s), if any, up to the Base Contribution
Percentage
15
<PAGE>
for such Contribution Determination Period, plus a
uniform percentage (as specified by the Employer in the
Adoption Agreement) of each Member's Salary for the
portion of the Contribution Determination Period during
which the Member satisfied the Employer's eligibility
requirement(s), equal to the Excess Contribution
Percentage.
The Excess Contribution Percentage described in Profit Sharing Formulas 3 and 4
above may not exceed the lesser of (i) the Base Contribution Percentage, or (ii)
the greater of (1) 5.7% or (2) the percentage equal to the portion of the Code
Section 3111(a) tax imposed on employers under the Federal Insurance
Contributions Act (as in effect as of the beginning of the Plan Year) which is
attributable to old-age insurance. For purposes of this Subparagraph,
"compensation" as defined in Section 414(s) of the Code shall be substituted for
"Salary" in determining the Excess Contribution Percentage and the Base
Contribution Percentage.
Notwithstanding the foregoing, the Employer may not adopt the Social Security
integration options provided above if any other integrated defined contribution
or defined benefit plan is maintained by the Employer during any Contribution
Determination Period.
Section 3.9 The 401(k) Feature
------------------
The Employer may, at its option, adopt the 401(k) Feature described hereunder
and in Section 3.2 above for the exclusive purpose of permitting its Members to
make 401(k) deferrals to the Plan.
The Employer may make, apart from any matching contributions it may elect to
make, Employer qualified nonelective contributions as defined in Section
1.401(k)-1(g)(13) of the Regulations. The amount of such contributions shall not
exceed 15% of the Salary of all Members eligible to share in the allocation when
combined with all Employer contributions (including 401(k) elective deferrals)
to the Plan for such Plan Year. Allocation of such contributions shall be made,
at the election of the Employer, to the accounts of (i) all Members, or (ii)
only Members who are not Highly Compensated Employees. Allocation of such
contributions shall be made, at the election of the Employer, in the ratio (i)
which each eligible Member's Salary for the Plan Year bears to the total Salary
of all eligible Members for such Plan Year, or (ii) which each eligible Member's
Salary not in excess of a fixed dollar amount specified by the Employer for the
Plan Year bears to the total Salary of all eligible Members taking into account
Salary for each such Member not in excess of the specified dollar amount.
Notwithstanding any provision of the Plan to the contrary, such contributions
shall be subject to the same vesting requirements and distribution restrictions
as Members' 401(k) deferrals and shall not be conditioned on any election or
contribution of the Member under the 401(k) feature. Any such contributions must
be made on or before the last day of the second month after the Plan Year to
which
16
<PAGE>
the contribution relates. Further, for purposes of the actual deferral
percentage or actual contribution percentage tests described below, the Employer
may apply (in accordance with applicable Regulations) all or any portion of the
Employer qualified nonelective contributions for the Plan Year toward the
satisfaction of the actual deferral percentage test. Any remaining Employer
qualified nonelective contributions not utilized to satisfy the actual deferral
percentage test may be applied (in accordance with applicable Regulations) to
satisfy the actual contribution percentage test.
Notwithstanding any other provision of this 401(k) Feature, the actual deferral
percentages for the Plan Year for Highly Compensated Employees shall not exceed
the greater of the following actual deferral percentages: (a) the actual
deferral percentage for such Plan Year of those Employees who are not Highly
Compensated Employees multiplied by 1.25; or (b) the actual deferral percentage
for the Plan Year of those Employees who are not Highly Compensated Employees
multiplied by 2.0, provided that the actual deferral percentage for the Highly
Compensated Employees does not exceed the actual deferral percentage for such
other Employees by more than 2 percentage points. This determination shall be
made in accordance with the procedure described in Section 3.10 below.
Section 3.10 Determining the Actual Deferral Percentages
-------------------------------------------
For purposes of this 401(k) Feature, the "actual deferral percentage" for a Plan
Year means, for each specified group of Employees, the average of the ratios
(calculated separately for each Employee in such group) of (a) the amount of
401(k) deferrals (including, as provided in Section 3.9, any Employer qualified
nonelective contributions) made to the Member's account for the Plan Year, to
(b) the amount of the Member's compensation (as defined in Section 414(s) of the
Code) for the Plan Year or, alternatively, where specifically elected by the
Employer, for only that part of the Plan Year during which the Member was
eligible to participate in the Plan. An Employee's actual deferral percentage
shall be zero if no 401(k) deferral (or, as provided in Section 3.9, Employer
qualified nonelective contribution) is made on his behalf for such Plan Year. If
the Plan and one or more other plans which include cash or deferred arrangements
are considered as one plan for purposes of Sections 401(a)(4) and 410(b) of the
Code, the cash or deferred arrangements included in such plans shall be treated
as one arrangement for purposes of this 401(k) Feature.
For purposes of determining the actual deferral percentage of a Member who is a
Highly Compensated Employee subject to the family aggregation rules of Section
414(q)(6) of the Code because such Employee is either a five-percent owner or
one of the ten most Highly Compensated Employees as described in Section
414(q)(6) of the Code, the 401(k) deferrals, contributions and compensation (as
defined in Section 414(s) of the Code) of such Member shall include 401(k)
deferrals, contributions and compensation (as defined in Section 414(s) of the
Code) of "family members", within the meaning of Section 414(q)(6) of the Code,
and such "family members" shall not
17
<PAGE>
be considered as separate Employees in determining actual deferral percentages.
The TPA shall determine as of the end of the Plan Year whether one of the actual
deferral percentage tests specified in Section 3.9 above is satisfied for such
Plan Year. This determination shall be made after first determining the
treatment of excess deferrals within the meaning of Section 402(g) of the Code
under Section 3.2 above. In the event that neither of such actual deferral
percentage tests is satisfied, the TPA shall, to the extent permissible under
the Code and the IRS Regulations, refund the excess contributions for the Plan
Year in the following order of priority: by (i) refunding such amounts deferred
by the Member which were not matched by his Employer (and any earnings and
losses allocable thereto), and (ii) refunding amounts deferred for such Plan
Year by the Member (and any earnings and losses allocable thereto), and, solely
to the extent permitted under the Code and applicable IRS Regulations,
distributing to the Member amounts contributed for such Plan Year by the
Employer with respect to the Member's 401(k) deferrals that are returned
pursuant to this Paragraph (and any earnings and losses allocable thereto).
The distribution of such excess contributions shall be made to Highly
Compensated Members to the extent practicable before the 15th day of the third
month immediately following the Plan Year for which such excess contributions
were made, but in no event later than the end of the Plan Year following such
Plan Year or, in the case of the termination of the Plan in accordance with
Article XI, no later than the end of the twelve-month period immediately
following the date of such termination.
For purposes of this 401(k) Feature, "excess contributions" means, with respect
to any Plan Year, the excess of the aggregate amount of 401(k) deferrals (and
any earnings and losses allocable thereto) made to the accounts of Highly
Compensated Members for such Plan Year, over the maximum amount of such
deferrals that could be made by such Members without violating the requirements
described above, determined by reducing 401(k) deferrals made by or on behalf of
Highly Compensated Members in order of the actual deferral percentages beginning
with the highest of such percentages.
Section 3.11 Determining the Actual Contribution Percentages
------------------------------------------------
Notwithstanding any other provision of this Section 3.11, the actual
contribution percentage for the Plan Year for Highly Compensated Employees shall
not exceed the greater of the following actual contribution percentages: (a) the
actual contribution percentage for such Plan Year of those Employees who are not
Highly Compensated Employees multiplied by 1.25, or (b) the actual contribution
percentage for the Plan Year of those Employees who are not Highly Compensated
Employees multiplied by 2.0, provided that the actual contribution percentage
for the Highly Compensated Employees does not exceed the actual contribution
percentage for such other Employees by more than 2 percentage points. For
purposes of this Article III, the "actual contribution
18
<PAGE>
percentage" for a Plan Year means, for each specified group of Employees, the
average of the ratios (calculated separately for each Employee in such group) of
(A) the sum of (i) Member after-tax contributions credited to his Account for
the Plan Year, (ii) Employer matching contributions and/or supplemental
contributions under Formula 1 credited to his Account as described in this
Article for the Plan Year, and (iii) in accordance with and to the extent
permitted by the IRS Regulations, 401(k) deferrals (and, as provided in Section
3.9, any Employer qualified nonelective contributions) credited to his Account,
to (B) the amount of the Member's compensation (as defined in Section 414(s) of
the Code) for the Plan Year or, alternatively, where specifically elected by the
Employer, for only that part of the Plan Year during which the Member was
eligible to participate in the Plan. An Employee's actual contribution
percentage shall be zero if no such contributions are made on his behalf for
such Plan Year.
The actual contribution percentage taken into account for any Highly Compensated
Employee who is eligible to make Member contributions or receive Employer
matching contributions under two or more plans described in Section 401(a) of
the Code or arrangements described in Section 401(k) of the Code that are
maintained by the Employer shall be determined as if all such contributions were
made under a single plan. For purposes of determining the actual contribution
percentage of a Member who is a Highly Compensated Employee subject to the
family aggregation rules of Section 414(q)(6) of the Code because such Member is
either a five-percent owner or one of the ten most Highly Compensated Employees
as described in Section 414(q)(6) of the Code, the Employer matching
contributions and Member contributions and compensation (as defined in Section
414(s) of the Code) of such Member shall include the Employer matching and
Member contributions and compensation (as defined in Section 414(s) of the Code)
of "family members," within the meaning of Section 414(q)(6) of the Code, and
such "family members" shall not be considered as separate Employees in
determining actual contribution percentages.
The TPA shall determine as of the end of the Plan Year whether one of the actual
contribution percentage tests specified above is satisfied for such Plan Year.
This determination shall be made after first determining the treatment of excess
deferrals within the meaning of Section 402(g) of the Code under Section 3.2
above and then determining the treatment of excess contributions under Section
3.10 above. In the event that neither of the actual contribution percentage
tests is satisfied, the TPA shall refund the excess aggregate contributions in
the manner described below.
For purposes of this Article III, "excess aggregate contributions" means, with
respect to any Plan Year and with respect to any Member, the excess of the
aggregate amount of contributions (and any earnings and losses allocable
thereto) made as (i) Member after-tax contributions credited to his Account for
the Plan Year, (ii) Employer matching contributions and/or supplemental
contributions under Formula 1 credited to his Account as described in this
Article for the Plan Year, and (iii) in
19
<PAGE>
accordance with and to the extent permitted by the IRS Regulations, 401(k)
deferrals (and, as provided in Section 3.9, any Employer qualified nonelective
contributions) credited to his Account (if the Plan Administrator elects to take
into account such deferrals and contributions when calculating the actual
contribution percentage) of Highly Compensated Members for such Plan Year, over
the maximum amount of such contributions that could be made as Employer
contributions, Member contributions and 401(k) deferrals of such Members without
violating the requirements of any Subparagraph of this Section 3.11.
If the TPA is required to refund excess aggregate contributions for any Highly
Compensated Member for a Plan Year in order to satisfy the requirements of any
Subparagraph above, then the refund of such excess aggregate contributions shall
be made with respect to such Highly Compensated Members to the extent
practicable before the 15th day of the third month im-
mediately following the Plan Year for which such excess aggregate contributions
were made, but in no event later than the end of the Plan Year following such
Plan Year or, in the case of the termination of the Plan in accordance with
Article XI, no later than the end of the twelve-month period immediately
following the date of such termination.
For each such Member, the amounts so refunded shall be made in the following
order of priority: (i) to the extent that the amounts contributed by the Member
on an after-tax basis for such Plan Year exceed the highest rate of such
contributions with respect to which amounts were contributed by the Employer, by
refunding such amounts contributed by the Member which were not matched by his
Employer (and any earnings and losses allocable thereto) and (ii) by refunding
amounts contributed for such Plan Year by the Member which were matched by his
Employer (and any earnings and losses allocable thereto) and, solely to the
extent permitted under the Code and applicable IRS Regulations, distributing to
the Member amounts contributed for such Plan Year by the Employer with respect
to the amounts so returned (and any earnings and losses allocable thereto). All
such distributions shall be made to, or shall be with respect to, Highly
Compensated Members on the basis of the respective portions of such amounts
attributable to each such Highly Compensated Member.
Section 3.12 The Aggregate Limit Test
-------------------------
Notwithstanding any other provision of the Plan, the sum of the actual deferral
percentage and the actual contribution percentage determined in accordance with
the procedures described above of those Employees who are Highly Compensated
Employees may not exceed the aggregate limit as determined below.
For purposes of this Article III, the "aggregate limit" for a Plan Year is the
greater of:
(1) The sum of:
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(a) 1.25 times the greater of the relevant actual deferral
percentage or the relevant actual contribution percentage, and
(b) Two percentage points plus the lesser of the relevant actual
deferral percentage or the relevant actual contribution
percentage. In no event, however, shall this amount exceed
twice the lesser of the relevant actual deferral percentage or
the relevant actual contribution percentage; or
(2) The sum of:
(a) 1.25 times the lesser of the relevant actual deferral
percentage or the relevant actual contribution percentage, and
(b) Two percentage points plus the greater of the relevant actual
deferral percentage or the relevant actual contribution
percentage. In no event, however, shall this amount exceed
twice the greater of the relevant actual deferral percentage
or the relevant actual contribution percentage; provided,
however, that if a less restrictive limitation is prescribed
by the IRS, such limitation shall be used in lieu of the
foregoing. The relevant actual deferral percentage and
relevant actual contribution percentage are defined in
accordance with the Code and the IRS Regulations.
The TPA shall determine as of the end of the Plan Year whether the aggregate
limit has been exceeded. This determination shall be made after first
determining the treatment of excess deferrals within the meaning of Section
402(g) of the Code under Section 3.2 above, then determining the treatment of
excess contributions under Section 3.10 above, and then determining the
treatment of excess aggregate contributions under this Article III. In the event
that the aggregate limit is exceeded, the actual contribution percentage of
those Employees who are Highly Compensated Employees shall be reduced in the
same manner as described in Section 3.11 of this Article until the aggregate
limit is no longer exceeded, unless the TPA designates, in lieu of the reduction
of the actual contribution percentage a reduction in the actual deferral
percentage of those Employees who are Highly Compensated Employees, which
reduction shall occur in the same manner as described in Section 3.10 of this
Article until the aggregate limit is no longer exceeded. Notwithstanding the
provisions of Sections 3.2 and 3.10 above, the amount of excess contributions to
be distributed, with respect to a Member for a Plan Year, shall be reduced by
any excess deferrals distributed to such Member for such Plan Year.
21
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Section 3.13 Remittance of Contributions
----------------------------
The contributions of both the Employer and the Plan Members shall be recorded by
the Employer and remitted to the TPA for transmittal to the Trustee or custodian
or directly to the Trustee or custodian so that the Trustee or custodian shall
be in receipt thereof by the 15th day of the month next following the month in
respect of which such contributions are payable. Such amounts shall be used to
provide additional Units pursuant to Article V.
22
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ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
Section 4.1 Investment by Trustee or Custodian
----------------------------------
All contributions to the Plan shall, upon receipt by the TPA, be delivered to
the Trustee or custodian to be held in the Trust Fund and invested and
distributed by the Trustee or custodian in accordance with the provisions of the
Plan and Trust Agreement. The Trust Fund shall consist of one or more of the
Investment Funds designated by the Employer in the Adoption Agreement.
With the exception of the Employer Stock Fund or, if applicable, the Employer
Certificate of Deposit Fund, the Trustee may in its discretion invest any
amounts held by it in any Investment Fund in any commingled or group trust fund
described in Section 401(a) of the Code and exempt under Section 501(a) of the
Code or in any common trust fund exempt under Section 584 of the Code, provided
that such trust fund satisfies any requirements of the Plan applicable to such
Investment Funds. To the extent that the Investment Funds are at any time
invested in any commingled, group or common trust fund, the declaration of trust
or other instrument pertaining to such fund and any amendments thereto are
hereby adopted as part of the Plan.
The Employer will designate in the Adoption Agreement which of the Investment
Funds described therein will be made available to Members and the terms and
conditions under which such Funds will operate with respect to employee
direction of allocations to and among such designated Funds and the types of
contributions and/or deferrals eligible for investment therein.
Section 4.2 Member Directed Investments
---------------------------
To the extent permitted by the Employer as set forth in the Adoption Agreement,
each Member shall direct in writing that his contributions and deferrals, if
any, and the contributions made by the Employer on his behalf shall be invested
(a) entirely in any one of the Investment Funds made available by the Employer,
or (b) among the available Investment Funds in any combination of multiples of
1%. If a Member has made any Rollover contributions in accordance with Article
III, Section 3.3, such Member may elect to apply separate investment directions
to such rollover amounts. Any such investment direction shall be followed by the
TPA until changed. Subject to the provisions of the following paragraphs of this
Section, as designated in the Adoption Agreement, a Member may change his
investment direction as to future contributions and also as to the value of his
accumulated Units in each of the available Investment Funds by filing written
notice with the TPA. Such directed change(s) will become effective upon the
Valuation Date coinciding with or next following the date which his notice was
received by the TPA or as soon as administratively practicable thereafter. If
the Adoption Agreement provides for Member directed investments, and if a Member
does not make a written
23
<PAGE>
designation of an Investment Fund or Funds, the Employer or its designee shall
direct the Trustee to invest all amounts held or received on account of the such
Member in the Investment Fund which in the opinion of the Employer best protects
principal.
Except as otherwise provided below, a Member may not direct a transfer from the
Stable Value Fund to the Government Money Market Fund. A Member may direct a
transfer from the 500 Stock Index Fund, the Midcap 400 Stock Index Fund, and/or
the Employer Stock Fund to the Government Money Market Fund provided that
amounts previously transferred from the Stable Value Fund to the 500 Stock Index
Fund, the Midcap 400 Stock Index Fund or the Employer Stock Fund remain in such
Funds for a period of three months prior to being transferred to the Government
Money Market Fund.
Section 4.3 Employer Securities
-------------------
If the Employer so elects in the Adoption Agreement, the Employer and/or Members
may direct that contributions will be invested in Qualifying Employer Securities
(within the meaning of Section 407(d)(5) of ERISA) through the Employer Stock
Fund.
24
<PAGE>
ARTICLE V
MEMBERS' ACCOUNTS, UNITS AND VALUATION
The TPA shall establish and maintain an Account for each Member showing his
interests in the available Investment Funds, as designated by the Employer in
the Adoption Agreement. The interest in each Investment Fund shall be
represented by Units.
As of each Valuation Date, the value of a Unit in each Investment Fund shall be
determined by dividing (a) the sum of the net assets at market value determined
by the Trustee by (b) the total number of outstanding Units.
The number of additional Units to be credited to a Member's interest in each
available Investment Fund, as of any Valuation Date, shall be determined by
dividing (a) that portion of the aggregate contributions and/or deferrals by and
on behalf of the Member which was directed to be invested in such Investment
Fund and received by the Trustee by (b) the Unit value of such Investment Fund.
The value of a Member's Account may be determined as of any Valuation Date by
multiplying the number of Units to his credit in each available Investment Fund
by that Investment Fund's Unit Value on such date and aggregating the results.
25
<PAGE>
ARTICLE VI
VESTING OF UNITS
Section 6.1 Vesting of Member Contributions and/or Deferrals
------------------------------------------------
All Units credited to a Member's Account based on after-tax contributions and/or
401(k) deferrals made by the Member and any earnings related thereto (including
any rollover contributions allocated to a Member's Account under the Plan and
any earnings thereon) and, as provided in Section 3.9, Employer qualified
nonelective contributions made on behalf of such Member shall be immediately and
fully vested in him at all times.
Section 6.2 Vesting of Employer Contributions
---------------------------------
The Employer may, at its option, elect one of the available vesting schedules
described herein for each of the employer contribution types applicable to the
Plan as designated in the Adoption Agreement.
Schedule 1: All applicable Units shall immediately and fully vest. If the
eligibility requirement(s) selected by the Employer under Article
II require(s) that an Employee complete a period of Employment
which is longer than 12 consecutive months, this vesting Schedule
1 shall be automatically applicable.
Schedule 2: All applicable Units shall become nonforfeitable and fully vested
in accordance with the schedule set forth below:
Completed Vested
Years of Employment 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%
Schedule 3: All applicable Units shall become nonforfeitable and fully vested
in accordance with the schedule set forth below:
26
<PAGE>
Completed Vested
Years of Employment Percentage
------------------- ----------
Less than 5 0%
5 or more 100%
Schedule 4: All applicable Units shall become nonforfeitable and fully vested
in accordance with the schedule set forth below:
Completed Vested
Years of Employment Percentage
------------------- ----------
Less than 3 0%
3 or more 100%
Schedule 5: All applicable Units shall become nonforfeitable and fully vested
in accordance with the schedule set forth below:
Completed Vested
Years of Employment Percentage
------------------- ----------
Less than 1 0%
1 but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 or more 100%
Schedule 6: All applicable Units shall become nonforfeitable and fully vested
in accordance with the schedule set forth below:
Completed Vested
Years of Employment 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%
Schedule 7: All applicable Units shall become nonforfeitable and fully vested
in accordance with the schedule set forth in the Adoption
Agreement created by the Employer in accordance with applicable
law.
27
<PAGE>
Notwithstanding the vesting schedules above, a Member's interest in his Account
shall become 100% vested in the event that (i) the Member dies while in active
Employment and the TPA has received notification of death, (ii) the Member has
been approved for Disability, pursuant to the provisions of Article VII, and the
TPA has received notification of Disability, or (iii) the Member has attained
Normal Retirement Age.
Except as otherwise provided hereunder, in the event that the Employer adopts
the Plan as a successor plan to another defined contribution plan qualified
under Sections 401(a) and 501(a) of the Code, or in the event that the Employer
changes or amends a vesting schedule adopted under this Article, any Member who
was covered under such predecessor plan or, in the case of a change or amendment
to the vesting schedule, any Member who has completed at least 3 Years of
Employment with the Employer may elect to have the nonforfeitable percentage of
the portion of his Account which is subject to such vesting schedule computed
under such predecessor plan's vesting provisions, or computed without regard to
such change or amendment (a "Vesting Election"). Any Vesting Election made under
this Subparagraph shall be made by notifying the TPA in writing within the
election period hereinafter described. The election period shall begin on the
date such amendment is adopted or the date such change is effective, or the date
the Plan which serves as a successor plan is adopted or effective, as the case
may be, and shall end no earlier than the latest of the following dates: (i) the
date which is 60 days after the day such amendment is adopted; (ii) the date
which is 60 days after the day such amendment or change becomes effective; (iii)
the date which is 60 days after the day the Member is given written notice of
such amendment or change by the TPA; (iv) the date which is 60 days after the
day the Plan is adopted by the Employer or becomes effective; or (v) the date
which is 60 days after the day the Member is given written notice that the Plan
has been designated as a successor plan. Any election made pursuant to this
Subparagraph shall be irrevocable.
To the extent permitted under the Code and Regulations, the Employer may, at its
option, elect to treat all Members who are eligible to make a Vesting Election
as having made such Vesting Election. Furthermore, subject to the requirements
of the applicable Regulations, the Employer may elect to treat all Members, who
were employed by the Employer on or before the effective date of the change or
amendment, as subject to the prior vesting schedule, provided such prior
schedule is more favorable.
Section 6.3 Forfeitures
-----------
If a Member who was partially vested in his Account on the date of his
termination of Employment returns to Employment, his Years of Employment prior
to the Break(s) in Service shall be included in determining future vesting and,
if he returns before incurring 5 consecutive one year Breaks in Service, any
Units forfeited from his Account shall be restored to his Account, including all
interest accrued during the intervening period; provided, however, that if such
a Member has received a distribution
28
<PAGE>
pursuant to Article VII, his Account Units shall not be restored unless he
repays the full amount distributed to him to the Plan before the earlier of (i)
5 years after the first date on which the Member is subsequently reemployed by
the Employer, or (ii) the close of the first period of 5 consecutive one-year
Breaks in Service commencing after the withdrawal. The Units restored to the
Member's Account will be valued on the Valuation Date coinciding with or next
following the later of (i) the date the Employee is rehired, or (ii) the date a
new enrollment application is received by the TPA. If a Member terminates
Employment without any vested interest in his Account, he shall (i) immediately
be deemed to have received a total distribution of his Account and (ii)
thereupon forfeit his entire Account; provided that if such Member returns to
Employment before the number of consecutive one-year Breaks in Service equals or
exceeds the greater of (i) 5, or (ii) the aggregate number of the Member's Years
of Service prior to such Break in Service, his Account shall be restored in the
same manner as if such Member had been partially vested at the time of his
termination of Employment, and his Years of Employment prior to incurring the
first Break in Service shall be included in any subsequent determination of his
vesting service.
Forfeited amounts, as defined in the preceding paragraph, shall be made
available to the Employer, through transfer from the Member's Account to the
Employer Credit Account, upon: (1) if the Member had a vested interest in his
Account at his termination of Employment, the earlier of (i) the date as of
which the Member receives a distribution of his entire vested interest in his
Account or (ii) the date upon which the Member incurs 5 consecutive one-year
Breaks in Service, or (2) the date of the Member's termination of Employment, if
the Member then has no vested interest in his Account. Once so transferred, such
amounts shall be used at the option of the Employer to (i) reduce administrative
expenses for that Contribution Determination Period, (ii) offset any
contributions to be made by the Employer for that Contribution Determination
Period or (iii) be allocated to all eligible Members deemed to be employed as of
the last day of the Contribution Determination Period. The Employer Credit
Account, referenced in this Subparagraph, shall be maintained to receive, in
addition to the forfeitures described above, (i) contributions in excess of the
limitations contained in Section 415 of the Code and (ii) Employer contributions
made in advance of the date allocable to Members, if any.
29
<PAGE>
ARTICLE VII
WITHDRAWALS AND DISTRIBUTIONS
Section 7.1 General Provisions
------------------
The Employer will define in the Adoption Agreement the terms and conditions
under which withdrawals and distributions will be permitted under the Plan. All
payments in respect of a Member's Account shall be made in cash from the Trust
Fund and in accordance with the provisions of this Article or Article XI. The
amount of payment will be determined in accordance with the Unit values on the
Valuation Date coinciding with or next following the date proper notice is filed
with the TPA, unless following such Valuation Date a decrease in the Unit values
of the Member's investment in any of the available Investment Funds occurs prior
to the date such Units of the Member are redeemed in which case that part of the
payment which must be provided through the sale of existing Units shall equal
the value of such Units determined on the date of redemption which date shall
occur as soon as administratively practicable on or following the Valuation Date
such proper notice is filed with the TPA. The redemption date Unit value with
respect to a Member's investment in any of the available Investment Funds shall
equal the value of a Unit in such Investment Fund, as determined in accordance
with the valuation method applicable to Unit investments in such Investment Fund
on the date the Member's investment is redeemed.
Except where otherwise specified, payments provided under this Article will be
made in a lump sum as soon as practicable after such Valuation Date or date of
redemption, as may be applicable, subject to any applicable restriction on
redemption imposed on amounts invested in any of the available Investment Funds.
Any partial withdrawal shall be deemed to come:
o First from the Member's after-tax contributions made prior to January 1,
1987.
o Next from the Member's after-tax contributions made after December 31, 1986
plus earnings on all of the Member's after-tax contributions.
o Next from the Member's rollover contributions plus earnings thereon.
o Next from the Employer matching contributions plus earnings thereon.
o Next from the Employer supplemental contributions plus earnings thereon.
o Next from the Employer basic contributions plus earnings thereon.
30
<PAGE>
o Next from the Member's 401(k) deferrals plus earnings thereon.
o Next from the Employer qualified nonelective contributions plus earnings
thereon.
o Next from the Employer profit sharing contributions plus earnings thereon.
Section 7.2 Withdrawals While Employed
--------------------------
The Employer may, at its option, permit Members to make withdrawals from one or
more of the portions of their Accounts while employed by the Employer, as
designated in the Adoption Agreement, under the terms and provisions described
herein.
Voluntary Withdrawals - To the extent permitted by the Employer as specified in
the Adoption Agreement, a Member may voluntarily withdraw some or all of his
Account (other than his 401(k) deferrals and Employer qualified nonelective
contributions treated as 401(k) deferrals except as hereinafter permitted) while
in Employment by filing a notice of withdrawal with the TPA; provided, however,
that in the event his Employer has elected to provide annuity options under
Section 7.3, no withdrawals may be made from a married Member's Account without
the written consent of such Member's Spouse (which consent shall be subject to
the procedures set forth in Section 7.3). Only one in-service withdrawal may be
made in any Plan Year from each of the rollover amount of the Member's Account
and the remainder of the Member's Account. This restriction shall not, however,
apply to a withdrawal under this Section in conjunction with a hardship
withdrawal.
Notwithstanding the foregoing paragraph, a Member may not withdraw any matching,
basic, supplemental, profit sharing or qualified nonelective contributions made
by the Employer under Article III unless (i) the Member has completed 60 months
of participation in the Plan; (ii) the withdrawal occurs at least 24 months
after such contributions were made by the Employer; (iii) the Employer
terminates the Plan without establishing a qualified successor plan; or (iv) the
Member dies, is disabled, retires, attains age 59 1/2 or terminates Employment.
For purposes of the preceding requirements, if the Member's Account includes
amounts which have been transferred from a defined contribution plan established
prior to the adoption of the Plan by the Employer, the period of time during
which amounts were held on behalf of such Member and the periods of
participation of such Member under such defined contribution plan shall be taken
into account.
Hardship Withdrawals - If designated by the Employer in the Adoption Agreement,
a Member may make a withdrawal of his 401(k) deferrals, Employer qualified
nonelective contributions which are treated as elective deferrals, and any
earnings credited thereto prior to January 1, 1989, prior to attaining age 59
1/2, provided that the withdrawal is solely on account of an immediate and heavy
financial need and is necessary to satisfy such financial need. For the purposes
of this Article, the
31
<PAGE>
term "immediate and heavy financial need" shall be limited to the need of funds
for (i) the payment of medical expenses (described in Section 213(d) of the
Code) incurred by the Member, the Member's Spouse, or any of the Member's
dependents (as defined in Section 152 of the Code), (ii) the payment of tuition
and room and board for the next 12 months of post-secondary education of the
Member, the Member's Spouse, the Member's children, or any of the Member's
dependents (as defined in Section 152 of the Code), (iii) the purchase
(excluding mortgage payments) of a principal residence for the Member, or (iv)
the prevention of eviction of the Member from his principal residence or the
prevention of foreclosure on the mortgage of the Member's principal residence.
For purposes of this Article, a distribution generally may be treated as
"necessary to satisfy a financial need" if the Plan Administrator reasonably
relies upon the Member's written representation that the need cannot be relieved
(i) through reimbursement or compensation by insurance or otherwise, (ii) by
reasonable liquidation of the Member's available assets, to the extent such
liquidation would not itself cause an immediate and heavy financial need, (iii)
by cessation of Member contributions and/or deferrals pursuant to Article III
of the Plan, to the extent such contributions and/or deferrals are permitted by
the Employer, or (iv) by other distributions or nontaxable (at the time of the
loan) loans from plans maintained by the Employer or by any other employer, or
by borrowing from commercial sources on reasonable commercial terms. The amount
of any withdrawal pursuant to this Article shall not exceed the amount required
to meet the demonstrated financial hardship, including any amounts necessary to
pay any federal income taxes and penalties reasonably anticipated to result from
the distribution as certified to the Plan Administrator by the Member.
Notwithstanding the foregoing, no amounts may be withdrawn on account of
hardship pursuant to this Article prior to a Member's withdrawal of his other
available Plan assets without regard to any other withdrawal restrictions
adopted by the Employer.
Section 7.3 Distributions Upon Termination of Employment
--------------------------------------------
In accordance with the provisions for distributions designated by the Employer
in the Adoption Agreement, a Member who terminates Employment with the Employer
may request a distribution of his Account at any time thereafter up to
attainment of age 70 1/2. Except as otherwise provided, only one distribution
under this Section 7.3 may be made in any Plan Year and any amounts paid under
this Article may not be returned to the Plan.
Any distribution made under this Section 7.3 requires that a Request for
Distribution be filed with the TPA. If a Member does not file such a Request,
the value of his Account will be paid to him as soon as practicable after his
attainment of age 70 1/2, but in no event shall payment commence later than
April 1 of the calendar year following the calendar year in which the Member
attains age 70 1/2 unless otherwise provided by law.
32
<PAGE>
Lump Sum Payments - A Member may request a distribution of all or a part of his
Account no more frequently than once per calendar year by filing the proper
Request for Distribution with the TPA. In the event the Employer has elected to
provide an annuity option under the Plan, no distributions may be made from a
married Member's Account without the written consent of such married Member's
spouse (which consent shall be subject to the procedures set forth below).
Installment Payments - To the extent designated by the Employer in the Adoption
Agreement and in lieu of any lump sum payment of his total Account, a Member who
has terminated his Employment may elect in his Request for Distribution to be
paid in up to 20 annual installments, provided that a Member shall not be
permitted to elect an installment period in excess of his remaining life
expectancy and if a Member attempts such an election, the TPA shall deem him to
have elected the installment period with the next lowest multiple within the
Member's remaining life expectancy. The amount of each installment will be equal
to the value of the total Units in the Member's Account, multiplied by a
fraction, the numerator of which is one and the denominator of which is the
number of remaining annual installments including the one then being paid, so
that at the end of the installment period so elected, the total Account will be
liquidated. The value of the Units will be determined in accordance with the
Unit values on the Valuation Date on or next following the TPA's receipt of his
Request for Distribution and on each anniversary thereafter subject to
applicable Regulations under Code Section 401(a)(9). Payment will be made as
soon as practicable after each such Valuation Date, but in no event shall
payment commence later than April 1 of the calendar year following the calendar
year in which the Member attains age 70 1/2 subject to the procedure for making
such distributions described below. The election of installments hereunder may
not be subsequently changed by the Member, except that upon written notice to
the TPA, the Member may withdraw the balance of the Units in his Account in a
lump sum at any time, notwithstanding the fact that the Member previously
received a distribution in the same calendar year.
Annuity Payments - The Employer may, at its option, elect to provide an annuity
option under the Plan. To the extent so designated by the Employer in the
Adoption Agreement and in lieu of any lump sum payment of his total Account, a
Member who has terminated his Employment may elect in his Request for
Distribution to have the value of his total Account be paid as an annuity
secured for the Member by the Plan Administrator through a Group Annuity
Contract adopted by the Plan. In the event the Employer elects to provide the
annuity option, the following provisions shall apply:
Unmarried Members -Any unmarried Member who has terminated his Employment may
elect, in lieu of any other available payment option, to receive a benefit
payable by purchase of a single premium contract providing for (i) a single life
annuity for the life of the Member or (ii) an annuity for the life of the Member
and, if the Member dies leaving a designated Beneficiary, a 50% survivor annuity
for the life of such designated Beneficiary.
33
<PAGE>
Married Members - Except as otherwise provided below, (i) any married Member who
has terminated his Employment shall receive a benefit payable by purchase of a
single premium contract providing for a Qualified Joint and Survivor Annuity, as
defined below, and (ii) the Surviving Spouse of any married Member who dies
prior to the date payment of his benefit commences shall be entitled to a
Preretirement Survivor Annuity, as defined below. Notwithstanding the foregoing,
any such married Member may elect to receive his benefit in any other available
form, and may waive the Preretirement Survivor Annuity, in accordance with the
spousal consent requirements described herein.
For purposes of this Section 7.3, the term "Qualified Joint and Survivor
Annuity" means a benefit providing an annuity for the life of the Member, ending
with the payment due on the last day of the month coinciding with or preceding
the date of his death, and, if the Member dies leaving a Surviving Spouse, a
survivor annuity for the life of such Surviving Spouse equal to one-half of the
annuity payable for the life of the Member under his Qualified Joint and
Survivor Annuity, commencing on the last day of the month following the date of
the Member's death and ending with the payment due on the first day of the month
coinciding with or preceding the date of such Surviving Spouse's death.
For purposes of this Section 7.3, the term "Preretirement Survivor Annuity"
means a benefit providing for payment of 50% of the Member's Account balance as
of the Valuation Date coinciding with or preceding the date of his death.
Payment of a Preretirement Survivor Annuity shall commence in the month
following the month in which the Member dies or as soon as practicable
thereafter; provided, however, that to the extent required by law, if the value
of the amount used to purchase a Preretirement Survivor Annuity exceeds $3,500,
then payment of the Preretirement Survivor Annuity shall not commence prior to
the date the Member reached (or would have reached, had he lived) Normal
Retirement Age without the written consent of the Member's Surviving Spouse.
Absence of any required consent will result in a deferral of payment of the
Preretirement Survivor Annuity to the month following the month in which occurs
the earlier of (i) the date the required consent is received by the TPA or (ii)
the date the Member would have reached Normal Retirement Age had he lived.
The TPA shall furnish or cause to be furnished, to each married Member with an
Account subject to this Section 7.3, explanations of the Qualified Joint and
Survivor Annuity and Preretirement Survivor Annuity. A Member may, with the
written consent of his Spouse (unless the TPA makes a written determination in
accordance with the Code and the Regulations that no such consent is required),
elect in writing (i) to receive his benefit in a single lump sum payment within
the 90- day period ending on the date payment of his benefit commences; and (ii)
to waive the Pre-retirement Survivor Annuity within the period beginning on the
first day of the Plan Year in which the Member attains age 35 and ending on the
date of his death. Any election made pursuant to this Subparagraph may be
revoked by a Member, without spousal consent, at any time within which such
election could have been made.
34
<PAGE>
Such an election or revocation must be made in accordance with procedures
developed by the TPA and shall be notarized.
Notwithstanding the preceding provisions of this Section 7.3, any benefit of
$3,500, subject to the limits of Article X, or less, shall be paid in cash in a
lump sum in full settlement of the Plan's liability therefor; provided, however,
that in the case of a married Member, no such lump sum payment shall be made
after benefits have commenced without the consent of the Member and his Spouse
or, if the Member has died, the Member's Surviving Spouse. Furthermore, if the
value of the benefit payable to a Member or his Surviving Spouse is greater than
$3,500 and the Member has or had not reached his Normal Retirement Age, then to
the extent required by law, unless the Member (and, if the Member is married and
his benefit is to be paid in a form other than a Qualified Joint and Survivor
Annuity, his Spouse, or, if the Member was married, his Surviving Spouse)
consents in writing to an immediate distribution of such benefit, his benefit
shall continue to be held in the Trust until a date following the earlier of (i)
the date of the TPA's receipt of all required consents or (ii) the date the
Member reaches his earliest possible Normal Retirement Age under the Plan (or
would have reached such date had he lived), and thereafter shall be paid in
accordance with this Section 7.3.
Solely to the extent required under applicable law and regulations, and
notwithstanding any provisions of the Plan to the contrary that would otherwise
limit a Distributee's election under this Subparagraph, a Distributee may elect,
at the time and in the manner prescribed by the TPA, to have any portion of an
Eligible Rollover Distribution paid directly to an Eligible Retirement Plan
specified by the Distributee in a Direct Rollover. For purposes of this
Subparagraph, the following terms shall have the following meanings:
Eligible Rollover Distribution - Any distribution of all or any portion of
the balance to the credit of the Distributee, except that an Eligible
Rollover Distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the Distributee or the
joint lives (or joint life expectancies) of the Distributee and the
Distributee's designated beneficiary, or for a specified period of ten years
or more; any distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; and the portion of any distribution that is
not includable in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to employer securities).
Eligible Retirement Plan - An individual retirement account described in
Section 408(a) of the Code, an individual retirement annuity described in
Section 408(b) of the Code, an annuity plan described in Section 403(a) of
the Code, or a qualified trust described in Section 401(a) of the Code, that
accepts the Distributee's Eligible Rollover Distribution. However, in the
case of an Eligible Rollover Distribution to a Surviving Spouse, an Eligible
Retirement Plan is an individual retirement account
35
<PAGE>
or an individual retirement annuity.
Distributee - A Distributee may be (i) an Employee, (ii) a former Employee,
(iii) an Employee's Surviving Spouse, (iv) a former Employee's Surviving
Spouse, (v) an Employee's Spouse or former Spouse who is an alternate payee
under a qualified domestic relations order, as defined in Section 414(p) of
the Code, or (vi) a former Employee's Spouse or former Spouse who is an
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, with respect to the interest of the Spouse or
former Spouse.
Direct Rollover - A payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.
Section 7.4 Distributions Due to Disability
-------------------------------
A Member who is separated from Employment by reason of a disability which is
expected to last in excess of 12 consecutive months and who is either (i)
eligible for, or is receiving, disability insurance benefits under the Federal
Social Security Act or (ii) approved for disability under the provisions of any
other benefit program or policy maintained by the Employer, which policy or
program is applied on a uniform and nondiscriminatory basis to all Employees of
the Employer, shall be deemed to be disabled for all purposes under the Plan.
The Plan Administrator shall determine whether a Member is disabled in
accordance with the terms of the immediately preceding paragraph; provided,
however, approval of Disability is conditioned upon notice to the Plan
Administrator of such Member's Disability within 13 months of the Member's
separation from Employment. The notice of Disability shall include a
certification that the Member meets one or more of the criteria listed above.
Upon determination of Disability, a Member may withdraw his total Account
balance under the Plan and have such amounts paid to him in accordance with the
applicable provisions of this Article VII, as designated by the Employer. If a
disabled Member becomes reemployed subsequent to withdrawal of some or all of
his Account balance, such Member may not repay to the Plan any such withdrawn
amounts.
Section 7.5 Distributions Due to Death
--------------------------
Subject to the provisions of Section 7.3 above, if a married Member dies, his
Spouse, as Beneficiary, will receive a death benefit equal to the value of the
Member's Account determined on the Valuation Date on or next following the TPA's
receipt of notice that such Member died; provided, however, that if such
Member's Spouse had consented in writing to the designation of a different
Beneficiary, the Member's Account will be paid to such designated Beneficiary.
Such nonspousal designation may be revoked by the Member without spousal consent
at any time prior to the Member's death. If a Member
36
<PAGE>
is not married at the time of his death, his Account will be paid to his
designated Beneficiary.
A Member may elect that upon his death, his Beneficiary, pursuant to this
Section 7.5, may receive, in lieu of any lump sum payment, payment in 5 annual
installments (10 if the Spouse is the Beneficiary, provided that the Spouse's
remaining life expectancy is at least 10 years) whereby the value of 1/5th of
such Member's Units (or 1/10th in the case of a spousal Beneficiary, provided
that the Spouse's remaining life expectancy is at least 10 years) in each
available Investment Fund will be determined in accordance with the Unit values
on the Valuation Date on or next following the TPA's receipt of notice of the
Member's death and on each anniversary of such Valuation Date. Payment will be
made as soon as practicable after each Valuation Date until the Member's Account
is exhausted. Such election may be filed at any time with the Plan Administrator
prior to the Member's death and may not be changed or revoked after such Mem-
ber's death. If such an election is not in effect at the time of the Member's
death, his Beneficiary (including any spousal Beneficiary) may elect to receive
distributions in accordance with this Article, except that any balance remaining
in the deceased Member's Account must be distributed on or before the December
31 of the calendar year which contains the 5th anniversary (the 10th anniversary
in the case of a spousal Beneficiary, provided that the Spouse's remaining life
expectancy is at least 10 years) of the Member's death. Notwithstanding the
foregoing, payment of a Member's Account shall commence not later than the
December 31 of the calendar year immediately following the calendar year in
which the Member died or, in the event such Beneficiary is the Member's
Surviving Spouse, on or before the December 31 of the calendar year in which
such Member would have attained age 70 1/2, if later (or, in either case, on any
later date prescribed by the IRS Regulations). If, upon the Spouse's or
Beneficiary's death, there is still a balance in the Account, the value of the
remaining Units will be paid in a lump sum to such Spouse's or Beneficiary's
estate.
Section 7.6 Minimum Required Distributions
------------------------------
In no event may payment of a Member's Account begin later than April 1 of the
year following the calendar year in which a Member attains age 70 1/2; provided,
however, if a Member attained age 70 1/2 prior to January 1, 1988, except as
otherwise provided below, any benefit payable to such Member shall commence no
later than the April 1 of the calendar year following the later of (i) the
calendar year in which the Member attains age 70 1/2 or (ii) the calendar year
in which the Member retires. Such benefit shall be paid, in accordance with the
Regulations, over a period not extending beyond the life expectancy of such
Member. Life expectancy for purposes of this Section shall not be recalculated
annualy in accordance with the Regulations.
If a Member who is a 5% owner attained age 70 1/2 before January 1, 1988, any
benefit payable to such Member shall commence no later than the April 1 of the
calendar year following the later of (i) the calendar year in which the Member
attains age 70 1/2 or (ii) the earlier of (a) the calendar year within
37
<PAGE>
which the Member becomes a 5% owner or (b) the calendar year in which the Member
retires. For purposes of the preceding sentence, 5% owner shall mean a 5% owner
of such Member's Employer as defined in Section 416(i) of the Code at any time
during the Plan Year in which such owner attains age 66 1/2 or any subsequent
Plan Year. Distributions must continue to such Member even if such Member ceases
to own more than 5% of the Employer in a subsequent year.
38
<PAGE>
ARTICLE VIII
LOAN PROGRAM
Section 8.1 General Provisions
------------------
An Employer may, at its option, make available the loan program described herein
for any Member (and, if applicable under Section 8.8 of this Article, any
Beneficiary), subject to applicable law. The Employer shall so designate its
adoption of the loan program and the terms and provisions of its operation in
the Adoption Agreement. In the event that the Employer has elected to provide an
annuity option under Article VII or amounts are transferred to the Plan from a
retirement plan subject to Section 401(a)(11) of the Code, no loans may be made
from a married Member's Account without the written consent of such Member's
Spouse (in accordance with the spousal consent rules set forth under Section
7.3). In the event the Employer elects to permit loans to be made from rollover
contributions and earnings thereon, as designated in the Adoption Agreement,
loans shall be available from the Accounts of any Employees of the Employer who
have not yet become Members. Only one loan may be made to a Member in the Plan
Year.
Section 8.2 Loan Application
----------------
Subject to the restrictions described in the paragraph immediately following, a
Member in Employment may borrow from his Account in each of the available
Investment Funds by filing a loan application with the TPA. Such application
(hereinafter referred to as a "completed application") shall (i) specify the
terms pursuant to which the loan is requested to be made and (ii) provide such
information and documentation as the TPA shall require, including a note, duly
executed by the Member, granting a security interest of an amount not greater
than 50% of his vested Account, to secure the loan. With respect to such Member,
the completed application shall authorize the repayment of the loan through
payroll deductions. Such loan will become effective upon the Valuation Date
coinciding with or next following the date on which his completed application
and other required documents were submitted, subject to the same conditions with
respect to the amount to be transferred under this Section which are specified
in the Plan procedures for determining the amount of payments made under Article
VII of the Plan.
The Employer shall establish standards in accordance with the Code and ERISA
which shall be uniformly applicable to all Members eligible to borrow from their
interests in the Trust Fund similarly situated and shall govern the TPA's
approval or disapproval of completed applications. The terms for each loan shall
be set solely in accordance with such standards.
39
<PAGE>
The TPA shall, in accordance with the established standards, review and approve
or disapprove a completed application as soon as practicable after its receipt
thereof, and shall promptly notify the applying Member of such approval or
disapproval. Notwithstanding the foregoing, the TPA may defer its review of a
completed application, or defer payment of the proceeds of an approved loan, if
the proceeds of the loan would otherwise be paid during the period commencing on
December 1 and ending on the following January 31.
Subject to the preceding paragraph and Section 8.6, upon approval of a completed
application, the TPA shall cause payment of the loan to be made from the
available Investment Fund(s) in the same proportion that the designated portion
of the Member's Account is invested at the time of the loan, and the relevant
portion of the Member's interest in such Investment Fund(s) shall be cancelled
and shall be transferred in cash to the Member. The TPA shall maintain
sufficient records regarding such amounts to permit an accurate crediting of
repayments of the loan.
Section 8.3 Permitted Loan Amount
---------------------
The amount of each loan may not be less than $1,000 nor more than the maximum
amount as described below. The maximum amount available for loan under the Plan
(when added to the outstanding balance of all other loans from the Plan to the
borrowing Member) shall not exceed the lesser of: (a) $50,000 reduced by the
excess (if any) of (i) the highest outstanding loan balance attributable to the
Account of the Member requesting the loan from the Plan during the one-year
period ending on the day preceding the date of the loan, over (ii) the
outstanding balance of all other loans from the Plan to the Member on the date
of the loan, or (b) 50% of the value of the Member's vested portion of his
Account available for borrowing as of the Valuation Date on or next following
the date on which the TPA receives the completed application for the loan and
all other required documents. The maximum amount available for a loan for
purposes of item (b) of the preceding sentence shall be determined by valuing
the Member's interest in that portion of his Account from which the loan will be
deducted as of the applicable Valuation Date. In determining the maximum amount
that a Member may borrow, all vested assets of his Account, regardless of
whether any particular portion of his Account is actually available for the
loan, will be taken into consideration, provided that, where the Employer has
not elected to make a Member's entire Account available for loans, in no event
shall the amount of the loan exceed the value of such portion of the Member's
Account from which loans are permissible.
Section 8.4 Source of Funds for Loan
------------------------
The amount of the loan will be deducted from the Member's Account in the
available Investment Funds in accordance with Section 8.2 of this Article and
the Plan procedures for determining the amount of payments made under Article
VII. Loans shall be deemed to come (to the extent the Employer permits
40
<PAGE>
Members to take loans from one or more of the portions of their Accounts, as
designated in the Adoption Agreement):
o First from the Employer profit sharing contributions plus earnings
thereon.
o Next from the Employer qualified nonelective contributions plus earnings
thereon.
o Next from the Member's 401(k) deferrals plus earnings thereon.
o Next from the Employer basic contributions plus earnings thereon.
o Next from the Employer supplemental contributions plus earnings thereon.
o Next from the Employer matching contributions plus earnings thereon.
o Next from the Member's rollover contributions plus earnings thereon.
o Next from the Member's after-tax contributions made after December 31,1986
plus earnings on all of the Member's after-tax contributions.
o Next from the Member's after-tax contributions made prior to January
1, 1987.
Section 8.5 Conditions of Loan
------------------
Each loan to a Member under the Plan shall be repaid in level monthly amounts
through regular payroll deductions after the effective date of the loan, and
continuing thereafter with each payroll. Except as otherwise required by the
Code and the IRS Regulations, each loan shall have a repayment period of not
less than 12 months and not in excess of 60 months, unless the purpose of the
loan is for the purchase of a primary residence, in which case the loan may be
for not more than 180 months.
The rate of interest for the term of the loan will be established as of the loan
date, and will be the Barron's Prime Rate (base rate) plus 1% as published on
the last Saturday of the preceding month, or such other rate as may be required
by applicable law and determined by reference to the prevailing interest rate
charged by commercial lenders under similar circumstances. The applicable rate
would then be in effect through the last business day of the month.
Repayment of all loans under the Plan shall be secured by 50% of the Member's
vested interest in his Account, determined as of the origination of such loan.
41
<PAGE>
Section 8.6 Crediting of Repayment
----------------------
Upon lending any amount to a Member, the TPA shall establish and maintain a loan
receivable account with respect to, and for the term of, the loan. The
allocations described in this Section shall be made from the loan receivable
account. Upon receipt of each monthly installment payment and the crediting
thereof to the Member's loan receivable account, there shall be allocated to the
Member's Account in the available Investment Funds, in accordance with his most
recent investment instructions, the principal portion of the installment payment
plus that portion of the interest equal to the rate determined in Section 8.5 of
this Article, less 2%. The unpaid balance owed by a Member on a loan under the
Plan shall not reduce the amount credited to his Account. However, from the time
of payment of the proceeds of the loan to the Member, such Account shall be
deemed invested, to the extent of such unpaid balance, in such loan until the
complete repayment thereof or distribution from such Account. Any loan repayment
shall first be deemed allocable to the portions of the Member's Account on the
basis of a reverse ordering of the manner in which the loan was originally
distributed to the Member.
Section 8.7 Cessation of Payments on Loan
-----------------------------
If a Member, while employed, fails to make a monthly installment payment when
due, as specified in the completed application, subject to applicable law, he
will be deemed to have received a distribution of the outstanding balance of the
loan. If such default occurs after the first 12 monthly payments of the loan
have been satisfied, the Member may pay the outstanding balance, including
accrued interest from the due date, by the last day of the calendar quarter
following the calendar quarter which contains the due date of the last monthly
installment payment, in which case no such distribution will be deemed to have
occurred. Subject to applicable law, notwithstanding the foregoing, a Member
that borrows any of his 401(k) deferrals and any of the earnings attributable
thereto may not cease to make monthly installment payments while employed and
receiving a Salary from the Employer.
Except as provided below, upon a Member's termination of Employment, death or
Disability, or the Employer's termination of the Plan, no further monthly
installment payments may be made. Unless the outstanding balance, including
accrued interest from the due date, is paid by the last day of the calendar
quarter following the calendar quarter which contains the date of such
occurrence, the Member will be deemed to have received a distribution of the
outstanding balance of the loan including accrued interest from the due date.
Section 8.8 Loans to Former Members
-----------------------
Notwithstanding any other provisions of this Article VIII, a member who
terminates Employment for any reason shall be permitted to continue making
scheduled repayments with respect to any loan balance
42
<PAGE>
outstanding at the time he becomes a terminated Member. In addition, a
terminated Member may elect to initiate a new loan from his Account, subject to
the conditions otherwise described in this Article VIII. If any terminated
Member who continues to make repayments or who borrows from his Account pursuant
to this Section 8.8 fails to make a scheduled monthly installment payment by the
last day of the calendar quarter following the calendar quarter which contains
the scheduled payment date, he will be deemed to have received a distribution of
the outstanding balance of the loan.
43
<PAGE>
ARTICLE IX
ADMINISTRATION OF PLAN AND ALLOCATION OF RESPONSIBILITIES
Section 9.1 Fiduciaries
-----------
The following persons are Fiduciaries under the Plan.
a) The Trustee,
b) The Employer,
c) The Plan Administrator or committee, appointed by the Employer pursuant to
this Article IX of the Plan and designated as the "Named Fiduciary" of the
Plan and the Plan Administrator, and
d) Any Investment Manager appointed by the Employer as provided in Section 9.4.
Each of said Fiduciaries shall be bonded to the extent required by ERISA.
The TPA is not intended to have the authority or responsibilities which would
cause it to be considered a Fiduciary with respect to the Plan unless the TPA
otherwise agrees to accept such authority or responsibilities in a service
agreement or otherwise in writing.
Section 9.2 Allocation of Responsibilities Among the Fiduciaries
----------------------------------------------------
a) The Trustee
-----------
The Employer shall enter into one or more Trust Agreements with a Trustee
or Trustees selected by the Employer. The Trust established under any such
agreement shall be a part of the Plan and shall provide that all funds
received by the Trustee as contributions under the Plan and the income
therefrom (other than such part as is necessary to pay the expenses and
charges referred to in Paragraph (b) of this Section) shall be held in the
Trust Fund for the exclusive benefit of the Members or their Beneficiaries,
and managed, invested and reinvested and distributed by the Trustee in
accordance with the Plan. Sums received for investment may be invested (i)
wholly or partly through the medium of any common, collective or commingled
trust fund maintained by a bank or other financial institution and which is
qualified under Sections 401(a) and 501(a) of the Code and constitutes a
part of the Plan; (ii) wholly or partly through the medium of a group
annuity or other type of contract issued by an insurance company and
constituting a part of the Plan, and utilizing, under any such contract,
44
<PAGE>
general, commingled or individual investment accounts; or (iii) wholly or
partly in securities issued by an investment company registered under the
Investment Company Act of 1940. Subject to the provisions of Article XI,
the Employer may from time to time and without the consent of any Member or
Beneficiary (a) amend the Trust Agreement or any such insurance contract in
such manner as the Employer may deem necessary or desirable to carry out
the Plan, (b) remove the Trustee and designate a successor Trustee upon
such removal or upon the resignation of the Trustee, and (c) provide for an
alternate funding agency under the Plan. The Trustee shall make payments
under the Plan only to the extent, in the amounts, in the manner, at the
time, and to the persons as shall from time to time be set forth and
designated in written authorizations from the Plan Administrator or TPA.
The Trustee shall from time to time charge against and pay out of the Trust
Fund taxes of any and all kinds whatsoever which are levied or assessed
upon or become payable in respect of such Fund, the income or any property
forming a part thereof, or any security transaction pertaining thereto. To
the extent not paid by the Employer, the Trustee shall also charge against
and pay out of the Trust Fund other expenses incurred by the Trustee in the
performance of its duties under the Trust, the expenses incurred by the TPA
in the performance of its duties under the Plan (including reasonable
compensation for agents and cost of services rendered in respect of the
Plan), such compensation of the Trustee as may be agreed upon from time to
time between the Employer and the Trustee, and all other proper charges and
disbursements of the Trustee or the Employer.
b) The Employer
------------
The Employer shall be responsible for all functions assigned or reserved to
it under the Plan and any related Trust Agreement. Any authority so
assigned or reserved to the Employer, other than responsibilities assigned
to the Plan Administrator, shall be exercised by resolution of the
Employer's Board of Directors and shall become effective with respect to
the Trustee upon written notice to the Trustee signed by the duly
authorized officer of the Board advising the Trustee of such exercise. By
way of illustration and not by limitation, the Employer shall have
authority and responsibility:
(1) to amend the Plan;
(2) to merge and consolidate the Plan with all or part of the assets or
liabilities of any other plan;
(3) to appoint, remove and replace the Trustee and the Plan
Administrator and to monitor their performances;
45
<PAGE>
(4) to appoint, remove and replace one or more Investment Managers, or
to refrain from such appointments, and to monitor their
performances;
(5) to communicate such information to the Plan Administrator, TPA,
Trustee and Investment Managers as they may need for the proper
performance of their duties; and
(6) to perform such additional duties as are imposed by law.
Whenever, under the terms of this Plan, the Employer is permitted or
required to do or perform any act, it shall be done and performed by an
officer thereunto duly authorized by its Board of Directors.
c) The Plan Administrator
----------------------
The Plan Administrator shall have responsibility and discretionary
authority to control the operation and administration of the Plan in
accordance with the provisions of Article IX of the Plan, including,
without limiting, the generality of the foregoing:
(1) the determination of eligibility for benefits and the amount and
certification thereof to the Trustee;
(2) the hiring of persons to provide necessary services to the Plan;
(3) the issuance of directions to the Trustee to pay any fees, taxes,
charges or other costs incidental to the operation and management of
the Plan;
(4) the preparation and filing of all reports required to be filed with
respect to the Plan with any governmental agency; and
(5) the compliance with all disclosure requirements imposed by state or
federal law.
d) The Investment Manager
----------------------
Any Investment Manager appointed pursuant to Section 9.4 shall have sole
responsibility for the investment of the portion of the assets of the Trust
Fund to be managed and controlled by such Investment Manager. An Investment
Manager may place orders for the purchase and sale of securities directly
with brokers and dealers.
Section 9.3 No Joint Fiduciary Responsibilities
-----------------------------------
This Article IX is intended to allocate to each Fiduciary the individual
responsibility for the prudent
46
<PAGE>
execution of the functions assigned to him, and none of such responsibilities or
any other responsibilities shall be shared by two or more of such Fiduciaries
unless such sharing is provided by a specific provision of the Plan or any
related Trust Agreement. Whenever one Fiduciary is required to follow the
directions of another Fiduciary, the two Fiduciaries shall not be deemed to have
been assigned a shared responsibility, but the responsibility of the Fiduciary
giving the directions shall be deemed his sole responsibility, and the
responsibility of the Fiduciary receiving those directions shall be to follow
them insofar as such instructions are on their face proper under applicable law.
To the extent that fiduciary responsibilities are allocated to an Investment
Manager, such responsibilities are so allocated solely to such Investment
Manager alone, to be exercised by such Investment Manager alone and not in
conjunction with any other Fiduciary, and the Trustee shall be under no
obligation to manage any asset of the Trust Fund which is subject to the
management of such Investment Manager.
Section 9.4 Investment Manager
------------------
The Employer may appoint a qualified Investment Manager or Managers to manage
any portion or all of the assets of the Trust Fund. For the purpose of this Plan
and the related Trust, a "qualified Investment Manager" means an individual,
firm or corporation who has been so appointed by the Employer to serve as
Investment Manager hereunder, and who is and has acknowledged in writing that he
is (a) a Fiduciary with respect to the Plan, (b) bonded as required by ERISA,
and (c) either (i) registered as an investment advisor under the Investment
Advisors Act of 1940, (ii) a bank as defined in said Act, or (iii) an insurance
company qualified to perform investment management services under the laws of
more than one state of the United States.
Any such appointment shall be by a vote of the Board of Directors of the
Employer naming the Investment Manager so appointed and designating the portion
of the assets of the Trust Fund to be managed and controlled by such Investment
Manager. Said vote shall be evidenced by a certificate in writing signed by the
duly authorized officer of the Board and shall become effective on the date
specified in such certificate but not before delivery to the Trustee of a copy
of such certificate, together with a written acknowledgement by such Investment
Manager of the facts specified in the second sentence of this Section.
Section 9.5 Advisor to Fiduciary
--------------------
A Fiduciary may employ one or more persons to render advice concerning any
responsibility such Fiduciary has under the Plan and related Trust Agreement.
47
<PAGE>
Section 9.6 Service in Multiple Capacities
------------------------------
Any person or group of persons may serve in more than one fiduciary capacity
with respect to the Plan, specifically including service both as Plan
Administrator and as a Trustee of the Trust; provided, however, that no person
may serve in a fiduciary capacity who is precluded from so serving pursuant to
Section 411 of ERISA.
Section 9.7 Appointment of Plan Administrator
---------------------------------
The Employer shall designate the Plan Administrator in the Adoption Agreement.
The Plan Administrator may be an individual, a committee of two or more
individuals, whether or not, in either such case, the individual or any of such
individuals are Employees of the Employer, a consulting firm or other
independent agent, the Trustee (with its consent), the Board of the Employer, or
the Employer itself. Except as the Employer shall otherwise expressly determine,
the Plan Administrator shall be charged with the full power and responsibility
for administering the Plan in all its details. If no Plan Administrator has been
appointed by the Employer, or if the person designated as Plan Administrator is
not serving as such for any reason, the Employer shall be deemed to be the Plan
Administrator. The Plan Administrator may be removed by the Employer or may
resign by giving written notice to the Employer, and, in the event of the
removal, resignation, death or other termination of service of the Plan
Administrator, the Employer shall, as soon as is practicable, appoint a
successor Plan Administrator, such successor thereafter to have all of the
rights, privileges, duties and obligations of the predecessor Plan
Administrator.
Section 9.8 Powers of the Plan Administrator
--------------------------------
The Plan Administrator is hereby vested with all powers and authority necessary
in order to carry out its duties and responsibilities in connection with the
administration of the Plan as herein provided, and is authorized to make such
rules and regulations as it may deem necessary to carry out the provisions of
the Plan and the Trust Agreement. The Plan Administrator may from time to time
appoint agents to perform such functions involved in the administration of the
Plan as it may deem advisable. The Plan Administrator shall have the
discretionary authority to determine any questions arising in the
administration, interpretation and application of the Plan, including any
questions submitted by the Trustee on a matter necessary for it to properly
discharge its duties; and the decision of the Plan Administrator shall be
conclusive and binding on all persons.
Section 9.9 Duties of the Plan Administrator
--------------------------------
The Plan Administrator shall keep on file a copy of the Plan and the Trust
Agreement(s), including any subsequent amendments, and all annual reports of the
Trustee(s), and such annual reports or registration statements as may be
required by the laws of the United States, or other jurisdiction, for
examination by Members in the Plan during reasonable business hours. Upon
request by any
48
<PAGE>
Member, the Plan Administrator shall furnish him with a statement of his
interest in the Plan as determined by the Plan Administrator as of the close of
the preceding Plan Year.
Section 9.10 Action by the Plan Administrator
---------------------------------
In the event that there shall at any time be two or more persons who constitute
the Plan Administrator, such persons shall act by concurrence of a majority
thereof.
Section 9.11 Discretionary Action
--------------------
Wherever, under the provisions of this Plan, the Plan Administrator is given any
discretionary power or powers, such power or powers shall not be exercised in
such manner as to cause any discrimination prohibited by the Code in favor of or
against any Member, Employee or class of Employees. Any discretionary action
taken by the Plan Administrator hereunder shall be consistent with any prior
discretionary action taken by it under similar circumstances and to this end the
Plan Administrator shall keep a record of all discretionary action taken by it
under any provision hereof.
Section 9.12 Compensation and Expenses of Plan Administrator
-----------------------------------------------
Employees of the Employer shall serve without compensation for services as Plan
Administrator, but all expenses of the Plan Administrator shall be paid by the
Employer. Such expenses shall include any expenses incidental to the functioning
of the Plan, including, but not limited to, attorney's fees, accounting and
clerical charges, and other costs of administering the Plan. Non- Employee Plan
Administrators shall receive such compensation as the Employer shall determine.
Section 9.13 Reliance on Others
------------------
The Plan Administrator and the Employer shall be entitled to rely upon all
valuations, certificates and reports furnished by the Trustee(s), upon all
certificates and reports made by an accountant or actuary selected by the Plan
Administrator and approved by the Employer and upon all opinions given by any
legal counsel selected by the Plan Administrator and approved by the Employer,
and the Plan Administrator and the Employer shall be fully protected in respect
of any action taken or suffered by them in good faith in reliance upon such
Trustee(s), accountant, actuary or counsel and all action so taken or suffered
shall be conclusive upon each of them and upon all Members, retired Members, and
Former Members and their Beneficiaries, and all other persons.
Section 9.14 Self Interest
-------------
No person who is the Plan Administrator shall have any right to decide upon any
matter relating solely to himself or to any of his rights or benefits under the
Plan. Any such decision shall be made by
49
<PAGE>
another Plan Administrator or the Employer.
Section 9.15 Personal Liability - Indemnification
------------------------------------
The Plan Administrator shall not be personally liable by virtue of any
instrument executed by him or on his behalf. Neither the Plan Administrator, the
Employer, nor any of its officers or directors shall be personally liable for
any action or inaction with respect to any duty or responsibility imposed upon
such person by the terms of the Plan unless such action or inaction is
judicially determined to be a breach of that person's fiduciary responsibility
with respect to the Plan under any applicable law. The limitation contained in
the preceding sentence shall not, however, prevent or preclude a compromise
settlement of any controversy involving the Plan, the Plan Administrator, the
Employer, or any of its officers and directors. The Employer may advance money
in connection with questions of liability prior to any final determination of a
question of liability. Any settlement made under this Article IX shall not be
determinative of any breach of fiduciary duty hereunder.
The Employer will indemnify every person who is or was a Plan Administrator,
officer or member of the Board or a person who provides services without
compensation to the Plan for any liability (including reasonable costs of
defense and settlement) arising by reason of any act or omission affecting the
Plan or affecting the Member or Beneficiaries thereof, including, without
limitation, any damages, civil penalty or excise tax imposed pursuant to ERISA;
provided (1) that the act or omission shall have occurred in the course of the
person's service as Plan Administrator, officer of the Employer or member of the
Board or was within the scope of the Employment of any Employee of the Employer
or in connection with a service provided without compensation to the Plan, (2)
that the act or omission be in good faith as determined by the Employer, whose
determination, made in good faith and not arbitrarily or capriciously, shall be
conclusive, and (3) that the Employer's obligation hereunder shall be offset to
the extent of any otherwise applicable insurance coverage, under a policy
maintained by the Employer, or any other person, or other source of
indemnification.
Section 9.16 Insurance
---------
The Plan Administrator shall have the right to purchase such insurance as it
deems necessary to protect the Plan and the Trustee from loss due to any breach
of fiduciary responsibility by any person. Any premiums due on such insurance
may be paid from Plan assets provided that, if such premiums are so paid, such
policy of insurance must permit recourse by the insurer against the person who
breaches his fiduciary responsibility. Nothing in this Article IX shall prevent
the Plan Administrator or the Employer, at its, or his, own expense, from
providing insurance to any person to cover potential liability of that person as
a result of a breach of fiduciary responsibility, nor shall any provisions of
the Plan preclude the Employer from purchasing from any insurance company the
right of recourse under any policy by such insurance company.
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Section 9.17 Claims Procedures
-----------------
Claims for benefits under the Plan shall be filed with the Plan Administrator on
forms supplied by the Employer. Written notice of the disposition of a claim
shall be furnished to the claimant within 90 days after the application thereof
is filed unless special circumstances require an extension of time for
processing the claim. If such an extension of time is required, written notice
of the extension shall be furnished to the claimant prior to the termination of
said 90-day period, and such notice shall indicate the special circumstances
which make the postponement appropriate.
Section 9.18 Claims Review Procedures
------------------------
In the event a claim is denied, the reasons for the denial shall be specifically
set forth in the notice described in this Section 9.18 in language calculated to
be understood by the claimant. Pertinent provisions of the Plan shall be cited,
and, where appropriate, an explanation as to how the claimant can request
further consideration and review of the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims review
procedures. Any Employee, former Employee, or Beneficiary of either, who has
been denied a benefit by a decision of the Plan Administrator pursuant to
Section 9.17 shall be entitled to request the Plan Administrator to give further
consideration to his claim by filing with the Plan Administrator (on a form
which may be obtained from the Plan Administrator) a request for a hearing. Such
request, together with a written statement of the reasons why the claimant
believes his claim should be allowed, shall be filed with the Plan Administrator
no later than 60 days after receipt of the written notification provided for in
Section 9.17. The Plan Administrator shall then conduct a hearing within the
next 60 days, at which the claimant may be represented by an attorney or any
other representative of his choosing and at which the claimant shall have an
opportunity to submit written and oral evidence and arguments in support of his
claim. At the hearing (or prior thereto upon 5 business days' written notice to
the Plan Administrator), the claimant or his representative shall have an
opportunity to review all documents in the possession of the Plan Administrator
which are pertinent to the claim at issue and its disallowance. A final
disposition of the claim shall be made by the Plan Administrator within 60 days
of receipt of the appeal unless there has been an extension of 60 days and shall
be communicated in writing to the claimant. Such communication shall be written
in a manner calculated to be understood by the claimant and shall include
specific reasons for the disposition and specific references to the pertinent
Plan provisions on which the disposition is based. For all purposes under the
Plan, such decision on claims (where no review is requested) and decision on
review (where review is requested) shall be final, binding and conclusive on all
interested persons as to participation and benefits eligibility, the amount of
benefits and as to any other matter of fact or interpretation relating to the
Plan.
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ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 General Limitations
-------------------
(A) In order that the Plan be maintained as a qualified plan and trust under
the Code, contributions in respect of a Member shall be subject to the
limitations set forth in this Section, notwithstanding any other provision
of the Plan. The contributions in respect of a Member to which this Section
is applicable are his own contributions and/or deferrals and the Employer's
contributions.
For purposes of this Section 10.1, a Member's contributions shall be
determined without regard to any rollover contributions as provided in
Section 402(a)(5) of the Code.
(B) Annual additions to a Member's Account in respect of any Plan Year may not
exceed the limitations set forth in Section 415 of the Code, which are
incorporated herein by reference. For these purposes, "annual additions"
shall have the meaning set forth in Section 415(c)(2) of the Code, as
modified elsewhere in the Code and the Regulations, and the limitation year
shall mean the Plan Year unless any other twelve-consecutive-month period
is designated pursuant to a resolution adopted by the Employer and
designated in the Adoption Agreement. If a Member in the Plan also
participates in any defined benefit plan (as defined in Sections 414(j) and
415(k) of the Code) maintained by the Employer or any of its Affiliates, in
the event that in any Plan Year the sum of the Member's "defined benefit
fraction" (as defined in Section 415(e)(2) of the Code) and the Member's
"defined contribution fraction" (as defined in Section 415(e)(3) of the
Code) exceeds 1.0, the benefit under such defined benefit plan or plans
shall be reduced in accordance with the provisions of that plan or those
plans, so that the sum of such fractions in respect of the Member will not
exceed 1.0. If this reduction does not ensure that the limitation set forth
in this Paragraph (B) is not exceeded, then the annual addition to any
defined contribution plan, other than the Plan, shall be reduced in
accordance with the provisions of that plan but only to the extent
necessary to ensure that such limitation is not exceeded.
(C) In the event that, due to forfeitures, reasonable error in estimating a
Member's compensation, or other limited facts and circumstances, total
contributions and/or deferrals to a Member's Account are found to exceed
the limitations of this Section, the TPA, at the direction of the Plan
Administrator, shall cause contributions made under Article III in excess
of such limitations to be refunded to the affected Member, with earnings
thereon, and shall take appropriate steps to reduce, if necessary, the
Employer contributions made with respect to those returned contributions.
Such refunds shall not be deemed to be withdrawals, loans, or distributions
from
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the Plan. If a Member's annual contributions exceed the limitations
contained in Paragraph (B) of this Section after the Member's Article III
contributions, with earnings thereon, if any, have been refunded to such
Member, any Employer supplemental and/or profit sharing contribution to be
allocated to such Member in respect of any Contribution Determination
Period (including allocations as provided in this Paragraph) shall instead
be allocated to or for the benefit of all other Members who are Employees
in Employment as of the last day of the Contribution Determination Period
as determined under the Adoption Agreement and allocated in the same
proportion that each such Member's Salary for such Contribution
Determination Period bears to the total Salary for such Contribution
Determination Period of all such Members or, the TPA may, at the election
of the Employer, utilize such excess to reduce the contributions which
would otherwise be made for the succeeding Contribution Determination
Period by the Employer. If, with respect to any Contribution Determination
Period, there is an excess profit sharing contribution, and such excess
cannot be fully allocated in accordance with the preceding sentence because
of the limitations prescribed in Paragraph (B) of this Section, the amount
of such excess which cannot be so allocated shall be allocated to the
Employer Credit Account and made available to the Employer pursuant to the
terms of Article VI. The TPA, at the direction of the Plan Administrator,
in accordance with Paragraph (D) of this Section, shall take whatever
additional action may be necessary to assure that contributions to Members'
Accounts meet the requirements of this Section.
(D) In addition to the steps set forth in Paragraph (C) of this Section, the
Employer may from time to time adjust or modify the maximum limitations
applicable to contributions made in respect of a Member under this Section
10.1 as may be required or permitted by the Code or ERISA prior to or
following the date that allocation of any such contributions commences and
shall take appropriate action to reallocate the annual contributions which
would otherwise have been made but for the application of this Section.
(E) Membership in the Plan shall not give any Employee the right to be retained
in the Employment of the Employer and shall not affect the right of the
Employer to discharge any Employee.
(F) Each Member, Spouse and Beneficiary assumes all risk in connection with any
decrease in the market value of the assets of the Trust Fund. Neither the
Employer nor the Trustee guarantees that upon withdrawal, the value of a
Member's Account will be equal to or greater than the amount of the
Member's own deferrals or contributions, or those credited on his behalf in
which the Member has a vested interest, under the Plan.
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(G) The establishment, maintenance or crediting of a Member's Account
pursuant to the Plan shall not vest in such Member any right, title or
interest in the Trust Fund except at the times and upon the terms and
conditions and to the extent expressly set forth in the Plan and the
Trust Agreement.
(H) The Trust Fund shall be the sole source of payments under the Plan and
the Employer, Plan Administrator and TPA assume no liability or
responsibility for such payments, and each Member, Spouse or Beneficiary
who shall claim the right to any payment under the Plan shall be
entitled to look only to the Trust Fund for such payment.
Section 10.2 Top Heavy Provisions
--------------------
The Plan will be considered a Top Heavy Plan for any Plan Year if it is
determined to be a Top Heavy Plan as of the last day of the preceding Plan Year.
The provisions of this Section 10.2 shall apply and supersede all other
provisions in the Plan during each Plan Year with respect to which the Plan is
determined to be a Top Heavy Plan.
(A) For purposes of this Section 10.2, the following terms shall have the
meanings set forth below:
(1) "Affiliate" shall mean any entity affiliated with the Employer
within the meaning of Section 414(b), 414(c) or 414(m) of the
Code, or pursuant to the IRS Regulations under Section 414(o) of
the Code, except that for purposes of applying the provisions
hereof with respect to the limitation on contributions, Section
415(h) of the Code shall apply.
(2) "Aggregation Group" shall mean the group composed of each
qualified retirement plan of the Employer or an Affiliate in which
a Key Employee is a member and each other qualified retirement
plan of the Employer or an Affiliate which enables a plan of the
Employer or an Affiliate in which a Key Employee is a member to
satisfy Sections 401(a)(4) or 410 of the Code. In addition, the
TPA, at the direction of the Plan Administrator, may choose to
treat any other qualified retirement plan as a member of the
Aggregation Group if such Aggregation Group will continue to
satisfy Sections 401(a)(4) and 410 of the Code with such plan
being taken into account.
(3) "Key Employee" shall mean a "Key Employee" as defined in Sections
416(i)(1) and (5) of the Code and the IRS Regulations thereunder.
For purposes of Section 416 of the Code and for purposes of
determining who is a Key Employee, an Employer which is not a
corporation may have "officers" only for Plan Years beginning
after December 31, 1985. For purposes of determining who is a Key
Employee pursuant to this Subparagraph (3), compensation shall
have the meaning prescribed in Section 414(s) of the Code,
or to the
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extent required by the Code or the IRS Regulations, Section
1.415-2(d) of the IRS Regulations.
(4) "Non-Key Employee" shall mean a "Non-Key Employee" as defined in
Section 416(i)(2) of the Code and the IRS Regulations thereunder.
(5) "Top Heavy Plan" shall mean a "Top Heavy Plan" as defined in
Section 416(g) of the Code and the IRS Regulations thereunder.
(B) Subject to the provisions of Paragraph (D) below, for each Plan Year that
the Plan is a Top Heavy Plan, the Employer's contribution (including
contributions attributable to salary reduction or similar arrangements)
allocable to each Employee (other than a Key Employee) who has satisfied
the eligibility requirement(s) of Article II, Section 2, and who is in
service at the end of the Plan Year, shall not be less than the lesser of
(i) 3% of such eligible Employee's compensation (as defined in Section
414(s) of the Code or to the extent required by the Code or the IRS
Regulations, Section 1.415-2(d) of the Regulations), or (ii) the percentage
at which Employer contributions for such Plan Year are made and allocated
on behalf of the Key Employee for whom such percentage is the highest. For
the purpose of determining the appropriate percentage under clause (ii),
all defined contribution plans required to be included in an Aggregation
Group shall be treated as one plan. Clause (ii) shall not apply if the Plan
is required to be included in an Aggregation Group which enables a defined
benefit plan also required to be included in said Aggregation Group to
satisfy Sections 401(a)(4) or 410 of the Code.
(C) If the Plan is a Top Heavy Plan for any Plan Year, and the Employer has
elected vesting Schedule 3 or 6 under Article VI, the vested interest of
each Member, who is credited with at least one Hour of Employment on or
after the Plan becomes a Top Heavy Plan, in the Units allocated to his
Account shall not be less than the percentage determined in accordance with
the following schedule:
Completed Years of Vested
Employment Percentage
---------- ----------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 or more 100%
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<PAGE>
(D) (1) For each Plan Year that the Plan is a Top Heavy Plan, 1.0
shall be substituted for 1.25 as the multiplicand of the dollar
limitation in determining the denominator of the defined benefit
plan fraction and of the defined contribution plan fraction for
purposes of Section 415(e) of the Code.
(2) If, after substituting "90%" for "60%" wherever the latter appears
in Section 416(g) of the Code, the Plan is not determined to be a
Top Heavy Plan, the provisions of Subparagraph (1) of this
Paragraph (D) shall not be applicable if the minimum Employer
contribution allocable to any Member who is a Non-Key Employee as
specified in Paragraph (B) of this Section is determined by
substituting "4%" for 3%.
(E) The TPA shall, to the maximum extent permitted by the Code and in
accordance with the IRS Regulations, apply the provisions of this
Section 10.2 by taking into account the benefits payable and the
contributions made under any other qualified plan maintained by the
Employer, to prevent inappropriate omissions or required duplication of
minimum contributions.
Section 10.3 Information and Communications
------------------------------
Each Employer, Member, Spouse and Beneficiary shall be required to furnish the
TPA with such information and data as may be considered necessary by the TPA.
All notices, instructions and other communications with respect to the Plan
shall be in such form as is prescribed from time to time by the TPA, shall be
mailed by first class mail or delivered personally, and shall be deemed to have
been duly given and delivered only upon actual receipt thereof by the TPA. All
information and data submitted by an Employer or a Member, including a Member's
birth date, marital status, salary and circumstances of his Employment and
termination thereof, may be accepted and relied upon by the TPA. All
communications from the Employer or the Trustee to a Member, Spouse or
Beneficiary shall be deemed to have been duly given if mailed by first class
mail to the address of such person as last shown on the records of the Plan.
Section 10.4 Small Account Balances
----------------------
Notwithstanding the foregoing provisions of the Plan, if the value of all
portions of a Member's Account under the Plan, when aggregated, is equal to or
exceeds $3,500, then the Account will not be distributed without the consent of
the Member prior to age 65 (at the earliest), but if the aggregate value of all
portions of his Account is less than $3,500, then his Account will be
distributed as soon as practicable following the termination of Employment by
the Member.
Section 10.5 Amounts Payable to Incompetents, Minors or Estates
--------------------------------------------------
If the Plan Administrator shall find that any person to whom any amount is
payable under the Plan is unable to care for his affairs because of illness or
accident, or is a minor, or has died, then any
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payment due him or his estate (unless a prior claim therefor has been made by a
duly appointed legal representative) may be paid to his Spouse, relative or any
other person deemed by the Plan Administrator to be a proper recipient on behalf
of such person otherwise entitled to payment. Any such payment shall be a
complete discharge of the liability of the Trust Fund therefor.
Section 10.6 Non-alienation of Amounts Payable
---------------------------------
Except insofar as may otherwise be required by applicable law, or Article VIII,
or pursuant to the terms of a Qualified Domestic Relations Order, no amount
payable under the Plan shall be subject in any manner to alienation by
anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge
or encumbrance of any kind, and any attempt to so alienate shall be void; nor
shall the Trust Fund in any manner be liable for or subject to the debts or
liabilities of any person entitled to any such amount payable; and further, if
for any reason any amount payable under the Plan would not devolve upon such
person entitled thereto, then the Employer, in its discretion, may terminate his
interest and hold or apply such amount for the benefit of such person or his
dependents as it may deem proper. For the purposes of the Plan, a "Qualified
Domestic Relations Order" means any judgment, decree or order (including
approval of a property settlement agreement) which has been determined by the
Plan Administrator, in accordance with procedures established under the Plan, to
constitute a Qualified Domestic Relations Order within the meaning of Section
414(p)(1) of the Code. No amounts may be withdrawn under Article VII, and no
loans granted under Article VIII, if the TPA has received a document which may
be determined following its receipt to be a Qualified Domestic Relations Order
prior to completion of review of such order by the Plan Administrator within the
time period prescribed for such review by the IRS Regulations.
Section 10.7 Unclaimed Amounts Payable
-------------------------
If the TPA cannot ascertain the whereabouts of any person to whom an amount is
payable under the Plan, and if, after 5 years from the date such payment is due,
a notice of such payment due is mailed to the address of such person, as last
shown on the records of the Plan, and within 3 months after such mailing such
person has not filed with the TPA or Plan Administrator written claim therefor,
the Plan Administrator may direct in accordance with ERISA that the payment
(including the amount allocable to the Member's contributions) be cancelled, and
used in abatement of the Plan's administrative expenses, provided that
appropriate provision is made for recrediting the payment if such person
subsequently makes a claim therefor.
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Section 10.8 Leaves of Absence
-----------------
(A) If the Employer's personnel policies allow leaves of absence for all
similarly situated Employees on a uniformly available basis under the
circumstances described in Paragraphs (B)(1)-(4) below, then
contribution allocations and vesting service will continue to the extent
provided in Paragraphs (B)(1)-(4).
(B) For purposes of the Plan, there are only four types of approved Leaves of
Absence:
(1) Non-military leave granted to a Member for a period not in excess
of one year during which service is recognized for vesting
purposes and the Member is entitled to share in any supplemental
contributions under Article III or forfeitures under Article VI,
if any, on a pro-rata basis, determined by the Salary earned
during the Plan Year or Contribution Determination Period; or
(2) Non-military leave or layoff granted to a Member for a period not
in excess of one year during which service is recognized for
vesting purposes, but the Member is not entitled to share in any
contributions or forfeitures as defined under (1) above, if any,
during the period of the leave; or
(3) To the extent not otherwise required by applicable law, military
or other governmental service leave granted to a Member from which
he returns directly to the service of the Employer. Under this
leave, a Member may not share in any contributions or forfeitures
as defined under (1) above, if any, during the period of the
leave, but vesting service will continue to accrue; or
(4) To the extent not otherwise required by applicable law, a military
leave granted at the option of the Employer to a Member who is
subject to military service pursuant to an involuntary call-up in
the Reserves of the U.S. Armed Services from which he returns to
the service of the Employer within 90 days of his discharge from
such military service. Under this leave, a Member is entitled to
share in any contributions or forfeitures as defined under (1)
above, if any, and vesting service will continue to accrue.
Notwithstanding any provision of the Plan to the contrary, if a
Member has one or more loans outstanding at the time of this
leave, repayments on such loan(s) may be suspended, if the Member
so elects, until such time as the Member returns to the service of
the Employer or the end of the leave, if earlier.
Section 10.9 Return of Contributions to Employer
-----------------------------------
(A) In the case of a contribution that is made by an Employer by reason of a
mistake of fact, the Employer may request the return to it of such
contribution within one year after the payment of
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<PAGE>
the contribution, provided such refund is made within one year after
the payment of the contribution.
(B) In the case of a contribution made by an Employer or a contribution
otherwise deemed to be an Employer contribution under the Code, such
contribution shall be conditioned upon the deductibility of the
contribution by the Employer under Section 404 of the Code. To the
extent the deduction for such contribution is disallowed, in accordance
with IRS Regulations, the Employer may request the return to it of such
contribution within one year after the disallowance of the deduction.
(C) In the event that the IRS determines that the Plan is not initially
qualified under the Code, any contribution made incident to that initial
qualification by the Employer must be returned to the Employer within
one year after the date the initial qualification is denied, 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.
The contributions returned under (A), (B) or (C) above may not include any gains
on such excess contributions, but must be reduced by any losses.
Section 10.10 Controlling Law
----------------
The Plan and all rights thereunder shall be governed by and construed in
accordance with ERISA and the laws of the State of New York.
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ARTICLE XI
AMENDMENT & TERMINATION
Section 11.1 General
-------
While the Plan is intended to be permanent, the Plan may be amended or
terminated completely by the Employer at any time at the discretion of its Board
of Directors. Except where necessary to qualify the Plan or to maintain
qualification of the Plan, no amendment shall reduce any interest of a Member
existing prior to such amendment. Subject to the terms of the Adoption
Agreement, written notice of such amendment or termination as resolved by the
Board shall be given to the Trustee, the Plan Administrator and the TPA. Such
notice shall set forth the effective date of the amendment or termination or
cessation of contributions.
Section 11.2 Termination of Plan and Trust
-----------------------------
This Plan and any related Trust Agreement shall in any event terminate whenever
all property held by the Trustee shall have been distributed in accordance with
the terms hereof.
Section 11.3 Liquidation of Trust Assets in the Event of Termination
-------------------------------------------------------
In the event that the Employer's Board of Directors shall decide to terminate
the Plan, or, in the event of complete cessation of Employer contributions, the
rights of Members to the amounts standing to their credit in their Accounts
shall be deemed fully vested and the Plan Administrator shall direct the Trustee
to either continue the Trust in full force and effect and continue so much of
the Plan in full force and effect as is necessary to carry out the orderly
distribution of benefits to Members and their Beneficiaries upon retirement,
Disability, death or termination of Employment; or (a) reduce to cash such part
or all of the Plan assets as the Plan Administrator may deem appropriate; (b)
pay the liabilities, if any, of the Plan; (c) value the remaining assets of the
Plan as of the date of notification of termination and proportionately adjust
Members' Account balances; (d) distribute such assets in cash to the credit of
their respective Accounts as of the notification of the termination date; and
(e) distribute all balances which have been segregated into a separate fund to
the persons entitled thereto; provided that no person in the event of
termination shall be required to accept distribution in any form other than
cash.
Section 11.4 Partial Termination
-------------------
The Employer may terminate the Plan in part without causing a complete
termination of the Plan. In the event a partial termination occurs, the Plan
Administrator shall determine the portion of the Plan assets attributable to the
Members affected by such partial termination and the provisions of Section
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<PAGE>
11.3 shall apply with respect to such portion as if it were a separate fund.
Section 11.5 Power to Amend
--------------
(A) Subject to Section 11.6, the Employer, through its Board of Directors,
shall have the power to amend the Plan in any manner which it deems
desirable, including, but not by way of limitation, the right to change or
modify the method of allocation of such contributions, to change any
provision relating to the distribution of payment, or both, of any of the
assets of the Trust Fund. Further, the Employer may (i) change the choice
of options in the Adoption Agreement; (ii) add overriding language in the
Adoption Agreement when such language is necessary to satisfy Section 415
or Section 416 of the Code because of the required aggregation of multiple
plans; and (iii) add certain model amendments published by the IRS which
specifically provide that their adoption will not cause the Plan to be
treated as individually designed. An Employer that amends the Plan for any
other reason, including a waiver of the minimum funding requirement under
Section 412(d) of the Code, will be considered to have an individually
designed plan.
Any amendment shall become effective upon the vote of the Board of
Directors of the Employer, unless such vote of the Board of Directors of
the Employer specifies the effective date of the amendment.
Such effective date of the amendment may be made retroactive to the vote of
the Board of Directors, to the extent permitted by law.
(B) The Employer expressly recognizes the authority of the Sponsor, Pentegra
Services, Inc., to amend the Plan from time to time, except with respect to
elections of the Employer in the Adoption Agreement, and the Employer shall
be deemed to have consented to any such amendment. The Employer shall
receive a written instrument indicating the amendment of the Plan and such
amendment shall become effective as of the date of such instrument. No such
amendment shall in any way impair, reduce or affect any Member's vested and
nonforfeitable rights in the Plan and Trust.
Section 11.6 Solely for Benefit of Members, Terminated Members and their
-----------------------------------------------------------------
Beneficiaries
-------------
No changes may be made in the Plan which shall vest in the Employer, directly or
indirectly, any interest, ownership or control in any of the present or
subsequent assets of the Trust Fund.
No part of the funds of the Trust other than such part as may be required to pay
taxes, administration expenses and fees, shall be reduced by any amendment or be
otherwise used for or diverted to purposes other than the exclusive benefit of
Members, retired Members, Former Members, and their Beneficiaries, except as
otherwise provided in Section 10.9 and under applicable law.
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No amendment shall become effective which reduces the nonforfeitable percentage
of benefit that would be payable to any Member if his Employment were to
terminate and no amendment which modifies the method of determining that
percentage shall be made effective with respect to any Member with at least
three Years of Service unless such member is permitted to elect, within a
reasonable period after the adoption of such amendment, to have that percentage
determined without regard to such amendment.
Section 11.7 Successor to Business of the Employer
-------------------------------------
Unless this Plan and the related Trust Agreement be sooner terminated, a
successor to the business of the Employer by whatever form or manner resulting
may continue the Plan and the related Trust Agreement by executing appropriate
supplementary agreements and such successor shall thereupon succeed to all the
rights, powers and duties of the Employer hereunder. The Employment of any
Employee who has continued in the employ of such successor shall not be deemed
to have terminated or severed for any purpose hereunder if such supplemental
agreement so provides.
Section 11.8 Merger, Consolidation and Transfer
----------------------------------
The Plan shall not be merged or consolidated, in whole or in part, with any
other plan, nor shall any assets or liabilities of the Plan be transferred to
any other plan unless the benefit that would be payable to any affected Member
under such plan if it terminated immediately after the merger, consolidation or
transfer, is equal to or greater than the benefit that would be payable to the
affected Member under this Plan if it terminated immediately before the merger,
consolidation or transfer.
Section 11.9 Revocability
------------
This Plan is based upon the condition precedent that it shall be approved by the
Internal Revenue Service as qualified under Section 401(a) of the Code and
exempt from taxation under Section 501(a) of the Code. Accordingly,
notwithstanding anything herein to the contrary, if a final ruling shall be
received in writing from the IRS that the Plan does not initially qualify under
the terms of Sections 401(a) and 501(a) of the Code, there shall be no vesting
in any Member of assets contributed by the Employer and held by the Trustee
under the Plan. Upon receipt of notification from the IRS that the Plan fails to
qualify as aforesaid, the Employer reserves the right, at its option, to either
amend the Plan in such manner as may be necessary or advisable so that the Plan
may so qualify, or to withdraw and terminate the Plan.
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Upon the event of withdrawal and termination, the Employer shall notify the
Trustee and provide the Trustee with a copy of such ruling and the Trustee shall
transfer and pay over to the Employer all of the net assets contributed by the
Employer pursuant to the Plan which remain after deducting the proper expense of
termination and the Trust Agreement shall thereupon terminate. For purposes of
this Article XI, "final ruling" shall mean either (1) the initial letter ruling
from the District Director in response to the Employer's original application
for such a ruling, or (2) if such letter ruling is unfavorable and a written
appeal is taken or protest filed within 60 days of the date of such letter
ruling, it shall mean the ruling received in response to such appeal or protest.
If the Plan is terminated, the Plan Administrator shall promptly notify the IRS
and such other appropriate governmental authority as applicable law may require.
Neither the Employer nor its Employees shall make any further contributions
under the Plan after the termination date, except that the Employer shall remit
to the TPA a reasonable administrative fee to be determined by the TPA for each
Member with a balance in his Account to defray the cost of implementing its
termination. Where the Employer has terminated the Plan pursuant to this
Article, the Employer may elect to transfer assets from the Plan to a successor
plan qualified under Section 401(a) of the Code in which event the Employer
shall remit to the TPA an additional administrative fee to be determined by the
TPA to defray the cost of such transfer transaction.
63
<PAGE>
TRUSTS ESTABLISHED UNDER THE PLAN
Assets of the Plan are held in trust under separate Trust Agreements with the
Trustee or Trustees. Any Eligible Employee or Member may obtain a copy of these
Trust Agreements from the Plan Administrator.
EXHIBIT 4.2
First Kansas Federal Savings Association Employees'
Savings & Profit Sharing Plan and Trust Adoption Agreement
<PAGE>
ADOPTION AGREEMENT
- --------------------------------------------------------------------------------
For First Kansas Federal Savings Association
Employees' Savings & Profit Sharing Plan and Trust
J02
Pentegra
<PAGE>
ADOPTION AGREEMENT
FOR
FIRST KANSAS FEDERAL SAVINGS ASSOCIATION
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Name of Employer: First Kansas Federal Savings Association
----------------------------------------------------
Address: 600 Main Street/P.O. Box 9, Osawatomie, KS 66064
-----------------------------------------------------
Telephone Number: (913) 755-3033 FAX: (913) 755-2795
-----------------------------------------------------
Contact Person: Mr. Larry B. Bailey, President
----------------------------------------------------
Name of Plan: First Kansas Federal Savings Association Employees'
----------------------------------------------------
Savings & Profit Sharing Plan and Trust
----------------------------------------------------
THIS ADOPTION AGREEMENT, upon execution by the Employer and the Trustee, and
subsequent approval by a duly authorized representative of Pentegra Services,
Inc. (the "Sponsor"), together with the Sponsor's Employees' Savings & Profit
Sharing Plan and Trust Agreement (the "Agreement"), shall constitute the First
Kansas Federal Savings Association Employees' Savings & Profit Sharing Plan and
Trust (the "Plan"). The terms and provisions of the Agreement are hereby
incorporated herein by this reference; provided, however, that if there is any
conflict between the Adoption Agreement and the Agreement, this Adoption
Agreement shall control.
The elections hereinafter made by the Employer in this Adoption Agreement may be
changed by the Employer from time to time by written instrument executed by a
duly authorized representative thereof; but if any other provision hereof or any
provision of the Agreement is changed by the Employer other than to satisfy the
requirements of Section 415 or 416 of the Internal Revenue Code of 1986, as
amended (the "Code"), because of the required aggregation of multiple plans, or
if as a result of any change by the Employer the Plan fails to obtain or retain
its tax-qualified status under Section 401(a) of the Code, the Employer shall be
deemed to have amended the Plan evidenced hereby and by the Agreement into an
individually designed plan, in which event the Sponsor shall thereafter have no
further responsibility for the tax-qualified status of the Plan. However, the
Sponsor may amend any term, provision or definition of this Adoption Agreement
or the Agreement in such manner as the Sponsor may deem necessary or advisable
from time to time and the Employer and the Trustee, by execution hereof,
acknowledge and consent thereto. Notwithstanding the foregoing, no amendment of
this Adoption Agreement or of the Agreement shall increase the duties or
responsibilities of the Trustee without the written consent thereof.
1
<PAGE>
I.Effect of Execution of Adoption Agreement
The Employer, upon execution of this Adoption Agreement by a duly authorized
representative thereof, (choose 1 or 2):
1. ___ Establishes as a new plan the [ Name of Employer ] Employees'
Savings & Profit Sharing Plan and Trust, effective __________
____, 19__ (the "Effective Date").
2. X Amends its existing defined contribution plan and trust ( the
Financial Institutions Thrift Plan as adopted by First Kansas
Federal Savings Association ) dated December 1 , 1992, in its
entirety into the First Kansas Federal Savings Association
Employees' Savings & Profit Sharing Plan and Trust, effective May
1, 1998 except as otherwise provided herein or in the Agreement
(the "Effective Date").
II. Definitions
A. Employer
1. "Employer," for purposes of the Plan, shall mean:
First Kansas Federal Savings Association
----------------------------------------------------------------
2. The Employer is (choose whichever may apply):
(a) ___ A member of a controlled group of corporations under
Section 414(b) of the Code.
(b) ___ A member of a group of entities under common control
under Section 414(c) of the Code.
(c) ___ A member of an affiliated service group under Section
414(m) of the Code.
(d) X A corporation.
(e) ___ A sole proprietorship or partnership.
(f) ___ A Subchapter S corporation.
3. Employer's Taxable Year Ends on 12/31 .
________________________
4. Employer's Federal Taxpayer Identification Number is 48-0221422.
__________
5. Employer's Plan Number is (enter 3-digit number) 001.
B. "Entry Date" means the first day of the (choose 1 or 2):
1. X Calendar month coinciding with or next following the
date the Employee satisfies the Eligibility
requirements described in Section III.
2
<PAGE>
2. ___ Calendar quarter (January 1, April 1, July 1, October 1)
coinciding with or next following the date the Employee
satisfies the Eligibility requirements described in Section
III.
C. "Member" means an Employee enrolled in the membership of the Plan.
D. "Normal Retirement Age" means (choose 1 or 2):
1. X Attainment of age 65 (select an age not less than 55
and not greater than 65).
2. ___ Later of: (i) attainment of age 65 or (ii) the fifth
anniversary of the date the Member commenced participation
in the Plan.
E. "Normal Retirement Date" means the first day of the first calendar
month coincident with or next following the date upon which a Member
attains his or her Normal Retirement Age.
F. "Plan Year" means the twelve (12) consecutive month period ending on
12/31 (month/day).
G. "Salary" for benefit purposes under the Plan means (choose 1, 2 or 3):
1.___ Total taxable compensation as reported on Form W-2 (exclusive
of any compensation deferred from a prior year).
2.___ Basic Salary only.
3. X Basic Salary plus one or more of the following (if 3 is chosen,
then choose (a), (b), (c) or (d), whichever shall apply):
(a) X Commissions not in excess of --NO CAP--
(b) ___ Commissions to the extent that Basic Salary plus
Commissions do not exceed $__________
(c) ___ Overtime
(d) X Overtime and bonuses
Note:Member pre-tax contributions to a Section 401(k) plan are always
included in Plan Salary.
Member pre-tax contributions to a Section 125 cafeteria plan
are also to be included in Plan Salary, unless the Employer
elects to exclude such amounts by checking this line ____.
III. Eligibility Requirements
A. All Employees shall be eligible to participate in the Plan in
accordance with the provisions of Article II of the Plan, except the
following Employees shall be excluded (choose whichever shall apply):
3
<PAGE>
1. X Employees who have not attained age 21.
2. X Employees who have not, during the 12 consecutive month
period (1-11, 12 or 24) beginning with an Employee's Date
of Employment, Date of Reemployment or any anniversary
thereof, completed 1,000 number of Hours of Service
(determined by multiplying the number of months above by
83 1/3).
Note: Employers which permit Members to make pre-tax
elective deferrals to the Plan (see V.A.3.) may
not elect a 24 month eligibility period.
3. X Employees included in a unit of Employees covered by a
collective bargaining agreement, if retirement benefits
were the subject of good faith bargaining between the
Employer and Employee representatives.
4. X Employees who are nonresident aliens and who receive no
earned income from the Employer which constitutes income
from sources within the United States.
5. ___ Employees included in the following job classifications:
(a) ___ Hourly Employees
(b) ___ Salaried Employees
6. ___ Employees of the following employers which are aggregated
under Section 414(b), 414(c) or 414(m) of the Code:
__________________________________________________________
__________________________________________________________
__________________________________________________________
Note:If no entries are made above, all Employees shall be eligible to
participate in the Plan on the later of: (i) the Effective Date
or (ii) the first day of the calendar month or calendar quarter
(as designated by the Employer in Section II.D.) coinciding with
or immediately following the Employee's Date of Employment or, as
applicable, Date of Reemployment.
B. Such Eligibility Computation Period established above shall be
applicable to (choose 1 or 2):
1. X Both present and future Employees.
2. ___ Future Employees only.
C. Such Eligibility requirements established above shall be (choose 1 or
2):
1. X Applied to the designated Employee group on and after the
Effective Date of the Plan.
2.___ Waived for the ___ consecutive monthly period (may not
exceed 12) beginning on the Effective Date of the Plan.
4
<PAGE>
IV. Hours of Employment and Prior Employment Credit
A. The number of Hours of Employment with which an Employee or Member is
credited shall be (choose 1 or 2):
1. X The actual number of Hours of Employment. (Hour of Service)
Method
2. ___ 83 1/3 Hours of Employment for every month of Employment.
(Elapsed Time Method)
Note: This election is relevant if you selected an eligibility
requirement under III.A.2. or a vesting schedule under
VIII.A. other than immediate vesting.
B. Prior Employment Credit: N/A
___ Employment with the following entity or entities shall be
included for eligibility and vesting purposes:
Note: If this Plan is a continuation of a Predecessor Plan,
service under the Predecessor Plan shall be counted as
Employment under this Plan.
____________________________________________________________
____________________________________________________________
____________________________________________________________
V.Contributions
Note: Annual Member pre-tax elective deferrals, Employer matching
contributions, Employer basic contributions, Employer supplemental
contributions, Employer profit sharing contributions and Employer
Qualified Non-Elective contributions, in the aggregate, may not
exceed 15% of all Members' Salary (excluding from Salary Member
pre-tax elective deferrals).
A. Employee Contributions (fill in 1 and/or 6 if applicable; choose 2 or
3; 4 or 5):
1. X The maximum amount of monthly contributions a Member may
make to the Plan is 15 % (1-20) of the Member's
monthly Salary.
2. X A Member may make pre-tax elective deferrals to the Plan,
based on multiples of 1% of monthly Salary.
3. ___ A Member may not make pre-tax elective deferrals to the
Plan.
4. ___ A Member may make after-tax contributions to the Plan,
based on multiples of 1% of monthly Salary.
5. X A Member may not make after-tax contributions to the Plan.
6. X An Employee may allocate a rollover contribution to the
Plan prior to satisfying the Eligibility requirements
described above.
5
<PAGE>
B. A Member may change his or her contribution rate (choose 1, 2 or 3):
1. X 1 time per pay period.
2. ___ 1 time per calendar month.
3. ___ 1 time per calendar quarter.
C. Employer Matching Contributions (fill in 1 if applicable; and choose
2, 3, 4 or 5):
1. The Employer matching contributions under 2, 3 or 4 below
shall be based on the Member's contributions not in excess of
6 % (1-20 but not in excess of the percentage specified in
A.1. above) of the Member's Salary.
2. X The Employer shall allocate to each contributing Member's
Account an amount equal to 50 % (based on 1%
increments not to exceed 200%) of the Member's contributions
for that month.
3. ___ The Employer shall allocate to each contributing Member's
Account an amount determined in accordance with the
following schedule:
Years of Employment Matching %
------------------- ----------
Less than 3 50%
At least 3, but less than 5 75%
5 or more 100%
4. ___ The Employer shall allocate to each contributing Member's
Account an amount determined in accordance with the
following schedule:
Years of Employment Matching %
------------------- ----------
Less than 3 100%
At least 3, but less than 5 150%
5 or more 200%
5. ___ No Employer matching contributions will be made to the
Plan.
NOTE: All Employer Matching Contributions will be allocated to the
Employer Stock Fund.
D. Employer Basic Contributions (choose 1 or 2): N/A
1. ___ The Employer shall allocate an amount equal to _______%
(based on 1% increments not to exceed 15%) of Member's
Salary for the month to (choose (a) or (b)):
(a) ___ The Accounts of all Members
(b) ___ The Accounts of all Members who were employed
with the Employer on the last day of such month.
2. ___ No Employer basic contributions will be made to the Plan.
6
<PAGE>
E. Employer Supplemental Contributions:
The Employer may make supplemental contributions for any Plan Year in
accordance with Section 3.7 of the Plan.
F. Employer Profit Sharing Contributions (Choose 1, 2, 3, 4, or 5): N/A
1. ___ No Employer Profit Sharing Contributions will be made to
the Plan.
Non-Integrated Formula
2. ___ Profit sharing contributions shall be allocated to each
Member in the same ratio as each Member's Salary during
such Contribution Determination Period bears to the total
of such Salary of all Members.
3. ___ Profit sharing contributions shall be allocated to each
Member in the same ratio as each Member's Salary for the
portion of the Contribution Determination Period during
which the Member satisfied the Employer's eligibility
requirement(s) bears to the total of such Salary of all
Members.
Integrated Formula
4. ___ Profit sharing contributions shall be allocated to each
Member's Account in a uniform percentage (specified by the
Employer as ___%) of each Member's Salary during the
Contribution Determination Period up to the Social Security
Taxable Wage Base as defined in Section ______ of the Plan
("Base Salary") for the Plan Year that includes such
Contribution Determination Period , plus a uniform
percentage(specified by the Employer as ____%) of each
Member's Salary for the Contribution Determination Period
in excess of the Social Security Taxable Wage Base ("Excess
Salary") for the Plan Year that includes such Contribution
Determination Period, in accordance with Article III of
the Plan.
5. ___ Profit sharing contributions shall be allocated to each
Member's Account in a uniform percentage (specified by the
Employer as ___%) of each Member's Salary for the portion
of the Contribution Determination Period during which the
Member satisfied the Employer's eligibility requirement(s),
if any, up to the Base Salary for the Plan Year that
includes such Contribution Determination Period, plus a
uniform percentage (specified by the Employer as ___%) of
each Member's Excess Salary for the portion of the
Contribution Determination Period during which the Member
satisfied the Employer's eligibility requirement(s) in
accordance with Article III of the Plan.
G. Allocation of Employer Profit Sharing Contributions: N/A
In accordance with Section V, G above, a Member shall be eligible to
share in Employer Profit Sharing Contributions, if any, as follows
(choose 1 or 2):
1. ___ A Member shall be eligible for an allocation of Employer
Profit Sharing Contributions for a Contribution
Determination Period in all events.
7
<PAGE>
2. ___ A Member shall be eligible for an allocation of Employer
Profit Sharing Contributions for a Contribution
Determination Period only if he or she (choose (a), (b) or
(c) whichever shall apply):
(a) ___ is employed on the last day of the Contribution
Determination Period or retired, died or became
totally and permanently disabled prior to the
last day of the Contribution Determination
Period.
(b) ___ completed 1,000 Hours of Employment if the
Contribution Determination Period is a period
of 12 months (250 Hours of Employment if the
Contribution Determination Period is a period
of 3 months) or retired, died or became totally
and permanently disabled prior to the last day
of the Contribution Determination Period.
(c) ___ is employed on the last day of the Contribution
Determination Period and, if such period is 12
months, completed 1,000 Hours of Employment
(250 Hours of Employment if the Contribution
Determination Period is a period of 3 months)
or retired, died or became totally and
permanently disabled prior to the last day of
the Contribution Determination Period.
H. "Contribution Determination Period" for purposes of determining and
allocating Employer profit sharing contributions means (choose 1,2,
3 or 4): N/A
1. ___ The Plan Year.
2. ___ The Employer's Fiscal Year (defined as the Plan's
"limitation year") being the twelve (12) consecutive month
period commencing ____________ (month/day) and ending
___________ (month/day).)
3. ___ The three (3) consecutive monthly periods that comprise
each of the Plan Year quarters.
4. ___ The three (3) consecutive monthly periods that comprise
each of the Employer's Fiscal Year quarters. (Employer's
Fiscal Year is the twelve (12) consecutive month period
commencing ____________ (month/day) and ending ___________
(month/day).)
I. Employer Qualified Nonelective Contributions:
The Employer may make qualified nonelective contributions for any Plan
Year in accordance with Section 3.9 of the Plan.
VI. Investment Funds
The Employer hereby appoints Barclays Global Investors, N.A. to serve as
Investment Manager under the Plan.
8
<PAGE>
The Employer hereby selects the following Investment Funds to be made
available under the Plan (choose whichever shall apply) and consent to the
lending of securities by such funds to brokers and other borrowers. The
Employer agrees and acknowledges that the selection of Investment Funds
made in this Section VI is solely its responsibility, and no other person,
including the Sponsor or Investment Manager, has any discretionary
authority or control with respect to such selection process. The Employer
hereby holds Investment Manager harmless from, and indemnifies it against,
any liability Investment Manager may incur with respect to such Investment
Funds so long as Investment Manager is not negligent and has not breached
its fiduciary duties.
1. X S&P 500 Stock Fund
2. X Stable Value Fund
3. X S&P MidCap Stock Fund
4. X Money Market Fund
5. X Government Bond Fund
6. X International Stock Fund
7. X Asset Allocation Funds (3)
o Income Plus
o Growth & Income
o Growth
8. X First Kansas Financial Corporation Stock Fund (the "Employer
Stock Fund")
9. ___ (Name of Employer) Certificate of Deposit Fund
VII. Employer Securities
A. If the Employer makes available an Employer Stock Fund pursuant to
Section VI of this Adoption Agreement, then voting and tender offer
rights with respect to Employer Stock shall be delegated and exercised
as follows (choose 1 or 2):
1. X Each Member shall be entitled to direct the Plan
Administrator as to the voting and tender offer rights
involving Employer Stock held in such Member's Account, and
the Plan Administrator shall follow or cause the Trustee to
follow such directions. If a Member fails to provide the
Plan Administrator with directions as to voting or tender
offer rights, the Plan Administrator shall exercise those
rights as it determines in its discretion and shall direct
the Trustee accordingly.
2. ___ The Plan Administrator shall direct the Trustee as to the
voting of all Employer Stock and as to all rights in the
event of a tender offer involving such Employer Stock.
9
<PAGE>
VIII. Investment Direction
A. Members shall be entitled to designate what percentage of employee
contributions and employer contributions made on their behalf will be
invested in the various Investment Funds offered by the Employer as
specified in Section VI of this Adoption Agreement; provided, however,
that the following portions of a Member's Account must be invested in
the Employer Stock Fund or, if applicable, the Employer Certificate of
Deposit Fund (choose whichever shall apply):
1. ___ Employer Profit Sharing Contributions
2. X Employer Matching Contributions
3. ___ Employer Basic Contributions
4. ___ Employer Supplemental Contributions
5. ___ Employer Qualified Nonelective Contributions
B. ___ Amounts invested in the Employer Stock Fund or, if applicable,
the Employer Certificate of Deposit Fund may not be
transferred to any other Investment Fund.
1. ___ Notwithstanding this election in B, a Member may transfer such
amounts upon (choose whichever may apply):
(a) ___ the attainment of age ___ (insert 45 or greater)
(b) ___ the completion of ___ (insert 10 or greater) years
of employment
(c) ___ the attainment of age plus years of employment
equal to ____(insert 55 or greater)
C. A Member may change his or her investment direction (choose 1,2, or 3):
1. X 1 time per business day.
2. ___ 1 time per calendar month.
3. ___ 1 time per calendar quarter.
D. If a Member fails to make an effective investment direction, the
Member's contributions and employer contributions made on the Member's
behalf shall be invested in the Money Market Fund .
IX. Vesting Schedules; Years of Employment for Vesting Purposes
A. (Choose 1, 2, 3, 4, 5, 6 or 7)
Schedule Years of Employment Vested %
-------- ------------------- --------
1. ___ Immediate Upon Enrollment 100%
10
<PAGE>
Schedule Years of Employment Vested %
-------- ------------------- --------
2. ___ 2-6 Year Graded 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%
3. X 5-Year Cliff Less than 5 0%
5 or more 100%
4. ___ 3-Year Cliff Less than 3 0%
3 or more 100%
5. ___ 4-Year Graded Less than 1 0%
1 but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 or more 100%
6. ___ 3-7 Year Graded 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%
7. ___ Other Less than ___ 0%
___ but less than ___%
___ but less than ___%
___ but less than ___%
___ but less than ___%
___ or more 100%
B. With respect to the schedules listed above, the Employer elects
(choose 1, 2, 3 and 4; or 5):
1. Schedule A-3 solely with respect to Employer matching
contributions.
2. Schedule ___ solely with respect to Employer basic contributions.
3. Schedule A-3 solely with respect to Employer supplemental
contributions.
4. Schedule ___ solely with respect to Employer profit sharing
contributions.
5. Schedule ___with respect to all Employer contributions.
11
<PAGE>
NOTE: Notwithstanding any election by the Employer to the contrary,
each Member shall acquire a 100% vested interest in his Account
attributable to all Employer contributions made to the Plan upon the
earlier of (i) attainment of Normal Retirement Age, (ii) approval for
disability or (iii) death. In addition, a Member shall at all times
have a 100% vested interest in the Employer Qualified Non-Elective
Contributions, if any, and in the pre-tax elective deferrals and
nondeductible after-tax Member Contributions.
C. Years of Employment Excluded for Vesting Purposes
The following Years of Employment shall be disregarded for vesting
purposes (choose whichever shall apply):
1. ___ Years of Employment during any period in which neither the
Plan nor any predecessor plan was maintained by the
Employer.
2. ___ Years of Employment of a Member prior to attaining age 18.
X. Withdrawal Provisions
A. The following portions of a Member's Account will be eligible for
in-service withdrawals, subject to the provisions of Article VII of
the Plan (choose whichever shall apply):
1. ___ Employee after-tax contributions and the earnings thereon.
In-service withdrawals permitted only in the event of
(choose whichever shall apply):
(a) ___ Hardship.
(b) ___ Attainment of age 59 1/2.
2. X Employee pre-tax elective deferrals and the earnings thereon.
Note: In-service withdrawals of all employee pre-tax
elective deferrals and earnings thereon as of
December 31, 1988 are permitted only in the event
of hardship or attainment of age 59 1/2.
In-service withdrawals of earnings after December
31, 1988 are permitted only in the event of
attainment of age 59 1/2.
3. X Employee rollover contributions and the earnings thereon.
In-service withdrawals permitted only in the event of
(choose whichever shall apply):
(a) ___ Hardship.
(b) ___ Attainment of age 59 1/2.
12
<PAGE>
4. X Employer matching contributions and the earnings thereon.
In-service withdrawals permitted only in the event of
(choose whichever shall apply):
(a) ___ Hardship.
(b) ___ Attainment of age 59 1/2.
5. ___ Employer basic contributions and the earnings thereon.
In-service withdrawals permitted only in the event of
(choose whichever shall apply):
(a) ___ Hardship.
(b) ___ Attainment of age 59 1/2.
6. X Employer supplemental contributions and the earnings thereon.
In-service withdrawals permitted only in the event of
(choose whichever shall apply):
(a) ___ Hardship.
(b) ___ Attainment of age 59 1/2.
7. ___ Employer profit sharing contributions and the earnings
thereon.
In-service withdrawals permitted only in the event of
(choose whichever shall apply):
(a) ___ Hardship.
(b) ___ Attainment of age 59 1/2.
8. ___ Employer qualified nonelective contributions and earnings
thereon.
Note:In-service withdrawals of all employer qualified
nonelective contributions and earnings thereon are
permitted only in the event of attainment of age 59 1/2
9. ___ No in-service withdrawals shall be allowed.
B. Notwithstanding any elections made in Subsection A of this Section X
above, the following portions of a Member's Account shall be excluded
from eligibility for in-service withdrawals (choose whichever shall
apply):
1. ___ Employer contributions, and the earnings thereon, credited
to the Employer Stock Fund or, if applicable, the Employer
Certificate of Deposit Fund.
2. ___ All contributions and/or deferrals, and the earnings
thereon, credited to the Employer Stock Fund or, if
applicable, the Employer Certificate of Deposit Fund.
3. ___ Other: ___________________________________________________
13
<PAGE>
XI. Distribution Option (choose whichever shall apply)
1. ___ Lump Sum and partial lump sum payments only.
2. X Lump Sum and partial lump sum payments plus one or more
of the following (choose (a) and /or (b)):
(a) X Installment payments.
(b) ___ Annuity payments.
3. X Distributions in kind of Employer Stock.
XII. Loan Program (choose 1, 2 or 3)
1. ___ No loans will be permitted from the Plan.
2. X Loans will be permitted from the Member's Account.
3. ___ Loans will be permitted from the Member's Account,
excluding (choose whichever shall apply):
(a) ___ Employer Profit sharing contributions and the
earnings thereon.
(b) ___ Employer matching contributions and the earnings
thereon.
(c) ___ Employer basic contributions and the earnings
thereon.
(d) ___ Employer supplemental contributions and the
earnings thereon.
(e) ___ Employee after-tax contributions and the earnings
thereon.
(f) ___ Employee pre-tax elective deferrals and the
earnings thereon.
(g) ___ Employee rollover contributions and the earnings
thereon.
(h) ___ Employer qualified nonelective contributions and
the earnings thereon.
(i) ___ Any amounts to the extent invested in the Employer
stock fund.
XIII. Additional Information
If additional space is needed to select or describe an elective feature of
the Plan, the Employer should attach additional pages and use the following
format:
The following is hereby made a part of Section --- of the Adoption
Agreement and is thus incorporated into and made a part of the [Plan Name]
Signature of Employer's Authorized Representative ________________________
Signature of Trustee _______________________________________
Supplementary Page _____ of [total number of pages].
14
<PAGE>
XIV. Plan Administrator
The Named Plan Administrator under the Plan shall be the (choose 1, 2, 3
or 4):
Note: Pentegra Services, Inc. may not be appointed Plan Administrator.
1. X Employer
2. ___ Employer's Board of Directors
3. ___ Plan's Administrative Committee
4. ___ Other (if chosen, then provide the following information)
Name: _________________________________________________________
Address: ______________________________________________________
Tel No: ______________________________________________________
Contact: _____________________________________________________
Note:If no Named Plan Administrator is designated above, the Employer
shall be deemed the Named Plan Administrator.
XV. Trustee
The Employer hereby appoints The Bank of New York to serve as Trustee for
all Investment Funds under the Plan except the Employer Stock Fund.
The Employer hereby appoints the following person or entity to serve as
Trustee under the Plan for the Employer Stock Fund.*
Name: ____________________________________________________________________
Address: _________________________________________________________________
Telephone No: _____________________________ Contact: ___________________
_____________________________________________________________
Signature of Trustee
(Required only if the Employer is serving as its own Trustee)
* Subject to approval by The Bank of New York, if The Bank of New York is
appointed as Trustee for the Employer Stock Fund.
The Employer hereby appoints The Bank of New York to serve as Custodian
under the Plan for the Employer Stock Fund in the event The Bank of New
York does not serve as Trustee for such Fund.
15
<PAGE>
EXECUTION OF ADOPTION AGREEMENT
By execution of this Adoption Agreement by a duly authorized representative of
the Employer, the Employer acknowledges that it has established or, as the case
may be, amended a tax-qualified retirement plan into the First Kansas Federal
Savings Association Employees' Savings & Profit Sharing Plan and Trust (the
"Plan"). The Employer hereby represents and agrees that it will assume full
fiduciary responsibility for the operation of the Plan and for complying with
all duties and requirements imposed under applicable law, including, but not
limited to, the Employee Retirement Income Security Act of 1974, as amended, and
the Internal Revenue Code of 1986, as amended. In addition, the Employer
represents and agrees that it will accept full responsibility of complying with
any applicable requirements of federal or state securities law as such laws may
apply to the Plan and to any investments thereunder. The Employer further
acknowledges that any opinion letter issued with respect to the Adoption
Agreement and the Agreement by the Internal Revenue Service ("IRS") to Pentegra
Services, Inc., as sponsor of the Employees' Savings & Profit Sharing Plan, does
not constitute a ruling or a determination with respect to the tax-qualified
status of the Plan and that the appropriate application must be submitted to the
IRS in order to obtain such a ruling or determination with respect to the Plan.
The failure to properly complete the Adoption Agreement may result in
disqualification of the Plan and Trust evidenced thereby.
The Sponsor will inform the Employer of any amendments to the Plan or Trust
Agreement or of the discontinuance or abandonment of the Plan or Trust.
Any inquiries regarding the adoption of the Plan should be directed to the
Sponsor as follows:
Pentegra Services, Inc.
108 Corporate Park Drive
White Plains, New York 10604
(914) 694-1300
EXHIBIT 4.3
Summary Plan Description of the Plan
<PAGE>
Pentegra Services, Inc.
- --------------------------------------------------------------------------------
FIRST KANSAS FEDERAL SAVINGS ASSOCIATION
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND
TRUST
Summary Plan Description
<PAGE>
SUMMARY PLAN DESCRIPTION
for
FIRST KANSAS FEDERAL SAVINGS ASSOCIATION
Osawatomie, KS
January 1, 1999
PENTEGRA SERVICES, INC.
108 Corporate Park Drive
White Plains, NY 10604
<PAGE>
PENTEGRA GROUP
Retirement Plan Solutions
PENTEGRA GROUP
108 Corporate Park Drive
White Plains, NY 10604
Tel: 800.872.3473
Fax: 914.696.9384
www.pentegra.com
<PAGE>
To Participating Employees of First Kansas Federal Savings Association:
We are pleased to present this booklet so that you may better understand and
appreciate the benefit which is provided by your employer by establishing the
First Kansas Federal Savings Association Employees' Savings & Profit Sharing
Plan and Trust (the "Plan").
The Plan enables you to save and invest on a regular, long term basis. All
contributions to the Plan (a defined contribution plan) are paid to the Trustee
to be invested in the investment options offered under the Plan. An individual
account is maintained for each member. Under certain conditions, a member may
make withdrawals or loans from his account based on its market value.
The Plan offers federal income tax advantages. The employee does not pay taxes
on employer contributions or investment income until he/she withdraws them. An
employer subject to income tax may deduct its contributions.
This booklet highlights the main features of the Plan. The Plan and Trust
contain the governing provisions and should be consulted as official text in all
cases. If there is any conflict between this booklet (Summary Plan Description)
and the Plan Document, the Plan Document will control.
Your Employer,
First Kansas Federal Savings Association
<PAGE>
S U M M A R Y O F Y OU R B E N E F I T S
- --------------------------------------------------------------------------------
ELIGIBILITY You will be eligible for membership in the Plan on the first day
of the month after you complete 12 months of employment and
attain age 21. In order for you to complete 12 months of
employment, you must complete at least 1,000 hours of employment
in a 12 consecutive month period.
PLAN SALARY Plan Salary is defined as basic salary plus overtime, bonuses and
commissions. In addition, any pre-tax contribution which you make
to an Internal Revenue Code Section 401(k) or Section 125
cafeteria plan is included in Plan Salary.
PLAN
CONTRIBUTIONS Employee - You may elect to make a contribution of 1%, 2%, 3%,
4%, 5%, 6%, 7%, 8%, 9%, 10%, 11%, 12%, 13%, 14% or 15% of Plan
Salary.
Employer - Your employer will contribute 50% of your contribution
to the Plan.
The above percentage rate shall apply to only the first 6% of
your Plan Salary (see "Plan Salary" section of this booklet).
Illustration
Employee Employer
Contribution Rate Matching Contribution
----------------- ---------------------
1% 0.5%
2% 1.0%
3% 1.5%
4% 2.0%
5% 2.5%
6-15% 3.0%
Please refer to the "Making Withdrawals From Your Account"
section of this booklet to determine if there are any
restrictions on employer contributions on account of a
withdrawal.
VESTING Generally, you will be 100% vested in any employer contributions
after you complete 5 years of employment. You are always 100%
vested (i.e., you will not give up any units when you terminate
employment) in any contributions you make to the Plan.
LOANS You may take a loan from your account and pay your account back
with interest.
WITHDRAWALS While you are working, you may withdraw all or part of your
vested account balance subject to certain limitations. You may
also make withdrawals from your account after termination of
employment.
DISABILITY If you are disabled, you will be entitled to the same withdrawal
rights as if you had terminated employment.
DEATH If you die before the value of your account is paid to you, your
beneficiary may receive the full value of your account or may
defer payment within certain limits. If you are married, your
spouse will be your beneficiary unless your spouse consents in
writing to the designation of a different beneficiary.
<PAGE>
T A B L E O F C O N T E N T S
- --------------------------------------------------------------------------------
Determining Your Eligibility................................................ 1
Reenrollment................................................................ 1
Making Contributions to the Plan............................................ 2
o Plan Contributions............................................ 2
o Allocation of Contributions.................................... 2
o Rollovers...................................................... 2
o Plan Salary.................................................... 2
Investing Your Account...................................................... 3
o Investment of Contributions .................................... 3
o Valuation of Accounts........................................... 4
o Reporting to Members............................................ 4
Vesting..................................................................... 5
Making Withdrawals From Your Account........................................ 6
o Upon Termination of Employment................................. 6
o Upon Disability................................................ 7
o Upon Death..................................................... 7
Borrowing From Your Account................................................. 8
Plan Limitations............................................................ 9
Top Heavy Information....................................................... 10
Disputed Claims Procedure................................................... 10
Statement of Member's Rights................................................ 11
Plan Information............................................................ 12
<PAGE>
D E T E R M I N I N G Y O U R E L I G I B I L I T Y
- --------------------------------------------------------------------------------
EMPLOYEE
ELIGIBILITY You will be eligible for membership in the Plan on the first day
of the month after you complete 12 months of employment and
attain age 21. In order for you to complete 12 months of
employment, you must complete at least 1,000 hours of employment
in a 12 consecutive month period. The initial 12 consecutive
month period is measured from your date of employment, and (if
you do not complete at least 1,000 hours of employment in such
period) subsequent 12 month periods are measured.
In counting hours, you will be credited with an hour of
employment for every hour you have a right to be paid. This
includes vacation, sick leave, jury duty, etc., and any hours for
which back pay may be due.
All employees shall be eligible to participate as stated above,
except employees covered by a collective bargaining agreement and
nonresident aliens who receive no earned income from the employer
which constitutes income from sources in the United States.
You will become a member as soon as a properly executed
enrollment application is received and processed by Pentegra
Services, Inc. Your membership will continue until the earlier of
(a) your termination of employment and payment to you of your
entire account or (b) your death.
REENROLLMENT If you terminate employment and are subsequently reemployed by
the same employer, you will be eligible for immediate
reenrollment.
<PAGE>
M A K I N G C O N T R I B U T I O N S T O T H E P L A N
- --------------------------------------------------------------------------------
PLAN
CONTRIBUTIONS Employee - You may elect to make pre-tax contributions of 1%, 2%,
3%, 4%, 5%, 6%, 7%, 8%, 9%, 10%, 11%, 12%, 13%, 14% or 15% of
Plan Salary (see "Plan Salary" section of this booklet). You may
elect not to make any contributions. You may change the rate at
which you are contributing one time in any pay period. You may
suspend your contributions at any time, but suspended
contributions may not be subsequently made up.
Employer -Your employer will contribute 50% of your contribution
to the Plan. The above percentage rate shall apply to only the
first 6% of your Plan Salary (see "Plan Salary" section of this
booklet).
Illustration
------------
Employee Employer
Contribution Rate Matching Contribution
----------------- ---------------------
1% 0.5%
2% 1.0%
3% 1.5%
4% 2.0%
5% 2.5%
6-15% 3.0%
Please refer to the "Account Withdrawal" section of this booklet
to determine if there are any restrictions on employer
contributions on account of withdrawal.
ALLOCATION OF
CONTRIBUTIONS Your employer has an account for each member. All of your own
contributions and all employer contributions will be allocated to
this account. The total of the value of your account represents
your interest in the Plan.
Internal Revenue Service Nondiscrimination Rules
------------------------------------------------
If you are a highly compensated employee, a portion of your
contributions and/or employer contributions, made on your behalf,
if any, may have to be returned to you in order to comply with
special Internal Revenue Service (IRS) nondiscrimination rules
(See "Plan Limitations" section of this booklet for other
limitations). In general, effective for years beginning after
December 31, 1996, a highly compensated employee is an employee
who:
(a) was a 5% owner at any time during the current or preceding
year, or
(b) received annual compensation from the employer for the
preceding year in excess of $80,000 (indexed for
cost-of-living adjustments, if any).
ROLLOVERS You may make a rollover contribution of an eligible rollover
distribution from any other Internal Revenue Service qualified
retirement plan or an individual retirement arrangement (IRA).
These funds will be maintained in a separate rollover account in
which you will have a nonforfeitable vested interest. Please note
that you may establish a "rollover" account within the Plan prior
to satisfying the Employer's eligibility requirements. However,
the establishment of a "rollover" account prior to satisfying
such eligibility will not constitute active membership in the
Plan.
PLAN SALARY Plan Salary is defined as basic salary plus overtime, bonuses and
commissions. In addition, any pre-tax contribution which you make
to an Internal Revenue Code Section 401(k) plan or Section 125
Cafeteria Plan is included in Plan Salary. However, Plan Salary
for any year may not exceed $160,000 for 1999 (indexed for
cost-of-living adjustments).
2
<PAGE>
I N V E S T I N G Y O U R A C C O U N T
- --------------------------------------------------------------------------------
INVESTMENT OF
CONTRIBUTIONS Contributions are invested at your direction in one or more of
the following investment funds:
ASSET ALLOCATION FUNDS (3)
Income Plus
Growth & Income
Growth
INTERNATIONAL STOCK FUND
S & P MIDCAP FUND
S & P 500 STOCK FUND
GOVERNMENT BOND FUND
STABLE VALUE FUND
MONEY MARKET FUND
FIRST KANSAS FINANCIAL CORPORATION STOCK FUND
These funds are described in greater detail on your quarterly
statements.
Contributions made by you are invested at your direction in one
or more of these funds in whole percentages. You may apply
different investment instructions to amounts already accumulated
as opposed to future contributions. Certain restrictions may
apply. Changes in investment instructions may be made by
submitting a properly completed form or by using Pentegra by
Phone, the Pentegra Voice Response System. You may access
Pentegra by Phone by calling 1-800-433-4422.
Any changes made by using Pentegra by Phone which are received by
Stock Market Closing (usually 4 p.m. Eastern Time) will be
processed at the business day's closing price. Transaction
changes received after Stock Market Closing will be processed on
the next business day. Your plan allows for a change of
investment allocation on a daily basis.
Investment changes made by submitting a form are effective on the
valuation date (see "Valuation of Accounts" section of this
booklet) on which your written notice is processed.
No amounts invested in the Stable Value Fund may be transferred
directly to the Money Market Fund. Stable Value Fund amounts
transferred to and invested in the S&P 500 Stock Fund, the S&P
Midcap Stock Fund, Government Bond Fund, International Stock
Fund, Income Plus Asset Allocation Fund, Growth and Income Asset
Allocation Fund, the Growth Asset Allocation Fund, and/or the
First Kansas Financial Corporation Stock Fund, for a period of
three months may be transferred to the Money Market Fund upon the
submission of a separate Change of Investment form.
If no investment direction is given, all contributions credited
to a participant's account will be invested in the Money Market
Fund.
Employer Matching Contributions will be invested in the First
Kansas Financial Corporation Stock Fund .
3
<PAGE>
I N V E S T I N G Y O U R A C C O U N T
- --------------------------------------------------------------------------------
VALUATION OF
ACCOUNTS The Plan uses a unit system for valuing each Investment Fund.
Under this system each participant's share in any Investment Fund
is represented by units. The unit value is determined as of the
close of business each regular business day (daily valuation).
The total dollar value of a participant's share in any Investment
Fund as of any valuation date is determined by multiplying the
number of units to the participant's credit by the unit value of
the Fund on that date. The sum of the values of the Funds you
select represents the total value of your Plan account.
Transaction requests, such as withdrawals, change of investment
elections, distributions, that are received by Pentegra Services,
Inc. (assuming proper receipt of all pertinent information) will
be processed as directed by the Plan Administrator.
NOTE: If for some reason (such as shut down of financial markets)
the underlying portfolio of any Investment Fund cannot be valued,
the valuation date for such Investment Fund shall be the next day
on which the underlying portfolios can be valued.
REPORTING TO
MEMBERS As soon as practicable after the end of each calendar quarter you
will receive a personal statement from the plan. This statement
provides information about your account including its market
value in each investment fund. Activity for the quarter is
reported by investment fund and contribution type.
4
<PAGE>
V E S T I N G
- --------------------------------------------------------------------------------
"Vesting" is the process under which you earn a non-forfeitable
right to the units in your account. You are always 100% vested
(i.e., You will not give up any units when you terminate
employment) in any contributions you make to the Plan.
With respect to any employer contributions credited to your
account, the following schedule will dictate when vesting will
occur:
Years of Employment Vesting Percentage
------------------- ------------------
0 - 5 0%
5 or more 100%
You will also become 100% vested in the employer contributions
and earnings thereon credited to your account upon your death,
approved disability or attainment of age 65 while employed with
this employer.
If you terminate employment with this employer prior to
completing 5 years of service, you will forfeit all of the
employer contributions and earnings thereon credited to your
account. However, if you are reemployed by this employer prior to
incurring 5 consecutive 1-year breaks in service, measured from
your date of termination, you are eligible to have the amount of
the forfeiture and your corresponding vesting service restored to
your account.
5
<PAGE>
M A K I N G W I T H D R A W A L S F R O M Y O U R A C C O U N T
- --------------------------------------------------------------------------------
ACCOUNT
WITHDRAWAL While Employed You may make a total or partial withdrawal of the
vested portion of your account by filing the appropriate form
with the Plan Administrator for transmittal to Pentegra Services,
Inc. A withdrawal is based on the unit values on the valuation
date coinciding with the date that a properly completed
withdrawal form is received and processed by Pentegra Services,
Inc. (see "Valuation of Accounts" section of this booklet).
Under current law, an excise tax of 10% is generally imposed on
the taxable portion of withdrawals occurring prior to your
attainment of age 59 1/2. There are certain exceptions to the 10%
excise tax. For example, the 10% excise tax will not apply to
withdrawals made on account of separation from service at or
after attainment of age 55, death or disability.
In general, employer contributions credited on your behalf will
not be available for in-service withdrawal until such employer
contributions have been invested in the Plan for at least 24
months (2 years) or you have been a participant in the Plan for
at least 60 months (5 years) or the attainment of age 59 1/2.
As required by Internal Revenue Service Regulations, a withdrawal
of your pre-tax contributions prior to age 59 1/2 or termination
of employment can only be made on account of a hardship. The
existence of an immediate and heavy financial need, and the lack
of any other available financial resources to meet this need,
must be demonstrated for a hardship withdrawal. The following
situations will be considered to constitute an immediate and
heavy financial need:
(1) Medical expenses (other than amounts paid by insurance).
(2) The purchase of a principal residence (mortgage payments are
excluded).
(3) Tuition, including room and board, for the next 12 months of
post- secondary education.
(4) The prevention of the eviction from a principal residence or
foreclosure on the mortgage of a principal residence.
Only one in-service withdrawal may be made in any Plan Year.
Upon Termination of Employment
You may leave your account with the Plan and defer commencement
of receipt of your vested balance until April 1 of the calendar
year following the calendar year in which you attain age 70 1/2.
You may make one withdrawal each plan year. You may continue to
change the investment instructions with respect to your remaining
account balance and make withdrawals as provided above. (See
"Investment of Contributions" section of this booklet).
You may elect, in lieu of a lump sum payment, to be paid in
annual installments over a period of 2-10, 15 or 20 years with
the right to take in a lump sum the vested balance of your
account at any time during such payment period. If the actuarial
determination of your life expectancy is less than the period you
elect, the maximum period over which you can receive annual
installments will be the next lower payment period.
Also, you may make a withdrawal from the First Kansas Financial
Corporation Stock Fund in the form of First Kansas Financial
Corporation Common Stock.
6
<PAGE>
M A K I N G W I T H D R A W A L S F R O M Y O U R A C C O U N T
- --------------------------------------------------------------------------------
(continued)
In addition, you may elect to take distributions from the First
Kansas Financial Corporation Stock Fund in the form of First
Kansas Financial Corporation Common Stock.
Upon Disability
If you are disabled in accordance with the definition of
disability under the Plan, you will be entitled to the same
withdrawal rights as if you had terminated your employment
You are disabled under the Plan if you are eligible to receive
(i) disability insurance benefits under Title II of the Federal
Social Security Act or (ii) disability benefits under any other
Internal Revenue Service qualified employee benefits plan or
long-term disability plan of your employer.
Upon Death
If you die when you are a participant of the Plan, the value of
your entire account will be payable to your beneficiary. This
payment will be made in the form of a lump sum, unless the
payment would be equal to or exceed $500, and you had elected
prior to your death that the payment be made in annual
installments over a period not to exceed 5 years (10 years if
your spouse is your beneficiary). If such an election is not in
effect at the time of your death, your beneficiary may elect to
receive the benefit in the form of annual installments over a
period not to exceed 5 years (10 years if your spouse is your
beneficiary) or make withdrawals as often as once per year,
except that any balance remaining must be withdrawn by the 5th
anniversary (10th anniversary if your spouse is your beneficiary)
of your death.
If you are married, your spouse will be your beneficiary unless
your spouse consents in writing to the designation of a different
beneficiary.
In addition, your beneficiary may elect to receive a distribution
from the First Kansas Financial Corporation Stock Fund in the
form of First Kansas Financial Corporation Common Stock.
7
<PAGE>
B O R R O W I N G F R O M Y O U R A C C O U N T
- --------------------------------------------------------------------------------
LOANS You may borrow from the vested portion of your account. You may
borrow any amount between $1,000 and $50,000 (reduced by your
highest outstanding loan balance(s) from the Plan during the
preceding 12 months). In no event may you borrow more than 50% of
the vested balance of your account.
The amount of your loan will be deducted on the valuation date
(see "Valuation of Accounts" section of this booklet) coinciding
with the date that Pentegra Services, Inc. receives and processes
your properly executed Loan Application, Promissory Note and
Disclosure Statement and Truth-in-Lending Statement. On request,
the Plan Administrator will provide you with the application
form. The loan will not affect your right to continue making
contributions or to receive the corresponding employer
contributions.
The rate of interest for the term of the loan will be established
as of the loan date, and shall be a reasonable rate of interest
generally comparable to the rates of interest then in effect at a
major banking institution (e.g., the Barron's Prime Rate (base
rate) plus 1%).
Repayments are made through payroll deductions and will be
transmitted along with the Employer's contribution reports. The
repayment period is between 1 and 15 years for loans used
exclusively for the purchase of a primary residence or 1 and 5
years for all other loans, at your option. After 12 monthly
payments have been made, you may repay the outstanding balance of
the loan. If a loan includes any employee pre-tax amounts, you
will not be permitted to default on the loan repayment while
employed. Your employer is required to withhold the loan
repayments from your salary.
As you repay the loan, the principal portion, together with the
interest, will be credited to your account, after deducting 2% of
the outstanding balance to cover administrative expenses. In this
way, you will be paying interest to yourself.
In the event that you leave employment or die before repaying the
loan, the outstanding balance will be due and, if not paid by the
end of the calendar quarter following the calendar quarter in
which you terminate employment or die, will be deemed a
distribution and subject to the applicable tax treatment.
However, you may elect upon termination of employment to continue
to repay the loan on a monthly basis directly to Pentegra
Services, Inc.
8
<PAGE>
P L A N L I M I T A T I O N S
- --------------------------------------------------------------------------------
PLAN
LIMITATIONS Internal Revenue Service ("IRS") requirements impose certain
limitations on the amount of contributions that may be made to
this and other qualified plans. In general, the annual
"contributions" made to a defined contribution plan such as this
Plan, in respect of any member, may not exceed the lesser of 25%
of the member's total compensation or $30,000. (This amount may
be subject to periodic adjustment by the IRS at some time in the
future). For this purpose, "contributions" include employer
contributions, member 401(k) contributions and member after-tax
contributions. The annual member contributions allocated to a
member's 401(k) account may not exceed the lesser of 25% of the
member's total compensation or $7,000 (indexed for cost-of-living
adjustments, if any - $10,000 in 1999). Further, if your employer
has another tax-qualified plan in effect, these limits are
subject to additional restrictions.
Each member and beneficiary assumes the risk in connection with
any decrease in the market value of his account. The benefit to
which you may be entitled upon your withdrawal of account cannot
be determined in advance.
As a defined contribution plan, the Plan is not covered by the
plan termination insurance provisions of Title IV of the Employee
Retirement Income Security Act of 1974 ("ERISA"). Therefore, your
benefits are not insured by the Pension Benefit Guaranty
Corporation in the event of a plan termination.
Except as may otherwise be required by applicable law or pursuant
to the terms of a Qualified Domestic Relations Order, amounts
payable by the Plan generally may not be assigned, and if any
person entitled to a payment attempts to assign it, his interest
in the amount payable may be terminated and held for the benefit
of that person or his dependents.
If Pentegra Services, Inc. cannot locate any person entitled to a
payment from the Plan and if 5 years have elapsed from the due
date of such payment, the Plan Administrator may cancel all
payments due him to the extent permitted by law.
Membership in the Plan does not give you the right to continued
employment with your employer or affect your employer's right to
terminate your employment.
The Plan's qualified status is subject to IRS approval and any
requirements the IRS may impose.
The employer may terminate the Plan at any time. If the Plan is
terminated, there will be no further contributions to the Plan
for your account.
9
<PAGE>
- --------------------------------------------------------------------------------
TOP HEAVY
INFORMATION A "top heavy" plan is a plan under which more than 60% of the
accrued benefits (account values) are for key employees. Key
employees generally include officers and shareholders earning
more than $45,000 (indexed for cost-of-living adjustments;
$65,000 in 1999) per year. If your employer's plan is top heavy
for a particular plan year, you may be entitled to a minimum
employer contribution equal to the lesser of 3% of your Plan
Salary or the greatest percentage contributed by the employer for
any key employee. This minimum contribution would be offset by
the regular contribution made by your employer (See "Plan
Contributions" section of this booklet).
In order to receive the minimum contribution for any plan year,
you must be employed on the last day of the plan year. If your
employer also provides a defined benefit or another defined
contribution plan, your minimum benefit may be provided under
such plan.
DISPUTED
CLAIMS
PROCEDURE If you disagree with respect to any benefit to which you feel you
are entitled, you should make a written claim to the Plan
Administrator of the Plan. If your claim is denied, you will
receive written notice explaining the reason for the denial
within 90 days after the claim is filed.
The Plan Administrator's decision shall be final unless you
appeal such decision in writing to the Plan Administrator of the
Plan, within 60 days after receiving the notice of denial. The
written appeal should contain all information you wish to be
considered. The Plan Administrator will review the claim within
60 days after the appeal is made. Its decision shall be in
writing, shall include the reason for such decision and shall be
final.
10
<PAGE>
M E M B E R S R I G H T S
- --------------------------------------------------------------------------------
STATEMENT OF
MEMBER'S
RIGHTS As a member of the Plan, you are entitled to certain rights and
protection under ERISA which provides that all members shall be
entitled to:
o Examine, without charge, at the Plan Administrator's office
or at other specified locations, all plan documents, and
copies of all documents filed by the Plan Administrator with
the U. S. Department of Labor such as detailed annual
reports and plan descriptions.
o Obtain copies of all plan documents and other plan
information upon written request to the Plan Administrator.
The Administrator may make a reasonable charge for the
copies.
o Receive a summary of the Plan's annual financial report. The
Plan Administrator is required by law to furnish each member
with a copy of such summary.
In addition to creating rights for Plan members, ERISA imposes
duties upon the people who are responsible for the operation of
the Plan. The people who operate your Plan, called "fiduciaries",
have a duty to do so prudently and in the interest of you and
other plan members and beneficiaries. No one may fire you or
otherwise discriminate against you in any way to prevent you from
obtaining a benefit or exercising your rights under ERISA. If
your claim for a benefit is denied in whole or in part, you will
receive a written explanation of the reason for the denial. As
already explained, you also have the right to have your claim
reconsidered.
Under ERISA, there are steps you can take to enforce the above
rights. For instance, if you request materials from the Plan
Administrator and do not receive them within 30 days, you may
file suit in a federal court. In such a case, the court may
require the Plan Administrator to provide the materials and pay
you up to $100 a day until you receive them, unless such
materials were not sent for reasons beyond the Administrator's
control. If you have a claim for benefits which is denied or
ignored, in whole or in part, you may file suit in a state or
federal court.
If it should happen that Plan fiduciaries misuse the Plan's
money, or if you are discriminated against for asserting your
rights, you may seek assistance from the U.S. Department of Labor
or you may file suit in a federal court. The court will decide
who should pay court costs and legal fees. If you are successful,
the court may order the person you have sued to pay these costs
and fees. If you lose, the court may order you to pay such costs
and fees (for example, if it finds your claim is frivolous).
If you have any questions about your Plan, you should contact the
Plan Administrator. If you have any questions about this
statement or your rights under ERISA, you should contact the
nearest Area Office of the U.S. Labor- Management Services
Administration, Department of Labor.
This Statement of ERISA Rights is required by federal law and
regulation.
11
<PAGE>
P L A N I N F O R M A T I O N
- --------------------------------------------------------------------------------
Plan Name:
First Kansas Federal Savings Association Employees' Savings &
Profit Sharing Plan and Trust
Plan Administrator:
First Kansas Federal Savings Association
600 Main Street/P.O. Box 9
Osawatomie, KS 66064
Phone No: (913) 755-3033
Employer Identification Number: 48-0221422
Plan Number: 001
Plan Year End: December 31
Trustee:
The Bank of New York
1 Wall Street
New York, NY 10286
Phone: (212) 635-8115
Agent for Service of Legal Process:
First Kansas Federal Savings Association
Administrative Services:
Record-keeping services are provided by:
Pentegra Services, Inc.
108 Corporate Park Drive
White Plains, New York 10604
Phone No. : (914) 694-1300 FAX No. : (914) 694-6429
(800) 872-3473
12
EXHIBIT 4.4
Trust Document for the Plan
<PAGE>
=========================================================
TRUST AGREEMENT
by and between
FIRST KANSAS FEDERAL SAVINGS BANK
and
THE BANK OF NEW YORK
=========================================================
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1 - GENERAL...................................................... 1
1.1 Definitions............................................ 1
1.2 Compliance With Law........................................ 2
SECTION 2 - ESTABLISHMENT OF TRUST....................................... 2
2.1 Appointment and Acceptance of Trustee.................. 2
2.2 Trustee Responsibilities............................... 3
2.3 Contribution........................................... 3
2.4 Exclusive Benefit...................................... 3
2.5 Return of Contributions................................ 3
2.6 Distributions.......................................... 4
SECTION 3 - AUTHORITIES.................................................. 5
3.1 Authorized Parties..................................... 5
3.2 Authorized Instructions................................ 5
SECTION 4 - INVESTMENT AND ADMINISTRATION OF THE FUND.................... 5
4.1 Investment Funds....................................... 5
4.2 Discretionary Powers and Duties of Trustee............. 6
4.3 Directed Powers of Trustee................................. 8
4.4 Employer Stock............................................ 10
4.5 Standard of Care.......................................... 12
4.6 Force Majeure............................................. 12
SECTION 5 - APPOINTMENT AND AUTHORITY OF PENTEGRA....................... 12
5.1 Appointment and Delegation................................ 12
5.2 Allocation and Investment Directions to Trustee........... 12
5.3 Custody of Participant Loan Documents..................... 13
5.4 Designation for Authorized Instructions................... 13
5.5 Resignation or Removal of Pentegra........................ 13
SECTION 6 - REPORTING AND RECORDKEEPING................................. 13
6.1 Records and Accounts...................................... 13
6.2 Non-Fund Assets........................................... 14
SECTION 7 - COMPENSATION, EXPENSES, TAXES, INDEMNIFICATION.............. 14
7.1 Compensation and Expenses................................. 14
7.2 Tax Obligations........................................... 15
7.3 Indemnification........................................... 15
SECTION 8 - AMENDMENT, TERMINATION, RESIGNATION, REMOVAL................ 16
8.1 Amendment................................................. 16
8.2 Removal or Resignation of Trustee......................... 16
8.3 Property Not Transferred.................................. 16
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SECTION 9 - ADDITIONAL PROVISIONS....................................... 17
9.1 No Merger, Consolidation or Transfer of Plan
Assets or Liabilities................................. 17
9.2 Assignment or Alienation.................................. 17
9.3 Successors and Assigns.................................... 17
9.4 Governing Law............................................. 17
9.5 Necessary Parties......................................... 17
9.6 No Third Party Beneficiaries.............................. 18
9.7 Execution in Counterparts................................. 18
9.8 No Additional Rights...................................... 18
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TRUST AGREEMENT
THIS TRUST AGREEMENT, effective as of August 1, 1998 by and
between FIRST KANSAS FEDERAL SAVINGS BANK (the "Company") and THE BANK OF NEW
YORK (the "Trustee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to an Adoption Agreement, the Company has
adopted a qualified retirement plan for the benefit of its employees and the
employees of certain of the Company's affiliates which have heretofore or may
hereafter adopt such plan (such plan, as amended from time to time, is referred
to herein as the "Plan");
WHEREAS, the Company has established or desires to establish a
trust constituting a part of the Plan, pursuant to which assets will be held to
provide for the funding of, and payment of benefits under, the Plan (the
"Trust");
WHEREAS, the Company desires to appoint the Trustee as trustee
of the Trust and the Trustee is willing to accept such appointment; and
WHEREAS, the Plan provides for one or more fiduciaries named
in the Plan having the power to manage and control the assets of the Plan (the
"Named Fiduciary");
NOW, THEREFORE, the Company and the Trustee, each intending to
be legally bound, agree as follows:
SECTION 1
GENERAL
1.1 Definitions. The terms used herein shall have the
following meanings:
(a) "Agreement" means this instrument, including all
amendments thereto.
(b) "Code" means the Internal Revenue Code of 1986, as
amended.
(c) "Employer" means the Company and any affiliate of
the Company which has heretofore adopted, or may hereafter adopt, the Plan. Each
affiliate of the Company adopting the Plan appoints the Company as its agent for
purposes of this Agreement and agrees that it shall be bound by the decisions,
actions and directions of the Company and the Named Fiduciary under this
Agreement and that the Trustee shall be fully protected in relying upon such
decisions, actions and directions and shall in no event be required to give
notice to or otherwise deal with such affiliate except by dealing with the
Company as agent of such affiliate.
(d) "Employer Stock" shall mean securities of the
Employer which constitute "qualifying employer securities" with respect to the
Plan within the meaning of Section 407 of ERISA.
(e) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
<PAGE>
(f) "Fund" means the assets held pursuant to this Agreement
as such assets shall exist from time to time.
(g) "Tax Obligations" means the responsibility for payment of
taxes, withholding, certification and reporting requirements, claims for
exemptions or refund, interest, penalties and other related expenses of the
Fund.
1.2 Compliance With Law. The Plan and Trust are intended to
comply with ERISA and to be tax-exempt under Section 501(a) of the Code. The
Company assumes full responsibility to establish and maintain the Plan as a plan
meeting the qualification requirements of Section 401(a) of the Code and shall
immediately notify the Trustee if the Plan ceases to be qualified.
SECTION 2
ESTABLISHMENT OF TRUST
----------------------
2.1 Appointment and Acceptance of Trustee. The Company hereby
appoints THE BANK OF NEW YORK as Trustee of the Trust with respect to the Fund.
The Company shall provide to Trustee a resolution of its Board of Directors
(which may include a resolution authorizing one or more officers authorized to
act on its behalf) certified by the Secretary or any Assistant Secretary of the
Company ("Certified Resolutions") appointing The Bank of New York as Trustee
hereunder. The Fund shall consist of all monies and other property acceptable to
the Trustee in its sole discretion as may be paid or delivered to the Trustee
from time to time, together with any and all increments thereto, proceeds and
reinvestments thereof, and income thereon, less payments and distributions
therefrom. The Fund shall be held by the Trustee in trust and dealt with in
accordance with the provisions of this Agreement without distinction between
principal and income. The Trustee hereby accepts its appointment as trustee,
acknowledges that it assumes the duties established by this Agreement and agrees
to be bound by the terms contained herein.
2.2 Trustee Responsibilities. The Trustee shall hold
the assets of, and collect the income and make payments from the Fund, all as
hereinafter provided. Except to the extent that assets of the Fund have been
deposited in a collective investment fund maintained by the Trustee, the Trustee
shall not be responsible, directly or indirectly, for the investment or
reinvestment of the assets of the Fund, which shall be the sole responsibility
of the Named Fiduciary. The Trustee is not a party to, and has no duties or
responsibilities under, the Plan other than those that may be expressly
contained in this Agreement. As to the responsibilities of the Trustee, in any
case in which a provision of this Agreement conflicts with any provision in the
Plan, this Agreement shall control. The Trustee shall have no duties,
responsibilities or liability with respect to the acts or omissions of any prior
trustee.
2.3 Contributions. The Trustee shall have no
authority or duty to determine the adequacy of or enforce the collection of
contributions under the Plan, shall not be responsible for the adequacy of the
Trust to meet and discharge any liabilities under the Plan and shall have no
responsibility for any property until such cash or property is received and
accepted by the Trustee. The Employer and the Named Fiduciary shall have the
sole duty and responsibility for ensuring the adequacy of the Trust to discharge
the liabilities under the Plan, determining the adequacy of the contributions to
be made under the Plan, transmitting the contributions to the Trustee and
ensuring compliance with any statute, regulation or rule applicable to
contributions.
2.4 Exclusive Benefit. Except as may be permitted by law or
by the terms of the Plan or this Agreement, at no time prior to the satisfaction
of all liabilities with respect to participants and their beneficiaries under
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<PAGE>
the Plan shall any part of the Trust be used for or diverted to any purpose
other than for the exclusive benefit of the participants and their
beneficiaries. The assets of the Trust shall be held for the exclusive purposes
of providing benefits to participants of the Plan and their beneficiaries and
defraying the reasonable expenses of administering the Plan and the Trust.
2.5 Return of Contributions. Notwithstanding any
other provision of this Agreement: (i) if a contribution is conditioned upon a
favorable determination as to the qualified status of the Plan under Code
Section 401 and the Plan receives an adverse determination with respect to its
initial qualification, then any such contribution may be returned to the
Employer within one year after the date of determination; (ii) a contribution
made by the Employer based upon mistake of fact may be returned to the Employer
within one year after the date of such contribution; and (iii) if a contribution
to the Plan is conditioned upon its deductibility under the Code and a deduction
for such a contribution is disallowed, such contribution may be returned to the
Employer within one year after the date of the disallowance of such deduction.
In the case of the return of a contribution due to mistake of
fact or the disallowance of a deduction, the amount which may be returned is the
excess of the amount contributed over the amount that would have been
contributed had there not been a mistake or disallowance. Earnings attributable
to the excess contributions may not be returned to the Employer but losses
attributable thereto must reduce the amount to be so returned. Any return of
contribution made by the Trustee pursuant to this Section shall be made only
upon the direction of the Named Fiduciary, which shall have exclusive
responsibility for determining whether the conditions of such return have been
satisfied and for the amount to be returned.
2.6 Distributions. The Trustee shall make distributions and
payments out of the Fund as directed by the Named Fiduciary and amounts
distributed or paid pursuant to such direction thereafter no longer shall
constitute a part of the Fund. The Named Fiduciary may direct such distributions
and payments to be made to any person, including the Named Fiduciary or an
Employer, or to any paying agent designated by the Named Fiduciary, in such
amounts and in such form (including, without limitation, shares of Employer
Stock) and for such purposes as the Named Fiduciary shall direct. Any such order
shall constitute a certification that the payment is one the Named Fiduciary is
authorized to direct. The Named Fiduciary shall have the exclusive
responsibility, and the Trustee shall not have any responsibility or duty under
this Agreement, for ensuring that any payment made from the Fund at the
direction of the Named Fiduciary does not constitute a diversion of the assets
of the Fund and for determining that any such distribution is in accordance with
the terms of the Plan and applicable law, including, without limitation,
determining the amount, timing or method of payment and the identity of each
person to whom such payments shall be made. The Trustee shall have no
responsibility or duty to determine the tax effect of any payment or to see to
the application of any payment. The Trustee shall not be required to make any
payment from the Fund in excess of the net realizable value of the assets of the
Fund or to make any payment in cash unless there is sufficient cash in the Fund
or the Named Fiduciary has provided written instructions as to the assets to be
converted to cash for the purpose of making the distribution. If a dispute
arises as to who is entitled to or should receive any benefit or payment, the
Trustee may withhold or cause to be withheld such payment until the dispute is
resolved.
SECTION 3
AUTHORITIES
-----------
3.1 Authorized Parties. The Company shall identify the Named
Fiduciary to the Trustee and shall furnish the Trustee with a written list of
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the names, signatures and extent of authority of all persons authorized to
direct the Trustee and otherwise act on behalf of the Company under the terms of
this Agreement. The Named Fiduciary will provide the Trustee with a written list
of the names, signatures and extent of authority of all persons authorized to
act on behalf of the Named Fiduciary. The Trustee shall be entitled to rely on
and shall be fully protected in acting upon direction from an authorized party
until notified in writing by the Company or the Named Fiduciary, as appropriate,
of a change of the identity of an authorized party.
3.2 Authorized Instructions. All directions and instructions
to the Trustee from a party who has been authorized to act on behalf of the
Company or the Named Fiduciary pursuant to Section 3.1 or from Pentegra (as
provided for in Section 5.4) shall be in writing, transmitted by mail or by
facsimile or shall be an electronic transmission, provided the Trustee may, in
its discretion, accept oral directions and instructions and may require
confirmation in writing of any such oral directions and instructions. The
Trustee shall be entitled to rely on and shall be fully protected in acting in
accordance with all such directions and instructions which the Trustee
reasonably believes to have been given by a party who has been authorized to act
on behalf of the Company or the Named Fiduciary pursuant to Section 3.1 or by
Pentegra (pursuant to Section 5.4) and in failing to act in the absence thereof.
SECTION 4
INVESTMENT AND ADMINISTRATION OF THE FUND
-----------------------------------------
4.1 Investment Funds. The Named Fiduciary, from time
to time and in accordance with the provisions of the Plan, shall direct the
Trustee to establish one or more separate investment accounts under the Trust
(each such separate account hereinafter referred to as an "Investment Fund").
The Trustee shall transfer to each such Investment Fund such portion of the
assets of the Fund as the Named Fiduciary directs. The assets which have been
allocated to an Investment Fund shall be invested and reinvested in accordance
with the instructions of the Named Fiduciary, which shall have exclusive
responsibility therefor. The Trustee shall be under no duty to question, and
shall not incur any liability on account of following, the instructions of the
Named Fiduciary, with respect to any Investment Fund or the investment or
reinvestment of any assets of the Fund or any Investment Fund, nor to make
suggestions to the Named Fiduciary in connection therewith or to determine the
compliance of such instructions with the Plan or applicable law, including,
without limitation, the requirements of Sections 406 and 407 of ERISA. The
Trustee shall not be liable for any losses, costs or expenses (including,
without limitation, any opportunity costs) resulting from any investment
directions given or omitted by the named Fiduciary and the Trustee shall not be
liable for any losses, cost or expenses associated with the investment decisions
of the Named Fiduciary, including, without limitation, any losses, costs or
expenses associated with the selection of investments by the Named Fiduciary,
actual investments directed by the Named Fiduciary and the market risks
associated with such selections and directions. If the Trustee is directed to
deliver property against payment, the Trustee shall have no liability for
non-receipt of such payment.
Unless the Trustee is otherwise directed by the Named
Fiduciary, all interest, dividends and other income received with respect to,
and all proceeds received from the sale or other disposition of, assets of an
Investment Fund shall be credited to and reinvested in such Investment Fund, and
all expenses of the Fund which are properly allocable to a particular Investment
Fund shall be so allocated and charged. Subject to the provisions of the Plan,
the Named Fiduciary may direct the Trustee to eliminate an Investment Fund or
Funds, and the Trustee thereupon shall dispose of the assets of such Investment
Fund or Funds and reinvest the proceeds thereof in accordance with the
instructions of the Named Fiduciary.
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<PAGE>
4.2 Discretionary Powers and Duties of Trustee. Subject to
the provisions and limitations contained elsewhere herein, in administering the
Trust, the Trustee shall be specifically authorized in its sole administrative
discretion to:
(a) Appoint subtrustees or depositories, domestic or foreign
(including affiliates of the Trustee), as to part or all of the Fund, except
that the indicia of ownership of any asset of the Fund shall not be held outside
the jurisdiction of the district courts of the United States unless in
compliance with Section 404(b) of ERISA and regulations thereunder;
(b) Appoint one or more individuals or corporations as a
custodian of any property of the Fund and, as part of its reimbursable expenses
under this Agreement, to pay the reasonable compensation and expenses of any
such custodian;
(c) Hold property in nominee name, in bearer form, or in book
entry form, in a clearinghouse corporation or in a depository (including an
affiliate of the Trustee), so long as the Trustee's records clearly indicate
that the assets held are a part of the Fund;
(d) Collect income payable to and distributions due to the
Fund and sign on behalf of the Trust any declarations, affidavits, certificates
of ownership and other documents required to collect income and principal
payments, including but not limited to, tax reclamations, rebates and other
withheld amounts;
(e) Collect proceeds from securities, certificates of deposit
or other investments which may mature or be called and surrender such securities
at maturity or when called; provided, however, that the Trustee shall not be
liable for failure to surrender any security for redemption prior to maturity or
take other action if notice of such redemption or other action was not provided
to the Trustee by the issuer, the Named Fiduciary or one of the nationally
recognized bond or corporate action services to which the Master Trustee
subscribes;
(f) Exchange securities in temporary form for securities in
definitive form, and to effect an exchange of shares where the par value of
stock is changed;
(g) Submit or cause to be submitted to the Named Fiduciary,
on a best efforts basis, all information received by the Trustee regarding
ownership rights pertaining to property held in the Fund;
(h) Attend to involuntary corporate actions;
(i) Determine, or cause to be determined, the fair market
value of the Fund daily, or for such other period as may be mutually agreed
upon, in accordance with methods consistently followed and uniformly applied;
(j) Render periodic statements for property held hereunder;
(k) Commence or defend suits or legal proceedings and
represent the Fund in all suits or legal proceedings in any court or before any
other body or tribunal as the Trustee shall deem necessary to protect the Fund
(provided, however, that the Trustee shall have no obligation to take any legal
action for the benefit of the Fund unless it shall first be indemnified for all
expenses in connection therewith, including without limitation counsel fees);
(l) Employ suitable agents and legal counsel, who may be
counsel for an Employer, and, as a part of its reimbursable expenses under this
Agreement, to pay their reasonable compensation and expenses. The Trustee shall
be entitled to rely on and may act upon advice of counsel on all matters, and
shall be without liability for any action reasonably taken or
-5-
<PAGE>
omitted pursuant to such advice;
(m) Subject to the requirements of applicable law, take all
action necessary to settle authorized transactions;
(n) Form corporations and create trusts under the laws of any
state for the purpose of acquiring and holding title to any securities or other
property, all on such terms and conditions as the Trustee deems advisable;
(o) Make, execute and deliver any and all documents,
agreements or other instruments in writing as are necessary or desirable for the
accomplishment of any of the powers and duties in this Agreement; and
(p) Generally take all action, whether or not expressly
authorized, which the Trustee may deem necessary or desirable for the
fulfillment of its duties hereunder.
4.3 Directed Powers of Trustee. In addition to the powers
enumerated in Section 4.2, the Trustee shall have the following powers and
authority in the administration of the Fund to be exercised solely as directed
by the Named Fiduciary:
(a) Invest and reinvest in any securities or other property
including Employer Stock, provided that in no case without the consent of the
Trustee will the assets of the Fund be invested in assets other than Employer
Stock or units of collective investment funds;
(b) Settle purchases and sales and engage in other
transactions, including free receipts and deliveries, exchanges and other
voluntary corporate actions, with respect to securities or other property
received by the Trustee;
(c) Redeem, transfer or exchange securities of the Fund;
sell, exchange, convey, transfer or otherwise dispose of any other property of
the Fund; and make, execute and deliver to the purchasers thereof good and
sufficient legal documents of conveyance therefor, and all assignments,
transfers and other legal instruments, either necessary or convenient for
passing the title and ownership of such securities and other property, and no
person dealing with the Trustee shall be bound to see to the application of the
purchase money or to inquire into the validity, expediency or propriety of any
such sale or disposition;
(d) Deliver notices, prospectuses and proxy statements to the
Named Fiduciary, and, subject to Section 4.4, vote in person or by proxy with
respect to any securities held by the Trust Fund in accordance with the written
directions of the Named Fiduciary; and in accordance with such power, exercise
subscription, conversion and other rights and options and make payments
incidental thereto and take action or refrain from taking any action with
respect to any reorganization, consolidation, merger, dissolution or other
recapitalization or refinancing and pay any assessments or charges in connection
therewith and delegate discretionary powers with respect thereto; but the
Company understands that, where options, tenders or other rights have fixed
expiration dates, in order for the Trustee to act, it must receive instructions
at its offices, addressed as the Trustee may from time to time request, by no
later than noon (N.Y. City time) at least one business day prior to the last
scheduled date to act with respect thereto (or such earlier date or time as the
Trustee may direct);
(e) Hold any part of the Fund in cash or cash balances and
the Trustee shall not be responsible for the payment of interest on such
balances;
(f) Make loans from the Fund to participants in the Plan,
which shall be secured by the participants account balance; however, the Named
Fiduciary shall have full and exclusive responsibility for loans made to
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<PAGE>
participants, including, without limitation, full and exclusive responsibility
for the following: development of procedures and documentation for such loans;
acceptance of loan applications; approval of loan applications; disclosure of
interest rate information required by Regulation Z of the Federal Reserve Board
promulgated pursuant to the Truth in Lending Act, 15 U.S.C. ss. 1601 et seq.;
ensuring that such loans shall bear a reasonable rate of interest (within the
meaning of Regulation ss. 2550.408(b)(1) promulgated by the Department of
Labor); acting as agent of the Trustee for the physical custody and safekeeping
of the promissory notes and other loan documents; performing necessary and
appropriate recordkeeping and accounting functions with respect to loan
transactions; enforcement of promissory note terms, including, but not limited
to, directing the Trustee to take specified actions to enforce its rights under
the documents relating to plan loans, including, without limitation, the
occurrence of events of default and maintenance of accounts and records
regarding interest and principal payments on notes. The Trustee shall not in any
way be responsible for holding or reviewing such documents, records and
procedures and shall be entitled to rely upon such information as is provided by
the Named Fiduciary or its own sub-agent or recordkeeper without any requirement
or responsibility to inquire as to the completeness or accuracy thereof, but may
from time to time examine such documents, records and procedures as it deems
appropriate. Unless otherwise instructed in writing by the Named Fiduciary, the
Trustee shall have no duty or responsibility to file a UCC-1 form or take other
action in order to perfect its security interest in the accounts of a
Participant to whom a loan is made. The Company shall indemnify and hold the
Trustee and its directors, officers and employees harmless from all claims,
liabilities, losses, damages, costs and expenses, including reasonable
attorneys' fees, arising out of any action or inaction of the Named Fiduciary
with respect to its agency responsibilities described herein with respect to
participant loans and this indemnification shall survive the termination of this
Agreement;
(g) Execute proxies for any securities held in the Fund;
(h) Deposit cash in interest bearing accounts in the banking
department of the Trustee, the Company (provided that the Company meets the
requirements of ss. 408(b)(4) of ERISA) or in affiliated banking organization of
the Trustee or the Company;
(i) Compromise, compound, settle or arbitrate any claim, debt
or obligation due to or from the Trustee and to reduce the rate of interest on,
extend or otherwise modify, or to foreclose upon default or otherwise enforce
any such obligation; and to abandon any property determined by the Named
Fiduciary to be worthless;
(j) Invest in any collective investment fund, including any
collective investment fund maintained by the Trustee or an affiliate. The
Trustee shall have no responsibility for the custody or safekeeping of assets
transferred to any collective investment trust not maintained by the Trustee. To
the extent that any investment is made in any such collective investment fund,
the terms of the collective trust indenture shall solely govern the investment
duties, responsibilities and powers of the trustee of such collective investment
fund and, to the extent required by law or by such indenture, such terms,
responsibilities and powers shall be incorporated herein by reference and shall
be a part of this Agreement. For purposes of valuation, the value of the
interest maintained by the Fund in any such collective investment fund shall be
the fair market value of the collective investment fund units held, determined
in accordance with generally recognized valuation procedures. The Company
expressly understands and agrees that any such collective investment fund may
provide for the lending of its securities by the collective investment fund
trustee and that such collective investment fund trustee will receive
compensation from the borrowers for the lending of securities that is separate
from any compensation of the Trustee hereunder, or any compensation of the
collective investment fund trustee for the management of such fund; and
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<PAGE>
(k) For the purposes of the Fund, to borrow money from any
person or persons, including The Bank of New York, to issue the Fund's
promissory note or notes therefor, and to secure the repayment thereof by
pledging, mortgaging or otherwise encumbering any property in its possession.
4.4 Employer Stock.
(a) The Named Fiduciary may direct that all or a portion of
the Fund or any Investment Fund be invested in Employer Stock and the Trustee
shall act in accordance with any such directions. Except as otherwise required
under ERISA, the Trustee shall have no discretionary authority or responsibility
to exercise voting rights, or rights in the event of a tender offer, with
respect to such Employer Stock but instead shall be subject to the directions of
the Named Fiduciary in the exercise of such rights.
To the extent that the Plan provides for the voting or
tendering of Employer Securities by Plan participants, the Named Fiduciary shall
not improperly interfere in any manner regarding the decisions by or directions
of any participant with respect to the vote of or response to a tender offer for
Employer Securities allocated to the participant's account, and the Named
Fiduciary shall arrange for such voting or participant's decision regarding the
participant's action with respect to an offer to take place on a confidential
basis. The Named Fiduciary will adequately communicate or cause to be
communicated to all participants the provisions of the Plan and this Agreement
relating to the right of participants with respect to Employer Stock under the
Plan. The Company will provide the Named Fiduciary with such information and
assistance as the Named Fiduciary may reasonably request, in connection with any
communications or distributions to participants.
The Company will distribute or cause to be distributed to
participants entitled to direct the Named Fiduciary with respect to Employer
Stock, all materials and communications which it provides to other stockholders
of the Company in connection with such vote. The Trustee may rely on the Company
for such distribution and will not be liable for the Company's failure to
provide such materials and communications to any such participant.
(b) In the event that the Trustee is directed to dispose of
any Employer Stock under circumstances which, in the opinion of the Trustee,
require registration of such securities under the Securities Act of 1933 and/or
qualification of such securities under the Blue Sky laws of any state or states,
then the Company, at its own expense, will promptly take or cause to be taken
any and all action necessary or appropriate to effect such registration and/or
qualification. In such event, the Trustee shall not be required to dispose of
such securities until such registration and/or qualification are complete and
effective, and the Trustee shall not be liable for any loss or depreciation of
the Fund resulting from any delay attributable thereto. The Company will
indemnify and hold the Trustee and its officers, directors and employees
harmless with respect to any claim, liability, loss, damage or expense (except
any such claims, liabilities, losses, damages or expenses that are attributable
to the Trustee's own gross negligence, bad faith or willful misconduct with
respect to any duties specifically undertaken herein) incurred as a result of
such registration or qualification or as a result of any information in
connection therewith furnished by the Company or as a result of any failure by
the Company to furnish any such information. This indemnification shall survive
termination of this Agreement. Unless otherwise directed by the Named Fiduciary,
any proceeds received by the Trustee as a result of the sale, exchange or
transfer of Employer Stock pursuant to a tender offer shall be reinvested in
Employer Stock by the Trustee if such security is available for purchase.
4.5 Standard of Care. The Trustee shall discharge its duties
under this Agreement with the care and skill required under ERISA with respect
to its duties. The Trustee shall not be responsible for the title, validity
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<PAGE>
or genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement and shall be held harmless in acting
upon any notice, request, direction, instruction, consent, certification or
other instrument believed by it to be genuine and delivered by the proper party
or parties. The duties of the Trustee shall only be those specifically
undertaken pursuant to this Agreement or by separate written agreement.
4.6 Force Majeure. The Trustee shall not be responsible or
liable for any losses to the Fund resulting from nationalization, expropriation,
devaluation, seizure, or similar action by any governmental authority, de facto
or de jure; or enactment, promulgation, imposition or enforcement by any such
governmental authority of currency restrictions, exchange controls, levies or
other charges affecting the Fund's property; or acts of war, terrorism,
insurrection or revolution; or acts of God; or any other similar event beyond
the control of the Trustee or its agents. This Section shall survive the
termination of this Agreement.
SECTION 5
APPOINTMENT AND AUTHORITY OF PENTEGRA
5.1 Appointment and Delegation. The Company hereby certifies
to the Trustee that Pentegra Services, Inc. ("Pentegra") is the third party
administrator appointed by the Named Fiduciary or the Company to receive,
cumulate and communicate investment and distribution directions of the
participants and beneficiaries of the Plan with respect to the Fund or the
Investment Funds, and the Named Fiduciary has delegated such responsibility and
authority exclusively to Pentegra. For purposes of this Agreement, Pentegra
shall be a delegee of the Named Fiduciary in accordance with Section
405(c)(1)(B) of ERISA. Except as provided in Section 5.5, the Trustee shall act
solely on the directions and instructions communicated to the Trustee by
Pentegra and the Trustee shall not be liable for any failure to act on any
direction or instruction of any other party.
5.2 Allocation and Investment Directions to Trustee. Pentegra
shall direct the Trustee with respect to the allocation of assets to the
Investment Funds, transfers among the Investment Funds and investment and
reinvestment of the assets of the Fund and each Investment Fund. The Trustee
shall have no duty to invest, and shall not be liable for any interest on, any
such assets it holds uninvested pending receipt of directions from Pentegra to
invest or reinvest assets of the Fund.
5.3 Custody of Participant Loan Documents. Pentegra is
further authorized and is hereby appointed by the Named Fiduciary and the
Company to act as custodian for the Trustee of all original promissory notes and
security agreements which shall be held subject to the order of the Trustee. In
the event that such custodianship is terminated by Pentegra, the Named Fiduciary
or the Trustee, the Named Fiduciary shall retain the originals of all promissory
notes and security agreements as custodian for the Trustee.
5.4 Designation for Authorized Instructions. Pentegra shall
furnish the Trustee with a written list of the names, signatures and extent of
authority of all persons authorized to act on behalf of Pentegra. The Trustee
shall be entitled to rely on and shall be fully protected in acting upon
direction reasonably believed by it to be from an authorized party (or omitting
to act in the absence of direction) until notified in writing by Pentegra, of a
change in the identity of an authorized party. Directions of an authorized party
shall be governed by Section 3.2 of this Agreement.
5.5 Resignation or Removal of Pentegra. In the event Pentegra
resigns or is removed as third party administrator under the Plan, or Pentegra's
authority is circumscribed in any manner, the Company shall promptly notify the
Trustee of such resignation, removal or circumscription of
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<PAGE>
authority and shall furnish the Trustee with Certified Resolutions identifying
the Named Fiduciary and any other persons authorized to assume the duties and
responsibilities of Pentegra with respect to the Plan. The Trustee shall not
have or be deemed to have any responsibility to assume the functions and duties
of Pentegra, shall have no duty or responsibility to invest or reinvest the
assets of the Fund and shall not be liable for any losses to the Fund (including
any opportunity costs) as a result of its failure to act prior to receiving the
foregoing Certified Resolution.
SECTION 6
REPORTING AND RECORDKEEPING
---------------------------
6.1 Records and Accounts. The Trustee shall keep full and
accurate records of all receipts, investments, disbursements, and other
transactions hereunder, including such specific records as may be agreed upon in
writing between the Company and the Trustee. Within ninety (90) days after the
end of each fiscal year of the Trust or within ninety (90) days after its
removal or resignation or the termination of this Agreement, the Trustee shall
file with the Company a written account of the administration of the Fund
showing all transactions effected by the Trustee and all property held by the
Fund at its fair market value for the accounting period. If, within ninety (90)
days after the Trustee mails such account to the Company, the Company has not
given the Trustee written notice of any exception or objection thereto, the
statement shall be deemed to have been approved, and in such case, the Trustee
shall not be liable for any matters in such statements. Upon prior written
notice, the Company or its agent shall have the right at its own expense to
inspect the Trustee's books and records directly relating to the Fund during
normal business hours. If for any reason the Trustee fails to file an account
required of the Trustee within the applicable times specified hereunder, such
account shall be filed by the Trustee after the expiration of such time as soon
as is reasonably practicable. To the extent that the Trustee shall be required
to value the assets of the Fund, the Trustee may rely for all purposes of this
Agreement upon any certified appraisal or other form of valuation submitted by
the Named Fiduciary, Pentegra, any investment manager or other third party
appointed by the Named Fiduciary. Nothing in this Section shall impair Trustee's
right to judicial settlement of any account rendered by it. In any such
proceeding the only necessary parties shall be the Trustee, the Company and any
other party whose participation is required by law, and any judgment, decree or
final order entered shall be conclusive on all pnterest in the trust.
The fiscal year of the Trust shall be the plan year as
established under the terms of the Plan.
6.2 Non-Fund Assets. The duties of the Trustee shall be
limited to the assets held in the Fund, and the Trustee shall have no duties
with respect to assets held by any other person including, without limitation,
any other trustee for the Plan unless otherwise agreed in writing. The Company
hereby agrees that the Trustee shall not serve as, and shall not be deemed to
be, a co-trustee under any circumstances. The Named Fiduciary may request the
Trustee to perform a recordkeeping service with respect to property held by
others and not otherwise subject to the terms of this Agreement. To the extent
the Trustee shall agree to perform this service, its sole responsibility shall
be to accurately reflect information on its books which it has received from the
Named Fiduciary.
SECTION 7
COMPENSATION, EXPENSES, TAXES, INDEMNIFICATION
----------------------------------------------
7.1 Compensation and Expenses. The Trustee shall be entitled
to compensation for services under this Agreement as mutually agreed by the
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<PAGE>
Company and the Trustee. The Trustee shall also be entitled to reimbursement for
reasonable expenses incurred by it in the discharge of its duties under this
Agreement. The Trustee is authorized to charge and collect from the Fund any and
all such fees and expenses to the extent such fees and expenses are not paid
directly by the Company, another Employer or by Pentegra (acting on behalf of
the Company or such other Employer).
All amounts (including taxes) paid from the Fund which are
allocable to an Investment Fund shall be charged to such Investment Fund in
accordance with Section 4.1 of this Agreement. All such expenses which are not
so allocable shall be charged against each of the Investment Funds in the same
proportion as the value of the total assets held in such Investment Fund bears
to the value of the total assets in the Fund.
To the extent the Trustee advances funds to the Fund for
disbursements or to effect the settlement of purchase transactions, the Trustee
shall be entitled to collect from the Fund an amount equal to what would have
been earned on the sums advanced (an amount approximating the "federal funds"
interest rate).
7.2 Tax Obligations. To the extent that the Company or Named
Fiduciary has provided necessary information to the Trustee, the Trustee shall
use reasonable efforts to assist the Company or the Named Fiduciary with respect
to any Tax Obligations. The Company or Named Fiduciary shall notify the Trustee
of any Tax Obligations. Notwithstanding the foregoing, the Trustee shall have no
responsibility or liability for any Tax Obligations now or hereafter imposed on
any Employer or the Fund by any taxing authorities, domestic or foreign, except
as provided by applicable law.
To the extent the Trustee is responsible under any applicable
law for any Tax Obligation, the Company or the Named Fiduciary shall inform the
Trustee of all Tax Obligations, shall direct the Trustee with respect to the
performance of such Tax Obligations, and shall provide the Trustee with all
information required by the Trustee to meet such Tax Obligations. All such Tax
Obligations shall be paid from the Fund unless paid by the Company or another
Employer.
7.3 Indemnification. The Company shall indemnify and hold
harmless the Trustee and its directors, officers and employees from all claims,
liabilities, losses, damages and expenses, including reasonable attorneys' fees
and expenses, incurred by the Trustee in connection with this Agreement, except
those resulting from the Trustee's gross negligence, bad faith or willful
misconduct. This indemnification (as well as any other indemnification in this
Agreement) shall survive the termination of this Agreement. If the Trustee is
acting as a successor trustee or succeeds to responsibilities hereunder for
trusteeship of plan assets with respect to the Fund (or any portion thereof),
the Company hereby agrees to hold the Trustee harmless from and against any tax,
claim, liability, loss, damage or expense incurred by or assessed against it as
such successor as a direct or indirect result of any act or omission of a
predecessor trustee or any other person charged under any agreement affecting
Fund assets with investment responsibility with respect to such assets, except
for such taxes, claims, liabilities, losses, damages or expenses attributable to
the Trustee's own gross negligence, bad faith or willful misconduct.
SECTION 8
AMENDMENT, TERMINATION, RESIGNATION, REMOVAL
--------------------------------------------
8.1 Amendment. This Agreement may be amended by written
agreement signed by the Company and the Trustee. This Agreement may be
terminated at any time by the Company by written instrument delivered to the
Trustee. Thereafter, the Trustee shall distribute all assets of the Fund, less
any fees and expenses payable from the Fund with respect to the Plan,
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<PAGE>
pursuant to instructions of the Named Fiduciary. The Trustee may condition its
delivery, transfer or distribution of any assets upon the Trustee's receiving
assurances reasonably satisfactory to it that the approval of appropriate
governmental or other authorities has been secured and that all notices and
other procedures required by applicable law have been complied with. The Trustee
shall be entitled to assume that such distributions are in full compliance with
and not in violation of the terms of the Plan or any applicable law.
8.2 Removal or Resignation of Trustee. The Trustee may be
removed with respect to all or part of the Fund upon receipt of sixty (60) days'
written notice (unless a shorter or longer period is agreed upon) from the
Company. The Trustee may resign as Trustee hereunder upon sixty (60) days'
written notice (unless a shorter or longer period is agreed upon) delivered to
the Company. In the event of such removal or resignation, a successor trustee
will be appointed and the retiring Trustee shall transfer the Fund, less such
amounts as may be reasonable and necessary to cover its compensation and
expenses. In the event the Company fails to appoint a successor trustee within
sixty (60) days of receipt of written notice of resignation, the Trustee
reserves the right to seek the appointment of a successor trustee from a court
of competent jurisdiction. The Trustee shall have no duties, responsibilities or
liability with respect to the acts or omissions of any successor trustee.
8.3 Property Not Transferred. The Trustee reserves the right
to retain such property as is not suitable for distribution or transfer at the
time of the termination of a Plan or this Agreement and shall hold such property
for the benefit of those persons or other entities entitled to such property
until such time as the Trustee is able to make distribution. Upon the
appointment and acceptance of a successor trustee, the Trustee's sole duties
shall be those of a custodian with respect to any property not transferred to
the successor trustee.
SECTION 9
ADDITIONAL PROVISIONS
9.1 No Merger, Consolidation or Transfer of Plan Assets or
Liabilities. Notwithstanding anything to the contrary contained herein, no
merger, consolidation or transfer of the assets or liabilities of the Plan with
or to any other plan shall be permitted, except in compliance with the
provisions of ERISA and the Code which are applicable to such mergers,
consolidations or transfers, including, without limitation, Sections 208 and
4043(b)(8) of ERISA and Sections 401(a)(12), 414(l) and 6058(b) of the Code, and
the regulations thereunder.
9.2 Assignment or Alienation. Except as may be required by
law or permitted by the Plan, the Fund shall not be subject to any form of
attachment, garnishment, sequestration or other actions of collection afforded
creditors of the Employer, participants or beneficiaries under the Plan. The
Trustee shall not recognize any permitted assignment or alienation of benefits
unless directed to do so by the Named Fiduciary or required to do so by
applicable law.
9.3 Successors and Assigns. Neither the Company nor the
Trustee may assign this Agreement without the prior written consent of the
other, except that the Trustee may assign its rights and delegate its duties
hereunder to any corporation or entity which directly or indirectly is
controlled by, or is under common control with, the Trustee. This Agreement
shall be binding upon, and inure to the benefit of, the Company and the Trustee
and their respective successors and permitted assigns. Any entity which shall by
merger, consolidation, purchase, or otherwise, succeed to substantially all the
trust business of the Trustee shall, upon such succession and without any
appointment or other action by the Company, be and
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<PAGE>
become successor trustee hereunder, upon notification to the Company.
9.4 Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York (without
giving effect to conflict of law principles thereof) to the extent not preempted
by Federal law.
9.5 Necessary Parties. The Trustee reserves the right to seek
a judicial or administrative determination as to its proper course of action
under this Agreement. Nothing contained herein will be construed or interpreted
to deny the Trustee or the Company the right to have the Trustee's account
judicially determined. To the extent permitted by law, only the Trustee and the
Company shall be necessary parties in any application to the courts for an
interpretation of this Agreement or for an accounting by the Trustee, and no
participant or beneficiary under the Plan or other person having an interest in
the Fund shall be entitled to any notice or service of process. Any final
judgment entered in such an action or proceeding shall, to the extent permitted
by law, be conclusive upon all persons.
9.6 No Third Party Beneficiaries. The provisions of this
Agreement are intended to benefit only the parties hereto, their respective
successors and assigns, and participants and their beneficiaries under the Plan.
There are no other third party beneficiaries.
9.7 Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, and
said counterparts shall constitute but one and the same instrument and may be
sufficiently evidenced by one counterpart.
9.8 No Additional Rights. Neither the establishment of the
Fund nor this Agreement shall be considered as giving any Plan participant or
any other person any legal or equitable rights against the Employer, the Named
Fiduciary, the Trustee or the assets, whether corpus or income, of the Fund
unless such right is specifically provided for in this Agreement or the Plan,
nor shall it be considered as giving any Plan participant or other employee of
the Employer the right to continue in the service of the Employer in any
capacity.
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EXHIBIT 5.1
Favorable determination letter dated June 26, 1998,
confirming that the Plan is qualified under Section 401
of the Internal Revenue Code of 1986, as amended
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
INTERNAL REVENUE SERVICE Department of the Treasury
Plan Description: Prototype Non-standardized Profit Sharing Plan with CODA
FFN: 50370030001-001 Case: 9700387 EIN: 13-3745616 Washington, D.C. 20224
RPD: 01 Plan: 001 Letter Serial No: D366852a
Contact Person: Ms. Arrington
PENTEGRA SERVICES INC.
Telephone Number: (202)
622-8173
108 CORPORATE PARK DRIVE
In Reference to:
OP:E:EP:T1
WHITE PLAINS, NY 10604
Date: 06/26/98
</TABLE>
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). Therefore, an employer adopting the form of the plan should apply for a
determination letter by filing an application with the Key District Director of
Internal Revenue Service on Form 5307, Short Form Application for Determination
for Employee Benefit Plan.
Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of sections 13 and 17.03 of
Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable.
Because you submitted this plan on or after July 1, 1994, it does not meet the
requirements for the extension of the remedial amendment period provided by Rev.
Proc. 95-12, 1995-3 I.R.B. 24.
This letter may not be relied upon with respect to whether the plan satisfies
the qualification requirements as amended by the Uruguay Round Agreements Act,
Pub. L. 103-465, and by the Small Business Job Protection Act of 1996, Pub. L.
104-108.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ John J. Swieca
John J. Swieca
Chief, Employee Plans Technical Branch 1
EXHIBIT 23.1
Consent of KPMG LLP
<PAGE>
[LETTERHEAD OF KPMG LLP]
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors and Stockholders
First Kansas Financial Corporation
600 Main Street
Osawatomie, Kansas 66064-1421
We consent to incorporation by reference in the Registration Statement
on Form S-8, of our report dated March 5, 1999 relating to the consolidated
balance sheets of First Kansas Financial Corporation and subsidiary as of
December 31, 1998 and 1997 and the related consolidated statements of income,
stockholders' equity, and cash flows for the years ending December 31, 1998 and
1997, which report appears in the December 31, 1998 annual report on Form 10-KSB
of First Kansas Financial Corporation.
/s/ KPMG LLP
KPMG LLP
June 28, 1999
Kansas City, Missouri
