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As filed with the Securities and Exchange Commission on August 20, 1998 Registration No. 333-57845
====================================================================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
----------
GOUVERNEUR BANCORP, INC.
(Exact Name of Registrant as Specified in Its Charter)
United States 6035 Requested
(State or Other Jurisdiction (Primary Standard Industry (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification No.)
42 Church Street, Gouverneur, New York 13642 Tel. No. (315) 287-2600
(Address, Including Zip Code, and Telephone Number, Including Area Code,
or Registrant's Principal Executive Offices)
Richard F. Bennett
President and Chief Executive Officer
Gouverneur Savings and Loan Association
42 Church Street, Gouverneur, New York 13642
(315) 287-2600
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
Please send copies of all communications to:
Jay L. Hack, Esq.
Clifford S. Weber, Esq.
Serchuk & Zelermyer, LLP
81 Main Street, White Plains, New York 10601
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this registration statement becomes effective.
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, check the following box [X]
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [X]
If the delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Amount to be Proposed Proposed Maximum Aggregate Amount of Registration
Securities Being Registered Registered Offering Price Offering Price (1) Fee
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Common Stock,
$0.01 Par Value 2,201,962 $5.00 $11,009,810 $3,336.00 (2)
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for purposes of calculating the registration fee.
(2) Previously paid with the filing of Form S-1 on June 26, 1998.
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Part II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
SEC registration fees ............................................ $3,336
NASD filing fee (1) .............................................. 1,600
NASDAQ National Market Listing Fee(1) ............................ 6,000
OTS filing fees .................................................. 19,600
Underwriter's legal fees ......................................... 25,000
Printing, postage and mailing .................................... 60,000
Legal fees and expenses - issuer's counsel ....................... 100,000
Accounting fees and expenses ..................................... 75,000
Marketing agent fees and commissions ............................. 135,000
Appraiser's fees and expenses (including business plan) .......... 23,500
Transfer agent and registrar fees and expenses ................... 4,000
Stock Certificate printing ....................................... 3,000
Blue Sky filing fees and related expenses ........................ 8,000
Miscellaneous .................................................... 60,964
--------
TOTAL ............................................................ $525,000
--------
(1) Actual expenses based upon the registration of 2,201,962 shares at $5.00 per
share. All other expenses are estimated.
(2) Estimated based upon the sale of 2,201,962 shares at $5.00 per share, with
no commission payable on 8% of the shares purchased by the ESOP and $745,000
estimated to be purchased by directors, officers and employees.
Item 14. Indemnification of Directors and Officers.
The directors and officers of the Company are entitled to indemnification
against certain liabilities in accordance with the provisions of section 545.121
of the regulations of the Office of Thrift Supervision, which generally provide
that directors, officers and employees are entitled to indemnification against
liability, costs and expenses arising out of any action brought or threatened
because such person is or was a director, officer or employee of the Company.
Indemnification is permitted if a final judgment on the merits is rendered in
favor of the indemnified person. If there is a settlement or a final judgment
against the indemnified person, then indemnification is permitted only if a
majority of the Company's disinterested directors determines that the
indemnified person was acting in good faith within the scope of his or her
employment or authority as he or she could have reasonably believed under the
circumstances was in the best interests of the Company or its stockholders.
Item 15. Recent Sales of Unregistered Securities.
None.
Item 16. Exhibits and Financial Statement Schedules.
The exhibits filed as part of this Registration Statement are as follows:
(a). List of Exhibits. (Filed herewith unless otherwise noted.)
Exhibit No. Description
1.1 Engagement Letter (proposal for marketing agent services, including
indemnification letter), dated April 6, 1998 between Gouverneur
Savings and Loan Association and First Albany Corporation.*
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1.2 Form of Agency Agreement*
2.1 Plan of Mutual Holding Company Reorganization and Stock Issuance of
Gouverneur Savings and Loan Association*
3.1 Federal Stock Charter of Gouverneur Bancorp, Inc.*
3.2 Bylaws of Gouverneur Bancorp, Inc.*
3.3 Federal Stock Charter of Gouverneur Savings and Loan Association*
3.4 Federal Stock Bylaws of Gouverneur Savings and Loan Association*
4.1 Form of Stock Certificate of Gouverneur Bancorp, Inc.*
5.1 Opinion of Serchuk & Zelermyer, LLP regarding legality*
8.1 Opinion of Serchuk & Zelermyer, LLP regarding federal and state
taxation*
8.2 Opinion of Keller & Company, Inc. regarding Subscription Rights*
10.1 Employee Stock Ownership Plan of Gouverneur Bancorp, Inc.
23.1 Consent of KPMG Peat Marwick LLP*
23.2 Consent of Serchuk & Zelermyer, LLP*
23.3 Consent of Keller & Company, Inc.*
24.1 Power of Attorney*
27.1 Financial Data Schedule*
99.1 Appraisal Report of Keller & Company, Inc.*
99.2 Form of Marketing Materials to be used in connection with the
Offerings
- ----------
* Previously filed
Financial Statement Schedules
All schedules have been omitted as not applicable or not required under the
rules of Regulation S-X.
Item 17. Undertakings.
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.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be
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reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
change to such information 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;
(3) To remove from registration by means of a post-effective amendment any
of the securities registered which remain unsold at the termination of the
Offering.
The undersigned Registrant hereby undertakes to provide to the agent at the
closing specified in the Agency Agreement, certificates in such denominations
and registered in such names as required by the agent to permit prompt delivery
to each purchaser.
Insofar as indemnification by the Registrant 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 Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense in connection
with the securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
For purpose of determining any liability under the Securities Act of 1933,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon the Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability the Securities Act of
1933, each post-effective amendment that contains a form of prospectus 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post- Effective Amendment No. 1 to Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
Town and Village of Gouverneur, State of New York, on August 20, 1998.
Gouverneur Bancorp, Inc.
By: /s/ Richard F. Bennett
----------------------------
Richard F. Bennett
President and Chief Executive
Officer
(duly authorized officer)
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
Name and Signature Title Date
- ------------------ ----- ----
/s/Richard F. Bennett President, Chief August 20, 1998
- ------------------------ Executive Officer and
Richard F. Bennett Director
(Principal Executive
Officer)
/s/Kay McIntosh Treasurer August 20, 1998
- ------------------------ (Principal Financial and
Kay McIntosh Accounting Officer)
/s/Richard F. Bennett As attorney for named August 20, 1998
- ------------------------ directors
Richard F. Bennett, as Power of
Attorney for* Charles E. Graves,
Robert J. Leader, Larry D. Straw,
Frank Langevin, Richard Jones
and Carl Pettito
* Pursuant to Power of Attorney previously filed as Exhibit 24.1 to the
Registration Statement on Form S-1.
<PAGE>
As filed with the Securities and Exchange Commission on August 20, 1998
Registration No. 333-57845
----------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
POST-EFFECTIVE AMENDMENT NO. 1 TO
EXHIBITS
TO THE
FORM S-1
UNDER
THE SECURITIES ACT OF 1933
----------
GOUVERNEUR BANCORP, INC.
42 Church Street
Gouverneur, New York 13642
----------------------------------
<PAGE>
TABLE OF EXHIBITS
(Filed herewith unless otherwise noted)
Exhibit
No. Description
1.1 Engagement Letter (proposal for marketing agent services, including
indemnification letter), dated April 6, 1998 between Gouverneur
Savings and Loan Association and First Albany Corporation.*
1.2 Form of Agency Agreement*
2.1 Plan of Mutual Holding Company Reorganization and Stock Issuance of
Gouverneur Savings and Loan Association*
3.1 Federal Stock Charter of Gouverneur Bancorp, Inc.*
3.2 Bylaws of Gouverneur Bancorp, Inc.*
3.3 Federal Stock Charter of Gouverneur Savings and Loan Association*
3.4 Federal Stock Bylaws of Gouverneur Savings and Loan Association*
4.1 Form of Stock Certificate of Gouverneur Bancorp, Inc.*
5.1 Opinion of Serchuk & Zelermyer, LLP regarding legality*
8.1 Opinion of Serchuk & Zelermyer, LLP regarding federal and state
taxation*
8.2 Opinion of Keller & Company, Inc. regarding Subscription Rights*
10.1 Employee Stock Ownership Plan of Gouverneur Bancorp, Inc.
23.1 Consent of KPMG Peat Marwick LLP*
23.2 Consent of Serchuk & Zelermyer, LLP*
23.3 Consent of Keller & Company, Inc.*
24.1 Power of Attorney*
27.1 Financial Data Schedule*
99.1 Appraisal Report of Keller & Company, Inc.*
99.2 Form of Marketing Materials to be used in connection with the
Offerings
- ----------
* Previously filed
GOUVERNEUR BANCORP, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
EFFECTIVE AS OF _____________
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
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Section 1.1 Account.........................................................................................1
Section 1.2 Affiliated Employer.............................................................................1
Section 1.3 Allocation Compensation.........................................................................1
Section 1.4 Bank............................................................................................2
Section 1.5 Board.......................................................................................... 2
Section 1.6 Beneficiary.................................................................................... 2
Section 1.7 Change In Control.............................................................................. 2
Section 1.8 Code........................................................................................... 2
Section 1.9 Computation Period............................................................................. 2
Section 1.10 Disability.................................................................................... 2
Section 1.11 Domestic Relations Order...................................................................... 2
Section 1.12 Effective Date................................................................................ 2
Section 1.13 Eligibility Computation Period................................................................ 2
Section 1.14 Eligible Employee............................................................................. 2
Section 1.15 Eligible Participant.......................................................................... 3
Section 1.16 Employee...................................................................................... 3
Section 1.17 Employer...................................................................................... 3
Section 1.18 Employment Commencement Date.................................................................. 3
Section 1.19 ERISA......................................................................................... 3
Section 1.20 ESOP Contribution............................................................................. 3
Section 1.21 Fair Market Value............................................................................. 3
Section 1.22 Family Member................................................................................. 4
Section 1.23 Financed Share................................................................................ 4
Section 1.24 Five Percent Owner............................................................................ 4
Section 1.25 Forfeitures................................................................................... 4
Section 1.26 Former Participant.............................................................................4
Section 1.27 General Investment Account.................................................................... 4
Section 1.28 Highly Compensated Employee................................................................... 4
Section 1.29 Hour of Service............................................................................... 5
Section 1.30 Investment Account............................................................................ 5
Section 1.31 Investment Fund............................................................................... 5
Section 1.32 Loan Repayment Account........................................................................ 5
Section 1.33 Loan Repayment Contribution................................................................... 5
Section 1.34 Maternity or Paternity Leave.................................................................. 5
Section 1.35 Military Service.............................................................................. 5
Section 1.36 Named Fiduciary............................................................................... 6
Section 1.37 Officer....................................................................................... 6
Section 1.38 One-Year Break in Service..................................................................... 6
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Section 1.39 Participant................................................................................... 6
Section 1.40 Plan.......................................................................................... 6
Section 1.41 Plan Administrator............................................................................ 6
Section 1.42 Plan Year..................................................................................... 6
Section 1.43 Qualified Domestic Relations Order............................................................ 6
Section 1.44 Qualified Participant......................................................................... 6
Section 1.45 Retirement.................................................................................... 7
Section 1.46 Share......................................................................................... 7
Section 1.47 Share Acquisition Loan........................................................................ 7
Section 1.48 Share Investment Account...................................................................... 7
Section 1.49 Tender Offer.................................................................................. 7
Section 1.50 Total Compensation............................................................................ 7
Section 1.51 Trust......................................................................................... 7
Section 1.52 Trust Agreement............................................................................... 7
Section 1.53 Trust Fund.................................................................................... 7
Section 1.54 Trustee....................................................................................... 8
Section 1.55 Valuation Date................................................................................ 8
Section 1.56 Vesting Computation Period.................................................................... 8
Section 1.57 Year of Eligibility Service................................................................... 8
Section 1.58 Year of Vesting Service....................................................................... 8
ARTICLE II
PARTICIPATION
Section 2.1 Eligibility For Participation.................................................................. 8
Section 2.2 Commencement of Participation.................................................................. 9
Section 2.3 Termination of Participation................................................................... 9
ARTICLE III
SPECIAL PROVISIONS
Section 3.1 Military Service............................................................................... 9
Section 3.2 Maternity or Paternity Leave................................................................... 9
Section 3.3 Adjustments to Years of Eligibility Service................................................... 10
Section 3.4 Leave of Absence.............................................................................. 11
Section 3.5 Family and Medical Leave...................................................................... 11
ARTICLE IV
CONTRIBUTIONS BY PARTICIPANTS NOT PERMITTED
Section 4.1 Contributions by Participants not Permitted................................................... 11
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ARTICLE V
CONTRIBUTIONS BY THE EMPLOYER
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Section 5.1 In General.................................................................................... 11
Section 5.2 Loan Repayment Contributions.................................................................. 11
Section 5.3 ESOP Contributions............................................................................ 12
Section 5.4 Time and Manner of Payment.................................................................... 12
ARTICLE VI
SHARE ACQUISITION LOANS
Section 6.1 In General.................................................................................... 13
Section 6.2 Collateral; Liability for Repayment........................................................... 13
Section 6.3 Loan Repayment Account........................................................................ 14
Section 6.4 Release of Financed Shares.................................................................... 14
Section 6.5 Restrictions on Financed Shares............................................................... 15
ARTICLE VII
ALLOCATION OF CONTRIBUTIONS
Section 7.1 Allocation Among Eligible Participants........................................................ 15
Section 7.2 Allocation of Released Shares or Other Property............................................... 16
Section 7.3 Allocation of ESOP Contributions.............................................................. 16
ARTICLE VIII
LIMITATIONS ON ALLOCATIONS
Section 8.1 Optional Limitations on Allocations of Contributions. .........................................16
Section 8.2 General Limitations on Contributions.......................................................... 17
ARTICLE IX
VESTING
Section 9.1 Vesting....................................................................................... 20
Section 9.2 Vesting on Death, Disability, Retirement or Change in Control................................. 20
Section 9.3 Forfeitures on Termination of Employment...................................................... 20
Section 9.4 Amounts Credited Upon Re-Employment........................................................... 21
Section 9.5 Allocation of Forfeitures..................................................................... 21
Section 9.6 Service Prior to Effective Date................................................................21
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ARTICLE X
THE TRUST FUND
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Section 10.1 The Trust Fund............................................................................... 21
Section 10.2 Investments.................................................................................. 22
Section 10.3 Diversification of Investments............................................................... 22
Section 10.4 Use of Commingled Trust Funds................................................................ 23
Section 10.5 Management and Control of Assets............................................................. 23
ARTICLE XI
VALUATION OF INTERESTS IN THE TRUST FUND
Section 11.1 Establishment of Investment Accounts......................................................... 24
Section 11.2 Share Investment Accounts.................................................................... 24
Section 11.3 General Investment Accounts.................................................................. 24
Section 11.4 Valuation of Investment Accounts............................................................. 24
Section 11.5 Annual Statements............................................................................ 25
ARTICLE XII
SHARES
Section 12.1 Specific Allocation of Shares................................................................ 25
Section 12.2 Divide4nds................................................................................... 25
Section 12.3 Voting Rights................................................................................ 25
Section 12.4 Tender Offers................................................................................ 27
Section 12.5 Dissent and Appraisal Rights................................................................. 29
ARTICLE XIII
PAYMENT OF BENEFITS
Section 13.1 In General................................................................................... 30
Section 13.2 Designation of Beneficiaries................................................................. 30
Section 13.3 Distributions to Participants and Former Participants.........................................31
Section 13.4 Manner of Payment............................................................................ 34
Section 13.5 Put Options.................................................................................. 34
Section 13.6 Right of First Refusal....................................................................... 35
Section 13.7 Minimum Required Distributions............................................................... 35
Section 13.8 Direct Rollover of Eligible Rollover Distributions........................................... 37
Section 13.9 Valuation of Shares Upon Settlement to a Participant......................................... 38
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ARTICLE XIV
CHANGE IN CONTROL
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Section 14.1 Definition of Change in Control.............................................................. 38
Section 14.2 Vesting on Change of Control................................................................. 39
Section 14.3 Repayment of Loan............................................................................ 39
Section 14.4 Plan Termination After Change in Control..................................................... 40
Section 14.5 Amendment of Article XIV..................................................................... 41
ARTICLE XV
ADMINISTRATION
Section 15.1 Named Fiduciaries............................................................................ 41
Section 15.2 Plan Administrator........................................................................... 41
Section 15.3 Claims Procedure............................................................................. 43
Section 15.4 Claims Review Procedure...................................................................... 43
Section 15.5 Allocation of Fiduciary Responsibilities and Employment of Advisors...........................44
Section 15.6 Other Administrative Provisions...............................................................44
ARTICLE XVI
AMENDMENT, TERMINATION AND TAX QUALIFICATION
Section 16.1 Amendment and Termination by Gouverneur Bancorp, Inc......................................... 45
Section 16.2 Amendment or Termination Other Than by Gouverneur Bancorp, Inc............................... 45
Section 16.3 Conformity to Internal Revenue Code.......................................................... 46
Section 16.4 Contingent Nature of Contributions........................................................... 46
ARTICLE XVII
SPECIAL RULES FOR TOP HEAVY PLAN YEARS
Section 17.1 In General................................................................................... 47
Section 17.2 Definition of Top Heavy Plan................................................................. 47
Section 17.3 Determination Date........................................................................... 48
Section 17.4 Cumulative Accrued Benefits.................................................................. 48
Section 17.5 Key Employees................................................................................ 48
Section 17.6 Required Aggregation Group................................................................... 49
Section 17.7 Permissible Aggregation Group................................................................ 49
Section 17.8 Special Requirements During Top Heavy Plan Years............................................. 50
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ARTICLE XVIII
MISCELLANEOUS PROVISIONS
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Section 18.1 Governing Law................................................................................ 50
Section 18.2 No Right to Continued Employment............................................................. 51
Section 18.3 Construction of Language..................................................................... 51
Section 18.4 Headings..................................................................................... 51
Section 18.5 Merger with Other Plans...................................................................... 51
Section 18.6 Non-Alienation of Benefits................................................................... 51
Section 18.7 Procedures Involving Domestic Relations Orders............................................... 52
Section 18.8 Leased Employees............................................................................. 52
Section 18.9 Status as an Employee Stock Ownership Plan....................................................53
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GOUVERNEUR BANCORP, INC. EMPLOYEE STOCK OWNERSHIP PLAN
ARTICLE I
DEFINITIONS
The following definitions shall apply for the purposes of the Plan, unless
a different meaning is clearly indicated by the context:
Section 1.1 Account means an account established for each Participant to
which is allocated such Participant's share, if any, of all Financed Shares and
other property that are released from the Loan Repayment Account in accordance
with Section 6.4, together with his share, if any, of any ESOP Contributions
that may be made by the Employer.
Section 1.2 Affiliated Employer means any corporation which is a member of
a controlled group of corporations (as defined in Section 414(b) of the Code)
that includes the Employer; any trade or business (whether or not incorporated)
that is under common control (as defined in Section 414(c) of the Code) with the
Employer; any organization (whether or not incorporated) that is a member of an
affiliated service group (as defined in Section 414(m) of the Code) that
includes the Employer; any leasing organization (as defined in Section 414(n) of
the Code) to the extent that any of its employees are required pursuant to
Section 414(n) of the Code to be treated as employees of the Employer; and any
other entity that is required to be aggregated with the Employer pursuant to
regulations under Section 414(o) of the Code.
Section 1.3 Allocation Compensation during any period means the
compensation taken into account in determining the allocation of benefits and
contributions among Participants and consists of the aggregate compensation
received by an Employee from the Employer or any Affiliated Employer with
respect to such period as reported to the Internal Revenue Service as wages for
such period pursuant to Section 6041(a) of the Code, plus the amount by which
such Employee's compensation with respect to such period has been reduced
pursuant to a compensation reduction agreement under the terms of any of the
following plans which may be maintained by the Employer:
(a) a qualified cash or deferred arrangement described in Section 401(k) of
the Code;
(b) a salary reduction simplified employee pension plan described in
Section 408(k) of the Code;
(c) a tax deferred annuity plan described in Section 403(b) of the Code; or
(d) a cafeteria plan described in Section 125 of the Code.
In no event, however, shall an Employee's Allocation Compensation for any
calendar year include any compensation in excess of $160,000, or any such other
amount as may be prescribed in accordance with regulations prescribed under
Section 401(a)(17) of the Code. If there are less
1
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than twelve (12) months in the Plan Year, the $160,000 limitation (as adjusted)
shall be prorated by multiplying such limitation by a fraction, the numerator of
which is the number of months in the Plan Year and the denominator of which is
twelve (12).
Section 1.4 Bank means Gouverneur Savings and Loan Association and any
successor thereto.
Section 1.5 Board means the Board of Directors of Gouverneur Bancorp, Inc.
Section 1.6 Beneficiary means the person or persons designated by a
Participant or Former Participant or other person entitled to a benefit under
the Plan, or otherwise determined to be entitled to a benefit under the Plan. If
more than one person is designated, each shall have an equal share unless the
person making the designation directed otherwise. The word "person" includes an
individual, a trust, an estate or any other person that is permitted to be named
as a Beneficiary.
Section 1.7 Change in Control means an event described in Section 14.1.
Section 1.8 Code means the Internal Revenue Code of 1986 (including the
corresponding provisions of any succeeding law).
Section 1.9 Computation Period means an Eligibility Computation Period or a
Vesting Computation Period.
Section 1.10 Disability means a condition of total incapacity, mental or
physical, for further performance of duty with the Employer or any Affiliated
Employer, which the Plan Administrator shall have determined, on the basis of
competent medical evidence, is likely to be permanent.
Section 1.11 Domestic Relations Order means a judgment, decree or order
(including the approval of a property settlement) that is made pursuant to a
state domestic relations or community property law and relates to the provision
of child support, alimony payments, or marital property rights to a spouse,
child or other dependent of a Participant or Former Participant.
Section 1.12 Effective Date means the first day of the calendar year in
which Gouverneur Savings and Loan Association converts from a mutual savings
bank to a stock savings bank.
Section 1.13 Eligibility Computation Period means, with respect to any
person, (a) the 12-consecutive month period beginning on such person's
Employment Commencement Date and (b) each 12-consecutive month period that
begins on an anniversary of such person's Employment Commencement Date.
Section 1.14 Eligible Employee means an Employee who is eligible for
participation in the Plan in accordance with Article II.
2
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Section 1.15 Eligible Participant means, for any Plan Year, an Employee who
is a Participant on the last day of such Plan Year and an Employee who was a
Participant during part of such Plan Year and whose participation ceased prior
to the last day of such Plan Year on account of his Retirement, Disability or
death.
Section 1.16 Employee means any person, including an officer, who is
employed by the Employer or an Affiliated Employer.
Section 1.17 Employer means Gouverneur Bancorp, Inc. and any successor
thereto and any Affiliated Employer which, with the prior written approval of
the Board of Directors of Gouverneur Bancorp, Inc. and subject to such terms and
conditions as may be imposed by the Board of Directors of Gouverneur Bancorp,
Inc., shall adopt this Plan.
Section 1.18 Employment Commencement Date means the date on which a person
first performs an Hour of Service, except that if an Employee separates from
service with the Employer, incurs a One-Year Break in Service and subsequently
returns to service with the Employer, his Employment Commencement Date shall be
the date on which he first performs an Hour of Service following the One-Year
Break in Service.
Section 1.19 ERISA means the Employee Retirement Income Security Act of
1974, as amended from time to time (including the corresponding provisions of
any succeeding law).
Section 1.20 ESOP Contribution means Shares or amounts of money contributed
to the Plan by the Employer in accordance with Section 5.3.
Section 1.21 Fair Market Value on any date means:
(a) with respect to a Share:
(i) the final quoted sale price on the date in question (or, if there is no
reported sale on such date, on the last preceding date on which any reported
sale occurred) as reported in the principal consolidated reporting system with
respect to securities listed or admitted to trading on the principal United
States securities exchange on which like Shares are listed or admitted to
trading; or
(ii) if Shares are not listed or admitted to trading on any such exchange,
the closing bid quotation with respect to a Share on such date on the Nasdaq
Stock Market, or, if no such quotation is provided, on another similar system,
selected by the Plan Administrator, then in use; or
(iii) if Sections 1.21(a)(i) and (ii) are not applicable, the fair market
value of a Share as determined by an appraiser independent of the Employer and
experienced and expert in the field of corporate appraisal.
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(b) with respect to property other than Shares, the fair market value
determined in the manner determined by the Trustee.
Section 1.22 Family Member means, with respect to any person, such person's
spouse and lineal ascendants or descendants and the spouses of such lineal
ascendants or descendants.
Section 1.23 Financed Share means: (a) a Share that has been purchased with
the proceeds of a Share Acquisition Loan, that has been allocated to the Loan
Repayment Account in accordance with Section 6.3 and that has not been released
in accordance with Section 6.4; or (b) a Share that constitutes a dividend paid
with respect to a Share described in Section 1.46, that has been allocated to
the Loan Repayment Account in accordance with Section 6.3 and that has not been
released in accordance with Section 6.4.
Section 1.24 Five Percent Owner means, for any Plan Year, a person who,
during such Plan Year, owned (or was considered as owning for purposes of
Section 318 of the Code): (a) more than 5% of the value of all classes of
outstanding stock of the Employer; or (b) stock possessing more than 5% of the
combined voting power of all classes of outstanding stock of the Employer.
Section 1.25 Forfeitures means the amounts forfeited by Participants and
Former Participants on termination of employment prior to full vesting, pursuant
to Section 9.3, less amounts credited because of re-employment, pursuant to
Section 9.4.
Section 1.26 Former Participant means a Participant whose participation in
the Plan has terminated pursuant to Section 2.3.
Section 1.27 General Investment Account means an Investment Account
established and maintained in accordance with Article XI.
Section 1.28 Highly Compensated Employee means, for any Plan Year, an
Employee who:
(a) at any time during such Plan Year or the immediately preceding Plan
Year was a Five Percent Owner; or
(b) during the immediately preceding Plan Year received Total Compensation
for such Plan Year in excess of $80,000 (or such higher amount as may be
permitted under Section 414(q) of the Code) and, if the Employer so elects, is a
member of the group consisting of the top 20% of Employees when ranked on the
basis of Total Compensation paid to Employees during such Plan Year.
The determination of who is a Highly Compensated Employee will be made in
accordance with Section 414(q) of the Code and the regulations thereunder.
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Section 1.29 Hour of Service means:
(a) Each hour for which a person is paid, or entitled to payment, for the
performance of duties for the Bank or any Affiliated Employer. These hours shall
be credited to the person for the Computation Period or Computation Periods in
which the duties are performed; and
(b) Each hour for which a person is paid, or entitled to payment, by the
Bank or any Affiliated Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty, or leave of absence. No more than
501 Hours of Service shall be credited under this Section 1.29(b) for any single
continuous period (whether or not such period occurs in a single Computation
Period). Hours under this Section 1.29(b) shall be calculated and credited
pursuant to Section 2530.200b-2 of the Department of Labor's regulations (or any
successor regulation), which are incorporated herein by reference; and
(c) Each hour for which back pay, irrespective of any mitigation of
damages, is either awarded or agreed to by the or any Affiliated Employer. The
same Hours of Service shall not be credited both under Section 1.29(a) or (b),
as the case may be, and under this Section 1.29(c). Hours under this Section
1.29(c) shall be credited to the person for the Computation Period or
Computation Periods to which the award or agreement pertains, rather than the
Computation Period in which the award, agreement or payment is made.
Section 1.30 Investment Account means either a General Investment Account
or a Share Investment Account.
Section 1.31 Investment Fund means any one of the three or more funds as
may be established from time to time by the Plan Administrator which, together
with any and all Shares and other investments held under the Plan, constitute
the Trust Fund.
Section 1.32 Loan Repayment Account means an account established and
maintained in accordance with Section 6.3.
Section 1.33 Loan Repayment Contribution means amounts of money contributed
to the Plan by the Employer in accordance with Section 5.2.
Section 1.34 Maternity or Paternity Leave means a person's absence from
work for the Employer and all Affiliated Employers: (a) by reason of the
pregnancy of such person; (b) by reason of the birth of a child of such person;
(c) by reason of the placement of a child with the person in connection with the
adoption of such child by such person; or (d) for purposes of caring for a child
of such person immediately following the birth of the child or the placement of
the child with such person.
Section 1.35 Military Service means service in the armed forces of the
United States. It may also include, if and to the extent that the Board so
provides and if all Participants and
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Former Participants in like circumstances are similarly treated, special service
for the government of the United States and other public service.
Section 1.36 Named Fiduciary means any person, committee, corporation or
organization as described in Section 15.1.
Section 1.37 Officer means an Employee who is an administrative executive
in regular and continued service with the Employer or any Affiliated Employer;
provided, however, that at no time shall more than the lesser of (a) 50
Employees or (b) the greater of: (i) 3 Employees or (ii) 10% of all employees be
treated as Officers. The determination of whether an employee is to be
considered an Officer shall be made in accordance with Section 416(i) of the
Code.
Section 1.38 One-Year Break in Service means, with respect to any person:
(a) for purposes of eligibility to participate, an Eligibility Computation
Period during which such person is credited with fewer than 501 Hours of Service
and (b) for purposes of vesting, a Vesting Computation Period during which such
person is credited with fewer than 501 Hours of Service.
Section 1.39 Participant means any person who has satisfied the eligibility
requirements set forth in Section 2.1, who has become a Participant in
accordance with Section 2.2, and whose participation has not terminated under
Section 2.3.
Section 1.40 Plan means this Gouverneur Bancorp, Inc. Employee Stock
Ownership Plan, as amended from time to time. This Plan may be referred to as
the "Gouverneur Bancorp, Inc. Employee Stock Ownership Plan."
Section 1.41 Plan Administrator means any person, committee, corporation or
organization designated in Section 15.2, or appointed pursuant to Section 15.2,
to perform the responsibilities of that office.
Section 1.42 Plan Year means the calendar year in which the Effective Date
occurs, and each calendar year thereafter.
Section 1.43 Qualified Domestic Relations Order means a Domestic Relations
Order that: (a) clearly specifies (i) the name and last known mailing address of
the Participant or Former Participant and of each person given rights under such
Domestic Relations Order, (ii) the amount or percentages of the Participant's or
Former Participant's benefits under this Plan to be paid to each person covered
by such Domestic Relations Order, (iii) the number of payments or the period to
which such Domestic Relations Order applies, and (iv) the name of this Plan; and
(b) does not require the payment of a benefit in a form or amount that is (i)
not otherwise provided for under the Plan, or (ii) inconsistent with a previous
Qualified Domestic Relations Order.
Section 1.44 Qualified Participant means a Participant who has attained age
55 and who has been a Participant in the Plan for at least 10 years.
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Section 1.45 Retirement means: (a) any termination of participation in the
Plan at or after attainment of age 65; and (b) any retirement under an
applicable qualified defined benefit plan of the Employer as in effect from time
to time with entitlement to a normal or early retirement allowance.
Section 1.46 Share means a share of any class of stock issued by the
Employer or any Affiliated Employer; provided, however, that such share is a
"qualifying employer security" within the meaning Section 409(l) of the Code and
Section 407(d)(5) of ERISA.
Section 1.47 Share Acquisition Loan means a loan obtained by the Trustee in
accordance with Article VI.
Section 1.48 Share Investment Account means an Investment Account
established and maintained in accordance with Article XI.
Section 1.49 Tender Offer means a tender offer made to holders of any one
or more classes of Shares generally, or any other offer, made to holders of any
one or more classes of Shares generally, to purchase, exchange, redeem or
otherwise transfer Shares, whether for cash or other consideration.
Section 1.50 Total Compensation during any period means an Employee's
aggregate total compensation paid by the Employer and any Affiliated Employer
with respect to such period and reportable for federal income tax purposes
pursuant to Section 6041(a) of the Code. In addition, solely for purposes of
identifying those Employees who are Highly Compensated Employees, each
Employee's Total Compensation shall include any amounts by which the Employee's
compensation paid by the Employer or any Affiliated Employer has been reduced
pursuant to a compensation reduction agreement under the terms of any qualified
cash or deferred arrangement described in Section 401(k) of the Code, any salary
reduction simplified employee pension plan described in Section 408(k) of the
Code, any tax deferred annuity plan described in Section 403(b) of the Code, or
any cafeteria plan described in Section 125 of the Code. In no event, however,
shall an Employee's Total Compensation for any calendar year include any
compensation in excess of $160,000 (or such other amount as may be permitted
under Section 401(a)(17) of the Code).
Section 1.51 Trust means the legal relationship created by the Trust
Agreement pursuant to which the Trustee holds the Trust Fund in trust. The Trust
may be referred to as the "Gouverneur Bancorp, Inc. Employee Stock Ownership
Plan Trust."
Section 1.52 Trust Agreement means the agreement between Gouverneur
Bancorp, Inc. and the Trustee therein named or its successors pursuant to which
the Trust Fund shall be held in trust.
Section 1.53 Trust Fund means the corpus (consisting of contributions paid
over to the Trustee, and investments thereof), and all earnings, appreciations
or additions thereof
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and thereto, held by the Trustee under the Trust Agreement in accordance with
the Plan, less any depreciation thereof and any payments made therefrom pursuant
to the Plan.
Section 1.54 Trustee means the Trustee of the Trust Fund from time to time
in office. The Trustee shall serve as Trustee until it is removed or resigns
from office and is replaced by a successor Trustee appointed in accordance with
the terms of the Trust Agreement.
Section 1.55 Valuation Date means the last business day of March, June,
September and December.
Section 1.56 Vesting Computation Period means, with respect to any person,
the 12-month period beginning on such person's Employment Commencement Date and
each Plan Year beginning after such Employment Commencement Date.
Section 1.57 Year of Eligibility Service means, with respect to any person,
an Eligibility Computation Period during which such person receives credit for
at least 1,000 Hours of Service.
Section 1.58 Year of Vesting Service means, with respect to any person, a
Vesting Computation Period during which such person receives credit for at least
1,000 Hours of Service, but limited by Section 9.6. If an Employee has credit
for 1,000 Hours of Service in the Vesting Computation Period that includes his
Employment Commencement Date and 1,000 Hours of Service in the first Vesting
Computation Period that begins after his Employment Commencement Date, he shall
receive credit for two Years of Vesting Service even if such periods overlap.
ARTICLE II
PARTICIPATION
Section 2.1 Eligibility for Participation.
(a) Only Eligible Employees may be or become Participants in the Plan. An
Employee shall be an Eligible Employee if he is a common law employee of an
Employer, has completed at least one Year of Eligibility Service and is not
excluded under Section 2.1(b).
(b) An Employee is not an Eligible Employee if he:
(i) is an Employee who has waived any claim to participation in the Plan;
or
(ii) is an Employee or in a unit of Employees covered by a collective
bargaining agreement with the Employer where retirement benefits were the
subject of good faith bargaining, unless such agreement expressly provides that
Employees such as he be covered under the Plan; or
(iii) is a "leased employee" as defined in Section 18.8(a).
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Section 2.2 Commencement of Participation.
Every Employee who is an Eligible Employee on the Effective Date shall
automatically become a Participant on the Effective Date. An Employee who
becomes an Eligible Employee after the Effective Date shall automatically become
a Participant on the first day of the month following the month in which he
becomes an Eligible Employee.
Section 2.3 Termination of Participation.
Participation in the Plan shall cease, and a Participant shall become a
Former Participant, upon termination of employment with the Employer, death,
Disability or Retirement, failure to return to work upon the expiration of a
leave of absence granted by the Employer pursuant to Section 3.4 or becoming an
Employee who is excluded under Section 2.1(b) or distribution of the entire
vested interest in his Account.
ARTICLE III
SPECIAL PROVISIONS
Section 3.1 Military Service.
In the case of a termination of employment of any Employee to enter
directly into Military Service, the entire period of his absence shall be
treated, for purposes of vesting and eligibility for participation (but not,
except as required by law, for purposes of eligibility to share in allocations
of contributions in accordance with Article VII), as if he had worked for the
Employer during the period of his absence. In the event of the re-employment of
such person by the Employer within a period of not more than six months:
(a) after he becomes entitled to release or discharge, if he has entered
into the armed forces; or
(b) after such service terminates, if he has entered into other service
defined as Military Service; such period, also, shall be deemed to be Military
Service.
Section 3.2 Maternity or Paternity Leave.
(a) Subject to Section 3.2(c), in the event of an Employee's absence from
work in the service of the Employer and all Affiliated Employers for a period:
(i) that commences on or after October 1, 1985;
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(ii) for which the person is not paid or entitled to payment by the
Employer or any Affiliated Employer; and
(iii) that constitutes Maternity or Paternity Leave;
then the rules of Section 3.2(b) shall apply.
(b) In cases of absence described in Section 3.2(a), solely for purposes of
determining whether a One-Year Break in Service has occurred, the person shall
be credited for the period of an absence described in Section 3.2(a) with the
number of Hours of Service equal to the lesser of:
(i) (A) the number of Hours of Service that would have been credited to the
person if he had continued working for the Bank during the period of such
absence, or (B) if the number of Hours of Service prescribed under Section
3.2(b)(i)(A) cannot be determined, 8 Hours of Service for each working day
during the period of absence; or
(ii) 501 Hours of Service.
Such credit shall be given during the Computation Period during which such
absence began, if necessary to prevent a One-Year Break in Service from
occurring during such Computation Period, and in all other cases, such credit
shall be given during the immediately following Computation Period.
(c) Notwithstanding anything in the Plan to the contrary, this Section 3.2
shall not apply unless the person furnishes to the Plan Administrator such
information as the Plan Administrator may reasonably require in order to
establish (i) that the person's absence is one described in Section 3.2(a), and
(ii) the number of working days during such absence.
Section 3.3 Adjustments to Years of Eligibility Service.
The Years of Eligibility Service of an Employee who returns to the
employment of the Employer or any Affiliated Employer following a separation
from service shall include his Years of Eligibility Service prior to such
separation from service, and such an Employee shall be readmitted to
participation immediately upon his return to service if he is then an Eligible
Employee; provided, however, that if such separation from service includes a
One-Year Break in Service, such prior Years of Eligibility Service shall not be
included until he has completed one Year of Eligibility Service following his
return to service, and upon completion of such one Year of Eligibility Service,
he shall be readmitted to participation in the Plan with retroactive effect to
the date of his return to employment, if he is then an Eligible Employee, but he
shall not participate in any ESOP Contributions or Loan Repayment Contributions
allocated during the interim period.
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Section 3.4 Leave of Absence.
In the event of temporary absence from work in the service of the Employer
and all Affiliated Employers for any period for which a Participant shall have
been granted a leave of absence by the Employer, the entire period of his
absence shall be treated for purposes of vesting and eligibility for
participation (but not for purposes of eligibility to share in the allocation of
contributions in accordance with Article VII), as if he had worked for the
Employer during the period of his absence. Absence from work for a period
greater than, or failure to return to work upon the expiration of, the period of
leave of absence granted by the Employer shall terminate participation in the
Plan as of the date on which such period ended. In granting leaves of absence
for purposes of the Plan, all Employees in like circumstances shall be similarly
treated.
Section 3.5 Family and Medical Leave.
In the event of a leave of absence satisfying all requirements for
mandatory leave under the federal Family and Medical Leave Act of 1992, the
period of such absence shall be recognized for purposes of vesting and
eligibility to participate to the full extent required by law.
ARTICLE IV
CONTRIBUTIONS BY PARTICIPANTS NOT PERMITTED
Section 4.1 Contributions by Participants not Permitted.
Participants shall not be required, nor shall they be permitted, to make
contributions to the Plan.
ARTICLE V
CONTRIBUTIONS BY THE EMPLOYER
Section 5.1 In General.
Subject to the limitations of Article VIII, for each Plan Year, the
Employer shall contribute to the Plan the amount, if any, determined by the
Board, but in no event less than the amount described in Section 5.2(a). The
amount contributed for any Plan Year shall be treated as a Loan Repayment
Contribution, an ESOP Contribution or a combination thereof, in accordance with
the provisions of this Article V.
Section 5.2 Loan Repayment Contributions.
For each Plan Year, a portion of the Employer's contributions, if any, to
the Plan for such Plan Year equal to the sum of:
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(a) the minimum amount required to be added to the Loan Repayment Account
in order to provide adequate funds for the payment of the principal and interest
then required to be repaid under the terms of any outstanding Share Acquisition
Loan obtained by the Trustee; plus
(b) the additional amount, if any, designated by the Plan Administrator to
be applied to the prepayment of principal or interest under the terms of any out
standing Share Acquisition Loan obtained by the Trustee;
shall be treated as a Loan Repayment Contribution for such Plan Year. A Loan
Repayment Contribution for a Plan Year shall be allocated to the Loan Repayment
Account and shall be applied by the Trustee, in the manner directed by the Plan
Administrator, to the payment of accrued interest and to the reduction of the
principal balance of any Share Acquisition Loan obtained by the Trustee that is
outstanding on the date on which the Loan Repayment Contribution is made. To the
extent that a Loan Repayment Contribution for a Plan Year results in a release
of Financed Shares in accordance with Section 6.4, such Shares shall be
allocated among the Accounts of Eligible Participants for such Plan Year in
accordance with Section 7.2.
Section 5.3 ESOP Contributions.
In the event that the amount of the Employer's contributions to the Plan
for a Plan Year exceeds the amount of the Loan Repayment Contributions for such
Plan Year, such excess shall be treated as an ESOP Contribution and shall be
allocated among the Accounts of the Eligible Participants for such Plan Year in
accordance with Section 7.3.
Section 5.4 Time and Manner of Payment.
(a) Payment of contributions made pursuant to this Article V shall be made:
(i) in cash, in the case of a Loan Repayment Contribution; and
(ii) in cash, in Shares or in a combination of cash and Shares, in the case
of an ESOP Contribution.
(b) Contributions made pursuant to this Article V for a Plan Year shall be
paid to the Trust Fund on or before the due date (including any extensions
thereof) of the Employer's federal income tax return for its taxable year during
which such Plan Year ends. All such contributions shall be allocated to the
Accounts of the Eligible Participants, in the case of an ESOP Contribution, or
to the Loan Repayment Account, in the case of a Loan Repayment Contribution, as
soon as is practicable following the payment thereof to the Trust Fund.
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ARTICLE VI
SHARE ACQUISITION LOANS
Section 6.1 In General.
The Plan Administrator may, with the prior approval of the Board, direct
the Trustee to obtain a Share Acquisition Loan on behalf of the Plan, the
proceeds of which shall be applied on the earliest practicable date:
(a) to purchase Shares; or
(b) to make payments of principal or interest, or a combination of
principal and interest, with respect to such Share Acquisition Loan; or
(c) to make payments of principal and interest, or a combination of
principal and interest, with respect to a previously obtained Share Acquisition
Loan that is then outstanding.
Any such Share Acquisition Loan shall be obtained on such terms and conditions
as the Plan Administrator may approve; provided, however, that such terms and
conditions shall provide for the payment of interest at no more than a
reasonable rate and shall permit such Share Acquisition Loan to satisfy the
requirements of Section 4975(d)(3) of the Code and Section 408(b)(3) of ERISA.
Section 6.2 Collateral; Liability for Repayment.
(a) The Plan Administrator may direct the Trustee to pledge, at the time a
Share Acquisition Loan is obtained, the following assets of the Plan as
collateral for such Share Acquisition Loan:
(i) any Shares purchased with the proceeds of such Share Acquisition Loan
and any earnings attributable thereto;
(ii) any Financed Shares then pledged as collateral for a prior Share
Acquisition Loan which is repaid with the proceeds of such Share Acquisition
Loan and any earnings attributable thereto; and
(iii) pending the application thereof to purchase Shares or repay a prior
Share Acquisition Loan, the proceeds of such Share Acquisition Loan and any
earnings attributable thereto.
Except as specifically provided in this Section 6.2(a), no assets of the Plan
shall be pledged as collateral for the repayment of any Share Acquisition Loan.
(b) No person entitled to payment under a Share Acquisition Loan shall have
any right to the assets of the Plan except for:
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(i) Financed Shares that have been pledged as collateral for such Share
Acquisition Loan pursuant to Section 6.2(a);
(ii) Loan Repayment Contributions made pursuant to Section 5.2; and
(iii) earnings attributable to Financed Shares described in Section
6.2(b)(i) and to Loan Repayment Contributions described in Section 6.2(b)(ii).
Except in the event of a default or a refinancing pursuant to which an existing
Share Acquisition Loan is repaid, the aggregate amount of all payments of
principal and interest made by the Trustee with respect to all Share Acquisition
Loans obtained on behalf of the Plan shall at no time exceed the aggregate
amount of all Loan Repayment Contributions theretofore made plus the aggregate
amount of all earnings (other than dividends paid in the form of Shares)
attributable to Financed Shares and to such Loan Repayment Contributions.
(c) Any Share Acquisition Loan shall be without recourse against the Plan
and Trust.
Section 6.3 Loan Repayment Account.
In the event that one or more Share Acquisition Loans shall be obtained, a
Loan Repayment Account shall be established under the Plan. The Loan Repayment
Account shall be credited with all Shares acquired with the proceeds of a Share
Acquisition Loan, all Loan Repayment Contributions and all earnings (including
dividends paid in the form of Shares) or appreciation attributable to such
Shares and Loan Repayment Contributions. The Loan Repayment Account shall be
charged with all payments of principal and interest made by the Trustee with
respect to any Share Acquisition Loan, all Shares released in accordance with
Section 6.4 and all losses, depreciation or expenses attributable to Shares or
to other property credited thereto. The Financed Shares, as well as any earnings
thereon, shall be allocated to such Loan Repayment Account and shall be
accounted for separately from all other amounts contributed under the Plan.
Section 6.4 Release of Financed Shares.
As of the last day of each Plan Year during which a Share Acquisition Loan
is outstanding, a portion of the Financed Shares purchased with the proceeds of
such Share Acquisition Loan and allocated to the Loan Repayment Account shall be
released. The number of Financed Shares released in any such Plan Year shall be
equal to the amount determined according to one of the following methods:
(a) by computing the product of: (i) the number of Financed Shares
purchased with the proceeds of such Share Acquisition Loan and allocated to the
Loan Repayment Account immediately before the release is effected; multiplied by
(ii) a fraction, the numerator of which is the aggregate amount of the principal
and interest payments (other than payments made upon the refinancing of a Share
Acquisition Loan as contemplated by Section 6.1(c)) made with respect to
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such Share Acquisition Loan during such Plan Year, and the denominator of which
is the aggregate amount of all principal and interest remaining to be paid with
respect to such Share Acquisition Loan as of the first day of such Plan Year; or
(b) by computing the product of: (i) the number of Financed Shares
purchased with the proceeds of such Share Acquisition Loan and allocated to the
Loan Repayment Account immediately before the release is effected; multiplied by
(ii) a fraction, the numerator of which is the aggregate amount of the principal
payments (other than payments made upon the refinancing of a Share Acquisition
Loan as contemplated by Section 6.1(c)) made with respect to such Share
Acquisition Loan during such Plan Year, and the denominator of which is the
aggregate amount of all of principal remaining to be paid with respect to such
Share Acquisition Loan as of the first day of such Plan Year; provided, however,
that the method described in this Section 6.4(b) may be used only if the Share
Acquisition Loan does not extend for a period in excess of 10 years after the
date of origination and only to the extent that principal payments on such Share
Acquisition Loan are made at least as rapidly as under a loan of like principal
amount with a like interest rate and term requiring level amortization of
principal and interest.
The method to be used shall be specified in the documents governing the Share
Acquisition Loan or, if not specified therein, prescribed by the Plan
Administrator, in its discretion. In the event that property other than, or in
addition to, Financed Shares shall be held in the Loan Repayment Account and
pledged as collateral for a Share Acquisition Loan, then the property to be
released pursuant to this Section 6.4 shall be property having a Fair Market
Value determined by applying the method to be used to the Fair Market Value of
all property pledged as collateral for such Share Acquisition Loan; provided,
however, that no property other than Financed Shares shall be released pursuant
to this Section 6.4 unless all Financed Shares have previously been released.
Section 6.5 Restrictions on Financed Shares.
Except to the extent required under any applicable law, rule or regulation,
no Shares purchased with the proceeds of a Share Acquisition Loan shall be
subject to a put, call or other option, or to any buy-sell or similar
arrangement, while held by the Trustee or when distributed from the Plan. The
provisions of this Section 6.5 shall continue to apply in the event that this
Plan shall cease to be an employee stock ownership plan, within the meaning of
Section 4975(e)(7) of the Code.
ARTICLE VII
ALLOCATION OF CONTRIBUTIONS
Section 7.1 Allocation Among Eligible Participants.
Subject to the limitations of Article VIII, ESOP Contributions for a Plan
Year made in accordance with Section 5.3 and Financed Shares and other property
that are released from the Loan Repayment Account for a Plan Year in accordance
with Section 6.4 shall be allocated among the Eligible Participants for such
Plan Year, in the manner provided in this Article VII.
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Section 7.2 Allocation of Releases Shares or Other Property.
Subject to the limitations of Article VIII, in the event that Financed
Shares or other property are released from the Loan Repayment Account for a Plan
Year in accordance with Section 6.4, such released Shares or other property
shall be allocated among the Accounts of the Eligible Participants for the Plan
Year in the proportion that each such Eligible Participant's Allocation
Compensation for the calendar year ending with or within the Plan Year bears to
the aggregate Allocation Compensation of all Eligible Participants for such
calendar year.
Section 7.3 Allocation of ESOP Contributions.
Subject to the limitations of Article VIII, in the event that the Employer
makes an ESOP Contribution for a Plan Year, such ESOP Contribution shall be
allocated among the Accounts of the Eligible Participants for such Plan Year in
the proportion that each such Eligible Participant's Allocation Compensation for
the calendar year that ends with or within the Plan Year bears to the aggregate
Allocation Compensation of all Eligible Participants for such calendar year.
ARTICLE VIII
LIMITATIONS ON ALLOCATIONS
Section 8.1 Optional Limitations on Allocations of Contributions.
If, for any Plan Year, the application of Sections 7.2 and 7.3 would result
in more than one-third of the number of Shares or of the amount of money or
property to be allocated thereunder being allocated to the Accounts of Eligible
Participants for such Plan Year who are also Highly Compensated Employees for
such Plan Year, then the Plan Administrator may, but shall not be required to,
direct that this Section 8.1 shall apply in lieu of Sections 7.2 and 7.3. If the
Plan Administrator gives such a direction, then the Plan Administrator shall
impose a maximum dollar limitation on the amount of Allocation Compensation that
may be taken into account for each Eligible Participant. The dollar limitation
which shall be imposed shall be the limitation which produces the result that
the aggregate Allocation Compensation taken into account for Eligible
Participants who are Highly Compensated Employees, constitutes exactly one-third
of the aggregate Allocation Compensation taken into account for all Eligible
Participants. In determining whether more than one-third of the number of Shares
or of the amount of money or property to be allocated under the Plan for a Plan
Year would be allocated to the Highly Compensated Employees, any allocation to
be made to the Account of a Family Member of a Highly Compensated Employee who
is either a Five Percent Owner or one of the ten Highly Compensated Employees
with the highest Total Compensation, shall be treated as an allocation to such
Highly Compensated Employee.
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Section 8.2 General Limitations on Contributions.
(a) No amount shall be allocated to a Participant's Account under this Plan
for any Limitation Year, to the extent that such an allocation would result in
an Annual Addition of an amount greater than the lesser of (i) $30,000 (or such
other amount as is permissible under Section 415(c)(1)(A) of the Code, or (ii)
25% of the Participant's Total Compensation for such Limitation Year.
(b) In the case of a Participant who may be entitled to benefits under any
qualified defined benefit plan (whether or not terminated) now in effect or ever
maintained by the Employer, such Participant's Annual Additions under this Plan
shall, in addition to the limitations provided under Section 8.2(a), be further
limited so that for any Limitation Year beginning prior to December 31, 1999,
the sum of the Participant's Defined Contribution Plan Fraction plus his Defined
Benefit Plan Fraction does not exceed 1.0 for any Limitation Year; provided,
however, that for any Limitation Year ending prior to January 1, 1983, the sum
of his Defined Contribution Plan Fraction plus his Defined Benefit Plan Fraction
shall not exceed 1.4; and provided further, that this limitation shall only
apply if and to the extent that the benefits under the Employer's Retirement
Plan or any other defined contribution plan are not limited so that such sum is
not exceeded.
(c) For purposes of this Section 8.2, the following special definitions
shall apply:
(i) Annual Addition means the sum of the following amounts allocated on
behalf of a Participant for a Limitation Year:
(A) all contributions by the Employer (including contributions made under a
salary reduction agreement pursuant to Sections 401(k), 408(k) or 403(b) of the
Code) under any qualified defined contribution plan (other than this Plan)
maintained by the Employer, as well as the Participant's allocable share, if
any, of any forfeitures under such plans; plus
(B) (I) for Limitation Years that began prior to January 1, 1987, the
lesser of (1) 50% of the Participant's voluntary nondeductible contributions to
all qualified defined contribution plans maintained by the Employer, or (2) the
amount by which the Participant's nondeductible voluntary contributions to such
plans exceeds 6% of his Total Compensation; and (II) for Limitation Years that
begin after December 31, 1986, all of the Participant's voluntary nondeductible
contributions to such plans; plus
(C) all ESOP Contributions under this Plan; plus
(D) except as hereinafter provided in this Section 8.2(c)(i), a portion of
the Employer's Loan Repayment Contributions to the Plan for such Limitation Year
which bears the same proportion to the total amount of the Employer's Loan
Repayment Contributions for the Limitation Year that the number of Shares (or
the Fair Market Value of property other than Shares) allocated to the
Participant's Account pursuant to Section 7.2 or 8.1, whichever is
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applicable, bears to the aggregate number of Shares (or Fair Market Value of
property other than Shares) so allocated to all Participants for such Limitation
Year.
Notwithstanding Section 8.2(c)(i)(D), if, for any Limitation Year, the
aggregate amount of ESOP Contributions allocated to the Accounts of the
individuals who are Highly Compensated Employees for such Limitation Year, when
added to such Highly Compensated Employees' allocable share of any Loan
Repayment Contributions for such Limitation Year, does not exceed one-third of
the total of all ESOP Contributions and Loan Repayment Contributions for such
Limitation Year, then that portion, if any, of the Loan Repayment Contributions
for such Limitation Year that is applied to the payment of interest on a Share
Acquisition Loan shall not be included as an Annual Addition. In no event shall
any Financed Shares, any dividends or other earnings thereon, any proceeds of
the sale thereof or any portion of the value of the foregoing be included as an
Annual Addition.
(ii) Employer means Gouverneur Bancorp, Inc. and all members of a
controlled group of corporations, as defined in Section 414(b) of the Code, as
modified by Section 415(h) of the Code, all commonly controlled trades or
businesses, as defined in Section 414(c) of the Code, as modified by Section
415(h) of the Code, all affiliated service groups, as defined in Section 414(m)
of the Code, of which Gouverneur Bancorp, Inc. is a member, as well as any
leasing organization, as defined in Section 18.8, that employs any person who is
considered an employee under Section 18.8 and any other entity that is required
to be aggregated with the Employer pursuant to regulations under Section 414(o)
of the Code.
(iii) Defined Benefit Plan Fraction means, for any Participant for any
Limitation Year, a fraction, the numerator of which is the Projected Annual
Benefit (determined as of the end of such Limitation Year) of the Participant
under any qualified defined benefit plans (whether or not terminated) maintained
by the Employer for the current and all prior Limitation Years, and the
denominator of which is as follows: (A) for Limitation Years ending prior to
January 1, 1983, the lesser of (I) the dollar limitation in effect under Section
415(b)(1) (A) of the Code for such Limitation Year, or (II) the amount which may
be taken into account under Section 415(b)(1)(B) of the Code with respect to
such Participant for such Limitation Year; and (B) in all other cases, the
lesser of (I) (except as provided in Section 17.8(b) for a Top Heavy Plan Year)
the product of 1.25 multiplied by the dollar limitation in effect under Section
415(b)(1)(A) of the Code for such Limitation Year, or (II) the product of 1.4
multiplied by the amount which may be taken into account under Section
415(b)(1)(B) of the Code with respect to such Participant for such Limitation
Year.
(iv) Defined Contribution Plan Fraction means, for any Participant for any
Limitation Year, a fraction (A) the numerator of which is the sum of such
Participant's Annual Additions (determined as of the end of such Limitation
Year) under this Plan and any other qualified defined contribution plans
(whether or not terminated) maintained by the Employer for the current and all
prior Limitation Years, and (B) the denominator of which is as follows: (I) for
Limitation Years ending prior to January 1, 1983, the sum of the lesser of the
following amounts for such Limitation Year and for each prior Limitation Year
during which such Participant was employed by the Employer: (1) the Maximum
Permissible Amount for such Limitation Year
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(without regard to Section 415(c)(6) of the Code), or (2) the amount which may
be taken into account under Section 415(c)(1)(B) of the Code with respect to
such Participant for such Limitation Year; and (II) in all other cases, the sum
of the lesser of the following amounts for such Limitation Year and for each
prior Limitation during which such Participant was employed by the Employer: (1)
(except as provided in Section 17.8(b) for a Top Heavy Plan Year) the product of
1.25 multiplied by the Maximum Permissible Amount for such Limitation Year
(determined without regard to Section 415(c)(6) of the Code), or (2) the product
of 1.4 multiplied by the amount which may be taken into account under Section
415(c)(1)(B) of the Code (or Section 415(c)(7) of the Code, if applicable) with
respect to such Participant for such Limitation Year; provided, however, that
the Plan Administrator may, at his election, adopt the transition rule set forth
in Section 415(e)(6) of the Code in making the computation set forth in this
Section 8.2(c)(iv). If the sum of a Participant's Defined Benefit Plan Fraction
and Defined Contribution Plan Fraction exceeded 1.0 as of September 30, 1983,
then such Participant's Defined Contribution Plan Fraction shall be determined
under regulations to be prescribed by the Secretary of the Treasury so that the
sum of the fractions does not exceed 1.0.
(v) Limitation Year means the Plan Year; provided, however, that if the
Employer changes the Limitation Year, the new Limitation Year shall begin on a
date within the Limitation Year in which the amendment is made.
(vi) Maximum Permissible Amount means (A) $25,000 (or such higher amount as
may be permitted under Section 415(d) of the Code because of cost of living
increases) for Limitation Years beginning prior to January 1, 1983, and (B) the
greater of (I) $30,000, or (II) 25% of the dollar limitation in effect under
Section 415(b)(1)(A) of the Code for Limitation Years beginning on or after
January 1, 1983.
(vii) Projected Annual Benefit means a Participant's annual retirement
benefit (adjusted to the actuarial equivalent of a straight life annuity if
expressed in a form other than a straight life or qualified joint and survivor
annuity) under any qualified defined benefit plan maintained by the Employer,
whether or not terminated, assuming that the Participant will continue
employment until the later of current age or normal retirement age under such
plan, and that the Participant's Total Compensation for the Limitation Year and
all other relevant factors used to determine benefits under such plan will
remain constant for all future Limitation Years.
(d) When a Participant's Annual Addition to this Plan must be reduced to
satisfy the limitations of Section 8.2(a) or (b), such reduction shall be
applied first to ESOP Contributions; and second, if necessary, to Shares
allocated as a result of a Loan Repayment Contribution which are included as an
Annual Addition in such order as shall result in the smallest reduction in the
number of Shares allocable to the Participant's Account. The amount by which any
Participant's Annual Addition to this Plan is reduced shall be allocated in
accordance with Articles V and VII as a contribution by the Employer in the next
succeeding Limitation Year.
(e) Prior to determining a Participant's actual Total Compensation for a
Limitation Year, the Employer may determine the limitations under this Section
8.2 for a Participant on the basis of a reasonable estimation of the
Participant's Total Compensation for the Limitation Year that is
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uniformly determined for all Participants who are similarly situated. As soon as
it is administratively feasible after the end of the Limitation Year, the
limitations of this Section 8.2 shall be determined on the basis of the
Participant's actual Total Compensation for the Limitation Year.
ARTICLE IX
VESTING
Section 9.1 Vesting.
Subject to the provisions of Section 9.2, the balance credited to each
Employee's Account shall become vested in accordance with the following
schedule:
Years of Vested Service Vesting Percentage
----------------------- ------------------
1 but less than 2 200%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
Section 9.2 Vesting on Death, Disability, Retirement or Change in Control.
Any previously unvested portion of the remainder of the balance credited to
the Account of a Participant or of a person who is a Former Participant solely
because he is excluded from participation under Section 2.1(b) shall become
fully vested in him immediately upon attainment of age 65, or, if earlier, upon
the termination of his participation by reason of death, Disability, Retirement
or upon the occurrence of a Change in Control of the Employer.
Section 9.3 Forfeitures on Termination of Employment.
Upon the termination of employment of a Participant or Former Participant
for any reason other than death, Disability or Retirement, that portion of the
balance credited to his Account which is not vested at the date of such
termination shall be forfeited as of the last Valuation Date for the Plan Year
in which such termination of employment occurs. The proceeds of such
forfeitures, less amounts, if any, required to be credited because of
re-employment pursuant to Section 9.4, shall be treated as Forfeitures and shall
be disposed of as provided in Section 9.5.
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Section 9.4 Amounts Credited Upon Re-Employment.
If an Employee forfeited any amount of the balance credited to his Account
upon his termination of employment with the Employer, and is re-employed prior
to the occurrence of five consecutive One-Year Breaks in Service, then:
(i) an amount equal to the Fair Market Value of the Shares forfeited,
determined as of the date of forfeiture; and
(ii) the amount credited to his General Investment Account that was
forfeited, determined as of the date of forfeiture;
shall be credited back to his Account from the proceeds of forfeitures which are
redeemed pursuant to Section 9.3 during the Plan Year in which he is
re-employed, unless such proceeds are insufficient, in which case the Employer
shall make an additional contribution in the amount of such deficiency.
Section 9.5 Allocation of Forfeitures.
Any Forfeitures that occur during a Plan Year shall be used to reduce the
contributions required of the Employer under the Plan and shall be treated as
Loan Repayment Contributions and ESOP Contributions in the proportions
designated by the Plan Administrator in accordance with Article V.
Section 9.6 Service Prior to Effective Date.
Notwithstanding any other provision of this Plan, service or employment
with the Employer including, without limitation, Gouverneur Savings and Loan
Association, prior to the calendar year in which the Effective Date occurs shall
be counted in the determination of years of vested service for the purposes
of this Plan.
ARTICLE X
THE TRUST FUND
Section 10.1 The Trust Fund.
The Trust Fund shall be held and invested under the Trust Agreement with
the Trustee. The provisions of the Trust Agreement shall vest such powers in the
Trustee as to investment, control and disbursement of the Trust Fund, and such
other provisions not inconsistent with the Plan, including provision for the
appointment of one or more "investment managers" within the meaning of Section
3(38) of ERISA to manage and control (including acquiring and disposing of) all
or any of the assets of the Trust Fund, as the Board may from time to time
authorize. Except as required by ERISA, no bond or other security shall be
required of any Trustee at any time in office.
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Section 10.2 Investments.
Except to the extent provided to the contrary in Section 10.3, the Trust
Fund shall be invested in:
(a) Shares;
(b) such Investment Funds as may be established from time to time by the
Plan Administrator; and
(c) such other investments as may be permitted under the Trust Agreement;
in such proportions as shall be determined by the Plan Administrator or, if so
provided under the Trust Agreement, as directed by one or more investment
managers or by the Trustee, in its discretion; provided, however, that the
investments of the Trust Fund shall consist primarily of Shares. Notwithstanding
the immediately preceding sentence, the Trustee may temporarily invest the Trust
Fund in short-term obligations of, or guaranteed by, the United States
Government or an agency thereof, or may retain uninvested, or sell investments
to provide, amounts of cash required for purposes of the Plan.
Section 10.3 Diversification of Investments.
(a) Notwithstanding Section 10.2, each Qualified Participant may:
(i) during the first 90 days of each of the first four Plan Years to begin
after the Plan Year in which he first becomes a Qualified Participant, elect
that such percentage of the balance credited to his Account as he may specify,
but in no event more than 25% of the balance credited to his Account, be
invested in one or more of the Investment Funds; and
(ii) during the first 90 days of the fifth Plan Year to begin after the
Plan Year in which he first becomes a Qualified Participant or of any Plan Year
thereafter, elect that such percentage of the balance credited to his Account as
he may specify, but in no event more than 50% of the balance credited to his
Account, be invested in one or more of the Investment Funds.
For purposes of an election under this Section 10.3, the balance credited to a
Participant's Account shall be the balance credited to his Account determined as
of the last Valuation Date to occur in the Plan Year immediately preceding the
Plan Year in which such election is made.
(b) An election made under Section 10.3(a) shall be made in writing, in the
form and manner prescribed by the Plan Administrator, and shall be filed with
the Plan Administrator during the election period specified in Section 10.3(a).
As soon as is practicable following the end of the election period during which
such election is made, the Plan Administrator shall take such actions as are
necessary to cause the specified percentage of the balance credited to the
Account of the Qualified Participant making the election to be invested in the
specified
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Investment Funds. Any investments made pursuant to this Section 10.3 shall be
specifically allocated to the General Investment Account of the Qualified
Participant for whom they are made.
(c) An election made under Section 10.3(a) may be changed or revoked at any
time during the election period described in Section 10.3(a) during which it is
initially made, during any subsequent election period described in Section
10.3(a) or, upon at least 15 days' advance written notice given in the form and
manner prescribed by the Plan Administrator, as of the first day of any calendar
quarter of any Plan Year that begins after the Participant first becomes a
Qualified Participant. In no event, however, shall any election under this
Section 10.3 result in more than 25% of the balance credited to the
Participant's Account being invested at the direction of the Participant, if
such election is made during a Plan Year to which Section 10.3(a)(i) applies, or
result in more than 50% of the balance credited to the Participant's Account
being invested at the direction of the Participant, if such election is made
during the Plan Year to which Section 10.3(a)(ii) applies or thereafter.
Section 10.4 Use of Commingled Trust Funds.
Subject to the provisions of the Trust Agreement, amounts held in the Trust
Fund may be invested in:
(a) any commingled or group trust fund described in Section 401(a) of the
Code and exempt under Section 501(a) of the Code; or
(b) any common trust fund exempt under Section 584 of the Code maintained
exclusively for the collective investment of the assets of trusts that are
exempt under Section 501(a) of the Code;
provided that the trustee of such commingled, group or common trust fund is a
bank or trust company.
Section 10.5 Management and Control of Assets.
All assets of the Plan shall be held by the Trustee in trust for the
exclusive benefit of Participants, Former Participants and their Beneficiaries.
No part of the corpus or income of the Trust Fund shall be used for, or diverted
to, purposes other than for the exclusive benefit of Participants, Former
Participants and their Beneficiaries, and for defraying reasonable
administrative expenses of the Plan and Trust Fund. No person shall have any
interest in or right to any part of the earnings of the Trust Fund, or any
rights in, to or under the Trust Fund or any part of its assets, except to the
extent expressly provided in the Plan.
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ARTICLE XI
VALUATION OF INTERESTS IN THE TRUST FUND
Section 11.1 Establishment of Investment Accounts.
The Plan Administrator shall establish, or cause to be established, for
each person for whom an Account is maintained a Share Investment Account and a
General Investment Account. Such Share Investment Accounts and General
Investment Accounts shall be maintained in accordance with this Article XI.
Section 11.2 Share Investment Accounts.
The Share Investment Account established for a person in accordance with
Section 11.1 shall be credited with: (a) all Shares allocated to such person's
Account; (b) all Shares purchased with amounts of money or property allocated to
such person's Account; (c) all dividends paid in the form of Shares with respect
to Shares credited to his Account; and (d) all Shares purchased with amounts
credited to such person's General Investment Account. Such Share Investment
Account shall be charged with all Shares that are sold or exchanged to acquire
other investments or to provide cash and with all Shares that are distributed in
kind.
Section 11.3 General Investment Accounts.
The General Investment Account that is established for a person in
accordance with Section 11.1 shall be credited with: (a) all amounts, other than
Shares, allocated to such person's Account; (b) all dividends paid in a form
other than Shares with respect to Shares credited to such person's Share
Investment Account; (c) the proceeds of any sale of Shares credited to such
person's Share Investment Account; and (d) any earnings attributable to amounts
credited to such person's General Investment Account. Such General Investment
Account shall be charged with all amounts credited thereto that are applied to
the purchase of Shares, any losses or depreciation attributable to amounts
credited thereto, any expenses allocable thereto and any distributions of
amounts credited thereto.
Section 11.4 Valuation of Investment Accounts.
(a) The Plan Administrator shall determine, or cause to be determined, the
aggregate value of each person's Share Investment Account as of each Valuation
Date by multiplying the number of Shares credited to such Share Investment
Account on such Valuation Date by the Fair Market Value of a Share on such
Valuation Date.
(b) As of each Valuation Date, the Accounts of each Participant shall be
separately adjusted to reflect their proportionate share of any appreciation or
depreciation in the fair market value of the Investment Funds, any income earned
by the Investment Funds and any expenses incurred by the Investment Funds, as
well as any contributions, withdrawals or distributions and investment transfers
not posted as of the last Valuation Date.
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Section 11.5 Annual Statements.
There shall be furnished, by mail or otherwise, at least once in each Plan
Year to each person who would then be entitled to receive all or part of the
balance credited to any Account if the Plan were then terminated, a statement of
his interest in the Plan as of such date as shall be selected by the Plan
Administrator, which statement shall be deemed to have been accepted as correct
and be binding on such person unless the Plan Administrator receives written
notice to the contrary within 30 days after the statement is mailed or furnished
to such person.
ARTICLE XII
SHARES
Section 12.1 Specific Allocation of Shares.
All Shares purchased under the Plan shall be specifically allocated to the
Share Investment Accounts of Participants, Former Participants and their
Beneficiaries in accordance with Section 11.2, with the exception of Financed
Shares, which shall be allocated to the Loan Repayment Account.
Section 12.2 Dividends.
(a) Dividends paid with respect to Shares held under the Plan shall be
credited to the Loan Repayment Account, if paid with respect to Financed Shares.
Such dividends shall be: (i) applied to the payment of principal and accrued
interest with respect to any Share Acquisition Loan, if paid in cash; or (ii)
held in the Loan Repayment Account as Financed Shares for release in accordance
with Section 6.4, if paid in the form of Shares.
(b) Dividends paid with respect to Shares allocated to a person's Share
Investment Account shall be credited to such person's Share Investment Account.
Cash dividends credited to a person's General Investment Account shall be, at
the direction of the Board, either: (i) held in such General Investment Account
and invested in accordance with Sections 10.2 and 10.3; (ii) distributed
immediately to such person; (iii) distributed to such person within 90 days of
the close of the Plan Year in which such dividends were paid; or (iv) used to
make payments of principal or interest on a Share Acquisition Loan; provided,
however, that the Fair Market Value of Financed Shares released from the Loan
Repayment Account equals or exceeds the amount of the dividend.
Section 12.3 Voting Rights.
(a) Each person shall direct the manner in which all voting rights
appurtenant to Shares allocated to his Share Investment Account will be
exercised, provided that such Shares were allocated to his Share Investment
Account as of the applicable record date. Such person shall, for such purpose,
be deemed a "named fiduciary" within the meaning of Section 402(a)(2) of
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ERISA. Such a direction shall be given by completing and filing with the
inspector of elections, the Trustee or such other person who shall be
independent of the Employer as the Plan Administrator shall designate, at least
10 days prior to the date of the meeting of holders of Shares at which such
voting rights will be exercised, a written direction in the form and manner
prescribed by the Plan Administrator. The inspector of elections, the Trustee or
such other person designated by the Plan Administrator shall tabulate the
directions given on a strictly confidential basis, and shall provide the Plan
Administrator with only the final results of the tabulation. The final results
of the tabulation shall be followed by the Plan Administrator in directing the
Trustee as to the manner in which such voting rights shall be exercised. The
Plan Administrator shall make a reasonable effort to furnish, or cause to be
furnished, to each person for whom a Share Investment Account is maintained all
annual reports, proxy materials and other information known by the Plan
Administrator to have been furnished by the issuer of the Shares, or by any
solicitor of proxies, to the holders of Shares.
(b) To the extent that any person shall fail to give instructions with
respect to the exercise of voting rights appurtenant to Shares allocated to his
Share Investment Account:
(i) the Trustee shall, with respect to each matter to be voted upon: (A)
cast a number of affirmative votes equal to the product of (I) the number of
allocated Shares for which no written instructions have been given, multiplied
by (II) a fraction, the numerator of which is the number of allocated Shares for
which affirmative votes will be cast in accordance with written instructions
given as provided in Section 12.3(a) and the denominator of which is the
aggregate number of affirmative and negative votes which will be cast in
accordance with written instructions given as aforesaid, and (B) cast a number
of negative votes equal to the excess (if any) of (I) the number of allocated
Shares for which no written instructions have been given over (II) the number of
affirmative votes being cast with respect to such allocated Shares pursuant to
Section 12.3(b)(i)(A); or
(ii) if the Trustee shall determine that it may not, consistent with its
fiduciary duties, vote the allocated Shares for which no written instructions
have been given in the manner described in Section 12.3(b)(i), it shall vote
such Shares in such manner as it, in its discretion, may determine to be in the
best interests of the persons to whose Share Investment Accounts such Shares
have been allocated.
(c) (i) The voting rights appurtenant to Financed Shares shall be exercised
as follows with respect to each matter as to which holders of Shares may vote:
(A) a number of votes equal to the product of (I) the total number of votes
appurtenant to Financed Shares allocated to the Loan Repayment Account on the
applicable record date; multiplied by (II) a fraction, the numerator of which is
the total number of affirmative votes cast by Participants, Former Participants
and the Beneficiaries of deceased Former Participants with respect to such
matter pursuant to Section 12.3(a) and the denominator of which is the total
number of affirmative and negative votes cast by Participants, Former
Participants and the Beneficiaries of deceased Former Participants, shall be
cast in the affirmative; and
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<PAGE>
(B) a number of votes equal to the excess of (I) the total number of votes
appurtenant to Financed Shares allocated to the Loan Repayment Account on the
applicable record date, over (II) the number of affirmative votes cast pursuant
to Section 12.3(c)(i)(A) shall be cast in the negative.
To the extent that the Financed Shares consist of more than one class of Shares,
this Section 12.3(c)(i) shall be applied separately with respect to each class
of Shares.
(ii) If voting rights are to be exercised with respect to Financed Shares
as provided in Section 12.3(c)(i)(A) and (B) at a time when there are no Shares
allocated to the Share Investment Accounts of Participants, Former Participants
and the Beneficiaries of deceased Former Participants, then the voting rights
appurtenant to Financed Shares shall be exercised as follows with respect to
each matter as to which holders of Shares may vote:
(A) Each person who is a Participant on the applicable record date and who
was a Participant on the last day of the Plan Year ending on or immediately
prior to such record date will be granted a number of votes equal to the
quotient, rounded to the nearest integral number, of (I) such Participant's
Allocation Compensation for the Plan Year ending on or immediately prior to such
record date (or for the portion of such Plan Year during which he was a
Participant); divided by (II) $1,000.00; and
(B) a number of votes equal to the product of (I) the total number of
Financed Shares allocated to the Loan Repayment Account on the applicable record
date; multiplied by (II) a fraction, the numerator of which is the total number
of votes that are cast in the affirmative with respect to such matter pursuant
to Section 12.3(c)(ii)(A) and the denominator of which is the total number of
votes that are cast either in the affirmative or in the negative with respect to
such matter pursuant to Section 12.3(c)(ii)(A), shall be cast in the
affirmative; and
(C) a number of votes equal to the excess of (I) the total number of
Financed Shares allocated to the Loan Repayment Account on the applicable record
date, over (II) the number of affirmative votes cast with respect to such matter
pursuant to Section 12.3(c)(ii)(B), shall be cast in the negative. To the extent
that the Financed Shares consist of more than one class of Shares, this Section
12.3(c)(ii) shall be applied separately with respect to each class of Shares.
Section 12.4 Tender Offers.
(a) Each person shall direct whether Shares allocated to his Share
Investment Account will be delivered in response to any Tender Offer. Such
person shall, for such purpose, be deemed a "named fiduciary" within the meaning
of Section 402(a)(2) of ERISA. Such a direction shall be given by completing and
filing with the Trustee or such other person who shall be independent of the
Employer as the Plan Administrator shall designate, at least 10 days prior to
the latest date for exercising a right to deliver Shares pursuant to such Tender
Offer, a written direction in the form and manner prescribed by the Plan
Administrator. The Trustee or other person designated by the Plan Administrator
shall tabulate the directions given on a strictly confidential basis, and shall
provide the Plan Administrator with only the final results of the
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<PAGE>
tabulation. The final results of the tabulation shall be followed by the Plan
Administrator in directing the number of Shares to be delivered. The Plan
Administrator shall make a reasonable effort to furnish, or cause to be
furnished, to each person for whom a Share Investment Account is maintained, all
information known by the Plan Administrator to have been furnished by the issuer
or by or on behalf of any person making such Tender Offer, to the holders of
Shares in connection with such Tender Offer.
(b) To the extent that any person shall fail to give instructions with
respect to Shares allocated to his Share Investment Account:
(i) the Trustee shall (A) tender or otherwise offer for purchase, exchange
or redemption a number of such Shares equal to the product of (I) the number of
allocated Shares for which no written instructions have been given, multiplied
by (II) a fraction, the numerator of which is the number of allocated Shares
tendered or otherwise offered for purchase, exchange or redemption in accordance
with written instructions given as provided in Section 12.4(a) and the
denominator of which is the aggregate number of allocated Shares for which
written instructions have been given as aforesaid, and (B) withhold a number of
Shares equal to the excess (if any) of (I) the number of allocated Shares for
which no written instructions have been given over (II) the number of Shares
being tendered or otherwise offered pursuant to Section 12.4(b)(i)(A); or
(ii) if the Trustee shall determine that it may not, consistent with its
fiduciary duties, exercise the tender or other rights appurtenant to allocated
Shares for which no written instructions have been given in the manner described
in Section 12.4(b)(i), it shall tender, or otherwise offer, or withhold such
Shares in such manner as it, in its discretion, may determine to be in the best
interests of the persons to whose Share Investment Accounts such Shares have
been allocated.
(c) In the case of any Tender Offer, any Financed Shares held in the Loan
Repayment Account shall be dealt with as follows:
(i) If such Tender Offer occurs at a time when there are no Shares
allocated to the Share Investment Accounts of Participants, Former Participants
and the Beneficiaries of deceased Former Participants, then the disposition of
the Financed Shares shall be determined as follows:
(A) each person who is a Participant on the applicable record date and who
was a Participant on the last day of the Plan Year ending on or immediately
prior to such record date will be granted a number of tender rights equal to the
quotient, rounded to the nearest integral number, of (I) such Participant's
Allocation Compensation for the Plan Year ending on or immediately prior to such
record date (or for the portion of such Plan Year during which he was a
Participant), divided by (II) $1,000.00; and
(B) on the last day for delivering Shares or otherwise responding to such
Tender Offer, a number of Shares equal to the product of (I) the total number of
Financed Shares allocated to the Loan Repayment Account on the last day of the
effective period of such Tender Offer; multiplied by (II) a fraction, the
numerator of which is the total number of tender rights exercised in favor of
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the delivery of Shares in response to the Tender Offer pursuant to Section
12.4(c)(i)(A) and the denominator of which is the total number of tender rights
that are exercisable in response to the Tender Offer pursuant to Section
12.4(c)(i)(A), shall be delivered in response to the Tender Offer; and
(C) a number of Shares equal to the excess of (I) the total number of
Financed Shares allocated to the Loan Repayment Account on the last day of the
effective period of such Tender Offer; over (II) the number of Shares to be
delivered in response to the Tender Offer pursuant to Section 12.4(c)(i)(B),
shall be withheld from delivery.
(ii) If such Tender Offer occurs at a time when the voting rights
appurtenant to such Financed Shares are to be exercised in accordance with
Section 12.3(c)(i), then:
(A) on the last day for delivering Shares or otherwise responding to such
Tender Offer, a number of Financed Shares equal to the product of (I) the total
number of Financed Shares allocated to the Loan Repayment Account on the last
day of the effective period of such Tender Offer; multiplied by (II) a
fraction, the numerator of which is the total number of Shares delivered from
the Share Investment Accounts of Participants,
Former Participants and the Beneficiaries of deceased Former Participants
in response to such Tender Offer pursuant to Section 12.4(a), and the
denominator of which is the total number of Shares allocated to the Share
Investment Accounts of Participants, Former Participants and Beneficiaries of
deceased Former Participants immediately prior to the last day for delivering
Shares or otherwise responding to such Tender Offer, shall be delivered; and
(B) a number of Financed Shares equal to the excess of (I) the total number
of Financed Shares allocated to the Loan Repayment Account on the last day for
delivering Shares or otherwise responding to such Tender Offer; over (II) the
number of Financed Shares to be delivered pursuant to Section 12.4(c)(ii)(A),
shall be withheld from delivery.
To the extent that the Financed Shares consist of more than one class of Shares,
this Section 12.4(c) shall be applied separately with respect to each class of
Shares.
Section 12.5 Dissent and Appraisal Rights.
(a) Each person shall have the right to direct the manner in which all
dissent and appraisal rights appurtenant to Shares allocated to his Share
Investment Account will be exercised. Such person shall, for such purpose, be
deemed a "named fiduciary" within the meaning of Section 402(a)(2) of ERISA.
Such a direction shall be given by completing and filing with the Trustee or
such other person who shall be independent of the Employer as the Plan
Administrator shall designate, at least 10 days prior to the latest date for
exercising such dissent and appraisal rights, a written direction in the form
and manner prescribed by the Plan Administrator. The Trustee or other person
designated by the Plan Administrator shall tabulate the directions given on a
strictly confidential basis, and shall provide the Plan Administrator with only
the final results of the tabulation. The final results of the tabulation shall
be followed by the Plan Administrator in
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directing the Trustee as to the manner in which such dissent and appraisal
rights shall be exercised. The Plan Administrator shall make a reasonable effort
to furnish, or cause to be furnished, to each person for whom a Share Investment
Account is maintained, all information known by the Plan Administrator to have
been furnished by the issuer or by or on behalf of any person to the holders of
Shares in connection with such dissent and appraisal rights.
(b) To the extent that any person for whom a Share Investment Account is
maintained shall fail to give instructions with respect to dissent and appraisal
rights appurtenant to Shares attributable to his interest, the Plan
Administrator shall direct the Trustee to exercise dissent and appraisal rights
as to those Shares in such manner as the Plan Administrator shall determine to
be in the best interest of the person to whom such Shares are attributable.
ARTICLE XIII
PAYMENT OF BENEFITS
Section 13.1 In General.
The balance credited to a Participant's or Former Participant's Account
under the Plan shall be paid only at the times, to the extent, in the manner and
to the persons provided in this Article XIII.
Section 13.2 Designation of Beneficiaries.
(a) Subject to Section 13.2(b), any person entitled to a benefit under the
Plan may designate a Beneficiary to receive any amount to which he is entitled
that remains undistributed on the date of his death. Such person shall designate
his Beneficiary (and may change or revoke any such designation) in writing in
the form and manner prescribed by the Plan Administrator. Such designation, and
any change or revocation thereof, shall be effective only if received by the
Plan Administrator prior to such person's death and shall become irrevocable
upon such person's death.
(b) A Participant or Former Participant who is married shall automatically
be deemed to have designated his spouse as his Beneficiary, unless, prior to the
time such designation would, under Section 13.2(a), become irrevocable:
(i) the Participant or Former Participant designates an additional or a
different Beneficiary in accordance with this Section 13.2; and
(ii) (A) the spouse of such Participant or Former Participant consents to
such designation in a writing that acknowledges the effect of such consent and
is witnessed by a Plan representative or a notary public; or (B) the spouse of
such Participant or Former Participant has previously consented to such
designation by signing a written waiver of any right to consent to any
designation made by the Participant or Former Participant, and such waiver
acknowledged the effect of the waiver and was witnessed by a Plan representative
or a notary public; or (C) it is
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established to the satisfaction of a Plan representative that the consent
required under Section 13.2(b)(ii)(A) may not be obtained because such spouse
cannot be located or because of other circumstances permitted under regulations
issued by the Secretary of the Treasury.
(c) In the event that a Beneficiary entitled to payments hereunder shall
die after the death of the person who designated him but prior to receiving
payment of his entire interest in the Account of the person who designated him,
then such Beneficiary's interest in the Account of such person, or any unpaid
balance thereof, shall be paid as provided in Section 13.3 to the Beneficiary
who has been designated by the deceased Beneficiary, or if there is none, to the
executor or administrator of the estate of such deceased Beneficiary, or if no
such executor or administrator is appointed within such time as the Plan
Administrator, in his sole discretion, shall deem reasonable, to such one or
more of the spouse and descendants and blood relatives of such deceased
Beneficiary as the Plan Administrator may select. If a person entitled to a
benefit under the Plan and any of the Beneficiaries designated by him shall die
in such circumstances that there shall be substantial doubt as to which of them
shall have been the first to die, for all purposes of the Plan, the person who
made the Beneficiary designation shall be deemed to have survived such
Beneficiary.
(d) If no Beneficiary survives the person entitled to the benefit under the
Plan or if no Beneficiary has been designated by such person, such benefit shall
be paid to the executor or administrator of the estate of such person, or if no
such executor or administrator is appointed within such time as the Plan
Administrator, in his sole discretion, shall deem reasonable, to such one or
more of the spouse and descendants and blood relatives of such deceased person
as the Plan Administrator may select.
Section 13.3 Distributions to Participants and Former Participants.
(a)(i) Subject to the provisions of Section 13.7 with respect to required
minimum distributions, the vested portion of the balance credited to a
Participant's or a Former Participant's Account shall be distributed to him
commencing as of the last Valuation Date to occur in the Plan Year in which the
Participant or Former Participant terminates employment with the Employer or
attains age 65, whichever is later; unless the Participant or Former Participant
elects otherwise pursuant to Section 13.3(a)(ii), and the payment, or first in a
series of payments, is actually made within three months following such
Valuation Date.
(ii) A Participant or Former Participant may, upon request on a form
provided by the Plan Administrator and filed with the Plan Administrator not
later than 15 days prior to the date on which his employment with the Employer
terminates, elect that his vested interest in his Account be paid commencing as
of any earlier or later Valuation Date after his termination of employment, but
in no event later than the last Valuation Date to occur in the calendar year in
which the Participant or Former Participant attains age 70 1/2, in which case
the payment, or first in a series of payments, shall be made within three months
following such Valuation Date.
(b)(i) Subject to Section 13.3(b)(ii), the vested portion of the balance
credited to the Account of a Participant or Former Participant will be paid to
him, commencing as of the
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Valuation Date determined under Section 13.3(a), in substantially equal annual
installments over a fixed period equal to the greater of:
(A) five years; or
(B) if the vested portion of the balance credited to the Account of the
Participant or Former Participant, determined as of the Valuation Date
determined under Section 13.3(a), is greater than $500,000 (or such larger
amount as may be prescribed by the Secretary of the Treasury pursuant to Section
409(o) of the Code), the sum of five years plus the lesser of (I) five
additional years, or (II) one additional year for each $100,000 (or fraction
thereof) by which the vested portion of the balance credited to the
Participant's or Former Participant's Account exceeds $500,000 (or such larger
amount as may be prescribed by the Secretary of the Treasury pursuant to Section
409(o) of the Code).
(ii) A Participant or Former Participant may, upon request on a form
provided by the Plan Administrator and filed with the Plan Administrator not
later than 15 days prior to the date on which his employment terminates, elect
that the vested portion of the balance credited to his Account be paid,
commencing as of the Valuation Date determined under Section 13.3(a):
(A) in substantially equal annual installments over a fixed period not to
exceed the lesser of (I) 10 years, or (II) the life expectancy of the
Participant or Former Participant, or, if his Beneficiary is a natural person,
the joint life and last survivor expectancy of the Participant or Former
Participant and his Beneficiary; or
(B) subject to Section 13.4, in a lump sum payment.
(c) If any person entitled to a benefit under the Plan dies before his
entire benefit has been distributed to him, then the remainder of such benefit
shall be paid to the Beneficiary designated by him under Section 13.2 either:
(i) in a lump sum distribution as of the Valuation Date next following the
date of his death, and the amount thereof shall be based upon the vested portion
of the balance credited to his Account as of such Valuation Date; or
(ii) if, prior to the death of the Participant or Former Participant whose
vested Account is being distributed, an election pursuant to Section
13.3(b)(ii)(B) is in effect for him, in a lump sum distribution as of the
Valuation Date specified in such election, or, if earlier, as of the latest
Valuation Date that would permit payment to be made within five years after the
Participant's or Former Participant's death, and the amount thereof shall be
based upon the vested portion of the balance credited to his Account as of such
Valuation Date; or
(iii) if, prior to the death of the Participant or Former Participant whose
vested Account is being distributed, an election pursuant to Section
13.3(b)(ii)(A) is in effect for him:
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(A) over the period and at the times set forth in such election, if
distribution has begun prior to the Participant's or Former Participant's death;
or
(B) commencing at the time set forth in such election and over the period
set forth in such election (or, if less, over a period equal to the life
expectancy of the Beneficiary of the deceased Participant or Former
Participant), if the deceased Participant's or Former Participant's spouse is
his Beneficiary and distribution has not begun prior to the deceased
Participant's or Former Participant's death; or
(C) commencing on the date specified in such election (or, if earlier, the
last Valuation Date that will permit payment to begin within one year after the
deceased Participant's or Former Participant's death) and over the period set
forth in such election (or, if less, over a period equal to the life expectancy
of the Beneficiary of the deceased Participant or Former Participant), if the
deceased Participant's or Former Participant's Beneficiary is a natural person
other than his spouse and distribution has not begun prior to the deceased
Participant's or Former Participant's death;
and the amount thereof shall be based upon the vested portion of the
balance credited to his Account as of the Valuation Dates as of which payments
are determined; or
(iv) upon written application of the Beneficiary made in such form and
manner as the Plan Administrator may prescribe, at another time or in another
manner permitted under Section 13.3(a) or (b), subject to the following
limitations:
(A)(I) If such Beneficiary is a natural person other than the spouse of the
deceased Participant or Former Participant whose vested Account is being
distributed, a distribution that commences within one year after such deceased
Participant's or Former Participant's death shall be made over a fixed period
that does not exceed the life expectancy of such Beneficiary when distribution
commences.
(II) If such Beneficiary is the spouse of the deceased Participant or
Former Participant whose vested Account is being distributed, a distribution
that commences no later than the later of: (1) the date on which the deceased
Participant or Former Participant would have attained age 70 1/2 had he lived;
or (2) the first anniversary of the death of such deceased Participant or Former
Participant; shall be made over a fixed period that does not exceed the life
expectancy of such Beneficiary when distribution commences.
(III) In all other cases where the spouse of the deceased Participant or
Former Participant whose vested Account is being distributed is not the
Beneficiary, payment must be completed within five years after the death of such
deceased Participant or Former Participant.
(B) In cases where distribution has commenced prior to the death of the
deceased Participant or Former Participant whose vested Account is being
distributed, distribution must be completed as least as rapidly as under the
method in effect prior to such deceased Participant's or Former Participant's
death.
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Section 13.4 Manner of Payment.
(a) Subject to Section 13.4(b), payments of distributions made pursuant to
Section 13.3 or Section 13.7 shall be paid, in accordance with the written
direction of the person requesting the payment, in whole Shares, in cash, or in
a combination of cash and whole Shares. Such written direction shall be given in
such form and manner as the Plan Administrator may prescribe. If no such
direction is given, then payment shall be made in the maximum number of whole
Shares that may be acquired with the amount of the payment, plus, if necessary,
an amount of money equal to any remaining amount of the payment that is less
than the Fair Market Value of a whole Share.
(b) No distribution of a lump sum payment shall be made in cash to the
extent that the making of such distribution, when combined with all other
distributions to be made in cash as of the same Valuation Date, would require
the sale of Shares constituting 1% or more of all outstanding Shares; provided,
however, that this Section 13.4(b) shall not apply to or in respect of a
Participant or Former Participant:
(i) following such Participant's or Former Participant's termination of
employment with the Employer on account of his Retirement or Disability; or
(ii) following such Participant's or Former Participant's 65th birthday; or
(iii) following the death of such Participant or Former Participant.
Section 13.5 Put Options.
(a) Except as provided otherwise in Section 13.5(b), each Participant or
Former Participant to whom Shares are distributed under the Plan, each
Beneficiary of a deceased Participant or Former Participant, including the
estate of a deceased Participant or Former Participant, to whom Shares are
distributed under the Plan, and each person to whom such a Participant, Former
Participant or Beneficiary gives Shares that have been distributed under the
Plan shall have the right to require the Employer to purchase from him all or
any portion of such Shares. A person shall exercise such right by delivering to
the Employer a written notice, in such form and manner as the Employer may by
written notice to such person prescribe, setting forth the number of Shares to
be purchased by the Employer, the number of the stock certificate evidencing
such person's ownership of such Shares, and the effective date of purchase. Such
notice shall be given, and the effective date of the purchase specified therein
shall be, no later than the last day of the fifteenth calendar month to begin
after the date on which the Shares to be purchased by the Employer were
distributed from the Plan. As soon as practicable following its receipt of such
notice, the Employer shall take such actions as are necessary to purchase the
Shares specified in such notice at a price per Share equal to the Fair Market
Value of a Share determined as of the effective date of the purchase.
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(b) The Employer shall have no obligation to purchase any Share (i)
pursuant to a notice given, or on an effective date of purchase, after the last
day of the fifteenth calendar month to begin after the date on which such Share
was distributed from the Plan; (ii) following the earliest date on which Shares
are publicly traded on an established market; or (iii) if the Employer is a
"bank" within the meaning of Section 581 of the Code and is prohibited by law
from redeeming or purchasing its own securities.
Section 13.6 Right of First Refusal.
(a) For any period during which Shares are not publicly traded on any
established market, no person who owns Shares that were distributed from the
Plan, other than a person to whom such Shares were sold in compliance with this
Section 13.6, shall sell such Shares to any person other than the Employer
without first offering to sell such Shares to the Employer (or person designated
by the Employer) in accordance with this Section 13.6.
(b) In the event that a person to whom this Section 13.6 applies shall
receive and desire to accept from a person other than the Employer a bona fide
offer to purchase Shares to which this Section 13.6 applies, he shall furnish to
the Employer a written notice which shall:
(i) include a copy of such offer to purchase;
(ii) offer to sell to the Employer the Shares subject to such offer to
purchase at a price per Share that is equal to the greater of:
(A) the price per Share specified in such offer to purchase; or
(B) the Fair Market Value of a Share as of the date of purchase;
and otherwise upon the same terms and conditions as those specified in such
offer to purchase; and
(iii) include an indication of his intention to accept such offer to
purchase if the Employer does not accept his offer to sell.
(c) The Employer shall have the right to purchase the Shares covered by the
offer to sell contained in a notice given pursuant to Section 13.6(b), on the
terms and conditions specified in such notice, by written notice given to the
party making the offer to sell not later than the fourteenth day after the
notice described in Section 13.6(b) is given. If the Employer does not give such
a notice during the prescribed fourteen day period, then the person owning such
Shares may accept the offer to purchase described in the notice.
Section 13.7 Minimum Required Distributions.
(a) Required minimum distributions of a Participant's or Former
Participant's Account shall commence no later than:
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(i) if the Participant or Former Participant is not a Five Percent Owner at
any time during the Plan Year ending in the calendar year in which he attains
age 70 1/2, the later of (A) the calendar year in which he attains or attained
age 70 1/2 or (B) the calendar year in which he terminates employment with the
Employer; or
(ii) if the Participant or Former Participant is or was a Five Percent
Owner at any time during the Plan Year ending in the calendar year in which he
attains age 70 1/2, the later of (A) the calendar year in which he attains age
70 1/2 or (B) the calendar year in which he first becomes a Five Percent Owner.
(b) The required minimum distributions contemplated by Section 13.7(a)
shall be made as follows:
(i) The minimum required distribution to be made for the calendar year for
which the first minimum distribution is required shall be no later than April
1st of the immediately following calendar year and shall be equal to the
quotient obtained by dividing (A) the vested balance credited to the
Participant's or Former Participant's Account as of the last Valuation Date to
occur in the calendar year immediately preceding the calendar year in which the
first minimum distribution is required (adjusted to account for any additions
thereto or subtractions therefrom after such Valuation Date but on or before
December 31st of such calendar year); by (B) the Participant's or Former
Participant's life expectancy (or, if his Beneficiary is a natural person, the
joint life and last survivor expectancy of him and his Beneficiary); and
(ii) the minimum required distribution to be made for each calendar year
following the calendar year for which the first minimum distribution is required
shall be made no later than December 31st of the calendar year for which the
distribution is required and shall be equal to the quotient obtained by dividing
(A) the vested balance credited to the Participant's or Former Participant's
Account as of the last Valuation Date to occur in the calendar year prior to the
calendar year for which the distribution is required (adjusted to account for
any additions thereto or subtractions therefrom after such Valuation Date but on
or before December 31st of such calendar year and, in the case of the
distribution for the calendar year immediately following the calendar year for
which the first minimum distribution is required, reduced by any distribution
for the prior calendar year that is made in the current calendar year); by (B)
the Participant's or Former Participant's life expectancy (or, if his
Beneficiary is a natural person, the joint life and last survivor expectancy of
him and his Beneficiary).
For purposes of this Section 13.7, the life expectancy of a Participant or
Former Participant (or the joint life and last survivor expectancy of a
Participant or Former Participant and his designated Beneficiary) for the
calendar year in which the Participant or Former Participant attains age 70 1/2
shall be determined on the basis of Tables V and VI, as applicable, of Section
1.72-9 of the Income Tax Regulations as of the Participant's or Former
Participant's and Beneficiary's birthday in such year. Such life expectancy or
joint life and last survivor expectancy for any subsequent year shall be equal
to the excess of (1) the life expectancy or joint life and last survivor
expectancy for the year in which the Participant or Former Participant
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attains age 70 1/2, over (2) the number of whole years that have elapsed since
the Participant or Former Participant attained age 70 1/2.
(c) Payment of the distributions required to be made to a Participant or
Former Participant under this Section 13.7 shall be made in accordance with
Section 13.4.
Section 13.8 Direct Rollover of Eligible Rollover Distributions.
(a) A Distributee may elect, at the time and in the manner prescribed by
the Plan Administer, to have any portion of an Eligible Rollover Distribution
paid directly to an Eligible Retirement Plan specified by the Distributee in a
Direct Rollover.
(b) The following rules shall apply with respect to Direct Rollovers made
pursuant to this Section 13.8:
(i) A Participant may only elect to make a Direct Rollover of an Eligible
Rollover Distribution if such Eligible Rollover Distribution (when combined with
other Eligible Rollover Distributions made or to be made in the same calendar
year) is reasonably expected to be at least $200;
(ii) If a Participant elects a Direct Rollover of a portion of an Eligible
Rollover Distribution, that portion must be equal to at least $500; and
(iii) A Participant may not divide his or her Eligible Rollover
Distribution into separate distributions to be transferred to two or more
Eligible Retirement Plans.
(c) For purposes of this Section 13.8 and any other applicable Section of
the Plan, the following definitions shall have the following meanings:
(i) "Direct Rollover" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
(ii) "Distributee" means an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's spouse or
former spouse who is the alternate payee under a Qualified Domestic Relations
Order are considered Distributees with regard to the interest of the spouse or
former spouse.
(iii) "Eligible Retirement Plan" means an individual retirement account
described in Section 408(a) of the Code, an individual retirement annuity
described in Section 408(b) or the Code, an annuity plan described in Section
403(a) of the Code, or a qualified trust described in Section 401(a) of the Code
that accepts the Distributee's Eligible Rollover Distribution. However, in the
case of an Eligible Rollover Distribution to the current or former spouse who is
the alternative payee under a Qualified Domestic Relations Order or to a
surviving spouse, an Eligible Retirement Plan is an individual retirement
account or individual retirement annuity.
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(iv) "Eligible Rollover Distribution" means any distribution of all or any
portion of the balance to the credit of the Distributee, except that an Eligible
Rollover Distribution does not include: 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's designated Beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; and the portion of
any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities).
Section 13.9 Valuation of Shares Upon Settlement to a Participant.
Notwithstanding any contrary provision in this Article XIII, in the event
that all or a portion of a payment of a distribution to a Participant is to be
made in cash, such Participant shall only be entitled to receive the proceeds of
the Shares allocated to his Account that are sold in connection with such
distribution and which are valued as of the date of such sale.
ARTICLE XIV
CHANGE IN CONTROL
Section 14.1 Definition of Change in Control.
A Change in Control of the Employer shall be deemed to have occurred upon
the happening of any of the following events:
(a) the occurrence of any event upon which any "person" (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended ("Exchange Act")), other than (A) a trustee or other fiduciary holding
securities under an employee benefit plan maintained for the benefit of
employees of Gouverneur Bancorp, Inc.; (B) a corporation owned, directly or
indirectly, by the shareholders of Gouverneur Bancorp, Inc. in substantially the
same proportions as their ownership of stock of Gouverneur Bancorp, Inc.; or (C)
any group constituting a person in which employees of Gouverneur Bancorp, Inc.
are substantial members, becomes the "beneficial owner" (as defined in Rule
13d-3 promulgated under the Exchange Act), directly or indirectly, of securities
issued by Gouverneur Bancorp, Inc. representing 25% or more of the combined
voting power of all of Gouverneur Bancorp, Inc.'s then outstanding securities;
or
(b) the occurrence of any event upon which the individuals who on the date
the Plan is adopted are members of the Board, together with individuals whose
election by the Board or nomination for election by Gouverneur Bancorp, Inc.'s
shareholders was approved by the affirmative vote of at least two-thirds of the
members of the Board then in office who were either members of the Board on the
date this Plan is adopted or whose nomination or election was previously so
approved, cease for any reason to constitute a majority of the members of the
Board, but excluding, for this purpose, any such individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of directors of
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Gouverneur Bancorp, Inc. (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act); or
(c) the shareholders of Gouverneur Bancorp, Inc. approve either:
(i) a merger or consolidation of Gouverneur Bancorp, Inc. with any other
corporation, other than a merger or consolidation following which both of the
following conditions are satisfied:
(A) either (1) the members of the Board of Gouverneur Bancorp, Inc.
immediately prior to such merger or consolidation constitute at least a majority
of the members of the governing body of the institution resulting from such
merger or consolidation; or (2) the shareholders of Gouverneur Bancorp, Inc. own
securities of the institution resulting from such merger or consolidation
representing 80% or more of the combined voting power of all such securities
then outstanding in substantially the same proportions as their ownership of
voting securities of Gouverneur Bancorp, Inc. before such merger or
consolidation; and
(B) the entity which results from such merger or consolidation expressly
agrees in writing to assume and perform Gouverneur Bancorp, Inc.'s obligations
under the Plan; or
(ii) a plan of complete liquidation of Gouverneur Bancorp, Inc. or an
agreement for the sale or disposition by Gouverneur Bancorp, Inc. of all or
substantially all of its assets; and
(d) any event that would be described in Section 14.1(c)(i), or (ii) if
"Gouverneur Savings and Loan Association" were substituted for "Gouverneur
Bancorp, Inc." therein, and "Board of Directors of Gouverneur Savings and Loan
Association" were substituted for "Board" therein; and
In no event, however, shall the transaction by which Gouverneur Savings and Loan
Association converts from a mutual savings bank to a stock savings bank, or any
transaction by which a company wholly owned by Gouverneur Savings and Loan
Association becomes the parent company of Gouverneur Savings and Loan
Association be deemed a Change in Control.
Section 14.2 Vesting on Change of Control.
Upon the effective date of a Change in Control, the Account of each person who
would then, upon termination of the Plan, be entitled to a benefit, shall be
fully vested and nonforfeitable.
Section 14.3 Repayment of Loan.
(a) Upon a Change in Control described in Section 14.1(c) (or which would
be described in Section 14.1(c) if "Gouverneur Savings and Loan Association"
were substituted for "Gouverneur Bancorp, Inc." thereunder), the Plan
Administrator shall direct the Trustee to sell a sufficient number of Shares to
repay any outstanding Share Acquisition Loan in full. The proceeds of such sale
shall be used to repay such Share Acquisition Loan. After repayment of the
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Share Acquisition Loan, all remaining Shares which had been unallocated (or the
proceeds thereof, if applicable) shall be allocated among the accounts of all
Participants who were employed by an Employer on the effective date of such
Change in Control. Such allocation of Shares or proceeds shall be credited as of
the date on which the Change in Control occurs to the Accounts of each
Participant who has not had a termination of participation under Section 2.3 as
of such date (each, an "Affected Participant"), in proportion to their
Allocation Compensation, for the period, beginning on the January 1 immediately
preceding the date on which the Change in Control occurs and ending on the date
on which the Change in Control occurs. If any amount cannot be allocated to an
Affected Participant in the year of such Change in Control as a result of the
limitations of Section 415 of the Code, the amounts will be allocated in
subsequent years to those persons who were Affected Participants and who
continue to be Participants in the Plan until finally distributed to Affected
Participants.
(b) In the event that the application of Section 415 of the Code prevents
the allocation of all of the Shares or other assets released from the Loan
Repayment Account as provided in Section 14.3(a) as of the effective date of the
Change in Control, each Affected Participant shall be entitled to receive a
supplemental benefit payment directly from the Employer. The supplemental
benefit payment to each Affected Participant shall be an amount equal to the
excess of:
(i) the total amount of Shares or other property that would be allocated to
such Affected Participant's Account under Section 14.3(a) if Section 415 of the
Code did not apply; over
(ii) the total of Shares or other property actually allocated to such
Affected Participant's Account under Section 14.3(a).
Such payment (without offset for any allocations which may occur under this Plan
subsequent to the Change in Control) shall be made as soon as practicable, but
in any event within ten business days, after the effective date of the Change in
Control. This Section 14.3(b) shall be treated as a separate, non-qualified
"excess benefit plan" within the meaning of Section 3(34) of ERISA and shall be
interpreted, administered and enforced in a manner consistent with this
intention. To the extent that any Affected Participant is entitled to the same
or a similar payment under any other non-qualified plan, program or arrangement
of the Employer, any payment under this Section 14.3(b) shall be coordinated
with the payments under such other non-qualified programs, plan or arrangements
in such manner as shall be determined by the Plan Administrator to be necessary
to prevent the duplication of benefits.
Section 14.4 Plan Termination After Change in Control.
After repayment of the loan and allocation of shares or proceeds as
provided in Section 14.3, the Plan shall be terminated and all amounts shall be
distributed as soon as practicable.
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Section 14.5 Amendment of Article XIV.
Article XIV of the Plan may not be amended after a Change in Control of the
Employer unless required by the Internal Revenue Service as a condition to the
continued treatment of the Plan as a tax-qualified plan under Section 401(a) of
the Code.
ARTICLE XV
ADMINISTRATION
Section 15.1 Named Fiduciaries.
The term "Named Fiduciary" shall mean (but only to the extent of the
responsibilities of each of them) the Plan Administrator, the Plan
Administrator, the Board and the Trustee. This Article XV is intended to
allocate to each Named Fiduciary the responsibility for the prudent execution of
the functions assigned to him or it, and none of such responsibilities or any
other responsibility shall be shared by two or more of such Named Fiduciaries.
Whenever one Named Fiduciary is required by the Plan or Trust Agreement to
follow the directions of another Named Fiduciary, the two Named Fiduciaries
shall not be deemed to have been assigned a shared responsibility, but the
responsibility of the Named Fiduciary giving the directions shall be deemed his
sole responsibility, and the responsibility of the Named Fiduciary receiving
those directions shall be to follow them insofar as such instructions are on
their face proper under applicable law.
Section 15.2 Plan Administrator.
There shall be a Plan Administrator, who shall be the Senior Human
Resources Officer of Gouverneur Bancorp, Inc., or such Employee or officer as
may be designated by the Board, as hereinafter provided, and who shall, subject
to the responsibilities of the Plan Administrator and the Board, have the
responsibility for the day-to-day control, management, operation and
administration of the Plan (except trust duties). The Plan Administrator shall
have the following responsibilities:
(a) To maintain records necessary or appropriate for the administration of
the Plan;
(b) To give and receive such instructions, notices, information, materials,
reports and certifications to the Trustee as may be necessary or appropriate in
the administration of the Plan;
(c) To prescribe forms and make rules and regulations consistent with the
terms of the Plan;
(d) To require such proof of age or evidence of good health of an Employee,
Participant or Former Participant or the spouse of either, or of a Beneficiary
as may be necessary or appropriate in the administration of the Plan;
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(e) To prepare and file, distribute or furnish all reports, plan
descriptions, and other information concerning the Plan, including, without
limitation, filings with the Secretary of Labor and communications with
Participants, Former Participants and other persons, as shall be required of the
Plan Administrator under ERISA;
(f) To determine any question arising in connection with the Plan, and the
Plan Administrator's decision or action in respect thereof shall be final and
conclusive and binding upon the Employer, the Trustee, Participants, Former
Participants, Beneficiaries and any other person having an interest under the
Plan;
(g) To review and dispose of claims under the Plan filed pursuant to
Section 15.3 and appeals filed pursuant to Section 15.4;
(h) If the Plan Administrator shall determine that by reason of illness,
senility, insanity, or for any other reason, it is undesirable to make any
payment to a Participant, Former Participant, Beneficiary or any other person
entitled thereto, to direct the application of any amount so payable to the use
or benefit of such person in any manner that he may deem advisable or to direct
in his discretion the withholding of any payment under the Plan due to any
person under legal disability until a representative competent to receive such
payment in his behalf shall be appointed pursuant to law;
(i) To review the performance of the Trustee and such investment managers
as may be appointed in or pursuant to the Trust Agreement in investing, managing
and controlling the assets of the Plan;
(j) To the extent required by ERISA, to establish a funding policy and
method consistent with the objectives of the Plan and the requirements of ERISA,
and to review such policy and method at least annually;
(k) To report and make recommendations to the Board regarding changes in
the Plan, including changes in the operation and management of the Plan and
removal and replacement of the Trustee and such investment managers as may be
appointed in or pursuant to the Trust Agreement;
(l) To the extent provided under and subject to the provisions of the Trust
Agreement, to appoint "investment managers" as defined in Section 3(38) of ERISA
to manage and control (including acquiring and disposing of) all or any of the
assets of the Plan;
(m) With the prior approval of the Board, to direct the Trustee to obtain
one or more Share Acquisition Loans;
(n) To develop and provide procedures and forms necessary to enable
Participants to give voting and tendering directions on a confidential basis;
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(o) To discharge such other responsibilities or follow such directions as
may be assigned or given by the Board; and
(p) To discharge such other responsibilities or follow such directions as
may be assigned or given by the Board; and
(q) To perform any duty or take any action which is allocated to the Plan
Administrator under the Plan.
The Plan Administrator shall have the power and authority necessary or
appropriate to carry out his responsibilities. The Plan Administrator may resign
only by giving at least 30 days' prior written notice of resignation to the
Board, and such resignation shall be effective on the date specified in such
notice.
Section 15.3 Claims Procedure.
Any claim relating to benefits under the Plan shall be filed with the Plan
Administrator on a form prescribed by him. If a claim is denied in whole or in
part, the Plan Administrator shall give the claimant written notice of such
denial, which notice shall specifically set forth:
(a) The reasons for the denial;
(b) The pertinent Plan provisions on which the denial was based;
(c) Any additional material or information necessary for the claimant to
perfect his claim and an explanation of why such material or information is
needed; and
(d) An explanation of the Plan's procedure for review of the denial of the
claim.
In the event that the claim is not granted and notice of denial of a claim
is not furnished by the 30th day after such claim was filed, the claim shall be
deemed to have been denied on that day for the purpose of permitting the
claimant to request review of the claim.
Section 15.4 Claims Review Procedure.
Any person whose claim filed pursuant to Section 15.3 has been denied in
whole or in part by the Plan Administrator may request review of the claim by
the Plan Administrator, upon a form prescribed by the Plan Administrator. The
claimant shall file such form (including a statement of his position) with the
Plan Administrator no later than 60 days after the mailing or delivery of the
written notice of denial provided for in Section 15.3, or, if such notice is not
provided, within 60 days after such claim is deemed denied pursuant to Section
15.3. The claimant shall be permitted to review pertinent documents. A decision
shall be rendered by the Plan Administrator and communicated to the claimant not
later than 30 days after receipt of the claimant's written request for review.
However, if the Plan Administrator finds it necessary, due to special
circumstances (for example, the need to hold a hearing), to extend this period
and so
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notifies the claimant in writing, the decision shall be rendered as soon as
practicable, but in no event later than 120 days after the claimant's request
for review. The Plan Administrator's decision shall be in writing and shall
specifically set forth:
(a) The reasons for the decision; and
(b) The pertinent Plan provisions on which the decision is based.
Any such decision of the Plan Administrator shall be binding upon the claimant
and the Employer, and the Plan Administrator shall take appropriate action to
carry out such decision.
Section 15.5 Allocation of Fiduciary Responsibilities and Employment of
Advisors.
Any Named Fiduciary may:
(a) Allocate any of his or its responsibilities (other than trustee
responsibilities) under the Plan to such other person or persons as he or it may
designate, provided that such allocation and designation shall be in writing and
filed with the Plan Administrator;
(b) Employ one or more persons to render advice to him or it with regard to
any of his or its responsibilities under the Plan; and
(c) Consult with counsel, who may be counsel to the Employer.
Section 15.6 Other Administrative Provisions.
(a) Any person whose claim has been denied in whole or in part must exhaust
the administrative review procedures provided in Section 15.4 prior to
initiating any claim for judicial review.
(b) No bond or other security shall be required of the Plan Administrator,
or any officer or Employee of the Employer to whom fiduciary responsibilities
are allocated by a Named Fiduciary, except as may be required by ERISA.
(c) Subject to any limitation on the application of this Section 15.6(c)
pursuant to ERISA, neither the Plan Administrator, nor any officer or Employee
of the Employer to whom fiduciary responsibilities are allocated by a Named
Fiduciary, shall be liable for any act of omission or commission by himself or
by another person, except for his own individual willful and intentional
malfeasance.
(d) The Plan Administrator may, except with respect to actions under
Section 15.4, shorten, extend or waive the time (but not beyond 60 days)
required by the Plan for filing any notice or other form with the Plan
Administrator, or taking any other action under the Plan.
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(e) The Plan Administrator may direct that the costs of services provided
pursuant to Section 15.5, and such other reasonable expenses as may be incurred
in the administration of the Plan, shall be paid out of the funds of the Plan
unless the Employer shall pay them.
(f) Any person, group of persons, committee, corporation or organization
may serve in more than one fiduciary capacity with respect to the Plan.
(g) Any action taken or omitted by any fiduciary with respect to the Plan,
including any decision, interpretation, claim denial or review on appeal, shall
be conclusive and binding on all interested parties and shall be subject to
judicial modification or reversal only to the extent it is determined by a court
of competent jurisdiction that such action or omission was arbitrary and
capricious and contrary to the terms of the Plan.
ARTICLE XVI
AMENDMENT, TERMINATION AND TAX QUALIFICATION
Section 16.1 Amendment and Termination by Gouverneur Bancorp, Inc.
The Employer expects to continue the Plan indefinitely, but specifically
reserves the right, in its sole discretion, at any time, by appropriate action
of the Board, to amend, in whole or in part, any or all of the provisions of the
Plan and to terminate the Plan at any time. Subject to the provisions of Section
16.2, no such amendment or termination shall permit any part of the Trust Fund
to be used for or diverted to purposes other than for the exclusive benefit of
Participants, Former Participants, Beneficiaries or other persons entitled to
benefits, and no such amendment or termination shall reduce the accrued benefit
of any Participant, Former Participant, Beneficiary or other person who may be
entitled to benefits, without his consent. In the event of a termination or
partial termination of the Plan, or in the event of a complete discontinuance of
the Employer's contributions to the Plan, the Accounts of each affected person
shall forthwith become nonforfeitable and shall be payable in accordance with
the provisions of Article XIII.
Section 16.2 Amendment or Termination Other Than by Gouverneur Bancorp,
Inc.
In the event that a corporation or trade or business other than Gouverneur
Bancorp, Inc. shall adopt this Plan, such corporation or trade or business
shall, by adopting the Plan, empower Gouverneur Bancorp, Inc. to amend or
terminate the Plan, insofar as it shall cover employees of such corporation or
trade or business, upon the terms and conditions set forth in Section 16.1;
provided, however, that any such corporation or trade or business may, by action
of its board of directors or other governing body, amend or terminate the Plan,
insofar as it shall cover employees of such corporation or trade or business, at
different times and in a different manner. In the event of any such amendment or
termination by action of the board of directors or other governing body of such
a corporation or trade or business, a separate plan shall be deemed to have been
established for the employees of such corporation or trade or business, and the
assets
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of such plan shall be segregated from the assets of this Plan at the earliest
practicable date and shall be dealt with in accordance with the documents
governing such separate plan.
Section 16.3 Conformity to Internal Revenue Code.
The Employer has established the Plan with the intent that the Plan and
Trust will at all times be qualified under Section 401(a) and exempt under
Section 501(a) of the Code and with the intent that contributions under the Plan
will be allowed as deductions in computing the net income of the Employer for
federal income tax purposes, and the provisions of the Plan and Trust Agreement
shall be construed to effectuate such intentions. Accordingly, notwithstanding
anything to the contrary hereinbefore provided, the Plan and the Trust Agreement
may be amended at any time without prior notice to Participants, Former
Participants, Beneficiaries or any other persons entitled to benefits, if such
amendment is deemed by the Board to be necessary or appropriate to effectuate
such intent.
Section 16.4 Contingent Nature of Contributions.
(a) All ESOP Contributions to the Plan are conditioned upon the issuance by
the Internal Revenue Service of a determination that the Plan and Trust are
qualified under Section 401(a) of the Code and exempt under Section 501(a) of
the Code. If the Employer applies to the Internal Revenue Service for such a
determination within 90 days after the date on which it files its federal income
tax return for its taxable year that includes the last day of the Plan Year in
which the Plan is adopted, and if the Internal Revenue Service issues a
determination that the Plan and Trust are not so qualified or exempt, all ESOP
Contributions made by the Employer prior to the date of receipt of such a
determination may, at the election of the Employer, be returned to the Employer
within one year after the date of such determination.
(b) All ESOP Contributions and Loan Repayment Contributions to the Plan are
made upon the condition that such ESOP Contributions and Loan Repayment
Contributions will be allowed as a deduction in computing the net income of the
Employer for federal income tax purposes. To the extent that any such deduction
is disallowed, the amount disallowed may, at the election of the Employer, be
returned to the Employer within one year after the deduction is disallowed.
(c) Any contribution to the Plan made by the Employer as a result of a
mistake of fact may, at the election of the Employer, be returned to the
Employer within one year after such contribution is made.
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ARTICLE XVII
SPECIAL RULES FOR TOP HEAVY PLAN YEARS
Section 17.1 In General.
As of the Determination Date for each Plan Year, the Plan Administrator
shall determine whether the Plan is a Top Heavy Plan in accordance with the
provisions of this Article XVII. If, as of such Determination Date, the Plan is
a Top Heavy Plan, then the Plan Year immediately following such Determination
Date shall be a Top Heavy Plan Year and the special provisions of this Article
XVII shall be in effect; provided, however, that if, as of the Determination
Date for the Plan Year in which the Effective Date occurs, the Plan is a Top
Heavy Plan, such Plan Year shall be a Top Heavy Plan Year, and the provisions of
this Article XVII shall be given retroactive effect for such Plan Year.
Section 17.2 Definition of Top Heavy Plan.
(a) Subject to Section 17.2(c), the Plan is a Top Heavy Plan if, as of a
Determination Date: (i) it is not a member of a Required Aggregation Group, and
(ii)(A) the sum of the Cumulative Accrued Benefits of all Key Employees exceeds
60% of (B) the sum of the Cumulative Accrued Benefits of all Employees
(excluding former Key Employees), former Employees (excluding former Key
Employees and other former Employees who have not performed any services for the
Employer or any Affiliated Employer during the immediately preceding five Plan
Years), and their Beneficiaries.
(b) Subject to Section 17.2(c), the Plan is a Top Heavy Plan if, as of a
Determination Date: (i) the Plan is a member of a Required Aggregation Group,
and (ii)(A) the sum of the Cumulative Accrued Benefits of all Key Employees
under all plans that are members of the Required Aggregation Group exceeds 60%
of (B) the sum of the Cumulative Accrued Benefits of all Employees (excluding
former Key Employees), former Employees (excluding former Key Employees and
other former Employees who have not performed any services for the Employer or
any Affiliated Employer during the immediately preceding five Plan Years), and
their Beneficiaries under all plans that are members of the Required Aggregation
Group.
(c) Notwithstanding Sections 17.2(a) and 17.2(b), the Plan is not a Top
Heavy Plan if, as of a Determination Date: (i) the Plan is a member of a
Permissible Aggregation Group, and (ii)(A) the sum of the Cumulative Accrued
Benefits of all Key Employees under all plans that are members of the
Permissible Aggregation Group does not exceed 60% of (B) the sum of the
Cumulative Accrued Benefits of all Employees (excluding former Key Employees),
former Employees (excluding former Key Employees and other former Employees who
have not performed any services for the Employer or any Affiliated Employer
during the immediately preceding five Plan Years), and their Beneficiaries under
all plans that are members of the Permissible Aggregation Group.
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Section 17.3 Determination Date.
The Determination Date for the Plan Year in which the Effective Date occurs
shall be the last day of such Plan Year, and the Determination Date for each
Plan Year beginning after the Plan Year in which the Effective Date occurs shall
be the last day of the preceding Plan Year. The Determination Date for any other
qualified plan maintained by the Employer for a plan year shall be the last day
of the preceding plan year of each such plan, except that in the case of the
first plan year of such plan, it shall be the last day of such first plan year.
Section 17.4 Cumulative Accrued Benefits.
(a) An individual's Cumulative Accrued Benefits under this Plan as of a
Determination Date are equal to the sum of:
(i) the balance credited to such individual's Account under this Plan as of
the most recent Valuation Date preceding the Determination Date;
(ii) the amount of any ESOP Contributions or Loan Repayment Contributions
made after such Valuation Date but on or before the Determination Date; and
(iii) the amount of any distributions of such individual's Cumulative
Accrued Benefits under the Plan during the five year period ending on the
Determination Date.
For purposes of this Section 17.4(a), the computation of an individual's
Cumulative Accrued Benefits, and the extent to which distributions, rollovers
and transfers are taken into account, will be made in accordance with Section
416 of the Code and the regulations thereunder.
(b) For purposes of this Plan, the term "Cumulative Accrued Benefits" with
respect to any other qualified plan, shall mean the cumulative accrued benefits
determined for purposes of Section 416 of the Code under the provisions of such
plans.
(c) For purposes of determining the top heavy status of a Required
Aggregation Group or a Permissible Aggregation Group, the Cumulative Accrued
Benefits under this Plan and the Cumulative Accrued Benefits under any other
plan shall be determined as of the Determination Date that falls within the same
calendar year as the Determination Dates for all other members of such Required
Aggregation Group or Permissible Aggregation Group.
Section 17.5 Key Employees.
(a) For purposes of the Plan, the term Key Employee means any employee or
former employee of the Employer or any Affiliated Employer who is at any time
during the current Plan Year or was at any time during the immediately preceding
four Plan Years:
(i) a Five Percent Owner;
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(ii) a person who would be described in Section 1.23 if the number "1%"
were substituted for the number "5%" in Section 1.23 and who has an annual Total
Compensation from the Employer and any Affiliated Employer of more than
$150,000;
(iii) an Officer of the Employer or any Affiliated Employer who has an
annual Total Compensation greater than 50% of the amount in effect under Section
415(b)(1)(A) of the Code of any such Plan Year; or
(iv) one of the ten persons owning the largest interests in the Employer
and having an annual Total Compensation from the Employer or any Affiliated
Employer in excess of the dollar limitation in effect under Section 415(c)(1)(A)
of the Code for such Plan Year.
(b) For purposes of Section 17.5(a):
(i) for purposes of Section 17.5(a)(iii), in the event the Employer or any
Affiliated Employer has more officers than are considered Officers, the term Key
Employee shall mean those officers, up to the maximum number, with the highest
annual compensation in any one of the five consecutive Plan Years ending on the
Determination Date; and
(ii) for purposes of Section 17.5(a)(iv), if two or more persons have equal
ownership interests in the Employer, each such person shall be considered as
having a larger ownership interest than any such person with a lower annual
compensation from the Employer or any Affiliated Employer.
(c) For purposes of Section 17.5(a): (i) a person's compensation from
Affiliated Employers shall be aggregated, but his ownership interests in
Affiliated Employers shall not be aggregated; (ii) an employee shall only be
deemed to be an officer if he has the power and responsibility of a person who
is an officer within the meaning of Section 416 of the Code; and (iii) the term
Key Employee shall also include the Beneficiary of a deceased Key Employee.
Section 17.6 Required Aggregation Group.
For purposes of this Article XVII, a Required Aggregation Group shall
consist of (a) this Plan; (b) any other qualified plans maintained by the
Employer and any Affiliated Employers that cover Key Employees; and (c) any
other qualified plans that are required to be aggregated for purposes of
satisfying the requirements of Sections 401(a)(4) or 410(b) of the Code.
Section 17.7 Permissible Aggregation Group.
For purposes of this Article XVII, a Permissible Aggregation Group shall
consist of (a) the Required Aggregation Group and (b) any other qualified plans
maintained by the Employer and any Affiliated Employers; provided, however, that
the Permissible Aggregation Group must satisfy the requirements of Sections
401(a)(4) and 410(b) of the Code.
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Section 17.8 Special Requirements During Top Heavy Plan Years.
(a) Notwithstanding any other provision of the Plan to the contrary, for
each Top Heavy Plan Year, in the case of a Participant (other than a Key
Employee) on the last day of such Top Heavy Plan Year who is not also a
participant in another qualified plan which satisfies the minimum contribution
and benefit requirements of Section 416 of the Code with respect to such
Participant, the sum of the ESOP Contributions and Loan Repayment Contributions
made with respect to such Participant, when expressed as a percentage of his
Total Compensation for such Top Heavy Plan Year, shall not be less than 3% of
such Participant's Total Compensation for such Top Heavy Plan Year or, if less,
the highest combined rate, expressed as a percentage of Total Compensation at
which ESOP Contributions and Loan Repayment Contributions were made on behalf of
a Key Employee for such Top Heavy Plan Year. The Employer shall make an
additional contribution to the Account of each Participant to the extent
necessary to satisfy the foregoing requirement.
(b) For any Top Heavy Plan Year, the number "1.0" shall be substituted for
the number "1.25" in Sections 8.2(c)(iii) and 8.2(c)(iv), except that:
(i) this Section 17.8(b) shall not apply to any individual for a Top Heavy
Plan Year that is not a Super Top Heavy Plan Year if the requirements of Section
17.8(a) would be satisfied for such Super Top Heavy Plan Year if the number "4%"
were substituted for the number 3% in Section 17.8(a); and
(ii) this Section 17.8(b) shall not apply to an individual for a Top Heavy
Plan Year if, during such Top Heavy Plan Year, there are no ESOP Contributions
or Loan Repayment Contributions allocated to such individual under this Plan,
there are no contributions under any other qualified defined contribution plan
maintained by the Employer, and there are no accruals for such individual under
any qualified defined benefit plan maintained by the Employer.
For purposes of this Section 17.8(b), the term Super Top Heavy Plan Year
means a Top Heavy Plan Year in which the Plan would meet the definitional
requirements of Sections 17.2(a) or 17.2(b) if the term "90%" were substituted
for the term "60%" in Sections 17.2(a), 17.2(b) and 17.2(c).
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
Section 18.1 Governing Law.
The Plan shall be construed, administered and enforced according to the
laws of the State of New York without giving effect to the conflict of laws
principles thereof, except to the extent that such laws are preempted by federal
law.
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Section 18.2 No Right to Continued Employee.
Neither the establishment of the Plan, nor any provisions of the Plan or of
the Trust Agreement establishing the Trust Fund nor any action of the Plan
Administrator, the Plan Administrator or the Trustee, shall be held or construed
to confer upon any Employee any right to a continuation of employment by the
Employer. The Employer reserves the right to dismiss any Employee or otherwise
deal with any Employee to the same extent as though the Plan had not been
adopted.
Section 18.3 Construction of Language.
Wherever appropriate in the Plan, words used in the singular may be read in
the plural, words used in the plural may be read in the singular, and words
importing the masculine gender may be read as referring equally to the feminine
and the neuter. Any reference to an Article or Section number shall refer to an
Article or Section of the Plan, unless otherwise indicated.
Section 18.4 Headings.
The headings of Articles and Sections are included solely for convenience
of reference. If there is any conflict between such headings and the text of the
Plan, the text shall control.
Section 18.5 Merger With Other Plans.
The Plan shall not be merged or consolidated with, nor transfer its assets
or liabilities to, any other plan unless each Participant, Former Participant,
Beneficiary and other person entitled to benefits, would (if that plan then
terminated) receive a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit he would have been
entitled to receive if the Plan had terminated immediately before the merger,
consolidation or transfer.
Section 18.6 Non-Alienation of Benefits.
(a) Except as provided in Section 18.6(b), the right to receive a benefit
under the Plan shall not be subject in any manner to anticipation, alienation or
assignment, nor shall such right to be liable for or subject to debts,
contracts, liabilities or torts. Should any Participant, Former Participant or
other person attempt to anticipate, alienate or assign his interest in or right
to a benefit, or should any person claiming against him seek to subject such
interest or right to legal or equitable process, all the interest or right of
such Participant or Former Participant or other person entitled to benefits in
the Plan shall cease, and in that event such interest or right shall be held or
applied, at the direction of the Plan Administrator, for or to the benefit of
such Participant or Former Participant, other person or his spouse, children or
other dependents in such manner and in such proportions as the Plan
Administrator may deem proper.
(b) This Section 18.6 shall not prohibit the Plan Administrator from
recognizing a Domestic Relations Order that is determined to be a Qualified
Domestic Relations Order in accordance with Section 18.7.
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Section 18.7 Procedures Involving Domestic Relations Orders.
Upon receiving a Domestic Relations Order, the Plan Administrator shall
segregate in a separate account or in an escrow account or separately account
for the amounts payable to any person pursuant to such Domestic Relations Order,
pending a determination whether such Domestic Relations Order constitutes a
Qualified Domestic Relations Order, and shall give notice of the receipt of the
Domestic Relations Order to the Participant or Former Participant and each other
person affected thereby. If, within 18 months after receipt of such Domestic
Relations Order, the Plan Administrator, a court of competent jurisdiction or
another appropriate authority determines that such Domestic Relations Order
constitutes a Qualified Domestic Relations Order, the Plan Administrator shall
direct the Trustee to pay the segregated amounts (plus any interest thereon) to
the person or persons entitled thereto under the Qualified Domestic Relations
Order. If it is determined that the Domestic Relations Order is not a Qualified
Domestic Relations Order or if no determination is made within the prescribed
18-month period, the segregated amounts shall be distributed as though the
Domestic Relations Order had not been received, and any later determination that
such Domestic Relations Order constitutes a Qualified Domestic Relations Order
shall be applied only with respect to benefits that remain undistributed on the
date of such determination. The Plan Administrator shall be authorized to
establish such reasonable administrative procedures as he deems necessary or
appropriate to administer this Section 18.7. This Section 18.7 shall be
construed and administered so as to comply with the requirements of Section
401(a)(13) of the Code.
Section 18.8 Leased Employees.
(a) Subject to Section 18.8(b), a leased employee shall be treated as an
Employee for purposes of the Plan. For purposes of this Section 18.8, the term
"leased employee" means any person (i) who would not, but for the application of
this Section 18.8, be an Employee and (ii) who pursuant to an agreement between
the Employer and any other person ("leasing organization") has performed for the
Employer (or for the Employer and related persons determined in accordance with
Section 414(n)(6) of the Code), on a substantially full-time basis for a period
of at least one year, services of a type historically performed by employees in
the business field of the Employer.
(b) For purposes of the Plan:
(i) contributions or benefits provided to the leased employee by the
leasing organization which are attributable to services performed for the
Employer shall be treated as provided by the Employer; and
(ii) Section 18.8(a) shall not apply to a leased employee if:
(A) the number of leased employees performing services for the Employer
does not exceed 20% of the number of the Employer's Employees who are not Highly
Compensated Employees; and
52
<PAGE>
(B) such leased employee is covered by a money purchase pension plan
providing (I) a nonintegrated contribution rate of at least 10% of the leased
employee's compensation; (II) immediate participation; (III) full and immediate
vesting; and (IV) coverage for all of the employees of the leasing organization
(other than employees who perform substantially all of their services for the
leasing organization).
Section 18.9 Status as an Employee Stock Ownership Plan.
It is intended that the Plan constitute an "employee stock ownership plan,"
as defined in Section 4975(e)(7) of the Code and Section 407(d)(6) of ERISA. The
Plan shall be construed and administered to give effect to such intent.
53
August 13, 1998
Dear Valued Borrower:
We are pleased to announce that our bank is reorganizing into the mutual
holding company form of organization. Gouverneur Bancorp, Inc. will own all the
stock of our bank and Cambray Mutual Holding Company will own a majority of the
stock of Gouverneur Bancorp, Inc. The remainder is being offered to our
depositors and, if not all sold to our depositors and our employee stock
ownership plan, it will be offered in a community offering with a preference to
residents of St. Lawrence, Jefferson and Lewis counties. The terms and
conditions of your loans from the bank will not change as a result of the
Reorganization.
To accomplish the Reorganization, our Plan of Reorganization must be
approved by our depositors and borrowers. A special meeting will be held on
September 24, 1998 to obtain that approval. Enclosed is a proxy card which will
allow you to cast your vote. We urge you to vote "YES" on the Reorganization
proposal listed on the proxy card. You need not vote on the proposal to convert
from a state to a federal charter because that matter involves only depositors.
Please sign the proxy card, mark your choice, and return the card to us in the
enclosed blue proxy return envelope as soon as possible. You can still come to
the meeting and vote in person even if you return your proxy card. Failure to
vote has the same effect as voting against the Reorganization, so please be sure
to return your proxy card.
You may also have the opportunity to subscribe for stock of Gouverneur
Bancorp, Inc. if you were a depositor as of March 31, 1997, June 30, 1998 or
July 31, 1998, with an account balance of at least $50. If you have subscription
rights, you will receive, along with this letter, a separate letter to
depositors and an order form.
Further information about voting is contained in the enclosed Prospectus
and Proxy Statement. Please read both documents carefully before deciding how to
vote. We have also enclosed a Question and Answer brochure which gives
information about the Reorganization. If you have any questions, you may call or
stop by our Stock Information Center Monday through Friday during bank business
hours at 42 Church Street, Gouverneur, New York 13642 (315) 287- 4293.
We look forward to continuing to provide you with quality financial
services in the future.
Sincerely,
/s/ Signature appears in original
Richard F. Bennett, President and CEO
THE COMMON STOCK BEING OFFERED IS NOT A DEPOSIT ACCOUNT AND IS NOT INSURED BY
THE FDIC OR ANY OTHER GOVERNMENT AGENCY. THIS IS NOT AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE
PROSPECTUS.
<PAGE>
August 13, 1998
Dear Valued Customer:
We are pleased to announce that our bank is reorganizing into the mutual
holding company form of organization. Gouverneur Bancorp, Inc. will own all the
stock of our bank and Cambray Mutual Holding Company will own a majority of the
stock of Gouverneur Bancorp, Inc. The remainder of the stock is being offered
first to our depositors.
As a depositor on March 31, 1997 or June 30, 1998, you have the right to
submit an order form to purchase stock of Gouverneur Bancorp, Inc. You are not
required to buy any stock. First priority subscription rights go to depositors
with accounts of at least $50 at March 31, 1997. Other depositors have lower
subscription priorities. If you want to buy stock, you must submit the enclosed
order form so it is received by the Bank, no later than noon, New York time, on
September 23, 1998.
Further information about purchasing stock is contained in the enclosed
Prospectus. Please read it carefully before deciding whether to purchase any
stock. We have also enclosed a Question and Answer brochure which gives
information about the Reorganization and the stock offering. If you have any
questions, you may call or stop by our Stock Information Center Monday through
Friday during bank business hours at 42 Church Street, Gouverneur, New York
13642 (315) 287- 4293.
Sincerely,
/s/ Signature appears in original
Richard F. Bennett, President and CEO
THE COMMON STOCK BEING OFFERED IS NOT A DEPOSIT ACCOUNT AND IS NOT INSURED BY
THE FDIC OR ANY OTHER GOVERNMENT AGENCY. THIS IS NOT AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE
PROSPECTUS.
<PAGE>
August 13, 1998
Dear Valued Customer:
We are pleased to announce that our bank is reorganizing into the mutual
holding company form of organization. Gouverneur Bancorp, Inc. will own all the
stock of our bank and Cambray Mutual Holding Company will own a majority of the
stock of Gouverneur Bancorp, Inc. The remainder of the stock is being offered
first to our depositors.
It is important to remember that:
o Your deposits will still be insured by the FDIC up to applicable
limits
o If you have any loans from the bank, the terms of your loans will not
change o You are not required to buy any stock
To accomplish the Reorganization, we need the approval of our depositors on
two proposals. Special meetings will be held on September 24, 1998 to obtain
those approvals. Enclosed is a proxy card which will allow you to cast your
vote. We urge you to vote "YES" on both proposals so that the Reorganization can
occur. Please sign the proxy card, mark your choice, and return the card to us
in the enclosed blue proxy return envelope as soon as possible. You can still
come to the meeting and vote in person even if you return your proxy card.
Failure to vote has the same effect as voting against the Reorganization, so
please be sure to return your proxy card.
You also have the right to submit an order form to purchase stock of
Gouverneur Bancorp, Inc. First priority subscription rights go to depositors
with accounts of at least $50 at March 31, 1997. Other depositors have lower
subscription priorities. If you want to buy stock, you must submit the enclosed
order form so it is received by the Bank, no later than noon, New York time, on
September 23, 1998.
Further information about voting and purchasing stock is contained in the
enclosed Prospectus and Proxy Statement. Please read both documents carefully
before deciding how to vote or whether to purchase any stock. We have also
enclosed a Question and Answer brochure which gives information about the
Reorganization and the stock offering. If you have any questions, you may call
or stop by our Stock Information Center Monday through Friday during bank
business hours at 42 Church Street, Gouverneur, New York 13642 (315) 287-4293.
Sincerely,
/s/ Signature appears in original
Richard F. Bennett, President and CEO
THE COMMON STOCK BEING OFFERED IS NOT A DEPOSIT ACCOUNT AND IS NOT INSURED BY
THE FDIC OR ANY OTHER GOVERNMENT AGENCY. THIS IS NOT AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE
PROSPECTUS.
<PAGE>
August 13, 1998
Dear Depositor:
As a qualified depositor of Gouverneur Savings and Loan Association
("Gouverneur Savings"), you have the right to vote upon Gouverneur Savings'
proposed Plan of Reorganization. However, the Plan of Reorganization provides
that Gouverneur Bancorp, Inc. will not offer shares in any state in which
compliance with the securities laws would be impracticable for reasons of cost
or otherwise. Unfortunately, the securities laws of your state would require
Gouverneur Bancorp, Inc. to register its common shares and /or its employees in
order to sell the common shares to you. Such registration would be prohibitively
expensive or otherwise impracticable. Therefore, the Common Stock of Gouverneur
Bancorp, Inc. is not being offered generally to persons in your state.
You may vote on the proposed Plan of Reorganization and we urge you to read
the enclosed Proxy Statement and Prospectus and execute the enclosed proxy card.
Please return your proxy card in the enclosed blue proxy return envelope.
Questions regarding the execution of the proxy card should be directed to our
Stock Information Center at (315) 287-4293.
Sincerely,
/s/ Signature appears in original
Richard F. Bennett
President and CEO
Enclosures
The common stock of Gouverneur Bancorp, Inc. is not a savings account or
deposit and will not be insured by the Federal Deposit
Insurance Corporation or any other government agency.
This is not an offer to sell or a solicitation of an offer to buy the
common stock of Gouverneur Bancorp, Inc. The offer is made only by
the Prospectus. The Prospectus does not constitute an offer for sale or
a solicitation of an offer to buy any shares of common stock of Gouverneur
Bancorp, Inc. in any state in which any offer, solicitation of an offer
or sale of stock would be unlawful.
<PAGE>
August 13, 1998
To Members and Friends of Gouverneur Savings and Loan Association:
First Albany Corporation, a member of the National Association of
Securities Dealers ("NASD"), is assisting Gouverneur Savings and Loan
Association ("Bank") in its Reorganization from a mutual form of organization to
the mutual holding company form of organization. Gouverneur Bancorp, Inc., a new
corporation formed under United States Law and Regulations of the OTS (the
"Company") will own a majority of the stock of the Bank.
At the request of the Company, we are enclosing materials explaining this
process and your options, including an opportunity to invest in shares of the
Company's common stock being offered to depositors, customers and the community
through September 23, 1998. Please read the enclosed offering materials
carefully. The Company has asked us to forward these documents to you in view of
certain requirements of the securities laws in your state.
If you have any questions, please visit our Stock Center at the Bank's
headquarters at 42 Church Street, Gouverneur, NY 13642 or call (315-281-4293).
Sincerely,
First Albany Corporation
THE SHARES OF COMMON STOCK BEING OFFERED ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY OTHER
GOVERNMENT AGENCY. THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY STOCK. THE OFFER IS MADE ONLY BY PROSPECTUS.
<PAGE>
[[Question and Answer Brochure to be printed in for panels folded, with the
first page of this version to appear as the front cover.]]
Gouverneur Savings and Loan Association
Reorganization
QUESTIONS
AND
ANSWERS
Gouverneur Bancorp, Inc.
THIS BROCHURE IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY
COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS. THE SHARES OF COMMON
STOCK ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
<PAGE>
Gouverneur Bancorp, Inc.
Gouverneur Savings and Loan Association
The reorganization of Gouverneur Savings and Loan Association into a mutual
holding company structure, including the organization of Gouverneur Bancorp,
Inc. and its related stock offering, is referred to as the "Reorganization" in
this pamphlet.
This pamphlet answers frequently asked questions about the Reorganization and
about your opportunity to invest in Gouverneur Bancorp, Inc. Please read the
enclosed Prospectus carefully before making an investment decision. For a
discussion of certain risk factors that should be considered before deciding
whether to buy stock, please see the "Risk Factors" section of the Prospectus.
<PAGE>
THE REORGANIZATION
Q. What is the Reorganization?
A. Gouverneur Savings and Loan Association, (the "Bank") is changing its legal
form from a mutual (no stockholders) savings and loan to a capital stock savings
and loan that will be a subsidiary of Gouverneur Bancorp, Inc. (the "Company").
In addition, the Bank will organize Cambray Mutual Holding Company (the "Mutual
Holding Company") which will own the majority of stock of the Company. The
Reorganization also involves the public sale of 45% of the common stock of the
Company (the "Offering") which will result in the public owning a minority
interest in the Company. After the Reorganization the Bank will continue to
provide customers with traditional financial services.
Q. Why is the Bank Reorganizing?
A. The Board of Directors has determined that the Reorganization is in the best
interests of the Bank and its customers for a number of reasons including:
o The Offering gives depositors (including directors, officers, and employees)
an opportunity to own an interest in the Bank and the Company. Management
believes that the Offering will provide purchasers of the common stock with an
opportunity to share in the Bank's future growth and potential earnings. There
can be no assurances, however, as to the Bank's future growth or potential
earnings.
o While the Bank currently exceeds all regulatory capital requirements, raising
equity capital through the Offering permits the Bank to enlarge its capital base
and will help the Bank take advantage of future business opportunities.
Q. Will there be any changes in directors, officers or employees as a result of
the Reorganization?
A. No. The directors, officers and employees of the Bank will not change as a
result of the Reorganization. The management and employees of the Bank will
continue in their current capacities and its directors and officers will serve
as the initial directors and officers of the Company and Mutual Holding Company.
The day-to-day activities of the Bank will not change as a result of the
Reorganization.
Q. Will the Reorganization affect deposit accounts or loan accounts?
A. No. The Reorganization will not affect the amount, interest rate or
withdrawal rights of deposit accounts, which will continue to be insured by the
FDIC to the maximum legal limit. Likewise, the loan accounts and rights of
borrowers will not be affected.
VOTING RIGHTS
Q. Who is eligible to vote on the Reorganization?
A. Depositors and certain borrowers of the Bank as of July 31, 1998, the Voting
Record Date, are eligible to vote. They have been provided with a Proxy
Statement describing the Reorganization. Depositors will also vote to approve a
change in the Bank's charter so the Bank can reorganize as a Federal Savings and
Loan Association.
Q. If I received proxy cards, am I required to vote on the Reorganization?
A. No. However, the Board of Directors urges you to vote "FOR" all matters
listed, sign all of the proxy cards and either hand-deliver them to our office
or mail them using the enclosed reply envelope.
Q. Why did I get several proxy cards?
A. If you have more than one account, you may have received more than one proxy
card, depending on the ownership structure of your accounts. Please complete,
sign and submit all proxy cards.
Q. Am I required to purchase stock if I vote in favor of the Reorganization?
<PAGE>
A. No. To become a stockholder, you must submit a Stock Order Form and payment,
as described below.
Q. May I vote in person at the Special Meetings?
A. Yes. If you attend the Special Meetings, you may revoke your existing proxy,
if any, and vote in person. Please send in your proxy card even if you plan on
attending the Special Meetings.
PURCHASING STOCK
Q. Who may purchase the common stock?
A. The Bank's depositors and members of the general public may subscribe for the
Company's common stock during the offering period. In the event, however, that
orders exceed the common stock available, the common stock will be allocated on
a priority basis to: (1) depositors of the Bank with aggregate deposits of $50
or more on March 31, 1997; (2) the Bank's Employee Stock Ownership Plan; (3)
depositors of the Bank with aggregate deposits of $50 or more on June 30, 1998;
(4) depositors of the Bank as of July 31, 1998 (the "Voting Record Date"); and
(5) members of the general public. Please note that you are not obligated to
purchase stock.
Q. How much common stock is being offered?
A. The Company is offering between 1,415,250 and 1,914,750 shares of common
stock which will represent a 45% minority ownership interest of the total common
stock expected to be outstanding. The number of shares offered is based on an
independent appraisal of the Company and the Bank, which determined that the
estimated pro forma market value was between $15.7 and $21.3 million as of June
5, 1998. The number of shares sold may be increased to 2,201,962 as described in
the Prospectus.
Q. What is the price per share?
A. The Company is offering the shares at a purchase price of $5.00 per share.
All purchasers, including the directors and officers, will pay the same price
per share. No commission will be charged for stock purchased in the Offering.
Q. How do I purchase common stock?
A.Complete the Stock Order Form and submit it to the Bank with payment so it is
received by 12:00 noon, New York time, on September 23, 1998. You may
hand-deliver the Stock Order Form to the Bank's office, or you may use the
enclosed Reply Envelope. Payment may be made by check or money order or by
authorization of withdrawal from one or more Gouverneur Savings and Loan
Association deposit accounts. (Note that any applicable penalty for early
withdrawal will be waived for such withdrawals).
Q. Will I receive interest on funds I submit for stock purchases?
A. Yes. Funds received will earn interest at the Bank's passbook account rate
from the date payment is received until the Offering is completed. With respect
to authorized account withdrawals, interest will continue to accrue at the
account's contract rate until the Offering is completed.
Q. What will the minimum and maximum number of shares be that I may purchase in
the Offering?
A. The minimum purchase is 25 shares ($125). The maximum individual order in the
Offering is 30,000 shares ($150,000) and no person, together with associates of
and persons acting in concert with such persons may purchase more than 30,000
shares ($150,000).
Q. Is the common stock insured by the FDIC?
A. No. Stock cannot be insured by the FDIC or any other government agency.
Q. May I obtain a loan from the Bank to pay for my shares?
<PAGE>
A. No. Regulations do not allow the Bank to make loans for this purpose.
Q. Can I subscribe for shares using funds in my IRA at Gouverneur Savings and
Loan Association?
A. Yes. However, to use such funds to purchase common stock, you need to
establish a self-directed account with an outside trustee. Please call the Stock
Information Center if you wish to use funds in your IRA or any tax-qualified
funds at other institutions to purchase common stock in the Offering. This will
require additional processing time, so please contact us as soon as possible.
Q. When does the Offering terminate?
A.The Offering will terminate at 12:00 noon New York time, on September 23,
1998, unless extended by the Bank.
Q. May I change my mind after I submit an Order?
A. The stock order you submit cannot be canceled or withdrawn unless the
Reorganization is not completed by November 7, 1998. However, you may order
additional shares by completing another stock order form, subject to the maximum
purchase limitations.
Q. Are my subscription rights transferable?
A. No. No person may transfer or enter into any agreement to transfer his or her
subscription rights issued under the Reorganization or the shares to be issued
upon the exercise of such rights. Persons violating such prohibition will lose
their right to purchase stock in the Offering and may be subject to further
government sanctions.
Q. What will happen to my order if orders are received for more common stock
than is available?
A. This is referred to as an over-subscription and shares will be allocated on a
priority basis as disclosed in the Prospectus. There is no guarantee that an
order will be filled either in whole or in part. Of course, if we are not able
to fill an order (either wholly or partly), funds remitted which are not used
toward the purchase of stock will be promptly refunded with interest. If payment
for the stock is made by authorization to withdraw the funds from a Gouverneur
Savings and Loan Association account, those funds not used to purchase common
stock will remain in that account.
Q. When will I receive my Stock Certificate?
A. Stock certificates will be mailed as soon as practicable after the Offering
is completed. Please be aware that you may not be able to sell the shares you
purchased until you have received a stock certificate.
Q. May I purchase or sell shares in the future?
A. You may purchase or sell shares through a stockbroker. The Company
anticipates that following the Offering, the common stock will be listed on the
Nasdaq Small-Cap Market under the symbol "GOUV". There can be no assurance,
however, that an active and liquid market for the common stock will develop.
<PAGE>
[Back Cover]
QUESTIONS?
PLEASE CALL
THE STOCK INFORMATION CENTER AT
(315) 287-4293
FROM 9:00 AM TO 4:00 PM
MONDAY THROUGH FRIDAY
Gouverneur Bancorp, Inc.
42 Church Street
Gouverneur, New York 13642
<PAGE>
Press Release
FOR IMMEDIATE RELEASE
For More Information Contact:
Richard F. Bennett
Telephone: (315) 287-2600
GOUVERNEUR SAVINGS AND LOAN ASSOCIATION REORGANIZATION APPROVED
STOCK OFFERING TO COMMENCE
Gouverneur, New York, August 21, 1998 - Richard F. Bennett, President and
Chief Executive Officer of Gouverneur Savings and Loan Association, Gouverneur,
New York, announced today that Gouverneur Savings and Loan Association has
received approval from the Office of Thrift Supervision to reorganize from a
state chartered mutual savings and loan association to a federally chartered
stock savings association indirectly owned by a mutual holding company. In
connection with the Reorganization, Gouverneur Savings and Loan Association is
forming a mid-tier stock form holding company, Gouverneur Bancorp, Inc., to own
all of the outstanding capital stock of Gouverneur Savings and Loan Association.
When the Reorganization is consummated, 55% of the common stock of Gouverneur
Bancorp, Inc., will be owned by a new mutual holding company, Cambray Mutual
Holding Company, and the remaining 45% will be sold to the public.
A Prospectus and Proxy Statement describing the Reorganization is being
mailed to certain depositors and borrowers of the Bank in a few days. As part of
the Reorganization, Gouverneur Bancorp, Inc. is offering an estimated 1,914,750
shares of common stock at $5.00 per share, which may increase up to 2,201,962
shares. Certain of the Bank's past and present depositors will have the
opportunity to purchase stock through a subscription offering that closes on
September 23, 1998. Shares that are not subscribed for during the subscription
offering, if any, will be offered to the general public, with preference given
to natural persons who are residents of St. Lawrence, Jefferson and Lewis
Counties in a community offering. The offerings are being managed by First
Albany Corporation of Albany, New York.
According to Mr. Bennett, "Our day to day operations will not change as a
result of the Reorganization. We will continue to be FDIC insured and the
interest rates and terms on our existing deposits and loans will remain the
same."
At June 30, 1998, Gouverneur Savings and Loan Association had total assets
of $55.7 million and total equity of $11.2 million.
Customers or interested members of the community with questions concerning
the Reorganization or the stock offering should call the Stock Information
Center at (315) 287-4293.
<PAGE>
The following special notices are provided at the request of the state
securities regulators in the states indicated.
============================================================
The following notice is provided to persons and entities residing in the State
of New Jersey:
"AN INVESTMENT IN THE COMMON STOCK INVOLVES CERTAIN RISKS"
============================================================
The following notice is provided to persons and entities residing in the State
of Maryland:
"Gouverneur Bancorp, Inc. has broad discretion regarding the investment of the
net proceeds remaining in its hands after first using a portion of the proceeds
to:
o pay the expenses of the Reorganization;
o purchase all the stock to be issued by Gouverneur Savings and Loan
Association; and
o fund the loan to be made to its Employee Stock Ownership Plan.
The net proceeds retained by the Company after such use are estimated to
represent approximately 39% of the total dollar amount of Common Stock sold,
including stock sold to the ESOP but excluding stock issued to the Mutual
Holding Company. You may want to consider the lack of certainty regarding how
the remaining net proceeds will be used as an additional risk in deciding
whether to purchase any Common Stock. For a detailed discussion of the types of
investments and activities which are permitted for Gouverneur Bancorp, Inc., see
the discussion under the caption "Regulation - Holding Company Regulation."
