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As filed with the Securities and Exchange Commission on April 22, 1998.
File No. 811-2631
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT /X/
OF 1940
AMENDMENT No. 21
CHESTNUT STREET EXCHANGE FUND
-----------------------------
(Exact Name of Registrant as Specified in Charter)
400 Bellevue Parkway
Wilmington, Delaware 19809
--------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number: (302) 792-2555
Edward J. Roach
400 Bellevue Parkway
Wilmington, Delaware 19809
--------------------------
(Name and Address of Agent for Service)
Copy to:
Vernon Stanton, Jr., Esq.
Drinker Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, Pennsylvania 19107-3496
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CONTENTS OF FORM N-1A
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PART A. INFORMATION REQUIRED IN A PROSPECTUS 1
Item 1. Cover Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Synopsis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 3. Condensed Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 4. General Description of Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 5. Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 5A. Management's Discussion of Fund Performance . . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 6. Capital Stock and Other Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 7. Purchase of Securities Being Offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 8. Redemption or Repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 9. Pending Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PART B. STATEMENT OF ADDITIONAL INFORMATION 14
Item 10. Cover Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 11. Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 12. General Information and History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 13. Investment Objective and Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 14. Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 15. Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Item 16. Investment Advisory and Other
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Item 17. Brokerage Allocation and Other
Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Item 18. Capital Stock and Other Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Item 19. Purchase, Redemption, and Pricing of
Securities Being Offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Item 20. Tax Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Item 21. Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Item 22. Calculation of Performance Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Item 23. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
PART C. OTHER INFORMATION C-1
Item 24. Financial Statements and Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
Item 25. Persons Controlled by or under Common Control with Registrant . . . . . . . . . . . . . . . . C-3
Item 26. Number of Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-3
Item 27. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-3
Item 28. Business and Other Connections of Investment Adviser . . . . . . . . . . . . . . . . . . . . . C-3
Item 29. Principal Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-9
Item 30. Location of Accounts and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-9
Item 31. Management Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-9
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PART A. INFORMATION REQUIRED IN A PROSPECTUS
Item 1. Cover Page
Inapplicable.
Item 2. Synopsis
Inapplicable.
Item 3. Condensed Financial Information
Inapplicable.
Item 4. General Description of Registrant
(i) Registrant is a limited partnership organized as
of March 23, 1976 under The Uniform Limited
Partnership Act of California. Registrant is an
open-end diversified management investment
company.
(ii) Registrant's investment objectives are to seek
long-term growth of capital and, secondarily,
current income. Registrant will invest in a
portfolio of common stocks and securities
convertible into common stocks of issuers included
in the "List of Representative Companies" on pages
10 to 12 of Post- Effective Amendment No. 1 to
Registrant's Registration Statement on Form S-5
filed under the Securities Act of 1933 on October
28, 1976, which is incorporated herein by
reference, and of other issuers of comparable
quality. Registrant may also invest in other
types of securities for temporary or defensive
purposes, including preferred stocks, investment
grade bonds and money market obligations such as
U.S. Government securities, certificates of
deposit and commercial paper.
Up to 10% of the value of Registrant's total
assets may be invested in securities which are
subject to legal or contractual restrictions on
resale and which Registrant reasonably believes
will be saleable after a two year holding period
pursuant to Rule 144 under the Securities Act of
1933.
The Registrant may write exchange-traded covered
call options on portfolio securities up to 25% of
the value of its assets and may loan portfolio
<PAGE> 4
securities as permitted under subpart (8) of this
Item 4(ii). The Registrant will not sell securities
covered by outstanding options and will endeavor to
liquidate its position as an option writer in a
closing purchase transaction rather than deliver
portfolio securities upon exercise of the option.
The extent to which the Registrant may be able to
write such options will depend in part on state
securities regulations as amended from time to
time.
The investment objectives stated above may be
changed by the Board of Managing General Partners
without the approval of a majority of Registrant's
outstanding voting securities.
Registrant's fundamental policies which may not be
changed without the approval of a majority of
Registrant's outstanding voting securities are as
follows:
(1) Registrant will not issue any senior
securities (as defined in the Investment
Company Act of 1940).
(2) Registrant will not purchase securities on
margin or sell any securities short.
Registrant will not purchase or write
puts, calls, straddles or spreads with
respect to any security except that (i)
Registrant may write call options on
securities constituting not more than 25%
of the value of its assets if the option
is listed on a national securities
exchange and, at all times while the
option is outstanding, Registrant owns the
securities against which the option is
written or owns securities convertible
into such securities, and (ii) Registrant
may purchase call options in closing
purchase transactions to liquidate its
position as an option writer.
(3) Registrant will not borrow money except
from banks in amounts which in the
aggregate do not exceed 10% of the value
of its assets at the time of borrowing.
This borrowing provision is not for
purposes of leverage but is intended to
facilitate the orderly sale of portfolio
securities to accommodate abnormally heavy
redemption requests, and to pay
subscription fees due with respect to
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the exchange without having to sell
portfolio securities. Securities may be
purchased for Registrant's portfolio while
borrowings are outstanding.
(4) Registrant will not act as an underwriter
(except as it may be deemed such in a sale
of restricted securities owned by it).
(5) It is not the policy of Registrant to
concentrate its investments in any
particular industry, but if it is deemed
advisable in light of Registrant's
investment objectives, up to 25% of the
value of its assets may be invested in any
one industry. Registrant will not be
required to reduce holdings in a
particular industry if, solely as a result
of price changes, the value of such
holdings exceeds 25% of the value of
Registrant's total assets.
(6) Registrant will not purchase or sell real
estate or real estate mortgage loans.
(7) Registrant will not purchase or sell
commodities or commodity contracts.
(8) Registrant will not make loans except by
(i) the purchase of debt securities in
accordance with its investment objectives
and (ii) the loaning of securities against
collateral consisting of cash or
securities issued or guaranteed by the
U.S. Government, its agencies or
instrumentalities, which is equal at all
times to at least 100% of the value of the
securities loaned. Registrant will lend
portfolio securities only when its
investment adviser believes that the net
return to Registrant in consideration of
the loan is reasonable, that any fee paid
for placing the loan is reasonable and
based solely upon services rendered, that
the loan is consistent with Registrant's
investment objectives, and that no
affiliate of Registrant or of its
investment adviser is involved in the
lending transaction or is receiving any
fees in connection therewith. Registrant
will not have the right to vote securities
loaned, but will have the right to
terminate such a loan at any time and
receive back equivalent securities and to
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receive amounts equivalent to all dividends
and interest paid on the securities loaned.
(9) Registrant will not:
(A) Mortgage, pledge or hypothecate
its assets except to secure
borrowings described in Item
4(ii)(3) and in amounts not
exceeding 10% of the value of its
assets.
(B) Invest more than 5% of its assets
at the time of purchase in the
securities of any one issuer
(exclusive of securities issued
or guaranteed by the U.S.
Government, its agencies or
instrumentalities).
(C) Purchase securities if such
purchase would result in its
owning more than 10% of the
outstanding voting securities of
any one issuer at the time of
purchase.
(D) Invest in securities of companies
which have a record, together
with their predecessors, of less
than five years of continuous
operation.
(E) Purchase or hold securities of
any company if, to its knowledge,
those General Partners of
Registrant and those directors
and officers above the level of
Senior Vice President of its
investment adviser beneficially
owning more than 1/2 of 1% of the
securities of that company,
together own beneficially more
than 5% of the securities of such
company taken at market value.
(F) Purchase the securities of other
investment companies except that
Registrant has accepted for
exchange shares of common stock
of Coca-Cola International
Corporation in accordance with
the limitations imposed by the
Investment Company Act of 1940.
(G) Purchase oil, gas or other
mineral leases or partnership
interests in oil,
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gas or other mineral exploration
programs.
(H) Knowingly purchase or otherwise
acquire any equity or debt
securities which are subject to
legal or contractual restrictions
on resale if, as a result
thereof, more than 10% of the
value of its assets would be
invested in such securities.
(I) Invest in companies for the
purpose of exercising control or
management.
Any investment policy or restriction in
these Items (1)-(9) which involves a
maximum percentage of securities or assets
shall not be considered to be violated
unless an excess over the percentage
occurs immediately after an acquisition of
securities or utilization of assets and
results therefrom.
Registrant's investment policies which are not
deemed fundamental and may be changed without
shareholder approval are as follows:
Registrant does not intend to engage in any
significant degree in short-term trading.
Portfolio turnover is not expected to exceed 15%,
although Registrant reserves the right to exceed
this turnover rate. The tax consequences of a
sale of portfolio securities will be considered
prior to a sale, but sales will be effected when
the investment adviser believes a sale would be in
the best interests of Registrant's shareholders
even though capital gains will be realized.
Registrant will not sell securities covered by
outstanding options and will endeavor to liquidate
its position as an option writer in a closing
purchase transaction rather than by delivering
portfolio securities upon exercise of the option.
* * *
Limited Partners generally are not personally
liable for liabilities of the Fund. However, if
the Fund were unable to pay its liabilities,
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recipients of distributions from the Fund could be
liable to creditors of the Fund to the extent of
such distributions, plus interest. See Item 6.
A Limited Partner has no right to take any part in
the control of the Partnership business, and the
exercise of such control would subject a Limited
Partner to the personal liability of a General
Partner for obligations of the Fund. Although no
absolute assurance can be given due to the lack of
specific statutory authority and the fact that
there are no authoritative judicial decisions on
the matter, the Fund received an opinion from
California Counsel that the existence and exercise
by the Limited Partners of the voting rights
provided for in the Partnership Agreement do not
subject the Limited Partners to liability as
general partners under the California Act. It is
possible, however, that the existence or exercise
of such rights, might subject the Limited Partners
to such liability under the laws of another state.
In the event that a Limited Partner should be
found to be liable as a general partner, then, to
the extent the assets and insurance of the Fund
and of the General Partners were insufficient to
reimburse a Limited Partner, he would be required
to personally satisfy claims of creditors against
the Fund.
The net asset value of the Shares on redemption or
repurchase may be more or less than the initial
offering price of the Shares depending upon the
market value of the Fund's portfolio securities at
the time of redemption or repurchase.
Item 5. Management of the Fund
(a) The business and affairs of the Fund are managed
by its five Managing General Partners. Their
addresses and principal occupations for the past
five years are stated at Item 14.
(b)(i) Registrant's investment advisers are PNC Bank,
National Association ("PNC Bank") which has banking
offices at 1600 Market Street, Philadelphia,
Pennsylvania 19101 and BlackRock Institutional
Management Corporation ("BIMC"), formerly PNC
Institutional Management Corporation, located at
Bellevue Park Corporate Center, 400 Bellevue
Parkway, Wilmington, Delaware 19809. PNC Bank and
its predecessors
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<PAGE> 9
have been in the business of managing the investments
of fiduciary and other accounts in the Philadelphia
area since 1847. Investment advisory services are
provided to the Registrant by PNC Bank through its
Trust Division. BIMC was organized by PNC Bank in
June 1977 to perform investment advisory services for
Registrant and certain other regulated investment
companies advised by PNC Bank.
All of the capital stock of BIMC is owned by PNC
Bank. All of the capital stock of PNC Bank is owned
by PNC Bancorp, Inc. with principal offices in
Wilmington, Delaware. All of the capital stock of
PNC Bancorp, Inc. is owned by PNC Bank Corp., a
publicly held bank holding corporation with principal
offices in Pittsburgh, Pennsylvania.
(ii) The investment advisers, subject to the
authority of the Managing General
Partners, are responsible for the overall
management of the Fund's business affairs.
(iii) For the services provided by PNC Bank and
BIMC and the expenses assumed by them under
the Advisory Agreement dated January 1,
1998, Registrant has agreed to pay BIMC a
fee, computed daily and payable monthly, at
the annual rate of 4/10ths of 1% of the
first $100,000,000 of the Registrant's net
assets, plus 3/10ths of 1% of the net
assets exceeding $100,000,000. For the
fiscal year ended December 31, 1997, the
Fund paid $1,463,053, or approximately .43%
of its average net assets to BIMC pursuant
to its former Investment Advisory
Agreement.
(c) Since January 1996, Mary Elizabeth C. Pfeil has been
primarily responsible for the day-to-day management of
the Fund's portfolio. Prior to joining PNC Equity
Advisors Company in 1993, Ms. Pfeil was a member of
the Equity Research Group of PNC Asset Management
Group (then named PNC Investment Management and
Research) where she covered the energy and
housing-related industries. From 1990 to 1992, she was
employed by Wellington Management Company as a
generalist equity researcher. Prior to 1990, Ms. Pfeil
worked first as a commercial lender and later as an
equity analyst for PNC Bank. She is a member of the
Financial Analysts of Philadelphia and is a Chartered
Financial Analyst.
(d) Inapplicable.
(e) The Fund's transfer agent and dividend disbursing
agent is PFPC Inc. ("PFPC"). Its principal business
address is 400 Bellevue Parkway, Wilmington, DE
19809.
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(f) For fiscal year ended December 31, 1997, the Fund's
expenses totalled $1,697,789, or approximately .50%
of its average net assets.
(g) Inapplicable.
Item 5A. Management's Discussion of Fund Performance
Inapplicable.
Item 6. Capital Stock and Other Securities
(a) Registrant has one class of partnership interest,
no par value ("Shares"). All Shares are entitled
to participate equally in distributions declared
by the Board of Managing General Partners. Each
full Share entitles the record holder thereof to
one full vote, and each fractional Share to a
fractional vote, on all matters submitted to the
shareholders. Shareholders are not entitled to
cumulative voting in elections for General
Partners. Each Share has equal liquidation
rights. There are no pre-emptive rights or
conversion rights.
Registrant is a limited partnership formed under
The Uniform Limited Partnership Act of
California. Limited Partners generally are not
personally liable for liabilities of Registrant.
However, if Registrant were unable to pay its
liabilities, recipients of distributions from
Registrant could be liable to certain creditors
of Registrant to the extent of such
distributions, plus interest. Registrant
believes that, because of the nature of
Registrant's business, the assets and insurance
of Registrant and of the General Partners, and
Registrant's ability to contract with third
parties to prevent recourse by the party against
a Limited Partner, it is unlikely that Limited
Partners will receive distributions which have
to be returned or that they will be subject to
liability as General Partners. In the event
that a Limited
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<PAGE> 11
Partner should be found to be liable as a General
Partner, then, to the extent the assets and
insurance of Registrant and of the General Partners
were insufficient to reimburse a Limited Partner,
he would be required to personally satisfy claims
of creditors against Registrant.
(b) Inapplicable.
(c) The rights of the holders of Shares may not be
modified otherwise than by the vote of a majority
of outstanding shares.
(d) Inapplicable.
(e) Shareholder inquiries should be made to the Fund,
400 Bellevue Parkway, Wilmington, Delaware 19809,
telephone (302) 792-2555.
(f) Registrant's Dividend/Distribution Policy Beginning
on January 1, 1998:
Effective January 1, 1998, the Registrant is deemed
a corporation, rather than a partnership, for
federal tax purposes. In connection with this
change in its federal tax status, the Registrant
will elect to be taxed as a regulated investment
company ("RIC"). To qualify as a RIC under the
Internal Revenue Code (the "Code"), the Registrant
is required to meet certain income, diversification
and distribution requirements. For example, to
qualify as a RIC, the Registrant must pay as
dividends each year at least 90% of its investment
company income which includes, but is not limited
to, taxable interest, dividends and short-term
capital gains less expenses. The Registrant intends
to continue its historic policy of regular and
quarterly dividends and to pay an additional
dividend at year end so that total distributions
for each year equal 100% of its net investment
income. The Registrant intends to retain all of
its net long-term capital gains. Under the new
policy, each Limited Partner will be deemed to have
received his or her pro rata share of net long-term
capital gain and will receive a tax credit equal to
the pro rata share of the capital gains tax paid by
the Fund. Formerly the Registrant, when it was
taxed as a partnership, distributed approximately
30% of its net long-term capital gains to provide
its Limited Partners, who were deemed to have been
distributed all of such gains, with funds with
which to pay the capital gains tax.
See Item 6(g) for more information on the tax
consequences to Partners of an investment in the
Registrant.
Investors who elect to participate in the
Registrant's Systematic Withdrawal Plan will
receive quarterly in cash as a partial redemption
of their Shares up to 3/4 of 1% of the net asset
value of their Shares determined as of the last
trading day of each calendar quarter.
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<PAGE> 12
(g) Tax Consequences to Partners Invested in the
Registrant Beginning on January 1, 1998:
Under the publicly traded partnership Rules of
the Code, the Registrant is treated as a
corporation for federal income tax purposes as of
January 1, 1998. However, the Registrant intends
to qualify as a RIC under the Code. The Code's
RIC provisions provide pass-through treatment of
taxable income similar to that provided under the
Code's partnership rules. Therefore, to the
extent that the Registrant's earnings are
distributed to its partners as required by the
RIC provisions of the Code, the Registrant itself
will not be required to pay federal income tax.
Distributions of net investment income by the
Registrant as a RIC will be treated as ordinary
income in determining a partner's gross income
for tax purposes, whether the partner receives
these dividends in cash or Shares. The Registrant
intends to retain all of its net realized
long-term capital gains as a RIC and pay the tax
on the gain at the required corporate rate. Each
partner will be required to report his allocable
portion of the Registrant's gain, but each
partner will also receive a tax credit for his
allocable portion of the tax paid by the
Registrant. As a result, each partner should
receive a federal income tax benefit equal to the
difference between the corporate tax rate and the
individual tax rate on long-term capital gains.
In addition, any retained capital gains, net of
tax, would generally increase a partner's
investment (and tax basis) in the Registrant.
Registrant will inform each Partner as to the
amount and nature of such income or gains.
Each partner should consult with his tax adviser
with specific references to his own tax
situation.
See Item 20 for additional background information
on the Registrant's federal income tax status.
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Item 7. Purchase of Securities Being Offered
(a) Inapplicable.
(b) Inapplicable.
(c) Investors may, by notice in writing to the
transfer agent, elect to participate in the
Systematic Withdrawal Plan (the "Plan").
Participants in the Plan may elect to receive
quarterly in cash as a partial redemption of
their Shares up to 3/4 of 1% of the net asset
value of their Shares as of the close of trading
on the New York Stock Exchange on the last
trading day of each calendar quarter. Registrant
does not intend to impose a charge upon investors
for participating in the Plan. Participants may
withdraw from the Plan at any time by written
notice to the transfer agent.
(d) Inapplicable.
(e) Inapplicable.
(f) Inapplicable.
(g) Inapplicable.
Item 8. Redemption or Repurchase
(a) Shares may be redeemed at the option of the
investor at any time without charge at their net
asset value next computed after receipt by PFPC
of a written request for redemption setting forth
the name of the Registrant and the investor's
account number. The request must be accompanied
by certificates (if issued) or if certificates
have not been issued, by stock powers. The
certificate or stock powers must be endorsed by
the record owner(s) exactly as the Shares are
registered and the signature(s) must be
guaranteed by an "eligible guarantor institution"
as defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934. The Registrant reserves
the right to require that additional documents be
furnished in the case of redemptions by other
than the registered owner of the Shares.
Except to the extent Shares are redeemed for
cash pursuant to the Systematic Withdrawal Plan,
Registrant intends to distribute upon redemption
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<PAGE> 14
securities in kind valued at the same value used
for purposes of next determining Registrant's
net asset value after the receipt of the request
for redemption in proper form. Registrant may
in its discretion pay part or all of redemption
proceeds in cash.
The proceeds of redemption will be paid as soon
as possible but not later than seven days after
the request for redemption is received with the
required documentation. The Registrant may
suspend the right of redemption or delay payment
during any period when the New York Stock
Exchange is closed (other than customary weekend
and holiday closings); when trading on that
exchange is restricted or an emergency exists
which makes disposal or valuation of portfolio
securities impracticable; or during such other
period as the Securities and Exchange Commission
may by order permit.
The net asset value of the Shares on redemption
or repurchase may be more or less than the
initial offering price of the Shares depending
upon the market value of the Fund's portfolio
securities at the time of redemption or
repurchase.
(b) Inapplicable.
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<PAGE> 15
(c) Inapplicable.
(d) Inapplicable.
Item 9. Pending Legal Proceedings
Inapplicable.
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PART B. STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page
Inapplicable.
<TABLE>
<CAPTION>
Item 11. Table of Contents Page No.
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<S> <C>
General Information and History . . . . . . . . . . . . . . . . . . . . . . . . . 14
Investment Objectives and Policies . . . . . . . . . . . . . . . . . . . . . . . . 14
Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Investment Advisory and Other Services . . . . . . . . . . . . . . . . . . . . . . 18
Brokerage Allocation and Other Practices . . . . . . . . . . . . . . . . . . . . . 20
Capital Stock and Other Securities . . . . . . . . . . . . . . . . . . . . . . . . 21
Purchase, Redemption and Pricing of
Securities Being Offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Tax Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Calculation of Performance Data . . . . . . . . . . . . . . . . . . . . . . . . . 24
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
Item 12. General Information and History
Inapplicable.
Item 13. Investment Objective and Policies
(a) See Item 4(ii).
(b) See Item 4(ii).
(c) See Item 4(ii).
(d) For the fiscal years ended December 31, 1997 and
1996, Registrant's portfolio turnover rates were
1.26% and 3.92%, respectively.
Item 14. Management of the Fund
(a) Managing General Partners and officers of the
Fund:
-14-
<PAGE> 17
<TABLE>
<CAPTION>
Principal Occupations
Position with During Past 5 Years and
Name and Address Age with Registrant and Current Affiliations
- ---------------- ---- --------------- ------------------------
<S> <C> <C> <C>
Richard C. Caldwell 53 Managing Executive Vice President, PNC Bank; Director of various
400 Bellevue Parkway General affiliates and subsidiaries of PNC Bank, including BIMC;
Wilmington, DE 19809 Partner Director or Trustee of no other investment companies
advised by BIMC.
Robert R. Fortune 81 President and Financial Consultant; Former Chairman,
2920 Ritter Lane Chairman of the President and Chief Executive
Allentown, PA 18104 Managing General Officer, Associated Electric &
Partners Gas Insurance Services Limited from 1984 to 1993; Member
of the Financial Executives Institute and American
Institute of Certified Pubic Accountants; Director,
Trustee or Managing General Partner of 4 other
investment companies advised by BIMC.
G. Willing Pepper 89 Managing Retired; Chairman of the Board,
128 Springton Lake Rd. General Specialty Composites Corporation
Media, PA 19063 Partner until May 1984; Chairman of the Board, The Institute for
Cancer Research until 1979; Director, Philadelphia
National Bank until 1978; President, Scott Paper
Company, 1971-1973; Director, Trustee or Managing
General Partner of 5 other investment companies advised
by BIMC.
Langhorne B. Smith 61 Managing President and Director, the Sandridge Corporation
Suite 400 General (private investment company); Executive Vice President
Plymouth Meeting Partner and Director, Clancil Enterprises, Inc. (private
Executive Campus investment company); Director or Trustee of 1 other
630 Germantown Pike investment company advised by BIMC.
Plymouth Meeting, P.A. 19462
David R. Wilmerding, Jr. 62 Managing President, Gee Wilmerding
Gee Wilmerding & Associates General & Associates (investment advisers) since February 1989;
Aldwyn Center Partner Director, Beaver Management Corporation; Until September
Villanova, PA 19085 1988, President, Treasurer and Trustee, The Mutual
Assurance Company; Until September 1988, Chairman,
President, Treasurer and Director, The Green Tree
Insurance Company (a wholly-owned subsidiary of The
Mutual Assurance Company); Until September 1988,
Director, Keystone State Life Insurance Company;
Director or Trustee
</TABLE>
-15-
<PAGE> 18
<TABLE>
<CAPTION>
Principal Occupations
Position with During Past 5 Years and
Name and Address Age with Registrant and Current Affiliations
- ---------------- ---- --------------- ------------------------
<S> <C> <C> <C>
of 2 other investment companies advised by BIMC.
Edward J. Roach 73 Treasurer Certified Public Accountant; Partner
400 Bellevue Parkway of the accounting firm of Main
Wilmington, DE 19809 Hurdman until 1981; Vice
Chairman of the Board, Fox Chase Cancer Center;
Trustee Emeritus, Pennsylvania
School for the Deaf; Trustee Emeritus, Immaculata
College; Former Director, Biotrol USA, Inc.; President,
Vice-President and/or Treasurer of 2 other
investment companies advised by BIMC; Director, The
Bradford Funds, Inc.
Morgan R. Jones 58 Secretary Partner of the law firm of
PNB Building Drinker Biddle & Reath LLP,
1345 Chestnut Street Philadelphia, Pennsylvania.
Philadelphia, PA 19107-3496
</TABLE>
(b) See item (a) above.
-16-
<PAGE> 19
(c) The Registrant pays Managing General Partners at the rate of
$6,000 annually ($10,000 beginning June 1998), and pays the
Chairman an additional $4,000 annually ($8,000 beginning
June 1998). The following table provides information
concerning the compensation of each of the Registrant's
Managing General Partners for services rendered during the
Company's last fiscal year ended December 31, 1997:
<TABLE>
<CAPTION>
Aggregate Pension or Retirement Estimated Annual Total Compensation
Name of Person/ Compensation Benefits Accrued as Benefits Upon from Registrant and
Position From Registrant Part of Fund Expenses Retirement Fund Complex (1)
- --------------- --------------- --------------------- ---------------- --------------------
<S> <C> <C> <C> <C>
Richard C. Caldwell(2) $0 None None $0
Managing General Partner
Robert R. Fortune $10,000 None None (5)(3) $64,000
President and Chairman
of the Managing General
Partners
G. Willing Pepper $ 6,000 None None (6)(3) $94,000
Managing General Partner
Longhorne B. Smith(2) $0 None None (2)(3) $0
Managing General Partner
David R. Wilmerding, Jr. $ 6,000 None None (3)(3) $66,100
Managing General Partner
</TABLE>
- -----------------------
(1) A Fund Complex means two or more investment
companies that hold themselves out to
investors as related companies for purposes
of investment and investor services, or have
a common investment adviser or have an
investment adviser that is an affiliated
person of the investment adviser of any of
the other investment companies.
(2) Messrs. Caldwell and Smith were elected Managing
General Partners of the Registrant on December 18,
1997.
(3) Total number of investment companies within the Fund Complex
of which the Managing General Partner serves as director,
trustee or managing general partner.
-17-
<PAGE> 20
Item 15. Control Persons and Principal Holders of Securities
(a) Inapplicable.
(b) Inapplicable.
(c) As of April 2, 1998, all officers and Managing General
Partners of Registrant as a group beneficially owned less
than 1% of the Registrant's outstanding equity
securities.
Item 16. Investment Advisory and Other Services
(a) All of the capital stock of BIMC is owned by PNC Bank. All
of the capital stock of PNC Bank is owned by PNC Bancorp,
Inc., with principal offices in Wilmington, Delaware. All
of the capital stock of PNC Bancorp, Inc. is owned by PNC
Bank Corp., a publicly held bank holding corporation with
principal offices in Pittsburgh, Pennsylvania. The
Registrant paid $1,021,188, $1,194,793 and $1,463,053 for
investment advisory services for the years ended December
31, 1995, 1996 and 1997, respectively. The method of
computing the advisory fee payable by the Registrant is
determined as in Item 5(b)(iii) above.
(b) Subject to the supervision of Registrant's Managing
General Partners, BIMC manages the Registrant's portfolio
and is responsible for, makes decisions with respect to,
and places orders for, all purchases and sales of the
Registrant's portfolio securities. BIMC is also required
to compute the Registrant's net asset value and net
income.
The Advisory Agreement also provides that, subject to the
supervision of the Registrant's Managing General Partners
and without additional charge to Registrant, PNC Bank
will, through its Trust Division and on behalf of
Registrant: (i) provide BIMC investment research and
credit analysis concerning prospective and existing
investments of the Registrant, (ii) make recommendations
to BIMC with respect to the Registrant's continuous
investment program, (iii) make recommendations to BIMC
regarding the amount of the Registrant's assets to be
invested or held uninvested in cash or cash equivalents,
(iv)
-18-
<PAGE> 21
supply BIMC with computer facilities and operating
personnel, (v) provide BIMC with such statistical
services as BIMC may reasonably request, and (vi)
maintain or cause BIMC to maintain Registrant's financial
accounts and records.
PNC Bank and BIMC have agreed to bear all expenses
incurred by them in connection with their activities
other than the cost of securities (including brokerage
commissions, if any) purchased for Registrant.
(c) Inapplicable.
(d) Inapplicable.
-19-
<PAGE> 22
(e) Inapplicable.
(f) Inapplicable.
(g) Inapplicable.
(h) The custodian of Registrant's portfolio securities is the
Wilmington Trust Company, located at Wilmington Trust
Center, Rodney Square North, Wilmington, Delaware 19890.
The custodian has agreed to provide certain services as
depository and custodian for the Registrant.
Registrant's independent accountants are Coopers &
Lybrand L.L.P., located at 2400 Eleven Penn Center,
Philadelphia, Pennsylvania 19103. The following is a
general description of the services performed by Coopers
& Lybrand L.L.P.: auditing and reporting upon financial
statements; reviewing semi-annual report; and reporting
on internal control structure for inclusion in Form
N-SAR.
(i) Inapplicable.
Item 17. Brokerage Allocation and Other Practices
(a) Registrant effects transactions in portfolio securities
through brokers and dealers. Registrant paid aggregate
brokerage commissions of $0, $19,505 and $5,850 for the
years ended December 31, 1995, 1996 and 1997,
respectively.
(b) Inapplicable.
(c) In placing orders with brokers and dealers for purchases
and sales of securities, BIMC attempts to obtain the best
net price and the most favorable execution of its orders.
In seeking best execution, BIMC uses its best judgment to
evaluate the terms of a transaction, giving consideration
to all relevant factors including the nature of the
transaction and of the markets for the security, the
financial condition and execution and settlement
capabilities of the broker-dealer, and the reasonableness
of any brokerage commission. Where the terms of a
transaction are comparable, BIMC may give consideration
to firms which supply investment research, statis-
-20-
<PAGE> 23
tical and other services to Registrant or to PNC Bank,
although there are no agreements to that effect with any
such firm. Research and statistical material furnished by
brokers without cost to PNC Bank and BIMC may tend to
benefit the Fund or other clients of PNC Bank and BIMC by
improving the quality of advice given.
(d) Inapplicable.
(e) Inapplicable.
Item 18. Capital Stock and Other Securities
(a) Inapplicable.
(b) Inapplicable.
Item 19. Purchase, Redemption, and Pricing of Securities
Being Offered
(a) Inapplicable.
(b) Net asset value per share is determined by BIMC as of the
close of business on each day. The net asset value per
share is computed by taking the total value of all assets
of Registrant less its liabilities and dividing by the
number of Shares outstanding. Securities for which market
quotations are readily available are valued at their
current market value in the principal market in which such
securities are normally traded. These values are normally
determined by (i) the last sales price, if the principal
market is on the New York Stock Exchange or other
securities exchange (or the closing bid price, if there
has been no sales on such exchange on that day), or (ii)
the most recent
-21-
<PAGE> 24
bid price, if the principal market is other than an
exchange. Securities and other assets for which market
quotations are not readily available (including
restricted securities) are valued at their fair value as
determined in good faith under procedures established by
and under the general supervision of the Managing General
Partners. With respect to call options written on
portfolio securities, the amount of the premium received
is treated as an asset and amortized over the life of the
option, and the price of an option to purchase identical
securities upon the same terms and conditions is treated
as a liability marked to the market daily. The price of
options are normally determined by the last sales price
on the principal exchange on which such options are
normally traded (or the closing asked price if there has
been no sales on such exchange on that day).
(c) Inapplicable.
Item 20. Tax Status
-22-
<PAGE> 25
The Revenue Act of 1987 added section 7704 to the Code. Section 7704, which
is also known as the publicly traded partnership rules, provides that a
publicly traded partnership is to be treated as a corporation for federal
tax purposes. A publicly traded partnership is defined to include any
partnership whose interests are (1) traded on an established securities
market, or (2) readily tradeable on a secondary market (or the substantial
equivalent thereof). A transitional rule postponed the application of
section 7704 to a partnership which was a publicly traded partnership on
-23-
<PAGE> 26
December 17, 1987 until its first taxable year beginning after
December 31, 1997 provided that the partnership does not add a
substantial new line of business. The Registrant was within the
definition of a publicly traded partnership and was eligible for the
transitional rule.
In connection with its deemed incorporation for federal income tax
purposes on January 1, 1998, the Registrant will elect to be taxed
federally as a RIC. This election permits the Registrant to
receive pass through tax treatment similar to that of a regular
partnership. In order to qualify as a RIC, the Registrant will have
to comply with certain income, diversification and distribution
requirements set forth in Subchapter M of the Code. If the Registrant
elected not to be a RIC or failed to meet the RIC requirements of
Subchapter M of the Code, it would be taxed as a regular corporation
and any distributions to its partners would be taxed as ordinary
dividend income to the extent of the Registrant's earnings and
profits. See Item 6 for information about the taxation of
Registrant's income and capital gains after January 1, 1998.
Although the Registrant is deemed a corporation for federal income tax
purposes as of January 1, 1998 and intends to qualify as a RIC
thereafter, the Registrant expects that it will continue to be
organized for all other purposes as a California Limited Partnership.
Item 21. Underwriters
(a) Inapplicable.
(b) Inapplicable.
(c) Inapplicable.
Item 22. Calculation of Performance Data
(a) Inapplicable.
(b) Inapplicable.
Item 23. Financial Statements
The audited financial statements and related report of Coopers &
Lybrand, L.L.P., independent accountants, contained in the annual report to
partners for the fiscal year ended December 31, 1997 (the "1997 Annual Report")
as filed with the Securities and Exchange Commission on March 2, 1998 are
incorporated herein by reference. No other parts of the 1997 Annual Report are
incorporated herein by reference. The financial statements included in the 1997
Annual Report have been incorporated herein in reliance upon the report of
Coopers & Lybrand, L.L.P. given on the authority of said firm as expert in
accounting and auditing. A copy of the 1997 Annual Report may be obtained by
writing to the Registrant or by calling (302) 792-2555.
-24-
<PAGE> 27
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
1. Part A:
None.
2. Part B:
The Registrant's December 31, 1997 Annual Report has been
filed with the Securities and Exchange Commission and the
financial statements included therein are incorporated
herein by reference. See Exhibit 24 below.
(b) Exhibits:
1. Amended and Restated Certificate and Agreement of
Limited Partnership dated January 1, 1998.
2. (a) Code of Regulations of Registrant filed as
Exhibit 2(a) to PEA No. 19 is incorporated herein by
reference.
(b) Amendment No. 1 to Registrant's Code of Regulations
adopted December 16, 1982 filed as Exhibit 2(b) is
incorporated herein by reference.
3. Inapplicable.
C-1
<PAGE> 28
4. Specimen certificate for units of partnership interest in
Registrant is incorporated herein by reference to Exhibit
No. (4)(a)(1) of Amendment No. 2 to Registrant's
Registration Statement on Form S-5, filed on September 16,
1976.
5. Advisory Agreement dated January 1, 1998.
6. Inapplicable.
7. Amended and Restated Fund Office Retirement Profit-Sharing
Plan and Trust Agreement dated January 1, 1998.
8. Amended and Restated Custodian Agreement dated October 15,
1983 filed as Exhibit 8 to PEA No. 19 is incorporated herein
by reference.
9. Inapplicable.
10. Inapplicable.
11. Consent of Independent Accountants.
12. Inapplicable.
13. (a) Agreement dated September 15, 1976 relating to Initial
Capitalization filed as Exhibit 13(a) to PEA No. 19 is
incorporated herein by reference.
(b) Amendment No. 1 to Agreement dated September 15, 1976
relating to Initial Capitalization filed as Exhibit
13(b) to PEA No. 19 is incorporated herein by
reference.
14. Inapplicable.
15. Inapplicable.
16. Inapplicable.
17. Financial Data Schedule of the Registrant as Exhibit 27.
18. Inapplicable.
24. Annual Report for Registrant (No. 811-2631) dated December
31, 1997 is incorporated herein by reference to the
Registrant's filing including such Annual Report and filed
on March 2, 1998 (Accession No. 893220-98-458).
C-2
<PAGE> 29
Item 25. Persons Controlled by or under Common Control with Registrant
Inapplicable.
Item 26. Number of Holders of Securities
<TABLE>
<CAPTION>
(1) (2)
Title of Number of Record Holders
Class as of March 31, 1998
<S> <C>
Shares of partnership
interest (no par value) 322
</TABLE>
Item 27. Indemnification
The answer to Item 19 of Amendment No. 2 to Registrant's
Registration Statement on Form N-8B-1 filed on September 16, 1976
is incorporated herein by reference.
Item 28. Business and Other Connections of Investment Adviser
(a) The information required by this Item 28 with respect to
each director, officer and partner of BIMC is incorporated by reference to
Schedules A and D of Form ADV filed by BIMC with the Securities and Exchange
Commission pursuant to the Investment Advisers Act of 1940 (the "1940 Act")
(SEC File No. 801-13304).
(b) To Registrant's knowledge, none of the directors or
principal officers of PNC Bank, N.A., except those set forth below, is, or has
been at any time during Registrant's past two fiscal years, engaged in any other
business, profession, vocation or employment of a substantial nature. Set forth
below are the names and principal businesses of the directors and principal
officers of PNC Bank, N.A. who are engaged in any other business, profession,
vocation or employment of a substantial nature.
(c) Set forth below are the names and principal businesses of
the directors and certain executives of PNC Bank who are engaged in any other
business, profession, vocation or employment of a substantial nature.
C-3
<PAGE> 30
PNC BANK, NATIONAL ASSOCIATION
DIRECTORS
<TABLE>
<CAPTION>
POSITION WITH TYPE
PNC BANK NAME OTHER BUSINESS CONNECTIONS OF BUSINESS
- -------- ---- -------------------------- -----------
<S> <C> <C> <C>
Director B.R. Brown Chairman, President and C.E.O. of Coal
Consol, Inc.
Consol Plaza
Pittsburgh, PA 15241
Director Constance E. Clayton Alleghany University of the Medical
Health Sciences
Ballet Building
1505 Race St. - Mail Stop 660
Philadelphia, PA 19102
Director Eberhard Faber IV Chairman and C.E.O. Manufacturing
E.F.L., Inc.
450 Hedge Road
P.O. Box 49
Bearcreek, PA 18602
Director Dr. Stuart Heydt President and C.E.O. Medical
Penn State Geisinger Health System
Commerce Court, Suite 300
2601 Market Place
Harrisburg, PA 17110-9603
Director Edward P. Junker, III Retired Vice Chairman Banking
PNC Bank, N.A.
901 State Street
Erie, PA 16553
Director Thomas A. McConomy President, C.E.O. and Manufacturing
Chairman, Calgon Carbon
Corporation
413 Woodland Road
Sewickley, PA 15143
Director Thomas H. O'Brien Chairman and CEO Banking
PNC Bank Corp.
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15265
</TABLE>
C-4
<PAGE> 31
<TABLE>
<CAPTION>
POSITION WITH TYPE
PNC BANK NAME OTHER BUSINESS CONNECTIONS OF BUSINESS
- -------- ---- -------------------------- -----------
<S> <C> <C> <C>
Director Rocco A. Ortenzio Chairman and C.E.O. Medical
Select Medical Corporation
4718 Old Gettsburg Road
P.O. Box 2034
Mechanicsburg, PA 17055
Director Robert C. Robb, Jr. President, Lewis, Eckert, Robb Financial
& Company Management
425 One Plymouth Meeting Consultants
Plymouth Meeting, PA 19462
Director James E. Rohr President and C.E.O. Banking
PNC Bank, National Association
One PNC Plaza, 30th Floor
Pittsburgh, PA 15265
Director Daniel M. Rooney President, Pittsburgh Steelers Football
Football Club of the National
Football League
300 Stadium Circle
Pittsburgh, PA 15212
Director Seth E. Schofield Chairman Security
Basa International Consulting
1479 Pointers Run Road
Pittsburgh, PA 15241
</TABLE>
C-5
<PAGE> 32
PNC BANK, NATIONAL ASSOCIATION
OFFICERS
Name Position with PNC Bank
- ---- ----------------------
James C. Altman Senior Vice President
Edward V. Arbaugh, III Senior Vice President
Robert Jones Arnold Senior Vice President
James N. Atteberry Senior Vice President
Lila M. Bachelier Senior Vice President
James C. Baker Senior Vice President
James R. Bartholomew Senior Vice President
Peter R. Begg Senior Vice President
Constance A. Bentzen Senior Vice President
Donald G. Berdine Senior Vice President
Ben Berzin, Jr. Senior Vice President
James H. Best Senior Vice President
Paul A. Best Senior Vice President
Michael J. Beyer Senior Vice President
R. Bruce Bickel Senior Vice President
Karen E. Blair Senior Vice President
Robald R. Blankenbuehler Senior Vice President
Eva T. Blum Senior Vice President
Ronald L. Bovill Senior Vice President
Dennis P. Brenckle Regional President, Central PA Market
George Brikis Executive Vice President
Michael Brundage Senior Vice President
Donna L. Burge Senior Vice President
Jane Wilson Burke Senior Vice President
Douglas H. Burr Senior Vice President
David D. Burrow Senior Vice President
Anthony J. Cacciatore Senior Vice President
Richard C. Caldwell Executive Vice President
Craig T. Campbell Senior Vice President
J. Richard Carnall Executive Vice President
Donald R. Carroll Senior Vice President
Edward V. Caruso Executive Vice President
Kevin J. Cecil Senior Vice President
Rhonda S. Chatzkel Senior Vice President
Chaomei Chen Senior Vice President
Sandra Chickletti Assistant Secretary
Thomas P. Ciak Assistant Secretary
Peter K. Classen Regional President, Northeast PA Market
Andra D. Cochran Senior Vice President
William Harvey Coggin Senior Vice President
Sharon Coghlan Coordinating Market Chief Counsel,
Philadelphia
John F. Colligan Senior Vice President
James P. Conley Senior Vice President
C. David Cook Senior Vice President
Robert F. Crouse Senior Vice President
Peter M. Crowley Senior Vice President
Keith P. Crytzer Senior Vice President
Terry D'Amore Senior Vice President
John J. Daggett Senior Vice President
Peter J. Danchak Senior Vice President
Richard Devore Senior Vice President
James N. Devries Senior Vice President
Anuj Dhanda Senior Vice President
Victor M. DiBattista Chief Regional Counsel
Frank H. Dilenschneider Senior Vice President
Thomas C. Dilworth Senior Vice President
Alfred J. DiMatteis Senior Vice President
Robert D. Edwards Senior Vice President
Tawana L. Edwards Senior Vice President
C-6
<PAGE> 33
PNC BANK, NATIONAL ASSOCIATION
OFFICERS
David J. Egan Senior Vice President
Richard M. Ellis Senior Vice President
Lynn Fox Evans Senior Vice President & Controller
William E. Fallon Senior Vice President
James M. Ferguson, III Senior Vice President
Charles J. Ferrero Senior Vice President
John Fox Executive Vice President
Frederick C. Frank, III Executive Vice President
William J. Friel Executive Vice President
Brian K. Garlock Senior Vice President
Leigh Gerstenberger Senior Vice President
George D. Gonczar Senior Vice President
Richard C. Grace Senior Vice President
James S. Graham Executive Vice President
Craig Davidson Grant Senior Vice President
Barbara J. Griec Senior Vice President
Donald W. Griffin, Jr. Senior Vice President
Thomas M. Groneman Senior Vice President
Thomas Grundman Senior Vice President
John C. Haller Regional President, Ohio Market
Michael J. Hannon Senior Vice President
Michael J. Harrington Senior Vice President
Michael N. Harrold Regional President, Kentucky Market
Maurice H. Hartigan, II Executive Vice President
G. Thomas Hewes Senior Vice President
Gregory A. Hoeck Executive Vice President
Susan G. Holt Senior Vice President
Sylvan M. Holzer Regional Vice President, Pittsburgh Market
William D. Hummel Senior Vice President
John M. Infield Senior Vice President
S. Terry Irvin Executive Vice President
Philip C. Jackson Senior Vice President
Robert Greg Jenkins Senior Vice President
William J. Johns Controller
Craig M. Johnson Senior Vice President and Comptroller
William R. Johnson Audit Director
Robert D. Kane Senior Vice President
Jack Kelly Senior Vice President
Michael D. Kelsey Chief Compliance Counsel
Geoffrey R. Kimmel Senior Vice President
Randall C. King Senior Vice President
Christopher M. Knoll Senior Vice President
William Koch Executive Vice President
Richard C. Krauss Senior Vice President
Frank R. Krepp Senior Vice President & Chief Credit Policy
Officer
Kenneth P. Leckey Senior Vice President & Cashier
Marilyn R. Levins Senior Vice President
Carl J. Lisman Executive Vice President
Richard J. Lovett Senior Vice President
Stephen F. Lugarich Senior Vice President
C-7
<PAGE> 34
PNC BANK, NATIONAL ASSOCIATION
OFFICERS
Brian S. MacConnell Senior Vice President
Jane E. Madio Senior Vice President
Nicholas M. Marsini, Jr. Senior Vice President
John A. Martin Senior Vice President
David O. Matthews Senior Vice President
Dennis McChesney Executive Vice President
Walter B. McClellan Senior Vice President
James F. McGowan Senior Vice President
Timothy McInerney Senior Vice President
Charlotte B. McLaughlin Senior Vice President
Kim D. McNeil Senior Vice President
Charles R. McNutt Senior Vice President
James W. Meighen Senior Vice President
James C. Mendelson Senior Vice President
Theodore Lang Merhoff Senior Vice President
Darryl Metsger Senior Vice President
Scott C. Meves Senior Vice President
Ralph S. Michael, III Executive Vice President
James P. Mikula Senior Vice President
Robert J. Miller, Jr. Senior Vice President
Melanie Millican Senior Vice President
J. William Mills Senior Vice President
Robert G. Mills Assistant Secretary
Francine Miltenberger Senior Vice President
Chester A. Misbach Senior Vice President
Barbara A. Misner Senior Vice President
D. Bryant Mitchell, II Executive Vice President
Michael D. Moll Senior Vice President
Thomas R. Moore Vice President and Secretary
Marlene D. Mosco Senior Vice President
Peter F. Moylan Senior Vice President
Ronald J. Murphy Executive Vice President
Saiyid T. Naqvi Executive Vice President
Michael B. Nelson Executive Vice President
Thomas J. Nist Senior Vice President
John L. Nocicke Senior Vice President
Thomas H. O'Brien Chairman
Cynthia G. Osofsky Senior Vice President
Thomas E. Paisley, III Senior Vice President
Daniel J. Pavlick Senior Vice President
David M. Payne Senior Vice President
John Pendergrass Senior Vice President
W. David Pendl Senior Vice President
Stephen D. Penn Senior Vice President
Frank Pomor Senior Vice President
Helen P. Pudlin Senior Vice President
Wayne Pulliam Senior Vice President
Arthur F. Radman, III Senior Vice President
Gordon L. Ragan Senior Vice President
Edward E. Randall Senior Vice President
Jesse S. Reinhardt Senior Vice President
Ronald J. Retzler Senior Vice President
Richard C. Rhoades Senior Vice President
Rodger L. Rickenbrode Senior Vice President
Bryan W. Ridley Senior Vice President
W. Alton Roberts Senior Vice President
James E. Rohr President and Chief Executive Officer
James C. Rooks Senior Vice President
Peter M. Ross Senior Vice President
Gerhard Royer Senior Vice President
Robert T. Saltarelli Senior Vice President
Robert V. Sammartino Senior Vice President
William Sayre, Jr. Senior Vice President
Stephen C. Schatteman Senior Vice President
Richard A. Seymour Senior Vice President
Timothy G. Shack Senior Vice President
Douglas E. Shaffer Senior Vice President
Bruce Shipley Senior Vice President
Alfred A. Silva Executive Vice President
George R. Simon Senior Vice President
J. Max Smith Senior Vice President
Richard L. Smoot President and CEO of PNC Bank, Philadelphia
C-8
<PAGE> 35
PNC BANK, NATIONAL ASSOCIATION
OFFICERS
Timothy N. Smyth Senior Vice President
Darcel H. Steber Senior Vice President
Donald N. Stolper Executive Vice President
Stephen L. Swanson Executive Vice President
Melvin A. Steele Senior Vice President
Richard Stegemaier Senior Vice President
Ted K. Stirgwolt Senior Vice President
Connie Bond Stuart Senior Vice President
Lon E. Susak Senior Vice President
Ronald L. Tassone Senior Vice President
Frank A. Taucher Senior Vice President
John T. Taylor Senior Vice President
Peter W. Thompson Senior Vice President
Jane B. Tompkins Senior Vice President
Alex T. Topping Senior Vice President
Kevin M. Tucker Senior Vice President
William H. Turner Regional President,
Northern New Jersey Market
William Thomps Tyrrell Senior Vice President
Alan P. Vail Senior Vice President
Michael B. Vairin Senior Vice President
Ellen G. Van der Horst Executive Vice President
Ronald H. Vicari Senior Vice President
Patrick M. Wallace Senior Vice President
Bruce E. Walton Executive Vice President
Annette M. Ward-Kredel Senior Vice President
Robert S. Warth Senior Vice President
Leonard A. Watkins Senior Vice President
Mark F. Wheeler Senior Vice President
Frances A. Wilkinson Assistant Secretary
Gary G. Wilson Senior Vice President
Nancy B. Wolcott Executive Vice President
Arlene M. Yocum Senior Vice President
Carole Yon Senior Vice President
George L. Ziminski, Jr. Senior Vice President
Item 29. PRINCIPAL UNDERWRITERS
Inapplicable.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
Books or other documents required to be maintained by Section 31(a) of
the Investment Company Act of 1940 and the Rules (17 CFR 270.31a-1 to 31a-3)
promulgated thereunder, are maintained by BIMC at 400 Bellevue Parkway,
Wilmington, Delaware 19809 except for the Certificate and Agreement of Limited
Partnership and Code of Regulations which are maintained by the Secretary of the
Registrant at Philadelphia National Bank Building, 1345 Chestnut Street,
Philadelphia, Pennsylvania 19107-3496.
Item 31. MANAGEMENT SERVICES
None.
C-9
<PAGE> 36
SIGNATURE
Pursuant to the requirements of the Investment Company Act of
1940, the Registrant has duly caused this Amendment No. 21 to its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wilmington, and State of Delaware, on the 22nd day
of April, 1998.
CHESTNUT STREET EXCHANGE FUND
By /s/ Edward J. Roach
--------------------------
Edward J. Roach
Treasurer
C-10
<PAGE> 37
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- ------- ------ -----------
<S> <C> <C>
(1) Amended and Restated Certificate of Limited
Partnership dated December 31, 1997.
(5) Advisory Agreement dated January 1, 1998.
(7) Amended and Restated Fund Office Retirement
Profit-Sharing Plan and Trust Agreement dated
January 1, 1998.
(11) Consent of Independent Accountants.
(27) Financial Data Schedule of the Registrant.
</TABLE>
<PAGE> 1
EXHIBIT 1
TABLE OF CONTENTS
TO
RESTATED CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP
OF
CHESTNUT STREET EXCHANGE FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
<TABLE>
<S> <C>
ARTICLE I - NAME AND STATUTORY OFFICE......................................................................... A-1
1.1 Name........................................................................................... A-1
1.2 Principal Place of Business.................................................................... A-1
ARTICLE II - CHARACTER OF THE BUSINESS OF THE FUND............................................................ A-2
2.1 Purpose........................................................................................ A-2
2.2 Investment Objectives.......................................................................... A-2
2.3 Operating Powers............................................................................... A-2
ARTICLE III - GENERAL PARTNERS................................................................................ A-3
3.1 Identity of Managing General Partners.......................................................... A-3
3.2 Designation and Election of Successor or Additional General Partners........................... A-3
3.3 Management and Control......................................................................... A-4
3.4 Limitations on the Authority of the General Partners........................................... A-6
3.5 Action by the General Partners................................................................. A-6
3.6 Reimbursement and Indemnification.............................................................. A-7
3.7 Limitation of Liability to Shareholders........................................................ A-8
3.8 Termination of Status and Interest of General Partners......................................... A-8
3.9 Right of General Partners to Become Limited Partners........................................... A-9
3.10 No Agency...................................................................................... A-9
3.11 Voting of Shares Owned by General Partners..................................................... A-9
ARTICLE IV - LIMITED PARTNERS................................................................................. A-9
4.1 Sales of Additional Shares; Admission of Additional Limited Partners........................... A-9
4.2 Right to Assign Shares; Substituted and Additional Limited Partners............................ A-9
4.3 No Power to Control Business................................................................... A-10
4.4 Limited Liability.............................................................................. A-10
4.5 Limited Partners Not Personally Liable......................................................... A-11
4.6 Death of a Limited Partner..................................................................... A-11
ARTICLE V - CAPITAL CONTRIBUTIONS: SALES OF SHARES; ALLOCATIONS TO SHARES..................................... A-11
5.1 Shares of Partnership Interest................................................................. A-11
5.2 Contributions by General Partners.............................................................. A-12
5.3 Contributions by the Limited Partners.......................................................... A-12
5.4 Allocation of Fund Income, Gains, Losses, Deductions and Credits Among the Shares.............. A-12
ARTICLE VI - DISTRIBUTIONS AND RETURNS OF CONTRIBUTIONS....................................................... A-12
6.1 In General..................................................................................... A-12
6.2 Distributions with Respect to Income and Net Realized Capital Gains............................ A-12
6.3 Distributions in Connection With Redemption of Shares.......................................... A-13
6.4 Distributions upon Winding Up of the Fund...................................................... A-14
6.5 Returns of Contributions....................................................................... A-15
ARTICLE VII - PARTNERS' RIGHTS TO VOTE UPON MATTERS AFFECTING THE BASIC STRUCTURE
OF THE FUND: EXERCISE OF VOTING RIGHTS.......................................................... A-16
7.1 Voting Rights of Partners...................................................................... A-16
7.2 Meetings of the Partners....................................................................... A-17
7.3 Quorum and Required Vote at Meetings of the Partners........................................... A-17
7.4 Action by Written Consent...................................................................... A-18
ARTICLE VIII - TERM AND DISSOLUTION OF THE FUND............................................................... A-18
8.1 Term........................................................................................... A-18
8.2 Events Causing Earlier Dissolution of the Fund................................................. A-18
8.3 Right of General Partners to Continue the Business of the Fund in Certain Events............... A-18
8.4 Right of the Partners to Provide for Continuation of the Business of the Fund in
Certain Events................................................................................. A-19
ARTICLE IX - FUND DOCUMENTATION; AMENDMENT OF THE CERTIFICATE AND AGREEMENT; POWER OF ATTORNEY................ A-19
9.1 Certificate and Agreement and Other Documentation.............................................. A-19
9.2 Events Requiring Amendment of Certificate and Agreement........................................ A-19
9.3 Partnership Authorization...................................................................... A-20
9.4 Power of Attorney by Substituted or Additional Limited Partners................................ A-22
9.5 Amendments Requiring Signature by Less than All Limited Partners............................... A-22
9.6 Amendments Requiring Signature by All Partners................................................. A-22
ARTICLE X - BOOKS AND RECORDS: STATEMENTS AND INCOME TAX INFORMATION.......................................... A-22
10.1 Fiscal Year.................................................................................... A-22
10.2 Records and Accounting......................................................................... A-23
10.3 Periodic Financial Statements.................................................................. A-23
10.4 Record Dates................................................................................... A-23
10.5 Income Tax Information......................................................................... A-24
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
10.6 Statement Upon Winding Up of the Fund.......................................................... A-24
ARTICLE XI - GENERAL PROVISIONS............................................................................... A-24
11.1 Definitions.................................................................................... A-24
11.2 Independent Activities......................................................................... A-26
11.3 Custodian...................................................................................... A-26
11.4 Benefit........................................................................................ A-26
11.5 Nonrecourse Creditors.......................................................................... A-26
11.6 Notices........................................................................................ A-26
11.7 Captions....................................................................................... A-26
11.8 Certificate and Agreement in Counterparts...................................................... A-26
11.9 Agent for Service of Process................................................................... A-27
11.10 Principles of Construction; Severability....................................................... A-27
11.11 California Law................................................................................. A-27
11.12 Integrated Agreement........................................................................... A-27
</TABLE>
SCHEDULE "A": Names, Places of Residence and Number of Shares of Partnership
Interest of the General Partners.
<PAGE> 3
CHESTNUT STREET EXCHANGE FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
RESTATED CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP
This RESTATED CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP (the
"Certificate and Agreement") has been executed and delivered among the General
Partners and Limited Partners herein named, for the purpose of amending and
restating in full the Restated Certificate and Agreement of Limited Partnership
dated as of September 16, 1976, recorded on September 16, 1976, as Document
Number 8504, in the official records of the office of the County Recorder of Los
Angeles County, California, of Chestnut Street Exchange Fund (a California
Limited Partnership), a limited partnership formed pursuant to the Uniform
Limited Partnership Act as enacted by the State of California.
WHEREAS, the General Partners and Limited Partners herein named have
formed a Limited Partnership under the laws of the State of California which
will qualify as a diversified, open-end, management investment company under the
Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the General and Limited Partners desire to amend and restate
the Restated Certificate and Agreement of Limited Partnership previously
recorded as described above;
NOW, THEREFORE, THE GENERAL PARTNERS AND THE LIMITED PARTNERS HEREIN
NAMED HEREBY AMEND AND RESTATE THE RESTATED CERTIFICATE AND AGREEMENT OF LIMITED
PARTNERSHIP OF CHESTNUT STREET EXCHANGE FUND (A CALIFORNIA LIMITED PARTNERSHIP)
IN FULL AS FOLLOWS:
ARTICLE I
NAME AND STATUTORY OFFICE
1.1 NAME. This Partnership shall be known as and shall operate under
the firm name of "CHESTNUT STREET EXCHANGE FUND" (A California Limited
Partnership).
1.2 PRINCIPAL PLACE OF BUSINESS. The principal place of business of
the Partnership for purposes of Section 15614 of the Limited Partnership Act
shall be c/o Corporation Service Company, 2730 Gateway Oaks Drive, Suite 100,
Sacramento, California 95833. The Managing General Partners may from time to
time establish additional places of business of the Partnership in such other
locations, within and without California, as they deem necessary or desirable
for the conduct of the Partnership's business.
A-1
<PAGE> 4
ARTICLE II
CHARACTER OF THE BUSINESS OF THE FUND
2.1 PURPOSE. The purpose of the Fund is to create and operate an
open-end, diversified management investment company which will qualify under the
1940 Act.
2.2 INVESTMENT OBJECTIVES. The Fund's investment objectives are to
seek long-term growth of capital and, secondarily, current income. The Fund will
invest in a portfolio of common stocks and securities convertible into common
stocks, and may also invest in other types of securities for temporary or
defensive purposes including preferred stocks, investment grade bonds,
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, certificates of deposit, commercial paper and other
"money-market" obligations. Up to 10% of the value of the Fund's total assets
may be invested in securities which are subject to legal or contractual
restrictions on resale (for example restrictions on resale without registration
under the Securities Act of 1933 (the "1933 Act")). The Fund may write
exchange-traded call options on portfolio securities and may loan portfolio
securities.
2.3 OPERATING POWERS. Subject to the Fund's Investment Objectives in
Section 2.2, the Fund shall have the power to: (a) to invest and trade in
capital stock, subscriptions, bonds, notes, debentures, trust receipts and other
securities of any corporation or entity; (b) to engage personnel and do such
other acts and incur such other expenses on behalf of the Fund as may be
necessary or advisable; (c) to engage attorneys, accountants or such other
persons as may be deemed necessary or advisable; (d) to receive, acquire, buy,
sell, exchange, trade, loan, borrow and otherwise deal in and with property; (e)
to open, conduct and close accounts with brokers and to pay the customary fees
and charges applicable to transactions in all such accounts; (f) to open,
maintain, and close bank accounts and to draw checks and other orders for the
payment of money; (g) to enter into, make and perform such contracts, agreements
and other undertakings, and to do such other acts, as may be deemed necessary or
advisable, including, without in any manner limiting the generality of the
foregoing, contracts, agreements, undertakings and transactions with any Partner
or with any other person, firm or corporation having any business, financial or
other relationship with any Partner; (h) to institute and prosecute litigation
arising out of the regular course of its affairs or in the enforcement of its
obligations due it, including all rights of appeal; (i) to compromise and settle
any claims against the Fund and to provide for indemnification by the Fund in
the Fund's contracts and agreements; (j) to defend any litigation, including all
rights of appeal, whether or not arising in the regular course of its affairs;
(k) to appear before any governmental
A-2
<PAGE> 5
board or agency or to otherwise participate in any administrative review or
appeal; (l) to employ one or more investment advisors for the Fund to supervise
the Fund's investments and to administer the affairs of the Fund subject to the
provisions of this Certificate and Agreement; (m) to file and publish all such
certificates, notices, statements or other instruments required by law for the
formation and operation of a limited partnership in any jurisdictions where the
Fund may elect to do business; (n) to exercise any and all other powers which
may be necessary to implement the purposes, policies and powers of the Fund and
not inconsistent therewith, including those granted to limited partnerships
under the California Revised Limited Partnership Act; and (o) to exercise such
other powers as the Managing General Partners reasonably believe to be necessary
to comply with the provisions of the 1940 Act.
ARTICLE III
GENERAL PARTNERS
3.1 IDENTITY OF MANAGING GENERAL PARTNERS. The General Partners of
the Fund shall consist of the Managing General Partners (hereinafter referred to
as the "General Partners" or the "Managing General Partners"). Only individuals
may act as Managing General Partners, and all individual General Partners shall
act as Managing General Partners.
The names of the currently acting Managing General Partners, their
places of residence and the number of Shares owned by each of them are set forth
in Schedule "A" to this Certificate and Agreement and are incorporated herein by
this reference.
3.2 DESIGNATION AND ELECTION OF SUCCESSOR OR ADDITIONAL GENERAL
PARTNERS. The Managing General Partners shall determine from time to time the
number of persons who will be proposed for election as General Partners. At the
annual meeting of Partners, if held in a given year, or at any special meeting
called for the purpose of electing General Partners, the Partners shall elect
the General Partners. Each of the Managing General Partners shall serve until
the next annual or special meeting at which General Partners are elected and
until the election and qualification of the person's successor, or until the
person's status as such is sooner terminated as provided in Section 3.8 below.
If at any time the number of Managing Partners is reduced to less than three,
the remaining Managing General Partners shall, within 120 days, call a meeting
of Partners for the purpose of electing an additional Managing General Partners
or Managing General Partners so as to restore the number of Managing General
Partners to at least three.
A-3
<PAGE> 6
If at any time a vacancy occurs among the Managing General Partners,
the vacancy may be filled by the Managing General Partners subject to the
limitations set forth in Sections 16(a) and (b) of the 1940 Act.
Each General Partner, by becoming a General Partner, consents to the
admission as an added or substituted General Partner of any person elected by
the Partners in accordance with this Certificate and Agreement. Each Partner, by
becoming a Partner of the Fund, consents to and ratifies the actions of the
General Partners in determining the persons who will be proposed for election
and admission as additional or substituted General Partners, and the actions of
the Partners in electing an additional or substituted General Partner pursuant
to the procedure in Article VII of this Certificate and Agreement.
Any General Partner who is elected at a meeting of the Partners and
who is not then serving as a General Partner shall be admitted to the
Partnership as a General Partner effective as of the date of such election.
3.3 MANAGEMENT AND CONTROL. Subject to the provisions of this
Certificate and Agreement, the business of the Fund shall be managed solely by
the Managing General Partners, and they shall have complete and exclusive
control over the management, conduct and operation of the Fund's business.
Except as otherwise specifically provided in this Certificate and Agreement, the
Managing General Partners, acting pursuant to Section 3.5 hereof, shall have the
right, power and authority, on behalf of the Fund and in its name to exercise
all of the rights, powers and authority of a partner in a partnership without
limited partners under the California Uniform General Partnership Act. Without
limiting the foregoing, but subject to the right of the Partners to vote on
certain matters affecting the basic structure of the Fund in Article VII below,
the Managing General Partners, acting pursuant to Section 3.5 below, shall have
the power and authority to: (a) adopt, amend and repeal a Code of Regulations
not inconsistent with this Certificate and Agreement providing for the operation
of the Fund; (b) appoint one of their number to be President, who shall preside
at all meetings of Partners, shall be responsible for the execution of policies
established by the Managing General Partners and may be the chief executive,
financial and accounting officer; (c) appoint from their own number, and
terminate, any one or more committees consisting of two or more managing General
Partners, including executive committee which may, when the Managing General
Partners are not in session, exercise one or all of the power and authority of
the Managing General Partners as the Managing General Partners may determine;
(d) elect and appoint, delegate authority to, remove and terminate such officers
and agents (who need not be Partners) as they consider appropriate; (e) subject
always to the continuing supervision of the Managing General Partners, contract
A-4
<PAGE> 7
with one or more banks, trust companies, investment advisers or other persons
for the performance of such functions as they may determine, including, but not
by way of limitation, the investment and reinvestment of all or part of the
Fund's assets and effecting portfolio transactions, and any or all
administrative functions of the Fund; (f) at any time and from time to time,
contract with any corporation, trust, association or other person to act as
exclusive or nonexclusive distributor or Principal Underwriter for the Shares;
(g) purchase and pay for entirely out of Fund property insurance policies
insuring the Shareholders, General Partners, Limited Partners, officers,
employees, agents, investment advisers, principal underwriters, or independent
contractors of the Fund individually against all claims and liabilities of every
nature arising by reason of holding, being or having held any such office or
position, or by reason of any action alleged to have been taken or omitted by
any such person as Partner, officer, employee, agent, investment adviser,
principal underwriter, or independent contractor, including any action taken or
omitted that may be determined to constitute negligence, whether or not the Fund
would have the power to indemnify such person against such liability; and (h)
pay or cause to be paid out of the principal or income of the Fund, or partly
out of principal and partly out of income, all expenses, fees, charges, taxes
and liabilities incurred or arising in connection with the Fund, or in
connection with the management thereof, including but not limited to, the
General Partners' compensation and such expenses and charges for the services of
the Fund's officers, employees, investment adviser or Manager, Principal
Underwriter, auditor, counsel, custodian, transfer agent, Shareholder servicing
agent, and such other agents or independent contractors and such other expenses
and charges as the Managing General Partners may deem necessary or advisable to
incur.
The Managing General Partners shall devote themselves to the Fund's
business to the extent they may determine necessary for the efficient conduct
thereof, which need not, however, occupy their full time. General Partners may
also engage in other businesses, whether or not similar in nature to the
business of the Fund, subject to the limitations of the 1940 Act. Further,
subject to the limitations of the 1940 Act and the Partnership Act, the fact
that:
(i) any of the Partners or officers of the Fund is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser, Principal Underwriter or distributor or agent of or for any
corporation, trust, association, or other person, or of or for any
parent or affiliate of any person which handles brokerage
transactions for the Fund or with which the Fund has or may hereafter
enter into an advisory or management contract, or Principal
Underwriter's or distributor's contract, or transfer, Shareholder
A-5
<PAGE> 8
servicing or other contract, or that any such organization, or any
parent or affiliate thereof, is a Shareholder or has an interest in
the Fund, or that
(ii) any corporation, trust, association or other person
which handles brokerage transactions for the Fund or with which the
Fund has or may hereafter enter into an advisory or management
contract or Principal Underwriter's or distributor's contract, or
transfer, Shareholder servicing or other contract, also has an
advisory or management contract, or Principal Underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
contract with one or more other corporations, trusts, associations,
or other persons, in which any of the Partners or officers of the
Fund may have an interest,
shall not preclude such contracts or dealings, or affect the validity of any
such contract or dealings or disqualify any Partner or officer of the Fund from
voting upon or executing the same or create any liability or accountability to
the Fund or its Shareholders with respect to such contract or dealings.
3.4 LIMITATIONS ON THE AUTHORITY OF THE GENERAL PARTNERS. The General
Partners shall have no authority without the vote or written consent of all of
the Limited Partners to: (a) do any act in contravention of this Certificate and
Agreement, as it may be amended, or which would make it impossible to carry on
the ordinary business of the Fund; (b) confess a judgment against the Fund; (c)
possess Fund property, or assign the Fund's rights in specific Fund property,
for other than a Fund purpose.
In addition, certain actions of the Managing General Partners shall
be subject to a Majority Shareholder Vote as provided in paragraph 7.3 below.
3.5 ACTION BY THE GENERAL PARTNERS. Except as may otherwise be
provided herein or from time to time in the Code of Regulations, any action to
be taken by the Managing General Partners shall be taken: (a) by a majority of
the Managing General Partners present at a meeting of the Managing General
Partners at which at least 50% of the Managing General Partners are present,
within or without California, including any meeting held by means of a
conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other at the same time, and
participation by such means shall constitute presence at a meeting; or (b) by
unanimous written consent of the Managing General Partners acting without a
meeting, unless the 1940 Act or the Partnership Act requires that a particular
action be taken by a greater vote or only at a meeting in person of the Managing
General Partners. Each Managing General Partner shall have one vote. No single
Managing General Partner shall have authority to act on behalf of
A-6
<PAGE> 9
the Partnership or to bind the Partnership except as specifically authorized in
a particular case by the Managing General Partners.
3.6 REIMBURSEMENT AND INDEMNIFICATION. The General Partners shall be
reimbursed for all reasonable out-of-pocket expenses incurred in performing
their duties hereunder. Each General Partner and officer of the Fund, each
corporate Non-Managing General Partner and officer and director thereof, and
each former General Partner who has not ceased to be liable as a General Partner
under the Partnership Act (herein collectively referred to as "Agent"), shall be
indemnified by the Fund, to the extent permitted by applicable law, against
judgments, fines, amounts paid in settlement, and expenses (including counsel
fees) reasonably incurred by such Agent by virtue of being threatened to be
made, being or having been a party to any civil, criminal, administrative or
investigative proceeding in which such Agent is involved or threatened to be
involved by reason of such person being an Agent, provided that the Agent acted
in good faith and in a manner the Agent reasonably believed to be within the
scope of such person's authority and for a purpose which such person reasonably
believed to be in the best interests of the Fund or the Limited Partners. To the
extent that an Agent has been successful on the merits or otherwise in defense
of any such proceeding or in defense of any claim or matter therein, such person
shall be deemed to have acted in good faith and in a manner such person
reasonably believed to be in the best interests of the Fund or the Limited
Partners. The determination under any other circumstances as to whether an Agent
acted in good faith and in a manner such person reasonably believed to be within
the scope of the person's authority and for a purpose which the person
reasonably believed to be in the best interests of the Fund or the Limited
Partners shall be made, (i) by action of the Managing General Partners who were
not parties to such proceedings, or (ii) the court in which such proceeding is
or was pending upon application made by the Fund or the Agent (whether or not
such application is opposed by the Fund), or (iii) by independent legal counsel
(who may not be the regular counsel for the Fund) in a written opinion. No Agent
shall be indemnified against any liability to the Fund or its Partners to which
he would otherwise be subjected by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office.
The foregoing indemnification provisions shall not preclude any other
rights to which those persons indemnified hereunder may be entitled under any
applicable statute, agreement, vote of the General Partners or Limited Partners
or otherwise, nor shall the foregoing preclude the Fund from purchasing and
maintaining insurance on behalf of any Agent against liability which may be
asserted against or incurred by the Agent in such capacity, whether or not the
Fund would have the power to indemnify the
A-7
<PAGE> 10
Agent against such liability under the provisions of this Section 3.6.
Expenses incurred in defending any proceeding may be advanced by the
Fund prior to final disposition of such proceeding upon receipt of an
undertaking by or on behalf of the Agent to repay such amount unless it shall be
determined ultimately that the Agent is entitled to be indemnified as authorized
in this Section 3.6.
3.7 LIMITATION OF LIABILITY TO SHAREHOLDERS. No General Partner shall
have any personal liability to any Shareholder for the repayment of the
contributions with respect to Shares held by him, or for the payment of the
amount standing in the individual accounts of the Limited Partners or any
portion thereof; any such amounts shall be paid solely from assets of the Fund,
if any, sufficient therefor, according to the terms of this Certificate and
Agreement. Nor, to the extent permitted by the Partnership Act and the 1940 Act,
shall the General Partners be liable to any Shareholder for any neglect or
wrongdoing of any officer, agent, employee, investment adviser or principal
underwriter of the Fund, or by reason of any change in the general or state
income tax laws, or in interpretations thereof, as they apply to the Partnership
and the Shareholders, whether such change occurs through legislative, judicial
or administrative action, provided, that nothing herein shall protect a General
Partner against any liability to which he would otherwise be subject by reason
of misfeasance, bad faith, negligence, or reckless disregard of the duties
involved in the conduct of his office.
3.8 TERMINATION OF STATUS AND INTEREST OF GENERAL PARTNERS.
(a) The status and interest of a person as a Managing General
Partner shall terminate and such person shall have no further right or power to
act as General Partner (except to execute any amendment to this Certificate and
Agreement to evidence his termination) effective when and if he: (1) dies; (2)
becomes insane; (3) is adjudicated a bankrupt; (4) voluntarily retires effective
upon not less than 180 days' written notice to the other General Partners or
election of his successor, whichever first occurs; (5) fails to be re-elected by
the Partners, as provided in Section 3.2 above; or (6) is removed by the
Partners, as provided in Section 7.1 below.
(b) Termination of a person's status as a General Partner
shall not affect his status, if any, as a Limited Partner. A General Partner
shall not be entitled to any special payment from the Partnership as a result of
termination of his status as General Partner. Upon termination of his status and
in interest as a General Partner, a General Partner may redeem his Shares in
accordance with Section 6.3 or retain such Shares as a Limited Partner.
A-8
<PAGE> 11
3.9 RIGHT OF GENERAL PARTNERS TO BECOME LIMITED PARTNERS. A General
Partner may also become a Limited Partner and thereby become entitled to all of
the rights of a Limited Partner to the extent of the Limited Partnership
interest so acquired, and the consent of the Limited Partners thereto need not
be obtained. Such event shall not, however, affect such General Partner's
liability hereunder.
3.10 NO AGENCY. Nothing in this Certificate and Agreement shall be
construed as establishing any General Partner as an agent of any Limited
Partner, except to the extent provided in Sections 9.3 and 9.4 below.
3.11 VOTING OF SHARES OWNED BY GENERAL PARTNERS. In accordance with
Section 7.1, the Managing General Partners shall have the right to vote any
Shares which they own, whether as a General or as a Limited Partner. Each
General Partner shall own at least one Share.
ARTICLE IV
LIMITED PARTNERS
4.1 SALES OF ADDITIONAL SHARES; ADMISSION OF ADDITIONAL LIMITED
PARTNERS. The Fund sold Shares through an initial public offering and admitted
such purchasers as additional Limited Partners in the Fund. In addition, without
the consent or approval of the Limited Partners, the Fund may issue additional
Shares from time to time in payment of the distributions to the Partners
contemplated by Article VI below or in connection with the admission of General
Partners pursuant to Section 3.2 above. The Fund shall not otherwise issue
additional Shares. Each purchaser of a Share from the Fund shall be bound by all
the terms and conditions of this Certificate and Agreement.
4.2 RIGHT TO ASSIGN SHARES; SUBSTITUTED AND ADDITIONAL LIMITED
PARTNERS. A Shareholder may assign the whole or any portion of his Shares by a
written instrument of assignment in form satisfactory to the Managing General
Partners. Each assignee of a Share shall be bound by all the terms and
conditions of this Certificate and Agreement including, without limitation, the
allocation of income, gains, losses, deductions and credits as provided in
Section 5.4. Any Shareholder who assigns Shares, and any assignee of such Shares
who subsequently assigns such Shares, by virtue of an assignment made in
accordance with the provisions hereof confers upon his assignee the right to be
substituted as a Limited Partner, and the assignee shall become a Limited
Partner upon being entered into the records of the Fund as a Limited Partner, by
which act the assignee shall be deemed to accept and adopt all of the terms and
A-9
<PAGE> 12
provisions of the Certificate and Agreement, as the same may be amended.
4.3 NO POWER TO CONTROL BUSINESS. A Limited Partner shall have no
right to and shall take no part in the control of the Fund's business and shall
have no right or authority to act for or bind the Fund, but may exercise the
rights and powers of a Limited Partner under this Certificate and Agreement,
including without limitation, the voting rights and the giving of consents and
approvals provided for hereunder. The exercise of such rights and powers are
deemed to be matters affecting the basic structure of the Fund and not the
control of its business.
4.4 LIMITED LIABILITY. No Limited Partner shall be liable for any
debts, obligations or losses of the Fund, provided, however, that the
contributions of a Limited Partner shall be subject to the risks of the business
of the Fund and subject to the claims of the Fund's creditors and provided
further, that after any Limited Partner has received the return of any part of
his contribution, he will be liable to the Fund, only to the extent required by
the Partnership Act, for: (a) his proportionate share, not in excess of the
amount of such returned contributions plus interest thereon, of any sum
necessary to discharge any liabilities of the Fund to creditors who extended
credit or whose claims arose before such returns were made; (b) for his
proportionate share, not in excess of any amount of such sum wrongfully
distributed to him and necessary to discharge any liabilities of the Fund to any
creditors.
In the event a Limited Partner or former Limited Partner who received
the return of any part of his contribution is required pursuant to the foregoing
paragraph to discharge more than his proportionate share of a Fund liability
("Discharged Liability"), the Fund shall indemnify such person, to the extent of
its net assets, against the Discharged Liability. In the event the Fund's net
assets are insufficient to satisfy such person's right of reimbursement for the
Discharged Liability, the Fund shall use its best efforts to obtain for such
person an amount equal to the insufficiency arising in its net assets to
reimburse ("Insufficiency Reimbursement") such person for the Discharged
Liability from each of the other Limited Partners or former Limited Partners of
the Fund who received a return of contribution after the time the creditor whose
claim was discharged extended credit to the Fund. The Insufficiency
Reimbursement to be sought against each other Limited Partner or former Limited
Partner shall be limited to that amount obtained by multiplying the amount of
the Insufficiency Reimbursement by that percentage of the aggregate
contributions so returned to all Limited Partners which was received by the
particular Limited Partner or former Limited Partner from whom the Insufficiency
Reimbursement is sought. Each Limited Partner, to the extent of his
proportionate share of such a returned contribution as above
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determined, hereby agrees to indemnify each other Limited Partner against such
Insufficiency Reimbursement.
In addition, the General Partners and the Fund (to the extent of its
net assets) hereby further indemnify any Limited Partner against any liability
of the Fund discharged by him pursuant to the final decision of any court of
competent jurisdiction that such Limited Partner was liable for such liability
solely by virtue of the grant or exercise of the voting rights as set forth in
Article VII (and not by virtue of any action or representation by such Limited
Partner).
Any such right of indemnification pursuant to either of the preceding
two paragraphs shall be conditioned upon the party so seeking indemnification
giving to the Fund prompt notice of, and the opportunity to defend, any claim
instituted or threatened against such person by a creditor of the Fund. Each
Limited Partner further agrees that any sum or property wrongfully distributed
to him shall be held by him as trustee for the Fund to be delivered to the Fund
upon its demand in order to satisfy the Insufficiency Reimbursement.
4.5 LIMITED PARTNERS NOT PERSONALLY LIABLE. All persons extending
credit to, contracting with or having any claim against the Fund shall look only
to the assets of the Fund and of the General Partners for payment under such
credit, contract or claim, or only to the assets of the Fund if any such person
has so agreed, and except to the extent provided in Section 4.4 hereof, neither
the Limited Partners, nor any of the Fund's officers, employees or agents,
whether past, present or future, shall be personally liable therefor.
4.6 DEATH OF A LIMITED PARTNER. The death of a Limited Partner shall
not dissolve or terminate the Partnership. Upon the death of a Limited Partner
the personal representative of such deceased Limited Partner shall have all the
rights of a Limited Partner, to the extent of the deceased's interest in the
Fund, for the sole purpose of settling his estate, including the right to assign
his Shares and to designate his assignee a substituted Limited Partner, upon
compliance with the provisions of Section 4.2 above. The estate of a deceased
Limited Partner shall be liable for all such deceased Limited Partner's
liabilities as a Limited Partner.
ARTICLE V
CAPITAL CONTRIBUTIONS: SALES OF SHARES; ALLOCATIONS TO SHARES
5.1 SHARES OF PARTNERSHIP INTEREST. The entire beneficial interest of
the Partners in the Fund and its assets shall be divided into equal
proportionate units of partnership interest, referred to herein as "Shares." The
Managing General Partners
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may from time to time divide or combine such units into a greater or less number
of Shares, provided that no such action shall in and of itself alter the
proportionate beneficial interest of the several Holders of Shares in the Fund
at the time. The Managing General Partners shall, by appointment of an agent for
the purpose or otherwise, at all times maintain a record of the outstanding
Shares and the Holders thereof from time to time.
5.2 CONTRIBUTIONS BY GENERAL PARTNERS. Each of the General Partners
has purchased the number of Shares set forth in Schedule "A" to this Certificate
and Agreement. Each Share purchased by a General Partner will be held in such
person's capacity as a General Partner and not as a Limited Partner.
Except as provided in this Section, no General Partner has agreed to
make any contributions in addition to that required as a condition to admission
as a General Partner, or to lend additional funds to the Partnership.
5.3 CONTRIBUTIONS BY THE LIMITED PARTNERS.
(a) Except to the extent a Limited Partner hereafter elects to
participate in an income and/or capital gains reinvestment program which may be
offered by the Fund, no Limited Partner has agreed to make any additional
contributions to or to lend additional funds to the Fund, and no Limited Partner
shall be liable for any additional assessment therefor.
5.4 ALLOCATION OF FUND INCOME, GAINS, LOSSES, DEDUCTIONS AND CREDITS
AMONG THE SHARES. All items of Fund income, gain, loss, deduction and credit
during each taxable year of the Fund shall be computed for the Fund in
accordance with generally accepted accounting principles applicable to regulated
investment companies.
ARTICLE VI
DISTRIBUTIONS AND RETURNS OF CONTRIBUTIONS
6.1 IN GENERAL. Distributions of cash or other property may be made
by the Managing General Partners in accordance with this Article: (a) with
respect to net income and net realized capital gains of the Fund; (b) in
connection with redemption of Shares; and (c) upon dissolution of the Fund.
However, all such distributions shall be in proportion to the number of Shares
held and without regard to the dollar amount of contributions received with
respect thereto.
6.2 DISTRIBUTIONS WITH RESPECT TO INCOME AND NET REALIZED CAPITAL
GAINS. The Managing General Partners shall determine the amounts with respect to
net investment income and net realized capital gains, if any, to be distributed
to the Shareholders and
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the times when such distributions shall be made. Except as otherwise provided in
this Certificate and Agreement, such amounts shall be distributed equally among
the Shares outstanding. For purposes of such distributions, a person will be
deemed to be a Shareholder if such person's interest is recorded on the books of
the Fund maintained for that purpose on the record date determined for such
distribution.
6.3 DISTRIBUTIONS IN CONNECTION WITH REDEMPTION OF SHARES.
(a) Subject to the requirement stated in Section 3.11 that
each General Partner own at least one Share, and to the limitations of Sections
6.3(b) and (d) below, a Shareholder may elect to redeem any or all of the Shares
held by him of record at the Net Asset Value Per Share next computed after
receipt by the Fund (or by a person designated by the Fund for such purpose) of
a written request for redemption. The request must be accompanied by either the
certificates representing the Shares to be redeemed, if certificates have been
issued, or a stock power, duly endorsed by the record Holder(s) with
signature(s) guaranteed by an "eligible guarantor institution" as defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934. Except as otherwise
provided in this Section 6.3(a) and except to the extent Shares are redeemed for
cash pursuant to a Systematic Withdrawal Plan described in Section 6.3(e) below,
payments upon redemption may be made in cash, in any portfolio securities or in
any combination thereof, in the sole discretion of the Managing General
Partners. Securities which are subject to a legal or contractual restriction on
their resale by the Fund ("restricted securities") will not be distributed in
redemption of Shares.
(b) The Managing General Partners may suspend redemptions and
defer payment of the redemption price during any period that the determination
of Net Asset Value Per Share is suspended pursuant to Section 11.1(g).
(c) No Holder shall be entitled to receive the return of any
part of the contribution with respect to his Shares unless all liabilities of
the Partnership, except liabilities to General Partners and to Limited Partners
on account of their contributions, have been paid or there remains property of
the Fund sufficient to pay them.
(d) Each Shareholder, by becoming a Shareholder: (i) agrees
that payment of the redemption price as determined hereunder with respect to a
Share owned by him as reflected in this Certificate and Agreement constitutes
full and complete discharge of any obligation of the Fund and the General
Partners with respect to his interest in the Fund represented by such Share,
including, without limitation, any right to the return of contribution
represented by such Share, and that, upon such redemption, he shall have no
further rights with respect to such
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share; (ii) agrees that the date upon which Net Asset Value is computed for
purposes of redeeming a Share shall constitute the date specified in this
Certificate and Agreement for the return of the contribution with respect to
such Shares for purposes of the Partnership Act; and (iii) consents to the
redemption of any Share in accordance with the provisions of this Certificate
and Agreement.
(e) The Managing General Partners may in their discretion
adopt a Systematic Withdrawal Plan (the "Plan") pursuant to which a Shareholder
electing to participate in the Plan will receive in cash as a partial redemption
of his Shares a stipulated percentage of the net asset value of such Shares as
of the close of trading on the New York Stock Exchange on such day or days as
the Managing General Partners may determine. The Managing General Partners may
in their sole discretion determine from time to time the percentage to be paid
to Plan participants, the amount of any fees or other service charges which may
be imposed upon participants, and such other matters as are necessary or
advisable in connection with the implementation and administration of the Plan.
6.4 DISTRIBUTIONS UPON WINDING UP OF THE FUND. Upon the dissolution
of the Fund pursuant to Section VIII, the Managing General Partners, or trustee,
if one is appointed, shall proceed to wind up the affairs for the Fund and to
liquidate its assets as promptly as is consistent with obtaining fair value. The
proceeds from such liquidation of the Fund assets shall be applied and
distributed in the following order of priority:
(a) to the payment of debts and liabilities of the Fund
(other than any loans or advances which may have been made by any of
the Partners to the Fund) and the expenses of liquidation;
(b) to create any reserve which the Managing General
Partners or trustee may deem reasonably necessary for any contingent
or unforeseen liabilities or obligations of the Fund. Such reserve
shall be paid over by the Managing General Partners or trustee to a
bank or trust company to act as escrow agent selected by the
Managing General Partners or trustee. Any such escrow agent shall
hold such reserves for payment of any of the aforementioned
contingencies, and, at the expiration of such period as the Managing
General Partners or trustee designate, shall distribute the balance
thereafter remaining in the manner hereinafter provided;
(c) to the repayment of any loans or advances that may
have been made by any of the Partners to the Fund, but if the amount
available for such repayment shall be insufficient, then pro rata on
account thereof; and
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(d) the balance, if any, pro rata among the Shareholders
in proportion to the number of Shares held by them at the record
date for any such distribution.
When the Managing General Partners have complied with the foregoing
distribution plan (including payment over to the escrow agent), the Partners
shall execute, acknowledge, and cause to be filed a cancellation of this
Certificate and Agreement.
6.5 RETURNS OF CONTRIBUTION.
(a) Except upon dissolution of the Fund or the earlier
effective date of any redemption of the Shares of a Holder pursuant to Section
6.3 above (which shall be the date specified in this Certificate and Agreement
for return of contributions pursuant to the Partnership Act), no Partner has the
right to demand return of any part of his contribution. The Managing General
Partners may, however, from time to time, elect to make returns of contributions
to Shareholders, provided that: (i) all liabilities of the Fund to persons other
than shareholders have been paid or, in the good faith determination of the
Managing General Partners, there remains property of the Fund sufficient to pay
them; (ii) the consent, expressed or implied, of all of the Partners is
obtained; and (iii) the Managing General Partners cause this Certificate and
Agreement to be amended to reflect a reduction in contributions.
For purposes of the foregoing provisions, the condition of
subpart (ii) shall have been satisfied if such return of contribution is
effected by a distribution made pro rata to all of the Shareholders based upon
the number of Shares held by each of them, or upon the redemption of Shares
pursuant to the authority of Section 6.3 above. Each Partner, by becoming such,
consents to any such distribution theretofore or thereafter duly authorized and
made in accordance with the foregoing provisions.
(b) In the event subparts (i) and (ii) of part (a) above are
satisfied, the Managing General Partners agree to cause an appropriate amendment
to this Certificate and Agreement to be promptly filed.
(c) In return for his contribution, subject to the provisions
of Section 6.3 above, a Shareholder may receive cash or other property at the
sole discretion of the Managing General Partners, but a Shareholder has no right
to demand return of his contribution other than in cash.
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ARTICLE VII
PARTNERS' RIGHTS TO VOTE UPON MATTERS AFFECTING
THE BASIC STRUCTURE OF THE FUND: EXERCISE OF VOTING RIGHTS
7.1 VOTING RIGHTS OF PARTNERS. Subject to the provisions of Section
4.3 and 4.4 above, the Managing General and Limited Partners shall have in
proportion to the numbers of Shares held of record by them, voting, approval,
consent or similar rights with respect to the following matters affecting the
basic structure of the Partnership, which include the voting, approval, consent
or similar rights required under the 1940 Act for voting security holders:
(a) the right to remove General Partners and to elect
General Partners;
(b) the right to approve or disapprove of proposed
changes in the investment limitations and policies;
(c) the right to approve or disapprove of a proposed
change in the nature of the Fund's business so as to cease to be an
investment company;
(d) the right to approve or disapprove of any investment
advisory contract or the termination of such a contract entered into
by the Managing General Partners pursuant to Section 3.3(e) above;
(e) the right to ratify or reject the appointment of and
to terminate employment of the independent public accountants of the
Fund to the extent required by the 1940 Act or other applicable law;
(f) the right to approve or disapprove the sale of all
or substantially all of the assets of the Fund;
(g) the right to amend this Certificate and Agreement in
any other respect; provided, however, that no such amendment shall
conflict with the 1940 Act, so long as the Fund is registered
thereunder, or affect the liability of the General Partners without
their consent nor the limited liability of the Limited Partners as
provided under Section 4.4 above and provided further that the
foregoing shall not preclude amendments to this Certificate and
Agreement without the vote of the Partners to the extent permitted
in Article IX below; and
(h) The right to elect to wind up and dissolve the Fund.
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Limited Partners shall not have the right to vote on any other matters.
7.2 MEETINGS OF THE PARTNERS. An annual meeting of the Partners for
the election of General Partners, the ratification or rejection of the
appointment of the independent public accountants of the Fund or other business
is not required to be held unless required by applicable law or otherwise
determined by the Managing General Partners. Any such meetings shall be held at
the statutory office of the Fund in California, or at such other place as may be
designated in the call thereof, which call shall be made by the Managing General
Partners. Special meetings may also be called by the Managing General Partners
from time to time for the purpose of taking action upon any matter requiring the
vote or authority of the Partners as herein provided.
7.3 QUORUM AND REQUIRED VOTE AT MEETINGS OF THE PARTNERS. Partners
holding a majority of the Shares entitled to vote present or represented by
proxy shall be a quorum for the transaction of business at a Partners' meeting,
but any lesser number shall be sufficient for adjournments.
Each Partner shall have one vote for each Share standing of record in
such Partner's name as of the record date set forth in the notice of meeting. A
majority of the Shares voted at a meeting at which a quorum is present shall
constitute action on the Partners, except:
(a) that in the election of General Partners, those
candidates receiving the highest number of votes cast at a meeting
of Partners at which a quorum is present, up to the number of
General Partners to be elected, shall be elected as General Partners
of the Fund; there shall be no cumulative voting in election of
General Partners;
(b) that approval of matters referred to in (b), (c) and
(d) and the termination of the employment of independent public
accountants referred to in (e) of paragraph 7.1 above shall require
a Majority Shareholder Vote; and
(c) where a larger vote, if any, is otherwise required
by provision of this Certificate and Agreement.
Shares may be voted at a meeting of Partners in person or by proxy
duly executed by the Partner(s) holding the Shares of record on the record date
for such meeting fixed by the Managing General Partners as provided in Section
10.4. All such proxies shall be filed with the Fund before or at the meeting. No
such proxy shall be valid after eleven months from the date of its execution.
The law of California pertaining to corporate proxies will govern all
Partnership proxies. Notwithstanding that a valid proxy is outstanding, powers
of the proxy holder will be
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suspended if the person executing the proxy is present at the meeting and elects
to vote in person.
7.4 ACTION BY WRITTEN CONSENT. Any action taken by Partners may be
taken without a meeting if all of the Partners entitled to vote on the matter
consent to the action in writing and such written consents are filed with the
records of the meetings of Partners. Such consent shall be treated for all
purposes as a vote taken at a meeting of Partners.
ARTICLE VIII
TERM AND DISSOLUTION OF THE FUND
8.1 TERM. The Term of this Partnership shall commence as of March
25, 1976, the date of the initial filing of this Certificate and Agreement with
the County Recorder in the County of Los Angeles, of the State of California, as
required by the Partnership Act, and shall continue in existence until December
31, 2071, on which date it shall commence dissolution, unless it is sooner
dissolved as hereinafter provided.
8.2 EVENTS CAUSING EARLIER DISSOLUTION OF THE FUND. The Fund shall
commence dissolution, and the affairs of the Fund shall be wound up, prior to
the date specified above, upon the happening of any of the following events:
(a) the Fund disposes of all of its assets; or
(b) if a Managing General Partner has not filed an
amendment to this Certificate and Agreement evidencing his
determination to continue the business of the Partnership within One
Hundred and Eighty (180) days after the death, retirement or
insanity of a General Partner; or
(c) partners holding a majority of the Shares vote to
dissolve the Fund.
The Limited Partners shall have no right or power to cause the
termination or dissolution of the Partnership except as set forth in this
Certificate and Agreement. No Limited Partner shall have the right to bring an
action for partition against the Partnership.
8.3 RIGHT OF GENERAL PARTNERS TO CONTINUE THE BUSINESS OF THE FUND
IN CERTAIN EVENTS. The death, retirement or insanity of a General Partner shall
not dissolve the Partnership. In any such event the business of the Partnership
shall continue pending the election to continue the business of the Fund
contemplated in this Section or the exercise of the rights of the Partners
provided in Section 8.4 below.
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After the death, retirement or insanity of a General Partner, any
remaining Managing General Partner shall have the right to elect to continue the
business of the Fund. If a remaining Managing General Partner so elects to
continue the Fund, within thirty (30) days after such event he shall execute and
cause to be filed an appropriate amendment to this Certificate and Agreement to
evidence such election. If no remaining Managing General Partner is willing to
continue the business of the Partnership, then prior to the expiration of such
thirty-day period, the remaining Managing General Partners shall (or, if there
is no Managing General Partner then acting, any Partner or Partners owning 10%
or more of the Shares then outstanding) shall, within one hundred and twenty
(120) days of such event, call a meeting of the Partners for the purpose of
exercising the rights provided in Section 8.4 below.
8.4 RIGHT OF THE PARTNERS TO PROVIDE FOR CONTINUATION OF THE
BUSINESS OF THE FUND IN CERTAIN EVENTS. In the event that: (a) at any time the
status and interest of all Managing General Partners has terminated by virtue of
any of the events or circumstances specified in Section 3.8 of this Certificate
and Agreement; or (b) the Managing General Partner(s) remaining after the death,
retirement or insanity of a General Partner do not elect to continue the Fund
(which failure to elect to continue the Fund shall constitute an election to
retire pursuant to Section 3.8(a)(4) above), then, to the extent permitted by
the Partnership Act, the Partners shall have the right to elect a successor
Managing General Partner or Partners who shall have the authority to elect to
continue the business of the Fund under its present name. Any such successor
Managing General Partner shall have all of the rights and powers, and be subject
to all of the duties and obligations of a Managing General Partner provided in
this Certificate and Agreement.
ARTICLE IX
FUND DOCUMENTATION; AMENDMENT OF THE
CERTIFICATE AND AGREEMENT; POWER OF ATTORNEY
9.1 CERTIFICATE AND AGREEMENT AND OTHER DOCUMENTATION. This
Certificate and Agreement shall constitute a Certificate of Limited Partnership
within the meaning of the Partnership Act, and the Managing General Partners
shall promptly cause it to be filed and recorded in accordance with the
Partnership Act in the County of the location of the Fund's statutory office,
and to the extent required by local law, in the appropriate place in each state
in which the Fund may hereafter establish a place of business.
9.2 EVENTS REQUIRING AMENDMENT OF CERTIFICATE AND AGREEMENT. This
Certificate and Agreement shall be promptly
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amended, as hereafter provided, upon the occurrence of any of the following
events: (a) there is a change in the name of the Fund; (b) there is a change in
the street address of the principal executive office; (c) there is a change in
the address of a General Partner or a change in the address of the agent for
service of process, unless a corporate agent is designated, or appointment of a
new agent for service of process; (d) a person is admitted as a General Partner;
(e) a General Partner retires, dies or becomes insane, and the business is
continued as permitted by Article VIII; (f) there is a false or erroneous
statement in this Certificate and Agreement; (g) the Partners desire to make a
change in any other statement in this Certificate and Agreement in order that it
shall accurately represent the agreement among them; or (h) there is a change in
the right to vote upon any of the matters described in Article VII.
9.3 PARTNERSHIP AUTHORIZATION. Each of the Limited Partners hereby
makes, constitutes and appoints the Managing General Partners of the Partnership
or any of them and each person who shall hereafter become a Managing General
Partner, with full power of substitution, the true and lawful attorney of, and
in the name, place and stead of such Limited Partner, with the power from time
to time to execute, acknowledge, make, swear to, verify, deliver, record, filed
and/or publish: (a) this Certificate and Agreement of Limited Partnership under
the laws of the State of California or any other jurisdiction, any amendment to
any such Certificate and Agreement of Limited Partnership (including, but not
limited to, amendments reflecting the withdrawal of any General Partner or the
return, in whole or in part, of the contribution of any Partner) or any other
document required from time to time to admit such Limited Partner, to effect his
substitution as a Limited Partner or to effect the substitution of the Limited
Partner's assignee as a Limited Partner as to any or all shares of limited
partnership interest assigned to such assignee; (b) any amendments to this
Certificate and Agreement or any other document required to reflect any action
of the Partners provided for in this Certificate and Agreement whether or not
such Limited Partner voted in favor of or otherwise consented to such action;
and (c) any other instrument, certificate or document as may be required by any
regulatory agency, the laws of the United States, any state or any other
jurisdiction in which the Fund is doing or intends to do business or which the
Managing General Partners deem advisable to file or record, provided such
instrument, certificate or document is in accordance with the terms of this
Certificate and Agreement as then in effect.
Each of the General Partners hereby makes, continues and appoints
the Managing General Partners and any one of them and each person who shall
hereafter become a Managing General Partner, and additionally appoints the
transfer agent and any
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successor transfer agent employed by the Fund, with full power of substitution,
the true and lawful attorney of, and in the name, place and stead of such
General Partner, with the powers from time to time to execute, acknowledge,
make, swear to, verify, deliver, record, file and/or publish the documents
specified or contemplated by subparts (a), (b) and (c) of the preceding
paragraph.
Each of the Limited Partners is aware that the terms of the
Certificate and Agreement permit certain amendments of the Certificate and
Agreement to be effected and certain other actions to be taken or omitted by or
with respect to the Partnership, in each case with the approval of less than all
the Limited Partners, provided that a specified percentage of Partners shall
have voted in favor of or otherwise consented to such action. Such actions
include, without limitation, admission of new General Partners duly elected at
meetings of the Partners. If, as and when (i) an amendment of the Certificate
and Agreement is proposed or an action is proposed to be taken or omitted by or
with respect to the Partnership which requires, under the terms of the
Certificate and Agreement, the approval of a specified percentage in interest
(but less than all) of the Partners, (ii) Partners holding the percentage of
Partnership interests in the Partnership specified in the Certificate and
Agreement as being required for such amendment or action have approved such
amendment or action in the manner contemplated by the Certificate and Agreement;
and (iii) a Limited Partner has failed or refused to approve such amendment or
action (hereinafter referred to as a non-consenting Limited Partner), each
nonconsenting Limited Partner agrees that each special attorney specified above,
with full power of substitution, is hereby authorized and empowered to execute,
acknowledge, make, swear to, verify, delivery, record, file and/or publish, for
and on behalf of such non-consenting Limited Partner, and in his name, place and
stead, any and all instruments and documents which may be necessary or
appropriate to permit such amendment to be lawfully made or action lawfully
taken or omitted. Each consenting and non-consenting Limited Partner is fully
aware that he and each other Limited Partner have executed this special power of
attorney, and that each Limited Partner will rely on the effectiveness of such
powers with a view to the orderly administration of the Partnership's affairs.
The foregoing grant of authority (i) is a special power-of-attorney
coupled with an interest in favor of the Managing General Partners now and
hereafter acting and as such shall be irrevocable and shall survive the death or
insanity (or, in the case of a Limited Partner that is a corporation,
association, partnership, joint venture or trust, the merger, dissolution or
other termination of the existence) of such Limited Partner, (ii) may be
exercised for each Limited Partner by a facsimile signature of any Managing
General Partner or by listing all of
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the Limited Partners executing any instrument with a single signature of any
Managing General Partner acting as attorney-in-fact for all of them, (iii) shall
survive the assignment by such Limited Partner of the whole or any portion of
his interest, and (iv) shall survive the redemption by the Limited Partner of
the whole or any portion of his interest as provided in section 6.3 hereof,
provided that where all of such Limited Partner's interest is so redeemed, the
power of attorney shall survive such redemption for the sole purpose of enabling
a Managing General Partner to execute, acknowledge and file any instrument
necessary to effect the deletion of such person as a Limited Partner.
9.4 POWER OF ATTORNEY BY SUBSTITUTED OR ADDITIONAL LIMITED PARTNERS.
As a condition to effectiveness of any assignment of Shares and to becoming a
Limited Partner, each original purchaser or assignee of Shares shall execute and
deliver to the Managing General Partners one or more Partnership Authorizations,
including a power-of-attorney in form acceptable to the Managing General
Partners and in content substantially in accordance with the foregoing
provisions of Section 9.3, which shall similarly be irrevocable during the
period specified above.
9.5 AMENDMENTS REQUIRING SIGNATURE BY LESS THAN ALL LIMITED
PARTNERS. Anything herein to the contrary notwithstanding, any amendment to this
Certificate and Agreement substituting or adding a Partner may be signed by any
Managing General Partner and by the person to be substituted or added as a
Partner. The execution of any such amendment on behalf of a Limited Partner or
any proposed substituted or added Limited Partner may be effected by his
attorney-in-fact. An amendment reflecting the death, retirement or insanity of a
General Partner and the election of a Managing General Partner to continue the
business of the Fund pursuant to Article VIII above, need only be signed by any
General Partner.
9.6 AMENDMENTS REQUIRING SIGNATURE BY ALL PARTNERS. Any amendment to
this Certificate and Agreement other than amendments described in Section 9.5
shall be signed by or on behalf of all Partners. The execution of any such
amendment on behalf of a General or Limited Partner may be effected by his
attorney-in-fact pursuant to Section 9.3 and 9.4.
ARTICLE X
BOOK AND RECORDS, STATEMENTS
AND INCOME TAX INFORMATION
10.1 FISCAL YEAR. The fiscal year of the Fund shall be the calendar
year for financial reporting and for federal income tax purposes.
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10.2 RECORDS AND ACCOUNTING. At all times during the continuance of
the Fund, books of account and records, which shall be adequate and appropriate
for the Fund business, shall be kept on a basis consistent with the accounting
methods followed by the Fund for federal income tax purposes and, where deemed
appropriate, in accordance with generally accepted accounting principles and
procedures applied in a consistent manner. Such books and records shall include
such separate and additional accounts for each Partner and such records of each
other Shareholder as shall be necessary to reflect accurately the rights and
interest of its respective Shareholders and shall specifically reflect the name
and address of each Shareholder and number of Shares held by him for the purpose
of determining recipients of distributions and notices. Such books of account, a
copy of this Certificate and Agreement and all amendments hereto, the Code of
Regulations, all documents relating to the ownership and condition of title of
Fund properties, and copies of all Fund tax returns shall be maintained by the
Fund at all times during its operations, and each Partner shall have access to
them and the right, at such Partner's expense, to inspect and copy them at all
reasonable times upon reasonable notice to the Fund. In addition, each Partner
shall have the right to receive by mail, upon written request to the
Partnership, a copy of a list of the names and addresses of the Limited Partners
and the number of Shares held by each of them, against reimbursement of the cost
of duplicating and mailing the same.
10.3 PERIODIC FINANCIAL STATEMENTS. The Fund shall cause certified
annual and uncertified semiannual financial statements of the operations of the
Fund to be prepared and forwarded to the Partners. The annual statements shall
include a statement of assets and liabilities, statements of operations and
changes in net assets, and such supporting statements or schedules as required
by law or by the Managing General Partners.
10.4 RECORD DATES. For the purpose of determining the Partners who
are entitled to notice of, and to vote or act at any Meeting of Partners or any
adjournment thereof, or the Shareholders who are entitled to receive payment of
any dividend or of any other distribution, the Managing General Partners may
from time to time, in advance, fix a time, which shall be not more than 50 days
nor less than 10 days before the date of any Meeting of Partners or the date for
the payment of any dividend or of any other distribution, as the record date for
determining the Partners having the right to notice of and to vote at such
meeting and any adjournment thereof or Shareholders having the right to receive
such dividend or distribution, and in such case only Partners or Shareholders of
record, as appropriate, on such record date shall have such right,
notwithstanding any transfer of shares on the books of the Fund after the record
date; or without fixing such record date, the Managing General Partners
A-23
<PAGE> 26
may, for any of such purposes, close the register or transfer books for all or
any part of such period.
10.5 INCOME TAX INFORMATION. The Fund shall provide to each
Shareholder on a timely basis annually information with respect to federal
taxable income and gain.
10.6 STATEMENT UPON WINDING UP OF THE FUND. As soon as possible
after completion of the winding up of the Fund pursuant to Section 6.4 above,
each Shareholder shall be furnished with a statement prepared by the Fund's
accountants which shall set forth the assets and liabilities of the Fund as at
the date of complete winding up.
ARTICLE XI
GENERAL PROVISIONS
11.1 DEFINITIONS. Whenever used herein, unless otherwise required by
the context or specifically provided:
(a) The terms "Affiliated Person," "Assignment,"
"Commission," "Interested Person," "Principal Underwriter" shall
have the respective meanings given such terms in Sections 2(a)(3),
2(a)(4), 2(a)(7), 2(a)(19), and 2(a)(29) respectively of the 1940
Act; "Majority Shareholder Vote" shall mean "vote of a majority of
outstanding voting securities" as defined in Section 2(a)(42) of the
1940 Act;
(b) "Certificate and Agreement" shall mean this
Certificate and Agreement of Limited Partnership, as amended or
restated from time to time;
(c) "Code of Regulations" shall mean the "Code of
Regulations" of the Fund as amended from time to time;
(d) "General Partners" refers to the Managing General
Partners named herein and any person who shall hereafter become a
General Partner. "Managing General Partner" refers to the
individuals designated as such in Section 3.1 and identified, from
time to time, in Schedule "A" to this Certificate and Agreement;
(e) The pronouns "he," "his," "him," "it" or "who," with
"Limited Partner" or "General Partner" as the antecedent shall be
deemed to refer also to a Limited Partner or General Partner who is
a woman, a partnership, a joint venture, an association, a
corporation or a trust;
(f) "Limited Partners" shall mean the original Limited
Partner and all other persons who shall hereafter be
A-24
<PAGE> 27
admitted to the Fund as additional Limited Partners or substituted
Limited Partners, except those persons who (i) have redeemed all
Shares of the Fund owned by them, or (ii) have been replaced by a
substituted Limited Partner to the extent of their entire Limited
Partnership Interest;
(g) "Net Asset Value Per Share." The Net Asset Value Per
Share of the Fund shall be determined as of the close of trading on
the New York Stock Exchange on each day on which the Exchange is
open for trading (and at such other times as the Fund may
determine). The Net Asset Value Per Share shall be computed by
taking the total value of all assets of the Fund, less its
liabilities and dividing by the number of Shares outstanding.
Securities for which market quotations are readily available shall
be valued at their current market values in the principal markets in
which such securities are normally traded. Securities and other
assets for which market quotations are not readily available
(including restricted securities) shall be valued at their fair
value as determined in good faith under procedures established by
and under the general supervision of the Managing General Partners.
The Partnership may suspend the determination of the Net
Asset Value Per Share in the event the New York Stock Exchange is
closed for other than customary weekends or holidays, or during
periods when trading on the Exchange is restricted or an emergency
exists which makes disposition or valuation of portfolio securities
impractical, or during any other period permitted by order of the
Commission.
(h) The "1940 Act" refers to the Investment Company Act
of 1940, as amended, and the Rules and Regulations thereunder, all
as amended from time to time; the "1933 Act" refers to the
Securities Act of 1933, as amended, and the Rules and Regulations
thereunder, all as amended from time to time;
(i) "Partners" shall mean collectively the General
Partners and the Limited Partners. Reference to a "Partner" shall
mean any one of the Partners.
(j) "Partnership" or the "Fund" refers to this Limited
Partnership formed under the law of the State of California and
established by this Certificate and Agreement, as amended from time
to time.
(k) The "Partnership Act" refers to The California
Revised Limited Partnership Act as enacted by the State of
California and hereafter amended, set forth presently at Sections
15611 and following, of the Corporations Code of the State of
California;
A-25
<PAGE> 28
(l) "Person" means an individual, partnership, joint
venture, association, corporation or trust;
(m) "Shareholder" or "Holder" means a holder of Shares,
whether a General Partner, Limited Partner or assignee of any of
them, but only to the extent such person's interest is recorded on
the books of the Fund maintained for such purpose either by the Fund
or by its appointed transfer or similar agent.
(n) "Shares" shall mean the equal proportionate units
into which the Partnership Interests of the Fund shall be divided
from time to time as provided in Section 5.1 of this Certificate and
Agreement.
11.2 INDEPENDENT ACTIVITIES. Each Partner reserves the right to
conduct activities similar to those conducted by the Fund, including buying or
selling securities for his own account or for others.
11.3 CUSTODIAN. All assets of the Partnership shall be held by a
Custodian as required by the 1940 Act, and may be registered in the name of the
Partnership or such custodian or a nominee thereof.
11.4 BENEFIT. Except as herein otherwise provided to the contrary,
this Certificate and Agreement shall be binding upon and inure to the benefit of
the parties signatory hereto, and their respective heirs, executors, guardians,
representatives, successors and assigns.
11.5 NONRECOURSE CREDITORS. No creditor making a nonrecourse loan to
the Partnership shall, by reason thereof, acquire any direct or indirect
interest in the profits, capital or property of the Partnership other than as a
secured creditor.
11.6 NOTICES. All notices required or permitted to be given under
this Certificate and Agreement shall be in writing and shall be given to the
parties at the addresses set forth in Schedule "A" to this Certificate and
Agreement and to the Fund at its statutory office in California, or at such
other address as any of the parties may hereafter specify in writing to the
Fund.
11.7 CAPTIONS. Paragraph titles or captions contained in this
Certificate and Agreement are inserted only as a matter of convenience and for
reference and in on way define, limit, extend or describe the scope of this
Certificate and Agreement or the intent of any provision hereof.
11.8 CERTIFICATE AND AGREEMENT IN COUNTERPARTS. This Certificate and
Agreement may be executed in several counterparts, and as so executed, shall
constitute one
A-26
<PAGE> 29
Certificate and Agreement, binding on all of the parties hereto, notwithstanding
that all of the parties are not signatory to the original or the same
counterpart.
11.9 AGENT FOR SERVICE OF PROCESS. The Managing General Partners
shall take whatever action is necessary to designate an agent at the Fund's
office in California upon whom service of process upon the Fund may lawfully be
made.
11.10 PRINCIPLES OF CONSTRUCTION; SEVERABILITY. This Certificate and
Agreement shall be construed to the maximum extent possible to comply with all
of the terms and conditions of the 1940 Act and the Partnership Act. If,
nevertheless, it shall be determined by a court of competent jurisdiction that
any provision or wording of this Certificate and Agreement shall be invalid or
unenforceable under the 1940 Act, the Partnership Act or other applicable law,
such invalidity or unenforceability shall not invalidate the Certificate and
Agreement. In that case, the Certificate and Agreement shall be construed so as
to limit any term or provision so as to make it enforceable or valid within the
requirements of such law, and in the event such term or provision cannot be so
limited, this Certificate and Agreement shall be construed to omit such invalid
or unenforceable provision.
11.11 CALIFORNIA LAW. This Certificate and Agreement is made in the
State of California, and it is created under and is to be governed by and
construed and administered according to the laws of said state.
11.12 INTEGRATED AGREEMENT. This Certificate and Agreement
constitutes the entire understanding and agreement among the parties hereto with
respect to the subject matter hereof, and there are no agreements,
understandings, restrictions, representations or warranties among the parties
other than those set forth herein.
A-27
<PAGE> 30
IN WITNESS WHEREOF, the Managing General Partners and Limited
Partners have executed this Certificate and Agreement as of this 31st day of
December, 1997.
MANAGING GENERAL PARTNERS
/s/ Robert R. Fortune
-----------------------------
By: Robert R. Fortune,
Attorney-in-fact for the
Managing General
Partners set forth in
Schedule A pursuant to
Section 9.3 of the
Certificate and
Agreement
THE LIMITED PARTNERS
/s/ Robert R. Fortune
-----------------------------
By: Robert R. Fortune,
Attorney-in-fact for
the Limited Partners
pursuant to Sections
9.3 and 9.4 of the
Certificate and Agreement
A-28
<PAGE> 31
SCHEDULE "A"
NAMES, PLACES OF RESIDENCE AND NUMBER OF SHARES
OF PARTNERSHIP INTEREST OF THE
GENERAL PARTNERS
MANAGING GENERAL PARTNERS
<TABLE>
<CAPTION>
Shares of
NAMES AND ADDRESS Partnership Interest
----------------- --------------------
<S> <C>
G. Willing Pepper
128 Springton Lake Road
Media, Pennsylvania
Robert R. Fortune
2920 Ritter Lane
Allentown, Pennsylvania 18104
David R. Wilmerding, Jr.
Gee, Wilmerding & Associates, Inc.
Villanova, PA 19085-1445
Richard C. Caldwell
PNC Bank, N.A.
1600 Market Street
29th Floor
Philadelphia, PA 19103
Langhorne B. Smith
Claniel Enterprises, Inc.
Suite 400
630 West Germantown Pike
Plymouth Meeting, PA 19462
</TABLE>
A-29
<PAGE> 1
EXHIBIT 5
ADVISORY AGREEMENT
AGREEMENT, dated January 1, 1998 between CHESTNUT STREET
EXCHANGE FUND, a California Limited Partnership ("Fund"), and PNC BANK, N.A., a
national banking association ("PNC"), and PROVIDENT INSTITUTIONAL MANAGEMENT
CORPORATION ("PIMC"), a Delaware corporation registered as an investment adviser
under the Investment Advisers Act of 1940 and wholly-owned by PNC.
WHEREAS, the Fund is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940; and
WHEREAS, the Fund desires to retain PNC and PIMC to render
investment advisory and administrative services to the Fund, and PNC and PIMC
are willing to render such services;
NOW THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. DELIVERY OF DOCUMENTS. The Fund has previously furnished
PNC with copies properly certified or authenticated of each of the following:
(a) The Fund's Restated Certificate and Agreement of
Limited Partnership dated August 16, 1976 and recorded in California on
August 16, 1976 and all subsequent restatements and amendments thereto.
Such Restated Certificates and Agreement of Limited Partnership, as
presently in effect and as it may hereinafter from time to time be
restated or further amended, is hereinafter referred to as the
"Certificate of Limited Partnership";
(b) The Fund's Code of Regulations, as amended, (such
Code, as presently in effect and as it may hereinafter from time to
time be amended, is hereinafter referred to as the "Code");
(c) Resolutions of the Managing General Partners of
the Fund authorizing the appointment of the Advisers and approving this
Agreement; and
(d) An Order of the Securities and Exchange
Commission, dated November 9, 1976, exempting the Fund from certain
provisions of Sections 2(a)(3), 2(a)(19), 18(f) and 22(e) of the
Investment Company Act of 1940, and exempting the Non-Managing General
Partner of the Fund from certain provisions of Section 17(a) of the
Act.
<PAGE> 2
The Fund agrees to furnish PIMC from time to time with copies,
properly certified or authenticated, of any amendments or supplements to the
foregoing.
2. APPOINTMENT. The Fund hereby appoints PNC and PIMC to act
an investment advisers to the Fund for the period and on the terms set forth in
this Agreement. The PNC and PIMC are sometimes hereinafter referred to
collectively as "the Advisers." The Advisers accept such appointment and agree
that the services herein set forth shall be rendered for the compensation herein
provided.
3. SERVICES RENDERED BY PNC. Subject to the supervision of the
Managing General Partners of the Fund, PNC, through its Trust Division and on
behalf of the Fund, will provide PIMC investment research and credit analysis
concerning prospective and existing Fund investments, make recommendations to
PIMC with respect to the Fund's continuous investment program, recommend to PIMC
the portion of the Fund's assets to be invested or held uninvested in cash or
cash equivalents, supply PIMC computer facilities and operating personnel, and
provide certain statistical services as PIMC may from time to time reasonably
request. PNC will provide the services rendered by it hereunder in accordance
with the Fund's investment objectives, policies and restrictions as stated in
the Prospectus and as they may hereafter be amended. PNC further agrees that it:
(a) will use the same skill and care in providing
such services as it uses in providing services to fiduciary accounts
for which it has investment responsibilities;
(b) will conform with all applicable Rules and
Regulations of the Securities and Exchange Commission (hereinafter
called the "Rules"), and will in addition conduct its activities under
this Agreement in accordance with the regulations of the Board of
Governors of the Federal Reserve System pertaining to the investment
advisory activities of bank holding companies to the same extent as if
such regulations were by their terms applicable to its activities
hereunder;
(c) will not invest its assets or assets of any
fiduciary account managed by it in Shares of the Fund, make loans for
purposes of purchasing or carrying such Shares or make loans to the
Fund;
(d) will maintain or cause PIMC to maintain all books
and records with respect to the Fund's securities transactions and
shall keep or shall cause PIMC to keep the Fund's books of account;
-2-
<PAGE> 3
(e) will render to the Fund's Managing General
Partners such periodic and special reports as the Board may request;
(f) will maintain its policy and practice of
conducting its Trust Division independently of its Commercial Division.
In making investment recommendations for the Fund, Trust Division
personnel will not inquire or take into consideration whether the
issuer of securities proposed for purchase or sale for the Fund's
account are customers of the Commercial Division. In dealing with
commercial customers, the Commercial Division will not inquire or take
into consideration whether securities of those customers are held by
the Fund; and
4. SERVICES PROVIDED BY PIMC. Subject to the supervision of
the Managing General Partners of the Fund, PIMC will provide a continuous
investment program for the Fund's portfolio, including investment research and
management with respect to all securities and investments and cash and cash
equivalents in the portfolio. PIMC will determine from time to time what
securities and other investments will be purchased, retained or sold by the
Fund, and what portion of its assets will be invested or held uninvested in cash
or cash equivalents. PIMC will provide the services rendered by it hereunder in
accordance with the Fund's investment objectives, policies and restrictions as
stated in the Prospectus and as they may hereafter be amended. PIMC further
agrees that it:
(a) will place orders pursuant to its investment
determinations for the Fund either directly with the issuer or with any
broker or dealer. In placing orders with brokers and dealers, PIMC will
attempt to obtain the best net price and the most favorable execution
of its orders. Consistent with this obligation, when the execution and
price offered by two or more brokers or dealers are comparable, PIMC
may, in its discretion, purchase and sell portfolio securities to and
from brokers and dealers who provide the Fund with research advice and
other services. In no instance will portfolio securities be purchased
from or sold to PNC, PIMC or any affiliated person thereof;
(b) will conform with all applicable Rules, and will
in addition conduct its activities under this Agreement in accordance
with the regulations of the Board of Governors of the Federal Reserve
System pertaining to the investment advisory activities of bank holding
companies to the same extent as if such regulations were by their terms
applicable to the activities of PIMC;
(c) will not invest its assets or the assets of any
accounts advised by it in Shares of the Fund, make loans
-3-
<PAGE> 4
for the purpose of purchasing or carrying Shares, or make loans to the
Fund; and
(d) will compute the net asset value and the net
income of the Fund on each business day as described in the Prospectus
or as more frequently requested by the Fund.
5. SERVICES NOT EXCLUSIVE. The investment advisory services
rendered by PNC and PIMC hereunder are not to be deemed exclusive, and PNC and
PIMC shall be free to render similar services to others so long as their
services under this Agreement are not impaired thereby.
6. BOOKS AND RECORDS. In compliance with the requirements of
Rule 31a-3 of the Rules, the Advisers hereby agree that all records which they
maintain for the Fund are property of the Fund and further agree to surrender
promptly to the Fund any of such records upon the Fund's request. The Advisers
further agree to preserve for the periods prescribed by Rule 31a-2 the records
required to be maintained by Rule 31a-1 of the Rules.
7. EXPENSES. During the term of this Agreement, the Advisers
will pay all expenses incurred by them in connection with their activities under
this Agreement other than the cost of (including brokerage commissions, if any)
securities purchased for the Fund.
In addition, if the expenses borne by the Fund in any fiscal
year exceed the applicable expense limitations imposed by the securities
regulations of any state in which the Shares are registered or qualified for
sale to the public, the Advisers shall reimburse the Fund for any excess up to
the amount of the fees payable to PIMC during such fiscal year pursuant to
paragraph 8 hereof.
8. COMPENSATION. For the services provided hereunder by PNC
and PIMC and the expenses assumed pursuant to this Agreement, the Fund will pay
PIMC, and PNC and PIMC will accept as full compensation therefor, a fee computed
daily and paid monthly at the annual rate of 4/10 of 1% of the first
$100,000,000 of the Fund's net assets, plus 3/10 of 1% of net assets exceeding
$100,000,000.
9. LIMITATION OF LIABILITY OF THE ADVISORS. The Advisers shall
not be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund in connection with the matters to which this Agreement
relates, except a loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence by either of them in the performance
of their duties or from reckless
-4-
<PAGE> 5
disregard by either of them of their obligations and duties under this
Agreement.
10. DURATION AND TERMINATION. This Agreement shall become
effective on January 1, 1998 or the date upon which it is approved by a majority
of the outstanding voting securities of the Fund at a meeting of Partners,
whichever is later. Unless sooner terminated as provided herein, this Agreement
shall continue until March 31, 1999. Thereafter, if not terminated, this
Agreement shall continue for successive annual periods ending on March 31,
provided, such continuance for successive annual periods is specifically
approved at least annually (a) by the vote of a majority of those members of the
Board of Managing General Partners of the Fund who are not parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Board of
Managing General Partners of the Fund or by vote of a majority of the
outstanding voting securities of the Fund, provided however, that this Agreement
may be terminated by the Fund at any time, without the payment of any penalty,
by the Managing General Partners of the Fund or by vote of a majority of the
outstanding voting securities of the Fund, on 60 days' written notice to the
Advisers, or the Advisers at any time, without payment of any penalty, on 90
days' written notice to the Fund. This Agreement will terminate automatically in
the event of its assignment. (As used in this Agreement, the terms "majority of
the outstanding voting securities," "interested person" and "assignment" shall
have the same meaning as such terms have in the Investment Company Act of 1940.)
11. AMENDMENT OF THIS AGREEMENT. No provision of this
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no amendment of this
Agreement shall be effective until approved by vote of the holders of a majority
of the Fund's outstanding voting securities.
12. MISCELLANEOUS. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by Delaware law.
13. NO PERSONAL LIABILITY. The persons executing this
Agreement on behalf of the Fund have executed the Agreement as Managing General
Partners or officers of the Fund and not individually. The obligations of the
Fund hereunder and any
-5-
<PAGE> 6
liabilities or claims in connection therewith are not binding upon any of the
Limited Partners of the Fund individually, but are binding only upon the assets
and property of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
Attest: PNC BANK, N.A.
/s/ Gary M. Gardner By:/s/ Joseph Gramlich
- ------------------------- ---------------------
[corporate seal]
PROVIDENT INSTITUTIONAL
Attest: MANAGEMENT CORPORATION
/s/ Gary M. Gardner By:/s/ Lisa M. Buono
- ------------------------- ---------------------
[corporate seal]
Attest: CHESTNUT STREET EXCHANGE FUND
/s/ Terrance James Reilly By:/s/ Robert R. Fortune
- ------------------------- ---------------------
-6-
<PAGE> 1
EXHIBIT 7
PART II
[ CHESTNUT STREET EXCHANGE FUND ]
NAME OF ADOPTING EMPLOYER
DEFINED CONTRIBUTION PLAN
(PROFIT-SHARING OR PROFIT-SHARING 401(K))
REGIONAL PROTOTYPE PLAN NUMBER 001
ADOPTION AGREEMENT
DRINKER BIDDLE & REATH LLP
REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN AND TRUST AGREEMENT
[ FUND OFFICE RETIREMENT PROFIT-SHARING PLAN ]
NAME OF PLAN
<PAGE> 2
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
31 HOPKINS PLAZA
BALTIMORE, MD 21201-0000
Employer Identification Number:
Date: JAN 04, 1993 23-1423089
File Folder Number:
DRINKER BIDDLE & REATH 521006125
PHILADELPHIA NATIONAL BANK BLDG Person to Contact:
C/O HOMER L ELLIOTT ESQUIRE G.N. Wallace
DRINKER BIDDLE & REATH Contact Telephone Number:
1345 CHESTNUT STREET PH NAT BK BLDG (410) 962-2973
PHILADELPHIA, PA 19107-3496 Plan Name:
REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN
Plan Number: 001
Letter Serial Number:
D8520005
Dear Applicant:
The amendment to the form of the plan identified above is acceptable
under section 401(a) or 403(a) of the Internal Revenue Code. This letter relates
only to the amendment to the form of the plan. It is not a determination of any
other amendment or of the form of the plan as a whole, or on the effect of other
federal or local statutes.
You must furnish a copy of this letter and the enclosed publication to
each employer who adopts this plan. You must also send a copy of this letter, a
copy of the approved form of the plan, and any approved amendments and related
documents to each key District Director of the Internal Revenue Service in whose
jurisdiction there are adopting employers.
The acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). To adopt the form of the plan, the employer should apply for a
determination letter by filing an application with the key District Director of
the Internal Revenue Service on Form 5307, Application for Determination for
Adopters of Master or Prototype, Regional Prototype or Volume Submitter Plans.
For purposes of sections 15.02 and 15.03 of Rev. Proc. 89-13, 1989-1 C
.B. 801, your application was received before March 31, 1991.
Please advise those adopting the plan to contact you if they have any
questions about the operation of the plan.
We have sent a copy of this letter to your representative as indicated
in your Power of Attorney.
If you have any questions on our processing of this case, please call
the above telephone number. If you write, please provide your telephone number
and the most convenient time for us to call in case we need more information.
Whether you call or write, please refer to the Letter Serial Number and File
Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record.
Sincerely yours,
/s/ H.J. Hightower
District Director
Enclosure(s)
Publication 1488 Letter 2026/DO/CG)
A-2
<PAGE> 3
Department of the Treasury Internal Revenue Service
PUBLICATION 1488
(Rev. February 1991)
FAVORABLE NOTIFICATION LETTER
INTRODUCTION
This publication is issued in conjunction with a favorable notification letter.
It explains the significance of your letter, points out some features that may
affect the qualified status of the plan, and provides information on the
reporting requirements for the plan.
An employee retirement plan qualified under Internal Revenue Code
section 401(a) or 403(a) (qualified plan) is entitled to favorable tax
treatment. For example, contributions made in accordance with the plan document
are generally currently deductible. Participants will not include these
contributions into income until the time they receive a distribution from the
plan, at which time special income averaging rates for lump sum distributions
may serve to reduce the tax liability. In some cases, taxation may be further
deferred by rollover to another qualified plan or individual retirement
arrangement. See Publication 575, Pension and Annuity Income (Including
Simplified General Rule), for further details. Finally, plan earnings may
accumulate free of tax.
Employee retirement plans that fail to satisfy the requirements under
section 401(a) or 403(a) are not entitled to this favorable tax treatment.
Therefore, many employers desire advance assurance that the terms of their plans
satisfy the qualification requirements. The Service provides such advance
assurance for regional prototype plans by issuing favorable notification
letters. However, in some cases, a determination letter is also required for
reliance.
SIGNIFICANCE OF A FAVORABLE NOTIFICATION LETTER
Notification letters are issued by the Service to sponsors of regional prototype
plans. Plan sponsors then make the plan available to employers who may adopt the
plans for the benefit of their employees.
The significance of a favorable notification letter differs for
standardized plans and nonstandardized plans. A standardized plan can be
identified by the number 2, 5, or 7 appearing in the second position of the
letter serial number (the number following the alpha character which appears in
the upper right portion of the letter). A nonstandardized plan may be identified
by the number 3, 6, or 8 appearing in the second position.
STANDARDIZED PLANS. A standardized plan is designed to be automatically
acceptable under any fact pattern, except as indicated below. Therefore, there
is no need to request a determination letter for such plans, provided the
employer does not amend the plan and chooses only those options in the adoption
agreement that were approved by the Service. Although a determination letter is
not requested, the employer must still inform interested parties of the
establishment or amendment of the plan. However, a determination letter is
required for advance assurance that the provisions of the plan satisfy the
qualification requirements if the employer maintains or has maintained another
qualified plan. The Employer is not considered to have maintained another plan
merely because the plan was previously not a standardized plan. Under certain
circumstances, employers who have adopted standardized defined benefit plans may
wish to request a determination letter that their plans prior benefit structure
satisfies the requirements of Internal Revenue Code section 401(a)(26).
Paired plans are standardized plans that are designed to work together.
A paired plan may be recognized by the phrase "other than a specified paired
plan" appearing in the fifth or sixth paragraph of the notification letter. If
the employer maintains and has maintained only paired plans, a determination
letter is not needed.
NONSTANDARDIZED PLANS. It is possible that the unique fact patterns applicable
to a specific employer may cause a nonstandardized plan to fail qualification.
Therefore, to obtain advance assurance that the plan is qualified, the plan must
be submitted for a determination letter. A determination letter is similar to an
insurance policy that will, in many cases, protect the employer and plan
beneficiaries from adverse tax consequences if the plan is later found to be
nonqualified in the absence of a change in law, provided the plan is being
operated in good faith in accordance with plan provisions. This advance
assurance is a service provided by the Internal Revenue Service, and is not
required for qualification. Form 5307, Application for Determination for
Adopters of Master or Prototype Regional Prototype or Volume Submitter Plans, is
used to request a determination letter, along with Form 5302, Employee Census,
Form 8717 (explained later), a copy of the adoption agreement, a copy of the
notification letter, a certification from the plan sponsor that the plan has not
been withdrawn and is still in effect, and a copy of any separate trust or
custodial account document.
USER FEE. There is a charge for requesting a determination letter, but the
charge is significantly reduced for regional prototype plans. Please complete
and attach Form 8717, User Fee for Employee Plan Determination Letter Request,
to Form 5307 when requesting a determination letter.
LAW CHANGES AFFECTING THE PLAN. Plans must be amended to retain their qualified
status if any plan provision fails qualification requirements because of changes
in the law becoming effective subsequent to the issuance of the notification
letter. If the plan is not amended, the plan will become nonqualified without
specific notice from the Service. This will occur even if the employer has
received a favorable determination letter in addition to the notification
letter. The employer and plan participants may be subject to adverse tax
consequences if the plan is nonqualified.
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The first character of the serial number assigned to the plan indicates
the latest law change for which the plan had been amended. For example, the
letter "D" indicates the plan was amended for the Tax Reform Act of 1986, which
generally became effective for plan years after the 1988 plan year.
A notification letter will not be applicable after a change in
qualification requirements unless the plan sponsor requests a new notification
letter within 12 months after the change. The plan sponsor must provide those
employers for whom the employer is continuing to sponsor the plan with a copy of
the amendments and the new notification letter within 60 days of the receipt of
the new letter. If a change requires modification of the adoption agreement,
employers must execute the new agreement by the later of 6 months after issuance
of the new notification letter, or the end of the period specified in Internal
Revenue Code section 401(b).
If the application for a notification letter was submitted to the
Service within certain time frames, the plan generally need not be amended again
unless required to do so by legislation. The application was submitted to the
Service within these time frames, if the following paragraph appears in the
notification letter: "For purposes of sections 15.02 and 15.03 of Rev. Proc.
89-13, 1989-1 C.B. 801, your application was received timely."
REQUIRED NOTIFICATIONS TO ADOPTING EMPLOYERS. The plan sponsor must provide
adopting employers with annual notifications indicating whether the sponsor
intends to continue to sponsor the plan, and whether amendments have been made
to the plan. The plan sponsor must also notify employers within 60 days if the
plan sponsor discontinues its sponsoring of the plan.
REQUIRED NOTIFICATIONS TO THE INTERNAL REVENUE SERVICE. On each anniversary of
the date of issuance of the notification letter, the plan sponsor must advise
the Service whether the sponsor has made any changes to the plan, and whether
the plan is still being made available for adoption by employers. The plan
sponsor must also provide a listing of adopting employers, and a statement that
the plan sponsor has provided employers with the notification described in the
above paragraph.
REPORTING REQUIREMENTS. Most plan administrators or employers who maintain an
employee benefit plan must file an annual return/report with the Internal
Revenue Service. The following forms should be used for this purpose:
FORM 5500EZ - generally for a "One-Participant Plan," which is a plan that
covers only: (1) an individual, or an individual or his or her spouse who wholly
owns a business, whether incorporated or not, or (2) partner(s) in a partnership
or the partner(s) and their spouse(s). If Form 5500EZ cannot be used, the
one-participant plan should use 5500-C or 5500-R, whichever applies. NOTE: Keogh
(H.R. 10) plans are required to file an annual return even if the only
participants are owner-employees. The term "owner-employee" includes a partner
who owns more than 10% interest in either the capital or the profits of the
partnership. This applies to both defined contribution and defined benefit
plans.
FILING EXCEPTION FOR PLANS THAT HAVE NO MORE THAN $100,000 IN ASSETS. An annual
return is not required to be filed for one participant plans having less than
$100,000 in assets that otherwise qualify for filing Form 5500EZ.
FORM 5500 - for a pension benefit plan with 100 or more participants at the
beginning of the plan year.
FORM 5500-C - for a pension benefit plan with more than one but fewer than 100
participants at the beginning of the plan year.
FORM 5500-R - for a pension benefit plan with more than one but fewer than 100
participants at the start of the plan year for which 5500-C is not filed. NOTE:
For 1989 and subsequent years Form 5500-R is part of the Form 5500C/R package.
Filing only the first two pages of the Form 5500C/R package constitutes the
filing of a Form 5500-R.
WHEN TO FILE. Forms 5500 and 5500EZ must be filed annually. Form 5500-C must be
filed for (i) the initial plan year, (ii) the year a final return/report would
be filed, and (iii) at three-year intervals. Form 5500-R must be filed in the
years when Form 5500-C is not filed (See Note above). However, 5500-C will be
accepted in place of 5500-R.
DISCLOSURE. The Internal Revenue Service will process the returns and provide
the Department of Labor and the Pension Benefit Guarantee Corporation with the
necessary information and copies of the returns on microfilm for disclosure
purposes.
A-4
<PAGE> 5
PART II
[CHESTNUT STREET EXCHANGE FUND]
DEFINED CONTRIBUTION PLAN
(PROFIT-SHARING OR PROFIT-SHARING 401(K))
REGIONAL PROTOTYPE PLAN NUMBER 001
ADOPTION AGREEMENT
DRINKER BIDDLE & REATH LLP
REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN AND TRUST AGREEMENT
NOTES TO ADOPTING EMPLOYERS AND TO ADOPTING AFFILIATED EMPLOYERS:
THIS ADOPTION AGREEMENT MAY ONLY BE USED WITH THE DRINKER BIDDLE & REATH LLP
REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN.
FAILURE TO PROPERLY FILL OUT THIS ADOPTION AGREEMENT MAY RESULT IN THE
DISQUALIFICATION OF THE PLAN AS ADOPTED BY THE EMPLOYER.
A CASH OR DEFERRED ARRANGEMENT MAY NOT BE ADOPTED BY A TAX EXEMPT OR
GOVERNMENTAL ORGANIZATION WITH THE EXCEPTION OF CERTAIN PRE-EXISTING PLANS.
DRINKER BIDDLE & REATH LLP, THE SPONSORING ORGANIZATION OF THIS PLAN, WILL
INFORM THE ADOPTING EMPLOYER AND/OR ADOPTING AFFILIATED EMPLOYER OF ANY
AMENDMENTS MADE TO THE PLAN OR OF THE DISCONTINUANCE OR ABANDONMENT OF THE PLAN.
DRINKER BIDDLE & REATH LLP IS THE SPONSORING ORGANIZATION OF THIS PLAN. ITS
ADDRESS IS PHILADELPHIA NATIONAL BANK BUILDING, 1345 CHESTNUT STREET,
PHILADELPHIA, PA 19107-3496 AND ITS TELEPHONE NUMBER IS (215) 988-2855.
(FILL IN BLANKS AND INDICATE SELECTION WHERE REQUIRED)
The undersigned Employer hereby (check applicable box)
[ ] adopts
[ X ] adopts, as an amendment to a predecessor plan and trust
agreement of the Employer,
the DRINKER BIDDLE & REATH LLP REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN AND
TRUST AGREEMENT, consisting of Part I, the Plan and Trust Agreement, and Part
II, this Adoption Agreement. The Plan and Trust Agreement, as so adopted, shall
be known as the [FUND OFFICE RETIREMENT PROFIT-SHARING PLAN AND TRUST AGREEMENT]
(the "Plan"), a DEFINED CONTRIBUTION PLAN (PROFIT-SHARING OR PROFIT-SHARING
401(K)) AND TRUST AGREEMENT. The Employer and Trustee, by signing this Adoption
Agreement, mutually agree and consent to the terms of the Plan and Trust,
consisting of Part I, the Plan and Trust Agreement, and Part II, this Adoption
Agreement.
(C) DRINKER BIDDLE & REATH LLP 1997
A-5
<PAGE> 6
NAME OF ADOPTING EMPLOYER: [CHESTNUT STREET EXCHANGE FUND]
ADDRESS OF ADOPTING EMPLOYER:[BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809 ]
ADOPTING EMPLOYER'S EMPLOYER IDENTIFICATION NUMBER: [ 51-0199471 ]
ADOPTING EMPLOYER'S BUSINESS CODE NUMBER: [ 6742 ]
TYPE OF ENTITY (check one): [ ] Corporation [ ] S Corporation
[ ] Sole Proprietor [ X ] Partnership [ ] Church
[ ] Tax Exempt Organization [ ] Governmental Organization
[ ] Professional Corporation
[ ] Other (Specify): [ ]
PLACE OF INCORPORATION OR OTHER ORGANIZATION (SPECIFY): [
CALIFORNIA ]
DATE OF INCORPORATION OR DATE BUSINESS BEGAN: [ MARCH 25, 1976 ]
ADMINISTRATIVE COMMITTEE EMPLOYER IDENTIFICATION NUMBER: [23-2118138]
PLAN NAME: [ FUND OFFICE RETIREMENT PROFIT-SHARING PLAN ]
PLAN IDENTIFICATION NUMBER: [ 001 (333 FOR FORM 5500C/R) ]
TRUST NAME: [ FUND OFFICE RETIREMENT PROFIT-SHARING PLAN TRUST ]
TRUST EMPLOYER IDENTIFICATION NUMBER (IF ANY): [ 23-2487197 ]
REGIONAL PROTOTYPE (PROFIT-SHARING (401(K)) PLAN NOTIFICATION
LETTER NUMBER: D8520005 (PN:001 JANUARY 4, 1993)
FROZEN PLAN: If the Employer has discontinued all further
contributions to the Plan, check here [ ]. The Employer and the
Trustee shall, however, continue to maintain the Plan and Trust in
accordance with the requirements of the Internal Revenue Code and
the Treasury regulations thereunder.
TYPE PLAN: The Plan, as adopted under this Adoption Agreement, is a
(check one):
[ X ] (A) Profit-Sharing Plan.
[ ] (B) Profit-Sharing 401(k) Plan.
A.1.1 ACCRUAL COMPUTATION PERIOD. The Accrual Computation Period is the
(check one):
[ X ] (A) Plan Year
[ ] (B)(A consecutive 12-month period ending with
or within the Plan Year.) Enter the day and the
month this period begins: [ ](day) [ ](month).
For Employees whose date of hire is less than 12
months before the end of the 12-month period
designated, Compensation will be determined over
the Plan Year.
A.1.4 ADMINISTRATIVE COMMITTEE. The name(s) and address(es) of the
member(s) of the Administrative Committee are:
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<PAGE> 7
[(A) EDWARD J. ROACH
BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
(B)
(C)
]
A.1.10 COMPENSATION. Compensation shall be determined over the
Accrual Computation Period elected in Section A.1.1.
(A) Compensation shall (check one):
[ X ] (1) Include [ ] (2) Not include
Employer contributions made pursuant to a salary reduction agreement which
are not includible in the gross income of the Employee under sections 125,
402(e)(3), 402(h)(1)(B) or 403(b) of the Code.
(B) Compensation shall exclude (specify): [
N/A .]
(Note that this exclusion applies only to the manner of determining
contributions to the Plan and for no other purpose; if not applicable,
insert letters N/A in blanks).
A.1.12 CONTROLLED GROUP.
(A) Is the adopting Employer a member of a Controlled
Group (check one)?
[ ] (1) Yes [ X ] (2) No
(B) If Section A.1.12(A)(1) is checked, is the adopting
Employer a member of an affiliated service group (check one)?
[ ] (1) Yes [ ] (2) No [ X ] (3) N/A
If Section A.1.12(A)(1) is checked, list the name and address of each
member in the following blanks (and if Section A.1.12(B)(1) is also
checked, indicate whether the member is an affiliated service group
member): [ N/A
]
(If Section A.1.12(A)(2) is checked, the letters N/A should be inserted
in these blanks)
A.1.17 CONTRIBUTIONS ON BEHALF OF DISABLED PARTICIPANTS. The Employer
(check one):
[ ] (A) Will [ X ] (B) Will not
make contributions on behalf of disabled Participants on the basis of the
compensation each such Participant would have received for the Limitation
Year if the Participant had been paid at the rate of compensation paid
immediately before becoming permanently and totally disabled.
Such imputed compensation for the disabled Participant may be taken into
account only if the Participant is not a Highly Compensated Employee, and
contributions made on behalf of such Participant shall be nonforfeitable
when made.
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A.1.18 EARLY RETIREMENT DATE.
(A) Shall the Plan provide for an Early Retirement Date (check
one)?
[ ] (1) Yes [ X ] (2) No
If Section A.1.18(A)(1) is checked, complete the following:
(B) Early Retirement Date shall mean the (check one):
[ ] (1) Last day of the Plan Year
[ ] (2) Last day of the month (must coincide with a
Valuation Date)
[ ] (3) [ ] (fill in date) (must coincide
with a Valuation Date)
in which the Participant attains age [ ] (not later than age 64) and
completes [ ] Years of Service for Benefit Accrual with the Employer.
A.1.19 EARNED INCOME. This Section shall apply only if the Plan,
as adopted by the adopting Employer, covers Self-Employed Persons.
A.1.20 EFFECTIVE DATE. If the adoption of this Plan and Trust
Agreement constitutes the adoption of a new plan and trust agreement, check (A)
and fill in blank. If the adoption of this Plan and Trust Agreement constitutes
the restatement of an existing plan and trust agreement (including a prior
version of this Plan and Trust Agreement), check (B) and fill in blanks.
[ ] (A) NEW PLAN. The Effective Date of the Plan
and Trust Agreement is [ ].
[ X ] (B) RESTATED PLAN. The original effective
date of the predecessor plan and trust agreement
was [SEPTEMBER 18, 1981]. Except as otherwise
specifically provided herein, the Effective Date
of the Plan and Trust Agreement, as restated
herein, is [DECEMBER 1, 1997, EXCEPT AS OTHERWISE
INDICATED].
A.1.24 ELIGIBILITY COMPUTATION PERIOD. If Section A.1.33(A)(4) is
checked or if the elapsed time method is checked under Section A.2.2(B)(2),
check here [ ] and do NOT complete the remainder of this Section A.1.24.
Otherwise, the Eligibility Computation Period shall be calculated as follows:
(A) COMPUTATION PERIOD. The Eligibility Computation
Period shall be calculated pursuant to (check (1) or (2)):
[ X ] (1) NORMAL RULE. The Eligibility
Computation Period(s) shall be
determined under Section 1.24(A) of the
Plan.
[ ] (2) ALTERNATE RULE. The Eligibility
Computation Period(s) shall be
determined under Section 1.24(B) of the
Plan.
(B) HOURS OF SERVICE REQUIRED. The number of Hours of
Service which must be completed in order to meet the Eligibility
Computation Period requirements of the Plan is [ 1 ] (fill in blank but
not to exceed 1,000 Hours of Service).
A.1.27 EMPLOYEE PENSION BENEFIT PLAN. Does the Employer or any
member of its Controlled Group maintain or has the Employer or any member of its
Controlled Group maintained any other Employee Pension Benefit Plan (check one)?
[ X ] (A) Yes [ ] (B) No
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<PAGE> 9
If Section A.1.27(A) is checked, list such Employee Pension Benefit
Plan(s) in the following lines: [CHESTNUT STREET EXCHANGE FUND
RETIREMENT PROFIT- SHARING PLAN; INDEPENDENCE SQUARE INCOME
SECURITIES, INC. RETIREMENT PROFIT- SHARING PLAN; TEMPORARY INVESTMENT
FUND, INC. RETIREMENT PROFIT-SHARING PLAN; AND TRUST FOR SHORT TERM
FEDERAL SECURITIES RETIREMENT PROFIT-SHARING PLAN. ALL OF THE
FOREGOING PLANS WERE MERGED INTO THIS PLAN EFFECTIVE DECEMBER 1,
1987.]
(If Section A.1.27(B) is checked, the letters N/A should be inserted
in these blanks).
A.1.33 ENTRY DATE. Entry Date shall mean (check (A) or (B)):
[ X ] (A) REGULAR METHOD.
[ ] (1) The first day of the Plan Year (this
option cannot be used unless the maximum
age and service requirements are reduced
by 1/2 year (i.e., age 20 1/2 or less
must be selected in Section
A.2.2(B)(1)(a)(ii) and the service
requirement in Section A.2.2(B)(1)(a)
(i) must be reduced by 1/2 year),
coincident with, or, if the first day of
the Plan Year does not so coincide, the
first day of the Plan Year next
following, the date on which an Employee
meets the eligibility requirements of
Article II of the Plan.
[ ] (2) The first day of the Plan Year or
the date six months after the first day
of the Plan Year (whichever date is
earlier), coincident with, or if such
dates do not so coincide, the first day
of the Plan Year or the date six months
after the first day of the Plan Year
(whichever date is earlier) next
following, the date on which an Employee
meets the eligibility requirements of
Article II of the Plan.
[ ] (3) The first day of the month
coincident with, or if the first day of
the month does not so coincide, the
first day of the month next following,
the date on which an Employee meets the
eligibility requirements of Article II
of the Plan.
[ ] (4) The Employee's date of hire.
[ X ] (5) The date on which the eligibility
requirements of Article II of the Plan
are met.
[ ] (6) The first day of the quarter (in the
Plan Year) coincident with, or if the
first day of the quarter does not so
coincide, the first day of the quarter
(in the Plan Year) next following, the
date on which an Employee meets the
eligibility requirements of Article II
of the Plan.
[ ] (7) The first day of the Plan Year in
which an Employee meets the eligibility
requirements of Article II of the Plan.
[ ] (B) ELAPSED TIME METHOD. The Employee's first day
of employment or reemployment in accordance with
the rules of Section 1.55(B) of the Plan.
A.1.35 EXCESS COMPENSATION. Excess Compensation shall mean
Compensation in excess of (check applicable block):
[ ] (A) Taxable Wage Base.
[ ] (B) [$ ] (if (B) is checked, insert dollar
amount not to exceed the Taxable Wage Base).
A-9
<PAGE> 10
[ X ] (C) N/A (The Plan is not integrated with Social
Security).
A.1.38 HIGHLY COMPENSATED EMPLOYEE.
(A) CALENDAR YEAR ELECTION. Does the
Employer desire to make the calendar year election provided in Section
1.38 of the Plan for purposes of determining the look-back year
calculation (check one)?
[ ] (1) Yes [ X ] (2) No
IF THIS ELECTION IS MADE, SUCH ELECTION MUST APPLY TO ALL PLANS, ENTITIES AND
ARRANGEMENTS OF THE EMPLOYER.
(B) SIMPLIFIED DEFINITION. If the Employer
maintains significant business activities (and employs Employees) in
at least two significantly separate geographic areas, the Employer may
elect the simplified definition of Highly Compensated Employee in
Section 1.38 of the Plan. Does the Employer desire to make this
election (check one):
[ ] (1) Yes [ X ] (2) No [ ] (3) N/A
A.1.44 INVESTMENT MANAGER. The name and address of the
Investment Manager are: [ N/A
]
(If no Investment Manager has been appointed by the Employer, the letters N/A
should be inserted in these blanks).
A.1.46 LEASED EMPLOYEES. Does the Employer have any Leased
Employees (check one)?
[ ] (A) Yes [ X ] (B) No
If Section A.1.46(A) is checked, complete Section A.2.3(H) below.
A.1.47 LIMITATION COMPENSATION. Limitation Compensation shall
mean all of each Participant's (check one):
[ X ] (A) Wages, Tips and Other Compensation as
Reported on Form W-2.
[ ] (B) Code Section 3401(a) Wages.
[ ] (C) Code Section 415 Safe-Harbor Compensation.
A.1.48 LIMITATION YEAR. The Limitation Year is the (check
applicable block):
[ ] (A) Calendar year.
[ X ] (B) Twelve-consecutive month period ending
(insert month and day) [ NOVEMBER 30 ].
A.1.53 NORMAL RETIREMENT AGE. Normal Retirement Age shall mean
(check one):
[ X ] (A) Age [ 65 ] (fill in blank but not earlier
than age 62 and not later than age 65).
[ ] (B) The later of age [ ] fill in blank but not
earlier than age 62 and not later than age 65) or
the [ ] (fill in blank but not to exceed 5th)
anniversary of the first day of the first Plan
Year in which the Participant commenced
participation in the Plan.
A.1.55 ONE-YEAR BREAK IN SERVICE. A One-Year Break In Service
shall be determined by the following method (check one):
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<PAGE> 11
[ X ] (A) REGULAR METHOD. If this method is
selected, a One-Year Break In Service shall occur
in any Computation Period in which the Employee
completes not more than [ 100] (fill in blank,
but not to exceed 500) Hours of Service.
[ ] (B) ELAPSED TIME METHOD.
A.1.56 OWNER-EMPLOYEES OR SHAREHOLDER-EMPLOYEES.
(A) Does the Plan cover any Owner-Employees, as
defined in Section 1.56 of the Plan (check one)?
[ ] (1) Yes [ ] (2) No
[ X ] (3) N/A (This Plan does not cover any
Self-Employed Persons)
If Section A.1.56(A)(1) is checked, see Section 2.4 of the Plan.
(B) Does the Plan cover any shareholder-employees, as
defined in Section 7.11(A)(7) of the Plan (check one)?
[ ] (1) Yes [ ] (2) No
[ X ] (3) N/A (The Employer is not an
electing S corporation)
If Section A.1.56(B)(1) is checked, see Section 7.11(A)(7) of the Plan.
A.1.63 PLAN SPONSOR. The name(s) and address(es) of the Plan
Sponsor(s) are: [ CHESTNUT STREET EXCHANGE FUND
BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809 ]
A.1.64 PLAN YEAR. The Plan Year shall be the Computation Period
ending (insert month and day) [ NOVEMBER 30 ].
A.1.72 QUALIFYING EMPLOYER SECURITIES. If this Adoption
Agreement provides for investments in Qualifying Employer Securities, the
Employer may restrict the types of Employer Securities so qualifying by
indicating the restrictions in the following blanks: [ NO RESTRICTIONS ] (If
investment in Qualifying Employer Securities is not restricted to type, insert
in the blanks the words "No Restrictions"; if investment in Qualifying Employer
Securities is not permitted, insert the letters N/A in the blanks).
A.1.78 SELF-EMPLOYED PERSONS. Does the Plan cover Self-Employed
Persons (check one)?
[ ] (A) Yes [ X ] (B) No
A.1.79 SERVICE.
(A) If not otherwise required by the Plan, shall
service with predecessor employer(s) (to the extent specified in
Section A.1.79 (B) and (C)) be treated as Service with the Employer
(check one)?
[ ] (1) Yes [ ] (2) No
[ X ] (3) N/A (No predecessor employer)
(B) If Section A.1.79(A)(1) is checked, service
with the predecessor employer(s) specified in Section A.1.79 (C) shall
be treated as Service with the Employer for purposes of (check
applicable blank(s)):
A-11
<PAGE> 12
[ ] (1) Eligibility for Participation
[ ] (2) Vesting
[ X ] (3) N/A
(C) If Section A.1.79(A)(1) is checked, indicate
the name of the predecessor employer(s) in the following blanks:
[ N/A ] (If Section A.1.79(A)(2) or (3) is checked, insert the letters
N/A in the blanks).
(D) If Section A.18.17(A) is checked, and the
Prior Plan credited service under the elapsed time method, indicate
the equivalency (if any) which is to be used to credit service in the
Computation Period in which the amendment is effective, if the
effective date of the amendment is other than the first day of the
Computation Period (check one):
[ ] Daily [ ] Monthly
[ ] Weekly [ X ] N/A
[ ] Semi-Monthly
A.1.83 TAXABLE YEAR. The Employer's Taxable Year is the year
ending (insert month and day) [ DECEMBER 31 ].
A.1.85 TOP-HEAVY RATIO. For purposes of establishing present value
to compute the Top-Heavy Ratios of Section 1.85 of the Plan, any benefit shall
be discounted only for mortality and interest based on the following:
(A) INTEREST RATE (check one):
[ X ] (1) APPLICABLE INTEREST RATE (For purposes
of this Section A.1.85, "Applicable Interest Rate"
shall mean the interest rate or rates which would
be used, as of the date distribution commences
under a Defined Benefit Plan, by the Pension
Benefit Guaranty Corporation for purposes of
determining the present value of a participant's
benefits under such Defined Benefit Plan if such
Defined Benefit Plan had terminated on the date
distribution commences with insufficient assets to
provide benefits guaranteed by the Pension Benefit
Guaranty Corporation on that date. For purposes of
this provision, the "date distribution commences"
shall mean the Top-Heavy Valuation Date).
[ ] (2) OTHER (specify) [ ]%
(B) MORTALITY TABLE: [ 1984 UNISEX MORTALITY TABLE]
A.1.86 TOP-HEAVY VALUATION DATE. The Top-Heavy Valuation Date, for
purposes of calculating the Top-Heavy Ratios shall be (fill in blank) [ THE LAST
DAY ] of each Plan Year.
A.1.91 TRUSTEE(S). The name(s) and address(es) of the Trustee(s)
are:
[(A) ROBERT R. FORTUNE
BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
(B) EDWARD J. ROACH
BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
A-12
<PAGE> 13
(C)
]
A.1.93 VALUATION DATE. Valuation Date shall mean:
(A) For purposes of determining a Participant's
Accrued Benefit which is distributable in accordance with Article VII
of the Plan (check one):
[ ] (1) Last day of Plan Year.
[ X ] (2) Last day of Plan Year and [ THE
LAST DAY OF EVERY OTHER CALENDAR MONTH
DURING THE PLAN YEAR
] (insert date(s)).
(B) For purposes of determining the fair market
value of assets in the Trust Fund and allocating the increase or
decrease in the assets in accordance with Sections 5.3 and 5.4 of the
Plan (check one):
[ X ] (1) The date(s) specified in Section A
.1.93(A).
[ ] (2) Last day of Plan Year and [
] (insert date(s)).
A.1.97 YEAR OF SERVICE FOR BENEFIT ACCRUAL.
(A) GENERAL. A Year of Service for Benefit
Accrual shall be determined by the following method (check one):
[ X ] (1) REGULAR METHOD. (This method
must be selected if Section A.1.55(A) is
checked). In order for a Participant to
have a Year of Service for Benefit
Accrual for any Plan Year, the
Participant must complete the number of
Hours of Service indicated (check either
(a) and fill in blank or (b)):
[ X ] (a) The number of Hours of
Service which must be completed
with the Employer in order for
a Participant to have a Year of
Service for Benefit Accrual is
[ 200 ] (fill in blank but not
to exceed 1,000 Hours of
Service).
[ ] (b) The number of Hours of
Service which must be completed
with the Employer in order for a
Participant to have a Year of
Service for Benefit Accrual for
a Plan Year is 501 if the
Participant is not an active
Employee on the last day of the
Plan Year; if the Participant is
an active Employee on the last
day of the Plan Year, only one
Hour of Service with the
Employer must be completed in
order for the Participant to
have a Year of Service for
Benefit Accrual for such Plan
Year.
NOTE: UNDER PROPOSED TREAS. REG. SECTION 1.410(b) AND
1.401(a)(26), IT MAY BE NECESSARY TO PROVIDE THAT NO
MORE THAN 501 HOURS OF SERVICE ARE REQUIRED FOR A YEAR
OF SERVICE FOR BENEFIT ACCRUAL FOR ANY PARTICIPANT WHO
HAS TERMINATED EMPLOYMENT AND IS NOT AN ACTIVE EMPLOYEE
ON THE LAST DAY OF THE PLAN YEAR AND THAT NO MORE THAN
ONE HOUR OF SERVICE IS REQUIRED FOR A YEAR OF SERVICE
FOR BENEFIT ACCRUAL FOR ANY PARTICIPANT WHO IS AN ACTIVE
EMPLOYEE ON THE LAST DAY OF THE PLAN YEAR. (PROPOSED
TREAS. REG. SECTION 1.410(b)-3(c) AND
1.401(a)(26)-3(b)(8)).
[ ] (2) ELAPSED TIME METHOD. (This method
must be selected if Section A.1.55(B)
is checked).
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<PAGE> 14
(B) ELECTIVE DEFERRAL CONTRIBUTIONS. If
Elective Deferral Contributions are provided for under Section A.3.4
of the Adoption Agreement, the number of Hours of Service which a
Participant must complete in a Year of Service for Benefit Accrual is
[ N/A ] (fill in blank but not to exceed 1,000 Hours of Service unless
Section A.1.97(A)(2) is checked, in which case insert letters "ET" and
the elapsed time rules apply; if there are no Elective Deferral
Contributions, insert letters "N/A") in order for the Participant to
have Elective Deferral Contributions made on his behalf under the
Plan.
(C) MATCHING CONTRIBUTIONS. If Matching
Contributions by the Employer are provided for under Section A.3.5 of
the Adoption Agreement, the number of Hours of Service which a
Participant must complete in a Year of Service for Benefit Accrual is
[ N/A ] (fill in blank (if there are no Matching Contributions, insert
letters "N/A") but not to exceed 1,000 Hours of Service unless Section
A.1.97(A)(2) is checked, in which case insert letters "ET" and the
elapsed time rules apply) in order for the Employer to match
Participant Contributions or Elective Deferral Contributions of such
Participant under Section A.3.5 of the Adoption Agreement.
Except as provided in Sections A.1.97(B) and A.1.97(C), a Year of
Service for Benefit Accrual shall be determined under Section
A.1.97(A).
A.1.98 YEAR OF SERVICE FOR ELIGIBILITY. The number of Hours of
Service which must be completed in order for an Employee to have a Year of
Service for Eligibility is [ 1 ] (fill in blank, but not to exceed 1,000 Hours
of Service; insert letters N/A if Section A.1.33(A)(4) is checked or if the
elapsed time method is selected under Section A.2.2.(B)(2).
A.1.99 YEAR OF SERVICE FOR VESTING. A Year of Service for Vesting
shall be determined by the following method (check one):
[ X ] (A) REGULAR METHOD. (This method must be
selected if Section A.1.55(A) is checked). The
number of Hours of Service which must be
completed in order for a Participant to have a
Year of Service for Vesting is [ 200 ] (fill in
blank but not to exceed 1,000 Hours of Service).
[ ] (B) ELAPSED TIME METHOD. (This method must be
selected if Section A.1.55(B) is checked).
[ ] (C) N/A (Plan provides 100% immediate vesting).
A.2.2 ELIGIBILITY REQUIREMENTS.
(A) ELIGIBLE CLASSES OF EMPLOYEES:
(1) Except as provided in (2) below, the
following Employees are or shall be
eligible to participate in the Plan
(check one):
[ X ] (a) All Employees
[ ] (b) Salaried Employees only
(as defined in Section 1.77 of
the Plan)
[ ] (c) Hourly Employees only (as
defined in Section 1.40 of the
Plan)
[ ] (d) All Employees except
(specify class or classes of
Employees to be excluded): [ ]
(2) The following Employees shall not be
eligible to participate in the Plan
(check block(s) if such Employees are to
be excluded):
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<PAGE> 15
[ X ] (a) Union Employees (as
defined in Section 1.92 of the
Plan)
[ X ] (b) Non-Resident Aliens (as
defined in Section 1.52 of the
Plan)
(B) LENGTH OF SERVICE; MINIMUM AGE:
Participation in the Plan shall be determined under either the regular
method or the elapsed time method (check (1) or (2)):
[ X ] (1) REGULAR METHOD. If the regular
method is selected, check (a) or (b):
[ ] (a) SERVICE AND AGE
REQUIREMENT. In order to
participate in the Plan, an
Employee shall meet the
following requirements
(complete blanks):
(i) SERVICE.
(AA) ELECTIVE DEFERRAL
CONTRIBUTIONS. An
Employee shall have
completed [ ] Year of
Service for
Eligibility (not more
than one Year of
Service for
Eligibility) to be
eligible to make
Elective Deferral
Contributions.
(BB) MATCHING
CONTRIBUTIONS. An
Employee shall have
completed [ ] Year(s)
of Service for
Eligibility (not more
than two Years of
Service for
Eligibility) to be
eligible for Matching
Contributions.
(CC) EMPLOYER
CONTRIBUTIONS AND ALL
OTHER PURPOSES. An
Employee shall have
completed [ ] Year(s)
of Service for
Eligibility (not more
than two Years of
Service for
Eligibility) for
Employer Contributions
and for all other
purposes of the Plan.
Note that in Section
A.2.2(B)(1)(a)(i)(BB) and (CC)
not more than one Year of
Service for Eligibility may be
selected, if the option under
Section A.7.6(B)(1)(a) is not
elected nor more than two Years
of Service for Eligibility if
the option under Section
A.7.6(B)(1)(a) is elected. For
purposes of this Section
A.2.2(B)(1)(a)(i), Service
includes service with a
predecessor employer if the
Employer adopting the Plan is
maintaining the plan of a
predecessor employer. Such
Service also includes
predecessor service to the
extent required by the
Secretary of the Treasury or
his delegate.
Service for purposes of
eligibility also includes
service with a predecessor
employer if such service is not
otherwise required to be
included under Sections 1.79
and 2.2 of the Plan to the
extent provided in Section
A.1.79.
(ii) AGE. An Employee
shall have attained [
] years of age (not
more than age 21).
[ X ] (b) NO SERVICE OR AGE
REQUIREMENT. The Plan shall
cover Employees in eligible
classes
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<PAGE> 16
effective on the first Entry
Date coinciding with, or next
following, their date of hire.
[ ] (2) ELAPSED TIME METHOD. The Employee
shall be eligible to participate in the
Plan on his first day of employment or
reemployment in accordance with the
rules of Section 1.55(B) of the Plan.
A.2.3 ADDITIONAL RULES.
(A)-(F) RESERVED.
(G) ALLOCATIONS TO PARTICIPANTS. Except as otherwise
provided below, a Participant shall share in Employer contributions in any
Plan Year if the Participant completes a Year of Service for Benefit
Accrual during such Plan Year. Notwithstanding any other provision of the
Plan or this Adoption Agreement, any Participant making Elective Deferral
or Participant Contributions to the Plan for any Plan Year shall be
entitled to such Elective Deferral or Participant Contributions.
(1) EMPLOYER CONTRIBUTIONS. This
provision shall only apply if Section
A.1.97(A)(1) is checked and then only to
the extent permitted by Section 3.11 of
the Plan.
(a) SEPARATION FROM SERVICE FOR
REASONS OTHER THAN DISABILITY, DEATH
OR RETIREMENT.
(i) Shall Participants who
separate from the service
of the Employer (for
reasons other than
Disability, death or
retirement) before the end
of the Plan Year even if
they have completed a Year
of Service for Benefit
Accrual share in Employer
contributions for such Plan
Year (check one)?
[ X ] (AA) Yes[ ] (BB) No
[ ] (CC) N/A (Section A.1
.97(A)(2) checked)
NOTE THAT SECTION A.2.3(G)(1)(a)(I)(AA) MUST BE
CHECKED IF SECTION A.1.97(A)(1)(B) IS CHECKED.
(ii) If Section
A.2.3(G)(1)(a)(i)(AA) is
checked, shall such
Participant share in
Employer contributions for
such Plan Year if such
Participant has not
completed a Year of Service
for Benefit Accrual (check
one)?
[ X ] (AA) Yes [ ] (BB) No
[ ] (CC) N/A (Section
A.2.3 (G)(1) (a)(i)
(AA) not checked)
(b) DISABILITY, DEATH OR RETIREMENT.
(i) Shall Participants who
separate from the service
of the Employer because of
Disability, death or
retirement before the end
of the Plan Year even if
they have completed a Year
of Service for Benefit
Accrual share in Employer
contributions for such Plan
Year (check one)?
[ X ] (AA) Yes [ ] (BB) No
[ ] (CC) N/A (Section A.1
.97(A)(2) checked)
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<PAGE> 17
NOTE THAT SECTION A.2.3(G)(1)(b)(I)(AA) MUST BE
CHECKED IF SECTION A.1.97(A)(1)(b) IS CHECKED.0
(ii) If Section
A.2.3(G)(1)(b)(i)(AA) is
checked, shall such
Participant share in
Employer contributions for
such Plan Year if such
Participant has not
completed a Year of Service
for Benefit Accrual (check
one)?
[ X ] (AA) Yes [ ] (BB) No
[ ] (CC) N/A (Section A.2
.3(G)(1)(b) (i)(AA)
not checked)
(2) MATCHING CONTRIBUTIONS. This
provision shall only apply if Section
A .1.97(A)(1) is checked.
(a) SEPARATION FROM SERVICE FOR
REASONS OTHER THAN DISABILITY, DEATH
OR RETIREMENT.
(i) Shall Participants who
separate from the service
of the Employer (for
reasons other than
Disability, death or
retirement) before the end
of the (check one) [ ] (aa)
month [ ] (bb) quarter [ ]
(cc) Plan Year for which
the Matching Contribution
is being made even if they
have completed a Year of
Service for Benefit Accrual
share in Matching
Contributions for such
period (check one)?
[ ] (AA) Yes [ ] (BB) No
[X] (CC) N/A (No Matching
Contributions or
Section A.1.97(A)
(2) checked)
NOTE THAT SECTION A.2.3(G)(2)(a)(I)(AA) MUST BE
CHECKED IF SECTION A.1.97 (A)(1)(b) IS CHECKED.
(ii) If Section
A.2.3(G)(2)(a)(i) (AA) is
checked, shall such
Participant share in
Matching Contributions for
such (check one) [ ] (aa)
month [ ] (bb) quarter [ ]
(cc) Plan Year if such
Participant has not
completed a Year of Service
for Benefit Accrual (check
one)?
[ ] (AA) Yes [ ] (BB) No
[ X ] (CC) N/A (Section
A.2.3(G)(2)(a)
(i) (AA) not
checked)
(b) DISABILITY, DEATH OR
RETIREMENT.
(i) Shall Participants who
separate from the service
of the Employer because of
Disability, death or
retirement before the end
of the (check one) [ ] (aa)
month [ ] (bb) quarter [ ]
(cc) Plan Year for which
the Matching Contribution
is being made even if they
have completed a Year of
Service for Benefit Accrual
share in Matching
Contributions for such
period (check one)?
[ ] (AA) Yes [ ] (BB) No
A-17
<PAGE> 18
[X] (CC) N/A (no
Matching
Contributions or
Section A.1.97
(A)(2) checked)
NOTE THAT SECTION A.2.3(G)(2)(b)(i)(AA) MUST BE
CHECKED IF SECTION A.1.97(A)(1)(b) IS
CHECKED.
(ii) If Section
A.2.3(G)(2)(b) (i)(AA) is
checked, shall such
Participant share in
Matching Contributions for
such (check one) [ ] (aa)
month [ ] (bb) quarter [ ]
(cc) Plan Year if such
Participant has not
completed a Year of Service
for Benefit Accrual (check
one):
[ ] (AA) Yes [ ] (BB) No
[ X ] (CC) N/A (Section
A.2.3(G)(2)(b)(i)
(AA) not checked.
(H) LEASED EMPLOYEES. Shall Leased Employees be
eligible to participate in the Plan (check applicable block)?
[ ] (1) Yes [ ] (2) No [ X ] (3) N/A
If Section A.2.3(H)(1) is checked, describe Leased Employees to be
covered by the Plan and conditions and other limitations on such
coverage in the following lines: [ N/A ] (If not applicable, insert
letters N/A in these blanks)
A.2.4 PLANS COVERING OWNER-EMPLOYEES. Section 2.4 of the Plan
does not apply unless Section A.1.56(A) is checked.
A.3.1 EMPLOYER CONTRIBUTIONS.
(A) EMPLOYER CONTRIBUTIONS.
(1) GENERAL. Shall the Employer, in its sole
discretion, be permitted to make Employer
Contributions to the Plan (check one)?
[ X ] (a) Yes [ ] (b) No
If Section A.3.1(A)(1)(a) is checked,
such Employer Contributions shall be
allocated under Section A.5.1(A).
(2) PROFIT REQUIREMENTS. Shall Profits be required
for Employer Contributions to the Plan (check one)?
[ ] (a) Yes [ X ] (b) No
(B) QUALIFIED NONELECTIVE CONTRIBUTIONS.
(1) ELECTION. May the Employer be permitted to
make, in its sole discretion, Qualified Nonelective
Contributions to the Plan (check one)?
[ ] (a) Yes [ ] (b) No
[ X ] (c) N/A (No Elective Deferral or
Participant Contributions)
(2) AMOUNT. If the Employer does make
such contributions to the Plan, then the
amount of such contributions for each
Plan Year shall be (check one):
A-18
<PAGE> 19
[ ] (a) [ ] percent (not to exceed 15 percent) of
the Compensation of all Participants eligible
to share in the allocation.
[ ] (b) [ ] percent of the Profits, but in no
event more than [$ ] for any Plan Year.
[ ] (c) An amount determined by the Employer.
[X] (d) N/A (Qualified Nonelective contributions
not permitted).
(3) PARTICIPANTS ELIGIBLE FOR ALLOCATION.
Allocation of Qualified Nonelective Contributions
shall be made to the accounts of (check one):
[ ] (a) All Participants
[ ] (b) Only Participants who are Non-Highly
Compensated Employees
[ ] (c) Only Participants who are Non-Highly
Compensated Employees and who are (specify
group to which allocations are to be made) [
]
[X] (d) N/A (Qualified Nonelective Contributions
not permitted)
(4) MANNER OF ALLOCATION. Allocation of Qualified
Nonelective Contributions shall be made (check
one):
[ ] (a) In the ratio which each affected
Participant's Compensation for the Plan Year
bears to the total Compensation of all
affected Participants for such Plan Year.
[ ] (b) In the ratio which each affected
Participant's Compensation not in excess of [$
] for the Plan Year bears to the total
Compensation of all affected Participants not
in excess of [$ ] for such Plan Year.
[X] (c) N/A (Qualified Nonelective Contributions
not permitted).
(C) QUALIFIED MATCHING CONTRIBUTIONS.
(1) ELECTION. May the Employer be permitted to
make Qualified Matching Contributions to the
Plan?
[ ] (a) Yes [ ] (b) No
[X] (c) N/A (No Elective Deferrals or
Participant Contributions)
(2) ALLOCATION. The Employer shall, in its sole
discretion, make Qualified Matching Contributions
to the Plan on behalf of (check one):
[ ] (a) All Participants
[ ] (b) All Participants who are Non-Highly
Compensated Employees
A-19
<PAGE> 20
[ ] (c) All Participants who are Non-Highly
Compensated Employees and who are (specify
group to which allocations are to be made) [
]
[X] (d) N/A (No Qualified Matching
Contributions)
If Section A.3.1(C)(2)(a), (b) or (c) is checked,
the allocation shall be made to applicable
Participants who make (check (i) and/or (ii) or
(iii)):
[ ] (i) Elective Deferral Contributions
[ ] (ii) Participant Contributions
[X] (iii) N/A (No Qualified Matching
Contributions)
(3) AMOUNT. The Employer shall contribute and
allocate to each Participant's Qualified Matching
Contribution account an amount determined as
follows (check applicable block(s)):
[ ] (a) ELECTIVE DEFERRAL CONTRIBUTIONS. The
Employer shall contribute an amount equal to
(check one):
[ ] (i) [ ] percent of the Participant's
Elective Deferral Contributions; or
[ ] (ii) that percent of the
Participant's Elective Deferral
Contributions, as determined by the
Employer, in its sole discretion,
for the Plan Year.
[ ] (b) PARTICIPANT CONTRIBUTIONS. The Employer
shall contribute an amount equal to (check one):
[ ] (i) [ ] percent of the Participant's
Participant Contributions; or
[ ] (ii) that percent of the
Participant's Participant
Contributions, as determined by the
Employer, in its sole discretion,
for the Plan Year.
[X] (c) N/A (No Qualified Matching Contributions).
The Employer shall not match amounts provided above in excess of
[$ N/A ], or in excess of [N/A] percent of the Participant's
Compensation (if there are no limitations or if this provision is
not otherwise applicable, insert letters N/A in blank(s)).
A-20
<PAGE> 21
A.3.2 PARTICIPANT CONTRIBUTIONS.
(A) PERMISSIBILITY. Participant Contributions shall
(check (1), (2) or (3)):
[X] (1) Not be permitted under the Plan (NOTE: THIS BLOCK
MUST BE CHECKED UNLESS THE PLAN HAS A CODA AS INDICATED
BY CHECKING SECTION A.3.4(A)(2)).
[ ] (2) Be permitted (but not required) in the amounts
provided by Section 3.2 of the Plan but subject to
the limitations of Section 3.8 of the Plan.
[ ] (3) Be required in order for an Employee to participate
in the Plan. Such Participant Contributions shall be
made by payroll deduction and shall equal no less than
[ ] percent but shall not exceed [ ] percent (not to
exceed 6 percent) of the Participant's Compensation for
the Plan Year. The Employee shall enter into an
agreement with the Employer providing for Participant
Contributions in any amount from [ ] percent to [ ]
percent (not to exceed 6 percent) of the Participant's
Compensation for the Plan Year. In addition, the
Employee may, but is not required to, make voluntary
Participant Contributions in the amounts provided for in
Section 3.2 of the Plan subject to the limitations of
Section 3.8 of the Plan.
(B) PAYROLL DEDUCTION. Participant Contributions by
payroll deduction (check (1), (2) or (3)):
[ ] (1) Shall not be permitted.
[ ] (2) Shall be permitted.
[X] (3) Are N/A (No Participant Contributions).
A.3.4 ELECTIVE DEFERRAL CONTRIBUTIONS.
(A) ELECTION. Elective Deferral Contributions shall
(check (1) or (2)):
[X] (1) Not be permitted under the Plan.
[ ] (2) Be permitted in accordance with the provisions of
Section 3.4 of the Plan.
If Section A.3.4(A)(2) is checked, a salary reduction agreement must be
completed and filed by the Participant with the Administrative Committee
prior to the date the Elective Deferral Contributions are made.
(B) ELECTION CHANGES. If Section A.3.4(A)(2) is
checked, the Participant shall be permitted to enter into a new salary
reduction agreement (check one):
[ ] (1) Monthly [ ] (2) Quarterly
[ ] (3) Semi-Annually [ ] (4) Annually
[ ] (5) Other (Specify): [ ]
[ X ] (6) N/A
A salary reduction agreement shall remain in effect until revoked or
changed.
(C) REVOCATION OF ELECTION. A Participant shall be
permitted to revoke his salary reduction agreement (check one):
A-21
<PAGE> 22
[ ] (1) Only as permitted under Section A.3.4(B).
[ ] (2) Upon 15 days' written notice to the
Administrative Committee on the Appropriate
Form.
[X] (3) N/A.
(D) INCLUSION OF QUALIFIED MATCHING AND QUALIFIED
NONELECTIVE CONTRIBUTIONS. Qualified Matching Contributions and
Qualified Nonelective Contributions may be taken into account as
Elective Deferral Contributions for purposes of calculating the
"Actual Deferral Percentages." In determining Elective Deferral
Contributions for the purpose of the ADP test, the Employer shall
include, under the Plan or any other plan of the Employer as provided
by Treasury regulations under the Code, (check one):
[ ] (1) Qualified Matching Contributions.
[ ] (2) Qualified Nonelective Contributions.
[X] (3) N/A (Elective Deferral Contributions are
not permitted or Employer does not desire to
make this election or no Qualified Matching
or Qualified Nonelective Contributions are
permitted).
(E) QUALIFIED MATCHING CONTRIBUTIONS - AMOUNT.
The amount of Qualified Matching Contributions made under Sections 3.1
of the Plan and A.3.1 of this Adoption Agreement and taken into
account as Elective Deferral Contributions for purposes of calculating
the "Actual Deferral Percentages," subject to such other requirements
as may be prescribed by the Secretary of the Treasury, shall be (check
one):
[ ] (1) All such Qualified Matching Contributions.
[ ] (2) Such Qualified Matching Contributions that
are needed to meet the "Actual Deferral
Percentage" test stated in Section 3.4(B)(2)
of the Plan.
[X] (3) N/A (Elective Deferral Contributions not
permitted and/or Qualified Matching
Contributions not permitted).
(F) QUALIFIED NONELECTIVE CONTRIBUTIONS - AMOUNT. The
amount of Qualified Nonelective Contributions made under Sections 3.1 of
the Plan and A.3.1 of this Adoption Agreement and taken into account as
Elective Deferral Contributions for purposes of calculating the "Actual
Deferral Percentages," subject to such other requirements as may be
prescribed by the Secretary of the Treasury, shall be (check one):
[ ] (1) All such Qualified Nonelective
Contributions.
[ ] (2) Such Qualified Nonelective Contributions
that are needed to meet the Actual Deferral
Percentage test stated in Section 3.4(B)(2) of
the Plan.
[X] (3) N/A (Elective Deferral Contributions
and/or Qualified Nonelective Contributions not
permitted).
A.3.5 MATCHING CONTRIBUTIONS.
(A) ELECTION. Matching Contributions by the Employer
(check (1), (2) or (3)):
[ ] (1) Shall not be permitted under the Plan.
[ ] (2) Shall be permitted in accordance with the
provisions of Section 3.5 of the Plan and
Section A.3.5(B) of the Adoption Agreement.
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<PAGE> 23
[X] (3) Are N/A (No Elective Deferral or
Participant Contributions).
If Section A.3.5(A)(2) is checked, the Employer may, in its sole
discretion, match, in accordance with Section A.3.5(B), the
Elective Deferral Contributions of a Participant made pursuant to
Section A.3.4 or Participant Contributions made pursuant to
Section A.3.2.
(B) ALLOCATION OF MATCHING CONTRIBUTIONS.
(1) AMOUNT. If Section A.3.5(A)(2) is checked,
Matching Contributions for the Plan Year shall be
allocated to the Matching Account of each
Participant, on whose behalf Elective Deferral
Contributions for the Plan Year are being made,
in an amount equal to (check one):
[ ] (a) [ ] (insert percentage) percent of the
(check applicable block): (i) [ ] Elective
Deferral Contribution; (ii)[ ] Participant
Contribution made on behalf of each
Participant for such Plan Year; or
[ ] (b) that percent of the (check applicable
block): (i) [ ] Elective Deferral Contribution
; (ii) [ ] Participant Contribution made on
behalf of each Participant for such Plan Year
as determined by the Employer, in its sole
discretion, for such Plan Year.
[X] (c) N/A (No Matching Contributions).
In no event shall such Matching Contribution
exceed the lesser of (aaa) (insert percentage) [ ]
percent of such Participant's Compensation for
such Plan Year or (bbb) (insert amount, if any, of
dollar limitation) [$ ].
(2) ALLOCATION DATE. Shall Matching Contributions
be allocated effective as of a date or dates other
than the last day of the Plan Year (check one)?
[ ] (a) Yes [ ] (b) No [X](c) N/A
(aaa) If Section A.3.5(B)(2)(a) is
checked, list the date(s) (month and
day) in each Plan Year as of which
Matching Contributions shall be
allocated: [
].
(bbb) If Section A.3.5(B)(2)(a) is
checked, a Participant who is employed
as of a date specified for the
allocation of Matching Contributions and
on whose behalf Elective Deferral
Contributions or Participant
Contributions are being made shall
receive an allocation of Matching
Contributions as of such date regardless
of the number of Hours of Service
credited to the Participant for purposes
of a Year of Service for Benefit Accrual
as of such date, notwithstanding
anything in the Plan to the contrary.
(C) VESTING. Matching Contributions shall be vested in
accordance with the following schedule (check one):
A-23
<PAGE> 24
[ ] (1) Nonforfeitable when made.
[ ] (2) The Plan's general vesting
schedule, other than that for
Elective Deferral Contributions.
[ ] (3) [The sponsor may add elections
for one or more of the vesting
schedules that comply with section
411(a)(2) of the Code: [
].
[X] (4) N/A (No Matching
Contributions).
(D) "AVERAGE CONTRIBUTION PERCENTAGE" COMPUTATIONS.
(1) In computing the "Average
Contribution Percentage" with respect to
Participant Contributions and Matching
Contributions, the Employer shall take
into account, under this Plan or any
other plan of the Employer, as provided
by Treasury regulations, and include as
"Contribution Percentage Amounts" (check
applicable block or blocks):
[ ] (a) Elective Deferral Contributions.
[ ] (b) Qualified Nonelective
Contributions.
[X] (c) N/A (There are no Participant
or Matching Contributions, or
Employer does not desire to make
this election).
(2) The amount of Qualified Nonelective
Contributions that are made under
Section 3.1 of the Plan and Section
A.3.1 and taken into account as
"Contribution Percentage Amounts" for
purposes of calculating the "Average
Contribution Percentage," subject to
such other requirements as may be
prescribed by the Secretary of the
Treasury, shall be (check one):
[ ] (a) All such Qualified Nonelective
Contributions.
[ ] (b) Such Qualified Nonelective
Contributions that are needed to
meet the "Average Contribution
Percentage" test stated in Section 3
.2 of the Plan.
[X] (c) N/A (No Participant or
Matching Contributions or Employer
does not desire to make this
election).
(3) The amount of Elective Deferral
Contributions made under Section 3.4 of
the Plan and Section A.3.4 and taken
into account as "Contribution Percentage
Amounts" for purposes of calculating the
"Average Contribution Percentage",
subject to such other requirements as
may be prescribed by the Secretary of
the Treasury, shall be:
[ ] (a) All such Elective Deferral
Contributions.
[ ] (b) Such Elective Deferral
Contributions that are needed to
meet the "Average Contribution
Percentage" test stated in Section
3.2 of the Plan.
A-24
<PAGE> 25
[X] (c) N/A (There are no Elective
Deferral Contributions under the
Plan or Employer did not make
election under Section A.3.5(D)(1)).
(4) To the extent forfeitable,
forfeitures of "Excess Aggregate
Contributions" shall be:
[ ] (a) Applied to reduce Employer
contributions.
[ ] (b) Allocated, after all other
forfeitures --- under the Plan, to
each Participant's Matching Account
in the ratio which each
Participant's Compensation for the
Plan Year bears to the total
Compensation of all Participants for
such Plan Year. Such forfeitures
shall not be allocated to the
account of any Highly Compensated
Employee.
[X] (c) N/A (No Matching
Contributions).
A.3.8 LIMITATIONS ON ALLOCATIONS.
(A) GENERAL RULES. If the Employer maintains or ever
maintained another qualified plan (other than a paired defined contribution
regional prototype plan) in which any Participant in this Plan is (or was)
a participant or could become a participant, the Employer must complete
this Section A.3.8. The Employer must also complete this Section A.3.8 if
it maintains a Welfare Benefit Fund or an individual medical benefit
account, as defined in section 415(l)(2) of the Code, under which amounts
are treated as "Annual Additions" with respect to any Participant in this
Plan. Does the Employer maintain or has the Employer maintained any such
plan(s) (check one):
[ ] (1) Yes [ X ] (2) No
If Section A.3.8(A)(1) is checked, complete Section A.3.8(B) and/or
(C).
(B) MAINTENANCE OF OTHER DEFINED CONTRIBUTION PLAN.
If the Participant is covered under another qualified Defined
Contribution Plan maintained by the Employer, other than a regional
prototype plan (check applicable provisions as necessary):
[ ] (1) The provisions of Section 3.8(B) of the
Plan shall apply as if the other plan were a
regional prototype plan.
[ ] (2) Provide the method under which the plans
will limit the total "Annual Additions" to
the "Maximum Permissible Amount", and will
properly reduce any "Excess Amounts", in a
manner that precludes Employer discretion: [
].
[X] (3) N/A (No other qualified Defined
Contribution Plan (other than a regional
prototype plan), Defined Benefit Plan,
Welfare Benefit Fund or individual medical
benefit account maintained).
(C) MAINTENANCE OF A DEFINED BENEFIT PLAN. If a
Participant is or has ever been a participant in a Defined Benefit
Plan maintained by the Employer, check either (1) or (2) and complete
as necessary:
[ ] (1) The limitations set forth in Section
3.8(C)(2) through (4) of the Plan shall apply.
A-25
<PAGE> 26
[ ] (2) Provide the method under which the Plan
will satisfy the 1.0 limitation of section 415
(e) of the Code (such language must preclude
employer discretion; see Treas. Reg. Section
1.415-1 for guidance) in the following blanks:
[
].
IF ADDITIONAL SPACE IS REQUIRED THE EMPLOYER IS TO INSERT
APPLICABLE LIMITATIONS IN AN ATTACHMENT TO THIS ADOPTION
AGREEMENT. SUCH ATTACHMENT SHALL BE ADDED TO, AND MADE A
PART OF, THIS ADOPTION AGREEMENT.
A.3.9 ROLLOVERS.
(A) PARTICIPANT ROLLOVERS. May Participants be permitted to
make Rollover Contributions to the Plan (check one)?
[ X ] (1) Yes [ ] (2) No
(B) NON-PARTICIPANT ROLLOVERS. May Employees other than
Participants be permitted to make Rollover Contributions to the Plan (check
one)?
[ ] (1) Yes [ X ] (2) No
A.3.10 TRANSFERS.
(A) PARTICIPANT DIRECT TRANSFERS. May Participants be
permitted to have direct transfers made on their behalf to the Plan (check
one)?
[ X ] (1) Yes [ ] (2) No
(B) NON-PARTICIPANT DIRECT TRANSFERS. May Employees other than
Participants be permitted to have direct transfers made on their behalf to the
Plan (check one)?
[ ] (1) Yes [ X ] (2) No
(C) TRANSFERS OF ACCOUNTS. Are assets being transferred to
this Plan from a qualified plan covering Key Employees in a Top-Heavy Plan or
five-percent owners (within the meaning of section 416(i)(1) of the Code) (check
one)?
[ ] (1) Yes [ X ] (2) No
If such assets are transferred, the restrictions of Section 3.10(B) of the
Plan apply.
A.3.11 TOP-HEAVY PROVISIONS.
(A) APPLICATION OF PROVISIONS AND ADJUSTMENTS.
(1) APPLICATION. Is the Plan a Top-Heavy Plan on
the Effective Date (check one):
[ ] (a) Yes [ ] (b) No
[ X ] (c) Uncertain (Note that if
this box is checked and the
Plan is a Top-Heavy Plan, the
Top-Heavy Plan provisions as
set forth herein shall apply)
(2) ADJUSTMENTS. If the Employer
maintains more than one plan in a
Permissive or Required Aggregation
Group, set forth here any adjustments to
be made for Employer contributions or
benefits attributable to Employer
contributions under such
A-26
<PAGE> 27
other plan(s) in determining the amount of
contributions to be made under the Top-Heavy
provisions of this Plan (if not applicable, insert
letters N/A)): [ N/A
]
(B) VESTING. The nonforfeitable interest of
each Employee in his account balance attributable to Employer
contributions shall be determined on the basis of the following (check
either (1) or (2) and fill in blank(s):
[ ] (1)100% vesting after [ ] (not to exceed 3)
Years of Service for Vesting;
[X] (2)[ 10 ]% (no minimum) vesting after 1 Year
of Service for Vesting;
[25]% (not less than 20) vesting after 2
Years of Service for Vesting;
[50]% (not less than 40) vesting after 3
Years of Service for Vesting;
[75]% (not less than 60) vesting after 4
Years of Service for Vesting;
[100]% (not less than 80) vesting after 5
Years of Service for Vesting;
100% vesting after 6 Years of Service for
Vesting.
If the vesting schedule under the Plan shifts in or out of the above
schedule for any Plan Year because of the Plan's top-heavy status, such
shift is an amendment to the vesting schedule and the election in
Section 15.2(G) of the Plan applies.
A.5.1 ALLOCATIONS. If Section A.3.1(A)(1)(a) is checked, complete the
following:
(A) ALLOCATION OF EMPLOYER CONTRIBUTIONS.
(1) METHOD. Shall Employer Contributions
(if any) to the Employer Accounts of
Participants be integrated with Social
Security contributions, subject to the
overall permitted disparity limits set
forth below (check (a) if integrated,
(b) if not integrated)?
[ ] (a) Yes
The annual Employer Contribution shall
not exceed the limitations set forth in
Section A.5.1(A)(2). In any Plan Year in
which there are Employer Contributions,
such Employer Contributions shall,
subject to the Top-Heavy Plan
provisions, be allocated to each
Participant's Employer Account as
follows:
(i) ALLOCATION OF EMPLOYER
CONTRIBUTIONS FOR PLAN
YEARS IN WHICH PLAN IS A
TOP-HEAVY PLAN. If the Plan
is a Top-Heavy Plan for the
Plan Year, the Employer
Contribution for such Plan
Year shall be allocated to
each Participant's Employer
Account as follows:
A-27
<PAGE> 28
(aa) "BASE CONTRIBUTION PERCENTAGE". First, (check either
(aaa) or (bbb))(percent in either (aaa) or (bbb) must not be
less than the "Minimum Top- Heavy Rate"):
[ ] (aaa) [ ] (insert percent), or
[ ] (bbb) that percent determined by the Employer
for the Plan Year
of the Participant's "Base Compensation" for such Plan Year
shall be allocated to the Employer Account of such
Participant;
(bb) "EXCESS CONTRIBUTION PERCENTAGE". Second, (check either
(aaa) or (bbb))(percent in either (aaa) or (bbb) must not be
less than the "Minimum Top-Heavy Rate" and must not exceed
the "Maximum Excess Allowance"):
[ ] (aaa)[ ] (insert percent) percent, or
[ ] (bbb) that percent determined by the Employer
for the Plan Year
of the Participant's Excess Compensation for such Plan Year
shall be allocated to the Employer Account of such
Participant (for purposes of this allocation, forfeitures
allocated to a Participant in the Plan Year shall be treated
as Employer Contributions); however, in the case of any
Participant who has exceeded the cumulative permitted
disparity limit described below, the Employer shall
contribute for such Participant an amount equal to the
"Excess Contribution Percentage" multiplied by the
Participant's total Compensation for the Plan Year; and
(cc) "ADDITIONAL CONTRIBUTION PERCENTAGE". Lastly, any
excess over (aa) and (bb) shall be allocated to each
Participant's Employer Account in the same ratio as his
Compensation for such Plan Year bears to the Compensation of
all Participants for such Plan Year.
(ii) ALLOCATION OF EMPLOYER CONTRIBUTIONS FOR PLAN YEARS IN WHICH PLAN
IS NOT A TOP-HEAVY PLAN. The Employer Contribution for the Plan Year,
if the Plan is not a Top-Heavy Plan for the Plan Year, shall be
allocated as follows:
(aa) "BASE CONTRIBUTION PERCENTAGE". First, (check either
(aaa) or (bbb)):
[ ] (aaa)[ ] (insert percent) percent, or
[ ] (bbb) that percent determined by the Employer for the
Plan Year
A-28
<PAGE> 29
of the Participant's "Base Compensation" for such Plan Year
shall be allocated to the Employer Account of such
Participant;
(bb) "EXCESS CONTRIBUTION PERCENTAGE". Second, (check either
(aaa) or (bbb))(percent in either (aaa) or (bbb) must not
exceed the "Maximum Excess Allowance"):
[ ] (aaa)[ ] (insert percent) percent, or
[ ] (bbb) that percent determined by the Employer
for the Plan Year
of the Participant's Excess Compensation for such Plan Year
shall be allocated to the Employer Account of such
Participant (for purposes of this allocation, forfeitures
allocated to a Participant in the Plan Year shall be treated
as Employer Contributions); however, in the case of any
Participant who has exceeded the cumulative permitted
disparity limit described below, the Employer shall
contribute for such Participant an amount equal to the
"Excess Contribution Percentage" multiplied by the
Participant's total Compensation for the Plan Year; and
(cc) "ADDITIONAL CONTRIBUTION PERCENTAGE". Lastly, any
excess over (aa) and (bb) shall be allocated to each
Participant's Employer Account in the same ratio as his
Compensation for such Plan Year bears to the Compensation of
all Participants for such Plan Year.
With respect to any Employee who is a Participant in the Plan for only
a portion of the Plan Year for which the Employer Contribution is
made, the allocation to such Employee of the Employer Contribution
(other than the Top-Heavy portion, if the Plan is a Top-Heavy Plan),
shall be (check one):
[ ] (AA) Based only upon the amount of "Base Compensation",
Excess Compensation and/or Compensation earned by such
Employee and all other Employees during the portion of the
Plan Year in which they are or were Plan Participants.
[ ] (BB) Based upon the amount of "Base Compensation,"
Excess Compensation and/or Compensation earned by such
Employee and all other Employees during the entire Plan
Year.
NOTE THAT THIS PLAN MAY NOT PROVIDE FOR PERMITTED DISPARITY IF THE EMPLOYER
MAINTAINS ANY OTHER PLAN THAT PROVIDES FOR PERMITTED DISPARITY AND BENEFITS ANY
OF THE SAME PARTICIPANTS.
[ X ] (b) No
The annual Employer Contributions (if any) shall be
determined by the Employer for each Plan Year but shall not
exceed the limitations of Section A.5.1(A)(2). In any Plan
Year in which
A-29
<PAGE> 30
there are Employer Contributions, such Employer
Contributions shall, subject to the Top-Heavy Plan
provisions, be allocated to such Participant's Employer
Account as follows:
(i) ALLOCATION OF EMPLOYER CONTRIBUTIONS FOR PLAN
YEARS IN WHICH PLAN IS A TOP-HEAVY PLAN. If the
Plan is a Top-Heavy Plan for the Plan Year, the
Employer Contribution for such Plan Year shall be
first allocated to each Participant's Employer
Account in the same ratio as his Compensation for
such Plan Year bears to the Compensation of all
Participants for such Plan Year, in an amount
which is not less than the "Minimum Top-Heavy
Rate". The balance of the Employer Contribution
for such Plan Year shall be allocated to each
Participant's Employer Account as follows (check
one):
[ ] (aa) In the same ratio as his
Compensation for such Plan Year bears to
the Compensation of all Participants for
such Plan Year.
[X] (bb) In the same ratio as his
Compensation for the portion of the Plan
Year in which he was a Participant bears
to the Compensation of all Participants
for the portion of the Plan Year in
which they were Participants.
(ii) ALLOCATION OF EMPLOYER CONTRIBUTIONS FOR PLAN
YEARS IN WHICH PLAN IS NOT A TOP-HEAVY PLAN. The
Employer Contribution for the Plan Year, if the
Plan is not a Top-Heavy Plan for the Plan Year,
shall be allocated to each Participant's Employer
Account as follows (check one):
[ ] (aa) In the same ratio as his
Compensation for such Plan Year bears to
the Compensation of all Participants for
such Plan Year.
[X] (bb) In the same ratio as his
Compensation for the portion of the Plan
Year in which he was a Participant bears
to the Compensation of all Participants
for the portion of the Plan Year in
which they were Participants.
[ ] (c) N/A (Section A.3.1(A)(1)(b)
checked)
(2) LIMITATIONS ON EMPLOYER CONTRIBUTIONS. The following
limitations on Employer Contributions apply:
(a) DEDUCTION LIMITATIONS. The annual Employer,
Matching, and Elective Deferral Contributions and
any other Employer contribution shall, in the
aggregate, not exceed the greater of:
(i) the Employer's "Primary Limitation"
(as defined below) for the Taxable Year
which ends with or within the Plan Year
for which the Employer, Matching, and/or
A-30
<PAGE> 31
Elective Deferral Contribution and/or other
Employer contribution is being made: or
(ii) the Employer's "Secondary Limitation" (as
defined below) for the Taxable Year which ends
with or within the Plan Year for which the
Employer, Matching, and/or Elective Deferral
Contribution and/or other Employer contribution
is being made.
(b) CODE SECTION 415 LIMITATION. The
allocation of the Employer contributions for
the Plan Year shall be further limited by
Section 3.8 of the Plan (Limitations on
Allocations).
(c) OVERALL PERMITTED DISPARITY LIMITS.
(i) ANNUAL OVERALL PERMITTED DISPARITY LIMIT.
Notwithstanding the preceding paragraphs, for any
Plan Year this Plan "Benefits" any Participant
who "Benefits" under another qualified plan or
simplified employee pension, as defined in
section 408(k) of the Code, maintained by the
Employer that provides for permitted disparity
(or imputes disparity), Employer contributions
and forfeitures shall be allocated to the account
of every Participant otherwise eligible to
receive an allocation in the ratio that such
Participant's total Compensation bears to the
total Compensation of all Participants.
(ii) CUMULATIVE PERMITTED DISPARITY LIMIT.
Effective for Plan Years beginning on or after
January 1, 1995, the cumulative permitted
disparity limit for a Participant is 35 total
cumulative permitted disparity years. Total
cumulative permitted years means the number of
years credited to the Participant for allocation
or accrual purposes under this Plan, any other
qualified plan or simplified employee pension
plan (whether or not terminated) ever maintained
by the Employer. For purposes of determining the
Participant's cumulative permitted disparity
limit, all years ending in the same calendar year
are treated as the same year. If the Participant
has not "Benefitted" under a defined benefit or
target benefit plan for any year beginning on or
after January 1, 1994, the Participant has no
cumulative disparity limit.
(3) DEFINITIONS. For purposes of this Section
A.5.1(A), the following definitions apply:
(a) "BASE CONTRIBUTION PERCENTAGE" means, for any
Plan Year, the percentage of Compensation
contributed under the Plan with respect to that
portion of each Participant's Compensation up to
the "Integration Level" (i.e., with respect to such
Participant's "Base Compensation") specified in the
Plan for such Plan Year.
A-31
<PAGE> 32
(b) "BASE COMPENSATION" means, for any Plan
Year, Compensation up to the "Integration
Level" for such Plan Year.
(c) "BENEFIT" OR" BENEFITING" means, with
respect to a Participant, that such
Participant is treated as benefiting under the
Plan for any Plan Year during which the
Participant received or is deemed to receive
an allocation in accordance with Treas. Reg. ss.
1.410(b)-3(a).
(d) "EXCESS CONTRIBUTION PERCENTAGE" means, for any
Plan Year, the percentage of Compensation which is
contributed under the Plan with respect to that
portion of each Participant's Compensation in
excess of the "Integration Level" (i.e., with
respect to such Participant's Excess Compensation)
specified in the Plan for such Plan Year.
(e) "INTEGRATION LEVEL" means the amount of
Compensation specified in the Plan at or below
which the rate of contributions (expressed as a
percentage of such Compensation) provided under the
Plan is less than the rate of contributions
(expressed as a percentage of Compensation)
provided under the Plan with respect to
Compensation above such level. The "Integration
Level" for any Plan Year may in no event exceed the
Taxable Wage Base as in effect on the first day of
such Plan Year.
(f) "MAXIMUM EXCESS ALLOWANCE" means, for any Plan
Year beginning before January 1, 1989, the "Base
Contribution Percentage" plus 5.7% and for any Plan
Year beginning after December 31, 1988, the
percentage determined under either (i) or (ii):
(i) If the "Integration Level" for such Plan Year
is equal to the Taxable Wage Base, in effect on
the first day of such Plan Year, or if the
"Integration Level" is a uniform dollar amount
for all Participants which is no greater than the
greater of $10,000 or 1/5 of the Taxable Wage
Base in effect on the first day of such Plan
Year, then the "Maximum Excess Allowance" for
such Plan Year is the lesser of:
(aa) The "Base Contribution Percentage," or
(bb) The greater of (AA) 5.7% or (BB) the
percentage equal to the rate of tax under
section 3111(a) of the Code (in effect on
the first day of the Plan Year) which is
attributable to the old age insurance
portion of the Old Age, Survivors and
Disability Insurance provisions of the
Social Security Act.
(ii) If the "Integration Level" for such Plan
Year is greater than the greater of $10,000 or
1/5 of the Taxable Wage Base in effect on the
first day of such Plan Year but less than the
Taxable Wage Base in
A-32
<PAGE> 33
effect on the first day of such Plan Year then
the "Maximum Excess Allowance" shall be
determined as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------
IF THE "INTEGRATION LEVEL"
---------------------------------- THE "MAXIMUM EXCESS
IS MORE THAN BUT NOT MORE THAN ALLOWANCE" IS
------------------------------------ ----------------------
<S> <C> <C>
(1) X* 80% OF TAXABLE
WAGE BASE 4.3%
(2) 80% OF Y**
TAXABLE
WAGE BASE 5.4%
-------------------------------------------------------------
</TABLE>
* x=The greater of $10,000 or 1/5 of Taxable Wage
Base
**y=Any amount more than 80% of Taxable Wage Base
but less than 100% of Taxable Wage Base.
(g) "MINIMUM TOP-HEAVY RATE" means a rate of at
least three percent (unless the total Employer
contribution to the Plan is less than three
percent), or, in certain cases where a Defined
Benefit Plan is maintained, five percent or seven
and one-half percent (whichever is applicable) of
each Participant's Compensation for such Plan Year;
if the Plan is integrated with Social Security, the
"Base Contribution Percentage" plus the "Excess
Contribution Percentage" plus the "Additional
Contribution Percentage" (if any) must be no less
than the "Minimum Top-Heavy Rate" as set forth in
the preceding clause.
(h) "PRIMARY LIMITATION" means 15 percent of the
Compensation otherwise paid or accrued by the
Employer during such Taxable Year to, or for, the
Participants in the Plan.
(i) "SECONDARY LIMITATION" means the lesser
of:
(i) 25 percent of the Participants' Compensation
for the Taxable Year which ends with or within
the Plan Year for which the Employer, Matching,
and/or Elective Deferral Contribution or other
Employer contribution is being made, or
(ii) Any excess of (aa) the aggregate of the
"Primary Limitations" for all Taxable Years
beginning before January 1, 1987, over (bb) the
aggregate of the deductions allowed or allowable
(for Employer, Matching, and Elective Deferral
Contributions or other Employer contributions
paid or deemed paid to the Plan) under section
404(a)(3)(A) of the Code for all Taxable Years
beginning before January 1, 1987, which excess is
available as a carryforward to the current
Taxable Year from such prior Taxable Year(s)
under said section 404(a)(3)(A).
A-33
<PAGE> 34
(B) OTHER ALLOCATIONS. Other contributions shall be allocated
in accordance with the Plan document.
A.5.4 ALLOCATION OF INCREASES AND DECREASES. Allocation of increases or
decreases in the fair market value of assets described in Section 5.4 of the
Plan shall be made on the basis of the amounts in the Accounts under the Plan
(as adjusted under Section 5.4 of the Plan) as determined on (check either (A)
or (B)):
[ X ](A) First day of the period in which the Valuation Date
occurs (except that the last day of the period shall be used
for the initial allocation).
[ ](B) Last day of the period in which the Valuation Date
occurs.
A.5.5 ALLOCATION OF FORFEITURES.
(A) Shall forfeitures be allocated in accordance with Section
5.5 of the Plan (check one)?
[ X ] (1) Yes [ ] (2) No
[ ] (3) N/A (No forfeitures)
If Section A.5.5(A)(1) is checked, such allocation shall be effected as of
the last day of the (check one): [ ] (a) month [ ] (b) quarter [ X ] (c) Plan
Year in which the forfeiture occurs under Section 7.6(c) of the Plan, in
proportion to the Employer and/or Matching Contributions (as applicable)
allocated to the remaining Participants for the period for which the
allocation is effected.
(B) If Section A.5.5(A)(2) is checked, forfeitures shall be
allocated as follows (check applicable block):
[ ] (1) Matching Account forfeitures shall be used to
reduce Matching Contributions for the Plan Year in which
such forfeitures occur but otherwise the provisions of
Section 5.5 of the Plan shall apply.
[ ] (2) All Matching and Employer Account forfeitures
shall be used to reduce Matching and Employer
Contributions for the Plan Year in which such
forfeitures occur.
[ X ] (3) N/A (Forfeitures shall be allocated under
Section 5.5 of Plan or no forfeitures).
A.6.1 INVESTMENT OF ACCOUNTS.
(A) INVESTMENT POWER. Investment of Trust assets shall be
directed as follows (check (1), (2) or (3)):
[ X ] (1) Subject to the terms of the Plan, the Trustee
shall, subject to any limitations indicated below, have
the sole power and authority to direct investment of
Trust assets.
[ ] (2) Subject to the terms of the Plan, the Investment
Manager shall, subject to any limitations indicated
below, have the sole power and authority to direct
investment of Trust assets held in (check applicable
block(s)):
[ ] Employer Accounts [ ] Matching Accounts
[ ] Participant Accounts [ ] Elective Deferral
Accounts
A-34
<PAGE> 35
[ ] QVEC Accounts [ ] Rollover Accounts
[ ] Transfer Accounts [ ] Other Accounts
Subject to the terms of the Plan, the Trustee shall have the sole
power and authority to direct investment of Trust assets not
committed to the direction of the Investment Manager.
[ ] (3) Subject to the terms of the Plan, each Plan
Participant or Beneficiary shall, subject to any
limitations indicated below, have the sole power and
authority to direct investment of the Trust assets held
in (check applicable block(s)):
[ ] Employer Accounts [ ] Matching Accounts
[ ] Participant Accounts [ ] Elective Deferral
Accounts
[ ] QVEC Accounts [ ] Rollover Accounts
[ ] Transfer Accounts [ ] Other Accounts
The investments which the Participant or Beneficiary may select
are any one or more of the following (specify investment
selections available): [__________________________________________
__________________________________________________________________
_________________________________________________________________]
Investment instructions shall be given by the Participant or
Beneficiary on the Appropriate Form to the Administrative Committee
not later than (fill in blank) [ ] days before the Valuation Date
preceding the effective date of the investment direction. The
Administrative Committee shall deliver such instructions to the
Trustee. Such investment instructions shall be effected by the
Trustee not later than (fill in blank) [ ] days following the
Valuation Date coincident with or next following the date on which
the investment instructions are delivered to the Administrative
Committee.
Subject to the terms of the Plan, the Trustee shall have the sole
power and authority to direct investment of Trust assets not
committed to the direction of the Participant or Beneficiary.
(B) LIMITATIONS. List any limitations on types of
investments and transitional investment rules (if none, write "none"): [____
NONE
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
___________________________________________________________________________]
(C) QUALIFYING EMPLOYER SECURITIES. May Plan assets be
invested in Qualifying Employer Securities (check one)?
[ X ] (1) Yes [ ] (2) No
In no event may Employer, Participant, Elective Deferral, Matching, Rollover
or Qualified Voluntary Employee Contributions or other Employer contributions
or direct transfers or Employer, Participant, Elective Deferral, Matching,
Rollover, Transfer or QVEC Accounts or other accounts be invested in
Qualifying Employer Securities unless such investment is in compliance with
applicable Federal and state securities laws (including any necessary filings
under such Federal and state securities laws) and the requirements of the
Plan.
If such investment is in compliance with such laws (including any required
filings) and Plan requirements, the prohibition on investment of Plan assets
in Qualifying Employer Securities does not apply and up to [ 100 ] (insert
percentage; if not applicable, insert letters N/A in blank) percent of Plan
assets may be so invested.
A-35
<PAGE> 36
If any such required filings have not been made, only Employer Contributions
and Employer Accounts not subject to Participant or Beneficiary directed
investment may be invested in Qualifying Employer Securities. In such case,
indicate the percentage of Employer Contributions and Employer Accounts which
may be invested in Qualifying Employer Securities in the following blank: [
100 ] percent (insert percentage; if not applicable, insert letters N/A in
blank).
A.7.6 SEPARATION FROM SERVICE.
(A) DISTRIBUTION OF ACCRUED BENEFITS UPON SEPARATION FROM
SERVICE.
(1) NORMAL RULES. Upon separation of a Participant from
the service of his Employer under Section 7.6(A) of the
Plan, distribution of such Participant's Vested Accrued
Benefit shall be made (check only one block (i.e., (a),
(b) or (c)):
[ ](a) Upon the request of the Participant in
writing on the Appropriate Form, within 60
days following the last day of the Plan Year
in which such Participant incurs five
consecutive One-Year Breaks In Service but if
distribution is not so requested by the
Participant, distribution shall be made on the
date the Participant would have attained his
Normal Retirement Age had he remained in the
employ of the Employer;
[ X ](b) Upon the request of the Participant in
writing on the Appropriate Form, at any time
following the first Valuation Date coincident with
or next following the date such Participant
separates from the service of the Employer;
however, if distribution is not so requested by the
Participant earlier, distribution shall be made no
later than 60 days following the date the
Participant would have attained his Normal
Retirement Age had he remained in the employ of the
Employer; or
[ ](c) Within 60 days following the date the
Participant would have attained his Normal
Retirement Age had he remained in the employ of the
Employer.
Notwithstanding any other provision in the Plan or Adoption Agreement,
if the Plan provides for distribution on an Early Retirement Date and if
a separated Participant met the service but not the age requirement for
such Early Retirement Date on the date of his separation from the
service of his Employer, upon meeting such age requirement after
separation, such Participant, if he so requests in writing on the
Appropriate Form, shall commence receiving his deferred Vested Accrued
Benefit no later than the date which would have been his Early
Retirement Date had he continued in the service of the Employer. If no
such request is made, distribution shall be made in accordance with
Section A.7.6(A)(1)(a), (b) or (c), as elected by the Employer in this
Adoption Agreement. All requests for payment under this Section A.7.6(A)
shall be made within the 90-day period preceding the date payment is to
commence.
(2) EXCEPTION. If a Participant separates from the
service of the Employer and the value of the
Participant's Vested Accrued Benefit does not exceed and
at the time of any prior distribution did not exceed
$3,500, the Participant shall automatically, whether or
not he requests distribution, receive, in one lump sum,
a distribution of his entire Vested Accrued Benefit (and
if the Vested Accrued Benefit
A-36
<PAGE> 37
is $-0-, he shall be deemed to have received such Vested
Accrued Benefit) within 60 days following the first
Valuation Date coincident with or next following the
date such Participant separates from the service of the
Employer.
This provision shall only apply if this block is checked [ X ].
If the above block is not checked or if the value of the Participant's
Vested Accrued Benefit exceeds or at the time of a prior distribution
exceeded $3,500, the election made under Section A.7.6(A)(1) shall apply
to the distribution of the Participant's Vested Accrued Benefit under
the Plan.
(B) VESTING UPON SEPARATION FROM SERVICE.
(1) Except as otherwise provided in the Plan and in
Sections A.3.5 and A.3.11, the interest of each
Participant in his Employer Account and Matching Account
shall vest as follows (check one and
complete applicable blanks):
[ ](a) 100 percent vesting immediately. (This
alternative must be chosen if a period of more than
one year has been designated in Section
A.2.2(B)(1)(a)(i)).
[ ](b) [ ] percent for each Year of Service for
Vesting (not less than 20 percent for each Year of
Service for Vesting, but not more than 100
percent).
[ ](c) Nothing for the first five Years of
Service for Vesting and 100 percent thereafter.
[ ](d) Nothing for the first [ ] Years of Service for
Vesting, then [ ] percent for each Year of Service
for Vesting thereafter, but not more than 100
percent. (Full vesting must occur after five Years
of Service for Vesting).
[ ](e) In accordance with the following table:
<TABLE>
<CAPTION>
IF YEARS OF SERVICE
FOR VESTING THEN THE VESTED
EQUAL OR EXCEED - PERCENTAGE IS
<S> <C>
3.................................. 20
4.................................. 40
5.................................. 60
6.................................. 80
7 or more.......................... 100
</TABLE>
[ X ](f) [Other. (This alternative, if chosen, must
provide a percentage of vesting which is not less
than the percentage that would be provided under
options (c) or (e) used consistently) - Specify:
<TABLE>
<CAPTION>
[IF YEARS OF SERVICE
FOR VESTING THEN THE VESTED
EQUAL OR EXCEED - PERCENTAGE IS
--------------- - -------------
<S> <C>
1.................................. 10
2.................................. 25
3.................................. 50
4.................................. 75
5 OR MORE......................... 100
</TABLE>
A-37
<PAGE> 38
(2) For purposes of Section A.7.6(B)(1) above and for
purposes of Section A.3.5 and Section 3.11(B) of the
Plan, Years of Service for Vesting attributable to the
following shall be disregarded (check applicable
blocks):
[ ](a) Service prior to the attainment of age 18,
exclusive of the year within which the Employee
attained age 18.
[ ](b) Service during any period for which the
Employer did not maintain this Plan or a
predecessor trust or plan.
[ ](c) Service before January 1, 1971, unless the
Employee has had at least three years of credited
service after December 31, 1970, determined without
application of paragraphs (a), (b), (d) and (e)
hereof if selected by the Employer.
[ X ](d) If an Employee is reemployed by the Employer
following a One-Year Break In Service, service
before such One-Year Break In Service, if the
Employee has not completed a Year of Service for
Vesting after such One-Year Break In Service, for
the purpose of determining the vested percentage in
his Employer-derived Accrued Benefit which accrues
after such One-Year Break In Service.
[ X ](e) If an Employee is reemployed by the Employer
following five consecutive One-Year Breaks In
Service (check only (i) or (ii) whichever is to
apply):
[ ](i) Service after such five
consecutive One-Year Breaks In
Service, for the purpose of
determining the vested percentage in
his Employer-derived Accrued Benefit
which accrued before such five
consecutive One-Year Breaks In
Service but both pre-Break and post-
Break service will count for purposes
of determining the vested percentage
in his Employer-derived Accrued
Benefit which accrued after such
Break.
[ X ](ii) Service after such five consecutive
One-Year Breaks In Service, for the purpose
of determining the vested percentage in his
Employer-derived Accrued Benefit which
accrued before such five consecutive
One-Year Breaks In Service and, if the
Employee had no vested interest in his
Employer-derived Accrued Benefit prior to
such Break(s) and the number of consecutive
One-Year Breaks In Service equals or exceeds
the aggregate Years of Service for Vesting,
service before such five consecutive
One-Year Breaks In Service for the purpose
of determining the vested percentage in his
Employer-derived Accrued Benefit which
accrues after such five
A-38
<PAGE> 39
consecutive One-Year Breaks In
Service.
To the extent required by the Plan, separate accounts shall be
maintained for the Participant's pre-Break and post-Break
Employer-derived account balances.
(3) Except as otherwise provided in Section 7.6(C) of
the Plan relating to benefits accruing before a
separation from service, if a Participant separates from
service and thereafter returns to employment with the
Employer without incurring five consecutive One-Year
Breaks In Service, he shall continue to vest in his
Accrued Benefit.
(4) In the event that an Employee who is not a member of
the eligible class of Employees becomes a member of the
eligible class, such Employee shall, subject to any
applicable limitation set forth in this Section A.7.6,
receive credit, for vesting purposes, for Service with
the Employer while such Employee was not a member of the
eligible class.
(5) Service, for purposes of Section A.7.6(B)(1),
includes service with a predecessor employer if the
Employer adopting the Plan is maintaining the Plan as a
plan of a predecessor employer.
Service, for purposes of Section A.7.6(B)(1), also includes service with
a predecessor employer whose plan is not being continued by the Employer
to the extent provided in Section A.1.79.
(C) FORFEITURES. If the provisions of Section 7.6(C)(1)(b) of
the Plan are to apply, check this block [ X ]; otherwise the provisions of
Section 7.6(C)(1)(a) of the Plan shall apply.
A.7.9 COMMENCEMENT OF PAYMENTS; DEFERRAL OF PAYMENTS; MINIMUM
DISTRIBUTION REQUIREMENTS.
(A) DATE PAYMENTS TO COMMENCE. This provision is
contained in the Plan.
(B) DEFERRAL OF PAYMENTS. Shall a Participant, to the extent
permitted by the Plan, be permitted to defer payment of benefits under
Sections 7.3, 7.4, 7.5 and 7.7 of the Plan (check one)?
[ X ] (1) Yes [ ] (2) No
(C) MINIMUM DISTRIBUTION REQUIREMENTS. This provision is
contained in the Plan.
A.7.10 WITHDRAWALS DURING EMPLOYMENT.
(A) WITHDRAWALS FROM PARTICIPANT ACCOUNTS. Shall withdrawals
of Participant Accounts (other than the portion of such Participant Accounts
attributable to required Participant Contributions and to Participant
Contributions which are matched by the Employer) be permitted (check one)?
[ ] (1) Yes [ ] (2) No [ X ] (3) N/A
(B) WITHDRAWALS FROM QVEC ACCOUNTS. Shall withdrawals of QVEC
Accounts be permitted (check one)?
[ ] (1) Yes [ ] (2) No [ X ] (3) N/A
(C) WITHDRAWALS FROM ROLLOVER ACCOUNTS. Shall withdrawals of
Rollover Accounts be permitted (check one)?
[ ] (1) Yes [ X ] (2) No [ ] (3) N/A
A-39
<PAGE> 40
(D) HARDSHIP AND POST - 59 1/2 WITHDRAWALS FROM ELECTIVE
DEFERRAL ACCOUNTS. Shall withdrawals of Elective Deferral Accounts be
permitted (if such withdrawals are to be permitted, check either (1) or (2)
or both) [ ] (1) on account of hardship [ ] (2) after reaching age 59- 1/2
(check one)?
[ ] (a) Yes [ ] (b) No [ X ] (c) N/A
(E) HARDSHIP AND POST - 59 1/2 WITHDRAWALS FROM EMPLOYER,
PARTICIPANT, ROLLOVER AND TRANSFER ACCOUNTS. Shall withdrawals of Employer,
Participant, Rollover and Transfer Accounts be permitted (if such withdrawals
are to be permitted, check either (1) or (2) or both) [ ] (1) on account of
hardship [ ] (2) after reaching age 59-1/2 (check one)?
[ ] (a) Yes [ X ] (b) No
(F) HARDSHIP AND POST - 59 1/2 WITHDRAWALS FROM MATCHING
ACCOUNTS. Shall hardship and post - age 59 1/2 withdrawals of Matching
Accounts be permitted (if such withdrawals are to be permitted, check either
(1) or (2) or both) [ ] (1) on account of hardship [ ] (2) after reaching age
59-1/2 (check one)?
[ ] (a) Yes [ ] (b) No [ X ] (c) N/A
(G) OTHER PRE-59-1/2 IN-SERVICE WITHDRAWALS. Shall withdrawals
of a Participant's Vested Accrued Benefit attributable to Participant
Contributions, Employer Contributions, and Matching Contributions after such
Participant completes five Years of Service for Benefit Accrual but before he
attains age 59 1/2 be permitted (check one)?
[ ] (1) Yes [ X ] (2) No
WITHDRAWALS SHALL ONLY BE MADE IN ACCORDANCE WITH THE PROVISIONS OF SECTION
7.10 OF THE PLAN.
A.7.11 LOANS.
(A) Shall loans to Participants and Beneficiaries if such
Beneficiaries are parties-in-interest (as defined in the Plan) be permitted
(check one)?
[ X ] (1) Yes [ ] (2) No
NOTE: NO LOANS MAY BE MADE TO OWNER-EMPLOYEES OR TO SHAREHOLDER
EMPLOYEES (AS DEFINED IN SECTION 7.11(A)(7) OF THE PLAN).
(B) The interest rate shall be determined as follows: The
interest rate shall equal one percentage point above the prime interest rate as
published in The Wall Street Journal on the first business day of the week in
which the loan is made.
(C) Shall the exception to the 50% of Vested Accrued Benefit
limitation on loans not in excess of $10,000 apply?
[ ] (1) Yes [ X ] (2) No
[ ] (3) N/A (No loans permitted)
If the exception is to apply, note that only 50% of the Vested Accrued
Benefit may be used as security for the loan. Additional security must be
provided by the Participant or Beneficiary. Specify the type of additional
collateral which will be used to secure the remainder of the loan: [ N/A
-------------------------------------------------------------------------
-------------------------------------------------------------------------
------------------------------------------------------------------------]
(D) Specify the types of collateral to be used to secure
loans under the Plan: [ One half of the present value of the Participant's
or Beneficiary's Vested Accrued Benefit under the Plan. ]
A-40
<PAGE> 41
(E) If Section A.7.11(A)(1) is checked, indicate any
additional limitations to be placed on loans (if none, so state; if not
applicable, insert letters N/A):[ Loans from the Plan will be permitted only
in the event of a personal emergency or financial hardship in accordance with
the guidelines set forth in Section 7.10(C)(3) of the Plan. ]
(F) Shall loans to a Participant be treated as an investment
by such Participant for his Accounts only (check one)?
[ X ] (1) Yes [ ] (2) No
[ ] (3) N/A (No loans permitted)
A.7.14 JOINT AND SURVIVOR ANNUITY. The provisions of Section 7.14 of the
Plan shall not apply to the Plan, as adopted under this Adoption Agreement.
A.8.2 SPECIAL PROVISION WITH RESPECT TO QUALIFIED DOMESTIC RELATIONS
ORDERS. Shall the special provision of Section 8.2 of the Plan with respect to
Qualified Domestic Relations Orders apply to the Plan as adopted by the Employer
(check one)?
[ X ] (A) Yes [ ] (B) No
A.15.1 AMENDMENT. THE CHANGES MADE BY THIS AMENDMENT AND RESTATEMENT
SHALL BE DEEMED ADOPTED BY EACH ADOPTING EMPLOYER ON THE DATE THE NOTIFICATION
LETTER IS ISSUED BY THE DISTRICT OFFICE OF THE INTERNAL REVENUE SERVICE WITHOUT
FURTHER ACTION ON THE PART OF THE ADOPTING EMPLOYER EXCEPT THAT SUCH ADOPTING
EMPLOYER MUST SEND A NOTICE TO INTERESTED PARTIES INFORMING SUCH INTERESTED
PARTIES THAT THE PLAN HAS BEEN AMENDED. SUCH NOTICE MUST BE GIVEN IN ACCORDANCE
WITH THE RULES OF SECTION 15.1(C) OF THE PLAN. SEE SECTION 15.1(C) OF THE PLAN
FOR FURTHER INFORMATION.
A.18.4 AGENT FOR SERVICE OF LEGAL PROCESS. The name(s) and address(es)
of the agent(s) for service of legal process under the Plan are:
ADMINISTRATIVE COMMITTEE, FUND OFFICE RETIREMENT PROFIT-SHARING PLAN
c/o Chestnut Street Exchange Fund
Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
A.18.17 RESTATEMENT.
(A) RESTATEMENT OF EXISTING PLAN. The Employer may adopt the
Plan as an amendment and restatement of any Prior Plan (including a prior
version of this Plan and Trust Agreement). Adoption shall not require
termination of the Prior Plan, except that amendment and restatement of an
existing Defined Benefit Plan into the Plan shall be deemed to be a
termination of such Prior Plan for the purposes of Title IV of ERISA. Upon
adoption of this Plan, the assets of the Prior Plan shall be invested in
accordance with the provisions of this Plan. Check if applicable:
[ X ] This is an amendment and restatement of the FUND OFFICE
RETIREMENT PROFIT-SHARING PLAN, an existing qualified profit-sharing
plan, which was adopted effective as of September 18, 1981.
(B) LIMITATIONS APPLICABLE TO PLAN PROVISIONS. Except as
otherwise provided in Section 3.11 of the Plan, the participation and/or
vesting provisions of the Plan, as adopted by the Employer, shall apply as
follows (check applicable block or blocks; to the extent not checked, the
Plan shall apply in accordance with the terms set forth herein):
[ ] (1) The participation provisions of this Plan, as
adopted by the Employer, shall apply only to Employees
hired on or after the date the Plan is adopted by the
Employer. The participation provisions of the Prior Plan
shall otherwise apply.
A-41
<PAGE> 42
[ ] (2) The vesting provisions of this Plan, as adopted by
the Employer, shall apply only to Employees hired on or
after the date the Plan is adopted by the Employer. The
vesting provisions of the Prior Plan shall otherwise
apply.
[ X ] (3) N/A.
(C) INCORPORATION OF APPLICABLE PRIOR PLAN PROVISIONS AND
TRANSITIONAL RULES. If the Employer checked A.18.17(A), such Employer shall
insert here any Prior Plan provisions and any transitional rules which such
Employer desires or is required to make applicable to this Plan (if none,
write the word "none"):
[(1) MERGER OF PLANS. Effective December 1, 1987, the Chestnut Street Exchange
Fund Retirement Profit-Sharing Plan, the Independence Square Income Securities,
Inc. Retirement Profit-Sharing Plan, the Temporary Investment Fund, Inc.
Retirement Profit-Sharing Plan, and the Trust for Short-Term Federal Securities
Retirement Profit-Sharing Plan were merged into, and their assets transferred
into, the Plan.
(2) CHANGE IN ACCRUAL COMPUTATION PERIODS, LIMITATION YEARS, PLAN YEARS
AND VESTING COMPUTATION PERIODS. As a result of the merger and transfer of
assets, the Accrual Computation Periods, Limitation Years, Plan Years and
Vesting Computation Periods for the Chestnut Street Exchange Fund, Independence
Square Income Securities, Inc., Temporary Investment Fund, Inc., and Trust for
Federal Securities Retirement Profit-Sharing Plans were changed as follows:
<TABLE>
<CAPTION>
PLAN OLD (UNDER OLD PLAN) NEW (UNDER THIS PLAN)
- --------------------------------------------------------------------------------
<S> <C> <C>
CHESTNUT STREET EX-
CHANGE FUND 1/1 TO 12/31 12/1 TO 11/30
INDEPENDENCE SQUARE
INCOME SECURITIES,
INC. 1/1 TO 12/31 12/1 TO 11/30
TEMPORARY INVESTMENT
FUND, INC. 10/1 TO 9/30 12/1 TO 11/30
TRUST FOR FEDERAL
SECURITIES 11/1 TO 10/31 12/1 TO 11/30
</TABLE>
This resulted in the following short Accrual Computation Periods,
Limitation Years, Plan Years and Vesting Computation Periods:
<TABLE>
<CAPTION>
PLAN SHORT PERIOD/YEAR
- --------------------------------------------------------------------------------
<S> <C>
CHESTNUT STREET 1/1/87 TO 11/30/87
INDEPENDENCE SQUARE INCOME SECURITIES, INC. 1/1/87 TO 11/30/87
TEMPORARY INVESTMENT FUND, INC. 10/1/87 TO 11/30/87
TRUST FOR FEDERAL SECURITIES 11/1/87 TO 11/30/87
</TABLE>
(a) CHANGE IN VESTING COMPUTATION PERIODS. Each Participant in the above
listed Plans received vesting credit for two Years of Service for
Vesting provided such Participant completed 200 or more Hours of
Service in both the Old Vesting Computation Period and the New
Vesting Computation Period as set forth above.
(b) CHANGE IN ACCRUAL COMPUTATION PERIODS. Any Participant in the above
listed Plans who completed 200 Hours of Service multiplied by the
number of months in the short Accrual Computation Period divided by
twelve received his proportionate share of Employer Contributions
during the short Accrual Computation Period set forth above.
(c) CHANGE IN LIMITATION YEARS. For the short Limitation Years, the
dollar limitations under section 415(c)(1)(A) of the Code were
adjusted as provided under Treas. Reg. Section 1.415-2(b)(4).
The above changes were made pursuant to the automatic approval
provisions of Rev. Proc. 87-27, 1987-25 I.R.B. 41.]
A-42
<PAGE> 43
A.18.18 INDIVIDUAL PROVISIONS. Any provisions applicable to the adopting
Employer only should be inserted here (if none, write the word "none"):
(A) EMPLOYER AMENDMENT OF PLAN AND/OR TRUST. Any Employer amendment of the
Plan and/or Trust permitted by Section 15.1 of the Plan and Trust Agreement
shall be effected by resolution of the Employer's Board of Directors adopted at
a duly held meeting of said Board or by unanimous written consent of said Board,
if the Employer is incorporated and otherwise by appropriate written action of
Employer's owner or other governing entity under State law. A certified copy of
such resolutions or other written action shall be delivered to the
Administrative Committee and the Trustee.
(B) TERMINATION OR PARTIAL TERMINATION OF PLAN AND/OR TRUST. Termination or
partial termination of the Plan and/or Trust under Article XVI of the Plan and
Trust Agreement shall be effected by resolution of the Employer's Board of
Directors adopted at a duly held meeting of said Board or by unanimous written
consent of said Board, if such Employer is incorporated and otherwise by
appropriate written action of the Employer's owner or other governing entity
under State law. A certified copy of such resolutions or other written action
shall be delivered to the Administrative Committee and the Trustee.
(C) SMALL BUSINESS JOB PROTECTION ACT OF 1996 AND TAXPAYER RELIEF ACT OF
1997 CHANGES.
(1) DEFINITION OF HIGHLY COMPENSATED EMPLOYEE. Notwithstanding Section
1.38 of the Plan, effective for Plan Years beginning on and after January 1,
1997, "Highly Compensated Employee" shall mean any Employee of the Employer who:
(a) Was a five percent owner (within the meaning of Section 414(q)(2) of
the Code) of the Employer at any time during the determination year or the
look back year; or
(b) For the preceding Plan Year:
(i) Had compensation from the Employer in excess of $80,000 (as
adjusted in accordance with Section 414(q)(1) of the Code);
(ii) If the Employer elects the application of this Section
18.18(C)(2)(b) for such look back year, was a member of the top-paid group
for such look back year.
Any calendar year election shall be made in accordance with Notice 97- 45.
(2) RESTRICTIONS ON MANDATORY DISTRIBUTIONS. Sections 7.1, 7.3, 7.4, 7.5,
7.6 and 7.7 of the Plan are amended by striking $3,500 each place it appears in
said Sections and inserting $5,000.
(D) UNPAID FAMILY AND MEDICAL LEAVE ACT OF 1993. Notwithstanding any
provision in the Plan to the contrary, and effective with respect to an Employee
whose absence after April 5, 1993 is governed by the Family and Medical Leave
Act of 1993 ("FMLA"), any period of unpaid FMLA leave shall not be treated as,
or counted toward, a One-Year Break in Service for purposes of vesting or
eligibility to participate. However, unpaid FMLA leave periods shall not be
treated as credited service for purposes of benefit accrual, vesting and
eligibility to participate. The Plan shall be administered in accordance with
the requirements of the FMLA and the Department of Labor regulations thereunder.
(E) USERRA AMENDMENT. Effective December 12, 1994, notwithstanding any
provision of this Plan to the contrary, contributions, benefits and service
credit with respect to qualified military service will be provided in accordance
with section 414(u) of the Internal Revenue Code. Loan repayments will be
suspended under this Plan as permitted under section 414(u)(4) of the Internal
Revenue Code.
(F) ADOPTION OF PLAN BY OTHER EMPLOYERS.
(1) EFFECTIVE DATE. This Section A.18.18(F) shall be effective as of
December 1, 1989.
A-43
<PAGE> 44
(2) ADOPTION OF PLAN AND TRUST. Any other employer may adopt the terms of
this Plan as adopted by the adopting Employer, and thereby become a
"Participating Employer," provided:
(a) The Board of Directors or other governing entity of the adopting
Employer consents to such adoption;
(b) The Board of Directors or other governing entity of the adopting
Participating Employer adopts this Plan by appropriate action;
(c) The adopting Participating Employer executes the Adoption
Agreement; and
(d) The adopting Participating Employer executes such other documents as
may be required to make such adopting Participating Employer a party to
the Plan and Trust as a Participating Employer (except as provided below).
A Participating Employer which adopts the Plan and Trust Agreement is
thereafter an Employer with respect to its employees for purposes of the Plan,
the Trust Agreement and this Adoption Agreement except that such Participating
Employer delegates to the adopting Employer the power to amend the Adoption
Agreement on its behalf and on behalf of the adopting Employer and each other
Participating Employer, provided such amendment does not materially affect the
substance of the Plan with respect to the adopting Employer or any Participating
Employer or materially affect the costs of the adopting Employer or any
Participating Employer. A Participating Employer reserves the power to withdraw
from the Plan, as provided in Section A.18.18(F)(3), and to terminate the Plan
and Trust Agreement with respect to such Participating Employer, as provided in
Section A.18.18(F)(5).
(3) WITHDRAWAL FROM PLAN. Subject to the requirements of Article XVII, any
Participating Employer may, at any time, withdraw from the Plan upon giving the
Board of Directors or other governing entity of the adopting Employer, the
Administrative Committee and the Trustee at least 30 days notice in writing of
its intention to withdraw. Upon the withdrawal of a Participating Employer
pursuant to this Section A.18.18(F)(3), the Trustee shall segregate a portion of
the assets in the Trust as set forth below, the value of which shall equal the
total amount credited to the accounts of Participants employed by the
withdrawing Participating Employer. Subject to the requirements of Article XVII,
the determination of which assets are to be so segregated shall be made by the
Trustee in its sole discretion as set forth below.
The Administrative Committee may, at any time, direct the Trustee to
segregate from the Trust such part thereof as the Administrative Committee shall
determine to be held for the benefit of the employees of a Participating
Employer, and shall give a copy of such directions to the adopting Employer and
each Participating Employer. Such directions shall specify the assets of the
Trust to be segregated. Unless the adopting Employer or any Participating
Employer files with the Trustee a written protest within 30 days after delivery
of such directions to the Trustee, such directions shall conclusively establish
that the assets specified therein represent the part of the Trust held for the
benefit of the Employees of the adopting Employer and of each Participating
Employer.
After the expiration of such 30 day period, and after settlement of any such
protest, the Trustee shall follow the Administrative Committee's directions,
including any modification thereof adopted in settlement of any protest. Any
part of the Trust segregated pursuant to such directions shall thereafter be
held in a separate trust identical in terms to the Trust hereby established or
maintained, except that, with respect to such separate trust, this Plan and
Trust Agreement shall be construed as if such Participating Employer were the
adopting Employer and all powers and authority conferred upon the adopting
Employer or its Board or other governing entity and the Administrative Committee
shall devolve upon such Participating Employer or its Board of Directors or
other governing entity. At any time thereafter, such Participating Employer and
the Trustee may (but they shall not be required to) enter into a separate
agreement stating the terms of such separate plan and trust agreement which may
be the DRINKER BIDDLE & REATH LLP REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN
AND TRUST AGREEMENT. If the
A-44
<PAGE> 45
DRINKER BIDDLE & REATH LLP REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN AND
TRUST AGREEMENT is not so adopted, the plan and trust agreement with respect to
the withdrawing Participating Employer shall be considered an individually
designed plan.
(4) EXCLUSIVE PURPOSE OF TRUST. Neither the segregation and transfer of the
Trust assets upon the withdrawal of a Participating Employer nor the execution
of a new plan and trust agreement by such withdrawing Participating Employer
shall operate to permit any part of the Trust to be used for, or diverted to,
purposes other than for the exclusive benefit of the Participants or their
Beneficiaries.
(5) APPLICATION OF WITHDRAWAL PROVISIONS. The withdrawal provisions
contained in Section A.18.18(G)(3) and (4) shall be applicable only if the
withdrawing Participating Employer continues to cover its Participants and
eligible Employees in another plan and trust qualified under sections 401 and
501 of the Code. Otherwise, the termination provisions of the Plan and Trust
Agreement shall apply with respect to the withdrawing Participating Employer.
(6) SINGLE PLAN. Notwithstanding any other provision set forth herein, the
Plan, as adopted pursuant to this Section A.18.18(F) by the adopting Employer
and each Participating Employer, shall constitute a single plan, as such term is
defined in Treas. Reg. Sections. 1.414(1)-1(b)(1), as to the adopting Employer
and each Participating Employer.
(7) QUALIFYING EMPLOYER SECURITIES. For purposes of Sections A.1.72 and
A.6.1(B), and for all other purposes of the Plan and Trust Agreement, the stock
of any adopting Employer and any Participating Employer shall be treated as
Qualifying Employer Securities.
(8) ADOPTING EMPLOYER APPOINTED AGENT OF PARTICIPATING EMPLOYERS. Each
Participating Employer appoints the Board of Directors or other governing entity
of the adopting Employer as its agent to exercise on its behalf all of the
administrative power and authority conferred upon the adopting Employer by this
Plan and Trust Agreement, including the power to amend the Adoption Agreement on
its behalf and on behalf of the adopting Employer and each other Participating
Employer as set forth in Article XV, provided such amendment does not materially
affect the substance of the Plan with respect to the adopting Employer or any
Participating Employer or materially affect the cost of the adopting Employer or
any Participating Employer. The authority of the Board of Directors or other
governing entity of the adopting Employer to act as agent of any Participating
Employer, in accordance with Sections A.18.18(F)(2) and A.18.18(F)(8), shall
terminate only if the part of the Plan's assets held for the benefit of the
employees of such Participating Employer shall be segregated in a separate trust
as provided in Section A.18.18(F)(3) and such Participating Employer thereupon
withdraws from the Plan in accordance with Section A.18.18(F)(3). Any material
amendment (i.e., any amendment materially affecting the substance of the Plan
with respect to the adopting Employer or any Participating Employer or
materially affecting the costs of the adopting Employer or any Participating
Employer) can only be adopted by the adopting Employer and all Participating
Employers. Each Participating Employer exclusively reserves the power to
terminate this Plan and/or the Trust Agreement as set forth in Article XVI with
respect to such Participating Employer. The complete termination of the Plan can
only be effected by action of the adopting Employer and all Participating
Employers.
(9) NAME OF ADOPTING EMPLOYER. The CHESTNUT STREET EXCHANGE FUND is the
adopting Employer.
(10) PARTICIPATING EMPLOYERS. The names and pertinent data for the
Participating Employers are as follows:
(a) THE RBB FUND, INC.:
ADDRESS: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
EMPLOYER IDENTIFICATION NUMBER:51-0312196
A-45
<PAGE> 46
TAXABLE YEAR: September 1 - August 31
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: Corporation
PLACE OF ORGANIZATION: Maryland
(b) INDEPENDENCE SQUARE INCOME SECURITIES, INC.:
ADDRESS: One Aldwyn Center
Villanova, PA 19085
EMPLOYER IDENTIFICATION NUMBER:23-1861553
TAXABLE YEAR: January 1 - December 31
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: Corporation
PLACE OF ORGANIZATION: Maryland
(c) TEMPORARY INVESTMENT FUND, INC.: (CEASED PARTICIPATION IN THE
PLAN EFFECTIVE DECEMBER 31, 1997)
ADDRESS: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
EMPLOYER IDENTIFICATION NUMBER:52-0983343
TAXABLE YEAR: October 1 - September 30
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: Corporation
PLACE OF ORGANIZATION: Maryland
(d) TRUST FOR FEDERAL SECURITIES (CEASED PARTICIPATION IN THE PLAN
EFFECTIVE DECEMBER 31, 1997):
ADDRESS: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
EMPLOYER IDENTIFICATION NUMBER:52-1036683
TAXABLE YEAR: November 1 - October 31
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: Business Trust
PLACE OF ORGANIZATION: Pennsylvania
(e) MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC. (CEASED
PARTICIPATION IN THE PLAN EFFECTIVE DECEMBER 31, 1997):
ADDRESS: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
EMPLOYER IDENTIFICATION NUMBER:51-0266273
TAXABLE YEAR: February 1 - January 31
BUSINESS CODE NUMBER: 6742
A-46
<PAGE> 47
TYPE OF ENTITY: Corporation
PLACE OF ORGANIZATION: Maryland
(f) MUNICIPAL FUND FOR NEW YORK INVESTORS, INC. (CEASED
PARTICIPATION THE PLAN EFFECTIVE DECEMBER 31, 1997):
ADDRESS: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
EMPLOYER IDENTIFICATION NUMBER:51-0270312
TAXABLE YEAR: August 1 - July 31
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: Corporation
PLACE OF ORGANIZATION: Maryland
(g) MUNICIPAL FUND FOR TEMPORARY INVESTMENT (CEASED PARTICIPATION IN THE
PLAN EFFECTIVE DECEMBER 31, 1997:
ADDRESS: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
EMPLOYER IDENTIFICATION NUMBER: 51-0241021
TAXABLE YEAR: December 1 - November 30
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: Business Trust
PLACE OF ORGANIZATION: Pennsylvania
(h) PORTFOLIOS FOR DIVERSIFIED INVESTMENT (CEASED PARTICIPATION IN
THE PLAN EFFECTIVE NOVEMBER 14, 1995):
ADDRESS: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
EMPLOYER IDENTIFICATION NUMBER:51-0300345
TAXABLE YEAR: July 1 - June 30
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: Business Trust
PLACE OF ORGANIZATION: Maryland
(i) THE PNC(R) FUND (CEASED PARTICIPATION IN THE PLAN EFFECTIVE
MARCH 31, 1996):
ADDRESS: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
EMPLOYER IDENTIFICATION NUMBER:51-0318674
TAXABLE YEAR: October 1 - September 30
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: Business Trust
A-47
<PAGE> 48
PLACE OF ORGANIZATION: Massachusetts
(j) PROVIDENT INSTITUTIONAL FUNDS, INC. (BECAME A PARTICIPATING EMPLOYER
IN THE PLAN EFFECTIVE FEBRUARY 16, 1995 AND CEASED PARTICIPATION IN THE
PLAN EFFECTIVE JUNE 24, 1996):
ADDRESS: Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, DE 19809
EMPLOYER IDENTIFICATION NUMBER:41-1769812
TAXABLE YEAR: January 1 - December 31
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: Corporation
PLACE OF ORGANIZATION: Maryland
(k) THE INTERNATIONAL FUND FOR INSTITUTIONS (CEASED PARTICIPATION
IN THE PLAN EFFECTIVE DECEMBER 1992):
ADDRESS: Bellevue Park Corporate Center
103 Bellevue Parkway, Suite 152
Wilmington, DE 19809
EMPLOYER IDENTIFICATION NUMBER:51-0273019
TAXABLE YEAR: February 1 - January 31
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: Business Trust
PLACE OF ORGANIZATION: Maryland
(l) CHESTNUT STREET CASH FUND, INC. (CEASED PARTICIPATION IN THE
PLAN EFFECTIVE AUGUST 1991):
ADDRESS: 3 Radnor Corporate Center
100 Matsonford Road
Radnor, PA 19087
EMPLOYER IDENTIFICATION NUMBER: 51-0263360
TAXABLE YEAR: June 1 - May 31
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: Corporation
PLACE OF ORGANIZATION: Maryland
A.19.1 ADOPTION OF PLAN AND TRUST BY AFFILIATED EMPLOYERS. Shall Article
XIX of the Plan apply (check one)?
[ ] (A) Yes [ ] (B) No
[ X ] (C) N/A (No Affiliated Employers adopting Plan)
If Section A.19.1(A) is checked, fill in the following blanks:
Name of Adopting Employer: [ ]
--------------------------------------------
Name(s), Address(es), Type of Entity and Tax Identification
Number(s) of Adopting Affiliated Employer(s):[
---------------------------
]
- ----------------------------------------------------------------------------
A-48
<PAGE> 49
The adopting Employer and each adopting Affiliated Employer must adopt the Plan
and execute the Adoption Agreement upon the initial adoption by an adopting
Affiliated Employer of the Plan. Thereafter the adopting Affiliated Employer,
pursuant to Article XIX of the Plan, authorizes the adopting Employer to take
all further action including, but not limited to, the amendment and/or
termination of the Plan, on behalf of the adopting Affiliated Employer under the
Plan (unless such adopting Affiliated Employer withdraws from the Plan pursuant
to Article XIX of the Plan) and such adopting Affiliated Employer need not be a
party to this Adoption Agreement with respect to any such subsequent action
relating to the Plan and Trust Agreement and/or Adoption Agreement.
THE ADOPTING EMPLOYER OR ADOPTING AFFILIATED EMPLOYER MAY NOT RELY ON THE
NOTIFICATION LETTER ISSUED BY THE NATIONAL OR DISTRICT DIRECTOR OF THE INTERNAL
REVENUE SERVICE AS EVIDENCE THAT THE PLAN IS QUALIFIED UNDER SECTION 401 OF THE
INTERNAL REVENUE CODE. IN ORDER TO OBTAIN RELIANCE WITH RESPECT TO PLAN
QUALIFICATION, THE ADOPTING EMPLOYER AND/OR ADOPTING AFFILIATED EMPLOYER MUST
APPLY TO THE APPROPRIATE KEY DISTRICT OFFICE FOR A DETERMINATION LETTER.
Executed at [WILMINGTON ], [ DELAWARE ], on this the [31st] day
of [December], 19[97].
ADOPTING EMPLOYER:
ATTEST: CHESTNUT STREET EXCHANGE FUND
[SEAL] -------------------------------------
[SEAL] NAME OF ADOPTING EMPLOYER
/s/ Morgan R. Jones By: /s/ Robert R. Fortune
- ---------------------------- ----------------------------------
Morgan R. Jones, Secretary Robert R. Fortune, President
PARTICIPATING EMPLOYERS:
ATTEST: THE RBB FUND
[SEAL] -------------------------------------
Name of Participating Employer
/s/ Morgan R. Jones By: /s/ Edward J. Roach
- ---------------------------- ----------------------------------
Morgan R. Jones, Secretary Edward J. Roach, President
ATTEST: INDEPENDENCE SQUARE INCOME
[SEAL] SECURITIES, INC.
-------------------------------------
Name of Participating Employer
/s/ Gary M. Gardner By: /s/ Robert R. Fortune
- ---------------------------- ----------------------------------
Gary M. Gardner, Secretary Robert R. Fortune, President
The undersigned hereby agree(s) to serve as the Trustee(s) under the Plan and
Trust Agreement.
EDWARD J. ROACH ROBERT R. FORTUNE
- ---------------------------- -------------------------------------
Name of Trustee Name of Trustee
/s/ Morgan R. Jones Edward J. Roach
- ---------------------------- ----------------------------------
Witness Signature
/s/ Morgan R. Jones /s/ Robert R. Fortune
- ---------------------------- ----------------------------------
Witness Signature
A-49
<PAGE> 1
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Post-Effective
Amendment No. 21 to the Registration Statement on Form N-1A (File No. 811-2631)
of our report dated January 30, 1998 on our audit of the financial statements
and financial highlights of Chestnut Street Exchange Fund, which report is
included in the Annual Report to Shareholders for the year ended December 31,
1997 which is incorporated by reference in the Post-Effective Amendment to the
Registration Statement. We also consent to the reference to our Firm under the
headings "Investment Advisory and Other Services," and "Financial Statements" in
the Statement of Additional Information.
/s/ Coopers & Lybrand L.L.P.
- ----------------------------
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
April 22, 1998
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<ARTICLE> 6
<CIK> 0000019780
<NAME> CHESTNUT STREET EXCHANGE FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 58307134
<INVESTMENTS-AT-VALUE> 352877245
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<OTHER-ITEMS-LIABILITIES> 2009620
<TOTAL-LIABILITIES> 2009620
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 78253059
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<EXPENSES-NET> 1697789
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<REALIZED-GAINS-CURRENT> 635807
<APPREC-INCREASE-CURRENT> 50408603
<NET-CHANGE-FROM-OPS> 66399890
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3987287
<DISTRIBUTIONS-OF-GAINS> 191984
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<NUMBER-OF-SHARES-SOLD> 9036
<NUMBER-OF-SHARES-REDEEMED> 3349904
<SHARES-REINVESTED> 863872
<NET-CHANGE-IN-ASSETS> 48387073
<ACCUMULATED-NII-PRIOR> 6668
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<PER-SHARE-NAV-BEGIN> 242.91
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<PER-SHARE-GAIN-APPREC> 50.27
<PER-SHARE-DIVIDEND> 3.28
<PER-SHARE-DISTRIBUTIONS> .16
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<PER-SHARE-NAV-END> 293.03
<EXPENSE-RATIO> .005
<AVG-DEBT-OUTSTANDING> 0
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