Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under The Securities Act of 1933
CITIZENS BANKING CORPORATION
(Exact name of registrant as specified in its charter)
Michigan 38-2378932
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
328 S. Saginaw Street, Flint, Michigan 48502
(810) 766-7500
(Address, including zip code, and telephone number, including
area code, of registrant's Principal Executive Office)
Citizens Banking Corporation
Amended and Restated Section 401(k) Plan
(Full title of the Plan)
ROBERT J. VITITO, President and Chief Executive Officer
328 S. Saginaw St., Flint, Michigan 48502
(810) 766-7500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications to:
JOHN W. ENNEST THOMAS W. GALLAGHER
Vice Chairman of the Board, Senior Vice President, Secretary
Chief Financial Officer and Treasurer and General Counsel
Citizens Banking Corporation Citizens Banking Corporation
328 S. Saginaw Street 328 S. Saginaw Street
Flint, Michigan 48502 Flint, Michigan 48502
(810) 766-7500 (810) 766-7500
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of Proposed Maximum Proposed Maximum Amount of
Securities to Amount to be Offering Aggregate Registration
be Registered Registered* Price Per Share** Offering Price** Fee
<S> <C> <C> <C> <C>
Common Stock 1,200,000 shares** $27.50 $33,000,000 $11,380
</TABLE>
* In addition, pursuant to Rule 416 under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit
plan described herein.
** Estimated solely for the purpose of calculating the registration
fee, based on the average of the high and low sale prices on the
Nasdaq National Market on July 30, 1996, in accordance with Rule
457(h).
In accordance with general instruction E to Form S-8, Citizens
Banking Corporation (the "Company") hereby incorporates by reference the
contents of its Registration Statement on Form S-8 (no. 33-28354), filed
April 26, 1989, as amended by Post-Effective Amendment No. 1 filed March 23,
1990.
<PAGE>
Item 8. EXHIBITS
The following exhibits are filed with this registration statement:
5 Internal Revenue Service Determination Letter dated August
2, 1995
23.1 Consent of Ernst & Young LLP
23.2 Consent of Coopers & Lybrand LLP
24 Power of Attorney (contained on signature page).
99.1 Amended and Restated Section 401(k) Plan, dated October 27,
1995
99.2 First Amendment to Trust Agreement under Citizens Banking
Corporation Amended and Restated Section 401(k) Plan (with
Citizens Bank as Trustee)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Flint, State of Michigan on July
19, 1996.
CITIZENS BANKING CORPORATION
By: /S/ Robert J. Vitito
-------------------------------------
Robert J. Vitito
President and Chief Executive Officer
POWER OF ATTORNEY
Each of the undersigned whose signature appears below hereby
constitutes and appoints John W. Ennest and Thomas W. Gallagher, and each of
them acting alone, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
to this Registration Statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities
and Exchange Commission, under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
indicated capacities on July 19, 1996.
Signature Title
--------- -----
/S/ Robert J. Vitito
- ----------------------------- President, Chief Executive Officer
Robert J. Vitito and Director (principal executive
officer)
/S/ John W. Ennest
- ----------------------------- Vice Chairman of the Board, Chief
John W. Ennest Financial Officer, Treasurer and
Director (principal financial officer)
/S/ Daniel E. Bekemeier
- ----------------------------- Senior Vice President and Controller
Daniel E. Bekemeier of Citizens Bank (principal accounting
officer)
/S/ Charles R. Weeks
- ----------------------------- Chairman of the Board and Director
Charles R. Weeks
/S/ Edward P. Abbott
- ----------------------------- Director
Edward P. Abbott
/S/ Hugo E. Braun, Jr.
- ----------------------------- Director
Hugo E. Braun, Jr.
/S/ Jonathan E. Burroughs, II
- ----------------------------- Director
Jonathan E. Burroughs, II
/S/ Joseph P. Day
- ----------------------------- Director
Joseph P. Day
/S/ Lawrence O. Erickson
- ----------------------------- Director
Lawrence O. Erickson
/S/ Victor E. George
- ----------------------------- Director
Victor E. George
/S/ William J. Hank
- ----------------------------- Director
William J. Hank
/S/ George H. Kossaras
- ----------------------------- Director
George H. Kossaras
/S/ Patricia L. Learman
- ----------------------------- Director
Patricia L. Learman
/S/ William F. Nelson, Jr.
- ----------------------------- Director
William F. Nelson, Jr.
/S/ Paul A. Rowley
- ----------------------------- Director
Paul A. Rowley
/S/ William C. Shedd
- ----------------------------- Director
William C. Shedd
/S/ David A. Thomas, Jr.
- ----------------------------- Vice Chairman of the Board and
David A. Thomas, Jr. Director
/S/ James E. Truesdell, Jr.
- ----------------------------- Director
James E. Truesdell, Jr.
/S/ Kendall B. Williams
- ----------------------------- Director
Kendall B. Williams
Pursuant to the requirements of the Securities Act of 1933, the Plan
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, and the undersigned members of the Plan Committee have signed
this Registration Statement below in the capacities indicated in the City of
Flint, State of Michigan on July 19, 1996.
CITIZENS BANKING CORPORATION
AMENDED AND RESTATED SECTION 401(k) PLAN
By: /S/ Gary P. Drainville
------------------------------
Gary P. Drainville, Chairman
Signature Title
--------- -----
/S/ Gary P. Drainville
- ------------------------------- Chairman
Gary P. Drainville
/S/ Kurt A. Schulze
- ------------------------------ Secretary of the Committee
Kurt A. Schulze
/S/ Marilyn K. Allor
- ------------------------------ Committee Member
Marilyn K. Allor
/S/ Nicholas J. Cilfone
- ------------------------------ Committee Member
Nicholas J. Cilfone
/S/ John W. Ennest
- ------------------------------ Committee Member
John W. Ennest
/S/ Edward P. Majask
- ------------------------------ Committee Member
Edward P. Majask
/S/ Wayne G. Schaeffer
- ------------------------------- Committee Member
Wayne G. Schaeffer
<PAGE>
INDEX TO EXHIBITS
Number Description
- ----- -----------
5 Internal Revenue Service Determination Letter dated August 2, 1995
23.1 Consent of Ernst & Young LLP
23.2 Consent of Coopers & Lybrand LLP
24 Power of Attorney (contained on signature page).
99.1 Amended and Restated Section 401(k) Plan, dated October 27, 1995
99.2 First Amendment to Trust Agreement under Citizens Banking
Corporation Amended and Restated Section 401(k) Plan (with Citizens
Bank as Trustee)
Exhibit 5
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P.O. BOX 2508
CINCINNATI, OH 45201
Dated: August 2, 1995 Employer Identification Number:
38-2378932
CITIZENS BANKING CORPORATION File Folder Number:
C/O RICHARD M. MATTHEWS, ESQ. 380011704
DYKEMA GOSSETT PLLC Person to Contact:
400 RENAISSANCE CENTER TODD HILGEFORT
DETROIT, MI 48243-1668 Contact Telephone Number:
(513) 684-3079
Plan Name:
AMENDED AND RESTATED SECTION 401K
PLAN
Plan Number: 002
Dear Applicant:
We have made a favorable determination on your plan, identified
above, based on the information supplied. Please keep this letter in your
permanent records.
Continued qualification of the plan under its present form will
depend on its effect in operation. (See section 1.401-1(b)(3) of the Income
Tax Regulations.) We will review the status of the plan in operation
periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the
publication.
This letter relates only to the status of your plan under the
Internal Revenue Code. It is not a determination regarding the effect of
other federal or local statutes.
This determination is subject to your adoption of the proposed
amendments submitted in your letter dated June 19, 1995. The proposed
amendments should be adopted on or before the date prescribed by the
regulations under Code section 401(b).
This determination is also subject to your adoption of the proposed
amendments submitted in your letter(s) dated June 30, 1995. The proposed
amendments should also be adopted on or before the date prescribed by the
regulations under Code Section 401(b).
This determination letter is applicable for the amendment(s) adopted
on December 22, 1994.
This plan has been mandatorily disaggregated, permissively
aggregated, or restructured to satisfy the nondiscrimination requirements.
This plan satisfies the nondiscrimination in amount requirement of
section 1.401(a)(4)-1(b)(2) of the regulations on the basis of a
design-based safe harbor described in the regulations.
This letter is issued under Rev. Proc. 93-39 and considers the
amendments required by the Tax Reform Act of 1986 except as otherwise
specified in this letter.
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401(a)(4)-4(b) of the regulations with respect to
those benefits, rights, and features that are currently available to all
employees in the plan's coverage group. For this purpose, the plan's
coverage group consists of those employees treated as currently benefiting
for purposes of demonstrating that the plan satisfies the minimum coverage
requirements of section 410(b) of the Code.
This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
The information on the enclosed addendum is an integral part of this
determination. Please be sure to read and keep it with this letter.
We have sent a copy of this letter to your representative as
indicated in the power of attorney.
If you have questions concerning this matter, please contact the
person whose name and telephone number are shown above.
Sincerely yours,
/S/ C. Ashley Bullard
----------------------
C. Ashley Bullard
District Director
Enclosures
Publication 794
Addendum
CITIZENS BANKING CORPORATION
This plan satisfies the requirements of Code section 409.
Exhibit 23.1
We consent to the incorporation by reference of our report dated January 18,
1996 with respect to the consolidated financial statements of Citizens
Banking Corporation included in its Annual Report (Form 10-K) for the year
ended December 31, 1995 in the Registration Statement on Form S-8 related to
the Citizens Banking Corporation Amended and Restated Section 401(k) Plan
filed with the Securities and Exchange Commission.
July 31, 1996 /S/ Ernst & Young LLP
---------------------
Ernst & Young LLP
We consent to the incorporation by reference in the registration statement
of Citizens Banking Corporation on Form S-8 of our report dated February 27,
1995 on our audits of the combined financial statements of the BANC ONE
Affiliates Banks in Michigan as of December 31, 1994 and 1993 and for the
years then ended, which report is included in Citizens Banking Corporation's
Current Report on Form 8-K filed March 15, 1995 and amended on April 28,
1995.
/S/ COOPERS & LYBRAND L.L.P.
----------------------------
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
July 31, 1996
Exhibit 99.1
CITIZENS BANKING CORPORATION
AMENDED AND RESTATED
SECTION 401(k) PLAN
As Amended and Restated
Generally Effective As of
January 1, 1989*
* As noted in Section 1.02, this amendment and restatement also is a
compilation of the 1990 amendment and restatement of the Plan and
subsequent amendments thereto.
TABLE OF CONTENTS
ARTICLE 1 - PREAMBLES
Section 1.01 Establishment of Plan................
Section 1.02 Amendment of Plan....................
Section 1.03 Applicable Law.......................
Section 1.04 Defined Terms........................
Section 1.05 Adoption of Plan by Related
Corporations and Transfers
to Other Plans.......................
ARTICLE 2 - ELIGIBILITY AND PARTICIPATION
Section 2.01 Eligibility..........................
Section 2.02 Participation........................
Section 2.03 Hourly Employees' Eligibility
and Participation....................
ARTICLE 3 - CONTRIBUTIONS AND ALLOCATIONS
Section 3.01 Sources of Contributions and
Allocations to Accounts..............
Section 3.02 Before-Tax Employee Contributions....
Section 3.03 Employer Matching Contributions......
Section 3.04 After-Tax Employee Contributions.....
Section 3.05 Rollover Contributions...............
Section 3.06 Direct Plan to Plan Transfers........
Section 3.07 Reversion of Employer Contributions..
Section 3.08 Omission of Eligible Employee........
Section 3.09 Inclusion of Ineligible Employee.....
ARTICLE 4 - INVESTMENT AND VALUATION OF ACCOUNTS
Section 4.01 Investment Elections.................
Section 4.02 Valuations...........................
Section 4.03 Annual Statements of Value of
Participants' Accounts...............
ARTICLE 5 - RETIREMENT AND OTHER TERMINATION OF EMPLOYMENT
Section 5.01 Retirement...........................
Section 5.02 Disability...........................
Section 5.03 Death................................
Section 5.04 Termination of Employment prior to
Retirement, Disability or Death......
ARTICLE 6 - DISTRIBUTIONS
Section 6.01 Distribution upon Retirement,
Disability, Death or Other
Termination of Employment............
Section 6.02 Withdrawals Due to Hardship..........
Section 6.03 Loans to Participants................
Section 6.04 In-Service Withdrawals...............
Section 6.05 Direct Rollovers after 1992..........
ARTICLE 7 - SPECIAL PROVISIONS
Section 7.01 Service Rules........................
Section 7.02 Transfers............................
Section 7.03 Limitations on Annual Allocations
to Accounts..........................
Section 7.04 Premature Distributions..............
Section 7.05 Top-Heavy Plan Rules.................
Section 7.06 Provisions Relating to Section 16
of the Securities Exchange Act
of 1934..............................
Section 7.07 Distributions Pursuant to Qualified
Domestic Relations Orders............
ARTICLE 8 - TRUST FUND
Section 8.01 Establishment and Maintenance
of Fund..............................
Section 8.02 The Trustee..........................
Section 8.03 Resignation or Removal of Trustee....
Section 8.04 Investment Manager and Custodian.....
Section 8.05 Expenses.............................
Section 8.06 Taxes................................
Section 8.07 Voting and Other Rights with Respect
to Employer Stock....................
ARTICLE 9 - PROVISIONS RELATING TO ADMINISTRATION AND FIDUCIARIES
Section 9.01 Plan Administration..................
Section 9.02 Claims Procedure.....................
Section 9.03 Special Ruling.......................
Section 9.04 Specific Allocation of Fiduciary
Duties between Named Fiduciaries.....
Section 9.05 Authorization for Further Allocation
of Fiduciary Duties..................
Section 9.06 Employment of Advisers...............
Section 9.07 Delegation to Officers or
Employees............................
Section 9.08 Bonding..............................
Section 9.09 Action Taken in Good Faith/
Indemnity............................
ARTICLE 10 - AMENDMENT, TERMINATION AND MERGER
Section 10.01 Amendment of the Plan................
Section 10.02 Termination of the Plan..............
Section 10.03 Predecessor and Successor Employers;
Merger or Consolidation of Plans.....
Section 10.04 Notice...............................
ARTICLE 11 - MISCELLANEOUS PROVISIONS
Section 11.01 Plan Subject to Approval.............
Section 11.02 Payments for the Benefit of Payee....
Section 11.03 Non-Alienation of Benefits...........
Section 11.04 Employer's Rights....................
Section 11.05 Litigation...........................
Section 11.06 Addresses and Mailing of Notices
and Checks...........................
Section 11.07 Written Explanations and Notices.....
Section 11.08 Action by Parent Company or Employer.
Section 11.09 Construction.........................
ARTICLE 12 - DEFINITIONS
EXECUTION
EXHIBIT 1 - Adopting Employers...................
APPENDIX A - Citizens Banking Corporation.........
APPENDIX B - Citizens Commercial & Savings Bank...
APPENDIX C - Commercial National Bank of Berwyn...
APPENDIX D - Second National Bank of Saginaw......
APPENDIX E - Second National Bank of Bay City.....
APPENDIX F - Grayling State Bank..................
APPENDIX G - State Bank of Standish...............
APPENDIX H - Citizens Commercial Leasing
Corporation..........................
APPENDIX I - National Bank of Royal Oak...........
ARTICLE 1
PREAMBLES
Section 1.01 Establishment of Plan. By agreement dated October 17,
1961, Citizens Commercial & Savings Bank established the Citizens Commercial
& Savings Bank Employees Profit Sharing Plan and Trust Agreement for the
purpose of sharing a portion of its profits with eligible employees.
Section 1.02 Amendment of Plan. Citizens Commercial & Savings Bank
has amended the plan as so established from time to time. The preceding
amendment and restatement was effective January 1, 1990. The purpose of the
preceding amendment and restatement was to accomplish the consolidation of
this plan with the Second National Bank Amended and Restated Section 401(k)
Plan and the Commercial National Bank of Berwyn Amended and Restated Section
401(k) Profit Sharing Plan, such that all Employees were covered by a single
plan effective as of January 1, 1990, and to make certain changes to this
plan required by the Tax Reform Act of 1986 and other applicable law. The
purpose of this amendment and restatement, which is effective as of January
1, 1989, except as otherwise stated, is to incorporate Amendments No. 1-4
into a single document which will enable the plan to be submitted to the
Internal Revenue Service for a favorable determination letter and to comply
with the $150,000 limit on compensation and certain other provisions of
applicable law. The plan, as so amended and restated and as set forth on
this and the following pages, is known as the Citizens Banking Corporation
Amended and Restated Section 401(k) Plan, has been adopted and will be
administered by Citizens Banking Corporation ("Parent Company"), and is
referred to simply as the "Plan."
Section 1.03 Applicable Law. The Plan is intended (a) to qualify
as a profit sharing plan under Section 401(a) of the Internal Revenue Code
of 1986, as amended ("Code"), (b) to permit tax-deferred voluntary savings
by eligible Employees pursuant to Code Section 401(k), and (c) to permit
after-tax voluntary savings by eligible Employees. In addition, it is
intended that the Plan meet the applicable requirements of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). Where not
governed by these laws, by regulations promulgated under them, or by other
federal laws, the Plan shall be administered and construed in accordance
with Michigan law.
Section 1.04 Defined Terms. Throughout the Plan, various terms are
used repeatedly, which terms have very specific and definite meanings when
capitalized in the text. For convenience, such terms are collected and
defined in Article 12. Wherever such capitalized terms appear in the Plan,
they shall have the meanings specified in that Article.
Section 1.05 Adoption of Plan by Related Corporations and Transfers
to Other Plans.
(a) Adoption of Plan by Related Corporations. Any subsidiary,
direct or indirect, or other corporation affiliated with the Parent Company,
may, with the approval of the Parent Company's Board of Directors, and by
resolution of such related corporation's own board of directors, adopt the
Plan. From and after the date when it shall have become a party to this
Plan, any such related corporation shall, for all purposes of the Plan, be
included within the meaning of the term "Employer" as defined herein, and
shall be listed in Exhibit 1. Special terms of the Plan, as they shall be
applied to the employees of such adopting corporation, shall be set forth in
an Appendix attached to and made part of the Plan. The Appendix shall set
forth only special provisions relating to such employees, and any other
pertinent information or specifications which would facilitate the effective
operation of the Plan with respect to such employees. All other provisions
of the Plan, if not specifically addressed in such Appendix, shall apply to
the employees of the adopting corporation.
(b) Transfers to Other Plans. In the event that a group of
Participants shall become covered by another pension or retirement plan
established by the Employer, the Parent Company's Board of Directors may
authorize the Plan Administrator to direct the Trustee to pay over and
deliver to the trustee of such other plan such assets of the Fund as are
properly allocable to such group.
ARTICLE 2
ELIGIBILITY AND PARTICIPATION
Section 2.01 Eligibility. Except as provided in Section 2.03, in
order to be eligible to participate in the Plan, an individual must:
(a) be a salaried Employee of the Employer; and
(b) not be represented by a labor organization (as defined in
the National Labor Relations Act, as amended), recognized by
the Employer as the collective bargaining representative of
such individual, and with which the Employer has a
bargaining agreement under which retirement benefits have
been the subject of good faith bargaining (unless that
bargaining agreement provides for such individual's
participation).
Section 2.02 Participation.
(a) Meaning of Participation. Participation entitles an
individual to receive a summary plan description that describes the terms of
the Plan in simple language, and to obtain various other reporting and
disclosure documents concerning the Plan. A Participant also will have
maintained on the books and records of the Plan's Fund an Account in his
name to which allocations may be made in accordance with Article 3.
However, mere participation in the Plan does not entitle a Participant to an
ultimate benefit from the Plan; a Participant will receive a benefit only if
allocations are made to his Account over his period of participation
pursuant to Article 3.
(b) Commencement of Participation. (1) An individual who was
participating in the Plan prior to its amendment and restatement on the
Effective Date, and who had not ceased participation for any reason as of
the Effective Date, shall continue participating in the Plan as amended and
restated. (2) An individual who as of the day prior to the Effective Date
satisfied the eligibility requirements of Section 2.01, but who was not
participating in the Plan prior to such date, shall commence participation
in the Plan on the Effective Date provided he then satisfies the eligibility
requirements of Section 2.01. (3) Except as provided in Section 2.03, any
other individual shall commence participation in the Plan on the later of:
(A) the Effective Date or (B) the first business day of the calendar quarter
coincident with or following the date he first satisfies the eligibility
requirements of Section 2.01.
(c) Termination of Participation. Participation in the Plan
shall terminate for a Participant on the later of (1) his date of
termination of employment or (2) the date he receives from the Plan a
distribution representing the entire nonforfeitable balance of his Account.
(d) Resumption of Participation. An individual whose
participation has terminated pursuant to paragraph (c) above shall resume
participation only as provided in Section 7.01.
Section 2.03 Hourly Employees' Eligibility and Participation.
Effective January 1, 1995, an individual who is an hourly Employee of the
Employer shall be eligible to participate in the Plan, provided that the
individual:
(a) is an hourly Employee of the Employer;
(b) is not represented by a labor organization (as specified in
Section 2.01(b)); and
(c) has completed at least 1,000 Hours of Service within the
Employee's first 12-consecutive months of employment or
within any Plan Year commencing after the Employee's date of
hire with the Employer.
Any hourly Employee who satisfies conditions (a), (b) and (c),
above, shall commence participation in the Plan on the January 1 or July 1
first following the date all such conditions are satisfied or, if later, on
January 1, 1995.
ARTICLE 3
CONTRIBUTIONS AND ALLOCATIONS
Section 3.01 Sources of Contributions and Allocations to Accounts.
(a) Sources and Forms of Contributions. It is contemplated that
both the Employer and Employees may make contributions to the Plan.
Employer matching contributions are purely discretionary and the Employer
shall not be required to contribute to the Plan for any year. Contributions
by Employees may be divided into before-tax, after-tax, and rollover
contributions. Direct plan to plan transfers are permitted, as provided in
Section 3.06. No further profit sharing contributions by any Employer will
be made to the Plan.
(b) Allocation of Contributions and Individual Accounts.
Contributions made by the Employer and by Employees shall be allocated to
individual Accounts maintained on the books and records of the Fund for each
Participant. Credits to Accounts shall be made in accordance with the
allocation process described in this Article 3 for contributions; credits
and charges shall be made for the allocation of earnings, gains, and losses
as described in Article 4; and charges shall be made for distributions made
pursuant to Article 6. The maintenance of individual accounts is only for
accounting purposes, and except as provided otherwise in the Plan or as
determined by the Trustee in accordance with the written powers granted to
the Trustee, a segregation of the assets of the Fund to each Account shall
not be required. The fact that individual accounts are maintained shall not
be construed to mean that any Participant or Beneficiary has title to any
specific assets of the Fund. Each Account may be further divided into
separate sub-accounts, as defined in Article 12 and as more particularly
described in this Article 3, to receive and hold contributions having a
particular characterization.
Section 3.02 Before-Tax Employee Contributions.
(a) Amount. For each Plan Year, a Participant may direct his
Employer to make cash contributions to a Before-Tax Employee Contribution
Account (which contributions are not includible in the Participant's gross
income for federal income tax purposes). Before-tax Employee contributions
may be made in any whole percentage of Base Salary, up to the maximum
percentage determined and set from time to time by the Plan Administrator,
which percentage for Highly Compensated Participants may be different from
the percentage for non-Highly Compensated Participants. For non-Highly
Compensated Participants such maximum percentage shall not be less than 6%
nor greater than 15% of Base Salary. For Highly Compensated Participants
such maximum percentage may be set at any level, which need not be the same
for each Highly Compensated Participant, provided that the level set for
each Highly Compensated Participant shall not exceed the maximum percentage
of Base Salary that is set for non-Highly Compensated Participants. Each
Participant shall file a written election with the Plan Administrator, on a
form prescribed by the Plan Administrator, specifying the percentage of his
Base Salary to be contributed by the Employer. For a new Participant the
election shall become effective on the first pay date on or after the first
day of the calendar quarter on which the Participant enters the Plan.
Existing Participants may submit an election or may increase existing
elections effective as of the first business day of each calendar quarter,
provided that the election is received by the Plan Administrator at least 10
business days in advance of the intended effective date. Existing
Participants may decrease or revoke existing elections at any time,
effective on the first pay date following the date on which such election is
received by the Plan Administrator, or in the case of demonstrated hardship,
on such earlier date as is determined by the Plan Administrator. All
deferral elections remain in effect until changed or revoked by the
Participant.
(b) Payment. Contributions directed by Participants under this
Section shall be made during the Plan Year by the Employer through payroll
deductions and paid to the Fund under procedures established by the Plan
Administrator.
(c) Limitations. Participant contributions made in accordance
with this Section are subject to the limitations of this paragraph.
(1) Deferral Percentage Test. Each Plan Year, the Plan
Administrator shall compute:
(A) the average actual deferral percentage of
all Highly Compensated Participants who are eligible to make
before-tax contributions under this Section, whether or not
any such contributions are made ("high-paid percentage");
and
(B) the average actual deferral percentage of
the remaining Participants who are eligible to make
before-tax contributions under this Section, whether or not
such contributions are made ("lower-paid percentage").
The actual deferral percentage shall be computed for each eligible
Participant by dividing the Participant's Compensation for the Plan
Year into the total amount of his before-tax contributions made
during the Plan Year under this Section.
For purposes of computing each Participant's actual deferral
percentage, and except as otherwise provided in applicable income
tax regulations, the following aggregation rules shall apply:
(i) all cash or deferred arrangements included in a
plan shall be treated or a single cash or deferred arrangement [as
and to the extent provided in Income Tax Regulation
1.401(k)-1(b)(3)];
(ii) all plans aggregated for purposes of Code Section
410(b), after application of the mandatory disaggregation and
permissive aggregation rules, shall be treated as a single plan [as
and to the extent provided in Income Tax Regulation
1.401(k)-1(g)(11)];
(iii) with respect to a Highly Compensated Participant,
all of the Employer's cash or deferred arrangements in which the
Highly Compensated Participant is eligible to participate shall be
treated as one [as and to the extent provided in Income Tax
Regulation 1.401(k)-1(g)(1)(ii)]; and
(iv) with respect to a Highly Compensated Participant
who is subject to the family aggregation rules of Code Section
414(q)(6) because that Participant is either a five-percent owner or
one of the 10 most highly compensated employees, the combined actual
deferral ratio for the family group (treated as one Highly
Compensated Participant) shall be determined by combining the
before-tax contributions (and amounts treated as such) and
compensation of all family members [as and to the extent provided in
Income Tax Regulation 1.401(k)-1(g)(1)(ii)(C)].
If the separate percentages for these two groups fail to satisfy one
of the tests below, or if the Plan Administrator otherwise
determines that a reduction of the amount of before-tax Employee
contributions is necessary in order to assure compliance with Code
Section 401(k), the Plan Administrator shall to the extent
necessary:
(i) suspend or reduce future before-tax Employee
contributions for Highly Compensated Participants;
(ii) recharacterize before-tax Employee contribu-
tions as after-tax Employee contributions; and/or
(iii) refund before-tax Employee contributions.
Any such recharacterization shall be accomplished by notifying each
affected Highly Compensated Participant of his recharacterized
amount within 2-1/2 months of the end of the Plan Year for which the
contributions were made.
Recharacterizations shall be made by recharacterizing the amount of
the before-tax contributions for those Highly Compensated
Participants who made the greatest percentage contribution until the
separate average actual deferral percentages for the two groups of
Participants satisfy one of the tests below.
Any amount recharacterized under (ii) above as an after-tax
contribution shall continue to be subject to the requirements of
Code Section 401(k)(2) (including restrictions on distributions) and
shall continue to be regarded as Employer contributions under
Subchapter D of the Code, except as otherwise provided in applicable
Income Tax Regulations and other official guidance.
Refunds under (iii) above shall be accomplished by decreasing the
amount of the before-tax contributions for those Highly Compensated
Participants who made the greatest percentage contribution until the
separate average actual deferral percentages for the two groups of
Participants satisfy one of the tests below. Any excess amount of
before-tax Employee contributions resulting from this reduction
process, along with income of the Fund allocable to those
contributions, shall be refunded by the Trustee to the affected
Highly Compensated Participants before the end of the Plan Year
following the Plan Year for which the contributions were made. If
such excess contributions are refunded before the close of the first
2-1/2 months following the end of the Plan Year for which the
contributions were made, the refunded amounts, including the
allocable income, shall be treated as earned and received in the
taxable year in which the excess before-tax contribution was made;
in all other cases, the refunded amounts, including the allocable
income, shall be treated as earned and taxable in the year of
receipt, and the Employer shall be subject to the 10% penalty tax of
Code Section 4979.
The Plan Administrator also may suspend, recharacterize or reduce
before-tax Employee contributions of all Participants so that the
deductible limits of Code Section 404 are not exceeded.
For purposes of this subparagraph (1), the applicable tests shall be
as follows:
(A) The high-paid percentage is not more than 1.25
times the lower-paid percentage; or
(B) The high-paid percentage is not more than 2.00
times the lower-paid percentage, and the difference
between the two percentages does not exceed two
percentage points.
(2) Limits on Individual Before-Tax Contributions.
Before-tax contributions made during a calendar year by each
Participant under this Plan and all other plans, contracts or
arrangements maintained by the Employer shall not exceed $9,240
(which amount shall be adjusted annually in accordance with the
procedures of Code Section 415(d)). On or before March 1 of each
year, each Participant shall notify the Plan Administrator in
writing of any before-tax Employee contributions made under this
Plan (and under any other plans in which he participates) in excess
of $9,240 (which amount shall be adjusted annually in accordance
with the procedures of Code Section 415(d)) during the Participant's
taxable year ending before such date and shall specify the amount to
be refunded to him. The amount in excess of the foregoing limit
shall be included in the Participant's gross income and shall be
refunded to the Participant by the Trustee, along with any income of
the Fund allocable to such amount, not later than April 15
immediately following the March 1 notice deadline. The allocable
income which is refunded to the Participant shall be treated as
earned and received in the taxable year in which the excess
contribution was made. Any excess before-tax Employee contribution
made by a Highly Compensated Participant, even though refunded under
this subparagraph (2), shall be included in the average actual
deferral percentage tests of subparagraph (1) of this Section
3.02(c).
(d) Reversion. Participant before-tax contributions made by the
Employer shall be irrevocable, subject to paragraph (c) and the exceptions
provided in Section 3.07, except that any such contributions, other than
those made by mistake of fact in excess of the amount of a Participant's
election for such contributions, which are returned to the Employer, and any
earnings thereon, shall be distributed in cash to the Participant on whose
behalf the contributions were made.
(e) Allocation. Subject to Section 7.03, the Trustee shall
allocate a contribution made pursuant to this Section to the Participant's
Before-Tax Employee Contribution Account as of the Accounting Date
immediately following the date the contribution was made.
(f) Vesting. A Participant's Before-Tax Employee Contribution
Account shall be 100% nonforfeitable at all times.
(g) Investment. Before-tax Employee contributions made by a
Participant and allocated to a Before-Tax Employee Contribution Account
shall be invested pursuant to the Employee's investment direction as
provided in Section 4.01. Prior to such direction before-tax Employee
contributions shall be invested in interest bearing securities at the
discretion of the Trustee.
(h) Cafeteria Plan Credits. Notwithstanding any other
provisions of this Plan to the contrary, to the extent provided for in the
Citizens Banking Corporation Flexible Benefits Plan or in any other flexible
benefits plan of the Employer, a Participant may elect to have cash or other
benefit credits under such flexible benefits plan contributed to this Plan
as before-tax Employee contributions. All such contributions shall be made
in accordance with procedures adopted by the Plan Administrator, through
payroll withholding or otherwise, and shall be held and administered in all
respects under this Plan as before-tax Employee contributions. To the
extent that suspensions, recharacterizations or refunds of before-tax
Employee contributions are necessary under Section 3.02(c), the suspensions,
recharacterizations or refunds shall occur first with respect to the
Participant's regular before-tax Employee contributions under Section
3.02(a) and then, only as is necessary, with respect to contributions of any
flexible benefits plan credits.
Section 3.03 Employer Matching Contributions.
(a) Amount. Subject to approval by the Parent Company, for each
Plan Year the Employer may contribute an amount to be determined from time
to time by the Employer's board of directors, but not to exceed 100% of
total before-tax contributions made by Participants for the Plan Year and
subject to a maximum for any Participant of 6% of Base Salary for the Plan
Year.
(b) Payment. Subject to approval by the Parent Company and to
suspensions or reductions in contributions for Highly Compensated
Participants as provided in paragraph (c) of this Section, the Employer's
matching contribution, as determined under paragraph (a), shall be paid to
the Fund periodically throughout each year, as determined by the Employer's
board of directors, but in no event later than the due date (including
extensions) for the Employer's federal income tax return for the taxable
year of the Employer corresponding to the Plan Year to which the matching
contribution relates.
(c) Limitations. The Employer's matching contribution shall be
made only with respect to before-tax contributions elected by Participants
out of regular Base Salary payments and/or with respect to any cash or other
benefit credits that may be available to participants in the Citizens
Banking Corporation Flexible Benefits Plan or in any other flexible benefits
plan of the Employer, and not with respect to elective deferrals made out of
bonus payments, overtime pay, or any other discretionary forms of
compensation. In no event shall the Employer deduct, for federal income tax
purposes, a matching contribution, which, when aggregated with Employee
before-tax contributions made under the Plan, exceeds the amount deductible
for the Employer's taxable year with respect to which the contribution is
made, as determined under Code Section 404. In addition, the Plan
Administrator shall compute:
(1) the average matching and after-tax contribution
percentage of all Highly Compensated Participants who are eligible
to make before-tax contributions under Section 3.02, whether or not
any such contributions are made ("high-paid percentage"); and
(2) the average matching and after-tax contribution
percentage of the remaining Participants who are eligible to make
before-tax contributions under Section 3.02, whether or not such
contributions are made ("lower-paid percentage").
The matching and after-tax contribution percentage shall be computed for
each eligible Participant by dividing the Participant's Compensation for the
Plan Year into the sum of the Employer's matching contributions paid into
the Plan and allocated to his Account for the Plan Year and the
Participant's after-tax contributions made to the Plan pursuant to Section
3.04 and allocated to his Account for the Plan Year.
For purposes of computing each Participant's matching and after-tax
contribution percentage, and except as otherwise provided in applicable
income tax regulations, the following aggregation rules shall apply:
(i) all plans aggregated for purposes of Code Section
410(b), after application of the mandatory disaggregation and
permissive aggregation rules, shall be treated as a single plan [as
and to the extent provided in Income Tax Regulation 1.401(m)-1(b)(3)
and 1.401(m)-1(f)(14)];
(ii) with respect to a Highly Compensated Participant,
all of the Employer's matching and after-tax contribution
arrangements in which the Highly Compensated Participant is eligible
to participate shall be treated as one [as and to the extent
provided in Income Tax Regulation 1.401(m)-1(f)(1)(B)]; and
(iii) with respect to a Highly Compensated Participant
who is subject to the family aggregation rules of Code Section
414(q)(6) because that Participant is either a five-percent owner or
one of the 10 most highly compensated employees, the combined
matching and after-tax contribution percentage for the family group
(treated as one Highly Compensated Participant) shall be determined
by combining the employer's matching contributions (and amounts
treated as such), the after-tax contributions and compensation of
all family members [as and to the extent provided in Income Tax
Regulation 1.401(m)-1(f)(1)(C)].
If the separate percentages for these two groups fail to satisfy one of the
tests set forth in Section 3.02(c), the Plan Administrator shall reduce the
amount of after-tax contributions, if any, and then, if necessary, also the
amount of matching contributions (with reductions first from the non-health
care portion of the Employer Matching Contribution Account), for those
Highly Compensated Participants who received the greatest percentage
allocation of such contributions, until the separate average matching and
after-tax contribution percentages for the two groups satisfy one of the
tests. Any excess contributions resulting from this reduction process,
along with the income of the Fund allocable to those contributions, shall be
paid out by the Trustee to the affected Highly Compensated Participants
before the end of the Plan Year following the Plan Year for which the
contributions were made. If such excess contributions are paid out before
the close of the first 2-1/2 months following the end of the Plan Year for
which the contributions were made, the amounts distributed, including any
allocable income, shall be treated as earned and received in the taxable
year in which the excess matching contributions were made; in all other
cases, the refunded amounts, including the allocable income, shall be
treated as earned and taxable in the year of receipt, and the Employer shall
be subject to the 10% penalty tax of Code Section 4979. Notwithstanding the
previous sentence, any distribution attributable to after-tax contributions
shall not be included in the Participant's gross income except to the extent
attributable to income on such contributions. Notwithstanding the above or
any Plan provision to the contrary, if the Plan Administrator determines
that a suspension or reduction of future Employer matching contributions or
allocations for Highly Compensated Participants is necessary in order to
satisfy the limitations of this paragraph, future Employer matching
contributions and/or allocations of such contributions shall be suspended or
reduced for Highly Compensated Participants (with suspension or reductions
first from the non-health care portion of the Employer Matching Contribution
Account). This Section shall be applied to determine any excess matching
and after-tax contributions only after first determining any excess
before-tax contributions under Section 3.02(c)(2) and then under Section
3.02(c)(1). Also, to the extent provided by Income Tax Regulations, and as
elected by the Plan Administrator, the percentages in (1) and (2) of this
paragraph (c) may be computed by also taking into account before-tax
Employee contributions under Section 3.02, provided that the remaining
before-tax Employee contributions not taken into account meet the deferral
percentage test set forth in Section 3.02(c)(1) both on their own and when
combined with all before-tax Employee contributions made during the Plan
Year.
(d) Multiple Use Test. If the high-paid percentage in Section
3.03(c)(1) exceeds 125% of the lower-paid percentage in Section 3.03(c)(2)
and if the high-paid percentage of before-tax Employee contributions also
exceeds 125% of the lower-paid percentage of before-tax Employee
contributions (but in each case, the percentages otherwise satisfy the test
set forth in Section 3.02), then such contributions and deferrals shall
remain in the Plan only if the aggregate limit of the multiple use test set
forth in Income Tax Regulation Section 1.401(m)-2 is met. If such aggregate
limit is exceeded, then either the Employer matching contribution made on
behalf of Highly Compensated Participants or the before-tax or the after-tax
Employee contributions of the Highly Compensated Participants shall be
reduced as the Plan Administrator deems necessary in the same manner as set
forth in this Section 3.03 and in Section 3.02, respectively, until such
aggregate limit is not exceeded.
(e) Reversion. Employer matching contributions shall be
irrevocable, subject to paragraphs (c) and (d) of this Section and to the
same exceptions as provided in Section 3.07.
(f) Allocation. Subject to Section 7.03 and to suspensions or
reductions in allocations for Highly Compensated Participants as provided in
paragraph (c) of this Section, Employer matching contributions made under
this Section shall be allocated as of each Accounting Date within the Plan
Year to and among the Employer Matching Contribution Accounts of those
Participants who elected to make and who were allocated before-tax Employee
contributions, at the rate of:
(1) 100% of so much of each such Participant's
before-tax Employee contributions as do not exceed 3% of Base
Salary, plus
(2) 50% so much of each such Participant's before-tax
Employee contributions as do exceed 3% of Base Salary but not 6% of
Base Salary,
such that the maximum Employer matching contribution for any such
Participant will be 4.5% of Base Salary. Subject to Section 7.03, to
paragraph (a) of this Section, and to approval by the Parent Company, the
Employer's board of directors may set a different allocation rate or maximum
for Employer matching contributions for any Plan Year.
One-third of the Employer matching contributions for each
Participant shall be allocated to a health care sub-account within the
Participant's Employer Matching Contribution Account and reserved for the
payment of medical care expenses incurred following the Participant's
retirement. Accordingly, amounts allocated to any such health care
sub-account shall not be available for loans, hardship withdrawals or
in-service withdrawals. In all other respects, such amounts shall be
subject to the Plan provisions pertaining to Employer Matching Contribution
Accounts (including but not limited to the vesting provisions in paragraph
(g) of this Section).
(g) Vesting. A Participant's Employer Matching Contribution
Account shall become 100% nonforfeitable upon the Participant's normal or
early retirement pursuant to Section 5.01, upon his disability as provided
in Section 5.02, upon his death prior to termination of employment with the
Employer, or upon his completion of three Years of Service; in all other
cases, such account shall be forfeitable. Forfeitures shall occur at the
time and in the manner specified by Section 7.01(d)(3) and shall be used to
reduce the Employer matching contributions otherwise required by this
Section 3.03 in the Plan Year in which the forfeitures occur, and in
succeeding Plan Years if not totally used in such year.
(h) Investment. Employer matching contributions allocated to a
Participant's Employer Matching Contribution Account shall be invested
pursuant to the Employee's investment direction as provided in Section 4.01.
Prior to such direction Employer matching contributions shall be invested in
interest bearing securities at the discretion of the Trustee.
Section 3.04 After-Tax Employee Contributions.
(a) Amount. Subject to approval by the Plan Administrator, for
each Plan Year a Participant may make contributions to an After-Tax Employee
Contribution Account, which contributions are not deductible or excludable
by the Participant from income for federal income taxes, but on which
earnings and gains, if any, will accumulate in the Fund on a tax-deferred
basis until distribution. The Plan Administrator at any time may preclude
after-tax Employee contributions by any Highly Compensated Participant.
(b) Payment. Contributions by Participants under this Section
shall be made only through payroll deductions, in such manner and at such
times during the Plan Year as the Plan Administrator shall prescribe.
(c) Limitation. Subject to Section 7.03, contributions of a
Participant under this Section may be made each Plan Year in an amount not
exceeding --
(1) 10 percent of the Participant's Compensation actually paid
for all periods of his participation under this Plan and
under all other qualified plans of the Employer, reduced by
(2) the sum of the Participant's previous voluntary
non-deductible contributions made under this Plan and under
all other qualified plans of the Employer during all periods
of his participation in such plans.
In addition, for each Plan Year beginning after December 31, 1986, after-tax
contributions (including before-tax contributions that have been
recharacterized in accordance with Section 3.02(c)) made by Participants
shall be subject to the tests and reduction prescribed by Section 3.03(c).
(d) Reversion. After-tax Employee contributions shall be
irrevocable and in no event may they revert to the Employer.
(e) Allocation. Subject to Section 7.03, the Trustee shall
allocate a contribution made pursuant to this Section to the Participant's
After-Tax Employee Contribution Account as of the Accounting Date
immediately following the date the contribution was made.
(f) Vesting. A Participant's After-Tax Employee Contribution
Account shall be 100% nonforfeitable at all times.
(g) Investment. After-tax Employee contributions made by a
Participant and allocated to an After-Tax Employee Contribution Account
shall be invested pursuant to the Employee's investment direction as
provided in Section 4.01. Prior to such direction after-tax Employee
contributions shall be invested in interest bearing securities at the
discretion of the Trustee.
Section 3.05 Rollover Contributions.
(a) Eligibility. Any Employee may pay to the Fund, or arrange
for the direct transfer to the Fund from another qualified retirement plan,
provided that in each case the Plan Administrator agrees, a contribution of
an amount that qualifies for rollover treatment under Code Section 402(c) or
408(d)(3)(A)(ii).
(b) Payment. An Employee's rollover contribution to the Plan,
other than a direct transfer, must be made to the Fund not later than the
60th day after the day on which he received the distribution described in
paragraph (a).
(c) Limitation. An Employee may not rollover to the Plan: (1) a
contribution which exceeds in value the amount received (or the proceeds of
the sale of property received) in a distribution described in paragraph (a);
(2) any amounts representing non-deductible employee contributions made
under any other plan and in which the Employee has other than a zero income
tax basis; (3) any amount representing a partial distribution as described
in Code Section 402(a)(5)(D) (as in effect prior to the Unemployment
Compensation Amendments [Act] of 1992); (4) any amount that is required to
be distributed pursuant to Code Sections 401(a)(9), 408(a)(6) or 408(b)(3);
(5) inherited accounts within the meaning of Code Section 408(d)(3)(C) or
any amount received as the surviving spouse or other beneficiary of a
deceased plan participant; or any other amount that may be precluded under
the Code. This Plan shall not be a direct or indirect transferee of a
pension plan or any retirement plan that at any time provided benefits in
the form of a life annuity.
(d) Reversion. Rollover contributions may in no event revert to
the Employer.
(e) Allocation. The Trustee shall allocate a contribution made
pursuant to this Section to a Rollover Contribution Account as of the
Accounting Date coinciding with or immediately following the date the
contribution was made. Prior to such Accounting Date or if the Employee has
not yet become a Participant under the Plan, any such contribution shall be
allocated by the Trustee to a temporary account, and as of the next
Accounting Date, or if later, as soon as the Employee does become a
Participant, any such amount in this temporary account shall become a
regular Rollover Contribution Account which shall be part of the
Participant's Account.
(f) Vesting. A Participant's Rollover Contribution Account
shall be 100% nonforfeitable at all times.
(g) Investment. Rollover contributions made by an Employee and
allocated to a Rollover Contribution Account shall be invested pursuant to
the Employee's investment direction. All such investments shall be made in
accordance with procedures adopted by the Plan Administrator. Prior to the
effective date of such direction, which need not correspond to the regular
effective date of participant investment directions under Section 4.01,
Rollover contributions shall be invested in interest bearing securities at
the discretion of the Trustee. Rollover contributions made by an Employee
and allocated to a temporary account shall be invested in interest bearing
securities at the discretion of the Trustee until such temporary account
becomes a regular Rollover Contribution Account and is invested pursuant to
the Employee's direction.
Section 3.06 Direct Plan to Plan Transfers.
(a) In General. Subject to advance approval by the Parent
Company, to procedures adopted by the Plan Administrator, and to the
limitations in paragraph (c) below, the Trustee may accept a direct transfer
of an Employee's account balance under any other defined contribution plan,
as defined in Section 3(34) of ERISA, from the trustee or other fiduciary of
such other plan.
(b) Payment. Subject to paragraph (a) and to paragraph (c)
below, direct plan to plan transfers may be accepted in cash or in kind and
may consist of amounts attributable to employer and employee contributions.
(c) Limitations. Unless the Plan Administrator otherwise
directs, the Trustee shall not accept a direct plan to plan transfer from a
defined benefit plan, as defined in Section 3(35) of ERISA, from a defined
contribution plan, as defined in Section 3(34) of ERISA, that is subject to
the funding standards of Code Section 412, or from a defined contribution
plan, as defined in Section 3(34) of ERISA, which is or once was subject to
the joint and survivor annuity requirements of Code Sections 401(a)(11) and
417. The Trustee shall not accept a direct plan to plan transfer unless and
until it has been provided with an acceptable accounting, which includes
details concerning: (1) employer and employee contribution amounts being
transferred; (2) the earnings attributable to each type of contribution; (3)
the current fair market value of transferred property; and (4) the cost or
other tax basis of such property to the transferor.
(d) Reversion. Direct plan to plan transfers may revert to the
Employer, if at all, only in accordance with Section 3.07 and the Plan
provisions that apply to the respective Accounts or sub-accounts to which
the transferred amounts are allocated.
(e) Allocation. Subject to procedures adopted by the Plan
Administrator, direct plan to plan transfers shall be allocated, accounted
for and administered under the Plan as follows:
(1) amounts attributable to contributions made pursuant to a
Code Section 401(k) cash or deferred arrangement shall be allocated
to the Before-Tax Employee Contribution Account of affected
Employees;
(2) amounts attributable to employer matching contributions that
were made on account of employee elective deferrals, within the
meaning of Code Section 401(m), shall be allocated to an Employer
Matching Contribution Account for affected Employees;
(3) amounts attributable to after-tax employee contributions,
within the meaning of Section 3.04, shall be allocated to the
After-Tax Employee Contribution Account of affected Employees; and
(4) except as provided in an Appendix to the Plan, any other
amounts shall be allocated to a fully vested Direct Transfer Account
for affected Employees or to a sub-account within each such
Employee's Direct Transfer Account.
All such allocations shall be made as of the Accounting Date coinciding with
or immediately following the date of the transfer. Prior to such Accounting
Date or if the Employee has not yet become a Participant under the Plan, any
such contribution shall be allocated by the Trustee to a temporary account,
and as of the next Accounting Date, or if later, as soon as the Employee
does become a Participant, any such amount in this temporary account shall
become a regular sub-account which shall be part of the Participant's
Account.
(f) Vesting. Amounts attributable to direct plan to plan
transfers shall be or become nonforfeitable in accordance with the Plan
provisions that apply to the respective sub-accounts to which the
transferred amounts are allocated.
(g) Investment. Amounts attributable to direct plan to plan
transfers shall be allocated on a provisional basis to a temporary account
and shall be invested by the Trustee in interest bearing securities pending
their allocation to Accounts or sub-accounts under the Plan. Amounts
allocated to a Direct Transfer Account shall be invested by the Trustee.
Earnings, gains and losses attributable to temporary accounts and to Direct
Transfer Accounts, as the case may be, shall be allocated as of each
Accounting Date to and among those temporary accounts or Accounts, as the
case may be, in proportion to the value of each Participant's balance in
those temporary accounts or Accounts, as of the immediately preceding
Accounting Date, less any distributions from the temporary accounts or
Accounts since the last Accounting Date. Notwithstanding the above, the
Plan Administrator may adopt special investment and allocation procedures
for temporary accounts or any portion of Participants' Direct Transfer
Accounts, including, but not limited to, procedures related to Participant
directed investments.
Section 3.07 Reversion of Employer Contributions. In no event
shall any contribution by the Employer to the Fund, or income on any such
contribution, revert to the Employer, except to the extent as provided by
this paragraph. All amounts paid to the Fund by the Employer shall be used
and applied for the exclusive benefit of Participants and their
Beneficiaries; provided, that for this purpose, payment of expenses by the
Fund shall be considered paid for such exclusive benefit. Notwithstanding
the foregoing or any other provision of the Plan to the contrary, a
contribution made to the Plan by the Employer may be returned to the
Employer if: (1) such contribution is made by the Employer by mistake of
fact, provided that the contribution is returned to the Employer within one
year after payment of the contribution; (2) subsequent to the Effective
Date, the Commissioner of Internal Revenue or his representative issues a
determination letter stating that the Plan does not initially qualify under
Code Section 401(a), provided that all contributions with respect to which
the letter relates are returned to the Employer within one year after the
date of denial of initial qualification for the Plan; (3) a deduction
claimed by the Employer on its federal income tax return under Code Section
404 for a Plan contribution is subsequently denied, in whole or in part,
provided that the contribution or portion for which the deduction is denied
is returned to the Employer within one year after the disallowance of the
deduction; or (4) the Plan is terminated and there is a balance in a special
suspense account created under Section 7.03, in which case such balance,
which may include forfeitures, may be returned to the Employer.
Section 3.08 Omission of Eligible Employee. If, in any Plan Year,
any Employee who should be included as a Participant in the Plan is
erroneously omitted and discovery of such omission is not made until after a
contribution by his Employer for the year has been made, the appropriate
Employer shall make a subsequent contribution with respect to the omitted
Employee in the amount which the said Employer would have contributed with
respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible by such Employer in whole or
in part in any taxable year under applicable provisions of the Internal
Revenue Code.
Section 3.09 Inclusion of Ineligible Employee. If, in any Plan
Year, any person who should not have been included as a Participant in the
Plan is erroneously included and discovery of such incorrect inclusion is
not made until after a contribution for the year has been made, the
appropriate Employer shall not be entitled to recover the contribution made
with respect to the ineligible person regardless of whether or not a
deduction is allowable with respect to such contribution. In such event,
the amount contributed with respect to the ineligible person shall
constitute a forfeiture for the Plan Year in which the discovery is made and
shall be used to reduce the Employer's contributions (under Section 3.03 or
otherwise) for the Plan Year and in succeeding Plan Years if not totally
used in such year.
ARTICLE 4
INVESTMENT AND VALUATION OF ACCOUNTS
Section 4.01 Investment Elections.
(a) Investment Options. Each Participant who is in active
employment of the Employer shall be eligible to invest his Account (other
than his ineligible Account, if any, under Section 4.01(e)) among such
investments as are made available from time to time by the Trustee at the
direction of the Plan Administrator. The Plan Administrator may from time
to time change the available investment options, in which event the Plan
Administrator shall give reasonable notification to eligible Participants of
the change. An eligible Participant shall invest his Account only in whole
increments of five percent and, as determined by the Plan Administrator, his
Account may be charged for all applicable fees and expenses associated with
his selected investments.
(b) Method of Election. Each eligible Participant, upon
enrollment with the Plan Administrator, may indicate his initial election
for investment of his Account by filing a written designation on a form
provided by the Plan Administrator. Thereafter, any changes shall be
arranged as permitted under procedures established by the Trustee and the
Plan Administrator. In the absence of an election the Participant's Account
shall be invested by the Trustee.
(c) Frequency and Effective Date of Elections.
(1) Future Contributions. With respect to future
contributions, a Participant who is actively employed by the
Employer may file a new designation at any time, but not more often
than once in any calendar quarter. In the absence of a new
election, future contributions shall be invested in the available
investments in the same proportions as specified in the eligible
Participant's most recently filed election.
(2) Existing Accounts -- Investment Transfers. With
respect to his existing Account balance, a Participant who is
actively employed by the Employer, may change his election and
request a transfer of monies among the available investments at any
time, but not more often than once in any calendar quarter. The
minimum amount transferrable out of any one investment option is
five percent of the value of the Participant's Account, or, if less,
the entire amount invested under such investment.
(3) Election Procedures and Effective Dates.
Investment elections shall become effective as of the first business
day of the calendar quarter following the Plan's receipt of such
request, or as soon thereafter as is reasonably practicable;
provided that, for existing Participants, receipt of the election by
the Plan Administrator must occur at least ten (10) business days
prior to such first day of the calendar quarter. However, in the
sole discretion of the Plan Administrator, any election may be made
effective at such later date as is appropriate to effectuate the
Participant's election without incurring significant losses,
transactional costs, or disrupting securities markets. The Trustee
shall transfer monies or other property from the appropriate option
to the other option(s) as may be necessary to reflect the aggregate
transfers of all Participants after the Trustee has caused the
necessary entries to be made to each Participant's interest in the
options and has reconciled offsetting transfer elections, in
accordance with uniform rules established by the Trustee.
(d) Ineligible Participants. Any Participant who is totally and
permanently disabled on or after July 1, 1993, within the meaning of Section
5.02, and any Participant who has had a termination of employment, shall not
be eligible to elect to have his Account invested under Section 4.01(a).
The entire Account of each such ineligible Participant shall be invested by
the Trustee.
(e) Ineligible Account. Any amount allocated to accounts
attributable to PAYSOP contributions under the Second National Bank Amended
and Restated Section 401(k) Plan, as provided for in Appendix D, but only to
the extent that (1) such accounts have not been consolidated with other
Accounts or sub-accounts according to an election made in accordance with
Income Tax Regulation 1.411(d)-4 or other official guidance under Code
Section 411 or (2) diversification of investments is not required pursuant
to paragraph (g)(4) of Appendix D, and any sub-accounts or other amounts
designated by the Plan Administrator, shall not be eligible for investment
pursuant to participant direction under Section 4.01(a). Any such
ineligible Account balance shall be invested by the Trustee.
(f) Other Election Procedures.
(1) The Plan Administrator may adopt special election
procedures and set special effective dates with respect to amounts
received in connection with a merger of another qualified plan into
this Plan or in connection with the appointment of a successor
Trustee.
(2) Each eligible Participant shall have a reasonable
opportunity to obtain written confirmation of his investment
instructions.
(3) In connection with the election of a distribution
from the Plan, a Participant may elect to have sold any or all
shares of Citizens Banking Corporation stock allocated to the
Participant's Account and to have the net sales proceeds held in
cash or a cash equivalent pending distribution from the Plan.
(4) Except as otherwise specified, investments made
pursuant to a Participant's election shall be made within sixty (60)
days of the Plan's receipt of the investment election or as soon
thereafter as is practicable.
(g) ERISA Section 404(c) Compliance. The Plan and its operation
are intended to comply with the provisions of ERISA Section 404(c) and the
regulations thereunder applicable to participant directed investments. The
Parent Company, as Plan Administrator, shall be responsible for
disseminating to Participants the information required by Section 404(c) and
the regulations thereunder, and for all other aspects of the Plan's
compliance with Section 404(c), except to the extent that it has appointed
one or more fiduciaries to assist with respect to such matters. Except as
provided by ERISA Section 404(c) and the regulations thereunder, the Trustee
shall have no fiduciary responsibility with respect to the selection of the
Plan's investment options, and neither the Parent Company, any Employer, the
Trustee, nor any other fiduciary with respect to the Plan shall have any
liability in connection with any losses that are the direct and necessary
result of the investment choices made by Participants. The Trustee's only
responsibility shall be with respect to the individual investments of any
investment options that are offered and operated by the Trustee and made
available for Participant investments under the Plan, and which are not
controlled by an independent investment manager. The only responsibility of
the Parent Company shall be to review periodically, in its capacity as Plan
Administrator, the performance of the investment options made available
under the Plan and to change the available options offered when appropriate.
Section 4.02 Valuations.
(a) Frequency of Valuations. The Plan Administrator shall
direct the Trustee to value the Fund, or the applicable portion of the Fund,
at least quarterly on regular Accounting Dates specified by the Plan
Administrator. The valuation may be solely for the purpose of effecting a
distribution from the Plan.
(b) Valuation at Fair Market Value. All assets shall be valued
by the Trustee on the basis of fair market value.
(c) Adjustment for Earnings, Gains and Losses. Except as
provided in Section 3.06(g), or in an Appendix to the Plan, each
Participant's Account shall be adjusted as of each Accounting Date for
earnings, gains and losses on the investments of that Account, with such
adjustment being determined by an allocation of aggregate earnings, gains,
and losses of the respective funds in proportion to the value of each
Participant's Account invested in each fund as of the immediately preceding
Accounting Date, but taking into account, in a manner determined to be
equitable by the Trustee (with the consent of the Plan Administrator), any
contributions to or distributions from Accounts since the immediately
preceding Accounting Date.
(d) Allocation of Contributions. Finally, after the valuation
and adjustment procedures of paragraphs (b) and (c) of this Section,
contributions made since the last Accounting Date shall be allocated to the
respective Accounts of Participants in accordance with the procedures
specified in Article 3.
Section 4.03 Annual Statements of Value of Participants' Accounts.
The Plan Administrator shall, not less frequently than annually, deliver to
each Participant a statement setting forth the value of the Participant's
Account, including a breakdown of the various sub-accounts.
ARTICLE 5
RETIREMENT AND OTHER TERMINATION OF EMPLOYMENT
Section 5.01 Retirement. A Participant who attains age 65 may
retire as of the first day of the month coincident with or following his
attainment of such age, which day shall be called the Participant's Normal
Retirement Date. A Participant (a) who attains age 55 and (b) who has
completed 10 or more Years of Service, may retire as of the first day of the
month coincident with or following his satisfaction of these requirements,
which day shall be called the Participant's Early Retirement Date. A
Participant may remain actively employed by the Employer after his Normal or
Early Retirement Date, subject to any written mandatory retirement policy of
the Employer. A Participant who continues to be actively employed by the
Employer after his Normal or Early Retirement Date shall continue to be a
Participant in the Plan as long as he remains so employed by the Employer,
and he may retire, or may be retired in accordance with any such written
mandatory retirement policy of the Employer. A Participant who retires
under this Section shall be entitled to distribution of his Account balance
at the time and in the manner provided by Article 6.
Section 5.02 Disability. A Participant who is determined by the
Plan Administrator to be under a total and permanent disability shall be
considered to have taken a disability retirement as of the first day of the
month following the month in which the Plan Administrator so determines that
the total and permanent disability began. Total and permanent disability
means a physical or mental condition of a Participant resulting from bodily
injury, disease or mental disorder which renders him incapable of continuing
his usual and customary employment with the Employer and which has existed
for at least 18 consecutive months. The total and permanent disability of a
Participant shall be determined by a licensed physician chosen by the Plan
Administrator. The Plan Administrator may require the Participant to submit
to medical examinations for the purpose of verifying his total and permanent
disability. Standards for the determination of disability shall be
uniformly applied to all Participants. A Participant who becomes totally
and permanently disabled as provided in this Section shall be entitled to
distribution of his Account balance at the time and in the manner provided
by Article 6. In the event of any such distribution before-tax Employee
contributions by the disabled Participant shall cease.
Section 5.03 Death. In the event of a Participant's death prior to
his termination of employment with the Employer, the entire balance of such
Participant's Account shall become payable to the Participant's Beneficiary
as designated to the Plan Administrator. Every Participant's designation
shall specify the share to be received by each Beneficiary and shall
indicate how any remaining balance is to be paid in the event of the death
of the designated Beneficiary or Beneficiaries. Such designation of a
Beneficiary may be changed from time to time by the Participant by filing a
new designation with the Plan Administrator. If any Participant shall fail
to designate a Beneficiary, or if all Beneficiaries predecease the
Participant, any balance in the Account shall be paid to the Participant's
surviving spouse, or if the surviving spouse does not survive, then to the
Participant's estate. If a Beneficiary survives the Participant but fails
to collect all amounts payable on behalf of the Beneficiary from the
Participant's Account, the balance shall be paid to the Beneficiary's
estate, unless specified otherwise by the Participant in his Beneficiary
designation. A Participant's designation of Beneficiary shall be made on a
form prescribed by, provided by, and filed with the Plan Administrator. In
any case where the Participant is married and has designated a primary
Beneficiary other than the Participant's spouse, the Participant's spouse
must sign the designation form which either (a) must designate a specific
beneficiary that cannot be changed without subsequent spousal consent, or
(b) must expressly permit subsequent designations by the Participant without
any requirement of further consent by the spouse. In each case, the
spouse's written consent must acknowledge the effect of the Participant's
designation of a beneficiary other than the spouse, and the spouse's
signature must be witnessed by a notary public. Distribution of the
Participant's Account balance to his Beneficiary shall be made at the time
and in the manner provided by Article 6.
Section 5.04 Termination of Employment prior to Retirement,
Disability or Death. A Participant who terminates employment with the
Employer, and who is not entitled to distribution of his nonforfeitable
Account balance under any previous Section of this Article 5, shall be
entitled to distribution of such balance at the time and in the manner
provided by Article 6.
ARTICLE 6
DISTRIBUTIONS
Section 6.01 Distribution upon Retirement, Disability, Death or
Other Termination of Employment.
(a) Time and Manner of Distribution. Following a Participant's
retirement, disability, death, or other termination of employment, there
shall be distributed to the Participant, or to his Beneficiary in the case
of death, the Participant's nonforfeitable Account balance as of the
Accounting Date coinciding with or immediately following the date of such
separation from employment, plus any net earnings or losses or other amounts
credited to his Account subsequent to such Accounting Date, in a lump sum,
to be distributed as soon as practicable after such separation from
employment and after such Accounting Date. Notwithstanding the foregoing, a
Participant who has separated from employment prior to his Normal Retirement
Age, and whose nonforfeitable Account balance exceeds $3,500, may elect,
pursuant to rules established by the Plan Administrator, to defer such lump
sum distribution to any subsequent date, subject to all other applicable
rules of the Plan. The entire nonforfeitable Account balance of any
terminated, disabled, deceased or retired Participant shall be invested by
the Trustee, effective as of the date on which the Participant or
Beneficiary would actually have received a distribution of the Account had
an election to receive a distribution been made when first offered.
Thereafter, the Participant shall have no further right to direct the
investment of any portion of his Account unless he is reemployed by the
Employer. The Accounting Date for determining the amount of any such
deferred lump sum distribution shall be the Accounting Date which
immediately precedes the date of the distribution elected by the
Participant. An election to defer a distribution shall be irrevocable
except to the extent that the Plan Administrator shall determine otherwise
pursuant to uniform rules. If a Participant (or Beneficiary) entitled to
receive a distribution under this Section 6.01 should die prior to the time
he has received the full distribution to which he is entitled, then the
nonforfeitable amount credited to his Account as of the Accounting Date
coincident with or immediately following his date of death shall be
distributed to the deceased Participant's Beneficiary, after consultation
with the Beneficiary (or to the estate of the Beneficiary in the case of the
Beneficiary's death). The forfeitable portion of the terminated
Participant's Account, if any, shall be forfeited and returned to the Fund
at the time and in the manner prescribed under the applicable service rules
in Article 7. Any distribution may be made in cash or in stock of the
Employer (to the extent the Participant's Account is invested in stock of
the Employer at the time of distribution), or partly in each, at the
discretion of the recipient.
(b) Restrictions. Distributions under this Article 6 shall be
subject to the following restrictions where applicable:
(1) Each Participant's Account balance must be
distributed to him in full no later than the April 1 following the
later of (A) the calendar year in which he attains age 70-1/2, or
(B) for calendar years prior to 1989 in the case of a Participant
other than one who is a 5-Percent Owner for any Plan Year ending in
or after the calendar year in which he attains age 66-1/2, the
calendar year in which he retires.
(2) If the Participant has begun to receive his
distribution but dies before his entire Account balance has been
distributed, the remaining amount shall be distributed to the
Participant's designated Beneficiary in a single lump sum payment.
(3) If a Participant dies before distribution of his
Account balance, or if the Participant's surviving spouse dies
before distribution of the Account balance has been made to such
surviving spouse, then the entire nonforfeitable Account balance
must be distributed to the Participant's designated Beneficiary
within five years of the Participant's death (or the death of his
surviving spouse), except that where the Beneficiary is the
Participant's surviving spouse, the required distribution date need
not be earlier than the date the Participant would have attained age
70-1/2.
(4) Notwithstanding (1), (2) or (3) above or any other
provision of the Plan to the contrary, in no event shall
distribution of a Participant's Account be made later than the 60th
day after the close of the Plan Year in which occurs the latest of
the following events: (A) the date on which the Participant attains
age 65, (B) the date which is the 10th anniversary of the day the
Participant commenced participation in the Plan, (C) the date the
Participant terminates employment with the Employer, or (D) the date
specified by the Participant in his election made pursuant to this
Section 6.01.
(5) As provided in Code Section 401(k) and applicable
regulations thereunder, in no event shall any distribution from a
Participant's Account, other than a distribution under Section 6.02
or 6.03, be made earlier than: (A) the Participant's retirement,
death, disability, separation from service, or attainment of age
59-1/2; (B) the termination of the Plan pursuant to Section 10.02
without establishment of a successor plan; (C) the date of sale by
the Employer of substantially all of its assets to a corporation in
whose employment the Participant continues; or (D) the date of sale
by the Employer of a subsidiary in whose employment the Participant
continues.
(6) The balance of any Participant's Account that is
$3,500 or less shall be paid out in accordance with Section 6.01(a)
as soon as practicable after the Participant's separation from
employment, but in no event shall any Participant whose Account
balance exceeds $3,500 (or at the time of any prior distribution
exceeded $3,500) be required, without his written consent, to take a
lump sum distribution of his Account prior to his attainment of
Normal Retirement Age.
(7) In no event shall any provision of this Article 6
be construed so as to allow any Participant to create a death
benefit which is more than incidental within the meaning of Income
Tax Regulation Section 1.401(a) - 14(b)(3).
Section 6.02 Withdrawals Due to Hardship.
(a) Withdrawal Procedure. A Participant may apply for a
distribution from his Account or any portion thereof because of a hardship
(as defined in paragraph (b) below) by filing a written application with the
Plan Administrator at least 30 days prior to the requested date of
distribution. In the discretion of the Plan Administrator, the application
may contain a requirement for consent to the distribution by the
Participant's spouse. Notwithstanding, commencing from and after January 1,
1989, no hardship withdrawals may be made from a Participant's Employer
Matching Contribution Account, and no hardship withdrawals may be made from
the health care sub-account portion of the Participant's Employer Matching
Contribution Account. The amount of a hardship distribution shall be
limited to (1) the amount which the Plan Administrator determines is
required to meet the immediate financial needs caused by the hardship,
including the amount necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result from the distribution,
and (2) with respect to withdrawals from the Participant's Before-Tax
Employee Contribution Account, the lesser of (A) the Participant's
Before-Tax Contribution Account balance, including the accumulated earnings
thereon, as of December 31, 1988, plus the cumulative total of the
Participant's before-tax Employee contributions to the Plan after December
31, 1988, or (B) the Participant's current Before-Tax Employee Contribution
Account balance. The Plan Administrator is authorized to limit the amount
of a withdrawal until the valuation process is completed.
(b) Hardship Definition. A hardship shall be considered to exist
only if (1) the Participant has an immediate and heavy financial need for
the funds, and (2) the hardship distribution requested is necessary to
satisfy such financial need.
(c) Financial Need. Requirement (1) of paragraph (b) shall be
deemed satisfied where the requested distribution is on account of:
(1) Expenses for medical care described in Code Section
213(d) which are (A) previously incurred by the Participant, the
Participant's spouse or any dependents of the Participant (as
defined in Code Section 152) or necessary for these persons to
obtain such medical care, and (B) not covered by any medical program
provided by the Employer;
(2) The purchase (excluding mortgage payments) of a
principal residence for the Participant;
(3) The payment of tuition and related educational fees
for the next 12 months of post-secondary education for the
Participant, his spouse, children, or dependents;
(4) The need to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage of the
Participant's residence; or
(5) Such other conditions that the Plan Administrator
may, in its complete discretion, adopt from time to time in writing,
following standards published by the Internal Revenue Service in
revenue rulings, notices or other official documents of general
applicability, and that the Plan Administrator finds, in the
specific circumstances, justify an immediate and heavy financial
need.
Based upon all relevant facts and circumstances, requirement (1) of
paragraph (b) may, in the Plan Administrator's discretion, generally be
deemed satisfied where the requested distribution is on account of:
(1) Funeral expenses of a family member; or
(2) Federal, state or local tax liens.
(d) Necessity. Requirement (2) of paragraph (b) shall be deemed
satisfied where:
(1) The distribution is not in excess of the amount of
the immediate and heavy financial need of the Participant;
(2) The Participant has obtained all distributions,
other than hardship distributions, and all nontaxable loans
currently available under the Plan and all other plans maintained by
the Employer;
(3) The Plan and all other plans maintained by the
Employer provide that the Participant's elective before-tax
contributions and after-tax contributions will be suspended for at
least twelve months after receipt of the hardship distribution; and
(4) The Plan and all other plans maintained by the
Employer provide that the Participant may not make elective
before-tax contributions for the Participant's taxable year
immediately following the taxable year of the hardship distribution
in excess of the applicable limits under Code Section 402(g) for
such next taxable year less the amount of the Participant's elective
before-tax contributions for the taxable year of the hardship
distribution.
Requirement (2) of paragraph (b) also shall be deemed satisfied under any
additional method that is prescribed by the Internal Revenue Service through
the publication of revenue rulings, notices or other official documents of
general applicability.
Based upon all relevant facts and circumstances, requirement (2) of
paragraph (b) may, in the Plan Administrator's discretion, generally be
deemed satisfied if the Plan Administrator relies upon the Employee's
representation that the need cannot be met by insurance, reasonable
liquidation of his assets or those of his spouse and minor children (not
itself creating a hardship), a cessation of before-tax and after-tax
contributions, by other distributions or nontaxable loans from the Plan and
other plans maintained by the Employer or by any other employer, or by
borrowing from commercial sources on reasonable commercial terms.
(e) Determination of Hardship. A Participant's request for a
hardship distribution shall be accompanied or supplemented by such written
evidence of hardship as the Plan Administrator may reasonably request. The
Plan Administrator, in its discretion, may grant a request for a hardship
distribution and may direct the Trustee to permit such Participant to make a
withdrawal if, in its discretion, the Plan Administrator finds that a
condition of hardship as defined in paragraph (b) above exists. In making
its determinations, the Plan Administrator shall adopt and follow uniform
and non-discriminatory rules and its decisions shall be final and binding.
(f) Limitation. Except as limited by subparagraph (a)(1) above,
in no event shall a hardship distribution of less than $500 or 100 percent
of the Participant's Account that is subject to withdrawal, whichever is
less, be permitted. Also, in no event may a Participant withdraw that part
of his Account attributable to Employer contributions made on his behalf
under the Plan within 24 months of the requested date of withdrawal, unless
the Participant has completed five or more years of participation in the
Plan.
(g) Costs. Any withdrawal pursuant to this Section shall be
subject to all costs of liquidating the Account, including but not limited
to early withdrawal penalties, brokerage fees, market value adjustments, and
similar charges.
(h) Special Definition. For purposes of this Section, the term
"Employer" shall include the Employer and each employer required to be
aggregated with the Employer under Code Section 414(b), (c), (m) or (o).
Section 6.03 Loans to Participants.
(a) General Rules. In addition to the powers granted under
Article 9, the Plan Administrator shall have the power to direct the Trustee
to make loans to Participants from their Accounts. Any application by a
Participant to borrow money from his Account shall be made by written
request to the Plan Administrator, on a form prescribed and provided by the
Plan Administrator. In the discretion of the Plan Administrator, the
application may contain a requirement for consent to the loan by the
Participant's spouse. Notwithstanding, no loans may be made from the health
care sub-account portion of the Participant's Employer Matching Contribution
Account. If, after appropriate investigation, the Plan Administrator
approves a loan application, the Plan Administrator shall direct the Trustee
to withdraw from the Participant's Account and disburse to the Participant
by check the amount requested and approved, but only upon the following
terms and conditions:
(1) the loan shall be disbursed only in whole
increments of $100, with a minimum loan of $2,000;
(2) the loan shall be evidenced by a promissory note
which shall be in a form prescribed by the Plan Administrator;
(3) the loan shall be for a principal amount which,
when added to the outstanding balance of any other loan or loans of
the Participant from the Plan and from any other tax-qualified
retirement plan of the Employer (including plans of other employers
required to be aggregated with this Plan pursuant to Code Section
414(b), (c), (m), or (o)) does not exceed the lesser of (A)
$50,000, reduced by the excess (if any) of the highest outstanding
balance of the Participant's Plan loans during the one-year period
ending on the day before the date on which the loan is to be made,
over the outstanding balance of Plan loans on the date on which such
loan is to be made, or (B) 50 percent of the nonforfeitable Account
balance of the Participant;
(4) the loan shall bear a reasonable rate of interest,
comparable to that being charged by local financial institutions on
loans of a similar character;
(5) the loan shall be for a prescribed term of no
longer than five years, unless the loan proceeds are to be applied
to acquire a dwelling unit which, within a reasonable time, is to be
used by the Participant as a principal residence, in which case the
loan shall be for a term no longer than the lesser of (a) 15 years
or (b) the term available on loans of a similar character from local
financial institutions;
(6) the loan shall provide for specific terms of
repayment, in substantially equal installments of principal and
interest, made at least quarterly, which terms the Plan
Administrator may request the Employer to implement by appropriate
withholding from the Participant's regular salary or wages;
(7) the loan shall be secured, notwithstanding any
other provision of the Plan to the contrary, by a pledge of not more
than 50% of the Participant's Account balance as of the date of the
loan, and if the Plan Administrator deems it appropriate, shall be
secured by other collateral comparable to that customarily required
by local financial institutions and by an irrevocable wage
assignment if permitted by local law;
(8) the loan proceeds shall be disbursed to the
Participant in accordance with procedures adopted by the Plan
Administrator, after receipt by the Plan Administrator of the
Participant's loan application, but in no event shall disbursement
be required prior to the expiration of 30 days from such receipt;
(9) the loan shall be subject to the availability of
cash in the Fund for making loans, the ability of the Trustee to
liquidate prior investments directed by the Participant for his
Account, and all costs of liquidating the Account to cash for
purposes of making the loan; and
(10) no more than one loan may be outstanding to any one
Participant at any time and no more than one loan may be applied for
within any Plan Year.
All loans under the Plan shall be made strictly in accordance with the
provisions of this Section and any additional rules which may be set forth
by the Plan Administrator. Loans shall be available to all Participants on
a reasonably equitable basis in a uniform and nondiscriminatory manner,
although the Plan Administrator may make distinctions on the basis of the
creditworthiness of the Participant, the liquidity of the Participant's
Account and of the Fund at the time of receipt of the Participant's loan
application, and such other factors as the Plan Administrator deems relevant
in protecting the interests of all Participants in the Fund. For purposes
of the allocation of earnings, gains and losses of the Fund and the
determination of the balance of a Participant's Account on any Accounting
Date under Article 4, a loan under this Section shall be treated as a
nontaxable withdrawal from the Participant's Account, on the date the loan
proceeds are disbursed, to the extent of the principal amount borrowed, and
each payment on the loan shall be treated as a contribution to the
Participant's Account, on the date received, to the extent such payment
constitutes repaid principal. Interest paid by a Participant on any loan
shall be credited directly to the Account of that Participant and shall not
be considered part of the earnings of the Fund for purposes of computing
earnings allocable among Participants' Accounts. Principal and interest
payments on loans shall be invested pursuant to the Participant's investment
direction made under Section 4.01 in accordance with procedures adopted by
the Plan Administrator. Prior to the effective date of such direction,
which need not correspond to the regular effective date of investment
directions under Section 4.01, principal and interest payments shall be
invested in interest bearing securities at the discretion of the Trustee.
Section 6.04 In-Service Withdrawals.
A Participant may withdraw up to 100 percent of the remaining
balance, if any, of his after-tax contributions made on or before December
31, 1986 (to his After-Tax Employee Contribution Account under this Plan or
to an after-tax contribution account under any plan merged with this Plan),
provided that the plan to which such contributions were made (this Plan or a
merged plan) permitted in-service withdrawals of such contributions on May
5, 1986, and that such contributions have been separately accounted for
thereafter. Withdrawal may be made upon at least 30 days advance written
notice to the Plan Administrator, but not more often than once in any six
month period. In the discretion of the Plan Administrator, (1) the
application may contain a requirement for consent to the withdrawal by the
Participant's spouse and (2) the amount of any withdrawal may be restricted
until the valuation process is completed and the percentage of the
Participant's vested Account balance that may be withdrawn may be reduced if
the value of that Account has declined since the previous Accounting Date or
as otherwise necessary or appropriate to prevent a loss or potential loss to
the Plan. After-tax contributions made after December 31, 1986 (under this
Plan or a merged plan) and earnings on all after-tax contributions (under
this Plan or a merged plan) may not be withdrawn prior to the Participant's
termination of employment.
Section 6.05 Direct Rollovers after 1992.
(a) Application. This section applies to distributions made on
or after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that otherwise would limit a distributee's election under the Plan,
a distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the distributee in
a direct rollover. If a distribution is one to which Sections 401(a)(11)
and 417 of the Code do not apply, such distribution may commence less than
30 days after the notice required under Section 1.411(a)-11(c) of the Income
Tax Regulations is given, provided that:
(1) the Plan Administrator clearly informs the
Participant that the Participant has a right to a period of at least
30 days after receiving the notice to consider the decision of
whether or not to elect a distribution (and, if applicable, a
particular distribution option), and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
(b) Definitions.
(1) Eligible rollover distribution: An eligible
rollover distribution is any distribution of all or any portion of
the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any distribution
that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; and the portion of any distribution
that is not includible in gross income (determined without regard to
the exclusion for net unrealized appreciation with respect to
employer securities).
(2) Eligible retirement plan: An eligible retirement
plan is an individual retirement account described in Section 408(a)
of the Code, an individual retirement annuity described in Section
408(b) of the Code, an annuity plan described in Section 403(a) of
the Code, or a qualified trust described in Section 401(a) of the
Code, that accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(3) Distributee: A distributee includes an employee or
former employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's spouse or
former spouse who is the alternate payee under a qualified domestic
relations order, as defined in Section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
(4) Direct rollover: A direct rollover is a payment by
the Plan to the eligible retirement plan specified by the
distributee.
ARTICLE 7
SPECIAL PROVISIONS
Section 7.01 Service Rules.
(a) Hour of Service. (1) For purposes of the Plan, an "Hour of
Service" means:
(A) each hour for which an Employee is paid, or
entitled to payment, for the performance of duties for the Employer
during the applicable period;
(B) each hour for which an Employee is paid, or
entitled to payment, by the Employer on account of a period of time
during which no duties are performed due to vacation, holiday,
illness, incapacity, layoff, jury duty, or leave of absence; and
(C) each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the
Employer.
(2) Notwithstanding (1) above, an Employee's Hours of
Service shall not include:
(A) hours in excess of 501 Hours of Service
under (1)(C) above with respect to periods described in
(1)(B) above, on account of any single continuous period
during which the Employee performs no duties for the
Employer, whether or not such period occurs in a single Plan
Year or other computation period used under the Plan;
(B) hours for which the Employee is directly or
indirectly paid, or entitled to payment, on account of a
period during which no duties are performed, irrespective of
whether the employment relationship has terminated, if such
payment is made or due under a plan maintained solely for
the purpose of complying with applicable workmen's
compensation, or unemployment compensation or disability
insurance laws;
(C) hours for a period during which payments
are made to the Employee solely to reimburse the Employee
for medical or medically related expenses incurred by the
Employee; and
(D) hours credited under (1)(C) above if such
hours also are credited to the Employee under either (1)(A)
or (1)(B) above.
(3) Any questions concerning the determination or
crediting of Hours of Service shall be resolved in accordance with
Sections 2530.200b-2(b) and (c) of the Department of Labor Rules and
Regulations for Minimum Standards, which are incorporated by
reference. Hours of Service shall be determined from records of the
Employer for hours worked and for hours for which payment is made or
due.
(4) In lieu of the foregoing, the Employer shall
determine Hours of Service for Employees who are not paid on an
hourly basis, or who do not work a fixed number of hours for any
period of time, by crediting to an Employee 45 Hours of Service for
each week for which the Employee would be credited with at least one
Hour of Service under the regular definition for Hour of Service in
paragraphs (1) to (3) of this Section. Provided, however, that use
of this equivalency shall be subject to the special rules of
Sections 2530.200b-3(e)(4) and (6) of the Department of Labor Rules
and Regulations for Minimum Standards in the case of any payments to
an Employee not made on the basis of units of time, and in the case
of periods of time which extend into two computation periods under
the Plan, respectively. Provided further, that Hours of Service
shall not be determined under the above equivalency if such
determination would result in discrimination prohibited under Code
Section 401(a)(4).
(5) Solely for purposes of determining whether a Break
in Service has occurred, there also shall be credited to an
Employee, for any child-related absence, the Hours of Service which
otherwise normally would have been credited to the Employee during
the same period (or if such hours cannot be determined, then 8 Hours
of Service per day during the absence), up to a maximum of 501 Hours
of Service for any one child-related absence. Hours so granted
shall be credited in the Plan Year in which the absence begins, but
only if the hours are needed to prevent the Employee's Break in
Service during such year; in all other cases, the hours shall be
credited in the immediately following Plan Year. For purposes of
this paragraph, "child-related absence" means an absence from work
due to pregnancy of the Employee, birth of a child of the Employee,
placement of a child with the Employee in connection with the
child's adoption by the Employee, or caring for such child for a
period beginning immediately following the birth or placement.
(b) Year of Service. For purposes of the Plan, a Year of
Service means, subject to the Break in Service rules in paragraph (d) of
this Section and to the subsequent rules in this paragraph (b), each Plan
Year in which an individual is credited with 1,000 or more Hours of Service
with the Employer. Provided, however, that an individual's Years of Service
also shall include Plan Years, measured on a 1,000 Hours of Service per Plan
Year basis, during which such individual:
(1) was employed by the Employer in a category of
employees excluded from the Plan;
(2) was employed by an employer which is a member of a
controlled group of corporations [as defined in Code Section 1563(a)
without regard to subsections (a)(4) and (e)(3)(C)] including the
Employer, by an employer which is a trade or business under common
control [as defined in Code Section 414(b) or (c)] with the
Employer, or by an employer which is an affiliated service group [as
defined in Code Section 414(m) (2) and (5)] including the Employer;
(3) was a leased employee [as defined in Code Section
414(n)(2)] who performed services for the Employer, to the extent
provided by Code Section 414(n) and the regulations thereunder;
(4) was employed by a predecessor employer of the
Employer, the plan of which predecessor is the Plan maintained by
the Employer; and
(5) was employed by a predecessor employer of the
Employer, even though the Plan is not the plan maintained by the
predecessoremployer, but only if service with such predecessor
employer is required to be included in the individual's Years of
Service by regulations under Code Section 414(a)(2).
(c) Break in Service. For purposes of the Plan, a Break in
Service means a Plan Year in which an Employee fails to complete more than
500 Hours of Service. As provided in section 104(a)(2) of the Family and
Medical Leave Act of 1993 and the regulations thereunder (29 CFR
825.215(d)(4)), an Employee shall not incur a Break in Service solely
because of any period of leave to which the Employee was entitled under the
Family and Medical Leave Act of 1993.
(d) Effects of Separation from Employment.
(1) Participation. (A) An Employee who separates from
employment, but who returns before incurring a Break in Service,
shall not have his eligibility for continued participation affected,
or if he has not satisfied the Plan's eligibility requirements as of
his date of separation, the determination of when he has satisfied
such requirements and the date on which he is to commence
participation shall not be affected; provided, in the case of a
Participant whose participation in the Plan has terminated during
the period of his separation, due to a distribution of the entire
nonforfeitable balance of his Account, participation shall resume on
the first date he is credited with an Hour of Service following the
separation. (B) If an Employee who incurs a Break in Service was
not a Participant in the Plan prior to the break, or if his
participation in the Plan has terminated pursuant to Article 2,
participation shall commence or resume, as the case may be, on the
first date that the Employee is credited with an Hour of Service
following the Break in Service, provided that the Employee then
meets the eligibility requirements of Article 2; otherwise,
participation shall commence or resume, as the case may be, as if
the individual were a new Employee. An Employee whose participation
does not terminate pursuant to the Plan shall continue as a
Participant in the Plan during and after a Break in Service.
(2) Years of Service. An Employee shall not lose Years
of Service credit in any of the following situations:
(A) the Employee temporarily separates from
employment but returns before incurring a Break in Service;
(B) the Employee incurs a Break in Service but
the break is not accompanied by an actual separation from
employment;
(C) the Employee incurs a Break in Service but
at the time had a nonforfeitable right to part or all of the
portion of his Account attributable to Employer
contributions;
(D) the Employee incurs fewer than five
consecutive one-year Breaks in Service; or
(E) the number of consecutive one-year Breaks
in Service incurred by the Employee is less than his number
of Years of Service prior to the break (without regard to
Years of Service disregarded by the rule immediately below).
Years of Service prior to a Break in Service shall be disregarded
only if the Employee had no nonforfeitable right to the portion of
his Account attributable to Employer contributions and his number of
consecutive one-year Breaks in Service equals or exceeds the greater
of five years or the Employee's number of Years of Service at the
time of the break (not taking into account any Years of Service
disregarded under a previous application of this rule).
(3) Forfeitures. Except as otherwise provided in an
Appendix to the Plan, the forfeitable portion of a Participant's
Account, if any, shall be forfeited and returned to the Fund (and
used to reduce Employer matching contributions, as provided in
Section 3.03, or restore prior forfeitures, as provided below) in
accordance with the rules of this paragraph.
(A) If the nonforfeitable balance of the
Participant's Account is distributed in a single lump sum
payment no later than the close of the Plan Year following
the Plan Year in which participation in the Plan terminates,
the forfeiture shall occur as of the Accounting Date the
Account is valued for distribution pursuant to Article 6.
(B) If the nonforfeitable balance of the
Participant's Account exceeds $3,500, and if the Participant
does not consent to payment of this amount prior to his
attainment of Normal Retirement Age, or in any case not
covered in (A), the forfeiture shall occur as of the last
day of the Plan Year in which the Participant incurs his
fifth consecutive one-year Break in Service.
Any amount previously forfeited from a Participant's Account,
pursuant to (A) above, shall be restored in full to that
Participant's Account as of the last day of the first Plan Year
(after the Participant's Break in Service or separation from
employment) in which he is credited with sufficient Hours of Service
so as not to incur a Break in Service. Provided, that no forfeiture
shall be restored to the Account of a Participant who has incurred
five or more consecutive one-year Breaks in Service or who fails to
make repayment of his prior distribution made pursuant to the rules
above. Any amount so restored shall be derived first from
forfeitures for that year and then from Employer contributions for
the year or, if necessary, succeeding years.
(4) Repayments. A Participant who has received a
distribution of less than the full balance of his Account, and who
returns to employment covered by the Plan prior to incurring five
consecutive one-year Breaks in Service, may elect to repay to the
Fund the full amount distributed, provided that such repayment is
made prior to the last day of the Plan Year in which he incurs the
fifth consecutive one-year Break in Service after resuming
employment. Any amount so repaid shall be aggregated in the
Participant's Account with any forfeiture restored pursuant to
paragraph (3) above.
(5) Nonforfeitable Percentage. Except in the case of a
Participant (A) whose nonforfeitable percentage was 100% pursuant to
Article 6, (B) who had no prior Account balance, or (C) who had a
prior Account balance that was disbursed and who now is not entitled
to make a repayment or to have a previous forfeiture restored, there
shall be created, for each Participant who incurs a Break in Service
or who receives a distribution (regardless of a Break in Service),
two sub-accounts within his Account. These sub-accounts shall
separate any additions to the Account made after the Break in
Service (or after the distribution) from the previous balance. The
Participant's nonforfeitable percentage shall be determined
separately for these sub-accounts, in accordance with the following
rules:
(i) Years of Service earned by the Participant subsequent to any
Breaks in Service of less than five consecutive years shall
be credited for purposes of determining the nonforfeitable
percentage of the Participant's pre-Break sub-account;
(ii) Years of Service earned by the Participant subsequent to any
five consecutive one-year Breaks in Service shall be
disregarded for purposes of determining the nonforfeitable
percentage of the Participant's pre-Break subaccount;
(iii) Years of Service earned by the Participant subsequent to the
Break in Service, plus any Years of Service earned prior to
the Break in Service which are retained pursuant to
paragraph (2) above, shall be used for purposes of
determining the nonforfeitable percentage of the
Participant's post-Break sub-account; and
(iv) Until a Participant entitled to make a repayment pursuant to
paragraph (4) above makes the full repayment, or in any case
for a Participant who fails or is ineligible to make a
repayment, the Participant's nonforfeitable interest in his
pre-Break sub- account (or initial sub-account, where there
has been a distribution but no Break in Service) shall be
equal to an amount, V, determined by the formula:
V = P[AB + D] - D, where:
P is the Participant's nonforfeitable percentage as
otherwise determined under the Plan at the relevant
time,
AB is the Participant's pre-Break (or initial)
sub-account balance at the relevant time,
D is the amount of the distribution which was made
to the Participant, and
the relevant time is the time at which the
Participant's nonforfeitable percentage in his
Account cannot increase.
Section 7.02 Transfers.
(a) Within Employer. As provided in Article 2, union Employees
are excluded from participation in the Plan and non-salaried Employees are
excluded from the Plan for Plan Years prior to 1995. The following
provisions of this subsection apply to Plan Years beginning on or after
January 1, 1995; transfers within the Employer for prior years are governed
by the terms of the Plan in effect for those years. An Employee who is
transferred from union employment to non-union employment may become a
Participant, provided that the Employee meets the other requirements for
participation under Section 2.01 or 2.03, whichever applies. As and to the
extent provided in Section 2.03, 7.01(a) or any other applicable provision
of the Plan, service in union employment shall be credited for purposes of
determining whether the eligibility requirements have been satisfied.
Participation shall commence after the Employee meets the requirements for
participation specified in Article 2 on the applicable entry date specified
in Article 2 or, as determined by the Parent Company, on the date of
employment transfer. In no event though, shall the Employee's compensation
while employed on a union basis be used in determining his allocations in
any Plan Year under Article 3. In the case of a transfer of a Participant
from non-union to union employment, his Account shall be valued and frozen
(except for allocation of subsequent earnings, gains, and losses) as of the
last day of the Plan Year in which his employment status changes, he will
continue to be credited with service following the transfer for purposes of
computing the vested percentage of his Account as and to the extent provided
under the Plan, but he shall not be entitled to any distribution of his
Account under Article 6 until his date of retirement, disability, death, or
other termination of employment with the Employer, after which date
distribution may be made in accordance with the provisions of the Plan as
they would otherwise apply to an Employee or his Beneficiary. An Employee
who transfers from salaried status to hourly status, or vice versa, shall be
eligible to participate in the Plan in accordance with Section 2.01 or 2.03,
as the case may be. A Participant who transfers from salaried status to
hourly status, or vice versa, shall not cease to participate in the Plan by
virtue of the transfer.
(b) Between Related Corporations.
(1) Any subsidiary or affiliate, direct or indirect, of
the Parent Company, with the approval of the Parent Company and, if
different, the Plan Administrator, and by resolution of such
subsidiary's or affiliate's board of directors, may adopt the Plan
and the trust(s) created under the Plan. From and after the date
when it shall have become a party to this Plan and the trust(s), any
such subsidiary shall, for all purposes of the Plan and trust(s), be
included within the meaning of the term "Employer," except as the
Parent Company and/or the Plan Administrator and such subsidiary or
affiliate shall otherwise agree, and shall be listed in Exhibit 1.
Special terms of the Plan, as they shall be applied to the employees
of such adopting employer, shall be set forth in an Appendix
attached to and made part of the Plan. The Appendix shall set forth
only special provisions relating to such employees, and any other
pertinent information or specifications which would facilitate the
effective operation of the Plan with respect to such employees. All
other provisions of the Plan, if not specifically addressed in such
Appendix, shall apply to the employees of the adopting subsidiary or
affiliate.
(2) Employees from time to time may transfer or may be
transferred to subsidiaries of the Parent Company or may transfer or
be transferred from such subsidiaries. Such Employees are referred
to herein as "transferred Employees." The status of any such
transferred Employee under this Plan as adopted by any such
subsidiary pursuant to paragraph (b)(1) of this Section shall be
determined in accordance with the following rules:
(A) A transferred Employee, if otherwise eligible,
shall become a Participant in the plan (including this
Plan), if any, of the entity to which he is transferred, on
the later of the date of his transfer or the date he would
have become a Participant in the plan (including this Plan)
of the entity from which he is transferred if no transfer
had occurred. A transferred Employee's participation in any
plan shall cease, and his Account in any plan shall be
distributed, only upon occurrence of the events prescribed
in such plan, but considering for such purpose that the
Employer and all related corporations are a single entity.
(B) A transferred Employee shall be considered as
employed on the last day of the Plan Year if he is employed
as of such date by the Parent Company or by any subsidiary
of the Parent Company.
(C) Provided, however, that for purposes of
determining the amount of any allocation under Article 3 of
this Plan or any other plan adopted by any subsidiary, a
transferred Employee's Account balance shall be limited to
his Account balance in the particular plan and his Base
Salary or Compensation shall be restricted to the Base
Salary or Compensation for the Plan Year from the Parent
Company or the subsidiary, as the case may be, under whose
plan the allocation is being made.
(D) In no event shall any of the foregoing
provisions be interpreted in such a way as to result in the
duplication of contributions or benefits for any transferred
Employee under this Plan and any other plan adopted by a
subsidiary of the Parent Company.
Section 7.03 Limitations on Annual Allocations to Accounts.
(a) Single Plan. Notwithstanding any provision of the Plan to
the contrary, the total additions made to the Account of any Participant in
any limitation year shall not exceed the lesser of:
(i) $30,000 (or, if greater, 25 percent of the dollar
limitation under Code Section 415(b)(1)(A)), or
(ii) 25 percent of the Participant's compensation for
such limitation year,
except that such $30,000 limitation shall be adjusted automatically, without
the necessity of a specific Plan amendment, whenever the Secretary of the
Treasury increases this dollar limitation to reflect cost-of-living
adjustments in accordance with Code Section 415(d) and the regulations
thereunder.
(b) Special Definitions. For purposes of this Section, the
following terms have the meanings indicated:
(1) "total additions" means, with respect to each limitation
year, the sum of:
(A) Employer contributions; and
(B) forfeitures (if any), allocated as Employer
contributions to the Participant's Account; plus, if the
Plan allowed and if the Participant made any employee
contributions,
(C) for limitation years ending before January
1, 1987, the lesser of --
(i) one-half of the Participant's
employee contributions made for the
limitation year, or
(ii) the amount of the Participant's
employee contributions made for the
limitation year in excess of 6
percent of his compensation for
such limitation year; and
(D) for limitation years beginning after
December 31, 1986, the total of the Participant's employee
contributions for the limitation year; and
(E) in addition, the following amounts shall be
treated as annual additions to a defined contribution plan
of the Employer -- amounts allocated, after March 31, 1984,
to an individual medical account, as defined in Code Section
415(1)(1), which is part of a defined benefit plan
maintained by the Employer, and amounts derived from
contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable
to postretirement medical benefits allocated to the separate
account of a key employee, as defined in Code Section
419A(d)(3), under a welfare benefit fund, as defined in Code
Section 419(e), maintained by the Employer.
(2) "limitation year" means the twelve month period
beginning each January 1 and ending on the following December 31.
(3) "compensation" means, as provided in Code Section
415(c)(3) and regulations issued thereunder, and with respect to
each limitation year, a Participant's total wages, salary, bonuses,
overtime, commissions and other amounts received for services
rendered in the course of employment for the Employer, including
amounts received from accident or health insurance for personal
injuries or sickness to the extent includible in the Participant's
gross income, amounts received as disability payments whether or not
includible in the Participant's gross income, amounts paid or
reimbursed by the Employer for moving expenses to the extent not
deductible by the Participant, and amounts includible in the
Participant's gross income for making an election on the transfer of
property in connection with the performance of services. Items not
includible in compensation include Employer contributions under this
Plan or made to any other deferred compensation plan on behalf of
the Participant if the contributions are not includible in the
Participant's gross income before application of the Code Section
415 limits (i.e., contributions to a cafeteria plan under Code
Section 125, to a qualified cash or deferred arrangement under Code
Section 402(e)(3), or to a simplified employee pension under Code
Section 402(h)(1)(B)), amounts realized from the Participant's
exercise of a non-qualified stock option or from the Participant's
transfer of stock acquired under a qualified stock option,
contributions made by the employer (whether or not under a salary
reduction agreement) toward the purchase of a Code Section 403(b)
annuity (whether or not the contributions are excludable from the
employee's gross income), and premiums paid by the Employer on
behalf of the Participant for group term life insurance to the
extent not includible in the Participant's gross income.
(4) "employee contributions" means after-tax amounts
contributed to the Plan by the Participant pursuant to Section 3.04,
and excludes rollover contributions made pursuant to Section 3.05
and before-tax contributions made pursuant to Section 3.02.
(5) "Employer contributions" means amounts contributed
to the Plan by the Employer pursuant to Section 3.03 and before-tax
amounts contributed on behalf of Participants pursuant to Section
3.02.
The limitation in (a)(i) above shall be prorated for any short limitation
year in accordance with the regulations under Code Section 415.
(c) Defined Benefit Plan also Maintained by the Employer. In
the event that the Employer maintains a defined benefit plan, as defined by
Section 3(35) of ERISA, in addition to this Plan, the otherwise permissible
total additions for any limitation year as determined under paragraph (a)
above, for any Participant who is also a participant in such defined benefit
plan, may be reduced further so that the sum of the defined benefit plan
fraction and the defined contribution plan fraction for any limitation year
does not exceed 1.0. For purposes of this paragraph, the following terms
have the meanings indicated:
(1) "defined benefit plan fraction" for any limitation
year means a fraction,
(A) the numerator of which is the projected
annual benefit of the Participant under the defined benefit
plan (determined as of the close of the limitation year),
and
(B) the denominator of which, for each
limitation year is the lesser of -
(i) the product of 1.25 multiplied by
the dollar limitation on benefits
under Code Section 415 in effect
for such year, or
(ii) the product of 1.40 multiplied by
the percentage limitation on
benefits under Code Section 415 for
such year.
(2) "defined contribution plan fraction" for any
limitation year means a fraction,
(A) the numerator of which is the sum of the
total additions to the Participant's Account for all years
of his participation under this Plan as of the close of the
limitation year, and
(B) the denominator of which, for each
limitation year is the sum of the lesser of the following
amounts for such year and for all prior years of the
Participant's employment with the Employer (without regard
to whether the Plan was in existence during all such years)
-
(i) the product of 1.25 multiplied by the applicable
dollar limitation on additions in effect under part
(a)(1) of this Section for such year, or
(ii) the product of 1.40 multiplied by the percentage
limitation on additions under part (a)(2) of this
Section for such year.
For purposes of this part (c)(2) only, the limitation on annual additions
for the limitation year ending with or within calendar year 1975 and each
prior limitation year shall be deemed to be the lesser of (aa) $25,000 or
(bb) 25 percent of the Participant's compensation for the respective
limitation year.
(d) Multiple Plans. In the event that the Employer maintains
one or more other defined contribution plans, as defined by Section 3(34) of
ERISA, in addition to this Plan, or more than one defined benefit plan, as
defined by Section 3(35) of ERISA, and any such plan covers one or more
Participants in this Plan, then the limitations of paragraphs (a), (b), and
(c) above shall be applied by treating all defined contribution plans,
including this Plan, as a single defined contribution plan, and all defined
benefit plans as one defined benefit plan.
(e) Multiple Employers. In the event that the Employer is a
member of a group of employers constituting (1) a controlled group of
corporations (within the meaning of Code Section 414(b) as modified by
Section 415(h)), (2) trades or businesses, whether or not incorporated,
under common control (within the meaning of Code Section 414(c) as modified
by Section 415(h)), or (3) an affiliated service group (as defined in Code
Section 414(m)), and any other member of such group maintains a plan or
plans covering one or more Participants in this Plan, then the limitations
of paragraphs (a), (b), and (c) above, and the aggregation rules of
paragraph (d) above, shall be applied by treating all the plans of such
other employers as plans maintained by the Employer.
(f) Employee Leasing. In the event the Employer is provided
with services by leased employees (within the meaning of Code Section
414(n)), then for purposes of this Section, the leased employees shall be
treated as Participants in the Plan and contributions or benefits provided
by the leasing organization which are attributable to services performed for
the Employer shall be treated as provided by the Employer. Notwithstanding
this provision, leased employees shall be eligible to participate in the
Plan only to the extent necessary to maintain the tax-qualified status of
the Plan under Code Section 401(a).
(g) Remedying Excess Total Additions. If for any limitation
year, as a result of the allocation for forfeitures, a reasonable error in
estimating a Participant's annual compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of Code
Section 402(g)(3)) that may be made with respect to any individual under the
limits of Code Section 415, or on account of other limited facts and
circumstances that the Commissioner of Internal Revenue finds to justify the
availability of the rules set forth in this paragraph (g), the total
additions to a Participant's Account exceed the applicable limitation as
determined under the foregoing paragraphs of this Section, then: (a) first,
the excess attributable to before-tax Employee contributions and/or to
after-tax Employee Contributions (including any allocable earnings) shall be
distributed to the affected Employees, as provided for in Income Tax
Regulation 1.415-6(b)(6)(iv); and (b) second, following the adjustment in
clause (a) immediately above, any excess attributable to Employer
contributions (including any allocable earnings) shall be held in a special
suspense account to be allocated to eligible Participants in the succeeding
limitation year or years; provided, however, that (1) no Employer
contributions and no Employee (but before-tax Employee contributions shall
be continued), (2) no investment gains and losses and other income shall be
allocated to the special suspense account, (3) the amounts in the suspense
account shall be allocated as soon as possible without violating the
limitations of this Section, and (4) the health care portion of the Employer
Matching Contribution Account shall be reduced only if necessary and only
after reduction of additions due to other Employer contribution amounts.
(h) Additional Adjustments. The Employer shall have the right
to make any other adjustments to the Account of any Participant, or to the
total additions to any such Account, or to the Participant's accrued benefit
under any defined benefit plan or plans maintained by the Employer, which
may be required in order to prevent disqualification under Code Section 415
of the Plan or any other plan maintained by the Employer. Where adjustments
are required, such adjustments will be made first in the contributions under
this Plan. Any such adjustments shall reduce the health care portion of the
Employer Matching Contribution Account only if necessary and only after
reduction of additions due to other Employer contribution amounts.
(i) Notice to Participants. The Employer shall advise affected
Participants of any adjustments to their Accounts required by the
limitations under this Section.
Section 7.04 Premature Distributions.
To the extent that it is includable in income, any distribution made
to a Participant prior to his attainment of age 59-1/2 shall be subject to
the 10 percent penalty tax unless an exception to such penalty tax applies,
as provided in Code Section 72(t) and Income Tax Regulations or other
official guidance thereunder.
Section 7.05 Top-Heavy Plan Rules.
(a) General Rule. If, for any Plan Year beginning after
December 31, 1983, the Plan is a top-heavy plan as determined under
paragraph (b), then the requirements in paragraph (c) shall apply to the
extent indicated by that paragraph. For purposes of this Section, the term
"Employer" shall include any member of a group of employers constituting (1)
a controlled group of corporations [within the meaning of Code Section
414(b) as modified by Code Section 415(h)], (2) trades or businesses,
whether or not incorporated, under common control [within the meaning of
Code Section 414(c) as modified by Code Section 415(h)], or (3) an
affiliated service group [as defined in Code Section 414(m)].
(b) Top-Heavy Test. The Plan's status as a top-heavy plan for
any Plan Year shall be determined in accordance with the following five step
procedure:
(1) Required Plan Aggregation. First, there shall be
aggregated with this Plan (A) each plan of the Employer in which a
key employee is a participant and (B) each other plan of the
Employer which enables a plan described in (A) to meet the
requirements of Code Section 401(a)(4) or Code Section 410.
(2) Key Employee Sum. Second, there shall be computed,
as of the determination date, the sum of the account balances of all
key employees under all defined contribution plans, including this
Plan, required to be aggregated under (1), and the present values of
the cumulative accrued benefits of all key employees under all
defined benefit plans required to be aggregated under (1). For
purposes of this computation, account balance means the account
balance as of the most recent valuation date occurring within a
12-month period ending on the determination date, plus an adjustment
for contributions due as of the determination date. In the case of
a profit sharing plan or other plan not subject to the minimum
funding requirements of Code Section 412, the adjustment is the
amount of any contributions actually made after the valuation date
but on or before the determination date, except that in the first
plan year, the adjustment shall include any contributions made after
the determination date that are allocated as of a date within the
first plan year. In the case of a money purchase pension plan or
other plan subject to the minimum funding requirements of Code
Section 412, the adjustment is the amount of any contributions that
would be allocated as of a date not later than the determination
date, even though such amount is not yet required to be contributed,
plus the amount of any contribution actually made (or due to be
made) after the valuation date but before the expiration of the
extended payment period under Code Section 412(c)(10). Also for
purposes of this computation, the present value of a cumulative
accrued benefit shall be determined as of the most recent valuation
date occurring within a 12-month period ending on the determination
date with the accrued benefit for a current participant determined
as if the individual had terminated employment as of such valuation
date, except that in the first plan year of a defined benefit plan,
the accrued benefit of a current participant must be determined as
if the individual had terminated employment as of the last day of
the plan year. Finally, for purposes of this computation: (A) there
shall be included in the sum any distributions (other than rollover
amounts or plan-to-plan transfers not initiated by the employee or
made to another plan maintained by the Employer) made to an employee
from this Plan, from another plan required to be aggregated under
(1), or from a terminated plan which, if it had not been terminated,
would have been required to be aggregated under (1), within the five
year period ending on the determination date; (B) there shall be
excluded from the sum any rollover contribution and any plan-to-plan
transfer initiated by the employee and accepted after December 31,
1983 by this Plan, or by any other plan required to be aggregated
under (1), from a plan other than one maintained by the Employer;
(C) there shall be excluded from the sum the account balance and
present value of the accrued benefit of any employee who formerly
was a key employee but who is not a key employee for the year ending
on the determination date; (D) there shall be excluded from the sum
any amounts attributable to tax deductible employee contributions
made pursuant to Code Section 219; and (E) there shall be excluded
from the sum the account balance and the present value of the
accrued benefit of any individual who has not performed any service
for the Employer at any time during the five year period ending on
the determination date; and the accrued benefit of each non-key
employee shall be determined under the method used for accrual
purposes under all plans of the Employer or, if there is no such
method, as if the benefit accrued under the slowest accrual rate
permitted under Code Section 411(b)(1)(C).
(3) All Employee Sum. Third, under the same procedures
as set forth in (2) above, including the special rules in (A), (B),
(C), (D), and (E), there shall be computed the sum of account
balances and present values of accrued benefits for all employees.
(4) Top-Heavy Test Fraction. Fourth, the sum computed
in (2) shall be divided by the sum computed in (3), and if the
resulting fraction is 0.60 or less, neither the Plan nor any plan
required to be aggregated under (1) is a top-heavy plan for the Plan
Year. If the fraction is greater than 0.60, both the Plan and any
plan required to be aggregated under (1) are top-heavy plans for the
Plan Year, unless after the permissive plan aggregation described in
(5) below, the recomputed fraction is 0.60 or less.
(5) Permissive Plan Aggregation. At the election of
the Plan Administrator, plans of the Employer, other than those
required to be aggregated under (1), but which provide contributions
or benefits comparable to this Plan, may be aggregated with this
Plan and the plans required to be aggregated under (1), provided
that such aggregated group would meet the requirements of Code
Sections 401(a)(4) and 410. Steps (2) through (4) above may then be
repeated, based on this permissively aggregated group, and if the
top-heavy test fraction computed in step (4) is 0.60 or less for
this group, then neither the Plan nor any plan required to be
aggregated under (1) is a top-heavy plan for the Plan Year; however,
if the top-heavy test fraction computed in step (4) is still greater
than 0.60, both the Plan and any plan required to be aggregated
under (1) will be top-heavy plans for the Plan Year, but no plan
which is permissively aggregated under this step (5) will be deemed
top-heavy for such reason.
(c) Superseding Rules. For each Plan Year that the Plan is a
top-heavy plan, the requirements in (1) and (2) below shall supersede any
other provisions of the Plan which otherwise would apply for that Plan Year.
For any Plan Year that the Plan is a top-heavy plan, the vesting schedule in
(3) below shall supersede the Plan's regular vesting schedule, but only to
the extent it provides a greater vested percentage for any level of Years of
Service than the Plan's regular vesting schedule, and only with respect to
employees who have at least one Hour of Service after the Plan becomes
top-heavy; if and when the Plan ceases to be a top-heavy plan, the Plan's
regular vesting schedule shall again apply (without regard to the schedule
in (3) below) as of the first day of the Plan Year after the last Plan Year
for which the Plan is a top-heavy plan, but subject to all Plan rules that
apply in the case of amendments to the vesting schedule.
(1) Adjusted Code Section 415 Limitations. In order to
reduce the overall limitations on combined plan contributions and
benefits under Code Section 415, the number 1.00 shall be
substituted for 1.25 in the definitions of defined contribution
fraction and defined benefit fraction in Section 7.03 of the Plan.
Provided, however, that the foregoing sentence shall not apply if
(A) the top-heavy test fraction in paragraph (b)(4), or the
recomputed fraction after applying paragraph (b)(5), is 0.90 or less
and (B) each non-key employee receives an additional minimum
contribution or benefit under a plan of the Employer. In the case
of a non-key employee participating only in a defined benefit plan,
the additional minimum benefit for each year of service counted is
one percentage point, up to a maximum of ten percentage points, of
the employee's average compensation for the five consecutive years
when the employee had the highest aggregate compensation from the
Employer, computed as described in (2) below. In the case of a
non-key employee participating only in this or another defined
contribution plan, the additional minimum contribution is one
percent of the employee's compensation. In the case of a non-key
employee participating both in a defined benefit plan and this or
another defined contribution plan, there is no additional minimum
benefit, but the additional minimum contribution shall be 2-1/2
percent of the employee's compensation.
(2) Minimum Contributions or Benefits for Non-Key
Employees. Employer contributions and forfeitures for the Plan Year
beginning after December 31, 1983 allocated on behalf of each
non-key employee Participant (A) who has not separated from
employment with the Employer at the end of the Plan Year, (B) who is
eligible for an allocation of Employer contributions under the Plan
(without regard to any requirements for a minimum number of hours of
service during the Plan Year, mandatory or voluntary contributions,
or compensation for the Plan Year in excess of a stated amount), and
(C) who does not participate in a defined benefit plan of the
Employer, shall be equal to at least (i) multiplied by (ii), where
--
(i) is equal to 3 percent, or if less, the maximum
percentage of Employer contributions and forfeitures (as a
percentage of compensation, as limited by Section 401(a)(17)
of the Code), allocated on behalf of any key employee
Participant for the Plan Year, and
(ii) is equal to the non-key employee
Participant's compensation for the Plan Year.
For purposes of this rule, Employer contributions and forfeitures
allocated under any other defined contribution plan of the Employer,
in which any key employee participates or which enables another
defined contribution plan to meet the requirements of Code Section
401(a)(4) or Code Section 410, shall be considered contributions and
forfeitures allocated under this Plan. In the case of any non-key
employee Participant who is also a participant in any defined
benefit plan of the Employer, the foregoing provisions of this part
(2) shall be applied, but with 5 percent substituted for 3 percent;
for non-key employees who participate in both this Plan and a
defined benefit plan of the Employer, the foregoing provisions of
this part (2) shall be inapplicable, provided that each non-key
employee eligible to participate in this Plan has, at any time, a
minimum accrued benefit under the defined benefit plan, expressed as
a life annuity commencing at normal retirement age, equal to at
least the product of (i) the employee's average compensation for the
five consecutive years when the employee had the highest aggregate
compensation from the Employer and (ii) the lesser of 2 percent per
year of service or 20 percent. For purposes of computing the
product in the foregoing sentence, compensation in years before
January 1, 1984 and in years after the close of the last Plan Year
in which the Plan is top-heavy shall be disregarded, and similarly,
years of service shall exclude years of service when the Plan was
not top-heavy (for any Plan Year ending during such year of service)
and years of service completed in a Plan Year beginning before
January 1, 1984. Although accruals of Employer derived benefits,
whether or not attributable to years for which the Plan is
top-heavy, may be used to satisfy the defined benefit plan minimum,
all accrued benefits attributable to employee contributions shall be
ignored. Notwithstanding the first sentence of this part (2) or any
other provision of the Plan to the contrary, (A) Before-Tax Employee
Contributions for a key employee shall be treated as Employer
contributions for purposes of determining whether the minimum
contribution or benefit rules of this section have been met, but
Before-Tax Employee Contributions for a non-key employee shall not
be counted for those purposes, (B) Employer matching contributions
that are applied to satisfy the limitation stated in Section 3.02(c)
shall not also be applied to satisfy the minimum contribution
required for non-key employee Participants under this part (2) and
(C) for Plan Years beginning after December 31, 1988, if Employer
matching contributions are applied to satisfy such minimum
contribution requirements then those Employer matching contributions
must meet the general nondiscrimination requirements of Code Section
401(a)(4) regardless of whether the limitation in Section 3.03(c) is
otherwise satisfied.
(3) Accelerated Vesting. A Participant's vested
percentage of his Employer Contribution Account for purposes of his
Termination Benefit under the Plan shall be determined in accordance
with the following vesting schedule:
Years of Service Vested Percentage
less than 3 years 0%
3 or more years 100%
(d) Special Definitions. For purposes of this Section, the
following terms shall have the meanings indicated:
(1) "compensation" means compensation as defined in
Section 7.03(b)(3); provided, that for purposes of the definition of
key employee in (4) below, compensation shall include amounts
contributed by the Employer pursuant to a salary reduction agreement
which are excludable from the Employee's gross income under Code
Section 125 [cafeteria plan], 402(e)(3) [401(k) cash or deferred
arrangement], 402(h)(1)(B) [simplified employee pension ], or 403(b)
[tax-sheltered annuity].
(2) "determination date" means, with respect to any
Plan Year, the last day of the preceding Plan Year, except that in
the case of the first Plan Year, the determination date shall be the
last day of that Plan Year. Where one or more plans are required or
permitted to be aggregated with this Plan, and where all plan years
do not coincide, the key employee and all employee sums in paragraph
(b) above each shall be determined separately for each plan on the
respective determination dates, and the results shall then be
combined for the determination dates falling within the same
calendar year.
(3) "employee" means (A) a common-law employee or
partner of the Employer who is or once was a Participant, or would
have been a Participant but for his failure to complete some minimum
number of hours of service in any Plan Year, if required, (after
meeting the Plan's initial eligibility requirements), to make
mandatory employee contributions, if required, or to receive
compensation in excess of a stated amount, and (B) any Beneficiary.
(4) "key employee" means each employee or former
employee (or Beneficiary of either) who, at any time during the Plan
Year containing the determination date or during any of the four
preceding Plan Years, --
(A) is an officer of the Employer and who has
annual compensation in the Plan Year, greater than 50
percent of the applicable dollar limitation of Code Section
415(b)(1)(A) in effect for the Plan Year;
(B) is one of the ten employees owning the
largest interests in the Employer and who has compensation
from the Employer greater than the applicable dollar
limitation of Code Section 415(c)(1)(A) in effect for the
calendar year in which the determination date falls;
(C) is a 5-Percent Owner of the Employer; or
(D) is a 1-Percent Owner of the Employer who
has annual compensation from the Employer of more than
$150,000.
For purposes of (A), no more than 50 employees, or if less, the
greater of 3 employees or 10 percent of all employees, shall be
treated as officers. For purposes of (B), (C), and (D), the
constructive ownership rules of Code Section 318 shall apply with
the modification that 5 percent shall be substituted for 50 percent
in Section 318(a)(2). Also, for purposes of (B), if two employees
have the same interest in the Employer, the employee having the
greater annual compensation from the Employer shall be treated as
having a larger interest; following application of this rule, an
employee shall be considered a key employee, even if he is not among
the first ten largest owners, if his ownership interest in the
Employer is not less than at least one of the top ten owners and
provided he has the requisite level of compensation described in
(B). Finally, for purposes of (C) and (D), each employer that
otherwise would be aggregated under this Section's definition of
"Employer" shall be treated as a separate employer to determine
ownership percentages.
(5) "valuation date" means the last day of the plan
year in the case of any defined contribution plan, including this
Plan, and the date used for computing plan costs for minimum funding
in the case of any defined benefit plan.
(e) Adjustment to Dollar Amount. The $150,000 limit in
paragraph (d)(4)(D) above shall be adjusted automatically, without the need
of specific plan amendment, whenever the corresponding amount from the Code
is adjusted by the Secretary of the Treasury for cost-of-living changes.
(f) Anti-Cutback Rule. Notwithstanding the foregoing rules of
this Section, in no event shall any changes in the Plan's benefit structure,
including its vesting provisions, that result from a change in the Plan's
top-heavy status, cause the Account balance or accrued benefit of any
Participant to be reduced in violation of Code Section 411. In addition, in
the case of any changes in the vesting provisions of the Plan, each
Participant (1) who has completed at least three Years of Service and (2)
whose nonforfeitable rights are adversely affected by the change, may elect,
during the election period, to have his nonforfeitable rights determined
without regard to such change. The election period shall begin on the date
the change is adopted or becomes effective, whichever is earlier, and end on
the latest of (A) the date which is sixty days after the day the change is
adopted, (B) the date which is sixty days after the day the change becomes
effective, or (C) the date which is sixty days after the day the Participant
is issued written notice of the change.
Section 7.06 Provisions Relating to Section 16 of the Securities
Exchange Act of 1934. The provisions of this Section 7.06 are intended to
conform the Plan with all applicable provisions of Regulation 17 CFR
240.16b-3 under the Securities Exchange Act of 1934 ("Rule 16b-3") and they
shall take precedence over any contrary provisions of the Plan.
(a) Grant and Award Transactions.
(1) Decisions concerning the timing, pricing and amount
of any contributions that are considered grant or award
transactions shall be made either by the Compensation and
Benefits Committee of the Employer's Board of Directors or
by another group or committee of disinterested Directors.
(2) If, as a result of a grant or award transaction, an
Employer equity security or an interest in the Employer
Stock Fund is allocated to the Account of a Participant who
is an officer or director of the Employer, then such equity
security or interest shall be held in such Participant's
Account for a minimum period of 6 months from the date of
the grant or award.
(b) Participant-Directed Transactions.
(1) If a Participant who is an officer or director of
the Employer receives a hardship withdrawal (under Section
6.02), a Plan loan (under Section 6.03), or any other type
of withdrawal from the portion of his Account, if any,
invested in either securities of the Employer or the
Employer Stock Fund, then further Plan purchases of
securities of the Employer and interests in the Employer
Stock Fund for such Participant's Account shall not be
permitted for a period of 6 months following such withdrawal
or loan.
(2) A Participant who is an officer or director of the
Employer shall be permitted to make investment election
changes into or out of the Employer Stock Fund only during
the period commencing with the third business day following
the date of release for publication of the Employer's
quarterly and annual summary statements of sales and
earnings, and ending with the twelfth business day following
such date. Further, a Participant who is an officer or
director of the Employer and who makes an investment
election change into or out of the Employer Stock Fund shall
not be permitted to make another investment election change
into or out of the Employer Stock Fund for a 6 month period.
(c) Defined Terms. For purposes of this Section 7.06, all
terms, including the terms "grant," "award," "disinterested,"
"equity security," "security," "officer" and "director," shall be
construed in accordance with Section 16 of the Securities Exchange
Act of 1934 and Rule 16b-3.
Section 7.07 Distributions Pursuant to Qualified Domestic Relations
Orders. Notwithstanding any contrary provisions of the Plan, the Plan will
not be treated as failing to meet the requirements of Code Section 401(a),
401(h), or 409(d) solely by reason of payments to an alternate payee
pursuant to a qualified domestic relations order, provided that the present
value of the benefit to be paid to the alternate payee (1) does not exceed
$3,500 or (2) exceeds $3,500 and the alternate payee consents in writing to
the distribution. In all cases, the benefit to be paid to the alternate
payee shall be invested by the Trustee. The alternate payee shall have no
right to direct the investment of any portion of the benefit.
ARTICLE 8
TRUST FUND
Section 8.01 Establishment and Maintenance of Fund.
(a) Establishment of Fund and Selection of Trustee. The Parent
Company shall establish a trust fund by a trust agreement with a Trustee to
carry out the purposes of the Plan. The Parent Company shall select such
Trustee, who may be one or more individuals or a corporate trustee or both.
The Parent Company may modify any such trust agreement to accomplish the
purposes of the Plan.
(b) Contributions to Fund and Investments by Trustee. All
contributions by the Employer, and any contributions by Employees, shall be
paid to the Trustee of the Fund. The Fund shall be invested in such
investments as are permissible for trustees under ERISA. At the request of
the Parent Company, the Trustee shall prepare and submit an accounting of
the Fund as of any date specified, but the Trustee shall not be required to
render more than four such accountings during any Plan Year. In any event,
the Trustee shall prepare and render to the Employer an accounting of the
Fund as of the last day of each Plan Year. The Trustee shall not be required
to render accounts to individual Participants but only to the Employer,
which may submit reports of the Fund to the Participants from time to time.
(c) Limitation of Liability to Assets of Fund. Except as
required under applicable federal law, the benefits of the Plan shall be
only such as can be provided by the assets of the Fund, and there shall be
no liability or obligation on the part of the Employer to make any
contributions or payments to establish or maintain the Plan, whether in the
event of termination of the Plan or otherwise. No liability for the payment
of benefits under the Plan shall be imposed on the Employer or on the
directors or officers of the Employer.
Section 8.02 The Trustee. The Trustee shall receive the
contributions to the Fund and shall hold, manage, invest, reinvest, and
distribute the same plus any earnings thereon, pursuant to the provisions of
the Plan and of the trust agreement with the Parent Company. The Trustee
also shall determine all questions relating to accounting and to the
financial position of the Fund and the shares and interests of the
Participants in accordance with information supplied by the Employer and
Plan Administrator, and, in general, shall discharge all the duties and
functions imposed by the terms of the Plan either expressly or by
implication. The Trustee shall have the powers, rights and duties, as
specified in the trust agreement with the Parent Company, in addition to
those specified elsewhere in the Plan or prescribed by law.
Section 8.03 Resignation or Removal of Trustee. Subject to notice
provisions, if any, in the trust agreement with the Parent Company, the
Trustee may resign by delivering a written resignation to the Parent
Company; similarly, the Trustee may be removed by the Parent Company at any
time, upon written notice to the Trustee.
Section 8.04 Investment Manager and Custodian.
(a) Appointment of Investment Manager or Custodian. The Parent
Company may appoint one or more investment managers meeting the definition
of "investment manager" under Section 3(38) of ERISA. Furthermore, the
Parent Company may appoint one or more custodians to hold any part or all of
the Fund. Any appointment of an investment manager or a custodian shall be
made only upon proper authorization of the Parent Company and evidenced by a
written designation signed by one or more duly authorized officers of the
Parent Company.
(b) Directions by Investment Manager. An investment manager
appointed pursuant to this Section may direct the Trustee to invest all or
such portion of the Fund placed in the discretion of the investment manager
in securities or other properties as are selected by the investment manager,
and may direct the Trustee to sell any securities or other property of the
Fund placed in its discretion. Where assets of the Fund are being held by a
custodian appointed pursuant to this Section, the investment manager's
direction shall be made to such custodian and copied to the Trustee.
(c) Actions by Trustee or Custodian at Direction of Investment
Manager. The Trustee or custodian, as the case may be, shall act on all
such recommendations of the investment manager, and the Trustee and
custodian shall have no fiduciary liability for acting in accordance with
such recommendations or for the retention of any securities or properties so
purchased. The Trustee and custodian will be protected in relying upon any
telegram or letter purporting to have been sent by the investment manager
which the Trustee or custodian believes in good faith to be genuine. In
directing investments, the investment manager shall diversify the
investments so as to minimize the risk of large losses, unless under the
circumstances and in the opinion of the investment manager, it is clearly
prudent not to do so.
(d) Contributions to Trustee or Direct to Custodian.
Contributions to and disbursements from the Fund may be made to the Trustee
or directly to and from any custodian appointed pursuant to this Section, as
determined by the Employer.
(e) Reliance by Trustee and Custodian. Notwithstanding any
other provision of the Plan or any trust agreement, the Trustee shall be
fully protected in relying upon the certification of the Parent Company with
respect to the appointment of such investment manager and it shall not be
the responsibility of the Trustee to determine or review investment
instructions given by the investment manager. Similarly, any custodian
appointed pursuant to this Section shall assume no liability for acting in
accordance with the directions of the investment manager.
(f) Status of Investment Manager as Named Fiduciary. Each
investment manager shall be a named fiduciary under the Plan and shall
acknowledge its action as a fiduciary under the Plan in a writing delivered
to the Trustee and to the Parent Company.
Section 8.05 Expenses. The reasonable expenses of the Trustee
relating to the Fund, including such compensation for the Trustee as may be
agreed to in writing from time to time by the Parent Company and the
Trustee, shall be paid to the Trustee and shall be deducted from the Fund,
except to the extent that the Employer pays the Trustee directly from
general assets of the Employer. Provided, however, in no event shall any
Trustee who is also an Employee be entitled to any separate compensation,
other than his regular remuneration from the Employer for services as an
Employee and reimbursement for expenses incurred on behalf of the Fund.
Section 8.06 Taxes. To the extent they are not paid by the
Employer, any taxes assessed against the Fund or against any of its assets
(including income taxes, property taxes, transfer taxes, and other taxes)
shall, after reasonable notice to the Employer, be paid by the Trustee and
deducted from the Fund.
Section 8.07 Voting and Other Rights with Respect to Employer
Stock.
(a) Participant's Confidential Voting Instructions.
Before each annual or special meeting of the stockholders of the Parent
Company, the Plan Administrator, in accordance with such reasonable
procedures as are acceptable to the Trustee, shall cause to be sent to each
Participant or former Participant (whose Account at such time then has
allocated to it any whole or fractional shares of Employer stock) a copy of
the proxy solicitation material or other solicitation material for such
meeting, together with a form requesting confidential instructions to the
Trustee on how voting rights appurtenant to the shares of Employer stock
which are then allocated to such Participant's or former Participant's
Account are to be exercised. All forms with such confidential instructions
shall be returnable to the Trustee. The number of shares indicated on such
forms as allocated to each Participant's or former Participant's Account
shall be determined by the Plan Administrator and the Trustee shall have no
duty or obligation for the accuracy of such determination.
(b) Voting of Shares by the Trustee. The Trustee shall afford
Participants and former Participants such reasonable period of time as may
be permitted by applicable law and regulations to return such confidential
instructions. Upon receipt of such instructions, the Trustee shall vote the
shares as instructed. Instructions received by the Trustee shall be held in
confidence and shall not be divulged or released by it to any person,
including the Employer and the Parent Company, and officers and employees of
the Employer or the Parent Company. If a Participant or former Participant
does not instruct the Trustee on how to vote the shares allocated to such
Participant's or former Participant's Account, the voting rights of such
shares, and the voting rights of any shares of Employer stock held in an
unallocated account, shall be exercised by the Trustee.
ARTICLE 9
PROVISIONS RELATING TO ADMINISTRATION
AND FIDUCIARIES
Section 9.01 Plan Administration. In the absence of specific
written appointment of a Plan Administrator by the Parent Company, the
Parent Company shall be the Plan Administrator for the purpose of complying
with the reporting and disclosure requirements of ERISA as well as other
actions and duties specified by ERISA for the Plan Administrator, and
otherwise shall administer the Plan in accordance with its terms. The Plan
Administrator shall have such powers and duties as may be necessary to
discharge its functions under the Plan, including, but not limited to the
following:
(a) [Construction] to construe and interpret the Plan,
decide all questions of eligibility and determine the amount, manner
and time of payment of any benefits under the Plan;
(b) [Forms] to require Participants (1) to complete and
file with it such forms as the Plan Administrator finds necessary
for the administration of the Plan and (2) to furnish all pertinent
information requested by the Plan Administrator, and to rely upon
all such forms and information furnished, including each
Participant's mailing address;
(c) [Procedures] to prescribe procedures to be followed
by Participants, spouses or Beneficiaries filing applications for
benefits;
(d) [Rules] to promulgate uniform rules and regulations
whenever in the opinion of the Plan Administrator such rules and
regulations are required by the terms of the Plan or would
facilitate the effective operation of the Plan;
(e) [Information] to prepare and distribute, in such
manner as the Plan Administrator determines to be appropriate,
information explaining the Plan, and to receive from Participants
and the Employer such information as shall be necessary for the
proper administration of the Plan;
(f) [Committee] to name two or more persons to
constitute an administrative committee, to remove and replace any
such persons, to prescribe rules and procedures of operation for the
committee, and to delegate any of the powers and duties of the Plan
Administrator to the committee; if such a committee is appointed, no
member of the committee who is also an employee receiving regular
compensation as such shall receive any compensation for his services
as a member. No member of the committee shall participate in any
action directly affecting his own retirement benefit under the Plan.
A majority of the members of the committee at the time in office
shall constitute a quorum for the transaction of business at any
meeting. Resolutions or other actions made or taken by the
committee shall require the affirmative vote of a majority of the
members of the committee attending a meeting, or a majority of
members in office by writing without a meeting. The committee may
authorize any one or more of its members to execute any document or
documents on behalf of the committee;
(g) [Annual Reports] to prepare and furnish to
Participants such annual reports with respect to the administration
of the Plan as are required by law or as are reasonable and
appropriate; and
(h) [Records Review] to receive and review the periodic
valuations of the Plan, and to receive, review and keep on file (as
it deems convenient and proper) reports of benefit payments by the
Trustee and reports of disbursements for expenses.
Section 9.02 Claims Procedure. The Plan Administrator shall make
all determinations as to the right of any person to receive a distribution.
Any denial by the Plan Administrator of a claim for a distribution under the
Plan by an Employee, Participant, Beneficiary or other person (collectively
referred to as "claimant") shall be stated in writing by the Plan
Administrator and delivered or mailed to the claimant within 90 days after
receipt of the claim, unless special circumstances require an extension of
time for processing the claim. If such an extension of time is required,
written notice of the extension shall be furnished to the claimant prior to
the termination of the initial 90-day period. In no event shall such
extension exceed a period of 90 days from the end of the initial period.
Any notice of denial shall set forth the specific reasons for the denial,
specific reference to pertinent provisions of the Plan upon which the denial
is based, a description of any additional material or information necessary
for the claimant to perfect his claim with an explanation of why such
material or information is necessary, and an explanation of claim review
procedures under the Plan written to the best of the Plan Administrator's
ability in a manner that may be understood without legal or actuarial
counsel. A claimant whose claim for benefits has been wholly or partially
denied by the Plan Administrator may request, within 90 days following the
date of such denial, in a writing addressed to the Plan Administrator, a
review of such denial. The claimant shall be entitled to submit such issues
or comments, in writing or otherwise, as he shall consider relevant to a
determination of his claim, and may include a request for a hearing in
person before the Plan Administrator. Prior to submitting his request, the
claimant shall be entitled to review such documents as the Plan
Administrator shall agree are pertinent to his claim. The claimant may, at
all stages of review, be represented by counsel, legal or otherwise, of his
choice, provided that the fees and expenses of such counsel shall be borne
by the claimant. All requests for review shall be promptly resolved. The
Plan Administrator's decision with respect to any such review shall be set
forth in writing and shall be mailed to the claimant not later than 60 days
following receipt by the Plan Administrator of the claimant's request unless
special circumstances, such as the need to hold a hearing, require an
extension of time for processing, in which case the Plan Administrator's
decision shall be so mailed not later than 120 days after receipt of such
request.
Section 9.03 Special Ruling. In order to resolve problems
concerning the Plan or to apply the Plan in unusual factual circumstances,
the Plan Administrator may make special rulings. Such special rulings shall
be in writing on a form to be developed by the Plan Administrator. In
making its rulings, the Plan Administrator may consult with legal,
accounting, actuarial, investment, and other counsel or advisers. Once
made, special rulings shall be applied uniformly, except that the Plan
Administrator shall not be bound by such rulings in future cases unless the
factual situation of a particular case is identical to that involved in the
special ruling. Special rulings shall be made in accordance with all
applicable law and in accordance with the Plan. It is not intended that the
special ruling procedure will be a frequently used device, but that it
should be followed only in extraordinary situations. The Plan Administrator
at all times shall have the final decision as to whether resort shall be
made to this special ruling feature.
Section 9.04 Specific Allocation of Fiduciary Duties between Named
Fiduciaries. The Parent Company and the Trustee shall be the "named
fiduciaries" of the Plan, within the meaning of that term as described in
ERISA, and shall have only those duties, responsibilities, and obligations
(referred to collectively as "fiduciary duties") as specifically are given
them under the Plan or as otherwise are imposed by applicable law. The
fiduciary duties given by the Plan are as follows:
(a) The Parent Company shall have the sole
responsibility for making contributions to the Fund (except to the
extent such contributions are properly chargeable to other
Employers) and for fulfilling its functions as Plan Administrator.
The Parent Company shall have the sole authority to appoint and
remove the Trustee and to amend or terminate, in whole or in part,
the Plan. The Parent Company shall not be responsible for the
management, investment, or safekeeping of the assets of the Fund.
The Parent Company periodically shall review the performance of the
Trustee. The Parent Company as Plan Administrator also shall have
the responsibility for the administration of the Plan as described
throughout the Plan.
(b) The Trustee shall have the sole responsibility for
the management, investment, and safe-keeping of the assets of the
Fund held by the Trustee under the Plan and for the distribution of
Participants' benefits in accordance with written instructions from
the Plan Administrator. In addition, the Trustee shall provide to
the Employer such information as the Employer may deem necessary or
desirable to permit the timely filing of all reports required by
law.
Section 9.05 Authorization for Further Allocation of Fiduciary
Duties. The Parent Company and the Trustee may, upon written agreement
between them, allocate their fiduciary duties under the Plan between
themselves in a manner different from that stated above. The Parent Company
and the Trustee each warrants that any directions given, information
furnished, or action taken by either one shall be in accordance with the
provisions of the Plan, authorizing or providing for such direction,
information, or action. Furthermore, each of them may rely upon any such
direction, information or action of the other as being proper under the
Plan, and is not required under the Plan to inquire into the propriety of
any such direction, information, or action. It is intended under the Plan
that the Parent Company and the Trustee each shall be responsible for the
proper exercise of their own respective powers, duties, responsibilities,
and obligations under the Plan and shall not be responsible for any act or
failure to act of the other, and neither of them guarantees the Fund assets
in any manner against investment loss or depreciation of asset value.
Section 9.06 Employment of Advisers. The Parent Company and the
Trustee shall have the authority to employ such legal, accounting,
actuarial, and financial counsel and advisers, as they shall deem necessary
in connection with the performance of their duties under the Plan, and to
act in accordance with the advice of such counsel and advisers. Except as
otherwise provided in the Plan, the fees and expenses of such counsel and
advisers shall, upon approval of the Plan Administrator, be paid by the Fund
or by the Employer, as the Plan Administrator shall deem appropriate.
Section 9.07 Delegation to Officers or Employees. The Parent
Company shall have the power to delegate its fiduciary duties under the Plan
to officers or employees of the Parent Company and to other persons, all of
whom, if officers or employees of the Parent Company, shall serve without
compensation other than their regular remuneration from the Parent Company.
Section 9.08 Bonding. The Parent Company shall purchase such
surety bonds covering fiduciaries and others as may be required pursuant to
Section 412 of ERISA.
Section 9.09 Action Taken in Good Faith/Indemnity. The Plan
Administrator, the Parent Company and its officers and directors shall be
entitled to rely upon tables, valuations, certificates, and reports
furnished by the recordkeeper or third-party administrator, upon all
certificates and reports made by an accountant or by the Trustee and upon
all opinions given by any legal or investment counsel selected or approved
by the Plan Administrator. The Plan Administrator, members of the
committee, the Parent Company and its officers and directors shall be fully
protected in respect of any action taken or suffered by them in good faith
in reliance upon any such tables, valuations, certificates, reports,
opinions or other advice of any recordkeeper or third-party administrator,
accountant, Trustee, investment or legal counsel, and all action so taken or
suffered shall be conclusive upon each of them and upon all Employees
included under the Plan. The Parent Company shall indemnify the Plan
Administrator, the committee, and each member of the committee for any
liability, joint and/or several, arising out of or connected with their
duties hereunder except as may arise from their gross negligence of willful
misconduct.
ARTICLE 10
AMENDMENT, TERMINATION AND MERGER
Section 10.01 Amendment of the Plan.
(a) Employer's Right to Amend. The Parent Company reserves the
right to make any amendments to the Plan, with or without retroactive
effect. Amendment of the Plan shall be made by resolution of the Parent
Company's board of directors, or by any person or persons authorized by
resolution of the board of directors to make amendments.
(b) Operation of Amendments. Except as may be specifically
provided otherwise in the Plan, or in any amendment to the Plan, each
amendment to the Plan shall operate prospectively only from the effective
date of the amendment, and the rights and obligations of an Employee,
Participant, or Beneficiary of a Participant, who retires, becomes disabled,
dies, or otherwise terminates employment with the Employer prior to the
effective date of any amendment, shall be determined without regard to such
amendment, on the basis of the Plan terms in effect on the date of
retirement, disability, death, or other termination of employment.
(c) Prohibition against Reversion of Assets or Reduction of
Benefits. Except as provided in the Code, ERISA, and applicable
regulations, and as specified in Section 3.07, no amendment shall (1) cause
any part of the Fund to be used for, or diverted to, any purpose other than
the exclusive benefit of Participants and their Beneficiaries, (2) reduce
the Account balance or nonforfeitable rights of any Participant or
Beneficiary, or (3) eliminate an optional form of benefit which is
attributable to the portion of the Participant's Account accumulated before
the amendment's adoption.
(d) Amendment to Vesting Provisions. In the case of any
amendment to the provisions of the Plan relating to nonforfeitable rights
based on service, each Participant (1) who has completed at least three
Years of Service and (2) whose nonforfeitable rights are adversely affected
by the amendment, may elect, during the election period, to have his
nonforfeitable rights determined without regard to such amendment. The
election period must begin no later than the date the amendment is adopted
and end no later than the latest of (A) the date which is sixty days after
the day the amendment is adopted, (B) the date which is sixty days after the
day the amendment becomes effective, or (C) the date which is sixty days
after the day the Participant is issued written notice of the amendment.
Section 10.02 Termination of the Plan.
(a) Termination. Although it is intended that the Plan shall be
permanent, the Employer reserves and shall have the right at any time to
discontinue its contributions under the Plan and to terminate or partially
terminate the Plan, by delivering to the Trustee written notice of such
discontinuance or termination, but only upon the condition that action is
taken, as shall render it impossible, except as specifically provided in
Article 3, for any part of the Fund to be used for, or diverted to purposes
other than for the exclusive benefit of Participants and their
Beneficiaries. If the Plan is terminated, or if there is a complete
discontinuance of contributions for any reason, the Parent Company may, in
its sole discretion, continue the Fund for the exclusive benefit of
Participants and their Beneficiaries or distribute the assets remaining in
the Fund to Participants and their Beneficiaries. In the event of the
dissolution, merger, consolidation, or reorganization of the Parent Company,
the Plan shall terminate and the Fund shall be liquidated unless the Plan is
continued by a successor to the Parent Company in accordance with Section
10.03(b).
(b) Termination and Transfer to New Plan. If the Parent Company
notifies the Trustee in writing (1) that it has established another plan
providing comparable benefits to this Plan, (2) that such other plan is
qualified under Code Section 401(a), and (3) that the Parent Company intends
to discontinue contributions under this Plan due to the liabilities created
under the new plan, then, upon further written direction from the Parent
Company, the Trustee shall cause the Fund to be transferred to such newly
created plan. Thereafter, this Plan shall cease to have any effect and the
rights of all parties shall be determined under the new plan.
(c) Rights upon Termination. If the Parent Company should
terminate or partially terminate the Plan, or if contributions to the Fund
are completely discontinued, or if the Parent Company should liquidate and
dissolve, or if a receiver of the Parent Company is appointed, or if the
Parent Company should terminate the Fund, or if the Plan should be wholly or
partially terminated for any other reason, the Accounts of all Participants
as then appearing upon the records of the Trustee (other than Account
balances that have been forfeited in accordance with Section 7.01(d)(3) or
other applicable Plan provision) or in the case of partial termination the
Accounts of affected Participants, shall become fully vested, the amounts
carried in said Accounts shall be revalued and adjusted as previously
provided in the Plan, and said Accounts (after payment of expenses properly
chargeable to the Fund and allocated among the Accounts) shall, as
determined by the Parent Company, be distributed to affected Participants
and Beneficiaries or held in a wasting trust for distribution in due course
as otherwise provided by the Plan.
(d) Manner of Distribution. To the extent that no
discrimination in value results, any distribution after termination of the
Plan may be made, in whole or in part, in cash, in securities or other
assets in kind, or in nontransferable annuity contracts, as the Plan
Administrator in its discretion may determine. All non-cash distributions
shall be valued at fair market value at the date of distribution. The
Trustee shall not effect such distribution until written evidence of
approval of the Commissioner of Internal Revenue or his delegate of such
termination and distribution shall have been submitted to the Trustee.
(e) Special Restriction. Notwithstanding the foregoing,
distribution on termination of the Plan to any Participant of that portion
of his Account attributable and subject to Code Section 401(k) shall be
subject to the special restrictions set forth in Section 6.01(b)(5).
Section 10.03 Predecessor and Successor Employers; Merger or
Consolidation of Plans.
(a) Predecessor Employer. Employment with a predecessor
employer acquired by the Employer shall be considered service with the
Employer under this Plan to the extent required by the Code and ERISA.
Provided, however, that where such employment with a predecessor employer is
not required by the Code or ERISA to be considered service with the
Employer, the Parent Company may, nevertheless, in its discretion, grant
credit for such service under such uniform and non-discriminatory rules as
may be established from time to time by the Parent Company.
(b) Successor Employer. In the event of the dissolution,
merger, consolidation, or reorganization of the Employer, the Parent Company
may provide that the Plan will be continued by the successor, and in that
event, such successor shall be substituted for the Employer under the Plan.
The substitution of the successor shall constitute an assumption of Plan
liabilities by the successor, and the successor shall have all of the
powers, duties and responsibilities of the Employer under the Plan.
(c) Merger or Consolidation. In the event of any merger or
consolidation of the Plan with, or transfer in whole or in part of the
assets and liabilities of the Plan to, another plan of deferred compensation
maintained or to be established for the benefit of all or some of the
Participants of this Plan, the assets of the Plan applicable to such
Participants shall be transferred to the other plan only if:
(1) Each Participant would (if either this Plan or the
other plan then terminated) receive a benefit immediately after the
merger, consolidation, or transfer which is equal to or greater than
the benefit he would have been entitled to receive immediately
before the merger, consolidation, or transfer (if this Plan had been
terminated);
(2) Resolutions of the board of directors of the Parent
Company under this Plan, and of the governing body of any new or
successor employer of the affected Participants, shall authorize
such transfer of assets; and, in the case of the new or successor
employer of the affected Participants, its resolutions shall include
an assumption of liabilities with respect to such Participants'
inclusion in the new employer's plan; and
(3) Such other plan is qualified under Code Sections
401(a) and 501(a).
Section 10.04 Notice. Affected Participants shall be given notice
of any amendments to, and termination or merger of, the Plan in accordance
with ERISA.
ARTICLE 11
MISCELLANEOUS PROVISIONS
Section 11.01 Plan Subject to Approval. The Plan and any
amendments are contingent upon and subject to obtaining and retaining such
approval of the Commissioner of Internal Revenue and of any other federal
agency with jurisdiction over the Plan as the Parent Company may find
necessary to establish the deductibility for federal income tax purposes of
contributions made by the Employer under the Plan, and qualification of the
Fund for tax exemption under the Code, and the qualification of the Plan
under ERISA.
Section 11.02 Payments for the Benefit of Payee. In the event that
the Parent Company shall find that any person to whom a benefit is payable
under the terms of the Plan is unable to care for his affairs because of
illness or accident, is otherwise mentally or physically incompetent, or is
unable to give a valid receipt, the Parent Company may cause the payments
becoming due to such person to be paid to another individual for such
person's benefit, without responsibility on the part of the Parent Company
to follow the application of such payment. Any such payment shall be a
payment for the account of such person and shall operate as a complete
discharge of the Parent Company from all liability under the Plan.
Section 11.03 Non-Alienation of Benefits. No right or benefit
provided for in the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and
any attempt to anticipate, alienate, sell, transfer, assign, pledge,
encumber, or charge the same shall be void. No such right or benefit shall
be liable for or subject to the debts, contracts, liabilities, engagements,
or torts of any person entitled to such right or benefit. No such right or
benefit shall be subject to garnishment, attachment, execution or levy of
any kind. The foregoing provisions of this Section shall not apply to any
qualified domestic relations order as defined in ERISA 206(d)(3)(B) or to
enforcement of federal tax levies as provided in Income Tax Regulation
Section 1.401(a)-13(b)(2).
Section 11.04 Employer's Rights. While the Employer believes in
the benefits, policies and procedures described in the Plan, the language
used in the Plan is not intended to create, nor is it to be construed to
constitute, a contract of employment between the Employer and any of its
Employees. The Employer retains all of its rights to discipline or
discharge Employees or to exercise its rights as to incidents and tenure of
employment. Employees retain the right to terminate their employment at any
time and for any reason, and the Employer retains a similar right.
Section 11.05 Litigation. In order to protect the Fund against
depletion as a result of litigation, in the event that any Participant,
Employee, Beneficiary, or spouse shall bring a legal or equitable action
against the Plan or against any fiduciary of the Plan, the result of which
shall be adverse to such Participant, Employee, Beneficiary, or spouse, or
in the event that the Plan or any fiduciary of the Plan shall find it
necessary to bring any legal or equitable action against any Participant,
Employee, Beneficiary, or spouse, or any other person claiming an interest
by or through such person, the cost to the Plan or to a fiduciary of the
Plan of bringing or defending such suit, as the case may be, shall be
charged, unless the Parent Company determines that such course would be
inequitable under all the circumstances, to such extent as is possible,
directly to the Account of such Participant, Employee, Beneficiary, or
spouse, if any, and only the excess, if any, of such costs over and above
the amount of such Account shall be included in the expenses of the Fund or
be paid by the particular fiduciary, as the case may be.
Section 11.06 Addresses and Mailing of Notices and Checks.
(a) Addresses of Participants. Each recipient of benefits from
the Plan shall be responsible for furnishing the Plan Administrator with his
address. Any notices required or permitted to be given under the Plan shall
be deemed given if directed to such address and mailed by regular United
States mail. If any check mailed by regular United States mail to such
address is returned, mailing of checks will be suspended until a correct
address is furnished by the intended recipient.
(b) Forfeitures from Accounts of Unlocated Participants. In the
event that all or any portion of the benefit payable to a Participant or
Beneficiary remains unpaid at the expiration of three years after such
benefit first became payable, solely by reason of the inability of the Plan
Administrator (after sending a registered letter, return receipt requested,
to the last known address, and after further diligent effort) to determine
the address of such Participant or Beneficiary, the remaining Account
balance shall be forfeited and allocated in accordance with the provisions
of the Plan that apply to the forfeited balance of the Account or
sub-account. In the event that a Participant or Beneficiary is located
subsequent to his Account balance being forfeited in accordance with the
foregoing sentence, the amount forfeited shall be restored at the end of the
Plan Year in which the Participant or Beneficiary is located. Funds for
making the restoration shall be obtained from the following sources in the
order indicated: first, from any forfeitures that occur during the Plan
Year in which the Participant is located; second, from any earnings of the
Fund which occur in such Plan Year; and finally, from an Employer
contribution to the Fund for such Plan Year. Distribution of a benefit will
be made to the relocated Participant or Beneficiary at the time and in the
manner specified pursuant to Article 6, but in no event earlier than sixty
days after the end of the Plan Year in which the Participant or Beneficiary
is relocated, unless the Employer waives such restriction.
Section 11.07 Written Explanations and Notices.
(a) Summary Plan Description. The Plan Administrator shall
supply a written explanation, in the form of a summary plan description as
contemplated by ERISA, to each Participant, and to each Beneficiary
receiving benefits under the Plan, in order to set forth in simple language
the terms and conditions of the Plan. Where required by ERISA, amendments
to the Plan shall be described in summaries of material modifications
supplied to each Participant and each Beneficiary receiving benefits.
Provided, however, that such explanation shall not create for any individual
rights that are not contemplated by the Plan, and in the event of any
conflict of interpretation between such explanation and the Plan, the terms
of the Plan always shall control.
(b) Summary Annual Report. The Plan Administrator also shall
supply each Participant and each Beneficiary receiving benefits under the
Plan a summary annual report, as contemplated by ERISA.
(c) Statement of Account. The Plan Administrator shall furnish,
upon written request, to any Participant (or Beneficiary receiving benefits
under the Plan), but not more frequently than once in any twelve month
period, a statement based upon the latest available information and showing
(1) the Participant's or Beneficiary's Account balance, (2) the
nonforfeitable percentage for such Account, (3) the number of additional
Years of Service, if any, required to obtain a 100 percent nonforfeitable
percentage, and (4) a description of any benefits which are forfeitable if
the Participant dies before a certain date.
(d) Statement on Separation. The Plan Administrator shall
furnish to each Participant who has separated from employment with a
nonforfeitable right to all or a portion of his Account a statement showing
(1) the Participant's Account balance, (2) the nonforfeitable percentage,
and (3) the first date on which the Participant may elect distribution of
the nonforfeitable portion of his Account. Such statement shall be furnished
within the time prescribed by Code Section 6057 for filing the registration
required by that Section.
(e) Rollover Notice. The Plan Administrator, when making any
qualified rollover distribution as defined in Code Section 402(a)(5)(E),
shall provide the recipient with a written explanation that the distribution
will not be subject to current income tax if rolled over to an individual
retirement account or other eligible retirement plan as defined in Code
Section 402(a)(5)(E) within 60 days after the recipient receives the
distribution.
(f) Age and Service Notice. Each Participant may be informed by
the Plan Administrator in writing of his age and service as of the Effective
Date, based on the Employer's records of employment, and thereafter from
time to time as the Plan Administrator may deem necessary. Such age and
service credits shall be considered correct and final and no contrary claims
concerning them may be raised unless the Participant files objection with
the Plan Administrator in writing within thirty days following receipt of
such notice by the Participant. In the case of a dispute over a
Participant's correct age, the Plan Administrator may require the
Participant to furnish a birth certificate issued by the proper public
authority or some other documented evidence of his age, satisfactory to the
Plan Administrator.
Section 11.08 Action by Parent Company or Employer. Unless
otherwise provided in the Plan, whenever the Employer under the terms of the
Plan is permitted or required to do or perform any act, such act shall be
done (a) by the authority of the Employer's board of directors and evidenced
by proper resolution in consent form or duly certified by the secretary of
the Employer, or (b) by such employee of the Employer who may, by proper
resolution, be duly authorized by the board of directors.
Section 11.09 Construction.
(a) Gender; Singular and Plural Words. Wherever any words are
used in the Plan in the masculine gender, they shall be construed as though
they also were used in the feminine gender in all cases where they would so
apply, and wherever any words are used in the Plan in the singular form,
they shall be construed as though they also were used in the plural form in
all cases where they would so apply.
(b) Headings. Headings of Sections and paragraphs of this
instrument are inserted for convenience of reference. They constitute no
part of the Plan and are not to be considered in the construction of the
Plan.
(c) Savings Clause. If any provisions of the Plan shall be for
any reason invalid or unenforceable, the remaining provisions nevertheless
shall be carried into effect.
ARTICLE 12
DEFINITIONS
Section 12.01 "Account" means the interest of a Participant in
the Fund as determined as of each Accounting Date and as reflected in the
records maintained for the Fund. Where appropriate, a Participant's Account
may be divided into separate sub-accounts, including but not limited to an
Employer Matching Contribution Account (which may include a health care
portion, as provided for in Section 3.03(f)), a Before-Tax Employee
Contribution Account, an After-Tax Employee Contribution Account, a Direct
Transfer Account and a Rollover Contribution Account, which may be mere
bookkeeping entries or individually or collectively segregated funds, as
determined by the Trustee in accordance with the Trustee's powers.
Section 12.02 "Accounting Date" means a date on which the Trustee
values the Fund and makes allocations to Accounts pursuant to Articles 3 and
4, i.e., generally each January 1, April 1, July 1, and October 1.
Section 12.03 "Base Salary" means a Participant's base annual
salary from the Employer actually paid for each year, exclusive of bonuses,
overtime pay, and discretionary forms of compensation and fringe benefits,
but including salary reduction amounts elected by the Participant under a
plan maintained by the Employer pursuant to Code Section 125. Base Salary
excludes any payments made in lieu of vacation with respect to vacation time
not taken.
Section 12.04 "Beneficiary" means the beneficiary or
beneficiaries of the Participant as designated pursuant to the provisions in
the Plan.
Section 12.05 "Code" means the Internal Revenue Code of 1986, as
amended.
Section 12.06 "Compensation" means the Participant's total of
Base Salary or other wages actually paid, plus overtime, bonuses, and
commissions, as reported on IRS Form W-2. Compensation also includes any
before-tax contributions made to this Plan by the Employer at the election
of the Participant through salary reduction or payroll deduction, but
excludes any other contributions made by the Employer on behalf of the
Participant under this Plan or any other fringe benefit program of the
Employer. It is intended that Compensation means compensation for service
performed for the Employer which is currently includible in the
Participant's gross income as provided in Code Section 414(s). For years
beginning after 1988, including Plan Years and limitation years, no more
then $200,000 (as adjusted under Code Section 401(a)(17)) of annual
compensation shall be taken into account for any individual; provided, for
years beginning after 1993, including Plan Years and limitations years, no
more than $150,000 (as adjusted pursuant to Code Section 401(a)(17)) of
annual compensation shall be taken into account for any individual. In the
case of a Participant who is a 5% owner as defined in Code Section
416(i)(1)(B)(iii) or one of the 10 Highly Compensated Participants paid the
greatest compensation during a Plan Year, then for such Plan Year this
$200,000 or $150,000 maximum shall be applied to the aggregate Compensation
of the Participant, his spouse, and any of his lineal descendants who have
not attained age 19 before the end of the Plan Year if such individuals are
also Employees of the Employer (as defined in Section 7.05(a)). For
purposes of the preceding sentence "compensation" is defined in Section
7.03(b)(3).
If, as a result of the application of such rules the adjusted
$200,000 or $150,000 limitation is exceeded, then the limitation shall be
prorated among the affected individuals in proportion to such individual's
Compensation as determined under this section prior to the application of
this limitation. If any Plan Year is shorter than 12-consecutive months,
the $200,000 or $150,000 limitation discussed above shall be reduced to bear
the same ratio to $200,000 or $150,000 as the number of days in the short
Plan Year bears to 365.
Section 12.07 "Early Retirement Age" means age 55, provided that
the Participant has 10 or more Years of Service.
Section 12.08 "Effective Date" means January 1, 1989, except as
otherwise specified.
Section 12.09 "Employee" means any common-law employee of the
Employer.
Section 12.10 "Employer" means Citizens Banking Corporation
and/or any of its subsidiaries which, with the approval of Citizens Banking
Corporation, adopts the Plan in accordance with Section 7.02(b).
Section 12.11 "ERISA" means the Employee Retirement Income
Security Act of l974, as amended.
Section 12.12 "5-Percent Owner" means any person who owns (or who
is considered as owning within the meaning of Code Section 318) more than 5
percent of the outstanding stock of the Employer or stock possessing more
than 5 percent of the total combined voting power of all stock of the
Employer.
Section 12.13 "Fund" means the trust fund(s) established pursuant
to Article 8 and maintained pursuant to the Plan and any trust instrument(s)
executed in connection with such fund(s).
Section 12.14 "Highly Compensated Participant" means, with
respect to any Plan Year, each Participant who, during that Plan Year or the
12-month period immediately preceding the Plan Year (i.e., the "look-back
year"), (a) was at any time a 5-Percent Owner, (b) received annual
compensation from the Employer in excess of $75,000 (as adjusted by the
Secretary of the Treasury), (c) received annual compensation from the
Employer in excess of $50,000 (as adjusted by the Secretary of the Treasury)
and was among the highest paid 20 percent of all Employees for such year
ranked on the basis of compensation (i.e., the "top-paid group"), or (d) was
at any time an officer of the Employer and received annual compensation in
excess of 50 percent of the applicable dollar limitation of Code Section
415(b)(1)(A) in effect for such year. Provided, however, that the following
special rules shall apply for purposes of the foregoing determination of
Highly Compensated Participants:
(1) A Participant shall not be considered a Highly
Compensated Participant for the current year under (b), (c), or (d)
above unless he was included within one of those categories in the
look-back year or is among the highest paid 100 Employees for the
current year;
(2) Under (d) above, no more than 50 Employees (or if
less, the greater of 3 Employees or 10 percent of the Employees)
shall be treated as officers;
(3) If, for any year, no officer has compensation in
excess of the amount described in (d) above, then in any event the
highest paid officer of the Employer for the year shall be treated
as being described in (d);
(4) For purposes of determining the number of Employees
to be included in the top-paid group (but not the members of such
group) under (c) above, and the number of officers taken into
account under (2) above, there shall be excluded from the highest
paid 20 percent of all Employees:
(A) Employees who have not completed 6 months
of service;
(B) Employees who normally work less than 17.5
hours per week;
(C) Employees who normally work during not more
than 6 months within any year; and
(D) Employees who have not attained age 21;
(5) If any Participant is the spouse or the lineal
ascendant or descendant (or spouse of either) of a 5-Percent Owner
or of one of the 10 most Highly Compensated Participants for the
year (ranked on the basis of compensation), then such Participant
shall not be considered a separate participant, but rather, any
compensation paid to the Participant, and any contribution made on
his behalf under the Plan, shall be treated as paid to (or on behalf
of) the 5-Percent Owner or Highly Compensated Participant;
(6) Compensation for purposes of this Section shall
have the meaning set forth in Code Section 415(c)(3), except that
such compensation shall be determined without regard to Code
Sections 125, 402(a)(8), and 402(h)(1)(B).
For purposes of this Section, the term "Employer" shall include any member
of a group of employers constituting (1) a controlled group of corporations
[within the meaning of Code Section 414(b) as modified by Code Section
415(h)], (2) trades or businesses, whether or not incorporated, under common
control [within the meaning of Code Section 414(c) as modified by Code
Section 415(h)], or (3) an affiliated service group [as defined in Code
Section 414(m)].
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of employees in the top-paid
group, the top 100 employees, the number of employees treated as officers
and the compensation that is considered, will be made in accordance with
Code Section 414(q) and the regulations thereunder.
Section 12.15 "Hour of Service" means an Hour of Service as
described under the service rules in Article 7.
Section 12.16 "Normal Retirement Age" means age 65.
Section 12.17 "Parent Company" means Citizens Banking
Corporation.
Section 12.18 "Participant" means an Employee who has met the
eligibility requirements specified in Article 2, who has commenced
participation in the Plan in accordance with that Article, and whose
participation has not terminated under the other applicable provisions of
the Plan.
Section 12.19 "Plan" means the 401(k) plan as described in this
instrument and any subsequent amendments.
Section 12.20 "Plan Administrator" means the person(s) or
organization(s) specifically designated by Article 9 as the administrator of
the Plan for purposes of ERISA.
Section 12.21 "Plan Year" means the 12-month period from each
January 1 to the following December 31.
Section 12.22 "Trustee" means the person(s) or organization(s)
acting as trustee under the Plan and of the Fund in accordance with any
trust instrument(s) executed in such connection.
Section 12.23 "Year of Service" means a Year of Service as
described under the service rules in Article 7.
EXECUTION
IN WITNESS WHEREOF, Citizens Banking Corporation has caused the Plan
to be executed on October 27, 1995.
CITIZENS BANKING CORPORATION
By: /S/ Gary P. Drainville
----------------------------
Gary P. Drainville
EXHIBIT 1
TO THE
CITIZENS BANKING CORPORATION
AMENDED AND RESTATED SECTION 401(k) PLAN
Adopting Employers
As of January 1, 1990 (except as indicated), the Plan has been
adopted by Citizens Banking Corporation ("Parent Company"), and through
separate certificates of adoption, by each of the following related
corporations:
- Citizens Commercial & Savings Bank
- Commercial National Bank of Berwyn
- Second National Bank of Saginaw
- Second National Bank of Bay City
- Grayling State Bank
- State Bank of Standish
- Citizens Commercial Leasing Corporation
(April 1, 1991)
- National Bank of Royal Oak
(January 1, 1994)
The background and any special provisions of the Plan relating to employees
of the Parent Company and these adopting employers (referred to in the Plan
individually and collectively as the "Employer") are set forth in the
Appendices.
APPENDIX A
TO THE
CITIZENS BANKING CORPORATION
AMENDED AND RESTATED SECTION 401(k) PLAN
Background and
Special Provisions Applicable to Employees of
Citizens Banking Corporation
Pursuant to Section 7.02(b) of the Citizens Banking Corporation
Amended and Restated Section 401(k) Plan ("Plan"), this appendix sets forth
special provisions of the Plan as they shall be applied to individuals who
are or were employed by Citizens Banking Corporation.
A. Background.
1. Prior Plan: Citizens Commercial & Savings Bank
Amended and Restated Section 401(k) Plan.
2. Disposition of Prior Plan: Adopted and amended as
this Plan, effective January 1, 1990.
APPENDIX B
TO THE
CITIZENS BANKING CORPORATION
AMENDED AND RESTATED SECTION 401(k) PLAN
Background and
Special Provisions Applicable to Employees of
Citizens Commercial & Savings Bank
Pursuant to Section 7.02(b) of the Citizens Banking Corporation
Amended and Restated Section 401(k) Plan ("Plan"), this appendix sets forth
special provisions of the Plan as they shall be applied to individuals who
are or were employed by Citizens Commercial & Savings Bank.
A. Background.
1. Prior Plan: Citizens Commercial & Savings Bank
Amended and Restated Section 401(k) Plan ("Citizens Plan").
2. Disposition of Prior Plan: Adopted and amended as
this Plan, effective January 1, 1990.
APPENDIX C
TO THE
CITIZENS BANKING CORPORATION
AMENDED AND RESTATED SECTION 401(k) PLAN
Background and
Special Provisions Applicable to Employees of
Commercial National Bank of Berwyn
Pursuant to Section 7.02(b) of the Citizens Banking Corporation
Amended and Restated Section 401(k) Plan ("Plan"), this appendix sets forth
special provisions of the Plan as they shall be applied to individuals who
are or were employed by Commercial National Bank of Berwyn.
A. Background.
1. Prior Plan: Commercial National Bank of Berwyn
Amended and Restated Section 401(k) Profit Sharing Plan ("Berwyn Plan").
2. Disposition of Prior Plan: Merged into this Plan
effective January 1, 1990.
B. Special Provisions.
1. Berwyn Plan Profit Sharing Accounts.
(a) Maintenance of Separate Accounts. For each
individual who was a Participant in the Berwyn Plan prior to January 1,
1990, and whose vested interest in the Berwyn Plan has not previously been
paid out, there shall be maintained a Berwyn Plan Profit Sharing Account.
Such account shall reflect Employer profit sharing plan contributions made
and allocated for Plan Years prior to 1990 under the provisions of the
Berwyn Plan in effect prior to that date, plus allocable forfeitures,
earnings, gains, and losses.
(b) Post-1989 Allocations. No Employer profit
sharing plan contributions or any other contributions shall be allocated to
the Berwyn Plan Profit Sharing Accounts under this Plan. Earnings, gains,
and losses attributable to the Berwyn Plan Profit Sharing Accounts shall be
allocated as of each Accounting Date to and among those accounts in
proportion to the to the value of each Participant's Berwyn Plan Profit
Sharing Account as of the immediately preceding Accounting Date, less any
distributions from that account since the last Accounting Date.
(c) Vesting. The Berwyn Plan Profit Sharing
Account, if any, of each Participant who has not retired, died or terminated
employment with the Employer prior to January 1, 1991, shall be 100%
nonforfeitable.
(d) Investment. A Participant's Berwyn Plan
Profit Sharing Account shall be invested in such investments as are selected
by the Employee, as provided in Section 4.01 of the Plan. In the absence of
an investment election by the Participant the account shall be invested by
the Trustee.
(e) Other Plan Provisions. Except as provided
in this appendix, a Participant's Berwyn Plan Profit Sharing Account shall
be treated in all respects as part of his Direct Transfer Account under all
other provisions of the Plan.
2. Loans.
Loans shall be allowed from Berwyn Plan Profit
Sharing Accounts.
APPENDIX D
TO THE
CITIZENS BANKING CORPORATION
AMENDED AND RESTATED SECTION 401(k) PLAN
Background and
Special Provisions Applicable to Employees of
Second National Bank of Saginaw
Pursuant to Section 7.02(b) of the Citizens Banking Corporation
Amended and Restated Section 401(k) Plan ("Plan"), this appendix sets forth
special provisions of the Plan as they shall be applied to individuals who
are or were employed by Second National Bank of Saginaw.
A. Background.
1. Prior Plan: Second National Bank Amended and
Restated Section 401(k) Profit Sharing Plan ("Second National Plan").
2. Disposition of Prior Plan: Merged into this Plan
effective January 1, 1990.
B. Special Provisions.
1. Second National Plan Stock Purchase Accounts.
(a) Maintenance of Separate Accounts. For each
individual who was a participant in the Second National Plan prior to
January 1, 1990, and whose vested interest in his stock purchase account, if
any, maintained under the Second National Plan has not previously been
distributed or consolidated with an Account or sub-account under this Plan
according to an election made in accordance with Income Tax Regulation
1.411(d)-4 or other official guidance under Code Section 411), there shall
be maintained a Second National Plan Stock Purchase Account. Such account
shall reflect Employer stock purchase contributions made and allocated under
the provisions of the Second National Plan, plus allocable earnings, gains
and losses.
(b) Post-1989 Allocations. No stock purchase
contributions or any other contributions shall be allocated to the Second
National Plan Stock Purchase Accounts under this Plan. Earnings, gains, and
losses attributable to such accounts shall be allocated as of each
Accounting Date to and among those accounts in proportion to the value of
each Participant's Second National Plan Stock Purchase Account as of the
immediately preceding Accounting Date, less any distributions from that
account since the last Accounting Date.
(c) Vesting. The Second National Plan Stock
Purchase Account, if any, of each Participant who has not retired, died or
terminated employment with the Employer prior to January 1, 1990 shall be
100% nonforfeitable.
(d) Investment. A Participant's Second
National Plan Stock Purchase Account shall be invested pursuant to the
Employee's investment direction as provided in Section 4.01 of the Plan. In
the absence of an investment election by the Employee the account shall be
invested by the Trustee.
(e) Employee Contributions. The Plan
Administrator shall separately account for that portion of a Participant's
Second National Plan Stock Purchase Account attributable to employer
contributions under the Second National Plan, and for that portion of such
account, if any, that is attributable to the Participant's after-tax
employee contributions under the Second National Plan.
(f) Other Plan Provisions. Except as provided
in this appendix, a Participant's Second National Plan Stock Purchase
Account shall be treated in all respects as part of his Direct Transfer
Account under all other provisions of the Plan.
2. PAYSOP Provisions.
(a) Background. This Provision 2 shall apply
to PAYSOP Accounts that were established under the PAYSOP (or tax-credit
ESOP) provisions of the Second National Plan and shall supersede any other
provisions of the Plan to the extent that such other provisions conflict
with the applicable provisions of this Provision.
(b) PAYSOP Participation. Each Employee who
was a PAYSOP Participant in the Second National Plan, and who had not ceased
participation for any reason as of January 1, 1990, shall continue
participating as provided herein and in Article 2.
(c) Payment of PAYSOP Benefits. Upon a
Participant's retirement, death, disability or termination of employment
pursuant to Article 5, the benefit payable under this Provision shall be in
such amount as is described in paragraph (e) below. Such benefit shall be
payable in a lump sum distribution.
There shall be no distribution of or withdrawal from a Participant's
PAYSOP Account prior to the Participant's retirement or other termination of
employment pursuant to Article 5, except as provided in paragraph (h) below
and as permitted under Code Section 409 and the rulings and regulations
thereunder.
(d) Employer Contributions. No further
Employer contributions shall be made under this Provision.
(e) Individual Participant PAYSOP Accounts.
There shall be established and maintained in the name of each PAYSOP
Participant a nonforfeitable PAYSOP Account.
(1) Adjustment to PAYSOP Accounts. As of each
Accounting Date, the following adjustments shall be
made to each PAYSOP Account:
(A) Dividends - Each PAYSOP Account shall be
credited with dividends received during the
calendar quarter in the ratio which the
shares of Employer stock (including
fractional shares) in each PAYSOP Account
as of the end of the preceding calendar
quarter bear to the shares of Employer
stock in all PAYSOP Accounts as of the end
of the preceding calendar quarter.
(B) Other Earnings - Any other earnings arising
during such calendar quarter from cash in
the PAYSOP Accounts shall be allocated
among the PAYSOP Accounts in the ratio that
the cash in each PAYSOP Account as of the
end of the preceding calendar quarter bears
to the cash in all PAYSOP Accounts as of
the end of the preceding calendar quarter.
(C) Expenses - To the extent they are not paid
by the Employer, any expenses that are
directly attributable to PAYSOP accounts
shall be paid by the Trustee during such
calendar quarter shall be allocated among
the PAYSOP Accounts in the ratio that each
PAYSOP Account as of the end of the
preceding quarter bears to all PAYSOP
Accounts as of the end of the preceding
quarter.
(2) Determination of Benefits. Whenever this
Provision requires the determination and payment of
a benefit, such benefit shall consist of the shares
of Employer stock and cash held in the
Participant's PAYSOP Account as adjusted at the end
of the calendar quarter immediately following or
coincident with the date when the benefit is to be
ascertained. Any fractional share of Employer
stock shall be converted to cash based on the
current market value on the last day of such
calendar quarter on which such stock was traded.
(f) Investment of PAYSOP Assets. All, or
substantially all, of the assets allocated to PAYSOP Accounts shall be
invested in Employer stock and the Trust instrument shall so direct.
(g) Distributions from PAYSOP Accounts,
Appraisals, Etc.
(1) Effective Date. Notwithstanding any
provisions of the Plan to the contrary, the
provisions of this paragraph shall apply to
Employer stock acquired by the PAYSOP
portion of the Second National Plan for any
Plan Year beginning after December 31,
1986, except as otherwise indicated below.
(2) Commencement of Distributions. Except as
provided in paragraph (h) below, unless the
Participant (or his or her Beneficiary)
elects otherwise, distributions
attributable to such Employer stock shall
be made as follows:
(A) if the Participant's PAYSOP
Account is to be distributed due to his or
her retirement or death, distribution must
be made within one year after the
Accounting Date coinciding with the next
following such retirement or death; or
(B) if the Participant's PAYSOP
Account is to be distributed for any reason
other than his or her retirement or death,
distribution must be made by the end of the
fifth Plan Year after the Accounting Date
coinciding with or next following the
Participant's termination of employment
unless the Participant again becomes an
Employee prior to the end of such Plan
Year.
(3) Independent Appraiser. All valuations of
Employer stock that is acquired by the Plan
for Plan Years after December 31, 1986 and
that is not readily tradeable on an
established securities market, shall be
made by an independent appraiser meeting
the requirements of Code Section 170(a)(1).
The name of each independent appraiser
rendering such a valuation shall be
furnished to the Internal Revenue Service
in accordance with published requirements.
(4) Diversification of Investments.
(A) Election by Qualified Participant.
Each PAYSOP Participant who has attained age 55 and
completed at least 10 years of PAYSOP participation
under the Second National Plan and/or this Plan
shall be permitted to direct the Plan Administrator
as to the investment of 25% of the value of the
Participant's PAYSOP Account that is attributable
to Employer stock acquired by the Second National
Plan for Plan Years beginning after December 31,
1986. This diversification election shall continue
for five Plan Years beginning with the Plan Year
after the Plan Year in which the Participant
attains age 55 or completes 10 years of PAYSOP
participation, whichever shall last occur (the
"qualified election period"). The Participant's
election shall be in writing and shall be made
within 90 days after the last day of each Plan Year
during the Participant's qualified election period
and shall be effective no later than 180 days after
the close of the Plan Year to which the direction
applies. Within 90 days after the close of the
last Plan Year in the Participant's qualified
election period, a qualified Participant shall be
permitted to direct the investment of an amount not
to exceed 50% of the value of such PAYSOP Account
balance (to the extent not previously diversified
under these rules).
(B) Investment Diversification. The
Plan shall distribute that portion of the
Participant's PAYSOP Account subject to the
election within 90 days after the last day of the
period during which the election can be made. In
lieu of distribution, the Plan Administrator may
adopt a written procedure that is uniformly
applicable to all qualified Participants and under
which each qualified Participant may direct the
Plan to transfer that portion of the Participant's
PAYSOP Account subject to the election to another
tax-qualified retirement plan maintained by the
Employer or another sub-account under this Plan
which accepts such transfers and permits
Participants to direct investments within at least
three investment options (other than Employer stock
options). Any such transfer shall be made no later
than 90 days after the last day of the period
during which the Participant's election can be
made.
(C) Amounts Subject to Diversification.
The portion of a Participant's PAYSOP Account
attributable to Employer stock acquired by the Plan
for Plan Years after December 31, 1986, shall be
determined by multiplying the number of shares of
Employer stock held in the PAYSOP Account by a
fraction, the numerator of which is the number of
shares acquired by the Plan for Plan Years after
December 31, 1986, and allocated to the
Participant's PAYSOP Account (but not to exceed the
number of shares held by the Plan on the date that
the individual became qualified to make such
diversification election), and the denominator of
which is the total number of shares allocated to
the Participant's PAYSOP Account at the date the
individual became qualified to make this
diversification election.
(h) Termination of PAYSOP Accounts. PAYSOP
Accounts maintained under this provision may be terminated at any time by
the Parent Company's board of directors and shall terminate automatically at
such time as such contributions cease to qualify for a tax credit under the
Code. In any such event, all of the PAYSOP accounts shall be used for the
benefit of Participants or their Beneficiaries under the Plan and for no
other purpose. As soon as legally permissible and as soon as practicable
following any such termination, each Participant shall be entitled to a
distribution of the entire amount in his PAYSOP Account in a lump sum or to
have such amount transferred to his Rollover Contribution Account.
Notwithstanding the above, PAYSOP Accounts shall
continue in existence so long after the discontinuance of contributions as
shall be required by applicable law and any regulations thereunder.
(i) Put Option. If at the time that shares of
Employer stock are distributed from PAYSOP Accounts, such shares are not
readily tradeable on an established securities market, a Participant or a
Beneficiary, or a donee or heir of either, shall be granted an option to
"put" the shares to the Parent Company. The "put" option shall provide
that, for a period of 60 days after such shares are distributed, and again
for a second 60 day period beginning 12 months after such shares are
distributed, the distributee shall have the right to have the Parent Company
purchase such shares at their fair market value. For purposes of this
section, fair market value shall be determined by the Trustee and shall be
based on all relevant factors for determining the fair market value of
securities. Such "put" option shall be exercised by notifying the Parent
Company in writing. If, as provided above, the Parent Company is required
to repurchase Employer stock, then (A) payment for the repurchased Employer
stock shall, as determined by the Parent Company, be in substantially equal
annual or more frequent installment payments, over a period beginning not
later than 30 days after the "put" option is exercised and extending for not
more than 5 years (except if the holder of the option agrees to a longer
period), and (B) as determined by the Plan Administrator, adequate security
shall be provided and reasonable interest paid with respect to the unpaid
installments. Provided, however, that the above provisions of this
paragraph (i) shall not apply to any Employer stock which a Participant has
elected to diversify under paragraph (g) above.
(j) PAYSOP Qualification. This provision is
intended to qualify under Code Section 409 and as a stock bonus plan under
Code Section 401(a).
3. Hardship and In-Service Withdrawals.
Neither hardship withdrawals nor in-service
withdrawals shall be allowed from Second National Plan PAYSOP Accounts.
4. Loans.
No loans shall be allowed from Second National Plan
PAYSOP Accounts.
APPENDIX E
TO THE
CITIZENS BANKING CORPORATION
AMENDED AND RESTATED SECTION 401(k) PLAN
Background and
Special Provisions Applicable to Employees of
Second National Bank of Bay City
Pursuant to Section 7.02(b) of the Citizens Banking Corporation
Amended and Restated Section 401(k) Plan ("Plan"), this appendix sets forth
special provisions of the Plan as they shall be applied to individuals who
are or were employed by Second National Bank of Bay City.
A. Background.
1. Prior Plan: Second National Bank Amended and
Restated Section 401(k) Profit Sharing Plan.
2. Disposition of Prior Plan: Merged into this Plan
effective January 1, 1990.
B. Special Provisions.
See Appendix D.
APPENDIX F
TO THE
CITIZENS BANKING CORPORATION
AMENDED AND RESTATED SECTION 401(k) PLAN
Background and
Special Provisions Applicable to Employees of
Grayling State Bank
Pursuant to Section 7.02(b) of the Citizens Banking Corporation
Amended and Restated Section 401(k) Plan ("Plan"), this appendix sets forth
special provisions of the Plan as they shall be applied to individuals who
are or were employed by Grayling State Bank.
A. Background.
1. Prior Plan: The Grayling State Bank Profit Sharing
Plan was terminated in 1987, and Grayling State Bank commenced participation
in the Citizens Commercial & Savings Bank Amended and Restated Section
401(k) Plan as of July 1, 1989.
2. Disposition of Prior Plan: Adopted and amended as
this Plan, effective January 1, 1990.
APPENDIX G
TO THE
CITIZENS BANKING CORPORATION
AMENDED AND RESTATED SECTION 401(k) PLAN
Background and
Special Provisions Applicable to Employees of
State Bank of Standish
Pursuant to Section 7.02(b) of the Citizens Banking Corporation
Amended and Restated Section 401(k) Plan ("Plan"), this appendix sets forth
special provisions of the Plan as they shall be applied to individuals who
are or were employed by State Bank of Standish.
A. Background.
1. Prior Plan: State Bank of Standish commenced
participation in the Citizens Commercial & Savings Bank Amended and Restated
Section 401(k) Plan as of April 1, 1989.
2. Disposition of Prior Plan: Adopted and amended as
this Plan, effective January 1, 1990.
APPENDIX H
TO THE
CITIZENS BANKING CORPORATION
AMENDED AND RESTATED SECTION 401(k) PLAN
Background and
Special Provisions Applicable to Employees of
Citizens Commercial Leasing Corporation
Pursuant to Section 7.02(b) of the Citizens Banking Corporation
Amended and Restated Section 401(k) Plan ("Plan"), this appendix sets forth
special provisions of the Plan as they shall be applied to individuals who
are or were employed by Citizens Commercial Leasing Corporation.
A. Background.
1. Prior Plan: None.
2. Disposition of Prior Plan: Not applicable.
3. Adoption of Plan: Citizens Commercial Leasing
Corporation adopted the Plan as of April 1, 1991.
B. Special Provisions.
1. Years of Service. For purposes of determining the
portion of a Participant's Account that is nonforfeitable or vested under
Sections 3.03(g), 3.06(f) and 7.05(c)(4), only Hours of Service completed
with Citizens Commercial Leasing Corporation on or after March 28, 1989
shall be taken into account.
APPENDIX I
TO THE
CITIZENS BANKING CORPORATION
AMENDED AND RESTATED SECTION 401(k) PLAN
Background and
Special Provisions Applicable to Employees of
National Bank of Royal Oak
Pursuant to Section 7.02(b) of the Citizens Banking Corporation
Amended and Restated Section 401(k) Plan ("Plan"), this appendix sets forth
special provisions of the Plan as they shall be applied to individuals who
are or were employed by National Bank of Royal Oak.
A. Background.
1. Prior Plan: National Bank of Royal Oak Profit
Sharing Plan.
2. Disposition of Prior Plan: Terminated as of
September 30, 1993.
3. Adoption of Plan: National Bank of Royal Oak
adopted the Plan as of January 1, 1994.
FIRST AMENDMENT
TO THE
TRUST AGREEMENT
UNDER THE
CITIZENS BANKING CORPORATION
AMENDED AND RESTATED SECTION 401(k) PLAN
(With Citizens Commercial & Savings Bank as Trustee)
WHEREAS, the Commercial National Bank of Berwyn Amended and Restated
Section 401(k) Profit Sharing Plan ("Berwyn Plan") was consolidated with the
Citizens Banking Corporation Amended and Restated Section 401(k) Plan
("Plan"), effective as of January 1, 1990;
WHEREAS, employer contributions made under the Berwyn Plan prior to
its consolidation with the Plan have been held in trust by Commercial
National Bank of Berwyn pursuant to the Trust Agreement under the Citizens
Banking Corporation Amended and Restated Section 401(k) Plan (with
Commercial National Bank of Berwyn as Trustee) ("Berwyn Trust");
WHEREAS, all other assets of the consolidated Plan are held in trust
by Citizens Commercial & Savings Bank pursuant to the Trust Agreement under
the Citizens Banking Corporation Amended and Restated Section 401(k) Plan
(with Citizens Commercial & Savings Bank as Trustee) ("Citizens Trust");
WHEREAS, Citizens Banking Corporation ("Parent Company") desires to
further consolidate the administration of the Plan by having all Plan assets
held under the Citizens Trust.
NOW, THEREFORE, pursuant to Section 9.1 of the Citizens Trust and in
accordance with authority granted by its Board of Directors, Citizens
Banking Corporation hereby adopts this First Amendment, to be effective upon
acceptance by Citizens Commercial & Savings Bank of its appointment as
successor Trustee of assets held under the Berwyn Trust, which assets are to
be transferred to the Citizens Trust.
1. Section 1.2 is amended in its entirety to read as follows:
1.2 Designation of Trustee. The Parent Company hereby
designates the Trustee to continue to hold in trust all funds contributed to
the Plan and earnings thereon, together referred to herein as the "Fund,"
for the purpose of providing benefits as described in the Plan. Employer
contributions made under the Commercial National Bank of Berwyn Amended and
Restated Section 401(k) Profit Sharing Plan prior to its consolidation with
the Plan, which were held under a separate trust agreement between the
Parent Company and Commercial National Bank of Berwyn as trustee, shall be
transferred to the Trustee and shall be held under the terms of this Trust
Agreement.
CITIZENS BANKING CORPORATION,
Parent Company
/S/ Kathleen Finch By:/S/ Gary P. Drainville
- ------------------------------- ------------------------------
Witness Gary P. Drainville
Senior Vice President
CITIZENS COMMERCIAL & SAVINGS BANK,
Trustee
/S/ Kathleen Finch By:/S/ Stephen I. Swett
- -------------------------------- -------------------------------
Witness Stephen I. Swett
Senior Vice President
