As filed with the Securities and Exchange Commission on July 10, 1995
Registration No. 33-43560
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. One to
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
SANTA BARBARA BANCORP
(Exact name of Registrant as specified in its charter)
California 95-
3673456
(State or other jurisdiction of (IRS Employer
Identification
incorporation or organization)
Number)
1021 Anacapa Street
Santa Barbara, California 93101
(805) 564-6300
(Address of Principal Executive Offices)
SANTA BARBARA BANK AND TRUST EMPLOYEE STOCK OWNERSHIP
PLAN AND TRUST ("ESOP")
SANTA BARBARA BANCORP STOCK OPTION PLAN ("SOP")
(Full titles of the Plan)
Kent M. Vining
1021 Anacapa Street
Santa Barbara, California 93101
(805) 564-6300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Bruce W. McRoy, Esq.
Schramm & Raddue
15 West Carrillo Street
Post Office Box 1260
Santa Barbara, California 93102
(805) 963-2044
Pursuant to Rule 416(e) under the Securities Act of 1933, this
Registration Statement covers an indeterminate amount of interests to be
offered or sold pursuant to the ESOP. Pursuant to Rule 429, the Reoffer
Prospectus contained herein relates to the Registration Statements filed
by Registrant on April 20, 1983 (File No. 2-83293), May 7, 1986 (File
No. 33-5493) and June 22, 1992 (File No. 33-48724), as amended.
This Registration Statement originally also covered the Santa
Barbara Bancorp Directors Stock Option Plan ("DSOP"). Pursuant to Rule
429, the Registrant has elected to have the Prospectus contained in the
Form S-8 Registration Statement filed by Registrant on June 22, 1992
(File No. 33-48724) and amended by Post-Effective Amendment No. One
filed June 12, 1995, cover the DSOP. Accordingly, this Registration
Statement no longer covers the DSOP.
SANTA BARBARA BANCORP
REOFFER PROSPECTUS
Cross Reference Sheet Showing Location in
Prospectus of Information Required by Items of Form S-3
Heading
Item of or Subheading
Form S-3 In Prospectus
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus Front Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus Inside Front
Cover Page
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges The Company
4. Use of Proceeds Manner of
Distribution
5. Determination of Offering Price Manner of
Distribution
6. Dilution Not Applicable
7. Selling Security Holders Selling
Security Holders
8. Plan of Distribution Manner of
Distribution
9. Description of Securities to be Registered Capital Stock
of the Company
10. Interests of Named Experts and Counsel Experts
11. Material Changes The Company
12. Incorporation of Certain Information
by Reference Incorporated of
Certain Documents
13. Disclosure of Commission Position
on Indemnification for Securities Act
Liabilities Indemnification
Reoffer This document constitutes part of a
prospectus
Prospectus covering securities that have been
registered
under the Securities Act of 1933
SANTA BARBARA BANCORP
COMMON STOCK
(without par value)
Offered as set forth in this document
pursuant to the
SANTA BARBARA BANK & TRUST
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
SANTA BARBARA BANCORP DIRECTORS STOCK OPTION PLAN
SANTA BARBARA BANCORP RESTRICTED STOCK OPTION PLAN
and
SANTA BARBARA BANCORP STOCK OPTION PLAN
This Prospectus covers (a) distributions, offers and/or sales of
common stock ("Common Stock") of Santa Barbara Bancorp (the "Company")
from the Santa Barbara Bank & Trust Employee Stock Ownership Plan and
Trust ("ESOP"), the Santa Barbara Bancorp Stock Option Plan, the Santa
Barbara Bancorp Directors Stock Option Plan, and the Santa Barbara
Bancorp Restricted Stock Option Plan to participants in such Plans (the
four plans being collectively referred to herein as the "Plans"), one or
more of which Plans may be deemed to be "affiliates" of the Company (as
that term is defined in Rule 405 under the Securities Act of 1933, as
amended); and (b) resales of Common Stock, if any, distributed under the
Plans by persons who may be deemed "affiliates" of the Company (as the
term is defined in Rule 405 under the Securities Act of 1933, as
amended).
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION") NOR
HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS DOCUMENT.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this document is April 1, 1995.
STATEMENT OF AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, and in accordance therewith the Company
files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company may be inspected, and copies of such
material may be obtained at prescribed rates, at the public reference
facilities maintained by the Commission in Washington, D.C., and at its
New York, Chicago and Los Angeles regional offices. The addresses of
these facilities are as follows:
Securities and Exchange Chicago Regional Office
Commission Everett McKinley Dirkson Bldg.
450 Fifth Street, N.W. 219 South Dearborn Street
Room 1024 Room 204
Washington, D.C. 20549 Chicago, Illinois 60604
New York Regional Office Los Angeles Regional Office 26
Federal Plaza 5757 Wilshire Boulevard
New York, N.Y. 10007 Room 1204
Los Angeles, California 90036
The Company will distribute to its shareholders and to all
Participants under the ESOP (a) annual reports containing financial
statements which have been certified by its independent certified public
accountants, (b) any quarterly reports that may be distributed to
shareholders generally, containing unaudited financial information for
the first three quarters of each fiscal year, and (c) copies of all
other reports, proxy statements and other communications distributed to
shareholders generally.
This Prospectus does not contain all information set forth in the
Registration Statement and exhibits thereto which the Company has filed
with the Commission. Any statements contained herein concerning the
provisions of any document filed as an exhibit to the Registration
Statement are not necessarily complete, and in each instance, reference
is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each
such statement is qualified in its entirety by such reference.
No person has been authorized to give any information or to make
any representations, other than those contained in this Prospectus, in
connection with the offer contained herein, and if given or made, such
information or representations must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer
to sell, or a solicitation of any offer to buy, the securities covered
by this Prospectus by the Company in any State to any person to whom it
is unlawful for the Company to make such offer or solicitation. Neither
the delivery of this Prospectus nor any sale hereunder under any
circumstances shall create an implication that there has been no change
of the facts set forth in this Prospectus since the date hereof.
The Company will provide without charge to each person to whom a
Prospectus is delivered, upon oral or written request of such person, a
copy of any and all of the information incorporated by reference in the
Registration Statement (not including exhibits to the information that
is incorporated by reference, unless such exhibits are specifically
incorporated by reference into the information that the Registration
Statement incorporates). (See "Incorporation of Certain Documents" for
a description of these documents.) Requests for such information or for
additional information about the Company or any of the Plans should be
directed to:
Clare McGivney
Assistant Corporate Secretary
Santa Barbara Bancorp
1021 Anacapa Street
Santa Barbara, California 93101
(805) 564-6300
TABLE OF CONTENTS
Title Page No.
THE COMPANY 1
SELLING SECURITY HOLDERS 1
INCORPORATION OF CERTAIN DOCUMENTS 2
MANNER OF DISTRIBUTION 3
CAPITAL STOCK OF THE COMPANY 3
EXPERTS 4
INDEMNIFICATION 4
APPENDIX A A-1
APPENDIX B B-1
THE COMPANY
Santa Barbara Bancorp (the "Company") is a bank holding company
organized under the Bank Holding Act of 1957, as amended. It was
incorporated under the laws of the State of California on December 7,
1981. The Company owns all of the outstanding shares of the capital
stock of Santa Barbara Bank & Trust (the "Bank"). As a bank holding
company, the Company is subject to the supervision and regulation of the
Board of Governors of the Federal Reserve System.
The Bank is a wholly owned, operating subsidiary of the Company.
It was incorporated under the laws of the State of California on April
13, 1979, and was licensed by the California State Banking Department
and commenced operation as a California state-chartered bank in 1979.
Prior to 1979, the Bank operated as Santa Barbara National Bank, which
commenced operations in 1960. The Bank is subject to regulation by the
California Superintendent of Banks and by the Federal Deposit Insurance
Corporation.
SBBT Service Corporation is a wholly owned subsidiary of the
Company ("Service Corporation"). It was incorporated under the laws of
the State of California in July, 1988. It is engaged in the business of
providing interbank courier services and management consulting services
to unaffiliated financial institutions throughout the Counties of Santa
Barbara, San Luis Obispo and Ventura, California.
The principal executive offices of the Company are located at 1021
Anacapa Street, Santa Barbara, California 93101, telephone number (805)
564-6300.
SELLING SECURITY HOLDERS
This Prospectus covers distributions of Common Stock of the Company
from the Plans to Participants under the Plans (which may involve offers
and/or sales of such Common Stock to Participants). Distributions will
not be made at the present time, but will only occur in accordance with
and at the times established under the Plans.
This Prospectus also covers the resale by persons who may be deemed
"affiliates" of the Company (as that term is defined in Rule 405 under
the Securities Act of 1933) of shares of Common Stock that were acquired
through distributions from the Plans and exercise of options granted
under the Plans. Such resales may include deemed sales of Common Stock
distributed pursuant to the ESOP in exercise of a Participant's right to
"Put" the Stock back to the ESOP. (The ESOP gives Participants the
option of selling distributed stock back to the Plan at its then-current
fair market value, in effect allowing the Participant to take the
distribution in cash rather than in shares of Common Stock.) No such
resales are being offered at the present time.
Appendix A sets forth the names of those Participants in the ESOP
who may be deemed affiliates of the Company, as well as certain other
information regarding the ESOP, all as of the date of the Appendix.
Such "affiliated" Participants may engage in resales of distributed
Common Stock covered by this Prospectus at some future date, although no
such resales are currently planned by these Participants. Appendix B
lists those affiliates of the Company who propose, as of the date of the
Appendix, to resell shares of Common Stock acquired under the Plans
pursuant to this Prospectus. The Company will update Appendix A and
Appendix B from time to time to identify those affiliates of the Company
who hereafter propose to resell shares of Common Stock acquired under
the Plans pursuant to this Prospectus.
It is not possible to predict when distributions from the Plans
will be made or when resales by affiliates of distributed Common Stock
may be offered, the method of disposition of the Common Stock, the price
at which distributed Common Stock may be offered or the use to which the
proceeds of any resales may be put. This Prospectus and the relevant
Appendices will be amended from time to time to include the names and
related security holding information of affiliates offering shares for
resale pursuant to this Prospectus.
INCORPORATION OF CERTAIN DOCUMENTS
By this reference, the following documents filed by the Company
with the Commission are incorporated into and made a part of this
Prospectus:
1. The Company's Annual Report to Shareholders for the fiscal
year ended December 31, 1994;
2. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994, filed pursuant to Section 13(a) of
the Exchange Act (which includes the financial statements of
the Company for such year and the report thereon of the
Company's independent public accountants);
3. The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1995, filed pursuant to Section
13(a)
of the Exchange Act; and
4. The description of Common Stock contained in Registrant's
Registration Statement on Form 8-A (Registration No. 0-
11113)
filed under the Exchange Act, including any amendment or
report subsequently filed by Registrant for the purpose of
updating that description.
All documents filed with the Commission by the Company and by each
Plan subsequent to the date of this Prospectus pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act (prior to the filing of a
post-effective amendment which indicates that all securities offered
have been distributed or sold or which deregisters all securities then
remaining not distributed or unsold) shall be deemed to be incorporated
into and made a part of this Prospectus from the date of filing of such
documents with the Commission.
MANNER OF DISTRIBUTION
The shares of Common Stock offered hereby (whether sales by
affiliates or distributions to Participants from one or more of the
Plans) may be sold and distributed on any securities exchange on which
the shares may then be traded or in the over-the-counter market (at
prices and at terms then prevailing) or in negotiated transactions or
otherwise, which transactions may include purchase of some or more of
the shares by broker-dealers or principals, for resale pursuant to this
Prospectus.
CAPITAL STOCK OF THE COMPANY
The authorized capital of the Company consists of 20,000,000 shares
of Common Stock. The holders of the Company's Common Stock outstanding
from time to time are entitled to receive, out of assets legally
available therefor, dividends at such time and in such amounts as the
Board of Directors may determine. Upon liquidation, dissolution or
winding-up of the Company, the assets of the Company legally available
for distribution to shareholders will be distributed ratably among the
holders of the outstanding Common Stock. Holders of Common Stock have
no conversion or preemptive rights. Shareholders have no liability for
further calls upon shares, and all the shares of Common Stock
outstanding are fully paid and nonassessable.
Each shareholder is entitled to one vote for each share of the
Company's Common Stock held by such shareholder. When electing
Directors of the Company, each shareholder has the right to vote
cumulatively in accordance with requirements set forth in the Company's
Bylaws and by statute.
The Company's Articles of Incorporation contain a provision of a
type commonly known as a "fair price" provision. In general the
Articles require the approval by holders of 66.67% of the outstanding
voting shares (as defined in the Articles) of the Company as a condition
for mergers, certain other business combinations and similar
transactions involving the Company ("Business Combinations") and any
holder of 10% or more of the outstanding voting shares of the Company (a
"Ten Percent Shareholder") unless either (a) the transaction is approved
by a majority of the "Disinterested Directors" [namely, members of the
Board who are neither affiliated with the Ten Percent Shareholder nor
nominated, elected or appointed to the Board by such Shareholder] or (b)
certain minimum price, form of consideration and procedural requirements
are met. The Articles also require the approval by the holders of
66.67% of the outstanding voting shares of the Company to amend or
repeal, or adopt provisions inconsistent with the "fair price"
provisions at any time in the future.
These "fair price" provisions are intended to provide a measure of
assurance that all shareholders of the Company will be treated similarly
in the event of certain Business Combinations involving a Ten Percent
Shareholder. The overall effect of these proposals may be to render
more difficult the accomplishment of mergers or certain other Business
Combinations or the assumption of control by a substantial shareholder
without the prior approval of the Board, and thus to make more difficult
the removal of management. The "fair price" provisions in the Articles
are designed to protect minority shareholders from a purchaser using
two-tier pricing and similar tactics in an attempt to take over the
Company. The provisions are not designed to prevent or discourage
tender offers for all of the Company's Common Stock or Business
Combinations approved by a majority of the Disinterested Directors.
They generally should not prevent a tender offer or other Business
Combination in which each shareholder receives substantially the same
price for his or her shares as each other shareholder or which the Board
of Directors has approved. Except for these restrictions on certain
Business Combinations, the Articles do not prevent a holder of a
controlling interest from increasing his or her share ownership
interest.
EXPERTS
The financial statements and schedules incorporated by reference in
this Prospectus have been audited by Arthur Andersen & Co., independent
public accountants, as indicated in their reports with respect thereto,
and are incorporated herein in reliance upon the authority of said firm
as experts in accounting and auditing in giving said reports.
INDEMNIFICATION
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the General Corporation Law of the
State of California and under the Company's Bylaws, Articles of
Incorporation or otherwise, the Company has been informed that in the
opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable.
Section 317 of the California Corporation Code provides broad
authority for a court to award, or for a corporation's Board of
Directors to grant, indemnification to directors and officers for
liabilities incurred in connection with their activities in such
capacities (including reimbursement for expenses incurred).
Pursuant to Article VI of its Bylaws, the Company is authorized to
indemnify its directors, officers and any other persons acting as agents
of the Company to the maximum extent permitted under California law.
Pursuant to authorization contained in said Article VI of the Bylaws,
the Company has obtained and continues to carry a policy of officers and
directors liability and corporate reimbursement insurance in connection
with such indemnification.
APPENDIX A
(to Reoffer Prospectus)
The date of this Appendix is .
1. ESOP DISTRIBUTIONS OF STOCK
A distribution of Common Stock of the Company is being or will be
made in the amounts and to the individuals named below, as a result of
termination of these individuals as Participants in the Company's
Employee Stock Ownership Plan ("ESOP").
Participant Name Number of Shares
As described in more detail below, the ESOP provides for certain put
option rights in favor of terminating Participants in the event of
distribution of Company stock upon termination of participation in the
ESOP. Because the ESOP may be deemed an "affiliate" of the Company,
these distributions of stock, combined with the put option rights, may
be considered a sale of the distributed stock by the ESOP.
A. Put Option
Upon a distribution of Common Stock of the Company to a
terminating Participant under the ESOP, the Participant may, within
sixty (60) days after receipt of the distribution or within sixty (60)
days after the close of the then-current Plan Year, require the Company
to purchase all or any part of the stock so distributed. In order to
exercise this put option, the Participant must deliver written notice to
the ESOP Advisory Committee of his or her election to sell the stock and
must deliver therewith the certificates representing the stock to be
sold, duly endorsed for transfer. The purchase price payable for the
stock so sold shall be its fair market value, as determined in good
faith by the Advisory Committee on the basis of all relevant factors and
in accordance with applicable federal income tax regulations, as of the
last day of the immediately preceding quarter.
The purchase price for the stock shall be paid by the Company
by a check within thirty (30) days following the date of the sale. If
the Company has insufficient funds to pay the full amount of the
purchase price at that time, payment may be deferred until the Company
has sufficient funds to pay the purchase price. In the event of such
deferral of the payment price, the Company must issue to the Participant
an appropriate instrument evidencing its indebtedness for the purchase
price. This instrument must accrue interest on the obligation at a
reasonable rate, must provide for substantially equal periodic payments
commencing within thirty (30) days after the date the option is
exercised and continuing for a period of no longer than five (5) years
and must provide for adequate security for the indebtedness.
The ESOP also gives the Trustee of the ESOP discretion, if the
Company agrees, to purchase the offered stock from the terminating
Participant in accordance with the above provisions, and subject to
further restrictions set forth in the ESOP.
B. Members of the ESOP Committee
The names and addresses of the Advisory Committee of the ESOP,
as of the date of this Appendix, are as follows:
Donald M. Anderson
1021 Anacapa Street
P.O. Box 1119
Santa Barbara, CA 93102
David W. Spainhour
1021 Anacapa Street
P.O. Box 1119
Santa Barbara, CA 93102
John J. McGrath
1021 Anacapa Street
P.O. Box 1119
Santa Barbara, CA 93102
Kent Vining
1021 Anacapa Street
P.O. Box 1119
Santa Barbara, CA 93102
Jay D. Smith
1021 Anacapa Street
P.O. Box 1119
Santa Barbara, CA 93102
Paulette Posch
1021 Anacapa Street
P.O. Box 1119
Santa Barbara, CA 93102
William S. Thomas, Jr.
1021 Anacapa Street
P.O. Box 1119
Santa Barbara, CA 93102
C. Readily Tradable Stock
The put option rights described above become inapplicable if,
at the time of the distribution of the stock from the ESOP, that stock
is publicly traded on an established market and is not subject to
trading restrictions under applicable securities laws during the time
when the put option is exercisable. The Company does not believe that
its stock is currently "readily tradable" and that the put option
consequently remains in effect as to the distributions of stock of the
ESOP.
2. AFFILIATE STATUS OF ESOP
As of the date of this Appendix, and prior to the distribution of
stock from the ESOP, as described in Paragraph 1, above, the ESOP owned
546,758 shares of Common Stock of the Company, or 10.67% of the issued
and outstanding Common Stock. After the distribution the ESOP will own
shares, or %. The Trustee of the ESOP is Santa Barbara
Bank & Trust, a subsidiary of the Company. Further, each of the members
of the Board of Directors of the Trustee, as well as each of the members
of the Advisory Committee of the ESOP, is either a director, officer or
employee of the Company. As a result, the Trustee may be deemed to be
controlled by the Company.
Share Ownership In
Name Position ESOP(Note 1) Other
ESOP 546,758(Note
2)
Donald M. Anderson Director and Chairman 35,006 183,737
Edward E. Birch Director 12,405 5,188
Frank H. Barranco Director 3,750 8,360
Richard M. Davis Director 3,000 7,050
Anthony Guntermann Director 13,146 18,468
Dale E. Hanst Director 18,273 19,574
Harry B. Powell Director 5,000 4,967
David W. Spainhour Director and President 36,353 122,238
John McGrath Senior Vice President 29,454 17,539
Jay Donald Smith Senior Vice President 31,800 30,830
Kent Vining Senior Vice President 30,962 16
William S. Thomas, Jr. Senior Vice President 2,000 4,727
Paulette Posch Vice President 5,544 3,923
Note 1: Includes shares allocated under the ESOP to the accounts of
the individuals listed above and shares that may be acquired through the
exercise of stock options granted under the Plans that are currently
exercisable or will be exercisable at any time during the sixty (60)-day
period following the date of this Appendix.
Note 2: Includes all shares held in the ESOP, including shares
allocated under the ESOP to the accounts of one or more of the
individuals listed above (and thus such shares are included in the table
more than once).
APPENDIX B
(to Reoffer Prospectus)
The date of this Appendix is .
1. RESALE BY AFFILIATES
Set forth below are the names of the persons who are affiliates of
the Company and who propose to resell shares of Common Stock of the
Company pursuant to this Reoffer Prospectus and the number of shares of
Common Stock proposed to be resold.
Name Number of Shares
This Reoffer Prospectus relates only to shares of Common Stock
acquired by the foregoing persons through distributions from the Plans
or upon exercise of stock options granted under the Plans.
EXPLANATORY NOTE
Following is the S-8 Registration Statement covering the Santa
Barbara Bank and Trust Employee Stock Ownership Plan and Trust ("ESOP")
and the Santa Barbara Bancorp Stock Option Plan ("SOP"). This
Registration Statement covers the registration of up to 110,250 shares
of Common Stock issuable upon exercise of stock options granted under
the SOP and up to 220,000 shares of Common Stock issuable under the
ESOP. The Registrant previously has filed a Registration Statement on
Form S-8 (Registration No. 2-83293 (April 20, 1983)) covering additional
shares of Common Stock issuable upon exercise of options granted under
the SOP and the ESOP. The Registrant previously has filed a
Registration Statement on Form S-8 (Registration No. 33-5493 (May 7,
1986)) covering additional shares of Common Stock issuable under the
ESOP.
The Registrant has filed a Registration Statement on Form S-8
(Registration No. 33-48724 (June 22, 1992)) covering additional shares
of Common Stock issuable upon exercise of options granted under the
Santa Barbara Bancorp Directors Stock Option Plan ("DSOP"). This
Registration Statement previously covered the shares issuable upon
exercise of options granted under the DSOP. Pursuant to Rule 429, the
S-8 Registration Statement filed June 22, 1992, related to this
Registration Statement as it covered the DSOP. Registrant has elected
to have the June 22, 1992 Registration Statement cover the DSOP and has
deleted the shares issuable upon exercise of options granted under the
DSOP from this Registration Statement.
PART I
INFORMATION REQUIRED IN THE SECTION 10 PROSPECTUS
Item 1. Plan Information*
Item 2. Registrant Information and Employee Plan Annual Information*
* The Part I information required to be contained in the
Section 10(a) prospectus is omitted from this Registration Statement in
accordance with Rule 428 promulgated under the Securities Act of 1933
and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by the Registrant and the Santa
Barbara Bank and Trust Employee Stock Ownership Plan and Trust ("ESOP")
with the Securities and Exchange Commission are incorporated by
reference in this Registration Statement:
(1) Registrant's Annual Report on Form 10-K for its fiscal
year ended December 31, 1994 (Commission file number 0-11113), which
Report incorporates by reference certain information contained in
Registrant's definitive proxy statement (the "1995 Proxy Statement") for
Registrant's April 25, 1995 annual meeting of shareholders;
(2) The ESOP's Annual Report on Form 11-K for the fiscal
year ended December 31, 1994;
(3) Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1995; and
(4) The description of Registrant's Common Stock contained
in Registrant's Registration Statement on Form 8-A (Registration No. 0-
11113) under the Securities Exchange Act of 1934, including any
amendment or report subsequently filed by Registrant for the purpose of
updating that description.
In addition, all documents subsequently filed by Registrant and the
ESOP pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, prior to the filing of a post-effective amendment
to this Registration Statement which indicates that all securities
offered under this Registration Statement have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a
part hereof from the date of filing of such documents.
Registrant will provide to participants in the ESOP and the SOP,
without charge, copies of the documents described above and incorporated
by reference in this Registration Statement and such copies of the other
documents required to be provided to participants pursuant to Rule
428(b) promulgated under the Securities Act of 1933, as amended.
Requests for copies of such documents should be sent to Clare McGivney,
Assistant Corporate Secretary, Santa Barbara Bancorp, 1021 Anacapa
Street, Santa Barbara, California 93101 (telephone: (805) 564-6300).
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Counsel for Registrant, Schramm & Raddue, has rendered an opinion
to the effect that Registrant's shares of Common Stock covered by the
Registration Statement will be duly and validly issued, fully paid and
nonassessable upon issuance.
Dale E. Hanst, a director of Registrant, is a partner in the firm
of Schramm & Raddue. Mr. Hanst owns 19,574 shares of Registrant's
Common Stock and holds options to purchase approximately 16,831 shares
of Registrant's Common Stock. Certain other attorneys of Schramm &
Raddue own an aggregate of approximately 14,524 shares of Registrant's
Common Stock. In addition, certain attorneys of Schramm & Raddue serve
as fiduciaries for various trust accounts. These trust accounts own an
aggregate of approximately 10,139 shares of Registrant's Common Stock,
as to which shares the attorneys serving as fiduciaries disclaim
beneficial ownership.
Item 6. Indemnification of Directors and Officers
The Board of Directors of Registrant has resolved to indemnify the
officers and directors of Registrant to the full extent permitted by
Section 317 of the California General Corporation Law, and Article VI of
Registrant's Bylaws provides for indemnification of officers and
directors to the same extent. Section 317 of the California General
Corporation Law makes provision for the indemnification of officers and
directors under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of
1933. On January 27, 1988, Registrant's Board of Directors approved
amendments to Registrant's Articles of Incorporation providing for the
indemnification of directors and officers of the Company to the fullest
extent permitted under California law. These amendments limit the
personal monetary liability of directors in performing their duties on
behalf of Registrant, to the extent permitted by the California General
Corporation Law, and permit Registrant to indemnify its directors and
officers against certain liabilities and expenses, to the extent
permitted by the California General Corporation Law. These amendments
and the entering into of indemnification agreements were approved by
Registrant's stockholders at the annual stockholders' meeting held on
March 30, 1988. In addition, Registrant maintains a directors' and
officers' liability insurance policy that insures its directors and
officers against certain liabilities, including certain liabilities
under the Securities Act of 1933.
Item 7. Exception from Registration Claimed
Not applicable.
Item 8. Exhibits
The following Exhibits are filed as a part of this Registration
Statement:
4.1 The Santa Barbara Bank and Trust Employee Stock Ownership
Plan and Trust (as amended through the date of this Registration
Statement)
4.2 The Santa Barbara Bancorp Stock Option Plan (as amended
through the date of this Registration Statement)*
4.2.1 Form of Incentive Stock Option Agreement*
4.2.2 Form of Nonqualified Stock Option Agreement*
4.2.3 Form of Incentive "Reload" Option*
4.2.4 Form of Nonqualified "Reload" Option*
5.1 Opinion of Schramm & Raddue*
24.1 Consent of Arthur Andersen & Co.*
24.2 Consent of Schramm & Raddue (included in Opinion of Schramm
& Raddue filed as Exhibit 5.1 herein)*
*Incorporated by reference to Registration Statement on Form S-8
filed October 25, 1991, (Registration No. 33-43560).
Item 9. Undertakings
(A) Rule 415 Offerings. The undersigned Registrant hereby
undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of this Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in this Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in
this Registration Statement;
Provided however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(B) Filings Incorporating Subsequent Documents by Reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be in
the initial bona fide offering thereof.
(C) Incorporated Annual and Quarterly Reports. The undersigned
Registrant hereby undertakes to deliver or cause to be delivered with
the Prospectus, to each person to whom the Prospectus is sent or given,
the latest Annual Report to security holders that is incorporated by
reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange
Act of 1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X are not set forth in the
Prospectus, to deliver, or cause to be delivered to each person to whom
the Prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the Prospectus to provide such
interim financial information.
(D) Filing of Registration Statement on Form S-8. Insofar as
indemnification for liabilities arising under the Securities Act of 1933
may be permitted to directors, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise,
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
the payment by Registrant of expenses incurred or paid by a director,
officer or controlling person of Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
POWER OF ATTORNEY
Each director and/or officer of the Registrant whose signature
appears below hereby appoints David W. Spainhour, Jay D. Smith, Kent
Vining, and Donald Lafler, and each of them severally, as his attorney-
in-fact to sign in his name and behalf, in any and all capacities stated
below, and to file with the Commission any and all amendments, including
post-effective amendments, to this Registration Statement, and the
Registrant hereby also appoints each such person as its attorney-in-fact
with like authority to sign and file any such amendments in its name and
behalf.
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, there unto duly authorized, in the City of Santa Barbara,
State of California, on July 6, 1995.
SANTA BARBARA BANCORP
By David W. Spainhour
David W. Spainhour
President/Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
/s/
Donald M. Anderson Chairman of the Board July 6, 1995
/s/
David W. Spainhour President, Chief Executive July 6, 1995
Officer and Director
Kent M. Vining
Kent Vining Senior Vice President and July 6, 1995
Chief Financial Officer
(Principal Financial Officer)
Donald Lafler
Donald Lafler Principal Accounting Officer July 6, 1995
/s/
Franco Barranco, M.D. Director July 6, 1995
/s/
Edward E. Birch Director July 6, 1995
/s/
Richard M. Davis Director July 6, 1995
/s/
Anthony Guntermann Director July 6, 1995
/s/
Dale E. Hanst Director July 6, 1995
/s/
Harry B. Powell Director July 6, 1995
*By Jay D. Smith
Jay D. Smith,
Attorney-in-Fact
July 6, 1995
Santa Barbara Bank and Trust Employee
Stock Ownership Plan and Trust
By: Santa Barbara Bank and Trust
Date: July 6,1995 By: Jay D. Smith
Jay D. Smith, Esq.
Corporate Secretary
EXHIBIT INDEX
Exhibit
Sequential
Number Description of Item Page
4.1 The Santa Barbara Bank and Trust Employee
Stock Ownership Plan and Trust (as amended
through the date of this Registration Statement)
4.2 The Santa Barbara Bancorp Stock Option Plan
(as amended through the date of this Registration
Statement)*
4.2.1 Form of Incentive Stock Option Agreement*
4.2.2 Form of Nonqualified Stock Option Agreement*
4.2.3 Form of Incentive "Reload" Option*
4.2.4 Form of Nonqualified "Reload" Option*
5.1 Opinion of Schramm & Raddue*
24.1 Consent of Arthur Andersen & Co.*
24.2 Consent of Schramm & Raddue (included in Opinion
of Schramm & Raddue filed as Exhibit 5.1 herein)*
*Incorporated by reference to Registration Statement on Form S-8
filed October 25, 1991 (Registration No. 33-43560).
SANTA BARBARA BANK AND TRUST EMPLOYEE STOCK OWNERSHIP PLAN AND
TRUST
(as amended through the date of this Registration Statement)
Exhibit 4.1
SANTA BARBARA BANK & TRUST
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
TABLE OF CONTENTS
Section Page
1. DEFINITIONS 1
2. TOP HEAVY AND ADMINISTRATION 16
2.1 Top Heavy Plan Requirements 16
2.2 Determination Of Top Heavy Status 16
2.3 Powers and Responsibilities of the Employer 19
2.4 Administrator 20
2.5 Allocation and Delegation of Responsibilities 20
2.6 Powers and Duties of the Administrator 20
2.7 Records and Reports 22
2.8 Appointment of Advisers 22
2.9 Information From Employer 22
2.10 Payment of Expenses 22
2.11 Majority Actions 23
2.12 Claims Procedure 23
2.13 Claims Review Procedure 23
3. ELIGIBILITY 24
3.1 Conditions of Eligibility 24
3.2 Application for Participation 24
3.3 Effective Date of Participation 24
3.4 Determination of Eligibility 24
3.5 Termination of Eligibility 24
3.6 Omission Of Eligible Employee 25
3.7 Inclusion of Ineligible Employee 25
3.8 Election Not to Participate 25
4. CONTRIBUTION AND ALLOCATION 25
4.1 Formula For Determining Employer's Contribution 25
4.2 Time of Payment of Employer's Contribution 26
4.3 Allocation of Contribution, Forfeitures
and Earnings 26
4.4 Maximum Annual Additions 31
4.5 Adjustment For Excessive Annual Additions 36
4.6 Directed Investment of Accounts 37
5. FUNDING AND INVESTMENT POLICY 40
5.1 Investment Policy 40
5.2 Application Of Cash 40
5.3 Transactions Involving Company Stock 40
5.4 Loans to the Trust 42
6. VALUATIONS 43
6.1 Valuation of the Trust Fund 43
6.2 Method of Valuation 43
7. DETERMINATION AND DISTRIBUTION OF BENEFITS 43
7.1 Determination of Benefits Upon Retirement 43
7.2 Determination of Benefits Upon Death 44
7.3 Determination of Benefits in Event of Disability 45
7.4 Determination of Benefits Upon Termination 45
7.5 Distribution of Benefits 49
7.6 How Plan Benefit Will be Distributed 54
7.7 Distribution for Minor Beneficiary 55
7.8 Location of Participant or Beneficiary Unknown 55
7.9 Right of First Refusal 55
7.10 Stock Certificate Legend 57
7.11 Put Option 57
7.12 Nonterminable Protections and Rights 59
7.13 Qualified Domestic Relations Order Distribution 59
8. TRUSTEE 59
8.1 Basic Responsibilities of the Trustee 59
8.2 Investment Powers and Duties of the Trustee 60
8.3 Other Powers of the Trustee 61
8.4 Voting Company Stock 64
8.5 Duties Of The Trustee Regarding Payments 65
8.6 Trustee's Compensation and Expenses and Taxes 65
8.7 Annual Report of the Trustee 66
8.8 Audit 66
8.9 Resignation, Removal and Succession of Trustee 67
8.10 Transfer of Interest 68
8.11 Direct Rollover 68
9. AMENDMENT, TERMINATION AND MERGERS 69
9.1 Amendment 69
9.2 Termination 70
9.3 Merger or Consolidation 70
10. MISCELLANEOUS 71
10.1 Participant's Rights 71
10.2 Alienation 71
10.3 Construction of Plan 71
10.4 Gender and Number 71
10.5 Legal Action 72
10.6 Prohibition Against Diversion of Funds 72
10.7 Bonding 72
10.8 Employer's and Trustee's Protective Clause 72
10.9 Insurer's Protective Clause 73
10.10 Receipt and Release for Payments 73
10.11 Action by the Employer 73
10.12 Named Fiduciaries and Allocation of Responsibility 73
10.13 Headings 74
10.14 Approval by Internal Revenue Service 74
10.15 Uniformity 74
10.16 Securities and Exchange Commission Approval 75
THIS AGREEMENT is made and entered into this ____ day of June,
1994, by and between SANTA BARBARA BANK & TRUST, a California
corporation, as Employer (herein referred to as the "Employer"), and
SANTA BARBARA BANK & TRUST, a California corporation, as Trustee (herein
referred to as the "Trustee"), with reference to the following facts:
RECITALS:
A. The Employer established an Employee Stock Ownership Plan
and Trust effective January 1, 1985 (the "Effective Date"), known as
Santa Barbara Bank & Trust Employee Stock Ownership Plan and Trust
(herein referred to as the "Plan"), in recognition of the contribution
made to its successful operation by its employees and for the exclusive
benefit of its eligible employees.
B. Contributions to the trust under the Plan will be made by
the Employer and invested by the Trustee primarily in the stock of the
Employer.
C. Under the terms of the Plan, the Employer has the ability to
amend the Plan, provided the Trustee joins in such amendment if the
provisions of the Plan affecting the Trustee are amended.
D. The Employer desires to amend and restate the Plan to
reflect the requirements of the Tax Reform Act of 1986, and subsequent
legislation, judicial decisions, and rulings.
AGREEMENT:
NOW, THEREFORE, effective January 1, 1989, except as otherwise
provided, the Employer and the Trustee in accordance with the provisions
of the Plan pertaining to amendments thereof, hereby amend and restate
the Plan in its entirety to provide as follows:
1. DEFINITIONS
1.1 "Act" or "ERISA" means the Employee Retirement Income
Security Act of 1974, as it may be amended from time to time.
1.2 "Administrator" means the person or entity designated by
the Employer pursuant to Section 2.4 to administer the Plan on behalf of
the Employer.
1.3 "Affiliated Employer" means any corporation which is a
member of a controlled group of corporations (as defined in Code Section
414(b)) which includes the Employer; any trade or business (whether or
not incorporated) which is under common control (as defined in Code
Section 414(c)) with the Employer; any organization (whether or not
incorporated) which is a member of an affiliated service group (as
defined in Code Section 414(m)) which includes the Employer; and any
other entity required to be aggregated with the Employer pursuant to
Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each
Participant, the value of all accounts maintained on behalf of a
Participant, whether attributable to Employer or Employee contributions,
subject to the provisions of Section 2.2.
1.5 "Anniversary Date" means last day of each calendar quarter
in the Plan Year.
1.6 "Beneficiary" means the person to whom the share of a
deceased Participant's total account is payable, subject to the
restrictions of Sections 7.2 and 7.5.
1.7 "Code" means the Internal Revenue Code of 1986, as amended
or replaced from time to time.
1.8 "Company Stock" means common stock issued by the Employer
(or by a corporation which is a member of the controlled group of
corporations of which the Employer is a member) which is readily
tradeable on an established securities market. If there is no common
stock which meets the foregoing requirement, the term "Company Stock"
means common stock issued by the Employer (or by a corporation which is
a member of the same controlled group) having a combination of voting
power and dividend rights equal to or in excess of: (A) that class of
common stock of the Employer (or of any other such corporation) having
the greatest voting power, and (B) that class of common stock of the
Employer (or of any other such corporation) having the greatest dividend
rights. Noncallable preferred stock shall be deemed to be "Company
Stock" if such stock is convertible at any time into stock which
constitutes "Company Stock" hereunder and if such conversion is at a
conversion price which (as of the date of the acquisition by the Trust)
is reasonable. For purposes of the preceding sentence, pursuant to
Regulations, preferred stock shall be treated as noncallable if after
the call there will be a reasonable opportunity for a conversion which
meets the requirements of the preceding sentence.
1.9 "Company Stock Account" means the account of a Participant
which is credited with the shares of Company Stock purchased and paid
for by the Trust Fund or contributed to the Trust Fund.
1.10 "Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other
payments of compensation by the Employer (in the course of the
Employer's trade or business) for a Plan Year for which the Employer is
required to furnish the Participant a written statement under Code
Sections 6041(d), 6051(a)(3) and 6052. Compensation must be determined
without regard to any rules under Code Section 3401(a) that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)).
1.10.1 Adjustments. For purposes of this Section, the
determination of Compensation shall be made by including amounts which
are contributed by the Employer pursuant to a salary reduction agreement
and which are not includable in the gross income of the Participant
under Code Sections 125, 402(e)(3), 402(h), 403(b) or 457, and Employee
contributions described in Code Section 414(h)(2) that are treated as
Employer contributions.
1.10.2 Initial Year. For a Participant's initial year of
participation, Compensation shall be recognized as of such Employee's
effective date of participation pursuant to Section 3.3.
1.10.3 Limit on Amount. For the Plan Years beginning:
A. Prior to January 1, 1994, Compensation in excess
of $200,000 shall be disregarded. Such amount shall be adjusted at the
same time and in such manner as permitted under Code Section 415(d),
except that the dollar increase in effect on January 1 of any calendar
year shall be effective for the Plan Year beginning with or within such
calendar year and the first adjustment to the $200,000 limitation shall
be effective on January 1, 1990. For any short Plan Year the
Compensation limit shall be an amount equal to the Compensation limit
for the calendar year in which the Plan Year begins multiplied by the
ratio obtained by dividing the number of full months in the short Plan
Year by twelve (12). In applying this limitation, the family group of a
Highly Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Participant is
either a "five percent owner" of the Employer or one of the ten (10)
Highly Compensated Employees paid the greatest "415 Compensation" during
the year, shall be treated as a single Participant, except that for this
purpose Family Members shall include only the affected Participant's
spouse and any lineal descendants who have not attained age nineteen
(19) before the close of the year. If, as a result of the application
of such rules the adjusted $200,000 limitation is exceeded, then the
limitation shall be prorated among the affected Family Members in
proportion to each such Family Member's Compensation prior to the
application of this limitation, or the limitation shall be adjusted in
accordance with any other method permitted by Regulation.
B. In addition to the other limitations set forth in
this Plan, and notwithstanding any of the provision of this Plan to the
contrary, for Plan Years beginning on or after January 1, 1994, the
annual Compensation of each Employee taken into account under this Plan
shall not exceed the One Hundred Fifty Thousand Dollars ($150,000), as
adjusted by the Internal Revenue Service for cost of living increases in
accordance with Code Section 401(a)(17)(B).
(1) The cost of living adjustment in effect for
a calendar year applies to any period which begins in that calendar
year, does not exceed twelve months, and for which Compensation is
required to be determined (the "determination period"). If a
determination period consists of fewer than twelve (12) months, then the
annual compensation limit for such period shall be $150,000 (or such
greater amount determined in accordance with Code Section
401(a)(17)(B)), multiplied by a fraction, the numerator of which is the
number of months in such determination period, and the denominator of
which is twelve (12). For Plan Years beginning on or after January 1,
1994, any reference in this Plan to the limitation under Code Section
401(a)(17) shall mean such $150,000 limit (has adjusted pursuant to Code
Section 401(a)(17)(B)) set forth in this Section 1.8.4.
(2) If an Employee's benefits accruing in any
Plan Year are determined by reference to the Employee's Compensation for
any determination period commencing prior to such Plan Year, then the
Compensation for such prior determination period shall be subject to the
$150,000 limit (as adjusted pursuant to Code Section 401(a)(17)(B)) in
effect for that prior determination period. For any such determination
period beginning prior to the first day of the first Plan Year beginning
on or after January 1, 1994, the annual compensation limit under this
Section 1.8.3 shall be $150,000.
1.10.4 Family Aggregation. If, as a result of such
rules, the maximum "annual addition" limit of Section 4.4(a) would be
exceeded for one or more of the affected Family Members, the prorated
Compensation of all affected Family Members shall be adjusted to avoid
or reduce any excess. The prorated Compensation of any affected Family
Member whose allocation would exceed the limit shall be adjusted
downward to the level needed to provide an allocation equal to such
limit. The prorated Compensation of affected Family Members not
affected by such limit shall then be adjusted upward on a pro rata basis
not to exceed each such affected Family Member's Compensation as
determined prior to application of the Family Member rule. The
resulting allocation shall not exceed such individual's maximum "annual
addition" limit. If, after these adjustments, an "excess amount" still
results, such "excess amount" shall be disposed of in the manner
described in Section 4.5.1 pro rata among all affected Family Members.
1.10.5 Prior Definition. If, in connection with the
adoption of this amendment and restatement, the definition of
Compensation has been modified, then, for Plan Years prior to the Plan
Year which includes the adoption date of this amendment and restatement,
Compensation means compensation determined pursuant to the Plan then in
effect.
1.10.6 Prior Plan Years. For Plan Years beginning prior
to January 1, 1989, the $200,000 limit (without regard to Family Member
aggregation) shall apply only for Top Heavy Plan Years and shall not be
adjusted.
1.11 "Contract" or "Policy" means any life insurance policy,
retirement income or annuity policy, or annuity contract (group or
individual) issued pursuant to the terms of the Plan.
1.12 "Current Obligations" means Trust obligations arising
from extension of credit to the Trust and payable in cash within (1)
year from the date an Employer contribution is due. With respect to the
estates of decedents who died prior to July 13, 1989, Trust obligations
shall include the liability for payment of taxes imposed by Code Section
2001, which liability is incurred pursuant to Code Section 2210(b).
1.13 "Early Retirement Date" means the first day of the month
(prior to the Normal Retirement Date) coinciding with or following the
date on which a Participant or Former Participant attains age 55 and has
completed at least 20 Years of Service with the Employer (Early
Retirement Age). A Participant shall become fully Vested upon
satisfying this requirement if still employed at his Early Retirement
Age.
A Former Participant who terminates employment after
satisfying the service requirement for Early Retirement and who
thereafter reaches the age requirement contained herein shall be
entitled to receive his benefits under this Plan.
1.14 "Eligible Employee" means any Employee. Employees of
Affiliated Employers shall not be eligible to participate in this Plan
unless such Affiliated Employers have specifically adopted this Plan in
writing.
1.15 "Employee" means any person who is employed by the
Employer or Affiliated Employer, but excludes any person who is an
independent contractor. Employee shall include Leased Employees within
the meaning of Code Sections 414(n)(2) and 414(o)(2) unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and
such Leased Employees do not constitute more than 20% of the recipient's
non-highly compensated work force.
1.16 "Employer" means Santa Barbara Bank & Trust and any
successor which shall maintain this Plan; and any predecessor which has
maintained this Plan. The Employer is a corporation with principal
offices in the State of California.
1.17 "ESOP" means an employee stock ownership plan that meets
the requirements of Code Section 4975(e)(7) and Regulation 54.4975-11.
1.18 "Exempt Loan" means a loan made to the Plan by a
disqualified person or a loan to the Plan which is guaranteed by a
disqualified person and which satisfies the requirements of Section
2550.408b-3 of the Department of Labor Regulations, Section 54.4975-7(b)
of the Treasury Regulations and Section 5.4 hereof.
1.19 "Family Member" means, with respect to an affected
Participant, such Participant's spouse, such Participant's lineal
descendants and ascendant and their spouses, all as described in Code
Section 414(q)(6)(B).
1.20 "Fiduciary" means any person who (a) exercises any
discretionary authority or discretionary control respecting management
of the Plan or exercises any authority or control respecting management
or disposition of its assets, (b) renders investment advice for a fee or
other compensation, direct or indirect, with respect to any monies or
other property of the Plan or has any authority or responsibility to do
so, or (c) has any discretionary authority or discretionary
responsibility in the administration of the Plan, including, but not
limited to, the Trustee, the Employer and its representative body, and
the Administrator.
1.21 "Fiscal Year" means the Employer's accounting year of 12
months commencing on January 1st of each year and ending the following
December 31st.
1.22 "Forfeiture" means that portion of a Participant's
Account that is not Vested, and occurs on the earlier of (a) the
distribution of the entire Vested portion of a Terminated Participant's
Account, or (b) the last day of the Plan Year in which the Participant
incurs five (5) consecutive 1-Year Breaks in Service. For purposes of
Clause (a), above, in the case of a Terminated Participant whose Vested
benefit is zero, such Terminated Participant shall be deemed to have
received a distribution of his Vested benefit upon his termination of
employment. Restoration of such amounts shall occur pursuant to Section
7.4.7.B, below. In addition, the term Forfeiture shall also include
amounts deemed to be Forfeitures pursuant to any other provision of this
Plan.
1.23 "Former Participant" means a person who has been a
Participant, but who has ceased to be a Participant for any reason.
1.24 "415 Compensation" with respect to any Participant means
such Participant's wages as defined in Code Section 3401(a) and all
other payments of compensation by the Employer (in the course of the
Employer's trade or business) for a Plan Year for which the Employer is
required to furnish the Participant a written statement under Code
Sections 6041(d), 6051(a)(3) and 6052. "415 Compensation" must be
determined without regard to any rules under Code Section 3401(a) that
limit the remuneration included in wages based on the nature or location
of the employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)). If, in connection with
the adoption of this amendment and restatement, the definition of "415
Compensation" has been modified, then, for Plan Years prior to the Plan
Year which includes the adoption date of this amendment and restatement,
"415 Compensation" means compensation determined pursuant to the Plan
then in effect.
1.25 "Highly Compensated Employee" means an Employee described
in Code Section 414(q) and the Regulations thereunder.
1.25.1 General. Generally, the term "Highly Compensated
Employee" means an Employee who performed services for the Employer
during the "determination year" and is in one or more of the following
groups:
A. Employees who at any time during the
"determination year" or "look-back year" were "five percent owners" as
defined in Section 1.30.3.
B. Employees who received "415 Compensation" during
the "look-back year" from the Employer in excess of $75,000.
C. Employees who received "415 Compensation" during
the "look-back year" from the Employer in excess of $50,000 and were in
the Top Paid Group of Employees for the Plan Year.
D. Employees who during the "look-back year" were
officers of the Employer (as that term is defined within the meaning of
the Regulations under Code Section 416) and received "415 Compensation"
during the "look-back year" from the Employer greater than 50 percent of
the limit in effect under Code Section 415(b)(1)(A) for any such Plan
Year. The number of officers shall be limited to the lesser of (i) 50
employees; or (ii) the greater of 3 employees or 10 percent of all
employees. For the purpose of determining the number of officers,
Employees described in Sections 1.50.3(A), 1.50.3(B), 1.50.3(C) and
1.50.3(D) shall be excluded, but such Employees shall still be
considered for the purpose of identifying the particular Employees who
are officers. If the Employer does not have at least one officer whose
annual "415 Compensation" is in excess of 50 percent of the Code Section
415(b)(1)(A) limit, then the highest paid officer of the Employer will
be treated as a Highly Compensated Employee.
E. Employees who are in the group consisting of the
100 Employees paid the greatest "415 Compensation" during the
"determination year" and are also described in Paragraphs B, C, or D,
above, when these Paragraphs are modified to substitute "determination
year" for "look-back year".
1.25.2 Look Back Year. The "look-back year" shall be the
calendar year ending with or within the Plan Year for which testing is
being performed, and the "determination year" (if applicable) shall be
the period of time, if any, which extends beyond the "look-back year"
and ends on the last day of the Plan Year for which testing is being
performed (the "lag period"). If the "lag period" is less than twelve
months long, the dollar threshold amounts specified in Sections 1.25.2,
1.25.3, or 1.25.4 above shall be prorated based upon the number of
months in the "lag period".
1.25.3 Compensation. For purposes of this Section, the
determination of "415 Compensation" shall be made by including amounts
that would otherwise be excluded from a Participant's gross income by
reason of the application of Code Sections 125, 402(e)(3), 402(h)(1)(B)
and, in the case of Employer contributions made pursuant to a salary
reduction agreement, by including amounts that would otherwise be
excluded from a Participant's gross income by reason of the application
of Code Section 403(b). Additionally, the dollar threshold amounts
specified in Sections 1.25.2 and 1.25.3 above shall be adjusted at such
time and in such manner as is provided in Regulations. In the case of
such an adjustment, the dollar limits which shall be applied are those
for the calendar year in which the "determination year" or "look-back
year" begins.
1.25.4 Other Rules. In determining who is a Highly
Compensated Employee, Employees who are nonresident aliens and who
received no earned income (within the meaning of Code Section 911(d)(2))
from the Employer constituting United States source income within the
meaning of Code Section 861(a)(3) shall not be treated as Employees.
Additionally, all Affiliated Employers shall be taken into account as a
single employer and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and
are not covered in any qualified plan maintained by the Employer. The
exclusion of Leased Employees for this purpose shall be applied on a
uniform and consistent basis for all of the Employer's retirement plans.
Highly Compensated Former Employees shall be treated as Highly
Compensated Employees without regard to whether they performed services
during the "determination year".
1.26 "Highly Compensated Former Employee" means a former
Employee who had a separation year prior to the "determination year" and
was a Highly Compensated Employee in the year of separation from service
or in any "determination year" after attaining age 55. Notwithstanding
the foregoing, an Employee who separated from service prior to 1987 will
be treated as a Highly Compensated Former Employee only if during the
separation year (or year preceding the separation year) or any year
after the Employee attains age 55 (or the last year ending before the
Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner". For
purposes of this Section, "determination year", "415 Compensation" and
"five percent owner" shall be determined in accordance with Section
1.25. Highly Compensated Former Employees shall be treated as Highly
Compensated Employees. The method set forth in this Section for
determining who is a "Highly Compensated Former Employee" shall be
applied on a uniform and consistent basis for all purposes for which the
Code Section 414(q) definition is applicable.
1.27 "Highly Compensated Participant" means any Highly
Compensated Employee who is eligible to participate in the Plan.
1.28 "Hour of Service" means (a) each hour for which an
Employee is directly or indirectly compensated or entitled to
compensation by the Employer for the performance of duties during the
applicable computation period; (b) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the
Employer (irrespective of whether the employment relationship has
terminated) for reasons other than performance of duties (such as
vacation, holidays, sickness, jury duty, disability, lay-off, military
duty or leave of absence) during the applicable computation period; (c)
each hour for which back pay is awarded or agreed to by the Employer
without regard to mitigation of damages. These hours will be credited
to the Employee for the computation period or periods to which the award
or agreement pertains rather than the computation period in which the
award, agreement or payment is made. The same Hours of Service shall
not be credited both under (a) or (b), as the case may be, and under
(c).
1.28.1 Limitations. Notwithstanding the above, (a) no
more than 501 Hours of Service are required to be credited to an
Employee on account of any single continuous period during which the
Employee performs no duties (whether or not such period occurs in a
single computation period); (b) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a
period during which no duties are performed is not required to be
credited to the Employee if such payment is made or due under a plan
maintained solely for the purpose of complying with applicable worker's
compensation, or unemployment compensation or disability insurance laws;
and (c) Hours of Service are not required to be credited for a payment
which solely reimburses an Employee for medical or medically related
expenses incurred by the Employee.
1.28.2 Payments. For purposes of this Section, a payment
shall be deemed to be made by or due from the Employer regardless of
whether such payment is made by or due from the Employer directly, or
indirectly through, among others, a trust fund, or insurer, to which the
Employer contributes or pays premiums and regardless of whether
contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group
of Employees in the aggregate.
1.28.3 Crediting Hours. An Hour of Service must be
credited for the purpose of determining a Year of Service, a year of
participation for purposes of accrued benefits, a 1-Year Break in
Service, and employment commencement date (or reemployment commencement
date). In addition, Hours of Service will be credited for employment
with other Affiliated Employers. The provisions of Department of Labor
regulations 2530.200b-2(b) and (c) are incorporated herein by reference.
1.29 "Investment Manager" means an entity that (a) has the
power to manage, acquire, or dispose of Plan assets and (b) acknowledges
fiduciary responsibility to the Plan in writing. Such entity must be a
person, firm, or corporation registered as an investment adviser under
the Investment Advisers Act of 1940, a bank, or an insurance company.
1.30 "Key Employee" means an Employee as defined in Code
Section 416(i) and the Regulations thereunder.
1.30.1 General. Generally, any Employee or former
Employee (as well as each of his Beneficiaries) is considered a Key
Employee if he, at any time during the Plan Year that contains the
"Determination Date" or any of the preceding four (4) Plan Years, has
been included in one of the following categories:
A. An officer of the Employer (as that term is
defined within the meaning of the Regulations under Code Section 416)
having annual "415 Compensation" greater than 50 percent of the amount
in effect under Code Section 415(b)(1)(A) for any such Plan Year.
B. One of the ten employees having annual "415
Compensation" from the Employer for a Plan Year greater than the dollar
limitation in effect under Code Section 415(c)(1)(A) for the calendar
year in which such Plan Year ends and owning (or considered as owning
within the meaning of Code Section 318) both more than one-half percent
interest and the largest interests in the Employer.
C. A "five percent owner" of the Employer. "Five
percent owner" means any person who owns (or is considered as owning
within the meaning of Code Section 318) more than five percent (5%) of
the outstanding stock of the Employer or stock possessing more than five
percent (5%) of the total combined voting power of ail stock of the
Employer or, in the case of an unincorporated business, any person who
owns more than five percent (5%) of the capital or profits interest in
the Employer. In determining percentage ownership hereunder, employers
that would otherwise be aggregated under Code Sections 414(b), (c), (m)
and (o) shall be treated as separate employers.
D. A "one percent owner" of the Employer having an
annual "415 Compensation" from the Employer of more than $150,000. "One
percent owner" means any person who owns (or is considered as owning
within the meaning of Code Section 318) more than one percent (1%) of
the outstanding stock of the Employer or stock possessing more than one
percent (1%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person who
owns more than one percent (I%) of the capital or profits interest in
the Employer. In determining percentage ownership hereunder, employers
that would otherwise be aggregated under Code Sections 414(b), (c), (m)
and (o) shall be treated as separate employers. However, in determining
whether an individual has "415 Compensation" of more than $150,000, "415
Compensation" from each employer required to be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be taken into account.
1.30.2 Compensation. For purposes of this Section, the
determination of "415 Compensation" shall be made by including amounts
that would otherwise be excluded from a Participant's gross income by
reason of the application of Code Sections 125, 402(e)(3), 402(h)(1)(B)
and, in the case of Employer contributions made pursuant to a salary
reduction agreement, by including amounts that would otherwise be
excluded from a Participant's gross income by reason of the application
of Code Section 403(b).
1.31 "Late Retirement Date" means the first day of the month
coinciding with or next following a Participant's actual Retirement Date
after having reached his Normal Retirement Date.
1.32 "Leased Employee" means any person (other than an
Employee of the recipient) who pursuant to an agreement between the
recipient and any other person ("leasing organization") has performed
services for the recipient (or for the recipient and related persons
determined in accordance with Code Section 414(n)(6)) on a substantially
full time basis for a period of at least one year, and such services are
of a type historically performed by employees in the business field of
the recipient employer. Contributions or benefits provided a Leased
Employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer. A Leased Employee shall not be considered an
Employee of the recipient if both of the following requirements are
satisfied:
1.32.1 Money Purchase Pension Plan. Such employee is
covered by a money purchase pension plan providing:
A. A nonintegrated employer contribution rate of at
least 10% of compensation, as defined in Code Section 415(c)(3), but
including amounts contributed pursuant to a salary reduction agreement
which are excludable from the employee's gross income under Code
Sections 125, 402(e)(3), 402(h) or 403(b);
B. Immediate participation; and
C. Full and immediate vesting; and
1.32.2 20% Limit. Leased Employees do not constitute
more than 20% of the recipient's non-highly compensated work force.
1.33 "Non-Highly Compensated Participant" means any
Participant who is neither a Highly Compensated Employee nor a Family
Member.
1.34 "Non-Key Employee" means any Employee or former Employee
(and his Beneficiaries) who is not a Key Employee.
1.35 "Normal Retirement Age" means the Participant's 65th
birthday. A Participant shall become fully Vested in his Participant's
Account upon attaining his Normal Retirement Age.
1.36 "Normal Retirement Date" means the first day of the month
coinciding with or next following the Participant's Normal Retirement
Age.
1.37 "1-Year Break in Service" means the applicable
computation period during which an Employee has not completed more than
500 Hours of Service with the Employer. Further, solely for the purpose
of determining whether a Participant has incurred a 1-Year Break in
Service, Hours of Service shall be recognized for "authorized leaves of
absence" and "maternity and paternity leaves of absence." Years of
Service and 1-Year Breaks in Service shall be measured on the same
computation period.
1.37.1 Authorized Leaves. "Authorized leave of absence"
means an unpaid, temporary cessation from active employment with the
Employer pursuant to an established nondiscriminatory policy, whether
occasioned by illness, military service, or any other reason.
1.37.2 Maternity, Etc. A "maternity or paternity leave
of absence" means, for Plan Years beginning after December 31, 1984, an
absence from work for any period by reason of the Employee's pregnancy,
birth of the Employee's child, placement of a child with the Employee in
connection with the adoption of such child, or any absence for the
purpose of caring for such child for a period immediately following such
birth or placement. For this purpose, Hours of Service shall be
credited for the computation period in which the absence from work
begins, only if credit therefore is necessary to prevent the Employee
from incurring a 1-Year Break in Service, or, in any other case, in the
immediately following computation period. The Hours of Service credited
for a "maternity or paternity leave of absence" shall be those which
would normally have been credited but for such absence, or, in any case
in which the Administrator is unable to determine such hours normally
credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave of
absence" shall not exceed 501.
1.38 "Other Investments Account" means the account of a
Participant which is credited with his share of the net gain (or loss)
of the Plan, Forfeitures and Employer contributions in other than
Company Stock and which is debited with payments made to pay for Company
Stock.
1.39 "Participant" means any Eligible Employee who
participates in the Plan as provided in Sections 3.2 and 3.3, and has
not for any reason become ineligible to participate further in the Plan.
1.40 "Participant's Account" means the account established and
maintained by the Administrator for each Participant with respect to his
total interest in the Plan and Trust resulting from the Employer's
contributions.
1.41 "Plan" means this instrument, including all amendments
thereto.
1.42 "Plan Year" means the Plan's accounting year of twelve
(12) months commencing on January 1st of each year and ending the
following December 31st.
1.43 "Regulation" means the Income Tax Regulations as
promulgated by the Secretary of the Treasury or his delegate, and as
amended from time to time.
1.44 "Retired Participant" means a person who has been a
Participant, but who has become entitled to retirement benefits under
the Plan.
1.45 "Retirement Date" means the date as of which a
Participant retires for reasons other than Total and Permanent
Disability, whether such retirement occurs on a Participant's Normal
Retirement Date, Early or Late Retirement Date (see Section 7.1).
1.46 "Super Top Heavy Plan" means a plan described in Section
2.2.2.
1.47 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by
death, Total and Permanent Disability or retirement.
1.48 "Top Heavy Plan" means a plan described in Section 2.2.1.
1.49 "Top Heavy Plan Year" means a Plan Year during which the
Plan is a Top Heavy Plan.
1.50 "Top Paid Group" means the top 20 percent of Employees
who performed services for the Employer during the applicable year,
ranked according to the amount of "415 Compensation" (determined for
this purpose in accordance with Section 1.25) received from the Employer
during such year.
1.50.1 Affiliated Employers. All Affiliated Employers
shall be taken into account as a single employer, and Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be
considered Employees unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and are not covered in any qualified
plan maintained by the Employer.
1.50.2 Non-Residents, Etc. Employees who are nonresident
aliens and who received no earned income (within the meaning of Code
Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated
as Employees.
1.50.3 Exclusions. Additionally, for the purpose of
determining the number of active Employees in any year, the following
additional Employees shall also be excluded (however, such Employees
shall still be considered for the purpose of identifying the particular
Employees in the Top Paid Group):
A. Employees with less than six (6) months of
service;
B. Employees who normally work less than 17 1/2 hours
per week;
C. Employees who normally work less than six (6)
months during a year;
D. Employees who have not yet attained age 21; and
E. If 90 percent or more of the Employees of the
Employer are covered under agreements the Secretary of Labor finds to be
collective bargaining agreements between Employee representatives and
the Employer, and the Plan covers only Employees who are not covered
under such agreements, then Employees covered by such agreements shall
be excluded from both the total number of active Employees as well as
from the identification of particular Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section 1.50.3 shall be
applied on a uniform and consistent basis for all purposes for which the
Code Section 414(q) definition is applicable.
1.51 "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 any gainful
occupation and which condition constitutes total disability under the
federal Social Security Acts.
1.52 "Trustee" means the person or entity named as trustee
herein or in any separate trust forming a part of this Plan, and any
successors.
1.53 "Trust Fund" means the assets of the Plan and Trust as
the same shall exist from time to time.
1.54 "Unallocated Company Stock Suspense Account" means an
account containing Company Stock acquired with the proceeds of an Exempt
Loan and which has not been released from such account and allocated to
the Participants' Company Stock Accounts.
1.55 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.56 "Year of Service" means the computation period of twelve
(12) consecutive months, herein set forth, during which an Employee has
at least 1000 Hours of Service.
1.56.1 Eligibility. For purposes of eligibility for
participation, the initial computation period shall begin with the date
on which the Employee first performs an Hour of Service. The
participation computation period beginning after a 1-Year Break in
Service shall be measured from the date on which an Employee again
performs an Hour of Service. The participation computation period shall
shift to the Plan Year which includes the anniversary of the date on
which the Employee first performed an Hour of Service. An Employee who
is credited with the required Hours of Service in both the initial
computation period (or the computation period beginning after a 1-Year
Break in Service) and the Plan Year which includes the anniversary of
the date on which the Employee first performed an Hour of Service, shall
be credited with two (2) Years of Service for purposes of eligibility to
participate.
1.56.2 Vesting. For vesting purposes, the computation
period shall be the Plan Year, including periods prior to the Effective
Date of the Plan.
1.56.3 Other. For all other purposes, the computation
period shall be the Plan Year.
1.56.4 Short Plan Year. Notwithstanding the foregoing,
for any short Plan Year, the determination of whether an Employee has
completed a Year of Service shall be made in accordance with Department
of Labor regulation 2530.203-2(c). However, in determining whether an
Employee has completed a Year of Service for benefit accrual purposes in
the short Plan Year, the number of the Hours of Service required shall
be proportionately reduced based on the number of full months in the
short Plan Year.
1.56.5 Prior Service. Years of Service with Community
Bank of Santa Ynez Valley shall be recognized.
1.56.6 Service With Affiliates. Years of Service with
any Affiliated Employer shall be recognized.
2. TOP HEAVY AND ADMINISTRATION
2.1 Top Heavy Plan Requirements. For any Top Heavy Plan Year,
the Plan shall provide the special vesting requirements of Code Section
416(b) pursuant to Section 7.4 of the Plan and the special minimum
allocation requirements of Code Section 416(c) pursuant to Section 4.3
of the Plan.
2.2 Determination Of Top Heavy Status.
2.2.1 Top Heavy. This Plan shall be a Top Heavy Plan for
any Plan Year in which, as of the Determination Date, (1) the Present
Value of Accrued Benefits of Key Employees and (2) the sum of the
Aggregate Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds sixty percent (60%) of the Present Value of
Accrued Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation Group.
A. If any Participant is a Non-Key Employee for any
Plan Year, but such Participant was a Key Employee for any prior Plan
Year, such Participant's Present Value of Accrued Benefit and/or
Aggregate Account balance shall not be taken into account for purposes
of determining whether this Plan is a Top Heavy or Super Top Heavy Plan
(or whether any Aggregation Group which includes this Plan is a Top
Heavy Group).
B. In addition, if a Participant or Former
Participant has not performed any services for any Employer maintaining
the Plan at any time during the five year period ending on the
Determination Date, any accrued benefit for such Participant or Former
Participant shall not be taken into account for the purposes of
determining whether this Plan is a Top Heavy or Super Top Heavy Plan.
2.2.2 Super Top Heavy. This Plan shall be a Super Top
Heavy Plan for any Plan Year in which, as of the Determination Date, (1)
the Present Value of Accrued Benefits of Key Employees and (2) the sum
of the Aggregate Accounts of Key Employees under this Plan and all plans
of an Aggregation Group, exceeds ninety percent (90%) of the Present
Value of Accrued Benefits and the Aggregate Accounts of all Key and Non-
Key Employees under this Plan and all plans of an Aggregation Group.
2.2.3 Aggregate Account. A Participant's Aggregate
Account as of the Determination Date is the sum of:
A. The Participant's Account balance as of the most
recent valuation occurring within a twelve (12) month period ending on
the Determination Date;
B. An adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of any
contributions actually made after the valuation date but due on or
before the Determination Date, except for the first Plan Year when such
adjustment shall also reflect the amount of any contributions made after
the Determination Date that are allocated as of a date in that first
Plan Year.
C. Any Plan distributions made within the Plan Year
that includes the Determination Date or within the four (4) preceding
Plan Years. However, in the case of distributions made after the
valuation date and prior to the Determination Date, such distributions
are not included as distributions for top heavy purposes to the extent
that such distributions are already included in the Participant's
Aggregate Account balance as of the valuation date. Notwithstanding
anything herein to the contrary, all distributions, including
distributions made prior to January 1, 1984, and distributions under a
terminated plan which if it had not been terminated would have been
required to be included in an Aggregation Group, will be counted.
Further, distributions from the Plan (including the cash value of life
insurance policies) of a Participant's account balance because of death
shall be treated as a distribution for the purposes of this Section.
D. Any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax deductible qualified
voluntary employee contributions shall not be considered to be a part of
the Participant's Aggregate Account balance.
E. With respect to unrelated rollovers and plan-to-
plan transfers (ones which are both initiated by the Employee and made
from a plan maintained by one employer to a plan maintained by another
employer), if this Plan provides the rollovers or plan-to-plan
transfers, it shall always consider such rollovers or plan-to-plan
transfers as a distribution for the purposes of this Section. If this
Plan is the plan accepting such rollovers or plan-to-plan transfers, it
shall not consider such rollovers or plan-to-plan transfers as part of
the Participant's Aggregate Account balance.
F. With respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or made to a plan
maintained by the same employer), if this Plan provides the rollover or
plan-to-plan transfer, it shall not be counted as a distribution for
purposes of this Section. If this Plan is the plan accepting such
rollover or plan-to-plan transfer, it shall consider such rollover or
plan-to-plan transfer as part of the Participant's Aggregate Account
balance, irrespective of the date on which such rollover or plan-to-plan
transfer is accepted.
G. For the purposes of determining whether two
employers are to be treated as the same employer in (5) and (6) above,
all employers aggregated under Code Section 414(b), (c), (m) and (o) are
treated as the same employer.
2.2.4 Aggregation Group. For purposes of this Plan, the
term "Aggregation Group" means either a Required Aggregation Group or a
Permissive Aggregation Group as hereinafter determined.
A. In determining a Required Aggregation Group
hereunder, each plan of the Employer in which a Key Employee is a
participant in the Plan Year containing the Determination Date or any of
the four preceding Plan Years, and each other plan of the Employer which
enables any plan in which a Key Employee participates to meet the
requirements of Code Sections 401(a)(4) or 410, will be required to be
aggregated. Such group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the group will
be considered a Top Heavy Plan if the Required Aggregation Group is a
Top Heavy Group. No plan in the Required Aggregation Group will be
considered a Top Heavy Plan if the Required Aggregation Group is not a
Top Heavy Group.
B. The Employer may also include any other plan not
required to be included in the Required Aggregation Group, provided the
resulting group, taken as a whole, would continue to satisfy the
provisions of Code Sections 401(a)(4) and 410. Such group shall be
known as a Permissive Aggregation Group. In the case of a Permissive
Aggregation Group, only a plan that is part of the Required Aggregation
Group will be considered a Top Heavy Plan if the Permissive Aggregation
Group is a Top Heavy Group. No plan in the Permissive Aggregation Group
will be considered a Top Heavy Plan if the Permissive Aggregation Group
is not a Top Heavy Group.
C. Only those plans of the Employer in which the
Determination Dates fall within the same calendar year shall be
aggregated in order to determine whether such plans are Top Heavy Plans.
D. An Aggregation Group shall include any terminated
plan of the Employer if it was maintained within the last five (5) years
ending on the Determination Date.
E. "Determination Date" means (a) the last day of the
preceding Plan Year, or (b) in the case of the first Plan Year, the last
day of such Plan Year.
F. Present Value of Accrued Benefit: In the case of a
defined benefit plan, the Present Value of Accrued Benefit for a
Participant other than a Key Employee, shall be as determined using the
single accrual method used for all plans of the Employer and Affiliated
Employers, or if no such single method exists, using a method which
results in benefits accruing not more rapidly than the slowest accrual
rate permitted under Code Section 411(b)(1)(C). The determination of
the Present Value of Accrued Benefit shall be determined as of the most
recent valuation date that falls within or ends with the 12-month period
ending on the Determination Date except as provided in Code Section 416
and the Regulations thereunder for the first and second plan years of a
defined benefit plan.
G. "Top Heavy Group" means an Aggregation Group in
which, as of the Determination Date, (1) the sum of (a) the Present
Value of Accrued Benefits of Key Employees under all defined benefit
plans included in the group, and (b) the Aggregate Accounts of Key
Employees under all defined contribution plans included in the group;
exceeds (2) sixty percent (60%) of a similar sum determined for all
Participants.
2.3 Powers and Responsibilities of the Employer.
2.3.1 Appoint and Remove. The Employer shall be
empowered to appoint and remove the Trustee and the Administrator from
time to time as the Employer deems necessary for the proper
administration of the Plan to assure that the Plan is being operated for
the exclusive benefit of the Participants and their Beneficiaries in
accordance with the terms of the Plan, the Code, and the Act.
2.3.2 Funding Policy and Method. The Employer shall
establish a "funding policy and method", i.e., it shall determine
whether the Plan has a short run need for liquidity (e.g., to pay
benefits) or whether liquidity is a long run goal and investment growth
(and stability of same) is a more current need, or shall appoint a
qualified person to do so. The Employer or its delegate shall
communicate such needs and goals to the Trustee, who shall coordinate
such Plan needs with its investment policy. The communication of such a
"funding policy and method" shall not, however, constitute a directive
to the Trustee as to investment of the Trust Funds. Such "funding
policy and method" shall be consistent with the objectives of this Plan
and with the requirements of Title I of the Act.
2.3.3 Review. The Employer shall periodically review the
performance of any Fiduciary or other person to whom duties have been
delegated or allocated by it under the provisions of this Plan or
pursuant to procedures established hereunder. This requirement may be
satisfied by formal periodic review by the Employer or by a qualified
person specifically designated by the Employer, through day-today
conduct and evaluation, or through other appropriate ways.
2.3.4 Notices. The Employer will furnish Plan
Fiduciaries and Participants with notices and information statements
when voting rights must be exercised pursuant to Section 8.4.
2.4 Administrator. The Employer shall appoint one or more
Administrators. Any person, including, but not limited to, the
Employees of the Employer, shall be eligible to serve as an
Administrator. Any person so appointed shall signify his acceptance by
filing written acceptance with the Employer. An Administrator may
resign by delivering his written resignation to the Employer or be
removed by the Employer by delivery of written notice of removal, to
take effect at a date specified therein, or upon delivery to the
Administrator if no date is specified. The Employer, upon the
resignation or removal of an Administrator, shall promptly designate in
writing a successor to this position. If the Employer does not appoint
an Administrator, the Employer will function as the Administrator.
2.5 Allocation and Delegation of Responsibilities. If more
than one person is appointed as Administrator, then the responsibilities
of each Administrator may be specified by the Employer and accepted in
writing by each Administrator. In the event that no such delegation is
made by the Employer, the Administrators may allocate the
responsibilities among themselves, in which event the Administrators
shall notify the Employer and the Trustee in writing of such action and
specify the responsibilities of each Administrator. The Trustee
thereafter shall accept and rely upon any documents executed by the
appropriate Administrator until such time as the Employer or the
Administrators file with the Trustee a written revocation of such
designation.
2.6 Powers and Duties of the Administrator. The primary
responsibility of the Administrator is to administer the Plan for the
exclusive benefit of the Participants and their Beneficiaries, subject
to the specific terms of the Plan.
2.6.1 General. The Administrator shall administer the
Plan in accordance with its terms and shall have the power and
discretion to construe the terms of the Plan and to determine all
questions arising in connection with the administration, interpretation,
and application of the Plan. Any such determination by the
Administrator shall be conclusive and binding upon all persons. The
Administrator may establish procedures, correct any defect, supply any
information, or reconcile any inconsistency in such manner and to such
extent as shall be deemed necessary or advisable to carry out the
purpose of the Plan; provided, however, that any procedure,
discretionary act, interpretation or construction shall be done in a
nondiscriminatory manner based upon uniform principles consistently
applied and shall be consistent with the intent that the Plan shall
continue to be deemed a qualified plan under the terms of Code Section
401(a), and shall comply with the terms of the Act and all regulations
issued pursuant thereto. The Administrator shall have all powers
necessary or appropriate to accomplish his duties under this Plan.
2.6.2 Duties. The Administrator shall be charged with
the duties of the general administration of the Plan, including, but not
limited to, the following:
A. The discretion to determine all questions relating
to the eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
B. To compute, certify, and direct the Trustee with
respect to the amount and the kind of benefits to which any Participant
shall be entitled hereunder;
C. To authorize and direct the Trustee with respect
to all nondiscretionary or otherwise directed disbursements from the
Trust;
D. To maintain all necessary records for the
administration of the Plan;
E. To interpret the provisions of the Plan and to
make and publish such rules for regulation of the Plan as are consistent
with the terms hereof;
F. To determine the size and type of any Contract to
be purchased from any insurer, and to designate the insurer from which
such Contract shall be purchased;
G. To compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or desirable to be
contributed to the Plan;
H. To consult with the Employer and the Trustee
regarding the short and long-term liquidity needs of the Plan in order
that the Trustee can exercise any investment discretion in a manner
designed to accomplish specific objectives;
I. To establish and communicate to Participants a
procedure for allowing each Participant to direct the Trustee as to the
distribution of his Company Stock Account pursuant to Section 4.6;
J. To establish and communicate to Participants a
procedure and method to insure that each Participant will vote Company
Stock allocated to such Participant's Company Stock Account pursuant to
Section 8.4;
K. To enter into a written agreement with regard to
the payment of federal estate tax pursuant to Code Section 2210(b); and
L. To assist any Participant regarding his rights,
benefits, or elections available under the Plan.
2.7 Records and Reports. The Administrator shall keep a
record of all actions taken and shall keep all other books of account,
records, and other data that may be necessary for proper administration
of the Plan and shall be responsible for supplying all information and
reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.
2.8 Appointment of Advisers. The Administrator, or the
Trustee with the consent of the Administrator, may appoint counsel,
specialists, advisers, and other persons as the Administrator or the
Trustee deems necessary or desirable in connection with the
administration of this Plan.
2.9 Information From Employer. To enable the Administrator to
perform its functions, the Employer shall supply full and timely
information to the Administrator on all matters relating to the
Compensation of all Participants, their Hours of Service, their Years of
Service, their retirement, death, disability, or termination of
employment, and such other pertinent facts as the Administrator may
require; and the Administrator shall advise the Trustee of such of the
foregoing facts as may be pertinent to the Trustee's duties under the
Plan. The Administrator may rely upon such information as is supplied
by the Employer and shall have no duty or responsibility to verify such
information.
2.10 Payment of Expenses. All expenses of administration may
be paid out of the Trust Fund unless paid by the Employer. Such
expenses shall include any expenses incident to the functioning of the
Administrator, including, but not limited to, fees of accountants,
counsel, and other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall constitute a
liability of the Trust Fund. However, the Employer may reimburse the
Trust Fund for any administration expense incurred.
2.11 Majority Actions. Except where there has been an
allocation and delegation of administrative authority pursuant to
Section 2.5, if there shall be more than one Administrator, they shall
act by a majority of their number, but may authorize one or more of them
to sign all papers on their behalf.
2.12 Claims Procedure. Claims for benefits under the Plan may
be filed with the Administrator on forms supplied by the Employer.
Written notice of the disposition of a claim shall be furnished to the
claimant within 90 days after the application is filed. In the event
the claim is denied, the reasons for the denial shall be specifically
set forth in the notice in language calculated to be understood by the
claimant, pertinent provisions of the Plan shall be cited, and, where
appropriate, an explanation as to how the claimant can perfect the claim
will be provided. In addition, the claimant shall be furnished with an
explanation of the Plan's claims review procedure.
2.13 Claims Review Procedure. Any Employee, former Employee,
or Beneficiary of either, who has been denied a benefit by a decision of
the Administrator pursuant to Section 2.12 shall be entitled to request
the Administrator to give further consideration to his claim by filing
with the Administrator (on a form which may be obtained from the
Administrator) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim
should be allowed, shall be filed with the Administrator no later than
60 days after receipt of the written notification provided for in
Section 2.12.
2.13.1 Hearing. The Administrator shall then conduct a
hearing within the next 60 days, at which the claimant may be
represented by an attorney or any other representative of his choosing
and at which the claimant shall have an opportunity to submit written
and oral evidence and arguments in support of his claim. At the hearing
(or prior thereto upon five (5) business days' written notice to the
Administrator) the claimant or his representative shall have an
opportunity to review all documents in the possession of the
Administrator which are pertinent to the claim at issue and its
disallowance. Either the claimant or the Administrator may cause a
court reporter to attend the hearing and record the proceedings. In
such event, a complete written transcript of the proceedings shall be
furnished to both parties by the court reporter. The full expense of
any such court reporter and such transcripts shall be borne by the party
causing the court reporter to attend the hearing.
2.13.2 Final Decision. A final decision as to the
allowance of the claim shall be made by the Administrator within 60 days
of receipt of the appeal (unless there has been an extension of 60 days
due to special circumstances, provided the delay and the special
circumstances occasioning it are communicated to the claimant within the
60 day period). Such communication shall be written in a manner
calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
3. ELIGIBILITY
3.1 Conditions of Eligibility. Any Eligible Employee who has
completed one (1) Year of Service and has attained age 18 shall be
eligible to participate hereunder as of the date he has satisfied such
requirements. However, any Employee who was a Participant in the Plan
prior to the effective date of this amendment and restatement shall
continue to participate in the Plan. The Employer shall give each
prospective Eligible Employee written notice of his eligibility to
participate in the Plan prior to the close of the Plan Year in which he
first becomes an Eligible Employee.
3.2 Application for Participation. In order to become a
Participant hereunder, each Eligible Employee shall make application to
the Employer for participation in the Plan and agree to the terms
hereof. Upon the acceptance of any benefits under this Plan, such
Employee shall automatically be deemed to have made application and
shall be bound by the terms and conditions of the Plan and all
amendments hereto.
3.3 Effective Date of Participation. An Eligible Employee
shall become a Participant effective as of the first day of the month
coinciding with or next following the date on which such Employee met
the eligibility requirements of Section 3.1, provided said Employee was
still employed as of such date (or if not employed on such date, as of
the date of rehire if a 1-Year Break in Service has not occurred).
3.4 Determination of Eligibility. The Administrator shall
determine the eligibility of each Employee for participation in the Plan
based upon information furnished by the Employer. Such determination
shall be conclusive and binding upon all persons, as long as the same is
made pursuant to the Plan and the Act. Such determination shall be
subject to review per Section 2.13.
3.5 Termination of Eligibility.
3.5.1 Vesting and Trust Fund. In the event a
Participant shall go from a classification of an Eligible Employee to an
ineligible Employee, such Former Participant shall continue to vest in
his interest in the Plan for each Year of Service completed while a
noneligible Employee, until such time as his Participant's Account shall
be forfeited or distributed pursuant to the terms of the Plan.
Additionally, his interest in the Plan shall continue to share in the
earnings of the Trust Fund.
3.5.2 Break in Service. In the event a Participant is no
longer a member of an eligible class of Employees and becomes ineligible
to participate but has not incurred a 1-Year Break in Service, such
Employee will participate immediately upon returning to an eligible
class of Employees. If such Participant incurs a 1-Year Break in
Service, eligibility will be determined under the break in service rules
of the Plan.
3.6 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
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
in whole or in part in any taxable year under applicable provisions of
the Code.
3.7 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
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.
3.8 Election Not to Participate. An Employee may, subject to
the approval of the Employer, elect voluntarily not to participate in
the Plan. The election not to participate must be communicated to the
Employer, in writing, at least thirty (30) days before the beginning of
a Plan Year.
4. CONTRIBUTION AND ALLOCATION
4.1 Formula For Determining Employer's Contribution.
4.1.1 Discretionary Contributions. For each Plan Year,
the Employer shall contribute to the Plan such amount as shall be
determined by the Employer.
4.1.2 Limitation Per Deduction. Notwithstanding the
foregoing, however, the Employer's contributions for any Plan Year shall
not exceed the maximum amount allowable as a deduction to the Employer
under the provisions of Code Section 404; provided, however, to the
extent necessary to provide the top heavy minimum allocations, the
Employer shall make a contribution even if it exceeds the amount which
is deductible under Code Section 404.
4.1.3 Form of Contribution. All contributions by the
Employer shall be made in cash, Company Stock or in such property as is
determined by the Employer and acceptable to the Trustee. Company Stock
and other property will be valued at their then fair market value.
4.2 Time of Payment of Employer's Contribution. The Employer
shall pay to the Trustee its contribution to the Plan for each Plan Year
within the time prescribed by law, including extensions of time, for the
filing of the Employer's federal income tax return for the Fiscal Year.
4.3 Allocation of Contribution, Forfeitures and Earnings.
4.3.1 Participant Accounts. The Administrator shall
establish and maintain an account in the name of each Participant to
which the Administrator shall credit as of each Anniversary Date all
amounts allocated to each such Participant as set forth herein.
4.3.2 Allocations of Contributions. Only Participants
who have completed a Year of Service during the Plan Year and are
actively employed on the last day of the Plan Year shall be eligible to
share in the discretionary contribution for the year. The Employer
shall provide the Administrator with all information required by the
Administrator to make a proper allocation of the Employer's
contributions for each Plan Year. Within a reasonable period of time
after the date of receipt by the Administrator of such information, the
Administrator shall allocate such contribution to each Participant's
Account in the same proportion that each such Participant's Compensation
for the year bears to the total Compensation of all Participants for
such year.
4.3.3 Company Stock Account. The Company Stock Account
of each Participant shall be credited as of each Anniversary Date with
Forfeitures of Company Stock and his allocable share of Company Stock
(including fractional shares) purchased and paid for by the Plan. Stock
dividends on Company Stock held in his Company Stock Account shall be
credited to his Company Stock Account when paid. Subject to Section
7.5.4, below, cash dividends on Company Stock held in his Company Stock
Account shall, in the discretion of the Administrator, either be
credited to his Other Investments Account when paid or be used to repay
an Exempt Loan; provided, when cash dividends are used to repay an
Exempt Loan, Company Stock shall be released from the Unallocated
Company Stock Suspense Account and allocated to the Participant's
Company Stock Account pursuant to Section 4.3.6 and, provided further,
that Company Stock allocated to the Participant's Company Stock Account
shall have a fair market value not less than the amount of cash
dividends which would have been allocated to such Participant's Other
Investments Account for the year. Company Stock acquired by the Plan
with the proceeds of an Exempt Loan shall only be allocated to each
Participant's Company Stock Account upon release from the Unallocated
Company Stock Suspense Account as provided in Section 4.3.6 herein.
Company Stock acquired with the proceeds of an Exempt Loan shall be an
asset of the Trust Fund and maintained in the Unallocated Company Stock
Suspense Account.
4.3.4 Trust Fund Earnings and Losses. As of each
Anniversary Date or other valuation date, before the current valuation
period allocation of Employer contributions and Forfeitures, any
earnings or losses (net appreciation or net depreciation) of the Trust
Fund shall be allocated in the same proportion that each Participant's
and Former Participant's nonsegregated accounts (other than each
Participant's Company Stock Account) bear to the total of all
Participants' and Former Participants' nonsegregated accounts (other
than Participants' Company Stock Accounts) as of such date. Earnings or
losses do not include the interest paid under any installment contract
for the purchase of Company Stock by the Trust Fund or on any loan used
by the Trust Fund to purchase Company Stock, nor does it include income
received by the Trust Fund with respect to Company Stock acquired with
the proceeds of an Exempt Loan; all income received by the Trust Fund
from Company Stock acquired with the proceeds of an Exempt Loan may, at
the discretion of the Administrator, be used to repay such loan.
4.3.5 Insurance. Participants' accounts shall be debited
for any insurance or annuity premiums paid, if any, and credited with
any dividends received on insurance contracts.
4.3.6 Suspense Account. All Company Stock acquired by
the Plan with the proceeds of an Exempt Loan must be added to and
maintained in the Unallocated Company Stock Suspense Account. Such
Company Stock shall be released and withdrawn from that account as if
all Company Stock in that account were encumbered. For each Plan Year
during the duration of the loan, the number of shares of Company Stock
released shall equal the number of encumbered shares held immediately
before release for the current Plan Year multiplied by a fraction, the
numerator of which is the amount of principal and interest paid for the
Plan Year and the denominator of which is the sum of the numerator plus
the principal and interest to be paid for all future Plan Years. As of
each Anniversary Date, the Plan must consistently allocate to each
Participant's Account, in the same manner as Employer discretionary
contributions pursuant to Section 4.1.1 are allocated, nonmonetary units
(shares and fractional shares of Company Stock) representing each
Participant's interest in Company Stock withdrawn from the Unallocated
Company Stock Suspense Account. However, Company Stock released from
the Unallocated Company Stock Suspense Account with cash dividends
pursuant to Section 4.3.3 shall be allocated to each Participant's
Company Stock Account in the same proportion that each such
Participant's number of shares of Company Stock sharing in such cash
dividends bears to the total number of shares of all Participants'
Company Stock sharing in such cash dividends. Income earned with
respect to Company Stock in the Unallocated Company Stock Suspense
Account shall be used, at the discretion of the Administrator, to repay
the Exempt Loan used to purchase such Company Stock. Company Stock
released from the Unallocated Company Stock Suspense Account with such
income, and any income which is not so used, shall be allocated as of
each Anniversary Date or other valuation date in the same proportion
that each Participant's and Former Participant's nonsegregated accounts
after the allocation of any earnings or losses pursuant to Section 4.3.4
bear to the total of all Participants, and Former Participants'
nonsegregated accounts after the allocation of any earnings or losses
pursuant to Section 4.3.4.
4.3.7 Allocations of Forfeitures. As of each Anniversary
Date any amounts which became Forfeitures since the last Anniversary
Date shall first be made available to reinstate previously forfeited
account balances of Former Participants, if any, in accordance with
Section 7.4.7.B. The remaining Forfeitures, if any, shall be allocated
among the Participants' Accounts of Participants otherwise eligible to
share in the allocation of discretionary contributions in the same
proportion that each such Participant's Compensation for the year bears
to the total Compensation of all such Participants for the year;
provided, however, that in the event the allocation of Forfeitures
provided herein shall cause the "annual addition" (as defined in Section
4.4) to any Participant's Account to exceed the amount allowable by the
Code, the excess shall be reallocated in accordance with Section 4.5.
4.3.8 Top Heavy Allocation. For any Top Heavy Plan Year,
Employees not otherwise eligible to share in the allocation of
contributions and Forfeitures as provided above, shall receive the
minimum allocation provided for in Section 4.3.10, below, if eligible
pursuant to the provisions of that Section.
4.3.9 Retirees and Disabled Participants.
Notwithstanding the foregoing, Participants who are not actively
employed on the last day of the Plan Year due to Retirement (Early,
Normal or Late), Total and Permanent Disability or death shall share in
the allocation of contributions and Forfeitures for that Plan Year.
4.3.10 Top Heavy Minimum. Notwithstanding the foregoing,
for any Top Heavy Plan Year, the sum of the Employer's contributions and
Forfeitures allocated to the Participant's Account of each Employee
shall be equal to at least three percent (3%) of such Employee's "415
Compensation" (reduced by contributions and forfeitures, if any,
allocated to each Employee in any defined contribution plan included
with this plan in a Required Aggregation Group). However, if (1) the
sum of the Employer's contributions and Forfeitures allocated to the
Participant's Account of each Key Employee for such Top Heavy Plan Year
is less than three percent (3%) of each Key Employee's "415
Compensation" and (2) this Plan is not required to be included in an
Aggregation Group to enable a defined benefit plan to meet the
requirements of Code Section 401(a)(4) or 410, the sum of the Employer's
contributions and Forfeitures allocated to the Participant's Account of
each Employee shall be equal to the largest percentage allocated to the
Participant's Account of any Key Employee; provided, no such minimum
allocation shall be required in this Plan for any Employee who
participates in another defined contribution plan subject to Code
Section 412 providing such benefits included with this Plan in a
Required Aggregation Group.
A. For purposes of the minimum allocations set forth
above, the percentage allocated to the Participant's Account of any Key
Employee shall be equal to the ratio of the sum of the Employer's
contributions and Forfeitures allocated on behalf of such Key Employee
divided by the "415 Compensation" for such Key Employee.
B. For any Top Heavy Plan Year, the minimum
allocations set forth above shall be allocated to the Participant's
Account of all Employees who are Participants and who are employed by
the Employer on the last day of the Plan Year, including Employees who
have (1) failed to complete a Year of Service; and (2) declined to make
mandatory contributions (if required) to the Plan.
C. Subject to Section 1.10.3, above, for the purposes
of this Section, "415 Compensation" shall be limited to $200,000. Such
amount shall be adjusted at the same time and in the same manner as
permitted under Code Section 415(d), except that the dollar increase in
effect on January 1 of any calendar year shall be effective for the Plan
Year beginning with or within such calendar year and the first
adjustment to the $200,000 limitation shall be effective on January 1,
1990. For any short Plan Year the "415 Compensation" limit shall be an
amount equal to the "415 Compensation" limit for the calendar year in
which the Plan Year begins multiplied by the ratio obtained by dividing
the number of full months in the short Plan Year by twelve (12).
However, for Plan Years beginning prior to January 1, 1989, the $200,000
limit shall apply only for Top Heavy Plan Years and shall not be
adjusted.
4.3.11 Reeemployed Former Participant. If a Former
Participant is reemployed after five (5) consecutive 1-Year Breaks in
Service, then separate accounts shall be maintained as follows:
A. one account for nonforfeitable benefits
attributable to pre-break service; and
B. one account representing his status in the Plan
attributable to post-break service.
4.3.12 Fail-Safe Allocations. Notwithstanding anything
to the contrary, for Plan Years beginning after December 31, 1989, if
this is a Plan that would otherwise fail to meet the requirements of
Code Sections 401(a)(26), 410(b)(1) or 410(b)(2)(A)(i) and the
Regulations thereunder because Employer contributions would not be
allocated to a sufficient number or percentage of Participants for a
Plan Year, then the following rules shall apply:
A. The group of Participants eligible to share in the
Employer's contribution and Forfeitures for the Plan Year shall be
expanded to include the minimum number of Participants who would not
otherwise be eligible as are necessary to satisfy the applicable test
specified above. The specific Participants who shall become eligible
under the terms of this Section shall be those who are actively employed
on the last day of the Plan Year and, when compared to similarly
situated Participants, have completed the greatest number of Hours of
Service in the Plan Year.
B. If after application of Section 4.3.15A. above,
the applicable test is still not satisfied, then the group of
Participants eligible to share in the Employer's contribution and
Forfeitures for the Plan Year shall be further expanded to include the
minimum number of Participants who are not actively employed on the last
day of the Plan Year as are necessary to satisfy the applicable test.
The specific Participants who shall become eligible to share shall be
those Participants, when compared to similarly situated Participants,
who have completed the greatest number of Hours of Service in the Plan
Year before terminating employment.
C. Nothing in this Section shall permit the reduction
of a Participant's accrued benefit. Therefore any amounts that have
previously been allocated to Participants may not be reallocated to
satisfy these requirements. In such event, the Employer shall make an
additional contribution equal to the amount such affected Participants
would have received had they been included in the allocations, even if
it exceeds the amount which would be deductible under Code Section 404.
Any adjustment to the allocations pursuant to this Section shall be
considered a retroactive amendment adopted by the last day of the Plan
Year.
D. Notwithstanding the foregoing, for any Top Heavy
Plan Year beginning after December 31, 1992, if the plan would fail to
satisfy Code Section 410(b) if the coverage tests were applied by
treating those Participants whose only allocation would otherwise be
provided under the top heavy formula as if they were not currently
benefiting under the Plan, then, for purposes of this Section 4.3.15,
such Participants shall be treated as not benefiting and shall therefore
be eligible to be included in the expanded class of Participants who
will share in the allocation provided under the Plan's non-top heavy
formula.
4.3.13 HCP in CODAs. For the purposes of this Section,
if a Highly Compensated Participant is a Participant under two or more
cash or deferred arrangements of the Employer or an Affiliated Employer,
then all such cash or deferred arrangements shall be treated as one cash
or deferred arrangement for the purpose of determining the actual
deferral ratio with respect to such Highly Compensated Participant.
However, for Plan Years beginning after December 31, 1988, no such
aggregation of cash or deferred arrangements is required.
4.4 Maximum Annual Additions.
4.4.1 Limitation. Notwithstanding the foregoing, the
maximum "annual additions" credited to a Participant's accounts for any
"limitation year" shall equal the lesser of: (a) $30,000 (or, if
greater, one-fourth of the dollar limitation in effect under Code
Section 415(b)(1)(A)) or (b) twenty-five percent (25%) of the
Participant's "415 Compensation" for such "limitation year". For any
short "limitation year", the dollar limitation in clause (a), above,
shall be reduced by a fraction, the numerator of which is the number of
full months in the short "limitation year" and the denominator of which
is twelve (12).
A. Any amount which would be allocable to a
Participant's accounts under this Plan in a Plan Year but for the
application of the foregoing limitation of Code Section 415 shall be
reallocated to other Participants in that Plan Year in accordance with
Section 4.3, above.
B. The Employer maintains an Incentive & Investment
and Salary Savings Plan (the "I&I and Salary Savings Plan"), in which
many Participants in this Plan also participate. In applying the
limitations of Code Section 415 to each Participant, the Participant (1)
first shall be credited under the I&I and Salary Savings Plan with the
maximum amount that the Participant is entitled to receive under that
Plan, and (2) thereafter shall be credited under this Plan with the
maximum additional amount which can be allocated to the Participant
hereunder in accordance with Section 4.3, above, and the limitations of
Code Section 415.
4.4.2 Pre-1989 Limitation Years. For "limitation years"
beginning prior to July 13, 1989, the dollar amount provided for in
Section 4.4.1(a), above, shall be increased by the lesser of the dollar
amount determined under Section 4.4.1(a), above, or the amount of
Company Stock contributed, or purchased with cash contributed. The
dollar amount shall be increased provided no more than one-third of the
Employer's contributions for the year are allocated to Highly
Compensated Participants. In applying this limitation, the family group
of a Highly Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) shall be determined pursuant
to Regulations.
4.4.3 Annual Additions Defined. For purposes of applying
the limitations of Code Section 415, "annual additions" means the sum
credited to a Participant's accounts for any "limitation year" of (a)
Employer contributions, (b) Employee contributions for "limitation
years" beginning after December 31, 1986, (c) forfeitures, (d) amounts
allocated, after March 31, 1984, to an individual medical account, as
defined in Code Section 415(1)(2) which is part of a pension or annuity
plan maintained by the Employer, and (e) amounts derived from
contributions paid or accrued after December 31, 1985, in taxable years
ending after such date, which are attributable to post-retirement
medical benefits allocated to the separate account of a key employee (as
defined in Code Section 419A(d)(3)) under a welfare benefit plan (as
defined in Code Section 419(e)) maintained by the Employer; provided,
however, the "415 Compensation" percentage limitation referred to in
Section 4.4.1(b), above, shall not apply to: (1) any contribution for
medical benefits (within the meaning of Code Section 419A(f)(2)) after
separation from service which is otherwise treated as an "annual
addition", or (2) any amount otherwise treated as an "annual addition"
under Code Section 415(1)(1).
4.4.4 Exclusions From Annual Additions. For purposes of
applying the limitations of Code Section 415:
A. The following are not "annual additions": (a) the
transfer of funds from one qualified plan to another and (b) provided no
more than one-third of the Employer contributions for the year are
allocated to Highly Compensated Participants, Forfeitures of Company
Stock purchased with the proceeds of an Exempt Loan and Employer
contributions applied to the payment of interest on an Exempt Loan.
B. The following are not Employee contributions for
the purposes of Section 4.4.3(b): (1) rollover contributions (as defined
in Code Sections 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3)); (2)
repayments of loans made to a Participant from the Plan; (3) repayments
of distributions received by an Employee pursuant to Code Section
411(a)(7)(B) (cash-outs); (4) repayments of distributions received by an
Employee pursuant to Code Section 411(a)(3)(D) (mandatory
contributions); and (5) Employee contributions to a simplified employee
pension excludable from gross income under Code Section 408(k)(6).
4.4.5 Limitation Year. For purposes of applying the
limitations of Code Section 415, the "limitation year" shall be the Plan
Year.
4.4.6 Dollar Limitation Adjustment. The dollar
limitation under Code Section 415(b)(1)(A) stated in Section 4.4.1(a),
above, shall be adjusted annually as provided in Code Section 415(d)
pursuant to the Regulations. The adjusted limitation is effective as of
January 1st of each calendar year and is applicable to "limitation
years" ending with or within that calendar year.
4.4.7 Defined Benefit Plans. For the purpose of this
Section, all qualified defined benefit plans (whether terminated or not)
ever maintained by the Employer shall be treated as one defined benefit
plan, and all qualified defined contribution plans (whether terminated
or not) ever maintained by the Employer shall be treated as one defined
contribution plan.
4.4.8 Controlled Groups. For the purpose of this
Section, if the Employer is a member of a controlled group of
corporations, trades or businesses under common control (as defined by
Code Section 1563(a) or Code Section 414(b) and (c) as modified by Code
Section 415(h)), is a member of an affiliated service group (as defined
by Code Section 414(m)), or is a member of a group of entities required
to be aggregated pursuant to Regulations under Code Section 414(o), all
Employees of such Employers shall be considered to be employed by a
single Employer.
4.4.9 Collectively Bargained Plans. For the purpose of
this Section, if this Plan is a Code Section 413(c) plan, all Employers
of a Participant who maintain this Plan will be considered to be a
single Employer.
4.4.10 Combined Plan Limits: Annual Additions.
A. If a Participant participates in more than one
defined contribution plan maintained by the Employer which have
different Anniversary Dates, the maximum "annual additions" under this
Plan shall equal the maximum "annual additions" for the "limitation
year" minus any "annual additions" previously credited to such
Participant's accounts during the "limitation year".
B. If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a defined contribution
plan not subject to Code Section 412 maintained by the Employer which
have the same Anniversary Date, "annual additions" will be credited to
the Participant's accounts under the defined contribution plan subject
to Code Section 412 prior to crediting "annual additions" to the
Participant's accounts under the defined contribution plan not subject
to Code Section 412.
C. If a Participant participates in more than one
defined contribution plan not subject to Code Section 412 maintained by
the Employer which have the same Anniversary Date, the maximum "annual
additions" under this Plan shall equal the product of (A) the maximum
"annual additions" for the "limitation year" minus any "annual
additions" previously credited under Sections 4.4.10A. or 4.4.10B.
above, multiplied by (B) a fraction (i) the numerator of which is the
"annual additions" which would be credited to such Participant's
accounts under this Plan without regard to the limitations of Code
Section 415 and (ii) the denominator of which is such "annual additions"
for all plans described in this subsection.
4.4.11 Combined Plan Fraction. If an Employee is (or has
been) a Participant in one or more defined benefit plans and one or more
defined contribution plans maintained by the Employer, the sum of the
defined benefit plan fraction and the defined contribution plan fraction
for any "limitation year" may not exceed 1.0.
4.4.12 Defined Benefit Plan Fraction. The defined
benefit plan fraction for any "limitation year" is a fraction, the
numerator of which is the sum of the Participant's projected annual
benefits under all the defined benefit plans (whether or not terminated)
maintained by the Employer, and the denominator of which is tho lesser
of 125 percent of the dollar limitation determined for the "limitation
year" under Code Sections 415(b) and (d) or 140 percent of the highest
average compensation, including any adjustments under Code Section
415(b). Notwithstanding the foregoing, if the Participant was a
Participant as of the first day of the first "limitation year" beginning
after December 31, 1986, in one or more defined benefit plans maintained
by the Employer which were in existence on May 6, 1986, the denominator
of this fraction will not be less than 125 percent of the sum of the
annual benefits under such plans which the Participant had accrued as of
the close of the last "limitation year" beginning before January 1,
1987, disregarding any changes in the terms and conditions of the plan
after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the
requirements of Code Section 415 for all "limitation years" beginning
before January 1, 1987.
4.4.13 Defined Contribution Plan Fraction. The defined
contribution plan fraction for any "limitation year" is a fraction, the
numerator of which is the sum of the annual additions to the
Participant's Account under all the defined contribution plans (whether
or not terminated) maintained by the Employer for the current and all
prior "limitation years" (including the annual additions attributable to
the Participant's nondeductible Employee contributions to all defined
benefit plans, whether or not terminated, maintained by the Employer,
and the annual additions attributable to all welfare benefit funds, as
defined in Code Section 419(e), and individual medical accounts, as
defined in Code Section 415(1)(2), maintained by the Employer), and the
denominator of which is the sum of the maximum aggregate amounts for the
current and all prior "limitation years" of service with the Employer
(regardless of whether a defined contribution plan was maintained by the
Employer).
A. The maximum aggregate amount in any "limitation
year" is the lesser of 125 percent of the dollar limitation determined
under Code Sections 415(b) and (d) in effect under Code Section
415(c)(1)(A) or 35 percent of the Participant's Compensation for such
year.
B. If the Employee was a Participant as of the end of
the first day of the first "limitation year" beginning after December
31, 1986, in one or more defined contribution plans maintained by the
Employer which were in existence on May 6, 1986, the numerator of this
fraction will be adjusted if the sum of this fraction and the defined
benefit fraction would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product of (1) the
excess of the sum of the fractions over 1.0 times (2) the denominator of
this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they
would be computed as of the end of the last "limitation year" beginning
before January 1, 1987, and disregarding any changes in the terms and
conditions of the Plan made after May 5, 1986, but using the Code
Section 415 limitation applicable to the first "limitation year"
beginning on or after January 1, 1987. The annual addition for any
"limitation year" beginning before January 1, 1987 shall not be
recomputed to treat all Employee contributions as annual additions.
4.4.14 Top Heavy Plan Year. Notwithstanding the
foregoing, for any "limitation year" in which the Plan is a Top Heavy
Plan, 100 percent shall be substituted for 125 percent in Sections
4.4.12 and 4.4.13 unless the extra minimum allocation is being provided
pursuant to Section 4.3. However, for any "limitation year" in which the
Plan is a Super Top Heavy Plan, 100 percent shall be substituted for 125
percent in any event.
4.4.15 Code and Regulations. Notwithstanding anything
contained in this Section to the contrary, the limitations, adjustments
and other requirements prescribed in this Section shall at all times
comply with the provisions of Code Section 415 and the Regulations
thereunder, the terms of which are specifically incorporated herein by
reference.
4.4.16 ESOP Allocation Limitation. Notwithstanding any
other provision of this plan to the contrary, in no event shall more
than one-third (1/3) of the Employer's contribution and forfeitures be
allocated for any Plan Year to the Participant's Accounts of the
Participants who are Highly Compensated Employees. In the event the
limitations set forth in this Section 4.4.16 are exceeded in any Plan
Year, then the Participant's accounts of those Highly Compensated
Employees shall be reduced equally until the limitations set forth in
this Section 4.4.16 is met. The amount by which the accounts of those
Highly Compensated Employees are reduced pursuant to this Section 4.4.16
shall be added to the Employer's contribution and allocated amongst the
Participant's Accounts of the remaining Participants in accordance with
their respective Compensation.
4.5 Adjustment For Excessive Annual Additions.
4.5.1 Definitions. For purposes of this Section 4.5, the
term:
A. "Excess amount" shall mean, for each Participant
in each limitation year, the excess, if any, of (1) the "annual
additions" which would be credited to his account under the terms of the
Plan without regard to the limitations of Code Section 415, over (2) the
maximum "annual additions" permitted by Code Section 415, as determined
pursuant to Section 4.4, above.
B. "Section 415 suspense account" shall mean an
unallocated account equal to the sum of "excess amounts" for all
Participants in the Plan during the limitation year. The amount
allocated to the "Section 415 suspense account" shall not share in any
earnings or losses of the Trust Fund.
4.5.2 Treatment of Excess Amounts. If the "annual
additions" under this Plan would cause the maximum "annual additions" to
be exceeded for any Participant by reason of (a) the allocation of
Forfeitures, (b) a reasonable error in estimating a Participant's
Compensation, (c) 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 Participant under the limits of Section
4.4, above, or (d) other facts and circumstances to which Regulation
Section 1.415-6(b)(6) shall be applicable, then the Administrator shall:
A. Allocate and reallocate such excess amount to
other Participants in accordance with Section 4.3, above, but subject to
the limits on annual additions under Section 4.4, above;
B. Hold in a "Section 415 suspense account" any
"excess amount" remaining after application of Paragraph A, above; and
C. Allocate and reallocate the Section 415 suspense
account in the next limitation year (and, if the amount in that Section
415 suspense account is not fully allocated in the next limitation year,
in succeeding limitation years) to all Participants in the Plan before
any Employer or Employee contributions which would constitute annual
additions are made to the Plan for such limitation year, and reduce
Employer contributions to the Plan for such limitation year by the
amount of the Section 415 suspense account allocated and reallocated
during such limitation year.
4.5.3 Distribution of Excess Amounts. The Plan may not
distribute excess amounts, other than voluntary Employee contributions,
to Participants or Former Participants.
4.6 Directed Investment of Accounts. Except as otherwise
provided in this Section 4.6, no Participant shall be entitled to direct
the investment of amounts allocated to the Participant's accounts under
this Plan.
4.6.1 Diversification by Qualified Participant. For Plan
Years beginning after December 31, 1986, each "Qualified Participant"
may elect, within ninety (90) days after the close of each Plan Year
during the Qualified Participant's "Qualified Election Period," to
direct the Trustee, in writing, as to the investment of the number of
shares of Company Stock determined pursuant to this Section 4.6.1.
A. For purposes of this Section 4.6, the term (a)
"Qualified Participant" means any Participant or Former Participant who
has completed ten (10) Plan Years of Service as a Participant and has
attained age 55, and (b) "Qualified Election Period" means the six-Plan-
Year-period beginning with the later of (1) the first Plan Year in which
the Participant first became a "Qualified Participant," or (2) the first
Plan Year beginning after December 31, 1986.
B. With respect to each Plan Year during the
Qualified Election Period, the Qualified Participant may elect to direct
the investment of twenty-five percent (25%) of the total number of
shares of Company Stock acquired by or contributed to the Plan that have
ever been allocated to the Qualified Participant's Company Stock Account
(reduced by the number of shares of Company Stock which the Participant
previously was entitled to elect to diversify). With respect to the
last year in the Qualified Election Period, the preceding sentence shall
be applied by substituting "fifty percent (50%)" for "twenty-five
percent (25%)."
C. The Trustee shall satisfy the diversification
direction of a Qualified Participant under this Section 4.6.1 by either
(1) offering at least three (3) investment options into which the
proceeds from the sale of the designated number of shares of Company
Stock shall be invested not later than 180 days after the close of the
Plan Year to which the Qualified Participant's investment direction
relates, or (2) distributing to the Qualified Participant, not later
than 180 days after the close of the Plan Year to which the
Participant's investment direction applies, such shares of Company
Stock; provided, any such shares of Company Stock distributed to a
Qualified Participant shall be subject to the requirements of Section
7.11, below.
D. Notwithstanding the provisions of Paragraphs B and
C of this Section 4.6.1, if the fair market value (determined pursuant
to Section 6.1, below, at the Plan valuation date immediately preceding
the first day in which a Qualified Participant is eligible to make an
election) of Company Stock acquired by or contributed to the Plan after
December 31, 1986, and allocated to a Qualified Participant's Company
Stock Account is not greater than five hundred dollars ($500.00), then
no portion of the shares of Company Stock allocated to that account
shall be subject to the requirements of this Section 4.6.1. For
purposes of determining whether the fair market value of such stock
exceeds $500, all Company Stock held in accounts of all employee stock
ownership plans (as defined in Code Section 4975(e)(7)) and tax credit
employee stock ownership plans (as defined in Code Section 409(a))
maintained by the Employer or any Affiliated Employer shall be
considered pursuant to this Plan.
4.6.2 Early Diversification in Employer Tenders. Subject
to the issuance by the Internal Revenue Service of a favorable
determination letter with respect to this Plan document (including this
Section 4.6.2), if, at any time on or after January 1, 1993, the
Employer or any Affiliated Employer undertakes a tender offer in which
the Employer or any Affiliated Employer offers to purchase pro rata from
its shareholders (including the Trustee as trustee of the Trust Fund)
outstanding shares of Company Stock, then each "Eligible Participant"
shall have the right to elect to direct the Trustee as to the investment
of the Eligible Participant's account in the manner provided in this
Section 4.6.2.
A. For purposes of this Section 4.6.2, the term
"Eligible Participant" shall mean (1) for any such tender offers
occurring on or before December 31, 1993, each Participant who would
become a "Qualified Participant" (as defined in Section 4.6.1 (A),
above) in any Plan Year ending on or before December 31, 2000, assuming
that such Eligible Participant continued to be a Participant until such
date; and (2) for any such tender offer occurring in Plan Years
beginning on or after January 1, 1994, each Participant who is or would
become a "Qualified Participant" (as defined in Section 4.6.1 (A),
above) in any of the seven (7) Plan Years next succeeding the Plan Year
in which such tender offer occurs, assuming that such Eligible
Participant continued to be a Participant until the last day of the
seventh such Plan Year (or, if greater, the minimum number of succeeding
Plan Years as may be necessary to ensure that the class of "Eligible
Participant" satisfies the requirements of Code Section 401(a)(4)).
B. Prior to implementing any sales of Company Stock
pursuant to this Section 4.6.2, the Trustee first shall determine, in
the exercise of its independent discretion, that the sale of the number
of shares of Company Stock which would be sold in any tender offer
pursuant to this Section 4.6.2 would represent a prudent investment
decision consistent with the duties and obligations of the Trustee under
the Code and ERISA.
C. In connection with each tender offer, each
Eligible Participant shall be entitled to direct the Trustee to sell in
the tender offer such number of the shares of Company Stock allocated to
the Eligible Participant's Company Stock Account as is determined by the
Trustee in a nondiscriminatory manner; provided, such amount shall not
exceed the number of shares of Company Stock that the Eligible
Participant would be entitled to diversify pursuant to Section 4.6.1,
above, in the first year in which the Eligible Participant becomes a
"Qualified Participant" (as defined in Section 4.6.1, above).
D. The Trustee shall implement any investment
directions received pursuant to this Section 4.6.2 from all Eligible
Participants by (1) selling in the tender offer such number of shares of
Company Stock as the Eligible Participant has elected and is entitled to
direct be sold in such tender offer, (2) offering the Eligible
Participant at least three (3) investment options in which the proceeds
from the sale of such Company Stock can be invested, and (3) investing
such proceeds, within ninety (90) days after completion of such tender
offer, in the particular investment options selected by the Eligible
Participant, provided, in the case of any shares sold in a tender offer
effected prior to December 31, 1993, such proceeds shall be so invested
within ninety (90) days after the Internal Revenue Service issues a
determination letter approving the terms of this Plan, including this
Section 4.6.2.
E. Notwithstanding any other provision of this
Section 4.6.2 to the contrary, if (1) the Trustee sells any shares of
Company Stock pursuant to this Section 4.6.2 and the Internal Revenue
Service subsequently determines that the provisions of this section are
inconsistent with any provision of the Code or ERISA, then (2) all such
shares sold in the tender offer shall be deemed to have been tendered
pro rata from all accounts of all Participants as a pooled investment
decision made by the Trustee with respect to the aggregate assets of the
Trust Fund.
4.6.3 Directed Investment Accounts. A separate Directed
Investment Account shall be established for each Participant who is
entitled to direct the investment of any portion of the Participant's
Account pursuant to this Section 4.6. The Directed Investment Account
shall not share in Trust Fund earnings or losses, but rather shall be
charged or credited, as appropriate, with the net earnings, gains,
losses, and expenses, as well as any appreciation or depreciation in
fair market value during each Plan Year, of investments allocable
separately to such account.
5. FUNDING AND INVESTMENT POLICY
5.1 Investment Policy.
5.1.1 General. The Plan is designed to invest primarily
in Company Stock.
5.1.2 Other Investments. With due regard to Section
5.1.1 above, the Administrator may also direct the Trustee to invest
funds under the Plan in other property described in the Trust or in life
insurance policies to the extent permitted by Section 5.1.3 below, or
the Trustee may hold such funds in cash or cash equivalents.
5.1.3 Keyman Insurance. With due regard to Section 5.1.1
above, the Administrator may also direct the Trustee to invest funds
under the Plan in insurance policies on the life of any "keyman"
Employee. The proceeds of a "keyman" insurance policy may not be used
for the repayment of any indebtedness owed by the Plan which is secured
by Company Stock. In the event any "keyman" insurance is purchased by
the Trustee, the premiums paid thereon during any Plan Year, net of any
policy dividends and increases in cash surrender values, shall be
treated as the cost of Plan investment and any death benefit or cash
surrender value received shall be treated as proceeds from an investment
of the Plan.
5.1.4 Limit on Stock Acquisition. The Plan may not
obligate itself to acquire Company Stock (a) from a particular holder
thereof at an indefinite time determined upon the happening of an event
such as the death of the holder, or (b) under a put option binding upon
the Plan. However, at the time a put option is exercised, the Plan may
be given an option to assume the rights and obligations of the Employer
under a put option binding upon the Employer.
5.1.5 Price of Company Stock. All purchases of Company
Stock shall be made at a price which, in the judgment of the
Administrator, does not exceed the fair market value thereof. All sales
of Company Stock shall be made at a price which, in the judgment of the
Administrator, is not less than the fair market value thereof. The
valuation rules set forth in Article VI, below, shall be applicable to
all such purchases and sales.
5.2 Application Of Cash. Employer contributions in cash and
other cash received by the Trust Fund shall first be applied to pay any
Current Obligations of the Trust Fund.
5.3 Transactions Involving Company Stock.
5.3.1 Limitations On Allocations. No portion of the
Trust Fund attributable to (or allocable in lieu of) Company Stock
acquired by the Plan after October 22, 1986 in a sale to which Code
Section 1042 or, for estates of decedents who died prior to December 20,
1989, Code Section 2057 applies may accrue or be allocated directly or
indirectly under any plan maintained by the Employer meeting the
requirements of Code Section 401(a):
A. During the "Nonallocation Period", for the benefit
of (1) any taxpayer who makes an election under Code Section 1042(a)
with respect to Company Stock or any decedent if the executor of the
estate of the decedent makes a qualified sale to which Code Section 2057
applies, or (2) any individual who is related to the taxpayer or the
decedent (within the meaning of Code Section 267(b)); or
B. For the benefit of any other person who owns
(after application of Code Section 318(a) applied without regard to the
employee trust exception in Code Section 318(a)(2)(B)(i)) more than 25
percent of (1) any class of outstanding stock of the Employer or
Affiliated Employer which issued such Company Stock, or (2) the total
value of any class of outstanding stock of the Employer or Affiliated
Employer; provided, however, Section 5.3.1A.(2), above, shall not apply
to lineal descendants of the taxpayer, provided that the aggregate
amount allocated to the benefit of all such lineal descendants during
the "Nonallocation Period" does not exceed more than five percent (5%)
of the Company Stock (or amounts allocated in lieu thereof) held by the
Plan which are attributable to a sale to the Plan by any person related
to such descendants (within the meaning of Code Section 267(c)(4)) in a
transaction to which Code Section 1042 or Code Section 2057 is applied.
5.3.2 Stock Ownership. A person shall be treated as
failing to meet the stock ownership limitation under Section 5.3.1B.
above if such person fails such limitation:
A. at any time during the one (1) year period ending
on the date of sale of Company Stock to the Plan, or
B. on the date as of which Company Stock is allocated
to Participants in the Plan.
5.3.3 Nonallocation Period. For purposes of this
Section, "Nonallocation Period," for Plan Years beginning after December
31, 1986, means the period beginning on the date of the sale of the
Company Stock and ending on the later of:
A. The date which is ten (10) years after the date of
sale, or
B. The date of the Plan allocation attributable to
the final payment of the Exempt Loan incurred in connection with such
sale.
5.4 Loans to the Trust.
5.4.1 Loans Permitted. The Plan may borrow money for any
lawful purpose, provided the proceeds of an Exempt Loan are used within
a reasonable time after receipt only for any or all of the following
purposes:
A. To acquire Company Stock.
B. To repay such loan.
C. To repay a prior Exempt Loan.
5.4.2 Loans Involving Disqualified Persons. All loans to
the Trust which are made or guaranteed by a disqualified person must
satisfy all requirements applicable to Exempt Loans, including but not
limited to the following:
A. The loan must be at a reasonable rate of interest;
B. Any collateral pledged to the creditor by the Plan
shall consist only of the Company Stock purchased with the borrowed
funds;
C. Under the terms of the loan, any pledge of Company
Stock shall provide for the release of shares so pledged on a pro-rata
basis pursuant to Section 4.3.6;
D. Under the terms of the loan, the creditor shall
have no recourse against the Plan except with respect to such
collateral, earnings attributable to such collateral, Employer
contributions (other than contributions of Company Stock) that are made
to meet Current Obligations and earnings attributable to such
contributions;
E. The loan must be for a specific term and may not
be payable at the demand of any person, except in the case of default;
F. In the event of default upon an Exempt Loan, the
value of the Trust Fund transferred in satisfaction of the Exempt Loan
shall not exceed the amount of default. If the lender is a disqualified
person, an Exempt Loan shall provide for a transfer of Trust Funds upon
default only upon and to the extent of the failure of the Plan to meet
the payment schedule of the Exempt Loan;
G. Exempt Loan payments during a Plan Year must not
exceed an amount equal to: (1) the sum, over all Plan Years, of all
contributions and cash dividends paid by the Employer to the Plan with
respect to such Exempt Loan and earnings on such Employer contributions
and cash dividends, less (2) the sum of the Exempt Loan payments in all
preceding Plan Years. A separate accounting shall be maintained for
such Employer contributions, cash dividends and earnings until the
Exempt Loan is repaid.
5.4.3 Disqualified Person. For purposes of this Section,
the term "disqualified person" means a person who is a Fiduciary, a
person providing services to the Plan, an Employer any of whose
Employees are covered by the Plan, an employee organization any of whose
members are covered by the Plan, an owner, direct or indirect, of 50% or
more of the total combined voting power of all classes of voting stock
or of the total value of all classes of the stock, or an officer,
director, 10% or more shareholder, or a highly compensated Employee.
6. VALUATIONS
6.1 Valuation of the Trust Fund. The Administrator shall
direct the Trustee, as of each Anniversary Date, and at such other date
or dates deemed necessary by the Administrator, herein called "valuation
date", to determine the net worth of the assets comprising the Trust
Fund as it exists on the "valuation date." In determining such net
worth, the Trustee shall value the assets comprising the Trust Fund at
their fair market value as of the "valuation date, and shall deduct all
expenses for which the Trustee has not yet obtained reimbursement from
the Employer or the Trust Fund.
6.2 Method of Valuation. Valuations must be made in good
faith and based on all relevant factors for determining the fair market
value of securities. Tn the case of a transaction between a Plan and a
disqualified person, value must be determined as of the date of the
transaction. For all other Plan purposes, value must be determined as
of the most recent "valuation date" under the Plan. An independent
appraisal will not in itself be a good faith determination of value in
the case of a transaction between the Plan and a disqualified person.
However, in other cases, a determination of fair market value based on
at least an annual appraisal independently arrived at by a person who
customarily makes such appraisals and who is independent of any party to
the transaction will be deemed to be a good faith determination of
value. Company Stock not readily tradeable on an established securities
market shall be valued by an independent appraiser meeting requirements
similar to the requirements of the Regulations prescribed under Code
Section 170(a)(1).
7. DETERMINATION AND DISTRIBUTION OF BENEFITS.
7.1 Determination of Benefits Upon Retirement. Every
Participant may terminate his employment with the Employer and retire
for the purposes hereof on his Normal Retirement Date or Early
Retirement Date. However, a Participant may postpone the termination of
his employment with the Employer to a later date, in which event the
participation of such Participant in the Plan, including the right to
receive allocations pursuant to Section 4.3, shall continue until his
Late Retirement Date. Upon a Participant's Retirement Date or
attainment of his Normal Retirement Date without termination of
employment with the Employer, or as soon thereafter as is practicable,
the Trustee shall distribute all amounts credited to such Participant's
Account in accordance with Sections 7.5 and 7.6.
7.2 Determination of Benefits Upon Death.
7.2.1 Vesting and Distribution. Upon the death of a
Participant before his Retirement Date or other termination of his
employment, all amounts credited to such Participant's Account shall
become fully Vested. If elected, distribution of the Participant's
Account shall commence not later than one (1) year after the close of
the Plan Year in which such Participant's death occurs. The
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 7.5 and 7.6, to distribute the value of the
deceased Participant's accounts to the Participant's Beneficiary.
7.2.2 Distributions. Upon the death of a Former
Participant, the Administrator shall direct the Trustee, in accordance
with the provisions of Sections 7.5 and 7.6, to distribute any remaining
Vested amounts credited to the accounts of a deceased Former Participant
to such Former Participant's Beneficiary.
7.2.3 Proof of Death. The Administrator may require such
proper proof of death and such evidence of the right of any person to
receive payment of the value of the account of a deceased Participant or
Former Participant as the Administrator may deem desirable. The
Administrator's determination of death and of the right of any person to
receive payment shall be conclusive.
7.2.4 Beneficiary. The Beneficiary of the death benefit
payable pursuant to this Section shall be the Participant's spouse.
A. Notwithstanding the foregoing, the Participant may
designate a Beneficiary other than his spouse if: (1) the spouse has
waived the right to be the Participant's Beneficiary; or (2) the
Participant is legally separated or has been abandoned (within the
meaning of local law) and the Participant has a court order to such
effect (and there is no "qualified domestic relations order, as defined
in Code Section 414(p) which provides otherwise); or (3) the Participant
has no spouse; or (4) the spouse cannot be located.
B. In the event of the occurrence of any of the
circumstances described in Paragraph A, above, the designation of a
Beneficiary shall be made on a form satisfactory to the Administrator.
A Participant may at any time revoke his designation of a Beneficiary or
change his Beneficiary by filing written notice of such revocation or
change with the Administrator. However, the Participant's spouse must
again consent in writing to any change in Beneficiary unless the
original consent acknowledged that the spouse had the right to limit
consent only to a specific Beneficiary and that the spouse voluntarily
elected to relinquish such right. In the event no valid designation of
Beneficiary exists at the time of the Participant's death, the death
benefit shall be payable to his estate.
7.2.5 Form of Spousal Waiver. Any consent by the
Participant's spouse to waive any rights to the death benefit must be in
writing, must acknowledge the effect of such waiver, and be witnessed by
a Plan representative or a notary public. Further, the spouse's consent
must be irrevocable and must acknowledge the specific nonspouse
Beneficiary.
7.3 Determination of Benefits in Event of Disability. In the
event of a Participant's Total and Permanent Disability prior to his
Retirement Date or other termination of his employment, all amounts
credited to such Participant's Account shall become fully Vested. In
the event of a Participant's Total and Permanent Disability, the
Trustee, in accordance with the provisions of Sections 7.5 and 7.6,
shall distribute to such Participant all amounts credited to such
Participant's Account as though he had retired. If such Participant
elects, distribution shall commence not later than one (1) year after
the close of the Plan Year in which Total and Permanent Disability
occurs.
7.4 Determination of Benefits Upon Termination.
7.4.1 Segregation of Accounts. On or before the
Anniversary Date coinciding with or subsequent to the termination of a
Participant's employment for any reason other than death, Total and
Permanent Disability or retirement, the Administrator may direct the
Trustee to segregate the amount of the Vested portion of such Terminated
Participant's Account and invest the aggregate amount thereof in a
separate, federally insured savings account, certificate of deposit,
common or collective trust fund of a bank or a deferred annuity. In the
event the Vested portion of a Participant's Account is not segregated,
the amount shall remain in a separate account for the Terminated
Participant and share in allocations pursuant to Section 4.3 until such
time as a distribution is made to the Terminated Participant.
A. If a portion of a Participant's Account is
forfeited, Company Stock allocated to the Participant's Company Stock
Account must be forfeited only after the Participant's Other Investments
Account has been depleted. If interest in more than one class of
Company Stock has been allocated to a Participant's Account, the
Participant must be treated as forfeiting the same proportion of each
such class.
B. In the event that the amount of the Vested portion
of the Terminated Participant's Account equals or exceeds the fair
market value of any insurance Contracts, the Trustee, when so directed
by the Administrator and agreed to by the Terminated Participant, shall
assign, transfer, and set over to such Terminated Participant all
Contracts on his life in such form or with such endorsements so that the
settlement options and forms of payment are consistent with the
provisions of Section 7.5. In the event that the Terminated
Participant's Vested portion does not at least equal the fair market
value of the Contracts, if any, the Terminated Participant may pay over
to the Trustee the sum needed to make the distribution equal to the
value of the Contracts being assigned or transferred, or the Trustee,
pursuant to the Participant's election, may borrow the cash value of the
Contracts from the insurer so that the value of the Contracts is equal
to the Vested portion of the Terminated Participant's Account and then
assign the Contracts to the Terminated Participant.
C. Distribution of the funds due to a Terminated
Participant shall be made on the occurrence of an event which would
result in the distribution had the Terminated Participant remained in
the employ of the Employer (upon the Participant's death, Total and
Permanent Disability, Early or Normal Retirement). However, at the
election of the Participant, the Administrator shall direct the Trustee
to cause the entire Vested portion of the Terminated Participant's
Account to be payable to such Terminated Participant on or after the
Anniversary Date coinciding with or next following termination of
employment. Distribution to a Participant shall not include any Company
Stock acquired with the proceeds of an Exempt Loan until the close of
the Plan Year in which such loan is repaid in full. Any distribution
under this Section shall be made in a manner which is consistent with
and satisfies the provisions of Sections 7.5 and 7.6, including, but not
limited to, all notice and consent requirements of Code Section
411(a)(11) and the Regulations thereunder.
D. If the value of a Terminated Participant's Vested
benefit derived from Employer and Employee contributions does not exceed
$3,500 and has never exceeded $3,500 at the time of any prior
distribution, the Administrator shall direct the Trustee to cause the
entire Vested benefit to be paid to such Participant in a single lump
sum.
E. For purposes of this Section 7.4, if the value of
a Terminated Participant's Vested benefit is zero, the Terminated
Participant shall be deemed to have received a distribution of such
vested benefit.
7.4.2 Regular Vesting Percentage. The Vested portion of
any Participant's Account shall be a percentage of the total amount
credited to his Participant's Account determined on the basis of the
Participant's number of Years of Service according to the following
schedule:
Vesting Schedule
Years of Service: Percentage:
Less than 2 0%
2 20%
3 30%
4 40%
5 60%
6 80%
7 100%
7.4.3 Top Heavy Vesting Schedule. Notwithstanding the
vesting schedule provided for in Section 7.4.2 above, for any Top Heavy
Plan Year, the Vested portion of the Participant's Account of any
Participant who has an Hour of Service after the Plan becomes top heavy
shall be a percentage of the total amount credited to his Participant's
Account determined on the basis of the Participant's number of Years of
Service according to the following schedule:
Vesting Schedule
Years of Service: Percentage:
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 100%
If in any subsequent Plan Year, the Plan ceases to be a
Top Heavy Plan, the Administrator shall revert to the vesting schedule
in effect before this Plan became a Top Heavy Plan. Any such reversion
shall be treated as a Plan amendment pursuant to the terms of the Plan.
7.4.4 Effect of Amendment. Notwithstanding the vesting
schedule above, the Vested percentage of a Participant's Account shall
not be less than the Vested percentage attained as of the later of the
effective date or adoption date of this amendment and restatement.
7.4.5 Effect of Terminations, Etc. Notwithstanding the
vesting schedule above, upon the complete discontinuance of the
Employer's contributions to the Plan or upon any full or partial
termination of the Plan, all amounts credited to the account of any
affected Participant shall become 100% Vested and shall not thereafter
be subject to Forfeiture.
7.4.6 No Reduction in Vesting. The computation of a
Participant's nonforfeitable percentage of his interest in the Plan
shall not be reduced as the result of any direct or indirect amendment
to this Plan. For this purpose, the Plan shall be treated as having
been amended if the Plan provides for an automatic change in vesting due
to a change in top heavy status. In the event that the Plan is amended
to change or modify any vesting schedule, a Participant with at least
three (3) Years of Service as of the expiration date of the election
period may elect to have his nonforfeitable percentage computed under
the Plan without regard to such amendment. If a Participant fails to
make such election, then such Participant shall be subject to the new
vesting schedule. The Participant's election period shall commence on
the adoption date of the amendment and shall end 60 days after the
latest of (a) the adoption date of the amendment, (b) the effective date
of the amendment, or (c) the date the Participant receives written
notice of the amendment from the Employer or Administrator.
7.4.7 Reemployment of Former Participant.
A. If any Former Participant shall be reemployed by
the Employer before a 1-Year Break in Service occurs, he shall continue
to participate in the Plan in the same manner as if such termination had
not occurred.
B. If any Former Participant shall be reemployed by
the Employer before five (5) consecutive 1-Year Breaks in Service, and
such Former Participant had received, or was deemed to have received, a
distribution of his entire Vested interest prior to his reemployment,
his forfeited account shall be reinstated only if he repays the full
amount distributed to him before the earlier of five (5) years after the
first date on which the Participant is subsequently reemployed by the
Employer or the close of the first period of five (5) consecutive 1-Year
Breaks in Service commencing after the distribution, or in the event of
a deemed distribution, upon the reemployment of such Former Participant.
In the event the Former Participant does repay the full amount
distributed to him, or in the event of a deemed distribution, the
undistributed portion of the Participant's Account must be restored in
full, unadjusted by any gains or losses occurring subsequent to the
Anniversary Date or other valuation date coinciding with or preceding
his termination. The source for such reinstatement shall first be any
Forfeitures occurring during the year. If such source is insufficient,
then the Employer shall contribute an amount which is sufficient to
restore any such forfeited Accounts provided, however, that if a
discretionary contribution is made for such year, such contribution
shall first be applied to restore any such Accounts and the remainder
shall be allocated in accordance with Section 4.3.
C. If any Former Participant is reemployed after a 1-
Year Break in Service has occurred, Years of Service shall include Years
of Service prior to his 1-Year Break in Service subject to the following
rules:
(1) If a Former Participant has a 1-Year Break
in Service, his pre-break and post-break service shall be used for
computing Years of Service for eligibility and for vesting purposes only
after he has been employed for one (1) Year of Service following the
date of his reemployment with the Employer;
(2) Any Former Participant who under the Plan
does not have a nonforfeitable right to any interest in the Plan
resulting from Employer contributions shall lose credits otherwise
allowable under Paragraph C(1), above, if the number of his consecutive
1-Year Breaks in Service equals or exceed the greater of (a) five (5) or
(b) the aggregate number of his pre-break Years of Service;
(3) After five (5) consecutive 1-Year Breaks in
Service, a Former Participant's Vested Account balance attributable to
pre-break service shall not be increased as a result of post-break
service;
(4) If a Former Participant who has not had his
Years of Service before a 1-Year Break in Service disregarded pursuant
to Paragraph C(2), above, completes one (1) Year of Service for
eligibility purposes following his reemployment with the Employer, he
shall participate in the Plan retroactively from his date of
reemployment;
(5) If a Former Participant who has not had his
Years of Service before a 1-Year Break in Service disregarded pursuant
to Paragraph C(2), above, completes a Year of Service (a 1-Year Break in
Service previously occurred, but employment had not terminated), he
shall participate in the Plan retroactively from the first day of the
Plan Year during which he completes one (1) Year of Service.
7.4.8 Pre-Age-18 Service. In determining Years of
Service for purposes of vesting under the Plan, Years of Service prior
to the vesting computation period in which an Employee attained his
eighteenth birthday shall be excluded.
7.5 Distribution of Benefits.
7.5.1 Form of Distribution. The Administrator, pursuant
to the election of the Participant (or if no election has been made
prior to the Participant's death, by his Beneficiary), shall direct the
Trustee to distribute to a Participant or his Beneficiary any amount to
which he is entitled under the Plan in one or more of the following
methods:
A. One lump-sum payment; or
B. Payments over a period certain in monthly,
quarterly, semiannual, or annual installments. The period over which
such payment is to be made shall not extend beyond the earlier of the
Participant's life expectancy (or the life expectancy of the Participant
and his designated Beneficiary) or the limited distribution period
provided for in Section 7.5.2.
7.5.2 Period of Installments. Unless the Participant
elects in writing a longer distribution period, distributions to a
Participant or his Beneficiary attributable to Company Stock shall be in
substantially equal monthly, quarterly, semiannual, or annual
installments over a period not longer than five (5) years. In the case
of a Participant with an account balance attributable to Company Stock
in excess of $500,000, the five (5) year period shall be extended one
(1) additional year (but not more than five (5) additional years) for
each $100,000 or fraction thereof by which such balance exceeds
$500,000. The dollar limits shall be adjusted at the same time and in
the same manner as provided in Code Section 415(d).
7.5.3 Participant Consent. Any distribution to a
Participant who has a benefit which exceeds, or has ever exceeded,
$3,500 at the time of any prior distribution shall require such
Participant's consent if such distribution commences prior to the later
of his Normal Retirement Age or age 62. With regard to this required
consent:
A. The Participant must be informed of his right to
defer receipt of the distribution. If a Participant fails to consent,
it shall be deemed an election to defer the commencement of payment of
any benefit. However, any election to defer the receipt of benefits
shall not apply with respect to distributions which are required under
Section 7.5.6.
B. Notice of the rights specified under this Section
shall be provided no less than 30 days and no more than 90 days before
the first day on which all events have occurred which entitle the
Participant to such benefit.
C. Written consent of the Participant to the
distribution must not be made before the Participant receives the notice
and must not be made more than 90 days before the first day on which all
events have occurred which entitle the Participant to such benefit.
D. No consent shall be valid if a significant
detriment is imposed under the Plan on any Participant who does not
consent to the distribution.
E. Notwithstanding the foregoing provisions of this
Section 7.5.3, if a distribution is one to which Code Sections
401(a)(11) and 417 do not apply, then such distribution may commence
less than thirty (30) days after the participant receives the notice
required under Treasury Regulation Section 1.411(a)-11(c), provided that
(1) the Administrator clearly informs the Participant that the
Participant has a right to a period of at least thirty (30) days after
receiving the notice to consider the decision of whether or not to elect
a distribution (and, if applicable, a particular distribution option),
and (2) the Participant, after receiving the notice, affirmatively
elects a distribution.
7.5.4 Distribution of Dividends. Notwithstanding
anything herein to the contrary, the Administrator, in its sole
discretion, may direct that cash dividends on shares of Company Stock
allocable to Participants' or Former Participants, Company Stock
Accounts be distributed to such Participants or Former Participants
within 90 days after the close of the Plan Year in which the dividends
are paid.
7.5.5 Treatment of Accounts. Any part of a Participant's
benefit which is retained in the Plan after the Anniversary Date on
which his participation ends will continue to be treated as a Company
Stock Account or as an Other Investments Account (subject to Section
7.4.1) as provided in Article IV. However, neither account will be
credited with any further Employer contributions or Forfeitures.
7.5.6 Required Distributions. Notwithstanding any
provision in the Plan to the contrary, the distribution of a
Participant's benefits shall be made in accordance with the following
requirements and shall otherwise comply with Code Section 401(a)(9) and
the Regulations thereunder (including Regulation 1.401(a)(9)-2), the
provisions of which are incorporated herein by reference:
A. A Participant's benefits shall be distributed to
him not later than April 1st of the calendar year following the later of
(i) the calendar year in which the Participant attains age 70 1/2 or
(ii) the calendar year in which the Participant retires, provided,
however, that this clause (ii) shall not apply in the case of a
Participant who is a "five (5) percent owner" at any time during the
five (5) Plan Year period ending in the calendar year in which he
attains age 70 1/2 or, in the case of a Participant who becomes a "five
(5) percent owner" during any subsequent Plan Year, clause (ii) shall no
longer apply and the required beginning date shall be the April 1st of
the calendar year following the calendar year in which such subsequent
Plan Year ends. Alternatively, distributions to a Participant must
begin no later than the applicable April 1st as determined under the
preceding sentence and must be made over a period certain measured by
the life expectancy of the Participant (or the life expectancies of the
Participant and his designated Beneficiary) in accordance with
Regulations. Notwithstanding the foregoing, clause (ii) above shall not
apply to any Participant unless the Participant had attained age 70 1/2
before January 1, 1988 and was not a "five (5) percent owner" at any
time during the Plan Year ending with or within the calendar year in
which the Participant attained age 66 1/2 or any subsequent Plan Year.
B. Distributions to a Participant and his
Beneficiaries shall only be made in accordance with the incidental death
benefit requirements of Code Section 401(a)(9)(G) and the Regulations
thereunder.
C. Additionally, for calendar years beginning before
1989, distributions may also be made under an alternative method which
provides that the then present value of the payments to be made over the
period of the Participant's life expectancy exceeds fifty percent (50%)
of the then present value of the total payments to be made to the
Participant and his Beneficiaries.
7.5.7 Post-Death Distributions. Notwithstanding any
provision in the Plan to the contrary, distributions upon the death of a
Participant shall be made in accordance with the following requirements
and shall otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder. If it is determined pursuant to Regulations
that the distribution of a Participant's interest has begun and the
Participant dies before his entire interest has been distributed to him,
the remaining portion of such interest shall be distributed at least as
rapidly as under the method of distribution selected pursuant to this
Section 7.5 as of his date of death.
A. If a Participant dies before he has begun to
receive any distributions of his interest under the Plan or before
distributions are deemed to have begun pursuant to Regulations, then his
death benefit shall be distributed to his Beneficiaries by December 31st
of the calendar year in which the fifth anniversary of his date of death
occurs.
B. However, in the event that the Participant's
spouse (determined as of the date of the Participant's death) is his
Beneficiary, then in lieu of the preceding rules, distributions must be
made over a period not extending beyond the life expectancy of the
spouse and must commence on or before the later of: (1) December 31st of
the calendar year immediately following the calendar year in which the
Participant died; or (2) December 31st of the calendar year in which the
Participant would have attained age 70 1/2. If the surviving spouse
dies before distributions to such spouse begin, then the 5-year
distribution requirement of this Section shall apply as if the spouse
was the Participant.
7.5.8 Life Expectancy. For purposes of this Section 7.5,
the life expectancy of a Participant and a Participant's spouse may, at
the election of the Participant or the Participant's spouse, be
redetermined in accordance with Regulations. The election, once made,
shall be irrevocable. If no election is made by the time distributions
must commence, then the life expectancy of the Participant and the
Participant's spouse shall not be subject to recalculation. Life
expectancy and joint and last survivor expectancy shall be computed
using the return multiples in Tables V and VI of Regulation 1.72-9.
7.5.9 Commencement of Distributions. Except as limited
by Sections 7.5 and 7.6, whenever the Trustee is to make a distribution
or to commence a series of payments on or as of an Anniversary Date, the
distribution or series of payments may be made or begun on such date or
as soon thereafter as is practicable. However, unless a Former
Participant elects in writing to defer the receipt of benefits (such
election may not result in a death benefit that is more than
incidental), the payment of benefits shall begin not later than the 60th
day after the close of the Plan Year in which the latest of the
following events occurs:
A. the date on which the Participant attains the
earlier of age 65 or the Normal Retirement Age specified herein;
B. the 10th anniversary of the year in which the
Participant commenced participation in the Plan; or
C. the date the Participant terminates his service
with the Employer.
7.5.10 Segregation of Account. If a distribution is made
at a time when a Participant is not fully Vested in his Participant's
Account (employment has not terminated) and the Participant may increase
the Vested percentage in such account:
A. A separate account shall be established for the
Participant's interest in the Plan as of the time of the distribution;
and
B. At any relevant time, the Participant's Vested
portion of the separate account shall be equal to an amount ("X")
determined by the formula:
X equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the
Vested percentage at the relevant time, AB is the account balance at the
relevant time, D is the amount of distribution, and R is the ratio of
the account balance at the relevant time to the account balance after
distribution.
7.6 How Plan Benefit Will be Distributed.
7.6.1 Form of Distribution. Distribution of a
Participant's benefit may be made in cash or Company Stock or both,
provided, however, that if a Participant or Beneficiary so demands, such
benefit shall be distributed only in the form of Company Stock. Prior
to making a distribution of benefits, the Administrator shall advise the
Participant or his Beneficiary, in writing, of the right to demand that
benefits be distributed solely in Company Stock.
7.6.2 Distribution of Stock. If a Participant or
Beneficiary demands that benefits be distributed solely in Company
Stock, distribution of a Participant's benefit will be made entirely in
whole shares or other units of Company Stock. Any balance in a
Participant's Other Investments Account will be applied to acquire for
distribution the maximum number of whole shares or other units of
Company Stock at the then fair market value. Any fractional unit value
unexpended will be distributed in cash. If Company Stock is not
available for purchase by the Trustee, then the Trustee shall hold such
balance until Company Stock is acquired and then make such distribution,
subject to Sections 7.5.9 and 7.5.6.
7.6.3 Instructions to Trustee. The Trustee will make
distribution from the Trust only on instructions from the Administrator.
7.6.4 Restricted Ownership. Notwithstanding anything
contained herein to the contrary, if the Employer's charter or by-laws
restrict ownership of substantially all shares of Company Stock to
Employees and the Trust Fund, as described in Code Section 409(h)(2),
the Administrator shall distribute a Participant's Account entirely in
cash without granting the Participant the right to demand distribution
in shares of Company Stock.
7.6.5 Restrictions on Resale. Except as otherwise
provided herein, Company Stock distributed by the Trustee may be
restricted as to sale or transfer by the by-laws or articles of
incorporation of the Employer, provided restrictions are applicable to
all Company Stock of the same class. If a Participant is required to
offer the sale of his Company Stock to the Employer before offering to
sell his Company Stock to a third party, in no event may the Employer
pay a price less than that offered to the distributee by another
potential buyer making a bona fide offer and in no event shall the
Trustee pay a price less than the fair market value of the Company
Stock.
7.6.6 Multiple Classes of Stock. If Company Stock
acquired with the proceeds of an Exempt Loan (described in Section 5.4
hereof) is available for distribution and consists of more than one
class, a Participant or his Beneficiary must receive substantially the
same proportion of each such class.
7.7 Distribution for Minor Beneficiary. In the event a
distribution is to be made to a minor, then the Administrator may direct
that such distribution be paid to the legal guardian, or if none, to a
parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such
Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act,
if such is permitted by the laws of the state in which said Beneficiary
resides. Such a payment to the legal guardian, custodian or parent of a
minor Beneficiary shall fully discharge the Trustee, Employer, and Plan
from further liability on account thereof.
7.8 Location of Participant or Beneficiary Unknown. In the
event that all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain
unpaid solely by reason of the inability of the Administrator, after
sending a registered letter, return receipt requested, to the last known
address, and after further diligent effort, to ascertain the whereabouts
of such Participant or his Beneficiary, the amount so distributable
shall be treated as a Forfeiture pursuant to the Plan. In the event a
Participant or Beneficiary is located subsequent to his benefit being
reallocated, such benefit shall be restored.
7.9 Right of First Refusal. The provisions of this Section
7.9 shall apply only in Plan Years beginning prior to January 1, 1992.
Effective January 1, 1992, the Employer shall not have any rights of
first refusal under this Plan with respect to any shares of Company
Stock, regardless whether such shares previously may have been held and
distributed pursuant to this Plan, are then held by the Trustee pursuant
to this Plan, or thereafter are distributed pursuant to this Plan.
7.9.1 Notice. If any Participant, his Beneficiary or any
other person to whom shares of Company Stock are distributed from the
Plan (the "Selling Participant") shall, at any time, desire to sell some
or all of such shares (the "Offered Shares") to a third party (the
"Third Party"), the Selling Participant shall give written notice of
such desire to the Employer and the Administrator, which notice shall
contain the number of shares offered for sale, the proposed terms of the
sale and the names and addresses of both the Selling Participant and
Third Party. Both the Trust Fund and the Employer shall each have the
right of first refusal for a period of fourteen (14) days from the date
the Selling Participant gives such written notice to the Employer and
the Administrator (such fourteen (14) day period to run concurrently
against the Trust Fund and the Employer) to acquire the Offered Shares.
As between the Trust Fund and the Employer, the Trust Fund shall have
priority to acquire the shares pursuant to the right of first refusal.
The selling price and terms shall be the same as offered by the Third
Party.
7.9.2 Failure to Exercise. If the Trust Fund and the
Employer do not exercise their right of first refusal within the
required fourteen (14) day period provided above, the Selling
Participant shall have the right, at any time following the expiration
of such fourteen (14) day period, to dispose of the Offered Shares to
the Third Party; provided, however, that (a) no disposition shall be
made to the Third Party on terms more favorable to the Third Party than
those set forth in the written notice delivered by the Selling
Participant above, and (b) if such disposition shall not be made to a
third party on the terms offered to the Employer and the Trust Fund, the
offered Shares shall again be subject to the right of first refusal set
forth above.
7.9.3 Closing. The closing pursuant to the exercise of
the right of first refusal under Section 7.9.1 above shall take place at
such place agreed upon between the Administrator and the Selling
Participant, but not later than ten (10) days after the Employer or the
Trust Fund shall have notified the Selling Participant of the exercise
of the right of first refusal. At such closing, the Selling Participant
shall deliver certificates representing the Offered Shares duly endorsed
in blank for transfer, or with stock powers attached duly executed in
blank with all required transfer tax stamps attached or provided for,
and the Employer or the Trust Fund shall deliver the purchase price, or
an appropriate portion thereof, to the Selling Participant.
7.9.4 Stock Acquired with Exempt Loan. Except as
provided in this Section 7.9.4, no Company Stock acquired with the
proceeds of an Exempt Loan complying with the requirements of Section
5.4 hereof shall be subject to a right of first refusal. Company Stock
acquired with the proceeds of an Exempt Loan, which is distributed to a
Participant or Beneficiary, shall be subject to the right of first
refusal provided for in Section 7.9.1 only so long as the Company Stock
is not publicly traded. The term "publicly traded" refers to a
securities exchange registered under Section 6 of the Securities
Exchange Act of 1934 (15 U.S.C. 78f) or that is quoted on a system
sponsored by a national securities association registered under Section
15A(b) of the Securities Exchange Act (15 U.S.C. 780). In addition, in
the case of Company Stock which was acquired with the proceeds of a loan
described in Section 5.4, the selling price and other terms under the
right must not be less favorable to the seller than the greater of the
value of the security determined under Section 6.2, or the purchase
price and other terms offered by a buyer (other than the Employer or the
Trust Fund), making a good faith offer to purchase the security. The
right of first refusal must lapse no later than fourteen (14) days after
the security holder gives notice to the holder of the right that an
offer by a third party to purchase the security has been made. The
right of first refusal shall comply with the provisions of Sections
7.9.1, 7.9.2 and 7.9.3, except to the extent those provisions may
conflict with the provisions of this Section.
7.10 Stock Certificate Legend. Certificates for shares
distributed pursuant to the Plan prior to January 1, 1992, shall contain
the following legend:
"The shares represented by this certificate are transferable
only upon compliance with the terms of SANTA BARBARA BANK & TRUST
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST effective as of January 1, 1989,
which grants to Santa Barbara Bank & Trust a right of first refusal, a
copy of said Plan being on file in the office of the Company."
7.11 Put Option.
7.11.1 Participant Right. If Company Stock which was not
acquired with the proceeds of an Exempt Loan is distributed to a
Participant and such Company Stock is not readily tradeable on an
established securities market, a Participant has a right to require the
Employer to repurchase the Company Stock distributed to such Participant
under a fair valuation formula. Such Stock shall be subject to the
provisions of Section 7.11.3.
7.11.2 Required Put Option. Company Stock which is
acquired with the proceeds of an Exempt Loan and which is not publicly
traded when distributed, or if it is subject to a trading limitation
when distributed, must be subject to a put option. For purposes of this
Section, a "trading limitation" on a Company Stock is a restriction
under any Federal or State securities law or any regulation thereunder,
or an agreement (not prohibited by Section 7.12) affecting the Company
Stock which would make the Company Stock not as freely tradeable as
stock not subject to such restriction.
7.11.3 Exercise of Put Option. The put option shall be
exercisable during the period commencing as of the first day following
the date the Company Stock is distributed to the Former Participant and
ending 60 days thereafter and if not exercised within such 60-day
period, an additional 60-day option period shall commence on the first
day of the Plan Year following the date the Company Stock was
distributed to the Former Participant (or, if later, the first day
following the end of the initial 60-day period as is provided in
regulations promulgated by the Secretary of the Treasury.
A. The put option shall commence as of the day
following the date the Company Stock is distributed to the Former
Participant and end 60 days thereafter and if not exercised within such
60-day period, an additional 60-day option shall commence on the first
day of the fifth month of the Plan Year next following the date the
stock was distributed to the Former Participant (or such other 60-day
period as provided in regulations promulgated by the Secretary of the
Treasury). However, in the case of Company Stock that is publicly
traded without restrictions when distributed but ceases to be so traded
within either of the 60-day periods described herein after distribution,
the Employer must notify each holder of such Company Stock in writing on
or before the tenth day after the date the Company Stock ceases to be so
traded that for the remainder of the applicable 60-day period the
Company Stock is subject to the put option. The number of days between
the tenth day and the date on which notice is actually given, if later
than the tenth day, must be added to the duration of the put option.
The notice must inform distributees of the term of the put options that
they are to hold. The terms must satisfy the requirements of this
Section.
B. The put option is exercised by the holder
notifying the Employer in writing that the put option is being
exercised; the notice shall state the name and address of the holder and
the number of shares to be sold. The period during which a put option
is exercisable does not include any time when a distributee is unable to
exercise it because the party bound by the put option is prohibited from
honoring it by applicable Federal or State law. The price at which a
put option must be exercisable is the value of the Company Stock
determined in accordance with Section 6.2. Payment under the put option
involving a "Total Distribution" shall be paid in substantially equal
monthly, quarterly, semiannual or annual installments over a period
certain beginning not later than thirty (30) days after the exercise of
the put option and not extending beyond (5) years. The deferral of
payment is reasonable if adequate security and a reasonable interest
rate on the unpaid amounts are provided. The amount to be paid under
the put option involving installment distributions must be paid not
later than thirty (30) days after the exercise of the put option.
Payment under a put option must not be restricted by the provisions of a
loan or any other arrangement, including the terms of the Employer's
articles of incorporation, unless so required by applicable state law.
C. For purposes of this Section, "Total Distribution"
means a distribution to a Participant or his Beneficiary within one
taxable year of the entire Vested Participant's Account.
7.11.4 Limitation. An arrangement involving the Plan
that creates a put option must not provide for the issuance of put
options other than as provided under this Section. The Plan (and the
Trust Fund) must not otherwise obligate itself to acquire Company Stock
from a particular holder thereof at an indefinite time determined upon
the happening of an event such as the death of the holder.
7.12 Nonterminable Protections and Rights. No Company Stock,
except as provided in Section 4.3.15 and Section 7.11.2, acquired with
the proceeds of a loan described in Section 5.4 hereof may be subject to
a put, call, or other option, or buy-sell or similar arrangement when
held by and when distributed from the Trust Fund, whether or not the
Plan is then an ESOP. The protections and rights granted in this
Section are nonterminable, and such protections and rights shall
continue to exist under the terms of this Plan so long as any Company
Stock acquired with the proceeds of a loan described in Section 5.4
hereof is held by the Trust Fund or by any Participant or other person
for whose benefit such protections and rights have been created, and
neither the repayment of such loan nor the failure of the Plan to be an
ESOP, nor an amendment of the Plan shall cause a termination of said
protections and rights.
7.13 Qualified Domestic Relations Order Distribution. All
rights and benefits, including elections, provided to a Participant in
this Plan shall be subject to the rights afforded to any "alternate
payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such
distribution is authorized by a "qualified domestic relations order,"
even if the affected Participant has not separated from service and has
not reached the "earliest retirement age" under the Plan. For the
purposes of this Section, "alternate payee," "qualified domestic
relations order" and "earliest retirement age" shall have the meaning
set forth under Code Section 414(p).
8. TRUSTEE
8.1 Basic Responsibilities of the Trustee. The Trustee shall
have the following categories of responsibilities:
8.1.1 Investment. Consistent with the "funding policy
and method" determined by the Employer, to invest, manage, and control
the Plan assets subject, however, to the direction of an Investment
Manager if the Trustee should appoint such manager as to all or a
portion of the assets of the Plan;
8.1.2 Benefits. At the direction of the Administrator,
to pay benefits required under the Plan to be paid to Participants, or,
in the event of their death, to their Beneficiaries;
8.1.3 Records. To maintain records of receipts and
disbursements and furnish to the Employer and/or Administrator for each
Plan Year a written annual report per Section 8.7; and
8.1.4 Co-Trustees. If there shall be more than one
Trustee, they shall act by a majority of their number, but may authorize
one or more of them to sign papers on their behalf.
8.2 Investment Powers and Duties of the Trustee.
8.2.1 General. The Trustee shall invest and reinvest the
Trust Fund to keep the Trust Fund invested without distinction between
principal and income and in such securities or property, real or
personal, wherever situated, as the Trustee shall deem advisable,
including, but not limited to, stocks, common or preferred, bonds and
other evidences of indebtedness or ownership, and real estate or any
interest therein. The Trustee shall at all times in making investments
of the Trust Fund consider, among other factors, the short and long-term
financial needs of the Plan on the basis of information furnished by the
Employer. In making such investments, the Trustee shall not be
restricted to securities or other property of the character expressly
authorized by the applicable law for trust investments; however, the
Trustee shall give due regard to any limitations imposed by the Code or
the Act so that at all times the Plan may qualify as an Employee Stock
Ownership Plan and Trust.
8.2.2 Banks. The Trustee may employ a bank or trust
company pursuant to the terms of its usual and customary bank agency
agreement, under which the duties of such bank or trust company shall be
of a custodial, clerical and record-keeping nature.
8.2.3 Pooled Funds. The Trustee may from time to time
with the consent of the Employer transfer to a common, collective, or
pooled trust fund maintained by any corporate Trustee hereunder, all or
such part of the Trust Fund as the Trustee may deem advisable, and such
part or all of the Trust Fund so transferred shall be subject to all the
terms and provisions of the common, collective, or pooled trust fund
which contemplate the commingling for investment purposes of such trust
assets with trust assets of other trusts. The Trustee may, from time
to time with the consent of the Employer, withdraw from such common,
collective, or pooled trust fund all or such part of the Trust Fund as
the Trustee may deem advisable.
8.2.4 Sale of Company Stock. In the event the Trustee
invests any part of the Trust Fund, pursuant to the directions of the
Administrator, in any shares of stock issued by the Employer, and the
Administrator thereafter directs the Trustee to dispose of such
investment, or any part thereof, under circumstances which, in the
opinion of counsel for the Trustee, require registration of the
securities under the Securities Act of 1933 and/or qualification of the
securities under the Blue Sky laws of any state or states, then the
Employer at its own expense, will take or cause to be taken any and all
such action as may be necessary or appropriate to effect such
registration and/or qualification.
8.2.5 Insurance. The Trustee, at the direction of the
Administrator, shall ratably apply for, own, and pay premiums on
Contracts on the lives of the Participants. If a life insurance policy
is to be purchased for a Participant, the aggregate premium for ordinary
life insurance for each Participant must be less than 50% of the
aggregate of the contributions and Forfeitures to the credit of the
Participant at any particular time. If term insurance is purchased with
such contributions, the aggregate premium must be less than 25% of the
aggregate contributions and Forfeitures allocated to a Participant's
Account. If both term insurance and ordinary life insurance are
purchased with such contributions, the amount expended for term
insurance plus one-half of the premium for ordinary life insurance may
not in the aggregate exceed 25% of the aggregate contributions and
Forfeitures allocated to a Participant's Account. The Trustee must
convert the entire value of the life insurance contracts at or before
retirement into cash or provide for a periodic income so that no portion
of such value may be used to continue life insurance protection beyond
retirement, or distribute the Contracts to the Participant. In the
event of any conflict between the terms of this Plan and the terms of
any insurance Contract purchased hereunder, the Plan provisions shall
control.
8.3 Other Powers of the Trustee. The Trustee, in addition to
all powers and authorities under common law, statutory authority,
including the Act, and other provisions of the Plan, shall have the
following powers and authorities, to be exercised in the Trustee's sole
discretion:
8.3.1 Purchase Securities. To purchase, or subscribe
for, any securities or other property and to retain the same. In
conjunction with the purchase of securities, margin accounts may be
opened and maintained;
8.3.2 Sell Securities. To sell, exchange, convey,
transfer, grant options to purchase, or otherwise dispose of any
securities or other property held by the Trustee, by private contract or
at public auction. No person dealing with the Trustee shall be bound to
see to the application of the purchase money or to inquire into the
validity, expediency, or propriety of any such sale or other
disposition, with or without advertisement;
8.3.3 Voting, Etc. To vote upon any stocks, bonds, or
other securities; to give general or special proxies or powers of
attorney with or without power of substitution; to exercise any
conversion privileges, subscription rights or other options, and to make
any payments incidental thereto; to oppose, or to consent to, or
otherwise participate in, corporate reorganizations or other changes
affecting corporate securities, and to delegate discretionary powers,
and to pay any assessments or charges in connection therewith; and
generally to exercise any of the powers of an owner with respect to
stocks, bonds, securities, or other property;
8.3.4 Title. To cause any securities or other property
to be registered in the Trustee's own name or in the name of one or more
of the Trustee's nominees, and to hold any investments in bearer form,
but the books and records of the Trustee shall at all times show that
all such investments are part of the Trust Fund;
8.3.5 Borrow. To borrow or raise money for the purposes
of the Plan in such amount, and upon such terms and conditions, as the
Trustee shall deem advisable; and for any sum so borrowed, to issue a
promissory note as Trustee, and to secure the repayment thereof by
pledging all, or any part, of the Trust Fund; and no person lending
money to the Trustee shall be bound to see to the application of the
money lent or to inquire into the validity, expediency, or propriety of
any borrowing;
8.3.6 Liquid Investments. To keep such portion of the
Trust Fund in cash or cash balances as the Trustee may, from time to
time, deem to be in the best interests of the Plan, without liability
for interest thereon;
8.3.7 Holding Period. To accept and retain for such time
as the Trustee may deem advisable any securities or other property
received or acquired as Trustee hereunder, whether or not such
securities or other property would normally be purchased as investments
hereunder;
8.3.8 Transfer Payments. To make, execute, acknowledge,
and deliver any and all documents of transfer and conveyance and any and
all other instruments that may be necessary or appropriate to carry out
the powers herein granted;
8.3.9 Disputes. To settle, compromise, or submit to
arbitration any claims, debts, or damages due or owing to or from the
Plan, to commence or defend suits or legal or administrative
proceedings, and to represent the Plan in all suits and legal and
administrative proceedings;
8.3.10 Agents. To employ suitable agents and counsel and
to pay their reasonable expenses and compensation, and such agent or
counsel may or may not be agent or counsel for the Employer;
8.3.11 Insurance. To apply for and procure from
responsible insurance companies, to be selected by the Administrator, as
an investment of the Trust Fund such annuity, or other Contracts (on the
life of any Participant) as the Administrator shall deem proper; to
exercise, at any time or from time to time, whatever rights and
privileges may be granted under such annuity, or other Contracts; to
collect, receive, and settle for the proceeds of all such annuity or
other Contracts as and when entitled to do so under the provisions
thereof;
8.3.12 Accounts. To invest funds of the Trust in time
deposits or savings accounts bearing a reasonable rate of interest in
the Trustee's bank;
8.3.13 Treasury Securities. To invest in Treasury Bills
and other forms of United States government obligations;
8.3.14 Mutual Funds. To invest in shares of investment
companies registered under the Investment Company Act of 1940;
8.3.15 Insured Deposits. To deposit monies in federally
insured savings accounts or certificates of deposit in banks or savings
and loan associations;
8.3.16 Voting Company Stock. To vote Company Stock as
provided in Section 8.4;
8.3.17 Reorganizations, Etc. To consent to or otherwise
participate in reorganizations, recapitalizations, consolidations,
mergers and similar transactions with respect to Company Stock or any
other securities and to pay any assessments or charges in connection
therewith;
8.3.18 Voting Trust, Etc. To deposit such Company Stock
(but only if such deposit does not violate the provisions of Section 8.4
hereof) or other securities in any voting trust, or with any protective
or like committee, or with a trustee or with depositories designated
thereby;
8.3.19 Options, Etc. To sell or exercise any options,
subscription rights and conversion privileges and to make any payments
incidental thereto;
8.3.20 Exercise Powers. To exercise any of the powers of
an owner, with respect to such Company Stock and other securities or
other property comprising the Trust Fund. The Administrator, with the
Trustee's approval, may authorize the Trustee to act on any
administrative matter or class of matters with respect to which
direction or instruction to the Trustee by the Administrator is called
for hereunder without specific direction or other instruction from the
Administrator;
8.3.21 Options. To sell, purchase and acquire put or call
options if the options are traded on and purchased through a national
securities exchange registered under the Securities Exchange Act of
1934, as amended, or, if the options are not traded on a national
securities exchange, are guaranteed by a member firm of the New York
Stock Exchange;
8.3.22 Other. To do all such acts and exercise all such
rights and privileges, although not specifically mentioned herein, as
the Trustee may deem necessary to carry out the purposes of the Plan.
8.4 Voting Company Stock. The Trustee shall vote all Company
Stock held by it as part of the Plan assets; provided, however, that if
any agreement entered into by the Trust provides for voting of any
shares of Company Stock pledged as security for any obligation of the
Plan, then such shares of Company Stock shall be voted in accordance
with such agreement. The Trustee shall not vote Company Stock which a
Participant or Beneficiary fails to exercise pursuant to this Section.
8.4.1 Voting Rights Pass-Through. Notwithstanding the
foregoing, if the Employer has a registration-type class of securities
or, with respect to Company Stock acquired by, or transferred to, the
Plan in connection with a securities acquisition loan (as defined in
Code Section 133(b)) after July 10, 1989, each Participant or
Beneficiary shall be entitled to direct the Trustee as to the manner in
which the Company Stock which is entitled to vote and which is allocated
to the Company Stock Account of such Participant or Beneficiary is to be
voted. If the Employer does not have a registration-type class of
securities, with respect to Company Stock other than Company Stock
acquired by, or transferred to, the Plan in connection with a securities
acquisition loan (as defined in Code Section 133(b)) after July 10,
1989, each Participant or Beneficiary in the Plan shall be entitled to
direct the Trustee as to the manner in which voting rights on shares of
Company Stock which are allocated to the Company Stock Account of such
Participant or Beneficiary are to be exercised with respect to any
corporate matter which involves the voting of such shares with respect
to the approval or disapproval of any corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of
substantially all assets of a trade or business, or such similar
transaction as prescribed in Regulations. For purposes of this Section
the term "registration-type class of securities" means: (A) a class of
securities required to be registered under Section 12 of the Securities
Exchange Act of 1934; and (B) a class of securities which would be
required to be so registered except for the exemption from registration
provided in subsection (g)(2)(H) of such Section 12.
8.4.2 Other. If the Employer does not have a
registration-type class of securities and the by-laws of the Employer
require the Plan to vote an issue in a manner that reflects a one-man,
one-vote philosophy, each Participant or Beneficiary shall be entitled
to cast one vote on an issue and the Trustee shall vote the shares held
by the Plan in proportion to the results of the votes cast on the issue
by the Participants and Beneficiaries.
8.5 Duties Of The Trustee Regarding Payments.
8.5.1 Distributions. The Trustee shall make
distributions from the Trust Fund at such times and in such numbers of
shares or other units of Company Stock and amounts of cash to or for the
benefit of the person entitled thereto under the Plan as the
Administrator directs in writing. Any undistributed part of a
Participant's interest in his accounts shall be retained in the Trust
Fund until the Administrator directs its distribution. Where
distribution is directed in Company Stock, the Trustee shall cause an
appropriate certificate to be issued to the person entitled thereto and
mailed to the address furnished it by the Administrator. Any portion of
a Participant's Account to be distributed in cash shall be paid by the
Trustee mailing its check to the same person at the same address. If a
dispute arises as to who is entitled to or should receive any benefit or
payment, the Trustee may withhold or cause to be withheld such payment
until the dispute has been resolved.
8.5.2 Administrator Directions. As directed by the
Administrator, the Trustee shall make payments out of the Trust Fund.
Such directions or instructions need not specify the purpose of the
payments so directed and the Trustee shall not be responsible in any way
respecting the purpose or propriety of such payments except as mandated
by the Act.
8.5.3 Returned Payment. In the event that any
distribution or payment directed by the Administrator shall be mailed
by the Trustee to the person specified in such direction at the latest
address of such person filed with the Administrator, and shall be
returned to the Trustee because such person cannot be located at such
address, the Trustee shall promptly notify the Administrator of such
return. Upon the expiration of sixty (60) days after such notification,
such direction shall become void and unless and until a further
direction by the Administrator is received by the Trustee with respect
to such distribution or payment, the Trustee shall thereafter continue
to administer the Trust as if such direction had not been made by the
Administrator. The Trustee shall not be obligated to search for or
ascertain the whereabouts of any such person.
8.6 Trustee's Compensation and Expenses and Taxes. The
Trustee shall be paid such reasonable compensation as shall from time to
time be agreed upon in writing by the Employer and the Trustee. An
individual serving as Trustee who already receives full-time pay from
the Employer shall not receive compensation from the Plan. In addition,
the Trustee shall be reimbursed for any reasonable expenses, including
reasonable counsel fees incurred by it as Trustee. Such compensation
and expenses shall be paid from the Trust Fund unless paid or advanced
by the Employer. All taxes of any kind and all kinds whatsoever that
may be levied or assessed under existing or future laws upon, or in
respect of, the Trust Fund or the income thereof, shall be paid from the
Trust Fund.
8.7 Annual Report of the Trustee. Within a reasonable period
of time after the later of the Anniversary Date or receipt of the
Employer's contribution for each Plan Year, the Trustee shall furnish to
the Employer and Administrator a written statement of account with
respect to the Plan Year for which such contribution was made.
8.7.1 Contents. Such report shall set forth:
A. The net income, or loss, of the Trust Fund;
B. The gains, or losses, realized by the Trust Fund
upon sales or other disposition of the assets;
C. The increase, or decrease, in the value of the
Trust Fund;
D. All payments and distributions made from the Trust
Fund; and
E. Such further information as the Trustee or
Administrator deems appropriate.
8.7.2 Employer Review. The Employer, forthwith upon its
receipt of each such statement of account, shall acknowledge receipt
thereof in writing and advise the Trustee and/or Administrator of its
approval or disapproval thereof. Failure by the Employer to disapprove
any such statement of account within thirty (30) days after its receipt
thereof shall be deemed an approval thereof. The approval by the
Employer of any statement of account shall be binding as to all matters
embraced therein as between the Employer and the Trustee to the same
extent as if the account of the Trustee had been settled by judgment or
decree in an action for a judicial settlement of its account in a court
of competent jurisdiction in which the Trustee, the Employer and all
persons having or claiming an interest in the Plan were parties;
provided, however, that nothing herein contained shall deprive the
Trustee of its right to have its accounts judicially settled if the
Trustee so desires.
8.8 Audit.
8.8.1 Conduct. If an audit of the Plan's records shall
be required by the Act and the regulations thereunder for any Plan Year,
the Administrator shall direct the Trustee to engage on behalf of all
Participants an independent qualified public accountant for that
purpose. Such accountant shall, after an audit of the books and records
of the Plan in accordance with generally accepted auditing standards,
within a reasonable period after the close of the Plan Year, furnish to
the Administrator and the Trustee a report of his audit setting forth
his opinion as to whether any statements, schedules or lists that are
required by Act Section 103 or the Secretary of Labor to be filed with
the Plan's annual report, are presented fairly in conformity with
generally accepted accounting principles applied consistently. All
auditing and accounting fees shall be an expense of and may, at the
election of the Administrator, be paid from the Trust Fund.
8.8.2 Information. If some or all of the information
necessary to enable the Administrator to comply with Act Section 103 is
maintained by a bank, insurance company, or similar institution,
regulated and supervised and subject to periodic examination by a state
or federal agency, it shall transmit and certify the accuracy of that
information to the Administrator as provided in Act Section 103(b)
within one hundred twenty (120) days after the end of the Plan Year or
by such other date as may be prescribed under regulations of the
Secretary of Labor.
8.9 Resignation, Removal and Succession of Trustee.
8.9.1 Resignation. The Trustee may resign at any time by
delivering to the Employer, at least thirty (30) days before its
effective date, a written notice of his resignation.
8.9.2 Removal. The Employer may remove the Trustee by
mailing by registered or certified mail, addressed to such Trustee at
his last known address, at least thirty (30)days before its effective
date, a written notice of his removal.
8.9.3 Successor. Upon the death, resignation,
incapacity, or removal of any Trustee, a successor may be appointed by
the Employer; and such successor, upon accepting such appointment in
writing and delivering same to the Employer, shall, without further act,
become vested with all the estate, rights, powers, discretions, and
duties of his predecessor with like respect as if he were originally
named as a Trustee herein. Until such a successor is appointed, the
remaining Trustee or Trustees shall have full authority to act under the
terms of the Plan.
8.9.4 Designation of Successor. The Employer may
designate one or more successors prior to the death, resignation,
incapacity, or removal of a Trustee. In the event a successor is so
designated by the Employer and accepts such designation, the successor
shall, without further act, become vested with all the estate, rights,
powers, discretions, and duties of his predecessor with the like effect
as if he were originally named as Trustee herein immediately upon the
death, resignation, incapacity, or removal of his predecessor.
8.9.5 Statement. Whenever any Trustee hereunder ceases
to serve as such, he shall furnish to the Employer and Administrator a
written statement of account with respect to the portion of the Plan
Year during which he served as Trustee. This statement shall be either
(a) included as part of the annual statement of account for the Plan
Year required under Section 8.7, or (b) set forth in a special
statement. Any such special statement of account should be rendered to
the Employer no later than the due date of the annual statement of
account for the Plan Year. The procedures set forth in Section 8.7 for
the approval by the Employer of annual statements of account shall apply
to any special statement of account rendered hereunder and approval by
the Employer of any such special statement in the manner provided in
Section 8.7 shall have the same effect upon the statement as the
Employer's approval of an annual statement of account. No successor to
the Trustee shall have any duty or responsibility to investigate the
acts or transactions of any predecessor who has rendered ali statements
of account required by Section 8.7 and this subsection.
8.10 Transfer of Interest. Notwithstanding any other
provision contained in this Plan, the Trustee at the direction of the
Administrator shall transfer the Vested interest, if any, of such
Participant in his account to another trust forming part of a pension,
profit sharing or stock bonus plan maintained by such Participant's new
employer and represented by said employer in writing as meeting the
requirements of Code Section 401(a), provided that the trust to which
such transfers are made permits the transfer to be made.
8.11 Direct Rollover. This Section applies to distributions
made on or after January 1, 1993.
8.11.1 Rule. Notwithstanding any provision of the Plan
to the contrary that would otherwise limit a distributees election under
this Section, 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."
8.11.2 Definitions. For purposes of this Section 8.11:
A. 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 distributees designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under section
401(a)(9) of the Code; and the portion of any distribution that is not
includable in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to employer securities).
B. 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.
C. 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.
D. A "direct rollover" is a payment by the plan to
the eligible retirement plan specified by the distributee.
9. AMENDMENT, TERMINATION AND MERGERS
9.1 Amendment.
9.1.1 General. The Employer shall have the right at any
time to amend the Plan, subject to the limitations of this Section, by
action of its Board of Directors or such committee as the Board may
designate or authorize to amend the Plan. However, any amendment which
affects the rights, duties or responsibilities of the Trustee and
Administrator may only be made with the Trustee's and Administrator's
written consent. Any such amendment shall become effective as provided
therein upon its execution. The Trustee shall not be required to
execute any such amendment unless the Trust provisions contained herein
are a part of the Plan and the amendment affects the duties of the
Trustee hereunder.
9.1.2 Limitation. No amendment to the Plan shall be
effective if it authorizes or permits any part of the Trust Fund (other
than such part as is required to pay taxes and administration expenses)
to be used for or diverted to any purpose other than for the exclusive
benefit of the Participants or their Beneficiaries or estates; or causes
any reduction in the amount credited to the account of any Participant;
or causes or permits any portion of the Trust Fund to revert to or
become property of the Employer.
9.1.3 Protected Benefits. Except as permitted by
Regulations, no Plan amendment or transaction having the effect of a
Plan amendment (such as a merger, plan transfer or similar transaction)
shall be effective to the extent it eliminates or reduces any "Section
411(d)(6) protected benefit" or adds or modifies conditions relating to
"Section 411(d)(6) protected benefits" the result of which is a further
restriction on such benefit unless such protected benefits are preserved
with respect to benefits accrued as of the later of the adoption date or
effective date of the amendment. "Section 411(d)(6) protected benefits"
are benefits described in Code Section 411(d)(6)(A), early retirement
benefits and retirement-type subsidies, and optional forms of benefit.
In addition, no such amendment shall have the effect of terminating the
protections and rights set forth in Section 7.12, unless such
termination shall then be permitted under the applicable provisions of
the Code and Regulations; such a termination is currently expressly
prohibited by Regulation 54.4975-11(a)(3)(ii).
9.2 Termination.
9.2.1 Employer Right; Vesting. The Employer shall have
the right at any time to terminate the Plan by delivering to the Trustee
and Administrator written notice of such termination. Upon any full or
partial termination, all amounts credited to the affected Participants'
Accounts shall become 100% Vested as provided in Section 7.4 and shall
not thereafter be subject to forfeiture, and all unallocated amounts
shall be allocated to the accounts of all Participants in accordance
with the provisions hereof.
9.2.2 Distribution of Trust Fund. Upon the full
termination of the Plan, the Employer shall direct the distribution of
the assets of the Trust Fund to Participants in a manner which is
consistent with and satisfies the provisions of Sections 7.5 and 7.6.
Except as permitted by Regulations, the termination of the Plan shall
not result in the reduction of "Section 411(d)(6) protected benefits" in
accordance with Section 9.1.3, above.
9.3 Merger or Consolidation. This Plan and Trust may be
merged or consolidated with, or its assets and/or liabilities may be
transferred to any other plan and trust only if the benefits which would
be received by a Participant of this Plan, in the event of a termination
of the plan immediately after such transfer, merger or consolidation,
are at least equal to the benefits the Participant would have received
if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not
otherwise result in the elimination or reduction of any "Section
411(d)(6) protected benefits" in accordance with Section 9.1.3, above.
10. MISCELLANEOUS
10.1 Participant's Rights. This Plan shall not be deemed to
constitute a contract between the Employer and any Participant or to be
a consideration or an inducement for the employment of any Participant
or Employee. Nothing contained in this Plan shall be deemed to give any
Participant or Employee the right to be retained in the service of the
Employer or to interfere with the right of the Employer to discharge any
Participant or Employee at any time regardless of the effect which such
discharge shall have upon him as a Participant of this Plan.
10.2 Alienation.
10.2.1 Prohibition. Subject to the exceptions provided
below, no benefit which shall be payable out of the Trust Fund to any
person (including a Participant or his Beneficiary) 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; and no such benefit shall in any manner be liable for, or subject
to, the debts, contracts, liabilities, engagements, or torts of any such
person, nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized by the
Trustee, except to such extent as may be required by law.
10.2.2 Exception: QDROS. This provision shall not apply
to a "qualified domestic relations order" defined in Code Section
414(p), and those other domestic relations orders permitted to be so
treated by the Administrator under the provisions of the Retirement
Equity Act of 1984. The Administrator shall establish a written
procedure to determine the qualified status of domestic relations orders
and to administer distributions under such qualified orders. Further,
to the extent provided under a "qualified domestic relations order", a
former spouse of a Participant shall be treated as the spouse or
surviving spouse for all purposes under the Plan.
10.3 Construction of Plan. This Plan and Trust shall be
construed and enforced according to the Act and the laws of the State of
California, other than its laws respecting choice of law, to the extent
not preempted by the Act.
10.4 Gender and Number. Wherever any words are used herein in
the masculine, feminine or neuter gender, they shall be construed as
though they were also used in another gender in all cases where they
would so apply, and whenever any words are used herein in the singular
or plural form, they shall be construed as though they were also used in
the other form in all cases where they would so apply.
10.5 Legal Action. In the event any claim, suit, or
proceeding is brought regarding the Trust and/or Plan established
hereunder to which the Trustee or the Administrator may be a party, and
such claim, suit, or proceeding is resolved in favor of the Trustee or
Administrator, they shall be entitled to be reimbursed from the Trust
Fund for any and all costs, attorney's fees, and other expenses
pertaining thereto incurred by them for which they shall have become
liable.
10.6 Prohibition Against Diversion of Funds.
10.6.1 Exclusive Benefit. Except as provided below and
otherwise specifically permitted by law, it shall be impossible by
operation of the Plan or of the Trust, by termination of either, by
power of revocation or amendment, by the happening of any contingency,
by collateral arrangement or by any other means, for any part of the
corpus or income of any trust fund maintained pursuant to the Plan or
any funds contributed thereto to be used for, or diverted to, purposes
other than the exclusive benefit of Participants, Retired Participants,
or their Beneficiaries.
10.6.2 Excess Contributions. In the event the Employer
shall make an excessive contribution under a mistake of fact pursuant to
Act Section 403(c)(2)(A), the Employer may demand repayment of such
excessive contribution at any time within one (1) year following the
time of payment and the Trustees shall return such amount to the
Employer within the one (1) year period. Earnings of the Plan
attributable to the excess contributions may not be returned to the
Employer but any losses attributable thereto must reduce the amount so
returned.
10.7 Bonding. Every Fiduciary, except a bank or an insurance
company, unless exempted by the Act and regulations thereunder, shall be
bonded in an amount not less than 10% of the amount of the funds such
Fiduciary handles; provided, however, that the minimum bond shall be
$1,000 and the maximum bond, $500,000. The amount of funds handled
shall be determined at the beginning of each Plan Year by the amount of
funds handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled
during the then current year. The bond shall provide protection to the
Plan against any loss by reason of acts of fraud or dishonesty by the
Fiduciary alone or in connivance with others. The surety shall be a
corporate surety company (as such term is used in Act Section
412(a)(2)), and the bond shall be in a form approved by the Secretary of
Labor. Notwithstanding anything in the Plan to the contrary, the cost
of such bonds shall be an expense of and may, at the election of the
Administrator, be paid from the Trust Fund or by the Employer.
10.8 Employer's and Trustee's Protective Clause. Neither the
Employer nor the Trustee, nor their successors, shall be responsible for
the validity of any Contract issued hereunder or for the failure on the
part of the insurer to make payments provided by any such Contract, or
for the action of any person which may delay payment or render a
Contract null and void or unenforceable in whole or in part.
10.9 Insurer's Protective Clause. Any insurer who shall issue
Contracts hereunder shall not have any responsibility for the validity
of this Plan or for the tax or legal aspects of this Plan. The insurer
shall be protected and held harmless in acting in accordance with any
written direction of the Trustee, and shall have no duty to see to the
application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any
provision of this Plan, the insurer shall not be required to take or
permit any action or allow any benefit or privilege contrary to the
terms of any Contract which it issues hereunder, or the rules of the
insurer.
10.10 Receipt and Release for Payments. Any payment to any
Participant, his legal representative, Beneficiary, or to any guardian
or committee appointed for such Participant or Beneficiary in accordance
with the provisions of the Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and the
Employer, either of whom may require such Participant, legal
representative, Beneficiary, guardian or committee, as a condition
precedent to such payment, to execute a receipt and release thereof in
such form as shall be determined by the Trustee or Employer.
10.11 Action by the Employer. Whenever the Employer under the
terms of the Plan is permitted or required to do or perform any act or
matter or thing, it shall be done and performed by a person duly
authorized by its legally constituted authority.
10.12 Named Fiduciaries and Allocation of Responsibility. The
"named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator and (3) the Trustee. The named Fiduciaries shall have
only those specific powers, duties, responsibilities, and obligations as
are specifically given them under the Plan. In general, the Employer
shall have the sole responsibility for making the contributions provided
for under Section 4.1; and shall have the sole authority to appoint and
remove the Trustee and the Administrator; to formulate the Plan's
"funding policy and method"; and to amend or terminate, in whole or in
part, the Plan. The Administrator shall have the sole responsibility
for the administration of the Plan, which responsibility is specifically
described in the Plan. The Trustee shall have the sole responsibility
of management of the assets held under the Trust, except those assets,
the management of which has been assigned to an Investment Manager, who
shall be solely responsible for the management of the assets assigned to
it, all as specifically provided in the Plan. Each named Fiduciary
warrants that any directions given, information furnished, or action
taken by it shall be in accordance with the provisions of the Plan,
authorizing or providing for such direction, information or action.
Furthermore, each named Fiduciary may rely upon any such direction,
information or action of another named Fiduciary 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 each named Fiduciary shall be responsible for the
proper exercise of its own powers, duties, responsibilities and
obligations under the Plan. No named Fiduciary shall guarantee the
Trust Fund in any manner against investment loss or depreciation in
asset value. Any person or group may serve in more than one Fiduciary
capacity. In the furtherance of their responsibilities hereunder, the
"named Fiduciaries" shall be empowered to interpret the Plan and Trust
and to resolve ambiguities, inconsistencies and omissions, which
findings shall be binding, final and conclusive.
10.13 Headings. The headings and subheadings of this Plan have
been inserted for convenience of reference and are to be ignored in any
construction of the provisions hereof.
10.14 Approval by Internal Revenue Service.
10.14.1 Qualification. Notwithstanding anything herein to
the contrary, contributions to this Plan are conditioned upon the
initial qualification of the Plan under Code Section 401. if the Plan
receives an adverse determination with respect to its initial
qualification, then the Plan may return such contributions to the
Employer within one year after such determination, provided the
application for the determination is made by the time prescribed by law
for filing the Employer's return for the taxable year in which the Plan
was adopted, or such later date as the Secretary of the Treasury may
prescribe.
10.14.2 Deductibility. Notwithstanding any provisions to
the contrary, except Sections 3.6, and 3.7, and the last clause of
Section 4.1.3, any contribution by the Employer to the Trust Fund is
conditioned upon the deductibility of the contribution by the Employer
under the Code and, to the extent any such deduction is disallowed, the
Employer may, within one (1) year following the disallowance of the
deduction, demand repayment of such disallowed contribution and the
Trustee shall return such contribution within one (1) year following the
disallowance. Earnings of the Plan attributable to the excess
contribution may not be returned to the Employer, but any losses
attributable thereto must reduce the amount so returned.
10.15 Uniformity. All provisions of this Plan shall be
interpreted and applied in a uniform, nondiscriminatory manner. In the
event of any conflict between the terms of this Plan and any Contract
purchased hereunder, the Plan provisions shall control.
10.16 Securities and Exchange Commission Approval. The
Employer may request an interpretative letter from the Securities and
Exchange Commission stating that the transfers of Company Stock
contemplated hereunder do not involve transactions requiring a
registration of such Company Stock under the Securities Act of 1933. In
the event that a favorable interpretative letter is not obtained, the
Employer reserves the right to amend the Plan and Trust retroactively to
their Effective Dates in order to obtain a favorable interpretative
letter or to terminate the Plan.
IN WITNESS WHEREOF, this Plan has been executed the day and year
first above written.
(Signatures appear on the following page)
"EMPLOYER:"
SANTA BARBARA BANK & TRUST, a California corporation
By
Jay D. Smith, Senior Vice President
"TRUSTEE:"
SANTA BARBARA BANK & TRUST, a California corporation
By
Janice Kroekel, Assistant Vice President
