<PAGE>
As filed with the Securities and Exchange Commission on June 26 , 2000
Registration No.
333-__________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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PACIFIC CAPITAL BANCORP
(formerly Santa Barbara Bancorp)
(Exact name of registrant as specified in its charter)
California
95-3673456
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
200 East Carrillo Street, Suite 300
Santa Barbara, California 93101
(Address of principal executive offices)
PACIFIC CAPITAL BANCORP AMENDED AND RESTATED INCENTIVE & INVESTMENT AND
SALARY SAVINGS PLAN DATED JANUARY 1, 1998
(Full title of the plan)
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Copy to:
Jay D. Smith, Esq. Bruce W. McRoy, Esq.
200 East Carrillo Street, Suite 300 Reicker, Clough, Pfau, Pyle, McRoy &
Herman, LLP
Santa Barbara, California 93101 1421 State Street, Suite B
(805) 564-6310 Santa Barbara, California 93101
(Name, address and telephone number of (805) 966-2440 - TEL
agent for service) (805) 966-3220 - FAX
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CALCULATION OF REGISTRATION FEE
================================================================================
TITLE OF EACH CLASS AMOUNT PROPOSED PROPOSED AMOUNT OF
OF SECURITIES TO BE MAXIMUM MAXIMUM REGISTRATION
TO BE REGISTERED REGISTERED OFFERING PRICE AGGREGATE FEE
PER SHARE OFFERING
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Common Stock, no 90,000 $25.9375(2) $2,334,375.00(2) $617.00
par value Shares(1)
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Beneficial ------ ------ ------ ------
Interests in
Pacific Capital
Bancorp Amended and
Restated Incentive
& Investment and
Salary Savings Plan
dated January 1,
1998(3)
================================================================================
(1) Based upon Pacific Capital Bancorp's estimate of the number of shares of
Common Stock that will be issued pursuant to the Pacific Capital Bancorp Amended
and Restated Incentive & Investment and Salary Savings Plan dated January 1,
1998. There is also being registered hereunder such additional undetermined
number of shares of stock which may be issued from time to time as a result of
stock splits, stock dividends or similar transactions.
(2) Estimated solely for purposes of calculating registration fee pursuant to
Rule 457(h) and (c). The maximum aggregate offering price is based on 90,000
shares of Pacific Capital Bancorp Common Stock available for issuance under the
Pacific Capital Bancorp Amended and Restated Incentive & Investment and Salary
Savings Plan dated January 1, 1998, multiplied by $25.9375, the average of the
high and low prices of Common Stock of Pacific Capital Bancorp as reported for
June 22, 2000 on the NASDAQ National Exchange, for proceeds of $2,334,375.00.
(3) In addition, pursuant to Rule 416(c), this Registration Statement also
covers an indeterminate amount of interests to be offered or sold pursuant to
the Pacific Capital Bancorp Amended and Restated Incentive & Investment and
Salary Savings Plan dated January 1, 1998.
<PAGE>
PART I INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual
Information.*
* Information required by Part I of Form S-8 to be contained in the Section
10(a) prospectus is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act of 1933, as amended (the
"Securities Act"), and the Note to Part I of Form S-8.
PART II INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Registrant and the Pacific Capital Bancorp Amended and Restated Incentive
& Investment and Salary Savings Plan dated January 1, 1998 (the "Plan") hereby
incorporates by reference in this Registration Statement the following documents
previously filed by Registrant with the Securities and Exchange Commission (the
"Commission"):
(1) Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999;
(2) Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 2000;
(3) Registrant's Current Reports on Forms 8-K filed March 7,
2000 and May 16, 2000;
(4) the description of the common stock, no par value, of Registrant
(the "Common Stock") set forth in the registration statement on Form S-4
filed May 4, 2000, and Amendment No. 1 thereto set forth in the
registration statement on Form S-4/A filed May 10, 2000 for the purpose of
updating such description.
All documents filed by Registrant and the Plan with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), subsequent to the date of this
Registration Statement shall be deemed to be incorporated herein by reference
and to be a part hereof from the date of the filing of such documents until such
time as there shall have been filed a post-effective amendment that indicates
that all securities offered hereby have been sold or that deregisters all
securities remaining unsold at the time of such amendment.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 317 of the California General Corporation Law authorizes a court
to award, or a corporation's Board of Directors to grant indemnity to directors,
officers, employees and other agents of the corporation ("Agents") in terms
sufficiently broad to permit such indemnification under certain circumstances
for liabilities (including reimbursement for expenses incurred) arising under
the Securities Act of 1933, as amended.
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 the Sixth Article of Registrant's
Certificate of Restatement of Articles of Incorporation and Section 5.3 of
Registrant's Amended and Restated Bylaws, as adopted by the Board of Directors
on January 26, 1999, authorize Registrant to provide for indemnification of
officers and directors to the same extent. This indemnification limits 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 permits Registrant to indemnify its directors and officers against certain
liabilities and expenses, to the extent permitted by the California General
Corporation Law. This indemnification is based upon the indemnification
provisions previously set forth in Registrant's Articles of Incorporation prior
to the merger of Pacific Capital Bancorp into Registrant as approved by Pacific
Capital Bancorp's shareholders and the indemnification agreements which were
approved by Registrant's shareholders at the annual meeting of shareholders 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. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following documents are filed as a part of this registration
statement.
Exhibit Number Document Description
4.1 Pacific Capital Bancorp Amended and Restated Incentive &
Investment and Salary Savings Plan dated January 1, 1998 *
5.1 Opinion of Counsel *
23.1 Consent of Counsel (included in the opinion filed as
Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP *
24.1 Power of Attorney (see signature page of this Registration
Statement).
* Filed herewith.
Item 9. Undertakings.
A. The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change
to such information in the Registration Statement;
(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; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Exchange Act of 1934) that
is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. 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 of whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Santa Barbara, State of California on June 26, 2000.
PACIFIC CAPITAL BANCORP
By: /s/ Jay D. Smith
--------------------------------
Jay D. Smith
Senior Vice President and
General Counsel
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints Jay D. Smith and Donald Lafler,
and each of them, each with full power to act without the other, his true and
lawful attorneys-in-fact and agents, each with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments to this registration statement, and to
file the same with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto each of
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he might or could do in
person hereby ratifying and confirming that each of said attorneys-in-fact and
agents or his substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
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/s/ David W. Spainhour Chairman of the Board and Director June 26, 2000
David W.Spainhour
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/s/ Donald M. Anderson Vice Chairman of the Board and June 26, 2000
Donald M. Anderson Director
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/s/ William S. Thomas, President, Chief Executive Officer June 26, 2000
Jr. and Director
William S. Thomas, Jr.
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/s/ Jay D. Smith Senior Vice President, General June 26, 2000
Jay D. Smith Counsel and Secretary
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/s/ Donald Lafler Executive Vice President and Chief June 26, 2000
Donald Lafler Financial Officer
------------------------
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/s/ Edward E. Birch Director June 26, 2000
Edward E. Birch
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/s/ Richard A. Director June 26, 2000
Nightingale
Richard A. Nightingale
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/s/ Richard M. Davis Director June 26, 2000
Richard M. Davis
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/s/ Kathy J. Odell Director June 26, 2000
Kathy J. Odell
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/s/ Dale E. Hanst Director June 26, 2000
Dale E. Hanst
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/s/ D. Vernon Horton Director June 26, 2000
D. Vernon Horton
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/s/ Roger C. Knopf Director June 26, 2000
Roger C. Knopf
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/s/ Clayton C. Larson Director June 26, 2000
Clayton C. Larson
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/s/ William H. Pope Director June 26, 2000
William H. Pope
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------------------------
------------------------
Pursuant to the requirements of the Securities Act of 1933, the Pacific
Capital Bancorp Amended and Restated Incentive & Investment and Salary Savings
Plan dated January 1, 1998 certifies that it has reasonable grounds to believe
that it meets all the requirements for filing on Form S-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Santa Barbara, State of California on
June 26, 2000.
PACIFIC CAPITAL BANCORP AMENDED AND
RESTATED INCENTIVE & INVESTMENT AND
SALARY SAVINGS PLAN DATED JANUARY
1, 1998
By: /s/ Jay D.
Smith
Jay D. Smith
Senior Vice President and General
Counsel
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
4.1 Pacific Capital Bancorp Amended and Restated Incentive &
Investment and Salary Savings Plan dated January 1, 1998 *
5.1 Opinion of Counsel *
23.1 Consent of Counsel (included in the opinion filed as
Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP *
24.1 Power of Attorney (see signature page of this registration
statement).
------------------
* Filed herewith.
<PAGE>
EXHIBIT 4.1
PACIFIC CAPITAL BANCORP
INCENTIVE & INVESTMENT AND SALARY SAVINGS PLAN
THIS AMENDED AND RESTATED INCENTIVE & INVESTMENT AND SALARY SAVINGS PLAN
is made and entered into, effective on the date set forth below, by SANTA
BARBARA BANK & TRUST, a California corporation, as "Employer" for periods prior
to January 1, 1999 (for such periods, the "Employer") and PACIFIC CAPITAL
BANCORP, a California corporation formerly known as "Santa Barbara Bancorp," as
"Employer" for periods on an after January 1, 1999 (for such periods, the
"Employer"), with reference to the following facts:
RECITALS:
A. PACIFIC CAPITAL BANCORP, a California corporation ("Parent") owns all
the outstanding shares of the capital stock of SANTA BARBARA BANK & TRUST, a
California corporation (the "Bank").
B. Effective January 1, 1966, the Bank established the "Santa Barbara Bank
& Trust Incentive & Investment Plan (the "Prior Plan") to recognize the
contributions made to the Bank's successful operation by its employees and for
the exclusive benefit of its eligible employees.
C. Effective January 1, 1989, the Bank amended and restated the Prior Plan
to reflect certain changes in the law and in the operation of the Plan and to
rename the Plan the "Incentive & Investment and Salary Savings Plan" (as so
amended, the "Plan").
D. Since the date of that most recent amendment and restatement, (i) there
have been certain changes in the laws applicable to the Plan, (ii) the Employer
has adopted certain amendments to the Plan to reflect changes in the operation
of the Plan, and (iii) the Employer has acquired certain wholly owned
subsidiaries.
E. The Employer desires to adopt this Amended and Restated Plan document
in order to incorporate all prior amendments to the Plan, to reflect the current
provisions of law applicable to the Plan, and to reward and provide incentives
for all employees of Employer and each of its Affiliated Employers.
NOW, THEREFORE, the Employer hereby amends and restates the Plan in its
entirety to provide as follows:
1. DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.2 "Administrator" means the person 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 December 31st.
1.6 "Beneficiary" means the person to whom a share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
6.2 and 6.6, below.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.8 "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)).
1.8.1 For purposes of this Section, the determination of
Compensation shall be made by (a) including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(a)(8),
402(h), 403(b) or 457, and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions, and (b) excluding any
taxable income arising by reason of the Participant's exercise of options to
purchase the capital stock of Employer or any Affiliated Employer.
1.8.2 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.
1.8.3 For the 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).
A. 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 the Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Code Section 401(a)(17)(B) shall mean such
$150,000 limit (as adjusted pursuant to Code Section 401(a)(17)(B)) set forth in
this Section 1.8.3.
B. 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.
1.8.4. 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.
1.9 "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.
1.10 "Deferred Compensation" with respect to any Participant means the
amount of the Participant's total Compensation which has been contributed to the
Plan in accordance with the Participant's deferral election pursuant to Section
4.2 excluding any such amounts distributed as excess "annual additions" pursuant
to Section 4.10.1.
1.11 "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 ("Early Retirement Age") and
has completed at least 20 years of service with the Employer. 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 such 20-year service requirement and who thereafter attains age 55
shall be entitled to receive his benefits under this Plan.
1.12 "Elective Contribution" means the Employer's contributions to the
Plan that are made pursuant to the Participant's deferral election provided in
Section 4.2, below. In addition, any Employer Qualified Non-Elective
Contribution made pursuant to Section 4.6 shall be considered an Elective
Contribution for purposes of the Plan. Any such contributions deemed to be
Elective Contributions shall be subject to the requirements of Sections 4.2.2
and 4.2.3 and shall further be required to satisfy the discrimination
requirements of Regulation 1.401(k)-l(b)(3), the provisions of which are
specifically incorporated herein by reference.
1.13 "Eligible Employee" means any Employee, except that:
1.13.1 Employees who are Leased Employees within the meaning of
Code Sections 414(n)(2) and 414(o)(2) shall not be eligible to participate in
this Plan.
1.13.2 Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have specifically
adopted this Plan in writing.
1.14 "Employee" means any person who is employed by the Employer or an
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.
1.15 "Employer" means (a) for Plan Years commencing prior to January 1,
1999, SANTA BARBARA BANK & TRUST, a California corporation, and (b) for Plan
Years commencing on or after January 1, 1999, PACIFIC CAPITAL BANCORP, a
California corporation, 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.
1.16 "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of the aggregate amount of the voluntary Employee contributions
made pursuant to Section 4.12, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 4.6.1 and any qualified non-elective
contributions or elective deferrals taken into account pursuant to Section 4.7.3
on behalf of Highly Compensated Participants for such Plan Year, over the
maximum amount of such contributions permitted under the limitations of Section
4.7.1, below.
1.17 "Excess Contributions" means, with respect to a Plan Year, the excess
of Elective Contributions made on behalf of Highly Compensated Participants for
the Plan Year over the maximum amount of such contributions permitted under
Section 4.5.1, below. Excess Contributions, including amounts recharacterized
pursuant to Section 4.6.1(C), below, shall be treated as an "annual addition"
pursuant to Section 4.9.1, below.
1.18 "Excess Deferred Compensation" means, with respect to any taxable
year of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 4.2.6 below
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference. Excess Deferred Compensation shall be treated as an "annual
addition" pursuant to Section 4.9.2, below, when contributed to the Plan unless
distributed to the affected Participant not later than the next succeeding April
15th following the close of the Participant's taxable year. Additionally, for
purposes of Sections 2.2 and 4.4.4, below, Excess Deferred Compensation shall
continue to be treated as Employer contributions even if distributed pursuant to
Section 4.2.6, below. However, Excess Deferred Compensation of Non Highly
Compensated Participants is not taken into account for purposes of Section
4.5.1, above, to the extent such Excess Deferred Compensation occurs pursuant to
Section 4.2.4, below.
1.19 "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.
1.20 "Fiscal Year" means each period of 12 months commencing on January
1st and ending on December 31st.
1.21 "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 the Participant's Account, or (b) the last date of the Plan
Year in which the Participant incurs five (5) consecutive 1-Year Breaks in
Service. Furthermore, for purposes of the foregoing clause (a), in the case of a
Terminated Participant whose Vested Benefit is zero, such Terminated Participant
shall be deemed to have received a distribution of the Participant's Vested
Benefit upon his termination of employment. Restoration of such amount shall
occur pursuant to Section 6.4, below. In addition, the term "Forfeiture" also
shall include such amounts that are deemed to be Forfeitures pursuant to any
other provisions of this Plan.
1.22 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.23 "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, and
effective with the Plan Years beginning on or after January 1, 1998, shall
include (a) all "Elected Deferrals" (as defined in Code Section 402(g)(3), and
(b) any other amount which is contributed or deferred at the election of the
Employee that is not includible in the gross income of the Employee by reason of
Code Section 125 or 457. "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.
1.24 "414(s) Compensation" means "415 Compensation" paid during a Plan
Year plus, for the Plan Years commencing prior to January 1, 1998, the
Participant's Elective Contributions attributable to Deferred Compensation
recharacterized as voluntary Employee contributions pursuant to Section 4.6(a).
The amount of "414(s) Compensation" with respect to any Participant shall
include "414(s) Compensation" for the entire twelve (12) month period ending on
the last day of such Plan Year, except that "414(s) Compensation" shall only be
recognized for that portion of the Plan Year during which an Employee was a
Participant in the Plan.
1.24.1 For purposes of this Section, the determination of "414(s)
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(a)(8),
402(h), 403(b) or and 457, Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
1.24.2 In addition to other limitations set forth in this Plan,
and notwithstanding any other 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 $150,000, as
adjusted by the Internal Revenue Service pursuant to Code Section 401(a)(17)(B).
The cost of living adjustment in effect for a calendar year applies to any
period which begins in that year, does not exceed twelve (12) months, and for
which Compensation is being determined (the "determination period"). If a
determination period consists of fewer than twelve (12) months, then the
limitation in effect under this Section 1.25.2 shall be equal to such $150,000
amount (as adjusted pursuant to 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 the annual compensation limit described in
this Section 1.25.2. If an Employee's benefits accruing in a Plan Year are
determined by reference to the Employee's Compensation for any prior
determination period, then the Compensation for that prior determination period
shall be subject to the limit in effect under Code Section 401(a)(17) for that
prior determination period. For this purpose, for any determination period
beginning prior to the first day of the first Plan Year beginning on or after
January 1, 1994, the annual compensation limit shall be $150,000.
1.24.3 If, in connection with the adoption of this amendment and
restatement, the definition of "414(s) Compensation" has been modified, then,
for Plan Years prior to the Plan Year which includes the adoption date of this
amendment and restatement, "414(s) Compensation" means compensation determined
pursuant to the Plan then in effect.
1.25 "Highly Compensated Employee" means an Employee who either (a) during
the current Plan Year or the immediately preceding Plan Year, was a "five
percent owner" (as defined in Section 1.32.3C, below), or (b) for the preceding
year, either (i) received 415 Compensation from the Employer in excess of Eighty
Thousand Dollars ($80,000) (as such amount is adjusted from time-to-time
pursuant to Code Section 414(g)(1), or (ii) in accordance with an election by
the Employer to apply this clause (b)(ii) of this Section 1.25 for any Plan
Year, was in the "Top Paid Group" of Employees for such preceding year. For Plan
Years beginning after December 31, 1996, and prior to January 1, 1998, the
determination of "415 Compensation" under this Section 1.25 shall be made by
including amounts that otherwise would 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).
1.26 "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 1.26. 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 Notwithstanding the above, (i), 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); (ii) 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 (iii) 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 For purposes of this Section 1.28, 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 An Hour of Service must be counted 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
re-employment 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 "Income" means the income allocable to "excess amounts" which shall
equal the sum of the allocable gain or loss for the "applicable computation
period" and the allocable gain or loss for the period between the end of the
"applicable computation period" and the date of distribution ("gap period"). The
income allocable to "excess amounts" for the "applicable computation period" and
the "gap period" is calculated separately and is determined by multiplying the
income for the "applicable computation period" or the "gap period" by a
fraction. The numerator of the fraction is the "excess amount" for the
"applicable computation period". The denominator of the fraction is the total
"account balance" attributable to "Employer contributions" as of the end of the
"applicable computation period" or the "gap period", reduced by the gain
allocable to such total amount for the "applicable computation period" or the
"gap period" and increased by the loss allocable to such total amount for the
"applicable computation period" or the "gap period". The provisions of this
Section shall be applied:
1.29.1 For purposes of Section 4.2.6, by substituting:
A. "Excess Deferred Compensation" for "excess amounts";
B. "taxable year of the Participant" for "applicable
computation period";
C. "Deferred Compensation" for "Employer contributions";
and
D. "Participant's Elective Account" for "account
balance".
1.29.2 For purposes of Section 4.6.1, by substituting:
A. "Excess Contributions" for "excess amount";
B. "Plan Year" for "applicable computation period";
C. "Elective Contributions" for "Employer
contributions"; and
D. "Participant's Elective Account" for "account
balance".
1.29.3 For purposes of Section 4.8.1, by substituting:
A. "Excess Aggregate Contributions" for "excess amounts";
B. "Plan Year" for "applicable computation period";
C. "Employer matching contributions made pursuant to
Section 4.1(b) and any qualified non-elective contributions or elective
deferrals taken into account pursuant to Section 4.7(c)" for "Employer
contributions"; and
D. "Participant's Account" for "account balance".
1.29.4 In lieu of the "fractional method" described above, a "safe
harbor method" may be used to calculate the allocable income for the "gap
period". Under such "safe harbor method", allocable Income for the "gap period"
shall be deemed to equal ten percent (10%) of the Income allocable to "excess
amounts" for the "applicable computation period" multiplied by the number of
calendar months in the "gap period". For purposes of determining the number of
calendar months in the "gap period", a distribution occurring on or before the
fifteenth day of the months shall be treated as having been made on the last day
of the preceding months and a distribution occurring after such fifteenth day
shall be treated as having been made on the first day of the next subsequent
month.
1.29.5 Income allocable to any distribution of Excess Deferred
Compensation on or before the last day of the taxable year of the Participant
shall be calculated from the first day of the taxable year of the Participant to
the date on which the distribution is made pursuant to either the "fractional
method" or the "safe harbor method".
1.30 "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.
1.31 "Key Employee" means an Employee as defined in Code Section 416(i)
and the Regulations thereunder. 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:
1.31.1 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.
1.31.2 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.
1.31.3 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 all 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.
1.31.4 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 (1%) 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.
A. 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.
B. 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(a)(8), 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).
1.32 "Late Retirement Date" means the Anniversary Date coinciding with or
next following a Participant's actual Retirement Date after having reached his
Normal Retirement Date.
1.33 "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 performed under primary direction or control by the
recipient. 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:
1.33.1 Such employee is covered by a money purchase pension plan
providing: (a) a non-integrated 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(a)(8), 402(h) or
403(b); (b) immediate participation; and (c) full and immediate vesting; and
1.33.2 Leased Employees do not constitute more than 20% of the
recipient's non-highly compensated work force.
1.34 "Non-Elective Contribution" means the Employer's contributions to
this Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2, below, and any "Qualified
Non-Elective Contribution".
1.35 "Non-Highly Compensated Participant" means any Participant who is
neither a Highly Compensated Employee nor a Family Member.
1.36 "Non-Key Employee" means any Employee or former Employee (and the
Beneficiaries of such persons) who is not a Key Employee.
1.37 "Normal Retirement Age" means the Participant's 65th birthday.
1.38 "Normal Retirement Date" means the Anniversary Date coinciding with
or next following the Participant's Normal Retirement Age.
1.39 "1-Year Break in Service" means a period of 12 consecutive calendar
months beginning on the date the Employee terminates service with the Employer
and ending on the first anniversary of such date during which the Employee does
not perform an Hour of Service for 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.
1.39.1 An Employee shall not be deemed to have incurred a 1-Year
Break in Service if he completes an Hour of Service within 12 months following
the last day of the month during which his employment terminated.
1.39.2 "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.
1.39.3 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.
1.40 "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.
1.41 "Participant's Account" means the account established and maintained
by the Administrator for each Participant with respect to the Participant's
total interest in the Plan resulting from the Employer's Non-Elective
Contributions. A separate accounting shall be maintained with respect to that
portion of the Participant's account attributable to Employer matching
contributions made pursuant to Section 4.1.1B, below, and Employer discretionary
contributions made pursuant to Section 4.1.1C, below.
1.42 "Participant's Combined Account" means the total aggregate amount of
each Participant's Elective account and the Participant's account.
1.43 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from the Employer's Elective Contributions. A
separate accounting shall be maintained with respect to that portion of the
Participant's Elective Account attributable to Elective Contributions pursuant
to Section 4.2 and any Employer Qualified Non-Elective Contributions.
1.44 "Plan" means this PACIFIC CAPITAL BANCORP Amended and Restated
Incentive & Investment and Salary Savings Plan, as amended from time to time.
For periods prior to January 1, 1999, this Plan shall be known as the "SANTA
BARBARA BANK & TRUST" "Incentive & Investment and Salary Savings Plan."
1.45 "Plan Year" means (a) for periods prior to April 1, 1993, the
Employer's accounting year of 12 months commencing on April 1st of each year and
ending the following March 31st; (b) for the period after March 31, 1993, and
prior to January 1, 1994, the nine-month period from April 1, 1993, through
December 31, 1993, and (c) for periods after December 31, 1993, each period of
12 months commencing on January 1 and ending on December 31.
1.46 "Qualified Non-Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to Section 4.6. Such
contributions shall be considered an Elective Contribution for the purposes of
the Plan and used to satisfy the "Actual Deferral Percentage" tests. In
addition, the Employer's contributions to the Plan that are made pursuant to
Section 4.8.7, below, which are used to satisfy the "Actual Contribution
Percentage" tests shall be considered Qualified Non-Elective Contributions and
be subject to the provisions of Sections 4.2.2, below and 4.2.3, below.
1.47 "Qualified Voluntary Employee Contribution Account" means the account
established and maintained by the Administrator for each Participant with
respect to such Participant's total interest in the Plan resulting from the
Participant's tax-deductible Qualified Voluntary Employee Contributions made
pursuant to Section 4.14, below.
1.48 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
1.49 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.50 "Retirement Date" means the date as of which a Participant retires
whether such retirement occurs on a Participant's Normal Retirement Date, Early
or Late Retirement Date.
1.51 "Super Top Heavy Plan" means a plan described in Section 2.2.2.
1.52 "Terminated Participant" means a person who has been a Participant,
but whose employment has been terminated other than by death or retirement.
1.53 "Top Heavy Plan" means a plan described in Section 2.2.1.
1.54 "Top Heavy Plan Year" means a Plan Year commencing after December 31,
1983 during which the Plan is a Top Heavy Plan.
1.55 "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" received from the Employer during such year. 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. Employees who are non-resident 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 86(a)(3) shall not be treated as Employees.
1.55.1 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 2 hours per
week;
C. Employees who normally work less than six (6) months
during a year; and
D. Employees who have not yet attained age 21.
1.55.2 In addition, if ninety percent (90%) 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.
1.55.3 The foregoing exclusions set forth in this Section 1.55.3
shall be applied on a uniform and consistent basis for all purposes for which
the Code Section 414(q) definition is applicable.
1.56 "Total and Permanent Disability" means a physical or mental condition
of a Participant resulting from bodily injury, disease, or mental disorder which
renders the Participant incapable of continuing in gainful occupation and which
condition constitutes a "total disability" under the Social Security Act.
1.57 "Trustee" means the person or entity named as trustee in any separate
trust forming a part of this Plan, and any successors.
1.58 "Trust Fund" or "Trust" means the assets of the separate trust
forming a part of this Plan, as the same shall exist from time to time.
1.59 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.60 "Voluntary Contribution Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from the Participant's nondeductible voluntary
contributions made pursuant to Section 4.12. Amounts recharacterized as
voluntary Employee contributions pursuant to Section 4.6.1, below, shall remain
subject to the limitations of Sections 4.2.2, and 4.2.3, below. Therefore, a
separate accounting shall be maintained with respect to that portion of the
Voluntary Contribution Account attributable to voluntary Employee contributions
made pursuant to Section 4.12, below.
1.61 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least
1,000 Hours of Service.
1.61.1 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.
1.61.2 Vesting. For vesting purposes, the computation period shall
be the Plan Year, including periods prior to the Effective Date of the Plan.
1.61.3 Other. For all other purposes, the computation
period shall be the Plan Year.
1.61.4 Prior Service. There shall be recognized as "Years of
Service" under this Plan all Years of Service by the Employee with any entity
acquired by the Employer if the terms and conditions of such acquisition
expressly require that such prior Years of Service be credited as such under
this Plan. For purposes of this Section 1.61.4, an entity shall be deemed to be
acquired by the Employer if (a) that entity is merged into the Employer, or (b)
the Employer purchases or otherwise acquires at least eighty percent (80%) of
the outstanding voting equity interests in such entity, or (iii) the Employer
acquires substantially all the assets of such entity."
1.61.5 Affiliated Employer. All 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 6.4 of the Plan and the special minimum allocation requirements of
Code Section 416(c) pursuant to Section 4.4 of the Plan.
2.2 Determination of Top Heavy Status.
2.2.1 This Plan shall be a Top Heavy Plan for any Plan Year
commencing. after December 31, 1983 in which, as of the Determination Date, (a)
the Present Value of Accrued Benefits of Key Employees and (b) 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, for Plan Years beginning after December 31,
1984, 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 This Plan shall be a Super Top Heavy Plan for any Plan Year
commencing after December 31, 1983, in which, as of the Determination Date, (a)
the Present Value of Accrued Benefits of Key Employees and (b) 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 A Participant's Aggregate Account as of the
Determination Date is the sum of:
A. His Participant's Elective 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. However, rollovers or
plan-to-plan transfers accepted prior to January 1, 1984, shall be considered 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 Paragraphs E and F, above, all employers
aggregated under Code Section 414(b), (c), (m) and (o) are treated as the same
employer.
2.2.4 "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. 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, (i) the sum of (a) the Present Value of Accrued
Benefits of Key Employees under all defined benefit plans included in the group,
plus (b) the Aggregate Accounts of Key Employees under all defined contribution
plans included in the group, exceeds (ii) sixty percent (60%) of a similar sum
determined for all Participants.
2.3 Powers and Responsibilities of the Employer.
2.3.1 The Employer shall be empowered to appoint and remove the
Trustee and the Administrator from time to time as it 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 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 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-to-day conduct and evaluation, or through other appropriate ways.
2.4 Designation of Administrative Authority. 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, 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 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 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 prepare and implement a procedure to notify
Eligible Employees that they may elect to have a portion of their
Compensation deferred or paid to them in cash;
J. 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 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 his
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, above, 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, above.
2.13.1 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 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.
3.1.1 Subject to Sections 3.1.2 and 3.1.3, below, each Eligible
Employee who commences employment prior to January 1, 1990, and has attained age
16 shall be eligible to participate hereunder as of the date he has satisfied
such requirements. Each Eligible Employee who commences employment with the
Employer after December 31, 1989, and prior to January 1, 1991, and who has
completed one (1) Year of Service and has attained age 16 shall be eligible to
participate hereunder as of the date he has satisfied such requirements. Each
Eligible Employee who commences employment with the Employer after December 31,
1990, and 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.
3.1.2 Notwithstanding the provisions of Section 3.1.1, above,
effective July 1, 1994, each Eligible Employee who has attained age 18 and
completed ninety (90) days of employment with the Employer shall be eligible to
(a) make Deferred Compensation contributions to the Plan in accordance with
Section 4.2, below, and (b) receive Employer's Matching Contributions with
respect to such Deferred Compensation in accordance with Section 4.1.1B, below;
provided, such Eligible Employee shall not be eligible to receive an allocation
of the discretionary Employer's Non-Elective Contribution under Section 4.1.1C,
below, until such Eligible Employee has completed one (1) Year of Service with
the Employer in accordance with Section 3.1.1, above, and commenced
participation in accordance with Section 3.1.3, below.
3.1.3 An Eligible Employee who has satisfied the participation
requirements of this Section 3.1 shall commence participation in the Plan at the
time specified in Section 3.3, below.
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 first calendar month commencing
after the Eligible Employee has satisfied the eligibility requirements of
Section 3.1, above, 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). In the event an Employee who is not a member of an
eligible class of Employees becomes a member of an eligible class, such Employee
will participate immediately if such Employee would have otherwise previously
become a Participant.
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,
above.
3.5 Termination of Eligibility.
3.5.1 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 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 (except for Deferred Compensation which shall be
distributed to the ineligible person) 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 For each Plan Year, the Employer shall contribute to
the Plan the sum of the following amounts:
A. The amount of the total salary reduction elections of all
Participants made pursuant to Section 4.2, below, which amount shall be deemed
to be an Employer's Elective Contribution.
B. On behalf of each Participant who is eligible to share in
matching contributions for the Plan Year, a matching contribution equal to the
sum of (i) one-hundred percent (100%) of that portion of the Participant's
Deferred Compensation up to three percent (3.0%) of the Participant's
Compensation, plus (ii) fifty percent (50%) of that portion of the Participant's
Deferred Compensation in excess of three percent (3.0%) of Compensation and up
to six percent (6.0%) of Compensation; provided, in no event shall the amount of
the matching contribution under this Section 4.1(b) on behalf of any Participant
in any Plan Year exceed four and one-half percent (4.5%) of the Participant's
Compensation for the Plan Year. The aggregate matching contribution under this
Section 4.1.1 shall be deemed to be an Employer Non-Elective Contribution.
C. Such amount, if any, which the Employer in its
discretionary elects to contribute, which amount shall be deemed to be an
Employer's Non-Elective Contribution.
4.1.2 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. All
contributions by the Employer shall be made in cash or in such property as is
acceptable to the Trustee.
4.1.3 Notwithstanding the foregoing, 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.
4.2 Participant's Salary Reduction Election.
4.2.1 Each Participant may elect to defer his Compensation which
would have been received in the Plan Year, but for the deferral election, by up
to ten percent (10%). A deferral election (or modification of an earlier
election) may not be made with respect to Compensation which is currently
available on or before the date the Participant executed such election. The
amount by which Compensation is reduced shall be that Participant's Deferred
Compensation and be treated as an Employer Elective Contribution and allocated
to that Participant's Elective Account.
4.2.2 The balance in each Participant's Elective Account shall be
fully Vested at all times and shall not be subject to Forfeiture for any reason.
4.2.3 Amounts held in the Participant's Elective Account
may not be distributable earlier than:
A. A Participant's termination of employment or death;
B. A Participant's attainment of age 59 2;
C. The termination of the Plan without the establishment
or existence of a "successor plan," as that term is described in Regulation
1.401(k)-l(d)(3);
D. The date of disposition by the Employer to an entity that
is not an Affiliated Employer of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) used in a trade or business of such
corporation if such corporation continues to maintain this Plan after the
disposition with respect to a Participant who continues employment with the
corporation acquiring such assets;
E. The date of disposition by the Employer or an Affiliated
Employer who maintains the Plan of its interest in a subsidiary (within the
meaning of Code Section 409(d)(3)) to an entity which is not an Affiliated
Employer but only with respect to a Participant who continues employment with
such subsidiary; or
F. The proven financial hardship of a Participant,
subject to the limitations of Section 6.10, below.
4.2.4 For each Plan Year beginning after December 31, 1987, a
Participant's Deferred Compensation made under this Plan and all other plans,
contracts or arrangements of the Employer maintaining this Plan shall not
exceed, during any taxable year of the Participant, the limitation imposed by
Code Section 402(g), as in effect at the beginning of such taxable year. if such
dollar limitation is exceeded, a Participant will be deemed to have notified the
Administrator of such excess amount which shall be distributed in a manner
consistent with 4.2.6, below. The dollar limitation shall be adjusted annually
pursuant to the method provided in Code Section 415(d) in accordance with
Regulations.
4.2.5 In the event a Participant has received a hardship
distribution from his Participant's Elective Account pursuant to Section 6.11 or
pursuant to Regulation 1.401(k)-l(d)(2)(iv)(B) from any other plan maintained by
the Employer, then such Participant shall not be permitted to elect to have
Deferred Compensation contributed to the Plan on his behalf for a period of
twelve (12) months following the receipt of the distribution. Furthermore, the
dollar limitation under Code Section 402(g) shall be reduced, with respect to
the Participant's taxable year following the taxable year in which the hardship
distribution was made, by the amount of such Participant's Deferred
Compensation, if any, pursuant to this Plan (and any other plan maintained by
the Employer) for the taxable year of the hardship distribution.
4.2.6 If a Participant's Deferred Compensation under this Plan
together with any elective deferrals (as defined in Regulation 1.402(g)-l(b))
under another qualified cash or deferred arrangement (as defined in Code Section
401(k)), a simplified employee pension (as defined in Code Section 408(k)), a
salary reduction arrangement (within the meaning of Code Section 3121(a)(5)(D)),
a deferred compensation plan under Code Section 457, or a trust described in
Code Section 501(c)(18) cumulatively exceed the limitation imposed by Code
Section 402(g) (as adjusted annually in accordance with the method provided in
Code Section 415(d) pursuant to Regulations) for such Participant's taxable
year, the Participant may, not later than March 1 following the close of the
Participant's taxable year, notify the Administrator in writing of such excess
and request that his Deferred Compensation under this Plan be reduced by an
amount specified by the Participant.
A. In such event, the Administrator may direct the Trustee to
distribute such excess amount (and any Income allocable to such excess amount)
to the Participant not later than the first April 15th following the close of
the Participant's taxable year. Distributions in accordance with this section
may be made for any taxable year of the Participant which begins after December
31, 1986. Any distribution of less than the entire amount of Excess Deferred
Compensation and Income shall be treated as a pro rata distribution of Excess
Deferred Compensation and Income. The amount distributed shall not exceed the
Participant's Deferred Compensation under the Plan for the taxable year.
B. Any distribution on or before the last day of the
Participant's taxable year must satisfy each of the following conditions: (1)
the distribution must be made after the date on which the Plan received the
Excess Deferred Compensation; (2) the Participant shall designate the
distribution as Excess Deferred Compensation; and (3) the Plan must designate
the distribution as a distribution of Excess Deferred Compensation.
4.2.7 Notwithstanding Section 4.2.6, above, a Participant's Excess
Deferred Compensation shall be reduced, but not below zero, by any distribution
and/or recharacterization of Excess Contributions pursuant to Section 4.6.1,
above, for the Plan Year beginning with or within the taxable year of the
Participant.
4.2.8 All amounts allocated to a Participant's Elective Account
may be treated as a Directed Investment Account pursuant to Section 4.13.
4.2.9 Employer Elective Contributions made pursuant to this
Section may be segregated into a separate account for each Participant in a
federally insured savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other short-term debt
security acceptable to the Trustee until such time as the allocations pursuant
to Section 4.4 have been made.
4.2.10 The Employer and the Administrator shall implement the
salary reduction elections provided for herein in accordance with the following:
A. A Participant may commence making elective deferrals to the
Plan only after first satisfying the eligibility and participation requirements
specified in Section 3. However, the Participant must make his initial salary
deferral election within a reasonable time, not to exceed thirty (30) days,
after entering the Plan pursuant to Section 3.3. If the Participant fails to
make an initial salary deferral election within such time, then such Participant
may thereafter make an election in accordance with the rules governing
modifications. The Participant shall make such an election by entering into a
written salary reduction agreement with the Employer and filing such agreement
with the Administrator. Such election shall initially be effective beginning
with the pay period following the acceptance of the salary reduction agreement
by the Administrator, shall not have retroactive effect and shall remain in
force until revoked.
B. A Participant may modify a prior election during the Plan
Year and concurrently make a new election by delivering notice with the
Administrator within a reasonable time before the pay period for which such
modification is to be effective. However, modifications to a salary deferral
election shall only be permitted quarterly, during election periods established
by the Administrator prior to the first day of each Plan Year quarter. Any
modification shall not have retroactive effect and shall remain in force until
revoked.
C. A Participant may elect to prospectively revoke his salary
reduction agreement in its entirety once in each calendar quarter by delivering
notice of revocation to the Employer or its designee at such times as are
designated by the Employer. Such revocation shall become effective as of the
beginning of the first pay period coincident with or next following the
expiration of the notice period. Furthermore, the termination of the
Participant's employment, or the cessation of participation for any reason,
shall be deemed to revoke any salary reduction agreement then in effect,
effective immediately following the close of the pay period within which such
termination or cessation occurs.
4.3 Time of Payment of Employer's Contribution. The Employer shall
generally 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. However, (a)
Employer Elective Contributions accumulated through payroll deductions shall be
paid to the Trustee as of the earliest date on which such contributions can
reasonably be segregated from the Employer's general assets, but in any event
within seven (7) days after the date on which such amounts would otherwise have
been payable to the Participant in cash, and (b) effective January 1, 1999, the
Employer matching contribution pursuant to Section 4.1.1B, above, shall be
contributed to the Plan on a monthly basis. The provisions of Department of
Labor regulations 2510.3-102 are incorporated herein by reference. Furthermore,
any additional Employer contributions which are allocable to the Participant's
Elective Account for a Plan Year shall be paid to the Plan no later than the
twelve-month period immediately following the close of such Plan Year.
4.4 Allocation of Contribution and Earnings.
4.4.1 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.
4.4.2 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 as follows:
A. With respect to the Employer's Elective Contribution
made pursuant to Section 4.1.1A, above, to each Participant's Elective
Account in an amount equal to each such Participant's Deferred Compensation
for the year;
B. With respect to the Employer's Non-Elective Contribution
made pursuant to Section 4.1.1B, above, to each Participant's Account in
accordance with Section 4.1.1B, above. Any Participant actively employed during
the Plan Year shall be eligible to share in the matching contribution for the
Plan Year.
C. With respect to the Employer's Non-Elective Contribution
made pursuant to Section 4.1.1C, above, 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. 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.
4.4.3 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 6.4.9, below. The remaining Forfeitures, if any,
shall be used to reduce the contribution of the Employer hereunder for the Plan
Year in which such Forfeitures occur in the following manner:
A. Forfeitures attributable to Employer matching contributions
made pursuant to Section 4.1.1B, above, shall be used to reduce the Employer's
contribution for the Plan Year in which such Forfeitures occur.
B Forfeitures attributable to Employer discretionary
contributions made pursuant to Section 4.1.1C, above, shall be used to reduce
the Employer's contribution for the Plan Year in which such Forfeitures occur.
4.4.4 For any Top Heavy Plan Year, Non-Key Employees not otherwise
eligible to share in the allocation of contributions as provided above, shall
receive the minimum allocation provided for in Section 4.4.8, below, if eligible
pursuant to the provisions of Section 4.4.10, below.
4.4.5 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 for that
Plan Year only if otherwise eligible in accordance with this Section 4.4.
4.4.6 As of each Anniversary Date or other valuation date, before
the current valuation period allocation of Employer contributions, 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 bear to the total of all Participant's and
Former Participant's nonsegregated accounts as of such date. Participant's
transfers from other qualified plans and voluntary contributions deposited in
the general Trust Fund shall share in any earnings and losses (net appreciation
or net depreciation) of the Trust Fund in the same manner provided above. Each
segregated account maintained on behalf of a Participant shall be credited or
charged with its separate earnings and losses.
4.4.7 Participant's accounts shall be debited for any insurance or
annuity premiums paid, if any, and credited with any dividends received on
insurance contracts.
4.4.8 Notwithstanding the foregoing, for any Top Heavy Plan Year,
the sum of the Employer's contributions allocated to the Participant's Elective
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 (a) the sum of the Employer's
contributions allocated to the Participant's Elective 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 (b) 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 allocated to the Participant's Elective Account of each Employee
shall be equal to the largest percentage allocated to the Participant's Elective
Account of any Key Employee. However, in determining whether a Non-Key Employee
has received the required minimum allocation, such Non-Key Employee's Deferred
Compensation shall not be taken into account. However, 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.
4.4.9 For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Elective Account of any Key Employee
shall be equal to the ratio of the sum of the Employer's contributions allocated
on behalf of such Key Employee divided by the "415 Compensation" for such Key
Employee.
4.4.10 For any Top Heavy Plan Year, the minimum allocations set
forth above shall be allocated to the Participant's Elective 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 (a) failed to complete a Year
of Service; and (b) declined to make mandatory contributions (if required) or,
in the case of a cash or deferred arrangement, elective contributions to the
Plan.
4.4.11 For the purposes of this Section, 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 $150,000, as adjusted by the Internal
Revenue Service pursuant to Code Section 401(a)(17)(B). The cost of living
adjustment in effect for a calendar year applies to any period which begins in
that year, does not exceed twelve (12) months, and for which Compensation is
being determined (the "determination period"). If a determination period
consists of fewer than twelve (12) months, then the limit in effect under this
Section 4.4.7(B) shall be equal to such $150,000 amount (as adjusted pursuant to
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 the annual Compensation limit described in this Section 4.4.11. If an
Employee's benefits accruing in a Plan Year are determined by reference to the
Employee's Compensation for any prior determination period, then the
Compensation for that prior determination period shall be subject to the limit
in effect under Code Section 401(a)(17) for that prior determination period. For
this purpose, for any determination period beginning prior to the first day of
the first Plan Year beginning on or after January 1, 1994, the annual
compensation limit shall be $150,000.
4.4.12 Notwithstanding anything herein to the contrary,
Participants who terminated employment for any reason during the Plan Year shall
share in the salary reduction contributions made by the Employer for the year of
termination without regard to the Hours of Service credited.
4.4.13 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 prebreak
service; and (b) one account representing his status in the Plan attributable to
post-break service.
4.4.14 Notwithstanding anything to the contrary, if this is a Plan
that would otherwise fail to meet the requirements of Code Sections 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 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 Paragraph A, above, the applicable
test is still not satisfied, then the group of Participants eligible to share in
the Employer's contribution 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 4.4.14 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.
4.5 Actual Deferral Percentage Tests.
4.5.1 For each Plan Year beginning after December 31, 1986, the
annual allocation derived from Employer Elective Contributions to a
Participant's Elective Account shall satisfy one of the following tests:
A. The "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group multiplied by
1.25; or
B. The excess of the "Actual Deferral Percentage" for the
Highly Compensated Participant group over the "Actual Deferral Percentage" for
the Non-Highly Compensated Participant group shall not be more than two
percentage points. Additionally, the "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not exceed the "Actual Deferral Percentage"
for the Non-Highly Compensated Participant group multiplied by 2. The provisions
of Code Section 401(k)(3) and Regulation 1.401(k)-1(b) are incorporated herein
by reference.
Notwithstanding, the foregoing, for Plan Years beginning after December 31,
1988, in order to prevent the multiple use of the alternative method described
in Paragraph B, above, and in Code Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals pursuant to Section 4.2 and to
make Employee contributions or to receive matching contributions under this Plan
or under any other plan maintained by the Employer or an Affiliated Employer
shall have his actual contribution ratio reduced pursuant to Regulation
1.401(m)-2, the provisions of which are incorporated herein by reference.
4.5.2 For the purposes of this Section 4.5, the term "Actual
Deferral Percentage" means, with respect to the Highly Compensated Participant
group and Non-Highly Compensated Participant group for a Plan Year, the average
of the ratios, calculated separately for each Participant in such group, of the
amount of Employer Elective Contributions allocated to each Participant's
Elective Account for such Plan Year, to such Participant's "414(s) Compensation"
for such Plan Year. The actual deferral ratio for each Participant and the
"Actual Deferral Percentage" for each group shall be calculated to the nearest
one-hundredth of one percent for Plan Years beginning after December 31, 1988.
Employer Elective Contributions allocated to each Non-Highly Compensated
Participant's Elective Account shall be reduced by Excess Deferred Compensation
to the extent such excess amounts are made under this Plan or any other plan
maintained by the Employer.
4.5.3 For the purpose of determining the actual deferral ratio of
a Highly Compensated Employee 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, the following
shall apply:
A. The combined actual deferral ratio for the family group
(which shall be treated as one Highly Compensated Participant) shall be
determined by aggregating Employer Elective Contributions and "414(s)
Compensation" of all eligible Family members (including Highly Compensated
Participants). However, in applying the $200,000 limit to "414(s) Compensation,"
for Plan Years beginning after December 31, 1988, Family Members shall include
only the affected Employee's spouse and any lineal descendants who have not
attained age 19 before the close of the Plan Year. Notwithstanding the
foregoing, with respect to Plan Years beginning prior to January 1, 1990,
compliance with the Regulations then in effect shall be deemed to be compliance
with this section.
B. The Employer Elective Contributions and "414(s)
Compensation" of all Family Members shall be disregarded for purposes of
determining the "Actual Deferral Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into account in Paragraph A, above.
C. If a Participant is required to be aggregated as a member
of more than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as one family
group in accordance with Paragraph (A) and (B), above.
4.5.4 For the purposes of Sections 4.5.1 and 4.6, a Highly
Compensated Participant and a Non-Highly Compensated Participant shall include
any Employee eligible to make a deferral election pursuant to Section 4.2,
whether or not such deferral election was made or suspended pursuant to Section
4.2.
4.5.5 For the purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(k), if two or more plans which include cash or
deferred arrangements are considered one plan for the purposes of Code Section
401(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii)as in effect for
Plan Years beginning after December 31, 1988), the cash or deferred arrangements
included in such plans shall be treated as one arrangement.
A. In addition, two or more cash or deferred arrangements may
be considered as a single arrangement for purposes of determining whether or not
such arrangements satisfy Code Sections 401(a)(4), 410(b) and 401(k). In such a
case, the cash or deferred arrangements included in such plans and the plans
including such arrangements shall be treated as one arrangement and as one plan
for purposes of this Section and Code Sections 401(a)(4), 410(b) and 401(k).
Plans may be aggregated under this Section 4.5.5 only if they have the same plan
year.
B. Notwithstanding the above, for Plan Years beginning after
December 31, 1988, an employee stock ownership plan described in Code Section
4975(e)(7) or 409 may not be combined with this Plan for purposes of determining
whether the employee stock ownership plan or this Plan satisfies this Section
and Code Sections 401(a)(4), 410(b) and 401(k).
4.5.6 For the purposes of this Section 4.5, if a Highly
Compensated Participant is a Participant under two or more cash or deferred
arrangements (other than a cash or deferred arrangement which is part of an
employee stock ownership plan as defined in Code Section 4975(e)(7) or 409 for
Plan Years beginning after December 31, 1988) of the Employer or an Affiliated
Employer, 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, if the cash or deferred arrangements have
different plan years, this section shall be applied by treating all cash or
deferred arrangements ending with or within the same calendar year as a single
arrangement.
4.6 Adjustment to Actual Deferral Percentage Tests. In the event that the
initial allocations of the Employer's Elective Contributions made pursuant to
Section 4.4 do not satisfy one of the tests set forth in Section 4.5.1, above,
for Plan Years beginning after December 31, 1986, the Administrator shall adjust
Excess Contributions pursuant to the options set forth below:
4.6.1 On or before the fifteenth day of the third month following
the end of each Plan Year, the Highly Compensated Participant having the highest
actual deferral ratio shall have his portion of Excess Contributions distributed
to him and/or at his election recharacterized as a voluntary Employee
contribution pursuant to Section 4.12 until one of the tests set forth in
Section 4.5.1, above, is satisfied, or until his actual deferral ratio equals
the actual deferral ratio of the Highly Compensated Participant having the
second highest actual deferral ratio. This process shall continue until one of
the tests set forth in Section 4.5.1, above, is satisfied.
A. For each Highly Compensated Participant, the amount of
Excess Contributions is equal to the Elective Contributions on behalf of such
Highly Compensated Participant (determined prior to the application of this
section) minus the amount determined by multiplying the Highly Compensated
Participant's actual deferral ratio (determined after application of this
section) by his "414(s) Compensation." However, in determining the amount of
Excess Contributions to be distributed and/or recharacterized with respect to an
affected Highly Compensated Participant as determined herein, such amount shall
be reduced by any Excess Deferred Compensation previously distributed to such
affected Highly Compensated Participant for his taxable year ending with or
within such Plan Year.
B. With respect to the distribution of Excess Contributions
pursuant to this Section 4.6.1, such distribution: (i) may be postponed but not
later than the close of the Plan Year following the Plan Year to which they are
allocable; (ii) shall be adjusted for Income; and (iii) shall be designated by
the Employer as a distribution of Excess Contributions (and Income).
C. With respect to the recharacterization of Excess
Contributions pursuant to this Section 4.6.3, such recharacterized amounts:
(1) Shall be deemed to have occurred on the date on
which the last of those Highly Compensated Participants with Excess
Contributions to be recharacterized is notified of the recharacterization and
the tax consequences of such recharacterization;
(2) Shall not exceed the amount of Deferred
Compensation on behalf of any Highly Compensated Participant for any Plan
Year;
(3) Shall be treated as voluntary Employee
contributions for purposes of Code Section 401(a)(4) and Regulation
1.401(k)-l(b). However, for purposes of Sections 2.2 and 4.4.4, above,
recharacterized Excess Contributions continue to be treated as Employer
contributions that are Deferred Compensation. For Plan Years beginning after
December 31, 1988, Excess Contributions recharacterized as voluntary Employee
contributions shall continue to be nonforfeitable and subject to the same
distribution rules provided for in Section 4.2.3, above;
(4) Are not permitted if the amount recharacterized
plus voluntary Employee contributions actually made by such Highly Compensated
Participant, exceed the maximum amount of voluntary Employee contributions
(determined prior to application of Section 4.7.1) that such Highly Compensated
Participant is permitted to make under the Plan in the absence of
recharacterization; and
(5) Shall be adjusted for Income.
D. Any distribution and/or recharacterization of less than the
entire amount of Excess Contributions shall be treated as a pro rata
distribution and/or recharacterization of Excess Contributions and Income.
E. The determination and correction of Excess Contributions of
a Highly Compensated Participant whose actual deferral ratio is determined under
the family aggregation rules shall be accomplished by reducing the actual
deferral ratio as required herein, and the Excess Contributions for the family
unit shall then be allocated among the Family members in proportion to the
Elective Contributions of each Family Member that were combined to determine the
group actual deferral ratio. Notwithstanding the foregoing, with respect to Plan
Years beginning prior to January 1, 1990, compliance with the Regulations then
in effect shall be deemed to be compliance with this section.
4.6.2 Within twelve (12) months after the end of the Plan Year,
the Employer may make a special Qualified Non-Elective Contribution on behalf of
Non-Highly Compensated Participants in an amount sufficient to satisfy one of
the tests set forth in Section 4.5.1, above. Such contribution shall be
allocated to the Participant's Elective Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly Compensated
Participant's Compensation for the year bears to the total Compensation of all
Non-Highly Compensated Participants.
4.6.3 If during a Plan Year the projected aggregate amount of
Elective Contributions to be allocated to all Highly Compensated Participants
under this Plan would, by virtue of the tests set forth in Section 4.5.1, above,
cause the Plan to fail such tests, then the Administrator may automatically
reduce proportionately or in the order provided in Section 4.6.1, above, each
affected Highly Compensated Participant's deferral election made pursuant to
Section 4.2, above, by an amount necessary to satisfy one of the tests set forth
in Section 4.5.1, above.
4.7 Actual Contribution Percentage Tests.
4.7.1 The "Actual Contribution Percentage" for Plan Years
beginning after December 31, 1986 for the Highly Compensated Participant group
shall not exceed the greater of:
A. 125 percent of such percentage for the Non-Highly
Compensated Participant group; or
B. The lesser of 200 percent of such percentage for the
Non-Highly Compensated Participant group, or such percentage for the Non-Highly
Compensated Participant group plus 2 percentage points. However, for Plan Years
beginning after December 31, 1988, to prevent the multiple use of the
alternative method described in this section and Code Section 401(m)(9)(A), any
Highly Compensated Participant eligible to make elective deferrals pursuant to
Section 4.2 or any other cash or deferred arrangement maintained by the Employer
or an Affiliated Employer and to make Employee contributions or to receive
matching contributions under this Plan or under any other plan maintained by the
Employer or an Affiliated Employer shall have his actual contribution ratio
reduced pursuant to Regulation 1.401(m)-2. The provisions of Code Section 401(m)
and Regulations 1.401(m)-l(b) and 1.401(m)-2 are incorporated herein by
reference.
4.7.2 For the purposes of this Section and Section 4.8, the
"Actual Contribution Percentage" for a Plan Year means, with respect to the
Highly Compensated Participant group and Non-Highly Compensated Participant
group, the average of the ratios (calculated separately for each Participant in
each group) of:
A. The sum of voluntary Employee contributions made
pursuant to Section 4.12 and Excess Contributions recharacterized as
voluntary Employee contributions pursuant to Section 4.6.1, above, on behalf
of each such Participant for such Plan Year; to
B. The Participant's "414(s) Compensation" for such Plan
Year.
4.7.3 For purposes of determining the "Actual Contribution
Percentage" and the amount of Excess Aggregate Contributions pursuant to Section
4.8.3, the Administrator may elect to take into account, with respect to
Employees eligible to have voluntary Employee contributions pursuant to Section
4.12 allocated to their accounts, elective deferrals (as defined in Regulation
1.402(g)-l(b)) and qualified non-elective contributions (as defined in Code
Section 401(m)(4)(C)) contributed to any plan maintained by the Employer. Such
elective deferrals and qualified non-elective contributions shall be treated as
Employer matching contributions subject to Regulation 1.401(m)-l(b)(5) which is
incorporated herein by reference. However, for Plan Years beginning after
December 31, 1988, the Plan Year must be the same as the plan year of the plan
to which the elective deferrals and the qualified non-elective contributions are
made.
4.7.4 For the purpose of determining the actual contribution ratio
of a Highly Compensated Employee who is subject to the Family Member aggregation
rules of Code Section 414(q)(6) because such Employee 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, the following shall apply:
A. The combined actual contribution ratio for the family group
(which shall be treated as one Highly Compensated Participant) shall be
determined by aggregating voluntary Employee contributions made pursuant to
Section 4.12, Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 4.6.1 and "414(s) Compensation" of all
eligible Family Members (including Highly Compensated Participants). However, in
applying the $200,000 limit to "414(s) Compensation" for Plan Years beginning
after December 31, 1988, Family Members shall include only the affected
Employee's spouse and any lineal descendants who have not attained age 19 before
the close of the Plan Year. Notwithstanding the foregoing, with respect to Plan
Years beginning prior to January 1, 1990, compliance with the Regulations then
in effect shall be deemed to be compliance with this section.
B. The voluntary Employee contributions made pursuant to
Section 4.12, Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 4.6.1, above, and "414(s) Compensation" of all
Family Members shall be disregarded for purposes of determining the "Actual
Contribution Percentage" of the Non-Highly Compensated Participant group except
to the extent taken into account in Section (1) above.
C. If a Participant is required to be aggregated as a member
of more than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as one family
group in accordance with Paragraphs (A) and (B), above.
4.7.5 For purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(m), if two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made are treated as one plan
for purposes of Code Sections 401(a)(4) or 410(b) (other than the average
benefits test under Code Section 410(b)(2)(A)(ii) as in effect for Plan Years
beginning after December 31, 1988), such plans shall be treated as one plan. In
addition, two or more plans of the Employer to which matching contributions,
Employee contributions, or both, are made may be considered as a single plan for
purposes of determining whether or not such plans satisfy Code Sections
401(a)(4), 410(b) and 401(m). In such a case, the aggregated plans must satisfy
this Section and Code Sections 401(a)(4), 410(b) and 401(m) as though such
aggregated plans were a single plan. Plans may be aggregated under this Section
4.7.5 for Plan Years beginning after December 31, 1988, only if they have the
same plan year. Notwithstanding the foregoing, for Plan Years beginning after
December 31, 1988, an employee stock ownership plan described in Code Section
4975(e)(7) or 409 may not be aggregated with this Plan for purposes of
determining whether the employee stock ownership plan or this Plan satisfies
this Section and Code Sections 401(a)(4), 410(b) and 401(m).
4.7.6 If a Highly Compensated Participant is a Participant under
two or more plans (other than an employee stock ownership plan as defined in
Code Section 4975(e)(7) or 409 for Plan Years beginning after December 31, 1988)
which are maintained by the Employer or an Affiliated Employer to which matching
contributions, Employee contributions, or both, are made, all such contributions
on behalf of such Highly Compensated Participant shall be aggregated for
purposes of determining such Highly Compensated Participant's actual
contribution ratio. However, for Plan Years beginning after December 31, 1988,
if the plans have different plan years, this section shall be applied by
treating all plans ending with or within the same calendar year as a single
plan.
4.7.7 For purposes of Sections 4.7.1 and 4.8, above, a Highly
Compensated Participant and Non-Highly Compensated Participant shall include any
Employee eligible to have voluntary Employee contributions pursuant to Section
4.12 (whether or not voluntary Employee contributions are made), below,
allocated to his account for the Plan Year.
4.8 Adjustment To Actual Contribution Percentage Tests.
4.8.1 In the event that, for Plan Years beginning after December
31, 1986, the "Actual Contribution Percentage" for the Highly Compensated
Participant group exceeds the "Actual Contribution Percentage" for the
Non-Highly Compensated Participant group pursuant to Section 4.7.1, above, the
Administrator (on or before the fifteenth day of the third month following the
end of the Plan Year, but in no event later than the close of the following Plan
Year) shall direct the Trustee to distribute to the Highly Compensated
Participant having the highest actual contribution ratio, his portion of Excess
Aggregate Contributions (and Income allocable to such contributions) until
either one of the tests set forth in Section 4.7.1, above, is satisfied, or
until his actual contribution ratio equals the actual contribution ratio of the
Highly Compensated Participant having the second highest actual contribution
ratio. This process shall continue until one of the tests set forth in Section
4.7.1, above, is satisfied.
4.8.2 Any distribution of less than the entire amount of Excess
Aggregate Contributions (and Income) shall be treated as a pro rata distribution
of Excess Aggregate Contributions and Income. Distribution of Excess Aggregate
Contributions shall be designated by the Employer as a distribution of Excess
Aggregate Contributions (and Income).
4.8.3 For each Highly Compensated Participant, the amount of
Excess Aggregate Contributions is equal to the voluntary Employee contributions
made pursuant to Section 4.12, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 4.6.1, above, and any qualified
non-elective contributions or elective deferrals taken into account pursuant to
Section 4.7.3, above, on behalf of the Highly Compensated Participant
(determined prior to the application of this section) minus the amount
determined by multiplying the Highly Compensated Participant's actual
contribution ratio (determined after application of this section) by his "414(s)
Compensation." The actual contribution ratio must be rounded to the nearest
one-hundredth of one percent for Plan Years beginning after December 31, 1988.
In no case shall the amount of Excess Aggregate Contribution with respect to any
Highly Compensated Participant exceed the amount of voluntary Employee
contributions made pursuant to Section 4.12, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to Section 4.6.1,
above, and any qualified non-elective contributions or elective deferrals taken
into account pursuant to Section 4.7.3, above, on behalf of such Highly
Compensated Participant for such Plan Year.
4.8.4 The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated as voluntary
Employee contributions due to recharacterization for the plan year of any other
qualified cash or deferred arrangement (as defined in Code Section 401(k))
maintained by the Employer that ends with or within the Plan Year or which are
treated as voluntary Employee contributions due to recharacterization pursuant
to Section 4.6.1, above.
4.8.5 If the determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual contribution
ratio is determined under the family aggregation rules, then the actual
contribution ratio shall be reduced and the Excess Aggregate Contributions for
the family unit shall be allocated among the Family Members in proportion to the
sum of voluntary Employee contributions made pursuant to Section 4.12, Excess
Contributions recharacterized as voluntary Employee contributions pursuant to
Section 4.6.1, above, and any qualified non-elective contributions or elective
deferrals taken into account pursuant to Section 4.7.3, above, of each Family
member that were combined to determine the group actual contribution ratio.
Notwithstanding the foregoing, with respect to Plan Years beginning prior to
January 1, 1990, compliance with the Regulations then in effect shall be deemed
to be compliance with this section.
4.8.6 If during a Plan Year the projected aggregate amount of
voluntary Employee contributions and Excess Contributions to be recharacterized
as voluntary Employee contributions to be allocated to all Highly Compensated
Participants under this Plan would, by virtue of the tests set forth in Section
4.7.1, above, cause the Plan to fail such tests, then the Administrator may
automatically reduce proportionately or in the order provided in Section 4.8.1,
above, each affected Highly Compensated Participant's projected share of such
contributions by an amount necessary to satisfy one of the tests set forth in
Section 4.7.1, above.
4.8.7 Notwithstanding the above within twelve (12) months after
the end of the Plan Year, the Employer may make a special Qualified Non-Elective
Contribution on behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy one of the tests set forth in Section 4.7.1, above. Such
contribution shall be allocated to the Participant's Elective Account of each
Non-Highly Compensated Participant in the same proportion that each Non-Highly
Compensated Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants. A separate accounting
shall be maintained for the purpose of excluding such contributions from the
"Actual Deferral Percentage" tests pursuant to Section 4.5.1, above.
4.9 Maximum Annual Additions.
4.9.1 Notwithstanding any provision in this Plan to the contrary,
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).
4.9.2 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 4.9.1(b) above shall not apply to 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
any amount otherwise treated as an "annual addition" under Code Section
415(1)(1).
4.9.3 For purposes of applying the limitations of Code Section
415, the transfer of funds from one qualified plan to another is not an "annual
addition." In addition, the following are not Employee contributions for the
purposes of Section 4.9.2(b): (a) Rollover contributions (as defined in Code
Sections 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3)); (b) Repayments of loans
made to a Participant from the Plan; (c) Repayments of distributions received by
an Employee pursuant to Code Section 411(a)(7)(B) (cash-outs); (d) repayments of
distributions received by an Employee pursuant to Code Section 411(a)(3)(D)
(mandatory contributions); and (e) Employee contributions to a simplified
employee pension excludable from gross income under Code Section 408(k)(6).
4.9.4 For purposes of applying the limitations of Code
Section 415, the "limitation year" shall be the Plan Year.
4.9.5 The dollar limitation under Code Section 415(b)(1)(A) stated
in Section 4.9.1(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.
4.9.6 For the purpose of this Section 4.9, 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.
4.9.7 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.
4.9.8 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.
4.9.9 If a Participant participates in:
A. 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. 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. 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 (1) the
maximum "annual additions" for the "limitation year" minus any "annual
additions" previously credited under Paragraphs (A) or (b) of this Section
4.4.9, multiplied by (2) 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
Section.
4.9.10 For Plan Years beginning on or before December 31,
1999:
A. 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.
B. 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 the 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); provided, 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.
C. 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).
(1) The maximum aggregate amount in any "limitation
years" 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.
(2) 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.
D. 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 Paragraphs B and C, above, unless the extra minimum allocation is
being provided pursuant to Section 4.4. 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.
4.9.11 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.
4.10 Adjustment For Excessive Annual Additions.
4.10.1 For purposes of this Section 4.10, the term:
A. "Excess Amount" shall mean, for each Participant in each
limitation year, the excess, if any, of (i) the "annual additions" which would
be credited to the Participant's account under the terms of this Plan without
regard to the limitations of Code Section 415, over (ii) the maximum "annual
additions" permitted by Code Section 415, as determined pursuant to Section 4.9,
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, determined after such excess amounts have been
reallocated to all Participants to the extent permitted by Section 415 in
accordance with the provisions of Section 4.10.2, below. the amount allocated to
the Section 415 Suspense Account shall not share in any earnings or losses of
the Trust Fund.
4.10.2 If the "annual additions" under this Plan would cause the
maximum "annual additions" permitted under this Plan to be exceeded for any
Participant, including by reason of (i) the allocation of Forfeitures, (ii) a
reasonable error in estimating a Participant's Compensation, (iii) 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 imposed on such deferrals, or (iv) other facts and circumstances to
which Treasury Regulations Section 1.415-6(b)(6) shall be applicable, then the
Administrator shall:
A. Allocate and reallocate such excess amounts to other
Participants in accordance with Section 4.4, above, but subject to the limits
on "annual additions" imposed by Section 4.9, above;
B. Allocate to the Section 415 Suspense Account any
"excess amount" remaining after application of Paragraph A, above; and
C. Allocate and reallocate the amount in 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, then in
succeeding limitation years) to all Participants in the Plan before any Employer
or Employee contribution 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.
D. The Plan may not distribute excess amounts, other
than voluntary Employee contributions, to Participants or Former Participants.
4.11 Transfers From Qualified Plans.
4.11.1 With the consent of the Administrator, amounts may be
transferred from other qualified plans (the "Rollover Funds") by Participants,
provided that the trust from which such funds are transferred permits the
transfer to be made and the transfer will not jeopardize the tax exempt status
of the Plan or Trust or create adverse tax consequences for the Employer. The
amounts transferred may be set up in a separate account herein referred to as a
"Participant's Rollover Account." All Rollover Funds shall be fully Vested at
all times and shall not be subject to Forfeiture for any reason.
4.11.2 Each Participant's Rollover Funds shall be held by the
Trustee pursuant to the provisions of this Plan and may not be withdrawn by, or
distributed to the Participant, in whole or in part, except as provided in
Sections 4.11.3 and 4.11.4, below.
4.11.3 Except as permitted by Regulations (including Regulation
1.411(d)-4), amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-l(g)(3)), including amounts treated as elective
contributions, which are transferred from another qualified plan in a
plan-to-plan transfer shall be subject to the distribution limitations provided
for in Regulation 1.401(k)-l(d).
4.11.4 At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits, the fair
market value of the Participant's Rollover Funds shall be used to provide
additional benefits to the Participant or his Beneficiary. Any distributions of
amounts held in a Participant's Rollover Funds shall be made in a manner which
is consistent with and satisfies the provisions of Section 6.5, including, but
not limited to, all notice and consent requirements of Code Section 411(a)(11)
and the Regulations thereunder. Furthermore, such amounts shall be considered as
part of a Participant's benefit in determining whether an involuntary cash-out
of benefits without Participant consent may be made.
4.11.5 The Administrator may direct that employee transfers made
after a valuation date be segregated into a separate account for each
Participant in a federally insured savings account, certificate of deposit in a
bank or savings and loan association, money market certificate, or other short
term debt security acceptable to the Trustee until such time as the allocations
pursuant to this Plan have been made, at which time they may remain segregated
or be invested as part of the general Trust Fund, to be determined by the
Administrator.
4.11.6 All Rollover Funds held in accounts under this Plan may be
treated as if those funds were held in a Directed Investment Account pursuant to
Section 4.13.
4.11.7 For purposes of this Section, the term "qualified plan"
shall mean any tax qualified plan under Code Section 401(a). The term "amounts
transferred from other qualified plans" shall mean: (a) amounts transferred to
this Plan directly from another qualified plan; (b) lump-sum distributions
received by an Employee from another qualified plan which are eligible for tax
free rollover to a qualified plan and which are transferred by the Employee to
this Plan within sixty (60) days following his receipt thereof; (c) amounts
transferred to this Plan from a conduit individual retirement account provided
that the conduit individual retirement account has no assets other than assets
which (1) were previously distributed to the Employee by another qualified plan
as a lump-sum distribution (2) were eligible for tax-free rollover to a
qualified plan and (3) were deposited in such conduit individual retirement
account within sixty (60) days of receipt thereof and other than earnings on
said assets; and (d) amounts distributed to the Employee from a conduit
individual retirement account meeting the requirements of clause (c) above, and
transferred by the Employee to this Plan within sixty (60) days of his receipt
thereof from such conduit individual retirement account.
4.11.8 Prior to accepting any transfers to which this Section
applies, the Administrator may require the Employee to establish that the
amounts to be transferred to this Plan meet the requirements of this Section and
may also require the Employee to provide an opinion of counsel satisfactory to
the Employer that the amounts to be transferred meet the requirements of this
Section.
4.11.9 This Plan shall not accept any direct or indirect transfers
(as that term is defined and interpreted under Code Section 401(a)(11) and the
Regulations thereunder) from a defined benefit plan, money purchase plan
(including a target benefit plan), stock bonus or profit sharing plan which
would otherwise have provided for a life annuity form of payment to the
Participant.
4.11.10 Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan (or a transaction
having the effect of such a transfer) shall only be permitted if it will not
result in the elimination or reduction of any "Section 411(d)(6) protected
benefit" as described in Section 8.1, below.
4.12 Directed Investment Account.
4.12.1 The Administrator, in its sole discretion, may determine
that all Participants be permitted to direct the Trustee as to the investment of
all or a portion of the Vested interest in any one or more of their individual
account balances. If such authorization is given, Participants may, subject to a
procedure established by the Administrator and applied in a uniform
nondiscriminatory manner, direct the Trustee in writing to invest the Vested
portion of their account in specific assets, specific funds or other investments
permitted under the Plan and the directed investment procedure. That portion of
the Vested account of any Participant so directing will thereupon be considered
a Directed Investment Account, which shall not share in Trust Fund earnings.
4.12.2 A separate Directed Investment Account shall be established
for each Participant who has directed an investment. Transfers between the
Participant's regular account and his Directed Investment Account shall be
charged and credited as the case may be to each account. The Directed Investment
Account shall not share in Trust Fund earnings, but it shall be charged or
credited as appropriate with the net earnings, gains, losses and expenses as
well as any appreciation or depreciation in market value during each Plan Year
attributable to such account.
4.13 Qualified Voluntary Employee Contributions. Any voluntary employee
contribution made in cash after December 31, 1981, attributable to taxable years
ending before January 1, 1987, shall be treated as a "Qualified Voluntary
Employee Contribution" within the meaning of Code Section 219(e)(2) as it
existed prior to the enactment of the Tax Reform Act of 1986, and held in a
separate Qualified Voluntary Employee Contribution Account.
4.13.1 The balance in each Participant's Qualified Voluntary
Employee Contribution Account shall be fully Vested at all times and shall not
be subject to Forfeiture for any reason.
4.13.2 A Participant may, upon written request delivered to the
Administrator, make withdrawals from his Qualified Voluntary Employee
Contribution Account. Any distribution shall be made in a manner which is
consistent with and satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code Section 411(a)(11) and
the Regulations thereunder.
4.13.3 At Normal Retirement Date, or such other date when the
Participant or the Participant's Beneficiary shall be entitled to receive
benefits, the fair market value of the Qualified Voluntary Employee Contribution
Account shall be used to provide additional benefits to the Participant or the
Participant's Beneficiary.
4.13.4 Unless the Administrator directs Qualified Voluntary
Employee Contributions made pursuant to this Section be segregated into a
separate account for each Participant in a federally-insured savings account,
certificate of deposit in a bank or savings and loan association, money market
certificate or other short-term debt security acceptable to the Trustee, they
shall be invested as part of the general Trust Fund and share in earnings and
losses.
4.13.5 All amounts allocated to a Qualified Voluntary Employee
Contribution Account may be treated as a Directed Investment Account pursuant to
Section 4.12, above.
4.14 USERRA. Notwithstanding any provision of this Plan to the contrary,
contributions, benefits, and service credit with respect to "qualified military
service" (as defined in Section 414(u) of the Code) will be provided in
accordance with Code Section 414(u).
5. VALUATIONS
5.1 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.
5.2 Method Of Valuation. In determining the fair market value of
securities held in the Trust Fund which are listed on a registered stock
exchange, the Administrator shall direct the Trustee to value the same at the
prices they were last traded on such exchange preceding the close of business on
the "valuation date." If such securities were not traded on the "valuation
date," or if the exchange on which they are traded was not open for business on
the "valuation date," then the securities shall be valued at the prices at which
they were last traded prior to the "valuation date." Any unlisted security held
in the Trust Fund shall be valued at its bid price next preceding the close of
business on the "valuation date," which bid price shall be obtained from a
registered broker or an investment banker. In determining the fair market value
of assets other than securities for which trading or bid prices can be obtained,
the Trustee may appraise such assets itself, or in its discretion, employ one or
more appraisers for that purpose and rely on the values established by such
appraiser or appraisers.
6. DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 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 4.4, 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 Elective Account in accordance with Section 6.5.
6.2 Determination Of Benefits Upon Death.
6.2.1 Upon the death of a Participant before his Retirement Date
or other termination of his employment, all amounts credited to such
Participant's Elective Account shall become fully Vested. The Administrator
shall direct the Trustee, in accordance with the provisions of Sections 6.6 and
6.7, to distribute the value of the deceased Participant's accounts to the
Participant's Beneficiary.
6.2.2 Upon the death of a Former Participant, the Administrator
shall direct the Trustee, in accordance with the provisions of Sections 6.6 and
6.7, to distribute any remaining Vested amounts credited to the accounts of a
deceased Former Participant to such Former Participant's Beneficiary.
6.2.3 Any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant shall be taken into
account in determining the amount of the death benefit.
6.2.4 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.
6.2.5 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. If a Participant designates a Beneficiary other than his
spouse in accordance with the preceding Paragraph A, then the designation of
that 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.
6.2.6 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.
6.3 Determination of Benefits on Disability. In the event of the
Participant's Total and Permanent Disability prior to the Participant's
Retirement Date or other termination of the Participant's employment with the
Employer, all amounts credited to such Participant's Combined Account shall
become fully Vested. In the event of the Participant's Total and Permanent
Disability, the Trustee, in accordance with the provisions of Sections 6.5 and
6.7 of this Plan, shall distribute to such Participant's Combined Account as
thought the Participant had retired.
6.4 Determination Of Benefits Upon Termination.
6.4.1 On or before the Anniversary Date coinciding with or
subsequent to the termination of a Participant's employment for any reason other
than death or retirement, the Administrator may direct the Trustee to segregate
the amount of the Vested portion of such Terminated Participant's Elective
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
Elective Account is not segregated, the amount shall remain in a separate
account for the Terminated Participant and share in allocations pursuant to
Section 4.4 until such time as a distribution is made to the Terminated
Participant. For purposes of this Section 6.4, if the value of a Terminated
Participant's Vested benefit is zero, then the Terminated Participant shall be
deemed to have received a distribution of such Vested benefit upon such
Participant's termination of employment with the Employer.
6.4.2 In the event that the amount of the Vested portion of the
Terminated Participant's Elective 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 6.5. 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.
6.4.3 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, Early or Normal Retirement). If the
value of a Terminated Participant's Vested benefit derived from Employer and
Employee contributions does not exceed $5,000 and has never exceeded $5,000 at
the time of any prior distribution, the Administrator shall direct the Trustee
to cause the entire Vested benefit to be payable in a single lump sum to such
Participant.
6.4.4 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.
6.4.5 The Vested portion of any Participant's Account shall be a
percentage of the total amount credited to the Participant's Account determined
on the basis of the Participant's number of Years of Service. Subject to Section
6.4.6 and 6.4.7, below:
A. Each Participant always shall be one hundred percent
(100%) vested in such Participant's Deferred Compensation under this Plan.
B. Each Participant's Vested percentage of the Employer's
Non-Elective Contribution made pursuant to Section 4.1.1B, above, shall be
determined according to the following schedule:
Employer Matching Non-Elective Contributions
(Section 4.1.1B)
<PAGE>
Years of Service
Less than 1
1
2
3
4
5 or more
Vested Percentage
0%
20%
40%
60%
80%
100%
<PAGE>
C. A Participant's Vested percentage of the Employer's
Non-Elective Contribution made pursuant to Section 4.1.1C, above, shall be
determined pursuant to the following schedule:
Employer Discretionary Non-Elective Contributions
(Section 4.1.1C)
<PAGE>
Years of Service
Less than 2
2
3
4
5
6
7 or more
Vested Percentage
0
20%
30%
40%
60%
80%
100%
<PAGE>
6.4.6 Employer hereby acknowledges that (a) Citizens State Bank of
Santa Paula ("Citizens Bank") formerly sponsored that certain "Citizens State
Bank of Santa Paula Profit Sharing 401(k) Plan" (the "Citizens Plan"), and (b)
in transactions that closed effective October 1, 1997, (i) Citizens Bank merged
with and into Employer, (ii) the Citizens Plan was merged with and into this
Plan, and (iii) the assets formerly held in the trust under the Citizens Plan
were merged into the trust under this Plan; (c) the Citizens Plan provided that
each participant in that plan (i) was 100% vested in "Employer Matching
Contributions" allocated to the participant's account under that plan, and (ii)
became vested, in accordance with the following schedule, in "Employer
Discretionary Contributions" allocated to the participant's account under the
Citizens Plan:
Vesting Schedule B Former Employer Discretionary Contributions Under
Citizens Plan
<PAGE>
Years of Service
0
1
2
3
4
5 or more
Vesting Percentage
0%
33.33%
66.67%
100.00%
100.00%
100.00%
<PAGE>
Therefore, notwithstanding any other provision of this Plan to the contrary,
each Participant who formerly participated in the Citizens State Bank of Santa
Paula Profit Sharing 401(k) Plan (the "Citizens Plan") and who had an account
balance which was held under that Citizens Plan and has been merged into this
Plan shall become vested in such account balance as follows:
A. That portion of such Participant's account balance
attributable to "Employer Matching Contributions," as defined under the
Citizens Plan, shall be and remain one hundred percent (100%) vested in such
contributions; and
B. That portion of such Participant's account balance
attributable to "Employer Discretionary Contributions" (as defined in the
Citizens Plan) shall continue to be and become vested in such contributions in
accordance with the following schedule:
Vesting Schedule B Former Employer Discretionary Contributions Under
Citizens Plan
<PAGE>
Years of Service
0
1
2
3
4
5 or more
Vesting Percentage
0%
33.33%
66.67%
100.00%
100.00%
100.00%
<PAGE>
Each such Participant shall be and become vested in all other contributions
allocated to such Participant's accounts under this Plan on or after October 1,
1997, in accordance with the regular vesting schedules under this Plan for such
other contributions, as set forth in Sections 6.4.5, above.
6.4.7 The Employer acknowledges that effective as of January 1,
1999, (i) PACIFIC CAPITAL BANCORP, a California corporation with offices in
Salinas, California (the "Merged Corporation"), is merging with and into the
Employer, and (ii) the PACIFIC CAPITAL BANCORP 401(k) PROFIT SHARING PLAN (the
"Merged Plan") sponsored by the Merged Corporation is merging into this Plan.
With respect to the account balance of each person who was a participant in the
Merged Plan as of the effective date of that merger, (a) the regular Vesting
schedules set forth in Section 6.4.5, above, shall apply only to contributions
allocated to such Participant's account under this Plan with respect to Plan
Years beginning on or after January 1, 1999, (b) all contributions, allocations,
and other additions to such Participant's account balance under the Merged Plan
constituting (i) Employee Elective Contributions shall be at all times fully
Vested and non-forfeitable and (ii) attributed to all other Employer
contributions and shall continue to be subject to the following vesting schedule
which was in effect under the Merged Plan:
Alternate Regular Vesting Schedule - Pacific Capital Bancorp Accounts
(for all Employee Contributions, except Employee Elective Contributions, as
of 12/31/98)
<PAGE>
Years of Service
0 to 1
2
3
4
5
Vested Percentage
20%
40%
60%
80%
100%
<PAGE>
6.4.8 Notwithstanding the vesting schedule provided for in
Sections 6.4.5, 6.4.6, or 6.4.7, above, for any Top Heavy Plan Year, the Vested
portion of the Participant's Account consisting of contributions made pursuant
to Sections 4.1.1B or 4.1.1C, above, for any Participant who has an Hour of
Service after the Plan becomes top heavy shall be a percentage of the total
amount credited to the Participant's Account determined on the basis of the
Participant's number of Years of Service according to the following schedule:
Top Heavy Vesting Schedule
Years of Service Percentage Vesting
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 100%
6.4.9 If any Former Participant shall be re-employed by the
Employer before a 1-Year Break in Service occurs, then that Participant shall
continue to participate in the Plan in the same manner as if such termination
had not occurred.
A. If any Former Participant shall be re-employed 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 re-employment, 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 re-employed 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 re-employment of such Former
Participant. If a distribution occurs for any reason other than a separation
from service, the time for repayment may not end earlier than five (5) years
after the date of distribution. 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 an amount which is sufficient to restore any such forfeited
Accounts provided, however, that if a discretionary contribution is made for
such year pursuant to Section 4.1.1C, above, such contribution shall first be
applied to restore any such Accounts and the remainder shall be allocated in
accordance with Section 4.4, above.
B. If any Former Participant is re-employed after a 1-Year
Break in Service has occurred, Years of Service shall include Years of Service
prior to that Participant's 1-Year Break in Service subject to the following
rules:
(1) If a Former Participant has a 1-Year Break in
Service, that Participant's pre-break and post-break service shall be used for
computing Years of Service for eligibility and for Vesting purposes only after
that Participant has been employed for one (1) Year of Service following the
date of re-employment 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 subparagraph
(1), above, if the Former Participant's 1-Year Breaks in Service equal or exceed
the greater of (a) five (5), or (b) the aggregate number of the Former
Participant's 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 any
Years of Service before a 1-Year Break in Service disregarded pursuant to
subparagraph (2), above, completes one (1) Year of Service for eligibility
purposes following re-employment with the Employer, such Former Participant
shall participate in the Plan retroactively from such date of re-employment.
(5) If a Former Participant who has not had any
Years of Service before a 1-Year Break in Service disregarded pursuant to
subparagraph (2), above, completes a Year of Service (a 1-Year Break in Service
previously occurred, but employment had not terminated), then such Participant
shall participate in the Plan retroactively from the first day of the Plan Year
during which one (1) year of Service was completed.
6.5 Distribution Of Benefits.
6.5.1 The Administrator, pursuant to the election of the
Participant, shall direct to 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 in cash or in property;
B. Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments. In order to provide such installment
payments, the Administrator may (1) segregate the aggregate amount thereof in a
separate, federally insured savings account, certificate of deposit in a bank or
savings and loan association, money market certificate or other liquid
short-term security or (2) purchase a nontransferable annuity contract for a
term certain (with no life contingencies) providing for such payment. The period
over which such payment is to be made shall not extend beyond the Participant's
life expectancy (or the life expectancy of the Participant and his designated
Beneficiary).
6.5.2 Any distribution to a Participant who has a benefit which
exceeds, or has ever exceeded, $5,000 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 6.5.3.
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
6.5.2, 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.
6.5.3 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
in accordance with Paragraph B, below, not later than:
(1) With respect to a Participant who is not a
"five percent owner" (as defined in Section 1.31.3, above), 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 from employment with the Employer; or
(2) With respect to a Participant who is a "five
percent owner" (as defined in Section 1.31.3, above), April 1 of the calendar
year following the calendar year in which such five percent owner attains age
70-1/2 (without regard to whether such five percent owner actually retires from
employment with the Employer).
B. Distributions shall be deemed to have satisfied the
requirements of this Paragraph B only if:
(1) Either (i) the entire account balance of the
Participant under the Plan shall have been distributed to the Participant or the
Participant's Beneficiaries, or (ii) distributions to the Participant (or the
Participant's beneficiary) commence as of the applicable required beginning date
under Paragraph A, above, and continue over a period certain measured by the
life expectancy of the Participant (or the life expectancies of the Participant
and the Participant's designated Beneficiaries).
(2) 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.
(3) 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 6.5 as of his
date of death. 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. 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: (a) December 31st of the calendar year
immediately following the calendar year in which the Participant died; or (b)
December 31st of the calendar year in which the Participant would have attained
age 70 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.
(4) For purposes of this Section 6.5, 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.
6.6 Distribution Of Benefits Upon Death.
6.6.1 The death benefit payable pursuant to Section 6.2 shall be
paid to the Participant's Beneficiary within a reasonable time after the
Participant's death by either of the following methods, as elected by the
Participant (or if no election has been made prior to the Participant's death,
by his Beneficiary) subject, however, to the rules specified in Section 6.6.2:
A. One lump-sum payment in cash or in property;
B. Payment in monthly, quarterly, semi-annual, or annual
cash installments over a period to be determined by the Participant or his
Beneficiary. After periodic installments commence, the Beneficiary shall have
the right to direct the Trustee to reduce the period over which such periodic
installments shall be made, and the Trustee shall adjust the cash amount of such
periodic installments accordingly.
6.6.2 In the event the death benefit payable pursuant to Section
6.2 is payable in installments, then, upon the death of the Participant, the
Administrator may direct the Trustee to segregate the death benefit into a
separate account, and the Trustee shall invest such segregated account
separately, and the funds accumulated in such account shall be used for the
payment of the installments.
6.6.3 Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant made on or after January 1, 1985
shall be made in accordance with the following requirements and shall otherwise
comply with Code Section 401(a)(9) and the Regulations thereunder.
A. If it is determined pursuant to such 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 Section 6.5 as of his date of death. 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, the 5-year distribution requirement of the
preceding section shall not apply to any portion of the deceased Participant's
interest which is payable to or for the benefit of a designated Beneficiary. In
such event, such portion. may, at the election of the Participant (or the
Participant's designated Beneficiary), be distributed over a period not
extending beyond the life expectancy of such designated Beneficiary provided
such distribution begins not later than December 31st of the calendar year
immediately following the calendar year in which the Participant died. However,
in the event the Participant's spouse (determined as of the date of the
Participant's death) is his Beneficiary, the requirement that distributions
commence within one year of a Participant's death shall not apply. In lieu
thereof, distributions 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 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.
6.6.4 For purposes of Section 6.6.2, above, the election by a
designated Beneficiary to be excepted from the 5-year distribution requirement
must be made no later than December 31st of the calendar year following the
calendar year of the Participant's death. Except, however, with respect to a
designated Beneficiary who is the Participant's surviving spouse, the election
must be made by the earlier of: (a) December 31st of the calendar year
immediately following the calendar year in which the Participant died or, if
later, the calendar year in which the Participant would have attained age 70 2;
or (b) December 31st of the calendar year which contains the fifth anniversary
of the date of the Participant's death. An election by a designated Beneficiary
must be in writing and shall be irrevocable as of the last day of the election
period stated herein. In the absence of an election by the Participant or a
designated Beneficiary, the 5-year distribution requirement shall apply.
6.6.5 Subject to the spouse's right of consent afforded under the
Plan, the restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have his death
benefits paid in an alternative method acceptable under Code Section 401(a) as
in effect prior to the enactment of the Tax Equity and Fiscal Responsibility Act
of 1982.
6.7 Time Of Segregation Or Distribution. Except as limited by Sections 6.5
and 6.6, 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.
6.8 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.
6.9 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.
6.10 Advance Distribution For Hardship.
6.10.1 The Administrator, at the election of the Participant,
shall direct the Trustee to distribute to any Participant in any one Plan Year
up to the lesser of 80% of his Participant's Elective Account valued as of the
last Anniversary Date or other valuation date or the amount necessary to satisfy
the immediate and heavy financial need of the Participant. Any distribution made
pursuant to this Section shall be deemed to be made as of the first day of the
Plan Year or, if later, the valuation date immediately preceding the date of
distribution, and the Participant's Elective Account shall be reduced
accordingly. Withdrawal under this Section shall be authorized only if the
distribution is on account of:
A. Expenses for medical care described in Code
Section 213(d) previously incurred by the Participant, his spouse, or any of
his dependents (as defined in Code Section 152) or necessary for these
persons to obtain medical care;
B. The costs directly related to the purchase of a
principal residence for the Participant (excluding mortgage payments);
C. Payment of tuition and related educational fees for
the next twelve (12) months of post-secondary education for the Participant,
his spouse, children, or dependents; or
D. Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on the mortgage of
the Participant's principal residence.
6.10.2 No distribution shall be made pursuant to this Section
unless the Administrator, based upon the Participant's representation and such
other facts as are known to the Administrator, determines that all of the
following conditions are satisfied:
A. The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant. The amount of the
immediate and heavy financial need may include any amounts necessary to pay any
federal, state, or local income taxes or penalties reasonably anticipated to
result from the distribution;
B. The Participant has obtained all distributions, other
than hardship distributions, and all nontaxable (at the time of the loan)
loans currently available under all plans maintained by the Employer;
C. The Plan, and all other plans maintained by the Employer,
provide that the Participant's elective deferrals and voluntary Employee
contributions will be suspended for at least twelve (12) months after receipt of
the hardship distribution or, the Participant, pursuant to a legally enforceable
agreement, will suspend his elective deferrals and voluntary Employee
contributions to the Plan and all other plans maintained by the Employer for at
least twelve (12) months after receipt of the hardship distribution; and
D. The Plan, and all other plans maintained by the Employer,
provide that the Participant may not make elective deferrals for the
Participant's taxable year immediately following the taxable year of the
hardship distribution in excess of the applicable limit under Code Section
402(g) for such next taxable year less the amount of such Participant's elective
deferrals for the taxable year of the hardship distribution.
6.10.3 Notwithstanding the above, for Plan Years beginning after
December 31, 1988, distributions from the Participant's Elective Account
pursuant to this Section shall be limited, as of the date of distribution, to
the Participant's Elective Account as of the end of the last Plan Year ending
before July 1, 1989, plus the total Participant's Deferred Compensation after
such date.
6.10.4 Any distribution made pursuant to this Section shall be
made in a manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent requirements
of Code Section 411(a)(11) and the Regulations thereunder.
6.11 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).
7. PLAN LOANS
7.1 Participant Loans.
7.1.1 Loans Permitted. The Trustee may, in the Trustee's
discretion, make loans to Participants and Beneficiaries under the following
circumstances: (a) loans shall be made available to all Participants and
Beneficiaries on a reasonably equivalent basis; (b) loans shall not be made
available to Highly Compensated Employees in an amount greater than the amount
made available to other Participants and Beneficiaries; (c) loans shall bear a
reasonable rate of interest; (d) loans shall be adequately secured; and (e)
shall provide for repayment over a reasonable period of time.
7.1.2 Loan Limit. Loans made pursuant to this Section (when added
to the outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of: (a) $50,000 reduced by the
excess (if any) of the highest outstanding balance of loans from the Plan to the
Participant during the one year period ending on the day before the date on
which such loan is made, over the outstanding balance of loans from the Plan to
the Participant on the date on which such loan was made, or (b) one-half (2) of
the present value of the nonforfeitable accrued benefit of the Participant under
the Plan. For purposes of this limit, all plans of the Employer shall be
considered one plan. Additionally, with respect to any loan made prior to
January 1, 1987, the $50,000 limit specified in clause (a) above shall be
unreduced.
7.1.3 Repayment Terms. Loans shall provide for level amortization
with payments to be made not less frequently than quarterly over a period not to
exceed five (5) years. However, loans used to acquire any dwelling unit which,
within a reasonable time, is to be used (determined at the time the loan is
made) as a principal residence of the Participant shall provide for periodic
repayment over a reasonable period of time that may exceed five (5) years.
Notwithstanding the foregoing, loans made prior to January 1, 1987 which are
used to acquire, construct, reconstruct or substantially rehabilitate any
dwelling unit which, within a reasonable period of time is to be used
(determined at the time the loan is made) as a principal residence of the
Participant or a member of his family (within the meaning of Code section
267(c)(4)) may provide for periodic repayment over a reasonable period of time
that may exceed five (5) years. Additionally, loans made prior to January 1,
1987, may provide for periodic payments which are made less frequently than
quarterly and which do not necessarily result in level amortization.
7.1.4 Loan Program. Any loans granted or renewed on or after the
last day of the first Plan Year beginning after December 31, 1988, shall be made
pursuant to a Participant loan program. Such loan program shall be established
in writing and must include, but need not be limited to, the following:
A. The identity of the person or positions authorized to
administer the Participant loan program;
B. A procedure for applying for loans;
C. The basis on which loans will be approved or denied;
D. Limitations, if any, on the types and amounts of
loans offered;
E. The procedure under the program for determining a
reasonable rate of interest;
F. The types of collateral which may secure a
Participant loan; and
G. The events constituting default and the steps that
will be taken to preserve Plan assets.
Such Participant loan program shall be contained in a separate written document
which, when properly executed, is hereby incorporated by reference and made a
part of the Plan. Furthermore, such Participant loan program may be modified or
amended in writing from time to time without the necessity of amending this
Section.
7.1.5 USERRA - Repayments. Loan repayments on participant loans
made under this Plan will be suspended as permitted under Code Section
414(u)(4).
7.2 Direct Rollovers. The provisions of this Section 7.2 shall apply to
distributions notwithstanding any provision of this Plan to the contrary that
would otherwise limit a distributee's election with respect to distributions.
7.2.1 Election. A "distributee" may elect, at the time and in the
manner prescribed by the 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."
7.2.2 Definitions. For purposes of this Section 7.2, the
following terms shall have the following definitions:
A. The term "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 (1)
any distribution that is one of a series of substantially equal periodic
payments (occurring not less frequently than annually) made for the life (or
life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; (2) any distribution to the
extent such distribution is required under Code Section 401(a)(9); and (3) the
portion of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities).
B. The term "eligible retirement plan" means an individual
retirement account described in Code Section 408(a), and an individual
retirement annuity described in Code Section 408(b), and an annuity plan
described in Code Section 403(a), or a qualified trust described in Code Section
401(a) that accepts the distributee's eligible rollover distribution. However,
in the case of an eligible rollover distribution to the surviving spouse of the
Participant, the term "eligible retirement plan shall mean only an individual
retirement account or an individual retirement annuity.
C. The term "distributee" includes an Employee or former
Employee, the Employee's or former Employee surviving spouse, and the Employee's
or former Employee's spouse or former spouse who is the ultimate payee under a
qualified domestic relations order (as defined in Code Section 414(p)).
D. The term "direct rollover" shall mean a payment by
the plan to the eligible retirement plan specified by the distributee.
8. AMENDMENT, TERMINATION AND MERGERS
8.1 Amendment.
8.1.1 Subject to the limitations of this Section 8.1, the
Employer shall have the right at any time to amend the Plan with the approval of
either the Employer's Board of Directors or a committee designated or authorized
by the Board of Trustees. 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.
8.1.2 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.
8.1.3 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.
8.2 Termination.
8.2.1 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 Participant's Elective Accounts shall become 100% Vested as provided in
Section 6.4 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.
8.2.2 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 Section 6.5.
Distributions to a Participant shall be made in cash or in property or through
the purchase of irrevocable nontransferable deferred commitments from an
insurer. 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 8.1.3, above.
8.3 Merger Or Consolidation. This Plan may be merged or consolidated with,
or its assets and/or liabilities may be transferred to any other Plan 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
8.3.1 Effective as of October 1, 1997, the Citizens State Bank of
Santa Paula Profit-Sharing 401(k) Plan (the "Citizens Plan") was merged with and
into this Plan. The entire account balance of each Participant in the Citizens
Plan shall be continued with and into and maintained under this Plan. In
accordance with Section 8.1.3, above, such merger shall not result in the
elimination or reduction of any "Section 411(d)(6) protected benefits" of any
person who was a participant in the Citizens Plan.
8.3.2 Effective as of January 1, 1999, the Pacific Capital
Bancorp 401(k) Profit-Sharing Plan (the "Merged Plan") is being merged and into
this Plan. The entire account balance of each Participant in the Merged Plan
shall be continued into and maintained under this Plan. Pursuant to Section
7.1.3, above, such merger shall not result in the elimination or reduction of
any "Section 411(d)(6) protected benefits" of any person who was a participant
in the Merged Plan.
9. MISCELLANEOUS
9.1 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.
9.2 Alienation.
9.2.1 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.
9.2.2 This provision shall not apply to the extent a Participant
or Beneficiary is indebted to the Plan, as a result of a loan from the Plan. At
the time a distribution is to be made to or for a Participant's or Beneficiary's
benefit, such proportion of the amount distributed as shall equal such loan
indebtedness shall be paid by the Trustee to the Trustee or the Administrator,
at the direction of the Administrator, to apply against or discharge such loan
indebtedness. Prior to making a payment, however, the Participant or Beneficiary
must be given written notice by the Administrator that such loan indebtedness is
to be so paid in whole or part from his Participant's Account. If the
Participant or Beneficiary does not agree that the loan indebtedness is a valid
claim against his Vested Participant's Account, he shall be entitled to a review
of the validity of the claim in accordance with procedures provided in Sections
2.12 and 2.13.
9.2.3 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.
9.3 Construction of Plan. This Plan 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.
9.4 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.
9.5 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, attorneys' fees, and other
expenses pertaining thereto incurred by them for which they shall have become
liable.
9.6 Prohibition Against Diversion of Funds.
9.6.1 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.
9.6.2 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 there must reduce the amount so returned.
9.7 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.
9.8 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.
9.9 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.
9.10 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.
9.11 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.
9.12 Named Fiduciaries And Allocation Of Responsibility. The "named
Fiduciaries" of this Plan are (a) the Employer, (b) the Administrator and (c)
the Trustee.
9.12.1 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.
9.12.2 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.
9.12.3 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 to resolve
ambiguities, inconsistencies and omissions, which findings shall be binding,
final and conclusive.
9.13 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.
9.14 Approval By Internal Revenue Service.
9.14.1 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.
9.14.2 Notwithstanding any provisions to the contrary, except
Sections 3.6, 3.7, and 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.
9.15 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.
9.16 Effective Date. Except as otherwise set forth in this Plan, the
effective date of this Plan's multidocuments shall be January 1, 1998.
(Signatures appear on the following page.)
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Plan on the date(s) set
forth below their respective signatures.
<PAGE>
"EMPLOYER:"
PACIFIC CAPITAL BANCORP, a California corporation, formerly known as "SANTA
BARBARA BANCORP," for periods on and after January 1 1999
By_/s/ Jay D. Smith______________
Jay D. Smith, Senior Vice President
SANTA BARBARA BANK & TRUST,
a California corporation, for periods prior to January 1, 1999
By_/s/ Jay D. Smith______________
Jay D. Smith, Senior Vice President
"TRUSTEE:"
SANTA BARBARA BANK & TRUST,
a California corporation
By_/s/ Janice Kroekel ______________
Janice Kroekel, Vice President
<PAGE>
2
EXHIBIT 5.1
June 26, 2000
Pacific Capital Bancorp
200 East Carrillo Street, Suite 300
Santa Barbara, California 93101
Re: Pacific Capital Bancorp
Registration Statement on Form S-8
We have examined the Registration Statement on Form S-8 (the "Registration
Statement") to be filed by Pacific Capital Bancorp, a California corporation
(the "Company"), with the Securities and Exchange Commission in connection with
the registration under the Securities Act of 1933, as amended, of the following
securities (collectively, the "Securities"): (i) an aggregate of 90,000 shares
of the Company's common stock, no par value reserved for issuance under the
Pacific Capital Bancorp Amended and Restated Incentive & Investment and Salary
Savings Plan dated January 1, 1998 (the "Plan"); and (ii) an indeterminate
amount of beneficial interests in the Plan. We have also reviewed the Company's
charter documents and the corporate proceedings taken by the Company in
connection with the issuance and sale of the Securities. This opinion is being
furnished in accordance with the requirements of Item 8 of Form S-8 and Item 601
of Regulation S-K.
Based on such review, and in reliance thereon, we are of the opinion that:
(a) the Securities have been duly authorized, and if, as and when issued
in accordance with the Registration Statement, will be legally
issued, fully paid and nonassessable; and
(b) The provisions of the Plan comply with the applicable provisions of
the Employee Income Retirement Security Act of 1974, as amended
("ERISA").
We consent to the filing of this opinion letter as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
/s/ Reicker Clough Pfau Pyle
McRoy & Herman LLP
REICKER CLOUGH PFAU PYLE
MCROY & HERMAN LLP
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this S-8 registration statement of our report dated February 4,
2000, included in Pacific Capital Bancorp's Form 10-K for the year ended
December 31, 1999, and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
Los Angeles, California
June 26, 2000
