As filed with the Securities and Exchange Commission on November 17, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE FIRST AMERICAN FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
California 6361 95-1068610
State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation of Organization) Classification Code No.) Identification No.)
114 East Fifth Street
Santa Ana, California 92701-4642
(800) 854-3643
(Address of Principal Executive Offices)
RELS Savings Plan
(Full title of the plan)
Mark R Arnesen, Esq. (Copy to)
Secretary Neil W. Rust, Esq.
The First American Financial Corporation White & Case LLP
114 East Fifth Street 633 West Fifth Street
Santa Ana, California 92701 Los Angeles, California 90071
(714) 558-3211 (213) 620-7700
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent For Service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=====================================================================================================================
Proposed Proposed
Title of Each Class of Amount To Be Maximum Maximum Amount of
Securities Registered(1) Aggregate Price Aggregate Registration Fee
To Be Registered Per Unit(2) Offering
Price (2)
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Common shares, $1.00 par value 300,000 shares $34.813 $10,443,900 2,820
=====================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as
amended (the "Act"), this registration statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the
employee benefit plan described herein.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Act, based on the average of the high
and low prices of the Common shares registered on the New York Stock
Exchange as of November 13, 1998.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed below are incorporated by reference in this
Registration Statement and all documents subsequently filed by the Registrant
and the RELS Savings Plan (the "Plan") pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
prior to the filing of a post-effective amendment that indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be part hereof from the date of filing of such
documents.
o The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
o The Registrant's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 1998, June 30, 1998 and September 30, 1998.
o The Registrant's Current Reports on Form 8-K dated January 23, 1998,
January 27, 1998, March 18, 1998, March 31, 1998, April 7, 1998, June 26,
1998 and October 22, 1998.
o The description of the Common shares, $1.00 par value, contained in the
Registrant's Registration Statement on Form 8-A, dated November 19, 1993,
which registers the shares under Section 12(b) of the Exchange Act.
o The description of Rights to Purchase Series A Junior Participating
Preferred Shares, which may be transferred with our Common shares,
contained in our Registration Statement on Form 8-A, dated November 7,
1997, which registers the rights under Section 12(b) of the Exchange Act.
Item 6. Indemnification of Directors and Officers.
Subject to certain limitations, Section 317 of the California
Corporations Code provides in part that a corporation shall have the power to
indemnify any person who was or is a party or is threatened to be made a party
to any proceeding (other than an action by or in the right of the corporation to
procure a judgment in its favor) by reason of the fact that the person is or was
an agent (which term includes officers and directors) of the corporation,
against expenses, judgments, fines, settlements, and other amounts actually and
reasonably incurred in connection with the proceeding if that person acted in
good faith and in a manner the person reasonably believed to be in the best
interests of the corporation and, in the case of a criminal proceeding, had no
reasonable cause to believe the conduct of the person was unlawful.
The California indemnification statute set forth in Section 317 of the
California Corporations Code (noted above) is nonexclusive and allows a
corporation to expand the scope of indemnification provided, whether by
provisions in its Bylaws or by agreement, to the extent authorized in the
corporation's articles.
The Restated Articles of Incorporation of the Registrant provide that:
"The liability of the directors of the Corporation for monetary damages shall be
eliminated to the fullest extent permissible under California law." The effect
of this provision is to exculpate directors from any liability to the
Registrant, or anyone claiming on the Registrant's behalf, for breaches of the
directors' duty of care. However, the provision does not eliminate or limit the
liability of a director for actions taken in his capacity as an officer. In
addition, the provision applies only to monetary damages and is not intended to
impair the rights of parties suing on behalf of the Registrant to seek equitable
remedies (such as actions to enjoin or rescind a transaction involving a breach
of the directors' duty of care or loyalty).
The Bylaws of the Registrant provide that, subject to certain
qualifications, "(i) The corporation shall indemnify its Officers and Directors
to the fullest extent permitted by law, including those circumstances in which
indemnification would otherwise be discretionary; (ii) the corporation is
required to advance expenses to its Officers and Directors as incurred,
including expenses relating to obtaining a determination that such Officers and
Directors are entitled to indemnification, provided that they undertake to repay
the amount advanced if it is ultimately determined that they are not entitled to
indemnification; (iii) an Officer or Director may bring suit against the
corporation if a claim for indemnification is not timely paid; (iv) the
corporation may not retroactively amend this Section 1 in a way which is adverse
to its Officers and Directors; (v) the provisions of subsections (i) through
(iv) above shall apply to all past and present Officers and Directors of the
corporation." "Officer" includes the following officers of the Registrant:
Chairman of the Board, President, Vice President, Secretary, Assistant
Secretary, Chief Financial Officer, Treasurer, Assistant Treasurer and such
other officers as the board shall designate from time to time. "Director" of the
Registrant means any person appointed to serve on the Registrant's board of
directors either by its shareholders or by the remaining board members.
Each of the Registrant's 1996 Stock Option Plan and its 1997
Directors' Stock Plan (each individually, the "Plan") provides that, subject to
certain conditions, "The Company shall, through the purchase of insurance or
otherwise, indemnify each member of the Board (or board of directors of any
affiliate), each member of the [Compensation] Committee, and any [other]
employees to whom any responsibility with respect to the Plan is allocated or
delegated, from and against any and all claims, losses, damages, and expenses,
including attorneys' fees, and any liability, including any amounts paid in
settlement with the Company's approval, arising from the individual's action or
failure to act, except when the same is judicially determined to be attributable
to the gross negligence or willful misconduct of such person."
The Registrant's Deferred Compensation Plan provides that, "To the
extent permitted by applicable state law, the Company shall indemnify and save
harmless the Committee and each member thereof, the Board of Directors and any
delegate of the Committee who is an employee of the Company against any and all
expenses, liabilities and claims, including legal fees to defend against such
liabilities and claims arising out of their discharge in good faith of
responsibilities under or incident to the Plan, other than expenses and
liabilities arising out of willful misconduct. This indemnity shall not preclude
such further indemnities as may be available under insurance purchased by the
Company or provided by the Company under any bylaw, agreement or otherwise, as
such indemnities are permitted under state law."
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
Item 8. Exhibits.
4.1. Description of the Registrant's capital stock in Article Sixth of the
Restated Articles of Incorporation of The First American Financial
Corporation, incorporated by reference to Exhibit 3.1 of the Registrant's
Post-Effective Amendment No. 1 to Registration Statement on Form S-4 dated
July 28, 1998.
4.2. Rights Agreement, incorporated by reference to Exhibit 4 of the
Registrant's Registration Statement on Form 8-A dated November 7, 1997.
4.3 RELS Savings Plan.
5. Opinion of counsel regarding legality.*
23.1. Consent of independent accountants.
23.2. Consent of counsel (contained in Exhibit 5).
24. Power of Attorney.
* In lieu of providing an opinion of counsel concerning compliance with the
requirements of the Employee Retirement Income Security Act of 1974, as
amended, or an Internal Revenue Service determination letter that the RELS
Savings Plan (the "Plan") is qualified under Section 401 of the Internal
Revenue Code of 1986, as amended, the Registrant undertakes to submit the
Plan and any amendment thereto to the Internal Revenue Service ("IRS") in a
timely manner and will make all changes required by the IRS in order to
qualify the Plan.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement; and
(iii) 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;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in 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.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Santa Ana, State of California, on November 17, 1998.
THE FIRST AMERICAN FINANCIAL
CORPORATION
By: /s/ Parker S. Kennedy
-----------------------------------
Parker S. Kennedy, President
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Date: November 17, 1998 By: /s/ D.P. Kennedy
-----------------------------------
D.P. Kennedy, Chairman and
Director
Date: November 17, 1998 By: /s/ Parker S. Kennedy
-----------------------------------
Parker S. Kennedy, President
and Director
Date: November 17, 1998 By: /s/ Thomas A. Klemens
-----------------------------------
Thomas A. Klemens, Executive
Vice President, Chief
Financial Officer
(Principal Financial and
Accounting Officer)
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Date: November 17, 1998 By:/s/ George L. Argyros *
-------------------------------------
George L. Argyros, Director
Date: November 17, 1998 By:/s/ Gary J. Beban *
-------------------------------------
Gary J. Beban, Director
Date: November 17, 1998 By: /s/ J. David Chatham *
-------------------------------------
J. David Chatham, Director
Date: November 17, 1998 By: /s/ William G. Davis *
-------------------------------------
William G. Davis, Director
Date: November 17, 1998 By: /s/ James J. Doti *
-------------------------------------
James L. Doti, Director
Date: November 17, 1998 By: /s/ Lewis W. Douglas, Jr. *
-------------------------------------
Lewis W. Douglas, Jr., Director
Date: November 17, 1998 By: /s/ Paul B. Fay, Jr. *
-------------------------------------
Paul B. Fay, Jr., Director
Date: November 17, 1998 By: /s/ Dale F. Frey *
-------------------------------------
Dale F. Frey, Director
Date: November 17, 1998 By: /s/ Anthony R. Moiso *
-------------------------------------
Anthony R. Moiso, Director
Date: November 17, 1998 By: /s/ Frank O'Bryan *
-------------------------------------
Frank O'Bryan, Director
Date: November 17, 1998 By: /s/ Roslyn B. Payne *
-------------------------------------
Roslyn B. Payne, Director
Date: November 17, 1998 By: /s/ D. Van Skilling *
-------------------------------------
D. Van Skilling, Director
Date: November 17, 1998 By: /s/ Virginia Ueberroth *
-------------------------------------
Virginia Ueberroth, Director
*By:/s/ Mark R Arnesen
------------------------
Mark R Arnesen
Attorney-in-Fact
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
Retirement Committee has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the city of Santa
Ana, State of California, on November 17, 1998.
RELS SAVINGS PLAN
By: /s/ Thomas Waversich
----------------------------------------
Name: Thomas Waversich
Title: Member of the Retirement Committee
<PAGE>
Exhibit Index
Exhibit
Number Description
4.1. Description of the Registrant's capital stock in Article Sixth of the
Restated Articles of Incorporation of The First American Financial
Corporation, incorporated by reference to Exhibit 3.1 of the
Registrant's Post-Effective Amendment No. 1 to Registration Statement
on Form S-4 dated July 28, 1998.
4.2. Rights Agreement, incorporated by reference to Exhibit 4 of the
Registrant's Registration Statement on Form 8-A dated November 7,
1997.
4.3 RELS Savings Plan.
5. Opinion of counsel regarding legality.
23.1. Consent of independent accountants.
23.2. Consent of counsel (contained in Exhibit 5).
24. Power of Attorney.
EXHIBIT 4.3
RELS SAVINGS PLAN
(Effective As of November 1, 1998)
<PAGE>
RELS SAVINGS PLAN
TABLE OF CONTENTS
ARTICLE I GENERAL ......................................................... 1
Section 1.1 Name of Plan............................................... 1
Section 1.2 Purpose.................................................... 1
Section 1.3 Establishment of the Plan................................... 1
Section 1.4 Transfer of Accounts From Norwest Plan...................... 1
Section 1.5 Construction and Applicable Law............................. 2
Section 1.6 Benefits Determined Under Provisions
in Effect at Termination of Employment...................... 2
Section 1.7 Effective Date of Document.................................. 2
ARTICLE II MISCELLANEOUS DEFINITIONS........................................ 3
Section 2.1 Account..................................................... 3
Section 2.2 Active Participant.......................................... 3
Section 2.3 Affiliate................................................... 3
Section 2.4 Alternate Payee............................................. 3
Section 2.5 Beneficiary................................................. 3
Section 2.6 Certified Compensation...................................... 4
Section 2.7 Code........................................................ 5
Section 2.8 Common Control.............................................. 6
Section 2.9 Controlled Group............................................ 6
Section 2.10 Effective Date............................................. 6
Section 2.11 Employer Matching Contributions............................ 6
Section 2.12 Employer Profit Sharing Contributions...................... 6
Section 2.13 Employment Commencement Date............................... 6
Section 2.14 Entry Date................................................. 6
Section 2.15 ERISA...................................................... 6
Section 2.16 Excess Deferrals........................................... 6
Section 2.17 First American............................................. 7
Section 2.18 First American Plan........................................ 7
Section 2.19 First American Stock....................................... 7
Section 2.20 Highly Compensated......................................... 7
Section 2.21 Hours of Service........................................... 7
Section 2.22 Leased Employee............................................ 8
Section 2.23 Management Committee....................................... 8
Section 2.24 Named Fiduciary............................................ 8
Section 2.25 Non-Highly Compensated Employee............................ 8
Section 2.26 Normal Retirement Age...................................... 8
Section 2.27 Norwest.................................................... 8
Section 2.28 Norwest Plan............................................... 8
Section 2.29 Norwest Participant........................................ 9
Section 2.30 Norwest Stock.............................................. 9
Section 2.31 Norwest Transferee......................................... 9
Section 2.32 Participant................................................ 9
Section 2.33 Participating Employer..................................... 9
Section 2.34 Pension Plan............................................... 9
Section 2.35 Plan Sponsor............................................... 9
Section 2.36 Plan Year..................................................10
Section 2.37 Predecessor Employer.......................................10
Section 2.38 Qualified Employee.........................................10
Section 2.39 Retirement Committee.......................................11
Section 2.40 Rollover Contributions.....................................11
Section 2.41 Salary Deferral Contributions..............................11
Section 2.42 Successor Employer.........................................11
Section 2.43 Termination of Employment..................................11
Section 2.44 Trust Agreement............................................12
Section 2.45 Trustee....................................................12
Section 2.46 Trust Fund.................................................12
Section 2.47 Valuation Date.............................................12
Section 2.48 Vesting Service............................................12
ARTICLE III SERVICE DEFINITIONS............................................ 14
Section 3.1 Employment Commencement Date........................... 14
Section 3.2 Hours of Service....................................... 14
Section 3.3 Vesting Service........................................ 14
Section 3.4 Service With Certain Prior Employers................... 16
Section 3.5 Periods of Military Service............................ 17
ARTICLE IV SALARY DEFERRALS AND OTHER EMPLOYEE CONTRIBUTIONS............... 18
Section 4.1 Eligibility for Participation in Salary
Deferral Contributions................................. 18
Section 4.2 Duration of Participation.............................. 19
Section 4.3 Amount of Salary Deferral Contributions................ 19
ARTICLE V EMPLOYER CONTRIBUTIONS........................................... 21
Section 5.1 Employer Matching Contributions........................ 21
Section 5.2 Employer Profit Sharing Contributions.................. 22
Section 5.3 Payment of Employer Contributions...................... 23
ARTICLE VI CONTRIBUTION ADJUSTMENTS AND LIMITATIONS........................ 25
Section 6.1 Adjustment of Salary Deferral Contributions............ 25
Section 6.2 Distribution of Excess Deferrals....................... 29
Section 6.3 Adjustment of Employer Matching Contributions.......... 30
Section 6.4 Multiple Use of the Alternative Limitations............ 33
Section 6.5 Limitation on Allocations.............................. 35
Section 6.6 Forfeitures Credited Against Employer Contributions.... 38
ARTICLE VII INDIVIDUAL ACCOUNTS............................................ 39
Section 7.1 Accounts for Participants.............................. 39
Section 7.2 Valuation of Accounts.................................. 40
Section 7.3 Participant Statements................................. 40
Section 7.4 Rollover Contributions................................. 41
ARTICLE VIII INVESTMENT OF FUNDS........................................... 42
Section 8.1 Description of Funds................................... 42
Section 8.2 Reinvestment........................................... 43
Section 8.3 Uninvested Cash........................................ 44
Section 8.4 Investment Fund Designations........................... 44
Section 8.5 Change in Investment Fund Designation.................. 44
Section 8.6 Special Rules for Norwest Stock Fund................... 45
Section 8.7 Voting of Norwest Stock and First American Stock....... 45
Section 8.8 Tender or Exchange Offers Regarding Norwest Stock
or First American Stock................................ 46
Section 8.9 Other Special Rules.................................... 47
Section 8.10 Information To Participants........................... 48
Section 8.11 Investment Risk....................................... 49
ARTICLE IX BENEFIT REQUIREMENTS............................................ 50
Section 9.1 Benefit Upon Retirement................................ 50
Section 9.2 Other Termination of Employment........................ 50
Section 9.3 Death.................................................. 52
Section 9.4 Loans to Participants.................................. 52
ARTICLE X DISTRIBUTION OF BENEFITS......................................... 57
Section 10.1 Time and Method of Payment............................ 57
Section 10.2 Form of Payment....................................... 63
Section 10.3 Accounting Following Termination of Employment........ 64
Section 10.4 Reemployment.......................................... 64
Section 10.5 Withdrawals From Accounts While
Employed--General Rules............................... 64
Section 10.6 Withdrawals While Employed--Non-Taxable............... 66
Section 10.7 Withdrawals While Employed--Regular
In-Service Withdrawals................................ 66
Section 10.8 Withdrawals While Employed--After Age 59 1/2.......... 66
Section 10.9 Withdrawals While Employed--Financial Hardship........ 67
Section 10.10 Source of Benefits................................... 68
Section 10.11 Incompetent Payee.................................... 68
Section 10.12 Benefits May Not Be Assigned or Alienated............ 69
Section 10.13 Payment of Taxes..................................... 69
Section 10.14 Conditions Precedent................................. 69
Section 10.15 Retirement Committee Directions to Trustee........... 69
Section 10.16 Effect on Unemployment Compensation.................. 70
Section 10.17 Direct Rollovers to Other Plans...................... 70
Section 10.18 Special Rights With Respect To Certain Norwest Stock..71
ARTICLE XI MANAGEMENT OF FUNDS............................................. 73
Section 11.1 Trust Fund............................................ 73
Section 11.2 Trustee and Trust Agreement........................... 73
Section 11.3 Compensation and Expenses of Trustee.................. 73
Section 11.4 Funding Policy........................................ 73
Section 11.5 No Diversion.......................................... 74
ARTICLE XII ADMINISTRATION OF PLAN......................................... 75
Section 12.1 Administration by Retirement Committee................ 75
Section 12.2 Certain Fiduciary Provisions.......................... 76
Section 12.3 Discrimination Prohibited............................. 78
Section 12.4 Evidence.............................................. 78
Section 12.5 Correction of Errors.................................. 78
Section 12.6 Records............................................... 78
Section 12.7 General Fiduciary Standard............................ 78
Section 12.8 Prohibited Transactions............................... 78
Section 12.9 Claims Procedure...................................... 78
Section 12.10 Bonding.............................................. 79
Section 12.11 Waiver of Notice..................................... 79
Section 12.12 Agent for Legal Process.............................. 79
Section 12.13 Indemnification...................................... 79
Section 12.14 Agents............................................... 79
ARTICLE XIII AMENDMENT, TERMINATION, MERGER................................ 81
Section 13.1 Amendment............................................. 81
Section 13.2 Discontinuance of Participation in Plan
by a Participating Employer........................... 82
Section 13.3 Reorganizations of Participating Employers............ 82
Section 13.4 Permanent Discontinuance of Contributions............. 83
Section 13.5 Termination........................................... 83
Section 13.6 Partial Termination................................... 83
Section 13.7 Merger, Consolidation, or Transfer of Plan Assets..... 83
Section 13.8 Deferral of Distributions............................. 84
ARTICLE XIV MISCELLANEOUS PROVISIONS....................................... 85
Section 14.1 Discontinuance of Employment.......................... 85
Section 14.2 Headings.............................................. 85
Section 14.3 Capitalized Definitions............................... 85
Section 14.4 Gender................................................ 85
Section 14.5 Use of Compounds of Word "Here."...................... 85
Section 14.6 Construed as a Whole.................................. 85
Section 14.7 Benefit Under Certain Appendices...................... 85
ARTICLE XV TOP-HEAVY PLAN PROVISIONS....................................... 86
Section 15.1 Key Employee Defined.................................. 86
Section 15.2 Determination of Top-Heavy Status..................... 86
Section 15.3 Minimum Contribution Requirement...................... 89
Section 15.4 Adjustments in Code Section 415 Limits................ 89
Section 15.5 Exception For Collective Bargaining Unit.............. 89
Section 15.6 Definition of Employer................................ 89
<PAGE>
RELS SAVINGS PLAN
ARTICLE I
GENERAL
Section 1.1 Name of Plan.
The name of this plan is the "RELS Savings Plan." It is sometimes referred to in
this document as the "Plan."
Section 1.2 Purpose.
The Plan has been established for the purposes of providing eligible employees
with a share in the profits of the Participating Employers and encouraging
employees to adopt a regular savings program.
Section 1.3 Establishment of the Plan.
Certain employees of Norwest Corporation, a Delaware Corporation ("Norwest"), or
entities under Common Control (as defined in Section 2.8) with Norwest were
participants in the Norwest Corporation Savings Investment Plan (the "Norwest
Plan") on October 31, 1998. These employees transferred to employment with RELS
LLC on or about November 1, 1998. Effective November 1, 1998, RELS LLC hereby
establishes this Plan to provide retirement benefits to certain of the employees
transferring to employment with RELS LLC from Norwest (or an entity under Common
Control with Norwest) and to certain other individuals who become employees of
RELS LLC.
Section 1.4 Transfer of Accounts From Norwest Plan.
During November, 1998, all accounts maintained for Norwest Participants (as
defined in Section 2.29) under the Norwest Plan shall be transferred to this
Plan and thereafter shall be maintained under and shall be part of this Plan.
The transfer of the Norwest Participants' accounts from the Norwest Plan to this
Plan is a transfer of assets and liabilities, within the meaning of Treasury
Regulation Section 1.414(l)-1(b)(3), from the Norwest Plan to this Plan. After
the transfer of a Norwest Participant's account from the Norwest Plan to this
Plan, the Norwest Participant shall cease to have any right to benefits under
the Norwest Plan with respect to service before the Effective Date.
As of the date the accounts of Norwest Participants were transferred from the
Norwest Plan to this Plan, the Norwest Plan was an employee stock ownership
plan, within the meaning of Section 4975(e)(7) of the Code (as defined in
Section 2.7) and Section 407(d)(6) of ERISA (as defined in Section 2.15). This
plan is not an employee stock ownership plan, within the meaning of Code Section
4975(e)(7) or ERISA Section 407(d)(6). Upon the transfer of the Norwest
Participant's accounts from the Norwest Plan to this Plan, the Norwest
Participants' accounts shall no longer be held under an employee stock ownership
plan and, except as otherwise expressly provided in this Plan, shall not be
subject to any provisions under the Code or ERISA that are applicable
specifically to an employee stock ownership plan.
Section 1.5 Construction and Applicable Law.
As of the Effective Date, RELS LLC is the Plan Sponsor and there are no other
Participating Employers. For so long as all of the Participating Employers (as
defined in Section 2.33) are not part of the same Controlled Group (as defined
in Section 2.9), this Plan shall be a multiple employer plan which is subject to
the requirements of Section 413(c) of the Code, and Section 210(a) of ERISA. The
Plan is intended to meet the requirements for qualification under Section 401(a)
of the Code. The Plan is intended to meet the requirements for a qualified cash
or deferred arrangement under Code Section 401(k) and the requirements for a
profit sharing plan under Code Section 401(a). In accordance with Code Section
401(a)(27), the determination of whether the Plan is a profit-sharing plan shall
be made without regard to whether the Participating Employers have current or
accumulated profits. The Plan is also intended to be in full compliance with
applicable requirements of ERISA. The Plan shall be administered and construed
consistent with these intents. It shall also be construed and administered
according to the laws of the State of Delaware to the extent that such laws are
not preempted by the laws of the United States of America. All controversies,
disputes, and claims arising hereunder shall be submitted to the United States
District Court for the District of Delaware, except as otherwise provided in the
Trust Agreement.
Section 1.6 Benefits Determined Under Provisions in Effect at
Termination of Employment. Except as may be specifically provided herein to the
contrary, with respect to a Participant or former Participant whose Termination
of Employment has occurred, benefits under the Plan attributable to service
prior to the Termination of Employment shall be determined and paid in
accordance with the provisions of the Plan as in effect on the date the
Termination of Employment occurred unless he or she later again becomes an
Active Participant and such active participation causes a contrary result under
the provisions hereof.
Section 1.7 Effective Date of Document.
Unless a different date is specified for some purpose in this document, the
provisions of this Plan document are generally effective as of November 1, 1998.
ARTICLE II
MISCELLANEOUS DEFINITIONS
Section 2.1 Account.
"Account" means a Participant's or Beneficiary's interest in the Trust Fund of
any of the types described in Section 7.1. Where more than one Account of any
type has been established for a Participant or Beneficiary, references to
"Account" shall include each Account of that type, except where the context
clearly indicates to the contrary.
Section 2.2 Active Participant.
An employee is an "Active Participant" only while the employee is both a
"Participant" and a "Qualified Employee."
Section 2.3 Affiliate.
"Affiliate" means any trade or business entity under Common Control with a
Participating Employer, or under Common Control with a Predecessor Employer
while it is such. A trade or business shall be an "Affiliate" only during the
period during which it is under Common Control with the Participating Employer
or Predecessor Employer (as applicable).
Section 2.4 Alternate Payee.
"Alternate Payee" means, with respect to a Participant, any spouse, former
spouse, child, or other dependent of the Participant who is an alternate payee,
within the meaning of Code Section 414(p)(8), and who is recognized by a
qualified domestic relations order, within the meaning of Code Section
414(p)(1)(A), as having the right to receive all or a portion of the benefits
payable under the Plan with respect to the Participant. Alternate Payees shall
be determined in accordance with the procedures established pursuant to Section
10.12.
Section 2.5 Beneficiary.
A "Beneficiary" is the person or persons, natural or otherwise, designated by a
Participant to receive any benefit payable under the Plan in the event of the
Participant's death. A Participant who has designated a Beneficiary may, without
the consent of such Beneficiary, alter or revoke such designation. To be
effective, any such designation, alteration, or revocation shall be in writing,
in such form as the Retirement Committee may prescribe, and shall be filed with
the person specified by the Retirement Committee prior to the Participant's
death.
(a) If at the time of a Participant's death there is not on file a fully
effective designation of his Beneficiary, or if the designated Beneficiary does
not survive the Participant, the Participant's Beneficiary shall be the person
or persons surviving in the first of the following classes in which there is a
survivor, share and share alike:
(1) The Participant's spouse.
(2) The Participant's children, except that if any of the Participant's
children predecease him or her but leave descendants surviving, such
descendants shall take by right of representation the share their
parent would have taken if living.
(3) The Participant's parents.
(4) The Participant's brothers and sisters.
(5) The Participant's personal representative (executor or administrator).
(a) Notwithstanding the foregoing, if a Participant is married at the time of
his or her death, the Beneficiary shall be the Participant's spouse unless the
spouse has consented in writing to the designation of a different Beneficiary,
the spouse's consent acknowledges the effect of such designation, and the
spouse's consent is witnessed by a representative of the Plan or a notary
public. The previous sentence shall not apply if it is established to the
satisfaction of the Retirement Committee that such consent cannot be obtained
because there is no spouse, because the spouse cannot be located, or because of
such other circumstances as may be prescribed by federal regulations.
(1) Any such consent shall be valid only with respect to the spouse who
signed the consent, or in the case of a deemed consent, the designated
spouse. The Participant may revoke a prior election at any time
without the consent of the spouse. The number of such revocations
shall not be limited. Any consent by a spouse cannot be revoked by the
spouse.
(2) Any designation of a Beneficiary or a form of benefits which has
received spousal consent may be changed without spousal consent only
if the consent by the spouse expressly permits subsequent designations
by the Participant without any requirement of further consent by the
spouse.
(b) Determination of the identity of the Beneficiary in each case shall be made
by the Retirement Committee.
Section 2.6 Certified Compensation.
"Certified Compensation" of a Participant from a Participating Employer means
all compensation paid to the Participant by the Participating Employer during a
particular pay period for service as an Active Participant which is reportable
on Form W-2, subject to the following:
(a) Certified Compensation shall include any Salary Deferral Contributions on
behalf of a Participant under this Plan, and any contributions by salary
reduction to any cafeteria plan under Code Section 125 maintained by a
Participating Employer, whether or not such contributions are actually
excludable from the Participant's gross income for tax purposes. Any other
payments or contributions to or for the benefit of the employee under this Plan
or a cafeteria plan shall not be included in Certified Compensation. Payments
under any short term disability plan and normal vacation payments shall be
included in Certified Compensation.
(b) Relocation expenses and other allowances or reimbursements for expenses,
perquisites, gross-ups, severance pay, payments under income continuation
agreements, payments or contributions to or for the benefit of the employee
under any other deferred compensation, pension, profit sharing, insurance, or
other employee benefit plan, stock option and equity or equity-like gains,
amounts paid in lieu of vacation, any compensation paid after the payroll date
for the payroll period in which the Participant's Termination of Employment
occurred, or compensation in the form of property other than cash or the use of
such property shall not be included in computing Certified Compensation, except
as provided to the contrary in subsection (a) or to the extent such amounts are
required to be included in determining the employee's regular rate of pay under
the Federal Fair Labor Standards Act for purposes of computing overtime pay
thereunder.
(c) Certified Compensation for a Plan Year shall not exceed $160,000, indexed
for each Plan Year to take into account any cost of living increase provided for
that year in accordance with regulations prescribed by the Secretary of the
Treasury. For the initial Plan Year ending December 31, 1998, Certified
Compensation shall not exceed two-twelfths of $160,000. In addition, in the case
of a Norwest Participant, the sum of the following shall not exceed $160,000:
Certified Compensation taken into account under this Plan for the Plan Year
ending December 31, 1998; and "Certified Compensation" (as defined in Section
2.6 of the Norwest Plan) taken into account under the Norwest Plan for the
period January 1, 1998 through October 31, 1998.
(d) Notwithstanding the foregoing provisions of this Section, solely for
purposes of allocating Employer Matching Contributions under Section 5.1 and
allocating any Employer Profit Sharing Contributions under Section 5.2, any
Certified Compensation paid to a Participant while the Participant is employed
in a position subject to this subsection shall be disregarded to the extent such
Certified Compensation exceeds $20,000 for a Plan Year.
(1) This subsection applies to any Participant who is employed in the
Mortgage Sales Representative job category or in any other job
category which the Retirement Committee classifies as equivalent to
the Mortgage Sales Representative category.
(2) If a Participant is transferred into a position that is subject to
this subsection during a Plan Year, the $20,000 limit under this
subsection for that Plan Year shall be reduced (but not below $0) by
the amount of Certified Compensation credited to the Participant for
service during that Plan Year prior to the date the transfer occurred.
Section 2.7 Code.
"Code" means the Internal Revenue Code of 1986, as from time to time
amended.
Section 2.8 Common Control.
A trade or business entity (whether corporation, partnership, sole
proprietorship or otherwise) is under "Common Control" with another trade or
business entity (i) if both entities are corporations which are members of a
controlled group of corporations as defined in Code Section 414(b), (ii) if both
entities are trades or businesses (whether or not incorporated) which are under
common control as defined in Code Section 414(c), (iii) if both entities are
members of an "affiliated service group" as defined in Code Section 414(m), or
(iv) if both entities are required to be aggregated pursuant to regulations
under Code Section 414(o). Service for all entities under Common Control shall
be treated as service for a single employer to the extent required by the Code;
provided, however, that an individual shall not be a Qualified Employee by
reason of this Section. In applying the preceding sentence for purposes of
Section 6.5, the provisions of subsections (b) and (c) of Code Section 414 are
deemed to be modified as provided in Code Section 415(h).
Section 2.9 Controlled Group.
"Controlled Group" means a Participating Employer and each other trade or
business entity that is under Common Control with that Participating Employer.
As of the Effective Date, there are two Controlled Groups.
Section 2.10 Effective Date.
"Effective Date" is November 1, 1998, the date on which this Plan becomes
effective.
Section 2.11 Employer Matching Contributions.
"Employer Matching Contributions" are contributions made pursuant to Section
5.1. Such contributions are held in the Participant's Employer Matching Sharing
Contributions Account.
Section 2.12 Employer Profit Sharing Contributions.
"Employer Profit Sharing Contributions" means contributions made pursuant to
Section 5.2. Such contributions are held in the Participant's Employer Profit
Sharing Contributions Account.
Section 2.13 Employment Commencement Date.
"Employment Commencement Date" is defined in Section 3.1.
Section 2.14 Entry Date.
"Entry Date" means the first day of each calendar month.
Section 2.15 ERISA.
"ERISA" means the Employee Retirement Income Security Act of 1974 as from time
to time amended.
Section 2.16 Excess Deferrals.
"Excess Deferrals" are those amounts described in Section 6.2(a).
Section 2.17 First American.
"First American" means The First American Financial Corporation, a California
Corporation.
Section 2.18 First American Plan.
"First American Plan" means The First American Financial Corporation 401(k)
Savings Plan, as from time to time amended.
Section 2.19 First American Stock.
"First American Stock" means common or preferred stock of First American,
including any preferred stock which is convertible into common stock. The
provisions of this Plan shall be applied separately to different types or
classes of First American Stock, or to shares acquired on different dates, to
the extent the Retirement Committee determines that such treatment is
appropriate.
Section 2.20 Highly Compensated.
"Highly Compensated Employee" for any calendar year means an individual
described as such in Code Section 414(q). Highly Compensated Employees shall be
determined as follows:
(a) Unless otherwise provided in Code Section 414(q), each employee who meets
one of the following requirements is a Highly Compensated Employee:
(1) The employee at any time during the current or prior year was a more
than 5-percent owner as defined in Code Section 414(q)(2).
(2) The employee received compensation from the employer in excess of
$80,000 for the prior year.
(b) The dollar amount specified in paragraph (2) of subsection (a)
shall be indexed for cost of living increases for each calendar year after 1998
as provided in the applicable Treasury regulations.
(c) For purposes of this Section, "employer" includes all Participating
Employers and all Affiliates in the applicable Controlled Group, and "employee"
includes Leased Employees of that Controlled Group. The Highly Compensated
Employees shall be determined separately with respect to each Controlled Group,
taking into account only the employees of entities included in that Controlled
Group.
(d) For purposes of this Section, "compensation" means the amount defined as
such under Section 6.5(e)(2).
Section 2.21 Hours of Service.
The term "Hours of Service" is defined in Sec 3.2.
Section 2.22 Leased Employee.
"Leased Employee" means any person defined as such by Code Section 414(n). In
general, a Leased Employee is any person who is not otherwise an employee of a
Participating Employer or an Affiliate (referred to collectively as the
"recipient") and 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. For purposes of the requirements listed in Code Section
414(n)(3), any Leased Employee shall be treated as an employee of the recipient,
and contributions or benefits provided by the leasing organization which are
attributable to services performed for the recipient shall be treated as
provided by the recipient. However, if Leased Employees constitute less than 20%
of the Participating Employers' non-highly compensated work force within the
meaning of Code Section 414(n)(5)(C)(ii), those Leased Employees covered by a
plan described in Code Section 414(n)(5) shall be disregarded. Notwithstanding
the foregoing, no Leased Employee shall be a Qualified Employee or a Participant
in this Plan unless specifically provided to the contrary herein.
Section 2.23 Management Committee.
The "Management Committee" is the management committee of RELS LLC.
Section 2.24 Named Fiduciary.
For purposes of ERISA, the following are "Named Fiduciaries" within the meaning
of Section 402 of ERISA: the Retirement Committee is the "Named Fiduciary" with
authority to control or manage the operation and administration of the Plan, and
the Management Committee is a "Named Fiduciary" with authority to appoint
individuals to serve on the Retirement Committee. The Retirement Committee may
from time to time designate a Named Fiduciary to act in connection with the
voting, tender, or exchange of shares of Norwest Stock or First American Stock
held under the Plan.
Section 2.25 Non-Highly Compensated Employee.
"Non-Highly Compensated Employee" means an employee of the Participating
Employer who is not a Highly Compensated Employee.
Section 2.26 Normal Retirement Age.
"Normal Retirement Age" is age 65.
Section 2.27 Norwest.
"Norwest" means the Norwest Corporation, a Delaware Corporation.
Section 2.28 Norwest Plan.
"Norwest Plan" means the Norwest Corporation Savings Investment Plan, as in
effect on the Effective Date.
Section 2.29 Norwest Participant.
"Norwest Participant" is a Norwest Transferee who becomes a Participant in this
Plan in accordance with the first sentence of Section 4.1.
Section 2.30 Norwest Stock.
"Norwest Stock" means common or preferred stock of Norwest, including any
preferred stock which is convertible into common stock. The provisions of this
Plan shall be applied separately to different types or classes of Norwest Stock,
or to shares acquired on different dates, to the extent the Retirement Committee
determines that such treatment is appropriate. If any common or preferred stock
of Norwest is renamed or exchanged for other stock, then such renamed of
exchanged stock shall be considered to be "Norwest Stock" for purposes of this
Plan.
Section 2.31 Norwest Transferee.
"Norwest Transferee" is an individual who:
(a) Was an employee of Norwest, or an entity under Common Control with Norwest,
immediately before the Effective Date;
(b) Was a "Participant," as defined in Section 2.25 of the Norwest Plan, in the
Norwest Plan on October 31, 1998; and
(c) Transferred, on or about November 1, 1998, to employment with the Plan
Sponsor in connection with the establishment of RELS LLC.
Section 2.32 Participant.
A "Participant" is an individual described as such in Articles IV and V.
Section 2.33 Participating Employer.
The Plan Sponsor is a Participating Employer in the Plan. Any entity which is
under Common Control with the Plan Sponsor shall become a Participating Employer
in the Plan upon being designated as such by the Plan Sponsor, by written action
of its Management Committee or authorized delegate. The Participating Employer's
participation in the Plan shall be effective as of the date specified in the
written action by the Plan Sponsor. In addition, with the consent of the Plan
Sponsor, any employer which is not under Common Control with the Plan Sponsor
may become a Participating Employer in the Plan effective as of a date specified
by it in its adoption of the Plan. The Retirement Committee shall maintain the
official list of the Participating Employers currently covered by the Plan and
the effective date of each such employer's participation, and shall update that
list at such times as may be appropriate.
Section 2.34 Pension Plan.
The "Pension Plan" is the RELS Pension Plan, as it may be amended from time to
time.
Section 2.35 Plan Sponsor.
The "Plan Sponsor" is RELS LLC, a Delaware limited liability company and any
Successor Employer thereof.
Section 2.36 Plan Year.
Effective January 1, 1999, a "Plan Year" is a calendar year. The first Plan Year
shall be a short year beginning on November 1, 1998 and ending on December 31,
1998.
Section 2.37 Predecessor Employer.
Any corporation, partnership, firm, or individual (referred to in this Section
as an "entity") is a "Predecessor Employer" if a substantial part of the assets
and employees of the entity are acquired by a Participating Employer, an
Affiliate, or another Predecessor Employer and if the entity is so designated by
the Plan Sponsor (which action may be in the form of the adoption of an Appendix
to the Plan recognizing service with the Predecessor Employer for one or more
purposes), subject to any conditions and limitations with respect thereto
imposed by this Section or an applicable Appendix. However, an entity may be
named as a Predecessor Employer only if all of its employees who become
employees of the acquiring employer at the time of the acquisition are treated
uniformly and the use of service with it does not produce discrimination in
favor of officers, shareholders, or highly compensated employees.
Notwithstanding anything in the Plan to the contrary, service with such a
Predecessor Employer shall be recognized only to the extent provided in the
Appendix applicable to that entity. Any other employer shall be a Predecessor
Employer if so required by regulations prescribed by the Secretary of the
Treasury.
Section 2.38 Qualified Employee.
"Qualified Employee" means any employee of a Participating Employer, subject to
the following:
(a) An employee is not a Qualified Employee prior to the date as of which his or
her employer becomes a Participating Employer.
(b) A nonresident alien while not receiving earned income (within the meaning of
Code Section 911(b)) from a Participating Employer which constitutes income from
sources within the United States (within the meaning of Code Section 861(a)(3))
is not a Qualified Employee.
(c) Eligibility of employees in a collective bargaining unit to participate in
the Plan shall be subject to negotiations with the representative of that unit.
During any period in which an employee is covered by the provisions of a
collective bargaining agreement between a Participating Employer and such
representative the employee shall not be considered a Qualified Employee for
purposes of this Plan unless such agreement expressly so provides.
(d) An employee shall be deemed to be a Qualified Employee during a period of
absence from active service which does not result from a Termination of
Employment, provided the employee is a Qualified Employee at the commencement of
such period of absence.
(e) Persons classified by a Participating Employer as casual or temporary
employees are not Qualified Employees.
(f) An employee who is a Leased Employee shall not be a Qualified Employee.
(g) Notwithstanding anything herein to the contrary, an individual is not a
Qualified Employee during any period during which the individual is classified
by a Participating Employer as an independent contractor or as any other status
in which the person is not treated as a common law employee of a Participating
Employer for purposes of withholding of taxes, regardless of the actual status
of the individual. The previous sentence applies to all periods of such service
of an individual who is subsequently reclassified as an employee, whether the
reclassification is retroactive or prospective.
Section 2.39 Retirement Committee.
"Retirement Committee" means the Retirement Plan Committee appointed pursuant to
Section 12.1 to perform the administrative tasks specified in the Plan.
Section 2.40 Rollover Contributions.
"Rollover Contributions" mean the contributions described in Section 7.4.
Section 2.41 Salary Deferral Contributions.
"Salary Deferral Contributions" are described in Sections 4.1 and 4.3 of the
Plan, and are contributions to the Plan made by the Employer on the
Participant's behalf in an amount deferred from salary, as elected by each
Participant. Such contributions are held in the Participant's Salary Deferral
Account.
Section 2.42 Successor Employer.
A "Successor Employer" is any entity that succeeds to the business of a
Participating Employer through merger, consolidation, acquisition of all or
substantially all of its assets, or any other means and which elects before or
within a reasonable time after such succession, by appropriate action evidenced
in writing, to continue the Plan; provided, however, that in the case of such
succession with respect to any Participating Employer other than the Plan
Sponsor, the acquiring entity, shall be a Successor Employer only if consent
thereto is granted by the Plan Sponsor, by action of its Management Committee or
authorized delegate.
Section 2.43 Termination of Employment.
The "Termination of Employment" of an employee for purposes of the Plan shall be
deemed to occur upon resignation, discharge, retirement, death, failure to
return to active work at the end of an authorized leave of absence or the
authorized extension or extensions thereof, failure to return to work when duly
called following a temporary layoff, or upon the happening of any other event or
circumstance which, under the policy of a Participating Employer, Affiliate, or
Predecessor Employer as in effect from time to time, results in the termination
of the employer-employee relationship; provided, however, that a Termination of
Employment shall not be deemed to occur upon a transfer between any combination
of Participating Employers, Affiliates, and Predecessor Employers. If an
employee ceases to be a Qualified Employee as a result of a sale of some or all
of the assets, operations or stock of his or her Participating Employer, and if
the employee's Accounts are not transferred to a separate plan pursuant to
Section 13.2, the Termination of Employment shall be deemed to occur on the date
the employee ceased to be a Qualified Employee for purposes of allowing
distribution of benefits, to the extent permitted under Code Section 401(k)(10).
If a Participant is receiving disability benefit payments under a plan of his
Participating Employer, the Participant's Termination of Employment for purposes
of this Plan shall be deemed to have occurred as of the date such disability
benefit payments commenced.
Section 2.44 Trust Agreement.
"Trust Agreement" means the agreement referred to in Section 11.2 between the
Plan Sponsor and the Trustee as in effect from time to time.
Section 2.45 Trustee.
The "Trustee" is the trustee or trustees or insurance company appointed and
acting from time to time in accordance with the provisions of Section 11.2 for
the purpose of holding, investing and disbursing all or a part of the Trust
Fund.
Section 2.46 Trust Fund.
The "Trust Fund" is the fund or funds provided for in Section 11.1.
Section 2.47 Valuation Date.
"Valuation Date" means the date on which the Investment Funds and Accounts are
valued as provided in Article VII. Each business day on which the New York Stock
Exchange is open for trading is a Valuation Date.
Section 2.48 Vesting Service.
"Vesting Service" is defined in Section 3.3.
<PAGE>
ARTICLE III
SERVICE DEFINITIONS
Section 3.1 Employment Commencement Date.
"Employment Commencement Date" means the date on which an employee first
performs an Hour of Service for a Participating Employer (whether before or
after the Participating Employer becomes such), an Affiliate, or a Predecessor
Employer.
Section 3.2 Hours of Service.
An "Hour of Service" shall be each hour for which the employee is paid, or
entitled to payment, for the performance of duties for his or her employer.
Hours of Service are determined according to the following subsections and in
accordance with Section 2530.200b-2 of the Department of Labor Regulations,
which is incorporated herein by this reference.
(a) Hours of Service are computed only with respect to service with
Participating Employers (for service both before and after the Participating
Employer becomes such), Affiliates, and Predecessor Employers and are aggregated
for service with all such employers.
(b) This subsection shall apply to an individual who has service as (i) either a
common law employee or Leased Employee of (ii) either a Participating Employer
or an Affiliate of a Participating Employer. For purposes of determining Hours
of Service, such an individual shall be considered an employee of such
Participating Employer or Affiliate but for the requirement that he or she must
have performed services for such Participating Employer or Affiliate on a
substantially full-time basis for a period of at least one year.
(a) The Retirement Committee may use any records to determine Hours of Service
which it considers an accurate reflection of the actual facts
Section 3.3 Vesting Service.
An individual's "Vesting Service" is equal to the aggregate time elapsed between
his or her Employment Commencement Date and most recent Termination of
Employment or any other date as of which a determination of Vesting Service is
to be made, expressed in years and days (with 365 days constituting one year),
subject to the following:
(a) If the individual has a Termination of Employment and was not reemployed by
a Participating Employer, an Affiliate or a Predecessor Employer within 12
months, the period of time from the Termination of Employment until the date he
or she next performs an Hour of Service shall be subtracted from the
individual's Vesting Service. If an individual remains absent from service
without pay for a period of one year or more for any reason other than quit,
retirement, discharge or death (such as sickness, disability, leave of absence
or layoff), the Termination of Employment for purposes of this subsection shall
be deemed to occur not later than the first anniversary of the first day of the
period of absence, notwithstanding the definition of Termination of Employment
in Section 2.43 hereof as it relates to Participants who are receiving
disability payments under the terms of a Participating Employer's long term
disability plan.
(b) Except as provided in Section 3.4, for purposes of determining Vesting
Service, there shall be disregarded any service prior to the earlier of (i) the
year in which the individual's Participating Employer first maintained the Plan
or a predecessor plan, or (ii) the earliest year in which any trade or business
entity at that time under Common Control with the Participating Employer first
maintained the Plan or a predecessor plan.
(c) If the Participant has had a break in service of at least 60 months
duration, for purposes of determining the vested percentage of his or her
Employer Matching Contributions Account, Employer Profit Sharing Contributions
Account, and Frozen Transferred Account (except to the extent otherwise provided
with respect to provisions applicable to amounts in the Frozen Transferred
Account) which accrued before such break, any Vesting Service after the break in
service shall not be taken into account.
(1) For purposes of this subsection, a "break in service" is a period
beginning on the earlier of (i) the Participant's Termination of
Employment or (ii) the first anniversary of the first day of a period
of absence from service without pay for any reason other than quit,
retirement, discharge or death (such as sickness, disability, leave of
absence or layoff), and ending on the date on which the individual
next performs an Hour of Service.
(2) If an individual is absent for maternity or paternity reasons, a break
in service under paragraph (1) shall not commence until the second
anniversary of the first day of such absence, but the period between
the first and second anniversaries of the first day of such absence
shall not be counted in the individual's Vesting Service. For purposes
of this paragraph, an absence from work for maternity or paternity
reasons means an absence (i) by reason of the pregnancy of the
individual, (ii) by reason of the birth of a child of the individual,
(iii) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or (iv)
for purposes of caring for such child for a period beginning
immediately following such birth or placement.
Section 3.4 Service With Certain Prior Employers.
In addition to any service credited under Section 3.3, the following Qualified
Employees shall be credited with whole and fractional years of Vesting Service,
but only to the extent such Vesting Service was credited with respect to periods
before the individual became an employee of a Participating Employer or
Affiliate:
(a) A Norwest Transferee shall be credited with the number of years of Vesting
Service equal to the number of years of "Vesting Service (as defined in Section
3.3 of the Norwest Plan) with which the Norwest Transferee was credited, under
the Norwest Plan, as of October 31, 1998.
(c) If after the Effective Date an employee who is not a Norwest Transferee
transfers from employment with Norwest (or any "Affiliate" of Norwest, as
defined in Section 2.6 of the Norwest Plan) to employment with a Participating
Employer (or Affiliate), then such an employee shall be credited with the number
of years of "Vesting Service," as defined in Section 3.2 of the Norwest Plan,
with which the employee was credited under the Norwest Plan, as of the date the
employee transfers to employment with a Participating Employer (or Affiliate).
(d) If after the Effective Date an employee transfers from employment with First
American (or any entity that would be an Affiliate of First American, if First
American were a Participating Employer) to employment with a Participating
Employer or Affiliate, then such an employee shall be credited with the number
of years of Vesting Service with which the employee would be credited, under
Section 3.3, for periods before the employee first transferred to employment
with a Participating Employer or Affiliate, if First American were treated as a
Participating Employer that had maintained this Plan since the employee first
performed an Hour of Service for First American (or any entity that would be an
Affiliate of First American if First American were a Participating Employer).
(e) For the calendar year in which an employee described in Sections 3.4(a)
through (c) transfers to employment with a Participating Employer (or
Affiliate), the total Vesting Service credited to the employee under the
provisions of these subsections (a) through (c) and the provisions of Section
3.3 shall not exceed one year of Vesting Service.
(f) The Retirement Committee may rely on records provided by the plan
administrator of the Norwest Plan to determine the number of years of vesting
service credited under that plan. The Retirement Committee may rely on
employment records of the plan administrator of the First American Plan to
determine the number of years of vesting service that should be credited under
subsection (c).
Section 3.5 Periods of Military Service.
Notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with Code Section 414(u).
<PAGE>
ARTICLE IV
SALARY DEFERRALS AND OTHER EMPLOYEE CONTRIBUTIONS
Section 4.1 Eligibility for Participation in Salary Deferral Contributions.
(a) A Norwest Transferee shall become a Participant in this Plan, effective as
of the later of the Effective Date or the date on or about the Effective Date on
which the employee becomes an employee of the Plan Sponsor, but only if the
Norwest Transferee is a Qualified Employee on that date. In all other cases, an
employee of a Participating Employer shall become a Participant in the Plan and
shall be eligible to have Salary Deferral Contributions made on his or her
behalf on the earliest Entry Date (provided that the employee is a Qualified
Employee on that Entry Date) following completion of the shorter of:
(3) One month of service, on or after the effective date of the Plan, with
respect to the employee's Participating Employer; or
(4) One year of Vesting Service.
(g) An Active Participant shall be eligible to have Salary Deferral
Contributions made on his or her behalf commencing on the Entry Date on which
the individual becomes a Participant or on any subsequent Entry Date, provided
that the individual has submitted the proper applications to the Retirement
Committee or its agent prior to the Entry Date pursuant to procedures
established by the Retirement Committee.
(h)Rehired and transferred employees shall enter or reenter the Plan as follows:
(1) If a former Participant is rehired as a Qualified Employee, he or she
shall become a Participant again on the date of reemployment, and
shall be eligible to make Salary Deferral Contributions again upon the
entry of reemployment information in the records of the Plan and the
employee making an election for Salary Deferral Contributions pursuant
to procedures established by the Retirement Committee.
(2) If a former employee who was not previously a Participant is rehired
as a Qualified Employee and would have met the requirements of this
Article on a prior Entry Date but for the fact that the employee was
not a Qualified Employee on such Entry Date, he or she shall become a
Participant for purposes of this Section on the date of rehire, and
shall be eligible to make Salary Deferral Contributions on the first
Entry Date following the entry of reemployment information in the
records of the Plan and the employee making an election for Salary
Deferral Contributions pursuant to procedures established by the
Retirement Committee.
(3) If an employee of a Participating Employer or Affiliate who is neither
a Participant nor a Qualified Employee is transferred to a position in
which he or she is a Qualified Employee, and if the employee would
have met the eligibility requirements of this Article on the Entry
Date preceding the transfer had he or she been a Qualified Employee on
that Entry Date, the employee shall become a Participant for purposes
of this Section on the date of the transfer and shall be eligible to
make Salary Deferral Contributions on the first Entry Date following
the entry of transfer information in the records of the Plan and the
employee making an election for Salary Deferral Contributions pursuant
to procedures established by the Retirement Committee.
Section 4.2 Duration of Participation.
A Participant shall continue to be such until the later of (i) his or her
Termination of Employment, or (ii) the date all benefits, if any, to which the
Participant is entitled hereunder have been distributed from the Trust Fund.
Section 4.3 Amount of Salary Deferral Contributions.
Each Active Participant who meets the requirements of Section 4.1 may elect to
have his or her Certified Compensation reduced by any whole percentage from 2%
to 18%. The Participant's Participating Employer shall make a Salary Deferral
Contribution to the Plan equal to the amount by which the Participant's
Certified Compensation is reduced.
(a) The salary reduction election shall be made in the form and according to the
procedures established by the Retirement Committee, and shall apply only to
Certified Compensation which becomes payable after the election is made.
(b) Effective as of any subsequent Entry Date, an Active Participant may elect
to increase or decrease the rate of Salary Deferral Contributions made on his or
her behalf to any rate permitted by this Section, or may elect to discontinue
such contributions.
(c) To be effective, an election to begin, change or discontinue Salary Deferral
Contributions must be made in the form and according to the procedures
prescribed by the Retirement Committee and must be submitted to the Retirement
Committee or its agent prior to deadline established by the Retirement
Committee, based on the payroll cut-off date established by the Participant's
Participating Employer.
(d) All Salary Deferral Contributions shall automatically be discontinued if the
Participant ceases to be a Qualified Employee.
(e) Salary Deferral Contributions by a Participant for any calendar year may not
exceed $10,000, and shall cease at the point that limit is reached during the
year. For each calendar year after 1998, the limit in the previous sentence
shall be indexed for any cost of living increases provided for that year in
accordance with regulations of the Secretary of the Treasury.
(f) Salary Deferral Contributions shall be paid to the Trustee not later than
the 15th business day of the month following the month containing the payroll
date to which they relate. Salary Deferral Contributions for a calendar year
shall be allocated to Salary Deferral Accounts not later than as of the last day
of such year and shall be reflected in such Accounts as provided in Article VII
within a reasonable period of time, as determined by the Retirement Committee,
following the payroll date to which they relate. However, Salary Deferral
Contributions which are deposited with the Trustee after the end of the calendar
year to which they relate may instead be treated by the Retirement Committee as
being Salary Deferral Contributions for the year in which they are deposited to
the extent necessary to satisfy the requirements of Sections 6.1 and 6.4.
<PAGE>
ARTICLE V
EMPLOYER CONTRIBUTIONS
Section 5.1 Employer Matching Contributions.
Salary Deferral Contributions for calendar quarters shall be matched as follows:
(a) Each Participant who is credited with at least one year of Vesting Service
with a Participating Employer as of the first day of a particular calendar
quarter shall be eligible to receive Employer Matching Contributions from his or
her Participating Employer for that calendar quarter, provided that the
Participant (i) must have been an Active Participant at some time during the
calendar quarter, (ii) must be employed by a Participating Employer or an
Affiliate on the last day of the calendar quarter, and (iii) must have made a
Salary Deferral Contribution during the calendar quarter. A Participant will be
deemed to have satisfied clause (ii) of the preceding sentence for a quarter if
the Participant's Termination of Employment occurred during that quarter due to
the Participant's retirement or disability which satisfies the requirements of
Section 9.1 or due to the Participant's death. The determination of whether a
Participant was credited with at least one year of Vesting Service as of the
first day of a calendar quarter shall take into account Vesting Service prior to
the quarter in the case of an individual who is rehired or transferred into a
position in which the individual is a Qualified Employee during the quarter, and
service prior to the quarter with a previous employer that is recognized as
Vesting Service under Section 3.4 or any other provision of this Plan.
(b) The amount allocated to a particular Participant's Employer Matching
Contributions Account under this subsection shall have a value, as of the
Valuation Date at the end of the quarter on which the allocation occurs, equal
to 100% of the Participant's Salary Deferral Contributions for that calendar
quarter, disregarding any Salary Deferral Contribution to the extent it exceeds
6% of the Participant's Certified Compensation for the quarter.
(c) If the Retirement Committee allows Active Participants to elect reduction
percentages in excess of 6% of Certified Compensation, and a Participant is
subject to the limit on Salary Deferral Contributions set forth in Section
4.3(e), the Employer Matching Contributions made pursuant to this Section shall
continue at the rate stated in this Section for the remainder of the year, to a
maximum dollar contribution which is equal to the lesser of 6% of the
Participant's Certified Compensation or the limit set forth in Section 4.3(e).
Section 5.2 Employer Profit Sharing Contributions.
The Participating Employers may, but shall not be required, to make Employer
Profit Sharing Contributions for a Plan Year.
(a) The amount of each Participating Employer's Employer Profit Sharing
Contribution for a Plan Year, if any, shall be determined by the Plan Sponsor.
With the consent of the Plan Sponsor, the Participating Employers may make
Employer Profit Sharing Contributions in amounts that result in allocations to
Active Participants employed by the respective Participating Employers which are
different percentages of the Certified Compensation paid by each Participating
Employer to Active Participants employed by that Participating Employer. With
the consent of the Plan Sponsor, a Participating Employer may make no Employer
Profit Sharing Contribution for a Plan Year even though other Participating
Employers make Employer Profit Sharing Contributions for that Plan Year.
(b) A Participant shall be allocated a share of his or her Participating
Employer's Profit Sharing Contributions for a Plan Year only if the Participant
is credited with at least one year of Vesting Service as of the last day of that
Plan Year and the Participant was employed by that Participating Employer as an
Active Participant at some time during that Plan Year.
(c) Any Employer Profit Sharing Contribution for a Plan Year made by a
Participating Employer shall be credited as of the last day of the Plan Year for
which it is contributed (even though receipt of the Employer Profit Sharing
Contribution by the Trust Fund may take place after the close of the Plan Year)
among the Employer Profit Sharing Accounts of all Active Participants for that
Plan Year who received Certified Compensation from that Participating Employer
and who satisfied the requirements of subsection (b) . Such contributions,
however, shall not be eligible to share in investment results until received by
the Trust Fund. The allocation of a Participating Employer's Employer Profit
Sharing Contribution shall be in the ratio that each such Active Participant's
Certified Compensation received from that Participating Employer while an Active
Participant during the Plan Year bears to the total Certified Compensation
during such Plan Year received by all Active Participants while they were Active
Participants employed by that Participating Employer. Participants who did not
receive Certified Compensation from a Participating Employer or who did not meet
the requirements of subsection (b) shall not be considered in determining the
allocations of that Participating Employer's Employer Profit Sharing
Contribution.
Section 5.3 Payment of Employer Contributions.
A Participating Employer shall pay its Employer Matching Contributions and its
Employer Profit Sharing Contributions to the Trustee not later than the due date
for the Participating Employer's federal income tax return (including
extensions) for the Plan Year to which the contributions relate, subject to the
provisions of Section 6.5. The amount paid shall be sufficient to make all
payments and allocations provided under this Article. However, any such
contributions made by a Participating Employer, together with other
contributions made under the Plan for the Plan Year by that Participating
Employer, shall not exceed the amount currently deductible by the Participating
Employer under Code Section 404(a) (applied without regard to Code Section
404(a)(5), relating to nonqualified plans).
<PAGE>
ARTICLE VI
CONTRIBUTION ADJUSTMENTS AND LIMITATIONS
Section 6.1 Adjustment of Salary Deferral Contributions.
If necessary to satisfy the requirements of Code Section 401(k), Salary Deferral
Contributions shall be adjusted in accordance with the following provisions of
this Section. The provisions of this Section shall be applied separately to
Salary Deferral Contributions made on behalf of Participants employed by each
Controlled Group.
(a) Each calendar year, the "deferral percentage" will be calculated for each
Active Participant. Each Participant's deferral percentage is calculated by
dividing the amount referred to in paragraph (1) by the amount referred to in
paragraph (2):
(4) The total Salary Deferral Contributions (including Excess Deferrals of
Highly Compensated Employees distributed under Section 6.2 but
excluding Excess Deferrals of Non-Highly Compensated Employees that
arise solely from contributions made under plans of the Participating
Employers or Affiliates), if any, allocated to the Participant's
Accounts with respect to the year.
(5) The Participant's compensation with respect to the calendar year. For
purposes of this Section, a Participant's "compensation" for the year
means compensation determined according to a definition selected by
the Retirement Committee for that year which satisfies the
requirements of Code Section 414(s). The same definition of
compensation shall be used for all Participants for a particular year,
but different definitions may be used for different years. The
Retirement Committee shall also determine whether compensation
includes or does not include the Salary Deferral Contributions to this
Plan and any contributions made pursuant to a salary reduction
agreement by or on behalf of the Participant to any other plan which
meets the requirements of Code Sections 125, 401(k), 402(h)(1)(B), or
403(b), and whether or not it includes amounts paid prior to the date
an individual became a Participant. Compensation shall be subject to
the limit provided under Section 2.6(c).
(i) Each calendar year, the average deferral percentage for Active Participants
who are Highly Compensated Employees and the average deferral percentage for
Active Participants who are Non-Highly Compensated Employees will be calculated.
A separate average deferral percentage shall be calculated for Active
Participants in a collective bargaining unit who are required to be
disaggregated pursuant to Treasury Regulation Section 1.401(k)-1(b)(3)(ii)(B).
Such Participants shall be disregarded in calculating the average deferral
percentage for Active Participants who are not in such collective bargaining
units.
(1) In each case, the average is the average of the percentages calculated
under subsection (a) for each of the employees in the particular
group. The deferral percentage for each Participant and the average
deferral percentage for a particular group of employees shall be
calculated to the nearest one-hundredth of one percent.
(2) The average deferral percentage for Active Participants who are
Non-Highly Compensated Employees that is used in applying this Section
for a particular calendar year shall be the percentage determined for
the preceding year, unless the Retirement Committee elects to use the
percentage for the current year in accordance with applicable
regulations. If an election is made under the previous sentence to use
the percentage for the current year, it may not be changed for later
years except as provided in applicable regulations.
(j) If the requirements of either paragraph (1) or (2) are satisfied, then no
further action is needed under this Section:
(1) The average deferral percentage for Participants who are Highly
Compensated Employees is not more than 1.25 times the average deferral
percentage for Participants who are Non-Highly Compensated Employees.
(2) The excess of the average deferral percentage for Participants who are
Highly Compensated Employees over the average deferral percentage for
Participants who are Non-Highly Compensated Employees is not more than
two percentage points, and the average deferral percentage for such
Highly Compensated Employees is not more than 2 times the average
deferral percentage for such Non-Highly Compensated Employees.
The requirements of this subsection shall be applied separately with
respect to Participants in a collective bargaining unit who are
required to be disaggregated pursuant to Treasury Regulation Section
1.401(k)-1(b)(3)(ii)(B).
(k) If neither of the requirements of subsection (c) is satisfied, then the
Salary Deferral Contributions with respect to Highly Compensated Employees shall
be reduced, beginning with the contributions representing the greatest dollar
amount per Participant, to the extent necessary to make the aggregate dollar
amount of such reductions equal to the amount by which the Salary Deferral
Contributions (prior to such reduction) had exceeded the requirements of
subsection (c)(1) or (c)(2), whichever is less. Such reduction shall be made in
accordance with the methodology prescribed at the time of the reduction by the
Internal Revenue Service under Notice 97-2 or other applicable Notices or
Treasury Regulations.
(l) At any time during the calendar year, the Retirement Committee may make an
estimate of the amount of Salary Deferral Contributions by Highly Compensated
Employees that will be permitted under this Section for the year and may reduce
the percent specified in Section 4.3 for such Participants to the extent the
Retirement Committee determines in its sole discretion to be necessary to
satisfy at least one of the requirements in subsection (c).
(m) If Salary Deferral Contributions with respect to a Highly Compensated
Employee are reduced pursuant to subsection (d), the excess Salary Deferral
Contributions shall be distributed, subject to the following:
(1) For purposes of this subsection, "excess Salary Deferral
Contributions" mean the amount by which Salary Deferral Contributions
for Highly Compensated Employees have been reduced under subsection
(d).
(2) Excess Salary Deferral Contributions (adjusted for income or losses
allocable thereto as specified in paragraph (3), if any) shall be
distributed to Participants on whose behalf such excess contributions
were made for the calendar year no later than December 31st of the
following year. Furthermore, the Retirement Committee shall attempt to
distribute such amount by March 15th of the year following the year
for which the excess contributions were made to avoid the imposition
on the Participating Employers of an excise tax under Code Section
4979.
(3) Income or losses allocable to excess Salary Deferral Contributions
shall be equal to the amount of income or loss allocable to such
excess amount pursuant to Section 7.2 for the year for which such
amount was contributed.
(4) The amount of excess Salary Deferral Contributions and income or
losses allocable thereto which would otherwise be distributed pursuant
to this subsection shall be reduced, in accordance with regulations,
by the amount of Excess Deferrals and income or losses allocable
thereto previously distributed to the Participant pursuant to Section
6.2 for the calendar year.
(n) In the sole discretion of the Retirement Committee, the provisions of this
Section may be applied on an aggregate basis to all Participants employed by a
particular Controlled Group and their Salary Deferral Contributions, or the
Participants employed by a particular Controlled Group may be treated as
disaggregated into separate groups under the provisions of Code Section 410(b)
and Treasury Regulations Sections 1.410(b)-6(b)(3) and 1.410(b)-7(c)(3), with
each such group separately satisfying the provisions of this Section.
(o) The deferral percentage for any Participant who is a Highly Compensated
Employee for the calendar year, and who is eligible to participate in two or
more plans with cash or deferred arrangements described in Code Section 401(k)
to which any Participating Employer or Affiliate in a Controlled Group
contributes, shall be determined as if all employer contributions made by
members of that Controlled Group were made under a single arrangement unless
mandatorily disaggregated pursuant to regulations under Code Section 401(k).
This subsection shall be applied by treating all cash or deferred arrangements
in a Controlled Group with Plan Years ending within the same calendar year as a
single arrangement.
(p) If two or more plans maintained by members of a Controlled Group which
include cash or deferred arrangements are considered as one plan for purposes of
Code Section 401(a)(4) or Code Section 410(b), the cash or deferred arrangements
shall be treated as one for the purposes of applying the provisions of this
Section unless mandatorily disaggregated pursuant to regulations under Code
Section 401(k).
(q) If the entire Account balance of a Highly Compensated Employee has been
distributed during the calendar year in which an excess arose, the distribution
shall be deemed to have been a corrective distribution of the excess and income
attributable thereto to the extent that a corrective distribution would
otherwise have been required under subsection (f) of this Section, Section 6.2
or Section 6.3(e).
(r) A corrective distribution of excess contributions under subsection (f) of
this Section, excess Employer Matching Contributions under Section 6.3(e), or
Excess Deferrals under Section 6.2 may be made without regard to any notice or
Participant or spousal consent required under Article IX or X.
(s) In the event of a complete termination of the Plan during the Plan Year in
which an excess arose, any corrective distribution under subsection (f) of this
Section or Section 6.3(e) shall be made as soon as administratively feasible
after the termination, but in no event later than 12 months after the date of
termination.
Section 6.2 Distribution of Excess Deferrals.
Notwithstanding any other provisions of the Plan, Excess Deferrals for a
calendar year and income or losses allocable thereto shall be distributed no
later than the following April 15 to Participants who claim such Excess
Deferrals, subject to the following:
(a) For purposes of this Section, "Excess Deferrals" means the amount of Salary
Deferral Contributions for a calendar year that the Participant claims, pursuant
to the procedure set forth in subsection (b), because the total amount deferred
for the calendar year exceeds $10,000 for 1998 (indexed for inflation for
subsequent calendar years) or such other limit imposed on the Participant for
that year under Code Section 402(g).
(b) The Participant's written claim, specifying the amount of the Participant's
Excess Deferral for any calendar year, shall be submitted to the Retirement
Committee no later than the March 1 following such calendar year. The claim
shall include the Participant's written statement that if such amounts are not
distributed, such Excess Deferrals, when added to amounts deferred under other
plans or arrangements described in Code Section 401(k), 403(b), or 408(k),
exceed the limit imposed on the Participant by Code Section 402(g) for the year
in which the deferral occurred. A Participant shall be deemed to have submitted
such a claim to the extent the Participant has Excess Deferrals for the calendar
year taking into account only contributions under this Plan and any other plan
maintained by the Participant's Participating Employer and any other
Participating Employer or Affiliate.
(c) Excess Deferrals distributed to a Participant with respect to a calendar
year shall be adjusted to include income or losses allocable thereto using the
same method specified for excess Salary Deferral Contributions under Section
6.1(f)(3).
(d) The amount of Excess Deferrals and income allocable thereto which would
otherwise be distributed pursuant to this Section shall be reduced, in
accordance with applicable regulations, by the amount of excess Salary Deferral
Contributions and income allocable thereto previously distributed to the
Participant pursuant to Section 6.1 for the calendar year, and by the amount of
any deferrals properly distributed as excess annual additions under Section 6.5.
Section 6.3 Adjustment of Employer Matching Contributions.
After the provisions of Section 6.1 and Section 6.2 have been satisfied, the
requirements set forth in this Section must also be met. If necessary to satisfy
the requirements of Code Section 401(m), Employer Matching Contributions shall
be adjusted in accordance with the following provisions of this Section. The
provisions of this Section shall be applied separately to Employer Matching
Contributions made on behalf of Participants employed by each Controlled Group.
(a) Each calendar year, the "contribution percentage" will be calculated for
each Active Participant (other than an Active Participant who is in a collective
bargaining unit required to be disaggregated pursuant to Treasury Regulation
Section 1.401(m)-1(b)(3)(ii)). Each Participant's contribution percentage is
calculated by dividing the amount referred to in paragraph (1) by the amount
referred to in paragraph (2):
(1) The total Employer Matching Contributions under Section 5.1, if any,
allocated to the Participant's Accounts with respect to the year. The
Retirement Committee may also elect to include all or part of the
Salary Deferral Contributions to be allocated to the Participant's
Accounts with respect to that year, provided that the requirements of
Treasury Regulation Section 1.401(m)-1(b) are satisfied and provided
that the requirements of Section 6.1 are met before such contributions
are used under this Section and continue to be met after the exclusion
for purposes of Section 6.1 of those contributions that are used to
satisfy the requirements of this Section. However, any Employer
Matching Contributions that are forfeited, either to correct excess
contributions under subsection (e) of this Section, or because the
contributions to which they relate are excess Salary Deferral
Contributions under Section 6.1, Excess Deferrals under Section 6.2 or
excess contributions under subsection (e) of this Section, shall be
disregarded.
(2) The Participant's compensation with respect to the year For purposes
of this Section, "compensation" has the same meaning as provided in
Section 6.1(a)(2).
(t) Each calendar year, the average contribution percentage of Active
Participants who are Highly Compensated Employees and the average contribution
percentage for Active Participants who are Non-Highly Compensated Employees will
be calculated. In each case, the average is the average of the percentages
calculated under subsection (a) for each of the employees in the particular
group. In calculating average contribution percentages, Participants employed in
a collective bargaining unit required to be disaggregated pursuant to Treasury
Regulation Section 1.401(m)-1(b)(3)(ii) shall be disregarded.
(1) The contribution percentage for each Participant and the average
contribution percentage for a particular group of employees shall be
calculated to the nearest one-hundredth of one percent.
(2) The average contribution percentage for Active Participants who are
Non-Highly Compensated Employees that is used in applying this Section
for a particular calendar year shall be the percentage determined for
the preceding year, unless the Retirement Committee elects to use the
percentage for the current year in accordance with applicable
regulations. If an election is made under the previous sentence to use
the percentage for the current year, it may not be changed for later
years except as provided in applicable regulations.
(u) If the requirements of either paragraph (1) or (2) are satisfied, then no
further action is needed under this Section:
(1) The average contribution percentage for Participants who are Highly
Compensated Employees is not more than 1.25 times the average
contribution percentage for Participants who are Non-Highly
Compensated Employees.
(2) The excess of the average contribution percentage for Participants who
are Highly Compensated Employees over the average contribution
percentage for Participants who are Non-Highly Compensated Employees
is not more than two percentage points, and the average contribution
percentage for such Highly Compensated Employees is not more than 2
times the average contribution percentage for such Non-Highly
Compensated Employees.
(v) If neither of the requirements of subsection (c) is satisfied, then the
Employer Matching Contributions with respect to Highly Compensated Employees
shall be reduced, beginning with the contributions representing the greatest
dollar amount per Participant, to the extent necessary to make the aggregate
dollar amount of such reductions equal to the amount by which the Employer
Matching Contributions (prior to such reduction) had exceeded the requirements
of subsection (c)(1) or (c)(2), whichever is less. Such reduction shall be made
in accordance with the methodology prescribed at the time of the reduction by
the Internal Revenue Service under Notice 97-2 or other applicable Notices or
Treasury Regulations.
(w) At any time during the year, the Retirement Committee may make an estimate
of the amount of Employer Matching Contributions on behalf of Highly Compensated
Employees that will be permitted under this Section for the year. If the
Retirement Committee determines in its sole discretion that reductions are
necessary to assure that at least one of the requirements in subsection (c) are
satisfied, the Retirement Committee may take written action to reduce or
eliminate Employer Matching Contributions for Highly Compensated Employees with
respect to Certified Compensation to be paid from the date such action is taken
to the end of the year.
(x) If contributions with respect to a Highly Compensated Employee are reduced
pursuant to subsection (d), the excess Employer Matching Contributions shall be
treated as follows:
(1) For purposes of this subsection, "excess Employer Matching
Contributions" mean the amount by which Employer Matching
Contributions must be reduced under subsection (d).
(2) Excess Employer Matching Contributions (adjusted for income or losses
allocable thereto) shall be forfeited (if otherwise forfeitable under
the provisions of Section 9.2 if the Participant were to terminate
employment on December 31st of the year for which the contribution was
made). Excess Employer Matching Contributions which are
non-forfeitable (adjusted for income or losses allocable thereto)
shall be distributed to Participants on whose behalf such excess
contributions were made for the year no later than December 31st of
the following year. Furthermore, the Retirement Committee shall
attempt to distribute such amount by March 15th of the year following
the year for which the excess contributions were made to avoid the
imposition on the Participating Employers of an excise tax under Code
Section 4979.
(3) Income or losses allocable to excess Employer Matching Contributions
shall be determined in the same manner specified for excess Salary
Deferral Contributions under Section 6.1(f)(3).
(4) Amounts forfeited by Highly Compensated Employees pursuant to
paragraph (2) shall be applied to reduce future Employer Matching
Contributions as provided in Section 6.6.
(y) In the sole discretion of the Retirement Committee, the provisions of this
Section may be applied on an aggregate basis to all Participants employed by a
particular Controlled Group and their Employer Matching Contributions, or the
Participants employed by that Controlled Group may be treated as disaggregated
into separate groups under the provisions of Code Section 410(b) and Treasury
Regulation Sections 1.410(b)-6(b)(3) and 1.410(b)-7(c)(3), with each such group
separately satisfying the provisions of this Section.
(z) The contribution percentage for any Participant who is a Highly Compensated
Employee for the year, and who is eligible to make nondeductible employee
contributions or to receive matching contributions under two or more plans
described in Code Section 401(a) that are maintained by the Participating
Employers or Affiliates in a particular Controlled Group, shall be determined as
if all such contributions were made under a single arrangement unless
mandatorily disaggregated pursuant to regulations under Code Section 401(m).
(aa) If two or more plans maintained by the Participating Employers or
Affiliates in a particular Controlled Group are treated as one plan for purposes
of satisfying the eligibility requirements of Code Section 410(b), those plans
must be treated as one plan for purposes of applying the provisions of this
Section unless mandatorily disaggregated pursuant to regulations under Code
Section 401(m).
(bb) Notwithstanding the foregoing, if neither subparagraph (c)(1) of this
Section nor Section 6.1(c)(1) was satisfied, the requirements set forth in
Section 6.4 must also be satisfied.
Section 6.4 Multiple Use of the Alternative Limitations.
If neither Section 6.1(c)(1) nor Section 6.3(c)(1) was satisfied, the following
additional requirements must also be satisfied. The provisions of this Section
shall be applied separately to Salary Deferral Contributions and Employer
Matching Contributions made on behalf of Participants employed by each
Controlled Group.
(a) The sum of the following two amounts must not exceed the greater of the
limit determined under subsection (b) or the limit determined under subsection
(c):
(1) The average deferral percentage for Highly Compensated Employees
(determined under Section 6.1(b) following any adjustments required by
Section 6.1).
(2) The average contribution percentages for Highly Compensated Employees
(determined under Section 6.3(b) following any adjustments required by
Section 6.3).
(cc) The limit under this subsection is the sum of the following amounts:
(1) 1.25 multiplied by the greater of:
(A) The average deferral percentage for Non-Highly Compensated
Employees (determined under Section 6.1(b) following any
adjustments required by Section 6.1), or
(B) The average contribution percentage for Non-Highly Compensated
Employees (determined under Section 6.3(b) following any
adjustments required by Section 6.3).
(2) Two percentage points plus the lesser of:
(A) The average deferral percentage for Non-Highly Compensated
Employees (determined under Section 6.1(b) following any
adjustments required by Section 6.1), or
(C) The average contribution percentage for Non-Highly Compensated
Employees (determined under Section 6.3(b) following any
adjustments required by Section 6.3).
Notwithstanding the foregoing, the amount under this subparagraph
cannot exceed the lesser of (A) or (B) above, multiplied by two.
These averages shall be determined after any adjustment made
pursuant to Sections 6.1, 6.2, or 6.3.
(dd) The limit under this subsection is the amount that would be determined
under subsection (b) by:
(1) Substituting "lesser" for "greater" in paragraph (1) of subsection
(b), and
(2) Substituting "greater" for "lesser" each place that word appears in
paragraph (2) of subsection (b).
(ee) If the amount determined under subsection (a) is greater than the
applicable limit determined under subsections (b) and (c), an additional amount
must be treated as excess Salary Deferral Contributions and distributed under
Section 6.1. In addition, any Employer Matching Contributions attributable to
those Salary Deferral Contributions must be treated as excess contributions and
distributed or forfeited under Section 6.3. Appropriate adjustments under this
subsection must be made pursuant to Treasury regulations until the sum of the
average deferral percentage and average contribution percentages for Highly
Compensated Employees is equal to the greater of the limits determined under
subsections (b) and (c).
(ff) This Section shall be applied in accordance with the provisions of IRS
Notice 97-2 or other applicable Notices or Treasury Regulations.
Section 6.5 Limitation on Allocations.
Notwithstanding the foregoing provisions of this Article, allocations to
Participants shall not exceed the limits provided under Code Section 415. The
limits of Code Section 415 (and this Section) shall be applied separately to the
Salary Deferral Contributions, Employer Matching Contributions and Employer
Profit Sharing Contributions made by Participating Employers in each Controlled
Group.
(a) The Annual Addition with respect to a Participant's Accounts in any calendar
year shall not exceed the lesser of:
(1) $30,000, adjusted for each year to take into account any cost of
living increase provided for that year in accordance with regulations
prescribed by the Secretary of the Treasury.
(2) 25% of the Compensation of such Participant for such limitation year.
(gg) Prior to January 1, 2000, if the Participant is also a participant in one
or more defined benefit plans maintained by a Participating Employer or an
Affiliate, the sum of the Participant's defined benefit plan fraction and
defined contribution plan fraction, determined according to Code Section 415(e),
for any Plan Year may not exceed 1.0. If the sum of a Participant's defined
benefit fraction and defined contribution fraction would otherwise exceed 1.0
for any Plan Year, the benefits provided under the defined benefit plan or plans
shall be reduced to the extent necessary to reduce the sum of the fractions to
1.0.
(hh) All defined contribution plans of a Participating Employer and other
members of its Controlled Group shall be treated as one defined contribution
plan for purposes of applying the limitations of this Section. If a limitation
on the contributions to be allocated to a Participant's Accounts hereunder for a
calendar year is required because of contributions or forfeitures under another
such plan, the allocations under this Plan and each such other plan shall be
reduced pro rata to the end that the limitation shall not be exceeded, except
that reductions to the extent necessary shall be made in allocations under
profit sharing and stock bonus plans before any reductions in allocations are
made under money purchase pension plans.
(ii) If for any calendar year the limitations described in subsection (a) are
exceeded with respect to any Participant, the Participant's Salary Deferral
Contributions for the year, if any, shall be refunded to the Participant to the
extent necessary to satisfy the limits. Any remaining excess amount shall be
disposed of as follows:
(1) If the Participant is covered by the Plan at the end of the year, then
any remaining excess amount must be used to reduce future employer
contributions for such Participant under this Plan for the next year,
and for each succeeding year, as necessary.
(2) If the Participant is not covered by the Plan at the end of the year,
the excess amount will be held unallocated in a suspense account. The
suspense account will be applied to reduce future employer
contributions for all remaining Participants in the next year, and in
each succeeding year, if necessary.
(3) If a suspense account is in existence at any time during the year
pursuant to this subsection, it will not participate in the allocation
of the investment gains and losses of the Trust Fund.
(4) Any Salary Deferral Contributions refunded under this subsection shall
be disregarded for purposes of applying the limits under Sections 6.1
through 6.4.
(jj) The following definitions shall be applicable for purposes of this Section:
(1) "Annual Additions" means the sum of the following amounts allocated to
a Participant:
(A) Employer contributions, including Salary Deferral Contributions
made under this Plan. Excess Salary Deferral Contributions, and
excess Employer Matching Contributions which are distributed
under the provisions of this Article are included in Annual
Additions, but Excess Deferrals which are distributed under
Section 6.2 are not included in Annual Additions.
(B) The portion of the Employer Matching Contribution which is
allocated to the Participant under Section 5.1.
(D) The portion of the Employer Profit Sharing Contribution which is
allocated to the Participant under Section 5.2.
(C) Employer contributions, employee contributions, and forfeitures,
if any, under any other qualified defined contribution plan
maintained by a Participating Employer.
(D) Amounts attributable to medical benefits as described in Code
Sections 415(1)(2) and 419A(d)(2).
An Annual Addition with respect to a Participant's Accounts shall
be deemed credited thereto with respect to a year if it is
allocated to the Participant's Accounts under the terms of the
Plan as of any date within that year.
(2) "Compensation" means a Participant's earned income, wages, salaries,
fees for professional services and other amounts received (without
regard to whether or not an amount is paid in cash) for personal
services actually rendered in the course of employment with the
Participating Employers and Affiliates to the extent that the amounts
are includible in gross income (including, but not limited to,
commissions, compensation for services on the basis of a percentage of
profits, tips, bonuses, fringe benefits, and reimbursements or other
expense allowances under a nonaccountable plan described in Treasury
Regulation Section 1.62-2(c)), subject to the following:
(A) Compensation does not include, except as provided below, any
employer contributions to a plan of deferred compensation which
are not includible in the employee's gross income for the taxable
year in which contributed, any distributions from a plan of
deferred compensation, and any other amounts which receive
special tax benefits. However, any amounts received by an
employee pursuant to an unfunded non-qualified plan of deferred
compensation may be considered as Compensation in the year such
amounts are includible in the employee's gross income.
Notwithstanding the foregoing, Compensation includes the Salary
Deferral Contributions to this Plan and any other elective
deferrals which are not includible in the gross income of the
employee under Code Sections 125, 401(k), 402(h)(1)(B), 403(b) or
457.
(B) Compensation excludes amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or
property) either becomes transferable or is no longer subject to
a substantial risk of forfeiture.
Section 6.6 Forfeitures Credited Against Employer Contributions.
Forfeitures arising on the first day of a calendar year under the provisions of
Section 9.2(c), and forfeitures of excess Employer Matching Contributions for
the previous year under Section 6.3(e), shall be applied, with respect to
Accounts of Participants employed by Participating Employers in the same
Controlled Group from which the forfeitures are derived, (i) first, to reinstate
Accounts of reemployed Participants in the manner prescribed by Section 9.2(d),
(ii) next, as a credit against Employer Matching Contributions, and (iii) if any
excess forfeitures remain, allocated in the same manner as an Employer Profit
Sharing Contribution for the current year by the Participating Employers, with
the allocation of such amounts among the Participating Employers in the same
Controlled Group to be determined by the Retirement Committee in its sole
discretion. Such forfeitures shall thereafter be treated hereunder as
contributions by the Participating Employers.
<PAGE>
ARTICLE VII
INDIVIDUAL ACCOUNTS
Section 7.1 Accounts for Participants.
The following Accounts may be established under the Plan for a Participant.
Subject to Section 8.6, all Accounts are subject to the Participant's investment
directions pursuant to Section 8.4 and Section 8.5.
(a) An "Employee After-Tax Contribution Account" shall hold any amounts
transferred, pursuant to Section 1.4, to this Plan on behalf of a Norwest
Participant from the Norwest Participant's "Employee After-Tax Contribution
Account" (as described in Section 7.1(b) of the Norwest Plan) under the Norwest
Plan and certain other amounts transferred to this Plan in accordance with
Section 7.5.
(kk) An "Employer Matching Contributions Account," which shall hold: any
Employer Matching Contributions allocated to the Participant pursuant to Section
5.1; and amounts transferred, pursuant to Section 1.4, to this Plan on behalf of
a Norwest Participant from the Norwest Participant's "Employer Directable
Contribution Account" and "Employer Non-Directable Contribution Account" (as
described in Section 7.1(b) of the Norwest Plan) under the Norwest Plan.
(ll) An "Employer Profit Sharing Contributions Account," which shall hold any
Employer Profit Sharing Contributions allocated to the Participant pursuant to
Section 5.2.
(mm) A "Frozen Transferred Account," as described in Section 10.1(l), which
shall hold any amounts transferred, pursuant to Section 1.4, to this Plan on
behalf of a Norwest Participant from the Norwest Participant's "Frozen
Transferred Account" (as described in Section 7.1(e) of the Norwest Plan) under
the Norwest Plan.
(nn) "Rollover Contributions Account," which shall hold: any Rollover
Contributions made to this Plan, pursuant to Section 7.4 by the Participant;
certain amounts transferred to this Plan in accordance with Section 7.5; and
amounts transferred, pursuant to Section 1.4, to this Plan on behalf of a
Norwest Participant from the Norwest Participant's "Rollover Account" (as
described in Section 7.1(d) of the Norwest Plan) under the Norwest Plan.
(oo) "Salary Deferral Contributions Account," which shall hold: any Salary
Deferral Contributions made on behalf of the Participant pursuant to Section
4.3; certain amounts transferred to this Plan in accordance with Section 7.5;
and. amounts transferred, pursuant to Section 1.4, to this Plan on behalf of a
Norwest Participant from the Norwest Participant's "Salary Deferral Account" (as
described in Section 7.1(a) of the Norwest Plan) under the Norwest Plan
More than one of any of the above types of Accounts may be established for a
Participant if required by the Plan or if considered advisable by the Retirement
Committee in the administration of the Plan. Except as provided in Section 8.6,
each account of a Participant under any plan which has been merged into this
Plan shall be held in the most comparable type of Account under this Plan.
Except as expressly provided herein to the contrary, the Trust Fund shall be
held and invested on a commingled basis, Accounts shall be for bookkeeping
purposes only, and the establishment of Accounts shall not require any
segregation of Trust Fund assets.
Section 7.2 Valuation of Accounts.
As of each Valuation Date, the Trustee or other recordkeeper, in accordance with
the accounting principles approved by the Retirement Committee, shall credit the
Accounts of Participants and Beneficiaries with contributions made during the
accounting period, if any, and debit such Accounts with withdrawals and
distributions for such period, if any, and shall also adjust the net credit
balances of such Accounts in the respective Investment Funds of the Trust Fund,
upward or downward, pro rata (using reasonable assumptions about the
availability of current period contributions, withdrawals, and distributions for
purposes of sharing in current period earnings and investment gains or losses),
so that such net credit balances will equal the net worth of each Investment
Fund of the Trust Fund as of that Valuation Date.
The net worth of an Investment Fund shall be determined by the Trustee or
Investment Fund manager and reported to the recordkeeper under procedures
approved by the Retirement Committee. All determinations made by the Trustee or
Investment Fund manager with respect to fair market values and net worth shall
be made in accordance with generally accepted principles of trust accounting.
The accounting made under this Section in accordance with procedures approved by
the Retirement Committee shall be conclusive and binding upon all persons having
an interest under the Plan.
Section 7.3 Participant Statements.
The Retirement Committee may from time to time issue statements to Participants
advising them of the status of their Accounts, but shall not be required to do
so. The issuance of such statements shall not in any way affect the rights of
Participants hereunder.
Section 7.4 Rollover Contributions.
With the consent of the Retirement Committee, which shall be granted in its sole
discretion and only if it is certain that the amount to be transferred
constitutes a Rollover Contribution, a Qualified Employee may transfer to the
Trust Fund an amount that constitutes a Rollover Contribution. Notwithstanding
any provisions of the Plan to the contrary, the following shall apply with
respect to a Rollover Contribution:
(a) A Rollover Account shall be established for each individual who makes a
Rollover Contribution. From the date the assets of the Rollover Contribution are
transferred to the Trust Fund through the first Valuation Date following such
transfer, the Rollover Account shall be valued at the fair market value of said
assets on the date of such transfer.
(b) No employer contributions made under this Plan shall ever be added to a
Rollover Account, and the Participant shall always be 100% vested in his
Rollover Account.
(c) The individual shall be treated the same as a Participant hereunder from the
time of the transfer, but shall not actually be a Participant and shall not be
eligible to receive an allocation of employer contributions until he or she has
satisfied the requirements of Articles IV and V.
(d) For purposes of this Section, "Rollover Contribution" means a rollover
contribution or rollover amount described in Code Sections 401(a)(31), 402(c),
403(a)(4), or 408(d)(3), or under any other provision of the Code which may
authorize rollovers to this Plan from time to time.
<PAGE>
ARTICLE VIII
INVESTMENT OF FUNDS
Section 8.1 Description of Funds.
The Retirement Committee shall from time to time establish three or more
Investment Funds for the investment of contributions by Participants and
Participating Employers described in Articles IV and V. The Retirement Committee
shall be the fiduciary responsible for selecting the Investment Funds for the
Plan. The Retirement Committee may at any time establish new Investment Funds,
terminate, suspend, merge or consolidate existing Funds, change the specific
categories of investments held in an Investment Fund, or take any other action
necessary for the operation and administration of Investment Funds. If
additional Investment Funds are created within a category as replacements of one
or more existing Investment Funds, the assets of the existing Funds and future
contributions to such Funds shall be divided equally among the new Funds unless
the Retirement Committee establishes a different allocation or the Participant
selects a different investment designation pursuant to Sections 8.4 and 8.5. If
an Investment Fund is eliminated, the Retirement Committee shall determine the
disposition of its assets, subject to Participant investment designations under
Sections 8.4 and 8.5. Any of the Investment Funds may be maintained through
investment in any common or collective fund maintained by the Trustee for the
investment of funds of qualified retirement plans which has the appropriate
investment objectives. In addition to any other Investment Funds, as of the
Effective Date the following Investment Funds shall be offered:
(a) Norwest Stock Fund. The Norwest Stock Fund shall consist primarily of shares
of Norwest Stock that were transferred to this Plan from the Norwest Plan in
accordance with Section 1.4. Investments in the Norwest Stock Fund shall be
subject to the rules in Section 8.6.
(3) It is contemplated that from time to time the Trustee may hold funds
in the Norwest Stock Fund temporarily awaiting a distribution in cash.
Such funds may, pending such distribution, be invested in short term
securities issued or guaranteed by the United States of America or any
agency or instrumentality thereof, or any other investment of a short
term nature, including collective funds, mutual funds, corporate
obligations or participations therein.
(4) Notwithstanding anything in the Plan to the contrary, the Trustee may
account for the Norwest Stock Fund in terms of units rather than in
terms of shares of stock and interests in other investments held in
the Fund.
(5) Any rights, warrants, or options issued with respect to Norwest Stock
held in the Trust Fund shall be exercised or sold as the Trustee may
determine. The Trustee may, in its discretion, limit the daily volume
of its purchases or sales of shares of Norwest Stock to the extent
such action is deemed by it to be in the best interest of the
Participants, Beneficiaries and Alternate Payees.
No new contributions under this Plan will be deposited into this Norwest
Stock Fund.
(pp) First American Stock Fund. The First American Stock Fund shall consist
primarily of shares of First American Stock. Investment in such shares shall be
made from time to time by the Trustee through brokers or by purchase from
securities dealers or by private purchase from First American or another seller
at such prices and in such amounts as the Trustee may determine in its absolute
and uncontrolled discretion.; provided, however, that no commissions may be
charged to the Plan for the private purchase of shares, and no private purchase
of shares of First American Stock shall be made at a total cost greater than the
total cost of purchasing such shares on the New York Stock Exchange at the
closing price on the date of such private purchase or, if shares of First
American Stock are not traded on such date, the next previous date on which such
shares are traded Any rights, warrants, or options issued with respect to First
American Stock held in the Trust Fund shall be exercised or sold as the Trustee
may determine. The Trustee may, in its discretion, limit the daily volume of its
purchases or sales of shares of First American Stock to the extent such action
is deemed by it to be in the best interest of the Participants, Beneficiaries
and Alternate Payees.
(1) It is contemplated that from time to time the Trustee may hold funds
in the First American Stock Fund temporarily awaiting investment in
shares of First American Stock. Such funds may, pending such
investment, be invested in short term securities issued or guaranteed
by the United States of America or any agency or instrumentality
thereof, or any other investment of a short term nature, including
collective funds, mutual funds, corporate obligations or
participations therein.
(2) The "closing price" for purposes of this subsection is the closing
price as reflected on the New York Stock Exchange Composite Tape on
the relevant trading date.
(3) Notwithstanding anything in the Plan to the contrary, the Trustee may
account for the First American Stock Fund in terms of units rather
than in terms of shares of stock and interests in other investments
held in the Fund.
Section 8.2 Reinvestment.
Income on and proceeds of sales of investments of each Investment Fund shall be
reinvested by the Trustee in the same Fund.
Section 8.3 Uninvested Cash.
The Trustee may, in its discretion maintain in cash, without obligation to
credit interest thereon, such part of the assets of each Investment Fund as it
considers necessary or desirable for the proper administration of such Fund and
may deposit any uninvested funds with itself or other banks.
Section 8.4 Investment Fund Designations.
Subject to Section 8.6, amounts allocated to a Participant's Accounts shall be
invested in one or more of the Investment Funds pursuant to the Participant's
direction. A Participant may direct that 100% of such contributions be invested
in any one of the Investment Funds (other than the Norwest Stock Fund), or may
direct that such contributions be apportioned between two or more Investment
Funds in multiples of 1%. The Retirement Committee may adopt rules and specify
procedures for directing the investment of a Participant's Account among the
various Investment Funds (and changing a prior election in accordance with
Section 8.5), including rules and procedures intended to ensure that all such
elections are made in accordance with the requirements of ERISA Section 404(c).
Each Qualified Employee as a part of the application for participation shall
designate the allocation applicable to all contributions to be made on his or
her behalf. If an amount is allocated to a Participant's Profit Sharing
Contribution Account, and the Participant has not submitted an election
directing the investment of such amounts by the deadline specified by the
Retirement Committee, then the Participant shall be deemed to have made an
election directing that all amounts allocated to the Participant's Profit
Sharing Account shall be invested in one or more Investment Funds specified in
rules adopted by the Retirement Committee. The Participant's Profit Sharing
Account shall be invested entirely in such Investment Funds until the
Participant (or his or her Beneficiary) changes the Participant's deemed
investment election pursuant to Section 8.5.
Section 8.5 Change in Investment Fund Designation.
Effective as of any payroll date, an Active Participant may change the
designation of the Investment Funds in which future contributions on his or her
behalf shall be invested. Subject to Section 8.6, the new designation must be
from among those described in Section 8.4, and the apportionment between the
Investment Funds shall be in multiples of 1%.
Effective as of any Valuation Date, a Participant may also direct that all or
part of the funds held in his or her Accounts (other than amounts outstanding as
a loan to the Participant) which are invested in any of the Investment Funds
shall be transferred to one or more of the other Investment Funds (other than
the Norwest Stock Fund). However, no funds invested in an Investment Fund other
than the Norwest Stock Fund may be invested in the Norwest Stock Fund pursuant
to this Section.
Any direction by the Participant under this Section must be received by and on
record with the Retirement Committee or its agent prior to the cut-off date and
time established by the Retirement Committee for the effective date of the
direction.
Section 8.6 Special Rules for Norwest Stock Fund.
When accounts of Norwest Participants are transferred to this Plan in accordance
with Section 1.4, any portions of their accounts that are invested in the
"Norwest Stock Fund" (as defined in Section 8.1(e) of the Norwest Plan) as of
the date of transfer shall be invested in the Norwest Stock Fund under this
Plan.
The portion of a Norwest Participant's Account which initially is invested in
the Norwest Stock Fund shall continue to be invested in the Norwest Stock Fund
until distributed from this Plan; provided, however, that a Norwest Participant
(or his or her Beneficiary or Alternate Payee) may direct that all or part of
the portion of his or her Account that is invested in the Norwest Stock Fund
shall be transferred to one or more of the other Investment Funds, in accordance
with the procedures in Section 8.5 that apply for other transfers among
Investment Funds.
No contributions made to this Plan (whether as Salary Deferral Contributions,
Employer Matching Contributions, Employer Profit Sharing Contributions or
Rollover Contributions) may be invested in the Norwest Stock Fund. No portion of
a Participant's Account which is invested in another Investment Fund (including
amounts previously invested in the Norwest Stock Fund and transferred to another
Investment Fund in accordance with the preceding paragraph of this Section) may
be invested in the Norwest Stock Fund.
If any portion of a Norwest Participant's Account is invested in the Norwest
Stock Fund at the time that distribution is made from this Plan, then the
special distribution rule in Section 10.2(a) shall apply (relating to the right
to receive an in-kind distribution).
Section 8.7 Voting of Norwest Stock and First American Stock.
Before each annual or special meeting of the stockholders of Norwest or First
American, the Retirement Committee shall cause to be sent to each Participant
who has any portion of his Account invested in the Norwest Stock Fund or the
First American Stock Fund (as applicable) a copy of the proxy solicitation
material therefor, together with a form requesting confidential instructions to
the Trustee on how to vote the shares of Norwest Stock or First American Stock
held in the Trust Fund. Instructions received from Participants by the Trustee
shall be held in the strictest confidence and shall not be divulged or released
to any person, including officers or employees of a Participating Employer.
The Trustee shall vote all shares of Norwest Stock held in the Norwest Stock
Fund and all shares of First American Stock held in the First American Stock
Fund in proportion to "votes" cast by Participants, as follows:
(a) The number of votes the Participant may cast shall be the total number of
shares allocated to the Participant's Accounts in the Norwest Stock Fund or the
First American Stock Fund (as applicable).
(b) The Trustee shall determine the number of votes for and against each
proposition and shall vote, in person or by proxy, all of the shares of Norwest
Stock held in the Norwest Stock Fund or all of the shares of First American
Stick held in the First American Stock Fund in proportion to the votes received.
The determinations in (a) shall be as of a Valuation Date selected by the
Retirement Committee which is not more than 90 days preceding the record date
for the meeting. It is intended that by, reason of the foregoing provisions,
shares held for the benefit of Participants who do not give voting instructions,
will be voted by the Trustee in proportion to the instructions actually
received. Any non-voting shares of Norwest Stock or First American Stock held in
the Trust Fund shall be disregarded for purposes of applying this Section.
Section 8.8 Tender or Exchange Offers Regarding Norwest Stock or
First American Stock. As soon as practicable after the commencement of a tender
or exchange offer (an "Offer") for shares of Norwest Stock or First American
Stock, the Retirement Committee shall use its best efforts to cause each
Participant who has invested any portion of his or her Account in the Norwest
Stock Fund or the First American Stock Fund (as applicable) to be advised in
writing of the terms of the Offer, and to be provided with forms by which the
Participant may instruct the Trustee, or revoke such instruction, to tender or
exchange shares of Norwest Stock or First American Stock (as applicable), to the
extent permitted under the terms of such Offer. The Trustee shall follow the
directions of each such Participant. In advising Participants of the terms of
the Offer, the Retirement Committee may include statements from the Board of
Directors of Norwest or First American (as applicable) setting forth its
position with respect to the Offer. The giving of instructions by a Participant
to the Trustee to tender or exchange shares and the tender or exchange thereof
shall not be deemed a withdrawal or suspension from the Plan solely by reason of
the giving of such instructions and the Trustee's compliance therewith.
Instructions by Participants pursuant to this Section shall apply both to shares
held in the Norwest Stock Fund and in the First American Stock Fund. The number
of shares as to which a Participant may provide instructions shall be determined
as follows:
(a) The Participant may provide instructions on the Offer with respect to the
total number of shares of Norwest Stock or First American Stock allocated to the
Participant's Accounts in the Norwest Stock Fund or the First American Stock
Fund (as applicable). If the Participant directs tender or exchange of the
shares for which the Participant may provide instructions, the Trustee shall
follow that instruction. The Trustee shall not tender or exchange the shares for
which a Participant may provide instructions if the Participant (i) directs
against their tender or exchange or (ii) gives no direction.
(b) The determination of the number of shares allocated to a Participant's
Account shall be as of the close of business on the day preceding the date on
which the Offer is commenced or such earlier date as shall be designated by the
Retirement Committee as the Retirement Committee, in its sole discretion, deems
appropriate for reasons of administrative convenience. Any securities received
by the Trustee as a result of a tender or exchange of shares of Norwest Stock or
First American Stock shall be held, and any cash so received shall be invested,
in short-term investments pending any reinvestment by the Trustee, as it may
deem appropriate, consistent with the purposes of the Plan.
Section 8.9 Other Special Rules.
(a) If a Participant has a Termination of Employment and does not elect an
immediate distribution of the value of his or her vested Account balance, then
the Participant's Account shall continue to be invested in accordance with the
former Participant's investment election, until the former Participant directs
otherwise.
(b) If a Participant dies, his or her Account shall continue to be invested, in
accordance with the investment election in effect immediately before his or her
death, until the Beneficiary directs otherwise. After the death of the
Participant, the Beneficiary may direct the investment of the Participant's
Account. The Beneficiary shall be treated as the Participant and have the same
rights as the Participant with respect to voting rights under Section 8.7 and
tender and exchange offer rights under Section 8.8.
(c) If any portion of a Participant's Account is segregated, under procedures
established pursuant to Section 10.12, while the Retirement Committee determines
whether it is a qualified domestic relations order (within the meaning of Code
Section 414(p)), then the segregated portion of the Participant's Account shall
continue to be invested in accordance with the Participant's investment
directions, including any investment elections made after the portion of the
Account is segregated.
(d) As soon as is practicable after the Retirement Committee determines that any
portion of a Participant's Account will be held for the benefit of an Alternate
Payee, pursuant to a domestic relations order which the Retirement Committee has
determined to be a qualified domestic relations order (within the meaning of
Code Section 414(p)), then the portion of the Participant's Account held for the
benefit of the Alternate Payee shall be invested in accordance with the
investment direction made by the Alternate Payee. The remaining portion of the
Participant's Account shall continue to be invested in accordance with the
Participant's investment directions. With respect to the portion of the
Participant's Account segregated for the benefit of the Alternate Payee, the
Alternate Payee shall be treated as the Participant and have the same rights as
the Participant with respect to voting rights under Section 8.7 and tender and
exchange offer rights under Section 8.8.
(e) In its discretion, the Retirement Committee may decline to comply with a
Participant's, Beneficiary's, or Alternate Payee's investment direction if the
Retirement Committee believes that complying with the investment direction
would:
(4) Result in a prohibited transaction, within the meaning of ERISA
Section 406 or Code Section 4975;
(5) Generate income taxable to the Plan;
(6) Not be in accordance with the terms of the Plan or any Trust
Agreement;
(7) Jeopardize the tax-qualified status of the Plan under the Code; or
(8) Result in compliance with an instruction described in Department of
Labor Regulation Section 2550.404c-1(d)(2)(ii).
(qq) Notwithstanding anything in the Plan to the contrary, the Plan Sponsor may
establish rules and procedures delaying the effective date of investment
elections, loans, withdrawals while employed, distributions or other
transactions, or establishing blackout periods during which such elections or
transactions will not be processed, as the Plan Sponsor determines is advisable
for the administration of the Plan; provided, however, that no such delay or
blackout period may exceed two months.
Section 8.10 Information To Participants.
The Retirement Committee shall furnish timely information to Participants,
Beneficiaries and any Alternate Payee directing the investment of the
Participant's Accounts concerning the procedures for providing such directions
and the nature of the Investment Funds offered under the Plan. The Retirement
Committee shall provide and make available such information as it determines is
required by ERISA Section 404(c) and shall be the fiduciary responsible for
making such disclosures. Neither the Participating Employers, the Retirement
Committee, nor any other person shall have any responsibility to provide
investment advice to any Participant, Beneficiary or Alternate Payee.
Section 8.11 Investment Risk.
The Plan is intended to constitute a plan described in ERISA Section 404(c) and
Department of Labor regulation Section 2550.404c-1, and will be administered in
accordance with the requirements for such a plan. Participants, Beneficiaries
and Alternate Payees shall assume all risks in connection with any decrease in
the value of any assets or funds that may be invested or reinvested in the
Investment Funds. Neither the Participating Employers, any employee or director
of any Participating Employer, the Retirement Committee, any member of the
Retirement Committee, the Trustee or any fiduciary with respect to the Plan
shall be liable to any Participant, Beneficiary, or Alternate Payee or any other
person with respect to the Participant's, Beneficiary's or Alternate Payee's
directions with respect to investment of the Participant's Account in the
Investment Funds, including (without limitation) any losses which are the direct
and necessary result of investment directions provided by the Participant,
Beneficiary or Alternate Payee and including any investment of the Participant's
Account which is made if the Participant, Beneficiary, or Alternate Payee fails
to make an affirmative investment direction.
<PAGE>
ARTICLE IX
BENEFIT REQUIREMENTS
Section 9.1 Benefit Upon Retirement.
If a Participant's Termination of Employment occurs (for any reason other than
death) under such circumstances that the Participant is entitled to a retirement
benefit under Section 6.1 or Section 6.2 of the Pension Plan (as amended from
time to time), or if the Participant becomes entitled to monthly benefits under
a long term disability plan of his Participating Employer, the Participant shall
be entitled to a benefit equal to 100% of the value of all of his or her
Accounts. For purposes of this Section, if a Participant's Termination of
Employment occurs on or after his or her 65th birthday, the Participant will be
presumed to be entitled to a retirement benefit under the Pension Plan. Benefits
under this Section shall be paid at the times and in the manner determined under
Article X.
Section 9.2 Other Termination of Employment.
If a Participant's Termination of Employment occurs (for any reason other than
death) and the Participant is not entitled to a benefit under Section 9.1, the
Participant shall be entitled to a benefit equal to 100% of the value of his or
her Employee After-Tax Contribution Account, Salary Deferral Account and
Rollover Account, and also a benefit equal to the vested percentage of the value
of the Participant's Employer Matching Contribution Account, Employer Profit
Sharing Contribution Account, and Frozen Transferred Account subject to the
following:
(a) If no withdrawals or distributions have been received by the Participant
from his or her Employer Matching Contribution Account, Employer Profit Sharing
Contribution Account or Frozen Transferred Account pursuant to Article X, the
vested portion of those Accounts shall be the vested percentage determined
according to the number of the Participant's years of Vesting Service prior to
the Termination of Employment, as follows:
Full Years of Vesting Service Vested Percentage
Less than 1 year 0%
1 but less than 2 years 25%
2 but less than 3 years 50%
3 but less than 4 years 75%
4 years or more 100%
(rr) If the Participant has received one or more withdrawals or distributions
from his or her Employer Matching Contributions Account, Employer Profit Sharing
Contributions Account, or Frozen Transferred Account pursuant to Article X, the
vested portion of the respective Account shall be determined as follows:
(1) There shall be added to the value of the Account the aggregate amount
of withdrawals or distributions made from that Account.
(2) The amount determined under paragraph (1) shall be multiplied by the
vested percentage determined in subsection (a).
(3) The amount determined under paragraph (2) shall be reduced by the
amount added to the value of the Account under paragraph (1). The
result (but not less than zero in any case) shall be the vested
portion of the Account.
(ss) The portion of each Employer Matching Contributions Account, Employer
Profit Sharing Contributions Account, or Frozen Transferred Account that is not
vested shall be designated as a forfeiture amount as of the Valuation Date
coincident with or next following the Termination of Employment, as provided in
Section 7.2. The sub-account of each Account holding the forfeiture amount shall
become a forfeiture on the January 1 following the earlier of (i) the date the
Participant's entire vested benefit has been distributed, or (ii) the date the
Participant incurs a break in service as defined in subsection (e), and shall
then be applied as provided in Section 6.6.
(tt) If the Participant is reemployed and completes an Hour of Service before a
break in service as defined in subsection (e) occurs, the respective forfeiture
amount shall be reinstated to the Account from which it was forfeited.
(1) The reinstatement shall occur as soon as reasonably possible after the
individual becomes a Participant again pursuant to Section 4.1(c), but
not later than as of the last Valuation Date for the calendar year in
which the Participant completed the Hour of Service after the
reemployment. If the forfeiture amount has become a forfeiture under
subsection (c), the amount of the reinstatement shall be equal to the
forfeiture amount as of the January 1 on which it became a forfeiture.
Otherwise, the separate forfeiture sub-account created pending a
forfeiture shall be reinstated to the Participant.
(2) The amount required for the reinstatement of a forfeited amount
pursuant to this subsection shall be provided from the following
sources in the priority indicated:
(A) Forfeiture amounts under subsection (c) which have not been
applied pursuant to Section 6.6.
(B) Additional contributions by the Participant's present
Participating Employer, in amounts specified by the Retirement
Committee.
(3) If the Participant is not 100% vested in such Accounts upon the
subsequent Termination of Employment, the benefit to which he or she
shall be entitled therefrom shall be determined as of the Valuation
Date coincident with or next following such Termination of Employment,
in accordance with subsection (a) or (b) (as applicable).
(uu) For purposes of this Section, a "break in service" means a period of at
least 60 months duration which meets the requirements of Section 3.3(c)(1) and
(2).
(vv) The benefit under this Section shall be paid at the times and in the manner
determined under Article X.
Section 9.3 Death.
If a Participant's Termination of Employment is the result of the Participant's
death, the Beneficiary shall be entitled to a benefit equal to 100% of the value
of all of the Participant's Accounts. If a Participant's death occurs after
Termination of Employment, the Beneficiary shall be entitled to whatever benefit
the Participant would have been entitled to receive if the Participant had
lived. Such benefits shall be paid at the times and in the manner determined
under Article X.
Section 9.4 Loans to Participants.
The Retirement Committee may authorize a loan to a Participant who is an
employee of a Participating Employer or an Affiliate and who makes application
therefor. Each loan shall be subject to the following provisions:
(a) The amount of any loan to a Participant, when added to the outstanding
balance of all other loans to the Participant under this Plan on the date the
loan is made, shall not exceed the smaller of:
(1) $50,000 reduced by the outstanding balance on all loans to the
Participant under all related plans on the date the loan is made, and
also by the difference between (i) the highest outstanding loan
balance under this Plan and all related plans during the 1-year period
ending on the day before the date on which the loan is made, and (ii)
the outstanding loan balance under this Plan and all related plans on
the date the loan is made, or
(2) 50% of the amount to which the Participant would be entitled from this
Plan in the event his or her Termination of Employment were to occur
on the date the loan is made.
For the purpose of this Section, a related plan is any "qualified
employer plan," as defined in Code Section 72(p)(4), sponsored by the
Participant's Participating Employer or any related employer in the same
Controlled Group or as otherwise determined according to Code Section
72(p)(2)(C).
(ww) The minimum amount a Participant may borrow in any loan is $1,000.
(xx) Each loan shall be evidenced by the Participant's promissory note payable
to the order of the Trustee. Each loan shall be adequately secured as determined
by the Retirement Committee. A loan shall be considered adequately secured
whenever the outstanding balance does not exceed the amount to which the
Participant would be entitled in the event of his or her Termination of
Employment.
(yy) The Retirement Committee shall determine the rate of interest to be paid
with respect to each loan, which shall be a reasonable rate of interest within
the meaning of Code Section 4975.
(zz) Each loan shall provide for payment of principal and interest in equal
semi-monthly installments over whichever of the following periods applies:
(1) Except as provided in paragraph (2), each loan shall be for a stated
term determined by agreement of the Participant and the Plan which
shall not exceed five years from the date the loan is made. If the
first installment payment is due within two months after the date the
loan was made, the five-year repayment period will be measured from
the due date of that first payment.
(2) If a loan is used to acquire any dwelling unit which within a
reasonable time is to be used as the principal residence of the
Participant, the maximum term shall be 20 years from the date the loan
is made.
(3) When assets are transferred from the Norwest Plan on behalf of Norwest
Participants in accordance with Section 1.4, any promissory notes
issued in connection with loans outstanding from the Norwest Plan to
Norwest Participants shall be assigned to the Trustee of this Plan.
Notwithstanding the foregoing provisions of this subsection, any loans
by Norwest Participants which are transferred to this Plan from the
Norwest Plan may continue to be repaid according to the original
payment schedule.
A maximum of one general purpose loan under paragraph (1) and one
principal residence loan under paragraph (2) may be outstanding to a
Participant at any time.
(aaa) A loan made to a Participant under this Section shall be deemed to be
effective on the date that the loan proceeds are issued to the Participant from
the Trust Fund. Loans will be repaid through payroll deductions beginning with
the pay period following the effective date of the loan and continuing through
the term of the loan until paid in full according to the terms of the loan note
agreement. The Participant may make a lump sum total prepayment to the Trustee
at any time.
(1) After a Participant ceases to be an employee of a Participating
Employer due to Termination of Employment or death, a loan will be due
and payable 90 days after the Termination of Employment or death
occurred. In the event the Participant's salary on any payroll date is
not sufficient to make a required loan payment, the Participant shall
make the required loan payment, or the balance of such payment,
directly to the Trustee.
(2) If any loan payment due under the provisions of this subsection is not
made within 90 days after the date it is due, the entire loan will be
declared to be in default, and the Participant will be deemed to have
received a distribution of the loan for tax purposes. Foreclosure on
the note and application of the Participant's Accounts to satisfy the
note will not occur until the earliest date on which the Participant
or Beneficiary is eligible to receive payment of benefits under the
Plan. A default authorizes the Trustee to treat the Participant as
having received an actual distribution of the note from the Plan on
the earliest date thereafter on which such a distribution is permitted
consistent with subsection (g) and Article X.
(bbb) If a loan to a Participant is outstanding on the date the Participant
becomes entitled to a distribution from the Trust Fund with respect to the
portion of the Participant's Account or Accounts attributable to the loan, the
balance of the loan, or a portion thereof equal to the amount to be distributed,
if less, shall on such date become due and payable. The portion of the loan due
and payable shall be satisfied by offsetting such amount against the amount to
be distributed to the Participant. Alternatively, the Retirement Committee may
in its discretion direct that the portion of the Participant's Account or
Accounts equal to the outstanding balance on the loan be distributed in kind by
distribution of the Participant's note.
(ccc) If a loan to a Participant is outstanding at the time of the Participant's
death, and if the loan is not repaid by the Participant's executor or
administrator, the note shall be distributed in kind to the Participant's
Beneficiary.
(ddd) The Retirement Committee shall direct the Trustee with respect to the
making of loans to Participants, the collection thereof, and all other matters
pertaining thereto, and the Trustee shall follow such directions to the extent
possible and shall not take any independent action with respect to such loans.
The Trustee shall have no responsibility whatsoever with respect to loans to
Participants except to follow the directions of the Retirement Committee to the
extent possible.
(eee) In accordance with the foregoing standards and requirements, loans shall
be available to all Participants on a reasonably equivalent basis.
(fff) All loans shall be governed by such rules and regulations as the
Retirement Committee may adopt, including any written rules governing loans
which are necessary to comply with federal regulations and which shall be deemed
to be incorporated in the Plan by this reference. Applications for loans shall
be made in such form and pursuant to such procedures as the Retirement Committee
may establish from time to time.
(ggg) The Retirement Committee shall cause to be furnished to any Participant
receiving a loan any information required to be furnished pursuant to the
Federal Truth In Lending Act, if applicable, or pursuant to any other applicable
law.
(hhh) Loans shall be made from the Participant's Accounts in accordance with the
order of priority established by the Retirement Committee. If a Participant's
Account from which a loan is to be made is invested in more than one Investment
Fund, to provide the Trust Fund with cash equal to the loan principal, the
investments shall be liquidated from each Investment Fund in accordance with
rules established by the Retirement Committee.
(iii) For purposes of Section 7.2, the portion of a Participant's Account or
Accounts represented by the outstanding loan principal shall be segregated and
shall not share in the income or losses of the Trust Fund. In lieu thereof, all
interest paid by the Participant on the loan shall be allocated to the
Participant's Account or Accounts. The Trustee may charge to the Participant's
Accounts any expenses attributable to the loan and such portion of the general
expenses of the Trust Fund as the Trustee determines in its discretion to be
reasonable.
(jjj) For purposes of the investment provisions of Article VIII, payments of
principal and interest on loans shall be invested in the same manner as Salary
Deferral Contributions to the Participant's Accounts.
(kkk) For purposes of this Section, Account values shall be determined as of the
most recent Valuation Date for which the valuation has been completed at the
time the Participant's loan request is received or as of any subsequent
Valuation Date selected by the Retirement Committee in its discretion.
(lll) Solely for purposes of receiving loans under this Section, a former Active
Participant (or any Beneficiary of a deceased Participant) who is entitled to a
benefit from the Plan, and who is a "party in interest" as defined in Section
3(14) of ERISA, is considered to continue to be an employee of a Participating
Employer.
<PAGE>
ARTICLE X
DISTRIBUTION OF BENEFITS
Section 10.1 Time and Method of Payment.
The benefit to which a Participant or Beneficiary may become entitled under
Article IX shall be distributed as described in this Section. Distributions may
commence at any time after the Participant or Beneficiary has become entitled to
a benefit.
(a) Distributions to Participants. Participants shall receive distributions from
their Accounts after Termination of Employment as follows:
(1) If at the time of the Termination of Employment the Participant is
eligible for a retirement benefit under Section 6.1 or 6.2 of the
Pension Plan (as amended from time to time), or is considered disabled
under the long term disability plan of the Participant's Participating
Employer, distributions from the Participant's Accounts shall be made
by one or a combination of the following methods, as the Participant
may select:
(A) Payment in a single lump sum, or in one or more partial lump
sums.
(B) Payment in a series of annual or monthly installments.
(2) If the Participant does not satisfy the requirements of paragraph (1)
at the time his or her Termination of Employment occurs, distributions
from the Participant's Accounts shall be made by one of the following
methods, as the Participant may select:
(A) Payment in a single lump sum.
(B) Payment in a series of annual or monthly installments.
(3) In all events, the distribution to a Participant must be made, or
installments must commence, by April 1 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's Termination of Employment
occurs. However, clause (ii) of the preceding sentence does not apply
to any Participant who is a 5-percent owner of the Participating
Employers (as defined in Code Section 416) with respect to the Plan
Year ending in the calendar year in which the Participant attains age
70 1/2.
(A) Installments during the life of the Participant shall be paid no
less rapidly than by reference to one of the following periods:
(i) a period-certain not longer than the life expectancy of the
Participant, or (ii) a period-certain not longer than the joint
life and last survivor expectancy of the Participant and his or
her designated Beneficiary.
(B) Notwithstanding the foregoing, if the designated Beneficiary is
not the Participant's spouse, installments during the life of the
Participant shall be limited to the maximum period permitted
under Treasury Regulation Section 1.401(a)(9)-2.
(C) If no election has been made by the Participant by the date
payments are required to begin under this paragraph, the
Participant shall receive installments over a period certain
equal to the Participant's life expectancy (except as otherwise
provided in subsection (m) in the case of a Frozen Transferred
Account).
(mmm) Distributions to Beneficiaries. Beneficiaries shall receive payment of
benefits after the death of the Participant as follows:
(1) If a Participant described in subsection (a)(2) dies after Termination
of Employment but before receiving distribution of his or her entire
benefit or commencing installments, the total vested value of the
Participant's Accounts shall be paid to the Beneficiary in a lump sum
not later than one year following the Participant's death.
(2) If a Participant who has begun to receive payments in installments
over a period-certain dies after the date distributions were required
to commence pursuant to subsection (a)(3), the remaining payments
shall be made to the Beneficiary at least as rapidly as under the
method of distribution selected by the Participant. The Beneficiary
may elect to receive any payment earlier than the date it otherwise
would have been paid, or to receive a full or partial lump sum
distribution of the remaining vested Account balances, by submitting a
request to the Retirement Committee or its agent pursuant to such
procedures and prior to such deadlines as the Retirement Committee may
establish.
(3) If the Participant died while employed by a Participating Employer, or
died after distributions began but before the date distributions were
required to commence pursuant to subsection (a)(3), or if a
Participant described in subsection (a)(1) died before beginning to
receive distributions, the Participant's remaining vested Account
balances shall be distributed to the Beneficiary as follows:
(A) The Beneficiary may elect to receive distributions in one or a
combination of the following methods:
(I) Payment in a single lump sum, or in one or more partial lump
sums.
(II) Payment in a series of annual or monthly installments.
(E) If the Beneficiary is the surviving spouse of the Participant,
the Participant's Accounts shall be distributed to the
Beneficiary not later than December 31st of the year containing
the fifth anniversary of the Participant's death. However,
distributions may extend beyond that deadline if they are in the
form of installment payments over a period-certain not exceeding
the Beneficiary's life expectancy, provided the spouse elects
installment payments prior to that deadline and such payments
begin not later than December 31st of the year in which the
Participant would have reached age 70 1/2 (or the year in which
the Participant's death occurred, if later).
(F) If the Beneficiary is not the surviving spouse of the
Participant, the Participant's Accounts shall be distributed to
the Beneficiary not later than December 31st of the year
containing the fifth anniversary of the Participant's death.
(G) If a surviving spouse described in subparagraph (B) dies before
distributions begin, this paragraph shall be applied as if the
surviving spouse were the Participant.
(nnn) Mandatory Cash-Outs. Notwithstanding anything in subsection (a), (b) or
(m) to the contrary, if the total value of the Accounts of a Participant (or of
a Beneficiary following the Participant's death) is $5,000 or less, the
individual shall receive a lump sum payment of the individual's entire benefit
as soon as administratively feasible, but in no event later than one year
following the Participant's Termination of Employment (or death, if applicable).
However, if the total value of the individual's Accounts was more than $5,000 on
the date the individual received any previous distribution, this subsection
shall not apply and distributions shall instead be made as provided in
subsection (a) or (b), whichever is applicable.
(ooo) Installment Distributions. If distributions are made in installments to a
Participant under subsection (a) or to a Beneficiary under subsection (b)(3),
the amount to be distributed each year, beginning with the first year for which
payments are required to be made under subsection (a)(3) or (b)(3), must be at
least equal to the quotient obtained by dividing the entire interest of the
individual on the preceding December 31st by the number of years of life
expectancy which remain, determined as provided in subsection (e).
(1) Any installment method under this Section shall specify the method for
determining life expectancies under subsection (e). The installment
method shall be irrevocable after the date payments are required to
commence under subsection (a)(3) or (b)(3), except that the individual
entitled to payments may thereafter elect to receive a full lump sum
distribution of his or her remaining vested Account balances. A
Participant described in subsection (a)(1) or a Beneficiary described
in subsection (b)(3) who had elected installment payments may also
elect to receive a partial lump sum distribution of his or her
remaining vested Accounts or to increase the amount of the remaining
installments. The balance remaining following a partial lump sum
distribution will continue to be distributed in installments according
to the individual's existing election. An election to increase the
amount of the remaining installments cannot be revoked, but subsequent
elections to further increase the amount are allowed.
(2) Prior to the date payments are required to commence under subsection
(a)(3) or (b)(3), installments can be adjusted as follows:
(A) If at the time of the Termination of Employment the Participant
was eligible for a retirement benefit under Section 6.1 or 6.2 of
the Pension Plan (as amended from time to time), or was
considered disabled under his Participating Employer's long term
disability plan, an individual who has elected installment
payments may elect to increase or decrease the amount of the
installments, to stop or restart installments, to move between
annual and monthly installments, or to receive a full or partial
lump sum distribution. An individual making such a change must
also make any election related to the change regarding
withholding of income taxes which is required by applicable
regulations.
(B) In any situation not subject to subparagraph (A), the individual
may elect at any time to receive a lump sum distribution of the
entire remaining vested Account balances.
(ppp) Determination of Life Expectancies. For purposes of this Section, life
expectancies initially shall be determined based on the birth date(s) occurring
in the first calendar year for which payments are required to be made under this
Section, using the mortality tables prescribed by the Secretary of the Treasury
for this purpose in Treasury Regulation Section 1.72-9.
(1) If life expectancy is determined by reference only to the Participant
and/or the Participant's spouse, life expectancies shall be reduced by
one year for each calendar year after the year payments are required
to begin, unless the individual who is entitled to payments elects
that one life expectancy (or both, where applicable) shall be
redetermined each calendar year.
(2) If life expectancy is determined by reference to a Beneficiary other
than the Participant's spouse, it shall ordinarily be reduced by one
year for each calendar year after the year payments are required to
begin. However, the Participant may elect that the joint life and last
survivor expectancy of the Participant and a designated Beneficiary
other than the Participant's spouse shall be redetermined annually to
reflect changes in the life expectancy of the Participant but not of
the Beneficiary.
(qqq) Requests for Distributions. The Participant (or Beneficiary, where
applicable) must submit all requests or elections relating to distributions
under this Section to the Retirement Committee or its agent pursuant to such
procedures and prior to such deadlines preceding the date on which a lump sum is
to be paid, installments are to commence, or any other election is to take
effect, as the Retirement Committee may establish.
(rrr) Distributions from Multiple Accounts or Investment Funds. Installment
distributions or partial lump sum distributions shall be withdrawn from Accounts
in the order of priority specified in Section 10.5(b) and shall be made pro rata
from the Investment Funds in which the Accounts being distributed are invested,
based on the investment in each Investment Fund as of the most recent Valuation
Date for which the valuation has been completed.
(sss) Limit on Partial Lump Sums. No more than one partial lump sum payment
under this Section may be made during any calendar year. However, this
subsection does not prevent an individual who has received a partial lump sum
payment from requesting a distribution of the entire remaining balance of the
individual's Accounts during the same calendar year.
(ttt) Beneficiaries. For purposes of this Section, "designated Beneficiary"
means any individual who is a Beneficiary pursuant to Section 2.5. If more than
one Beneficiary is entitled to benefits following the Participant's death, the
interest of each Beneficiary shall be segregated pro rata into separate Accounts
for purposes of applying this Section.
(uuu) Compliance with Code Requirements. Notwithstanding the foregoing,
distributions required by this Section will be made in accordance with the
regulations under Code Section 401(a)(9), including Treasury Regulation Section
1.401(a)(9)-2. No distribution option otherwise permitted under this Plan will
be available to a Participant or Beneficiary if such distribution option does
not meet the requirements of Code Section 401(a)(9).
(vvv) Transfers Among Affiliates. Under the definition of Termination of
Employment in Section 2.43, a Participant's transfer of employment between any
combination of Participating Employers, Affiliates (whether or not such
Affiliate is a Participating Employer), or Predecessor Employers is not a
Termination of Employment for purposes of this Article and will not entitle the
Participant to a distribution of his or her benefit from the Plan.
(www) Special Rules for Frozen Transferred Accounts. To the extent that a
portion of a Norwest Participant's Frozen Transferred Account is attributable to
a merged plan which was subject to the qualified joint and survivor annuity
requirements of Code Sections 401(a)(11) and 417, the form of distribution from
that Account will comply with such requirements. The Plan shall also make
available any other optional form of settlement from any Frozen Transferred
Account which may be required by Code Section 411(d)(6). In any case where a
Frozen Transferred Account is subject to the qualified joint and survivor
annuity requirements, the following shall apply:
(1) The spouse of the Participant must consent to the election of any
payment from a "Frozen Transferred Account" under this Section in a
form other than a qualified joint and survivor annuity, to any
withdrawal from such an Account under Sections. 10.6 through 10.9, and
to any loan against such an Account under Section 9.4, to the extent
required by the Code or ERISA. The Retirement Committee will provide
such notices and explanations of the qualified joint and survivor
annuity and the rights of the Participant and the spouse as may be
required by applicable regulations, subject to any provisions of law
or regulations permitting waiver of a notice period.
(2) Notwithstanding any provision of paragraph (1), above, or of a merged
plan to the contrary, if the Frozen Transferred Account does not hold
any assets that have been transferred, directly or indirectly, from a
defined benefit plan or a money purchase pension plan, spousal consent
to a distribution under this Section following Termination of
Employment shall not be required if the Participant does not elect
payment in any form of annuity payable to the Participant for life. In
addition, spousal consent is not required in any case where the form
of distribution elected by the Participant is a qualified joint and
survivor annuity.
(xxx) Election Periods. In general, except as provided in subsection (a)(3), the
distribution to a Participant shall not occur, or installments shall not
commence, until at least 30 days after the Participant has been given all
notices and other information required by applicable regulations. However,
except in the case of a distribution from any portion of a Frozen Transferred
Account that is subject to the requirements of Code Sections 401(a)(11) and 417,
the distribution may occur or commence less than 30 days after the notice
required under Treasury Regulation Section 1.411(a)-11(c) and any other
applicable notices are given, provided that:
(1) The Retirement Committee clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
(2) The Participant, after receiving the notice, affirmatively elects a
distribution.
In the case of a distribution from any portion of a Frozen Transferred
Account that is subject to the requirements of Code Sections 401(a)(11) and
417, the Participant may elect (with any applicable spousal consent) to
waive the applicable 30-day periods pursuant to Code Section 417(a)(7)(B)
provided that the distribution occurs or commences more than seven days
after the explanation is provided.
Section 10.2 Form of Payment.
All distributions and withdrawals under this Article shall be made in cash,
except as follows:
(a) In the case of funds transferred from the Norwest Plan on behalf of a
Norwest Participant in accordance with Section 1.4 which continue to be invested
in the Norwest Stock Fund at the time distribution is made, the Norwest
Participant or his/her Beneficiary or Alternate Payee may elect that
distributions from such portion of the Participant's Account shall be in full
shares of Norwest Stock, with the value of any remaining fractional share paid
in cash. In the case of distributions in installments, any election under this
subsection to receive Norwest Stock must be made prior to the date installments
commence, and is irrevocable thereafter.
(yyy) In the case of amounts invested in the First American Stock Fund at the
time distribution is made, the Participant, Beneficiary or Alternate Payee may
elect that distribution from such Investment Fund shall be in full shares of
First American Stock, with the value of any remaining fractional share paid in
cash. This option may be elected only for single sum distributions.
(b) In kind distributions of notes pursuant to Section 9.4 shall occur as
provided therein.
Section 10.3 Accounting Following Termination of Employment.
Following the Participant's Termination of Employment, the undistributed portion
of any Account shall continue to be revalued as of each Valuation Date as
provided in Article VII. Distributions under Section 10.1 shall be based on the
Account values determined as of a Valuation Date (determined under procedures
established by the Retirement Committee) which is after the date the
distribution request is received by the Retirement Committee or its agent, and
shall be paid to the Participant as soon as reasonably possible following the
completion of the valuation for that Valuation Date.
Section 10.4 Reemployment.
Except as provided to the contrary in Section 10.1, distributions from the Trust
Fund shall cease upon reemployment of a Participant in a regular position by a
Participating Employer, or upon reemployment in any position with a
Participating Employer or an Affiliate prior to age 59 1/2, and shall recommence
in accordance with Section 10.1 upon a subsequent Termination of Employment.
Section 10.5 Withdrawals From Accounts While Employed--General Rules.
An Active Participant may request a withdrawal from his or her various Accounts
of any of the types of withdrawal described in Section 10.6 through Section
10.9, subject to the following:
(a) A request for a withdrawal while employed shall be made pursuant to
applicable rules and regulations adopted by the Retirement Committee and shall
be submitted to the Retirement Committee or its agent in such manner as the
Retirement Committee prescribes for this purpose. A withdrawal shall be paid
from the Trust Fund as soon as reasonably possible after the Participant's
request based on a Valuation Date (determined under procedures established by
the Retirement Committee) following the date the request is received by the
Retirement Committee or its agent (referred to in this Section as the
"applicable Valuation Date"). For purposes of Article VII, the withdrawal shall
be deemed to have been made on the applicable Valuation Date.
(b) Subject to any specific rules provided in Section 10.6 through 10.9, the
amount to be withdrawn shall be charged against the vested balance of the
Participant's various Accounts as of the applicable Valuation Date in the
following order of priority:
(3) Any pre-1987 employee after-tax contributions held in the Norwest
Participant's Employee After-Tax Contribution Account.
(4) The remaining balance in the Participant's Employee After-Tax
Contribution Account, including post-1987 contributions and earnings
on all contributions.
(5) The Participant's Employer Profit Sharing Contribution Account.
(6) The Participant's Employer Matching Contribution Account.
(7) The Participant's Rollover Account.
(8) The Participant's Salary Deferral Account.
(1) The Participant's Frozen Transferred Account.
However, no withdrawal may be made from the portion of any Account
attributable to an outstanding loan under Section 9.4. No more than the
vested balance of an Account may be withdrawn from that Account.
(zzz) Only one withdrawal under Section 10.6, Section 10.7 and Section 10.8,
combined, may be made by a Participant in any calendar year. Withdrawals under
Section 10.9 do not count against this limit.
(aaaa) If a withdrawal is to be made from an Account that is invested in more
than one Investment Fund, the amount of the withdrawal shall be made up of pro
rata amounts withdrawn from each Investment Fund. Payments shall be made in cash
or Norwest Stock, as provided in Section 10.2.
Section 10.6 Withdrawals While Employed--Non-Taxable.
An Norwest Participant who is an Active Participant may make a withdrawal of all
or part of any pre-1987 employee after-tax contributions to the Norwest Plan
that are held in his or her Employee After-Tax Contribution Account, subject to
the general rules in Section 10.5.
Section 10.7 Withdrawals While Employed--Regular In-Service
Withdrawals.
An Active Participant who has not reached age 59 1/2 may make a regular
in-service withdrawal under this Section from his or her Accounts, subject to
the general rules in Section 10.5 and the following additional restrictions;
(a) No withdrawal may be made under this Section from the Participant's Salary
Deferral Account, or from any portion of a Frozen Transferred Account that is
attributable to elective deferrals subject to Code Section 401(k) or earnings on
such deferrals. In addition, no withdrawals under this Section may be made from
any other Account which is attributable to contributions that were used to
calculate deferral percentages under Sec.
6.1 and earnings attributable to such contributions.
(b) If the Participant has not completed five years of active participation in
the Plan (measured from the most recent date on which he or she became eligible
to make contributions pursuant to Article IV of the Plan), the amount that may
be withdrawn from the Participant's Employer Matching Contribution Account shall
be limited so that immediately after the withdrawal the value of this Account is
not less than the amount allocated to this Account from Employer Matching
Contributions received by the Trustee during the 24 months prior to the
withdrawal.
Section 10.8 Withdrawals While Employed--After Age 59 1/2.
An Active Participant who is age 59 1/2 or older may make a withdrawal of all or
part of his or her Accounts, subject to the general rules in Section 10.5.
Section 10.9 Withdrawals While Employed--Financial Hardship.
An Active Participant who has not reached age 59 1/2 may make a withdrawal from
the Participant's Accounts to meet a financial hardship, subject to the general
rules in Section 10.5 and the following additional requirements:
(a) A hardship withdrawal will be permitted only if the Retirement Committee
determines that both of the following requirements are met:
(1) The withdrawal must be made on account of one of the following
reasons:
(A) To acquire needed medical care or to pay medical expenses
described in Section 213(d) of the Code incurred by the
Participant, the Participant's spouse, or any dependents of the
Participant, as defined in Section 152 of the Code.
(B) Purchase (excluding mortgage payments) of the principal residence
of the Participant.
(C) Payment of tuition, room and board for the next year of
post-secondary education for the Participant, or for his or her
spouse, children, or dependents.
(D) The need to prevent the eviction of the Participant from his or
her principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(2) All of the following requirements must be satisfied:
(A) The amount of the withdrawal cannot exceed the amount of the
immediate and heavy financial need of the Participant. The
Retirement Committee may reasonably rely on the Participant's
representation as to that amount. However, the amount of the
withdrawal may include any amounts determined by the Retirement
Committee to be necessary to pay any federal, state or local
income taxes or penalties reasonably expected to result from the
withdrawal.
(B) The Participant must have obtained all distributions, other than
hardship withdrawals, and all nontaxable loans currently
available under this Plan or any other plan maintained by the
employer. For purposes of this paragraph, "employer" includes all
Participating Employers and any entity under Common Control with
a Participating Employer.
(C) The Participant's elective contributions and employee
contributions under all plans maintained by the employer will be
suspended for at least 12 months after the receipt of the
hardship withdrawal.
(D) For the calendar year immediately following the calendar year of
the hardship withdrawal, the Participant may not make
contributions under all plans maintained by the employer in
excess of the applicable limit under Section 402(g) of the Code
for such next calendar year less the amount of the Participant's
elective contributions for the calendar year of the hardship
withdrawal.
(E) Notwithstanding the foregoing provisions of this paragraph, this
paragraph will be satisfied if the Internal Revenue Service
issues a revenue ruling, notice, or other document of general
applicability which establishes an alternative method under which
distributions will be deemed to be necessary to satisfy an
immediate and heavy financial need and all of the requirements of
such alternative method are met.
(bbbb) With respect to any such hardship withdrawal, the following earnings may
not be withdrawn under this Section: earnings credited under this Plan to a
Participant's Salary Deferral Account; earnings credited after December 31, 1988
under the Norwest Plan to a Norwest Participant's "Salary Deferral Account" (as
described in Section 7.1(a) of the Norwest Plan); earnings credited under this
Plan to any portion of a Frozen Transferred Account that is attributable to
elective deferrals subject to Code Section 401(k); earnings credited after
December 31, 1988 under the Norwest Plan to any portion of the Norwest
Participant's "Frozen Transferred Account" (as described in Section 7.1(e) of
the Norwest Plan) that is attributable to elective deferrals subject to Code
Section 401(k); and earnings on any other Account which is attributable to
contributions that were used to calculate deferral percentages under Section
6.1.
Section 10.10 Source of Benefits.
All benefits to which persons become entitled hereunder shall be provided only
out of the Trust Fund and only to the extent that the Trust Fund is adequate
therefor. No benefits are provided under the Plan except those expressly
described herein.
Section 10.11 Incompetent Payee.
If in the opinion of the Retirement Committee a person entitled to payments
hereunder is disabled from caring for his or her affairs because of mental
condition, physical condition, or age, payment due such person may be made to
such person's guardian, conservator, or other legal personal representative upon
furnishing the Retirement Committee with evidence satisfactory to the Retirement
Committee of such status. Prior to the furnishing of such evidence, the
Retirement Committee may cause payments due the person under disability to be
made, for such person's use and benefit, to any person or institution then in
the opinion of the Retirement Committee caring for or maintaining the person
under disability. The Retirement Committee shall have no liability with respect
to payments so made. The Retirement Committee shall have no duty to make inquiry
as to the competence of any person entitled to receive payments hereunder.
Section 10.12 Benefits May Not Be Assigned or Alienated.
Except as otherwise expressly permitted by the Plan or required by law, the
interests of persons entitled to benefits under the Plan may not in any manner
whatsoever be assigned or alienated, whether voluntarily or involuntarily, or
directly or indirectly, subject to the following:
(a) The Plan shall comply with the provisions of any court order which the
Retirement Committee determines is a qualified domestic relations order as
defined in Code Section 414(p). Notwithstanding any provisions in the Plan to
the contrary, an individual who is entitled to payments from the Plan as an
Alternate Payee pursuant to a qualified domestic relations order may receive a
lump sum payment from the Plan as soon as administratively feasible after the
Valuation Date coincident with or next following the date of the Retirement
Committee's determination that the order is a qualified domestic relations
order, unless the order specifically provides that payment is to be made at a
later time.
(b) The Retirement Committee shall establish procedures for determining whether
an order is a qualified domestic relations order. These procedures may be
amended at any time by written action of the Retirement Committee.
Section 10.13 Payment of Taxes.
The Trustee may pay any estate, inheritance, income, or other tax, charge, or
assessment attributable to any benefit payable hereunder which in the Trustee's
opinion it shall be or may be required to pay out of such benefit. The Trustee
may require, before making any payment, such release or other document from any
taxing authority and such indemnity from the intended payee as the Trustee shall
deem necessary for its protection.
Section 10.14 Conditions Precedent.
No person shall be entitled to a benefit hereunder until the person's right
thereto has been finally determined by the Retirement Committee nor until the
person has submitted to the Retirement Committee relevant data reasonably
requested by the Retirement Committee, including, but not limited to, proof of
date of birth, date of death, or marital status.
Section 10.15 Retirement Committee Directions to Trustee.
The Retirement Committee shall issue such directions to the Trustee as are
necessary to accomplish distributions to the Participants and Beneficiaries in
accordance with the provisions of the Plan.
Section 10.16 Effect on Unemployment Compensation.
For purposes of any unemployment compensation law, a distribution hereunder in
one sum attributable to an Account other than the Employee After-Tax
Contribution Account or the Rollover Contributions Account shall be considered
to be a severance payment and shall be allocated over a period of weeks equal to
the one sum payment divided by the employee's regular weekly pay while employed
by the Participating Employers, which period shall commence immediately
following the employee's Termination of Employment.
Section 10.17 Direct Rollovers to Other Plans.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Section, a distributee may elect, at
the time and in the manner prescribed by the Retirement Committee, to have any
portion of an eligible rollover distribution paid in a direct rollover directly
to an eligible retirement plan specified by the distributee. For purposes of
this Section:
(a) An "eligible rollover distribution" is any distribution or withdrawal of all
or any portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include any distribution or withdrawal:
(1) that is one of a series of substantially equal periodic payments (not
less frequently than annually) made over the life expectancy of the
distributee or the joint life expectancies of the distributee and the
distributee's designated beneficiary,
(2) that is paid in the form of a life annuity;
(3) for a specified period of ten years or more;
(4) to the extent such distribution is required under Code Section
401(a)(9);
(5) to the extent that such distribution or withdrawal is not includible
in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities); or
(6) the portion of any hardship withdrawal made, pursuant to Section 10.9,
after December 31, 1998, that comes from the Participant's Salary
Deferral Contributions Account or any portion of a Frozen Transferred
Account that is attributable to elective deferrals subject to Code
Section 401(k).
(cccc) An "eligible retirement plan" is an individual retirement account
described in Code Section 408(a), an individual retirement annuity described in
Code Section 408(b), 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, an eligible retirement plan is an
individual retirement account or individual retirement annuity.
(b) A "distributee" includes an employee or former employee. In addition, the
employee's or former employee's surviving spouse and the employee's or former
employee's spouse or former spouse who is the Alternate Payee under a qualified
domestic relations order, as defined in Code Section 414(p), are distributees
with regard to the interest of the spouse or former spouse.
(c) A "direct rollover" is a payment by the Plan to the eligible retirement plan
specified by the distributee.
Section 10.18 Special Rights With Respect To Certain Norwest Stock.
Certain stock of Norwest was acquired pursuant to Article XVI of the Norwest
Plan by means of an exempt loan that was intended to satisfy the requirements of
Section 4975(d)(3) of the Code and Section 408(b)(3) of ERISA. Norwest stock
acquired by the Norwest Plan by means of the exempt loan was allocated to the
accounts of certain Norwest Participants and transferred to this Plan in
accordance with Section 1.4. The Norwest stock acquired by means of the exempt
loan and transferred to this Plan in accordance with Section 1.4 shall be
referred to as "Norwest Leveraged ESOP Stock." The provisions of this Section
shall only apply to Norwest Leveraged ESOP Stock included in the Account of a
Norwest Participant and only to the extent required by Treasury Regulation
Section 54.4975-11(a)(3)(ii).
(a) To the extent required by the third sentence of Treasury Regulation Section
54.4975-7(b)(4), no share of Norwest Leveraged ESOP Stock shall be subject to a
put (other than the put described in subsection (b)), call, or other option, or
buy-sell or similar arrangement while held in the Trust Fund for this Plan or
when distributed from this Plan.
(b) If, when distributed from this Plan, a share of Norwest Leveraged ESOP Stock
is not publicly traded or is subject to a "trading limitation," as defined in
Treasury Regulation Section 54.4975-7(b)(10), then the Norwest Participant (or
his Beneficiary) shall have the right to exercise the "put option" described in
this subsection with respect to such stock.
(1) During the 15-month period after such shares of Norwest Leveraged ESOP
Stock are distributed from the Plan, the Norwest Participant (or his
Beneficiary) shall have a put option to sell such shares of Norwest
Leveraged ESOP Stock to the Norwest Participant's Participating
Employer. If Norwest Leveraged ESOP Stock ceases to be publicly traded
or becomes subject to a trading limitation after distribution but not
later than the end of the 15-month period after distribution, then the
Norwest Participant's Participating Employer shall provide written
notice of the put option to the Norwest Participant (or Beneficiary)
on or before the tenth day after the date the stock becomes so
restricted. The notice shall inform the Norwest Participant (or
Beneficiary) that for the remainder of the 15-month period the Norwest
Participant (or Beneficiary) shall have a put option.
(2) A Norwest Participant (or his Beneficiary) may exercise his put option
by notifying the Norwest Participant's Participating Employer in
writing that he or she is exercising the put option. If a Norwest
Participant (or his or her Beneficiary) decides to exercise the put
option, then the Norwest Participant's Participating Employer shall
pay the Norwest Participant (or Beneficiary) a price equal to the fair
market value of the stock, as determined in accordance with Treasury
Regulation Section 54.4975-11(d)(5). The Participating Employer shall
make payment of the fair market value of the stock under reasonable
terms, which may include making periodic payments over a period of up
to 5 years after the put option is exercised. The Participating
Employer shall disclose such payment terms to any Norwest Participant
(or Beneficiary) seeking to exercise his or her put option.
<PAGE>
ARTICLE XI
MANAGEMENT OF FUNDS
Section 11.1 Trust Fund.
All sums of money and all securities and other property transferred to this Plan
in accordance with Section 1.4 or contributed by the Participating Employers and
employees from time to time in support of the Plan, together with all
investments made therewith, the proceeds thereof and all earnings and
accumulations thereon, and the part thereof from time to time remaining, shall
be held and administered, without distinction between principal and income, in
one or more funds herein collectively referred to as the "Trust Fund," in trust,
in accordance with the terms and provisions hereof.
Section 11.2 Trustee and Trust Agreement.
The Trust Fund may be held and invested as one fund or may be divided into any
number of parts for investment purposes. Each part of the Trust Fund, or the
entire Trust Fund if it is not divided into parts for investment purposes, shall
be held and invested by one or more trustees or by an insurance company. The
trustee or trustees or the insurance company so acting with respect to any part
of the Trust Fund is referred to herein as the "Trustee" with respect to such
part of the Fund. The selection and appointment of each Trustee shall be made by
Retirement Committee. The Retirement Committee shall have the right at any time
to remove a Trustee and appoint a successor thereto, subject only to the terms
of any applicable trust agreement or group annuity contract. The Retirement
Committee shall have the right to determine the form and substance of each trust
agreement and group annuity contract under which any part of the Trust Fund is
held, subject only to the requirement that they are not inconsistent with the
provisions of the Plan. Any such trust agreement may contain provisions pursuant
to which the Trustee will make investments on direction of a third party.
Section 11.3 Compensation and Expenses of Trustee.
The Trustee and any co-trustee shall be entitled to receive such reasonable
compensation for services as may be agreed upon with the Retirement Committee.
The Trustee and any co-trustee shall also be entitled to reimbursement for all
reasonable and necessary costs, expenses, and disbursements incurred by it in
the performance of its services. Such compensation and reimbursements shall be
paid directly by the Participating Employers in such proportions as the
Retirement Committee shall determine, except to the extent that any such item of
compensation or reimbursement is included in an embedded fee which the
Retirement Committee determines can be properly paid directly or indirectly by
the Trust Fund.
Section 11.4 Funding Policy.
The Retirement Committee shall adopt a procedure, and revise it from time to
time as it shall consider advisable, for establishing and carrying out a funding
policy and method consistent with the objectives of the Plan and the
requirements of ERISA. It shall advise the Trustee of the funding policy in
effect from time to time.
Section 11.5 No Diversion.
The Trust Fund shall be for the exclusive purpose of providing benefits to
Participants under the Plan and their beneficiaries and defraying reasonable
expenses of administering the Plan. Such expenses may include premiums for the
bonding of Plan officials required by ERISA. No part of the corpus or income of
the Trust Fund may be used for, or diverted to, purposes other than for the
exclusive benefit of employees of the Participating Employers or their
beneficiaries. Notwithstanding the foregoing:
(a) If any contribution or portion thereof is made by a Participating Employer
by a mistake of fact, the Trustee shall, upon written request of the Retirement
Committee, return such contribution to the Participating Employer within one
year after the payment of the contribution to the Trustee. However, earnings
attributable to such contribution or portion thereof shall not be returned to
the Participating Employer but shall remain in the Trust Fund, and the amount
returned to the Participating Employer shall be reduced by any losses
attributable to such contribution or portion thereof.
(b) Contributions by a Participating Employer are conditioned upon initial
qualification of the Plan as to such Participating Employer under Code Section
401(a). If the Plan receives an adverse determination letter from the Internal
Revenue Service with respect to such initial qualification, the Trustee shall,
upon written request of the Retirement Committee, return the amount of such
contribution to the Participating Employer within one year after the date of
denial of qualification of the Plan. For this purpose, the amount to be so
returned shall be the contributions actually made, adjusted for the investment
experience of, and any expenses chargeable against, the portion of the Trust
Fund attributable to the contributions actually made.
(c) Contributions by a Participating Employer are conditioned upon the
deductibility of each contribution under Code Section 404. To the extent the
deduction is disallowed, the Trustee shall return such contribution (to the
extent disallowed) to the Participating Employer within one year after the
disallowance of the deduction. However, earnings attributable to such
contribution (or disallowed portion thereof) shall not be returned to the
Participating Employer but shall remain in the Trust Fund, and the amount
returned to the Participating Employer shall be reduced by any losses
attributable to such contribution (or disallowed portion thereof).
In the case of any such return of contribution, the Retirement Committee shall
cause such adjustment to be made to the Accounts of Participants as it considers
fair and equitable under the circumstances resulting in the return of such
contribution.
<PAGE>
ARTICLE XII
ADMINISTRATION OF PLAN
Section 12.1 Administration by Retirement Committee.
(a) The Retirement Plan Committee (the "Retirement Committee") shall be the
administrator of the Plan, within the meaning of Code Section 414(g) and ERISA
Section 3(16)(A). The Retirement Committee shall generally administer the Plan,
and except as expressly otherwise provided herein, the Retirement Committee
shall control and manage the operation and administration of the Plan and make
all decisions and determinations incident thereto. The Retirement Committee
shall have discretionary authority to construe the terms of the Plan.
(dddd) The Retirement Committee shall be composed of as many members as the Plan
Sponsor may appoint from time to time.
(1) The Management Committee shall appoint the Retirement Committee
members. Members of the Retirement Committee may, but need not, be
employees of a Participating Employer.
(2) Any member of the Retirement Committee may resign by delivering his or
her written resignation to the Management Committee. The resignation
shall be effective as of the date it is received by the Management
Committee or such later date as is specified in the resignation
notice. At any time and for any reason, the Management Committee may
remove any member of the Retirement Committee. Any employee of a
Participating Employer who is appointed to the Retirement Committee
shall automatically cease to be a member of the Retirement Committee,
effective on the date he or she ceases to be an employee of all
Participating Employers, unless the Management Committee specifies
otherwise in writing.
(3) Vacancies in the Retirement Committee arising by resignation, death,
removal, or otherwise shall be filled by the Management Committee.
(eeee) A majority of the members of the Retirement Committee at the time in
office shall constitute a quorum for the transaction of business. All
resolutions adopted and other actions taken by the Retirement Committee at any
meeting shall be by the vote of a majority of those present at any such meeting.
Upon the concurrence of all of the members in office at the time, action by the
Retirement Committee may be taken otherwise than at a meeting.
(ffff) The members of the Retirement Committee shall elect one of their number
as Chair and shall elect a Secretary who may, but need not, be a member of the
Retirement Committee.
(gggg) The members of the Retirement Committee may authorize one or more of
their number or any agent to execute or deliver any instrument or instruments on
their behalf. The members of the Retirement Committee may allocate any of the
Retirement Committee's powers and duties among individual members of the
Retirement Committee. The Retirement Committee may appoint one or more
subcommittees and delegate any of its discretionary authority and such of its
powers and duties as it deems desirable to any such subcommittee. The members of
any such subcommittee shall consist of such persons as the Retirement Committee
may appoint.
(hhhh) All resolutions, proceedings, acts, and determinations of the Retirement
Committee, with respect to the administration of the Plan, shall be recorded,
and all such records, together with such documents and instruments as may be
necessary for the administration of the Plan, shall be preserved by the
Retirement Committee.
(iiii) Subject to the limitations contained in the Plan, the Retirement
Committee shall be empowered from time to time in its discretion to establish
rules for the exercise of the duties imposed upon the Retirement Committee under
the Plan.
Section 12.2 Certain Fiduciary Provisions.
For purposes of the Plan:
(a) Any person or group of persons may serve in more than one fiduciary capacity
with respect to the Plan.
(b) A Named Fiduciary, or a fiduciary designated by a Named Fiduciary pursuant
to the provisions of the Plan, may employ one or more persons to render advice
with regard to any responsibility such fiduciary has under the Plan.
(c) To the extent permitted by an applicable trust agreement or group annuity
contract a Named Fiduciary with respect to control or management of the assets
of the Plan may appoint an investment manager or managers, as defined in ERISA,
to manage (including the power to acquire and dispose of) any assets of the
Plan.
(d) A person who is a fiduciary with respect to the Plan, including a Named
Fiduciary, shall be recognized and treated as a fiduciary only with respect to
the particular fiduciary functions as to which such person has responsibility.
(e) A Named Fiduciary may designate persons other than Named Fiduciaries to
carry out any or all of their fiduciary responsibilities; provided, however,
that such designation shall not include any responsibility, if any, in a trust
agreement to manage or control the assets of the Plan other than a power under
the trust agreement to appoint an investment manager as defined in ERISA. Such
designation shall be in writing.
Each Named Fiduciary (other than the Management Committee), each other
fiduciary, each person employed pursuant to subsection (b) above, and each
investment manager shall be entitled to receive reasonable compensation for
services rendered, or for the reimbursement of expenses properly and actually
incurred in the performance of their duties with the Plan and to payment
therefor from the Trust Fund if not paid directly by the Participating Employers
in such proportions as the Retirement Committee shall determine. Notwithstanding
the foregoing, no person so serving may receive compensation from the Plan for
fiduciary services if such person, natural or otherwise, is affiliated with the
Participating Employers, and no person so serving who already receives full-time
pay from any Participating Employer shall receive compensation from the Plan,
except for reimbursement of expenses properly and actually incurred.
Section 12.3 Discrimination Prohibited.
No person or persons in exercising discretion in the operation and
administration of the Plan shall discriminate in favor of highly compensated
employees, as defined in Section 414(q) of the Code.
Section 12.4 Evidence.
Evidence required of anyone under this Plan may be by certificate, affidavit,
document, or other instrument which the person acting in reliance thereon
considers to be pertinent and reliable and to be signed, made, or presented to
the proper party.
Section 12.5 Correction of Errors.
It is recognized that in the operation and administration of the Plan certain
mathematical and accounting errors may be made or mistakes may arise by reason
of factual errors in information supplied to the Retirement Committee, a
Participating Employer, or the Trustee. The Retirement Committee shall have
power to cause such equitable adjustments to be made to correct for such errors
as the Retirement Committee in its discretion considers appropriate. Such
adjustments shall be final and binding on all persons.
Section 12.6 Records.
The Retirement Committee, each fiduciary with respect to the Plan, and each
other person performing any functions in the operation or administration of the
Plan or the management or control of the assets of the Plan shall keep such
records as may be necessary or appropriate in the discharge of their respective
functions hereunder, including records required by ERISA or any other applicable
law. Records shall be retained as long as necessary for the proper
administration of the Plan and at least for any period required by ERISA or
other applicable law.
Section 12.7 General Fiduciary Standard.
Each fiduciary shall discharge his or her duties with respect to the Plan solely
in the interests of Participants and their beneficiaries and with the care,
skill, prudence, and diligence under the circumstances then prevailing that a
prudent person acting in a like capacity and familiar with such matters would
use in the conduct of an enterprise of a like character and with like aims.
Section 12.8 Prohibited Transactions.
A fiduciary with respect to the Plan shall not cause the Plan to engage in any
prohibited transaction within the meaning of ERISA.
Section 12.9 Claims Procedure.
The Retirement Committee shall establish a claims procedure consistent with the
requirements of ERISA. Such claims procedure shall provide adequate notice in
writing to any Participant or beneficiary whose claim for benefits under the
Plan has been denied, setting forth the specific reasons for such denial,
written in a manner calculated to be understood by the claimant and shall afford
a reasonable opportunity to a claimant whose claim for benefits has been denied
for a full and fair review by the appropriate Named Fiduciary of the decision
denying the claim.
Section 12.10 Bonding.
Plan personnel shall be bonded to the extent required by ERISA. Premiums for
such bonding may, in the sole discretion of the Retirement Committee, be paid in
whole or in part from the Trust Fund. Such premiums may also be paid in whole or
in part by the Participating Employers in such proportions as the Retirement
Committee shall determine. The Plan Sponsor may provide by agreement with any
person that the premium for required bonding shall be paid by such person.
Section 12.11 Waiver of Notice.
Any notice required hereunder may be waived by the person entitled thereto.
Section 12.12 Agent for Legal Process.
The Plan Sponsor shall be the agent for service of legal process with respect to
any matter concerning the Plan, unless and until the Retirement Committee
designates some other person as such agent.
Section 12.13 Indemnification.
In addition to any other applicable provisions for indemnification, the
Participating Employers jointly and severally agree to indemnify and hold
harmless, to the extent permitted by law, each member of the Retirement
Committee, each member of the Management Committee or governing body of the
Participating Employers, each officer, and each employee of the Participating
Employers against any and all liabilities, losses, costs, or expenses (including
legal fees) of whatsoever kind and nature which may be imposed on, incurred by,
or asserted against such person at any time by reason of such person's services
as a fiduciary in connection with the Plan, but only if such person did not act
dishonestly, or in bad faith, or in willful violation of the law or regulations
under which such liability, loss, cost, or expense arises.
Section 12.14 Agents.
The Retirement Committee, Management Committee, or Plan Sponsor may:
(a) Delegate such of its powers and duties as it deems desirable to any
person, in which case every reference herein made to the Retirement
Committee, the Management Committee, or the Plan Sponsor (as
applicable) shall be deemed to mean or include the delegated persons
as to matters within their jurisdiction;
(b) Appoint one or more persons or agents to aid it in carrying out its
duties and delegate such of its powers and duties as it deems
desirable to such persons or agents; and
(c) Employ such counsel, auditors, and other specialists and such clerical
and other services as it may require in carrying out the provisions of
the Plan, with the expenses therefore paid, as provided in Section
12.2.
<PAGE>
ARTICLE XIII
AMENDMENT, TERMINATION, MERGER
Section 13.1 Amendment.
Subject to the non-diversion provisions of Section 11.5, the Plan Sponsor, by
action of its Management Committee, may amend the Plan at any time and from time
to time. In addition, the Retirement Committee may approve a written action
amending the Plan in any of the following respects:
(a) With the approval of a duly authorized officer of the Plan Sponsor, to add
Appendices relating to eligibility, vesting and benefits of persons formerly
employed by entities whose stock, assets or operations have been acquired by a
Participating Employer or any of its subsidiaries.
(b) With the approval of a duly authorized officer of the Plan Sponsor, to merge
plans of any such acquired entities into this Plan (including any incidental
amendments required to accomplish such a merger) or to permit any such plans to
be invested through a master pension trust maintained for this Plan.
(c) To make changes required by the Internal Revenue Service in order to obtain
favorable determination letters for the Plan.
(d) To make changes in administration or operation of the Plan which do not
materially increase the cost of the Plan to the Participating Employers.
All such amendments shall be binding on all Participating Employers. No
amendment of the Plan shall have the effect of changing the rights, duties, and
liabilities of the Trustee without its written consent. Also, no amendment shall
divest a Participant or Beneficiary of Accounts accrued prior to the amendment.
Promptly upon adoption of any amendment to the Plan, the Retirement Committee
shall furnish a copy of the amendment to the Trustee. If an amendment to the
Plan changes the vesting schedule of the Plan, each Participant having not less
than three years of service shall be permitted to elect to have his or her
vested percentage computed under the Plan without regard to such amendment.
However, no election need be provided for any Participant whose vested
percentage under the Plan, as amended, cannot at any time be less than the
vested percentage determined without regard to such amendment.
Section 13.2 Discontinuance of Participation in Plan by a
Participating Employer. By written action of a duly authorized officer of the
Plan Sponsor, the Plan Sponsor may discontinue the participation in the Plan by
another Participating Employer. Discontinuance of participation in the Plan by a
Participating Employer shall also be effected if it fails to make contributions
required pursuant to the provisions of the Plan, if at any time it ceases to be
affiliated with the Plan Sponsor, if substantially all of its assets are
disposed of and it discontinues active business operations, if it is adjudicated
a bankrupt, or if a trustee or receiver of all of substantially all of its
assets is appointed.
(a) If the Plan Sponsor determines in its sole discretion to spin off the
portion of the Plan attributable to the withdrawing employer, the Retirement
Committee shall cause a determination to be made of the equitable part of the
Trust Fund assets held on account of Participants of the withdrawing employer
and their Beneficiaries. The Retirement Committee shall direct the Trustee to
transfer assets representing such equitable part to a separate fund for the plan
of the withdrawing employer. Such withdrawing employer may thereafter exercise,
in respect of such separate fund, all the rights and powers reserved to the Plan
Sponsor with respect to the Trust Fund. The plan of the withdrawing employer
shall, until amended by the withdrawing employer, continue with the same terms
as the Plan herein, except that with respect to the separate plan of the
withdrawing employer the words "Participating Employer" and "Plan Sponsor" shall
thereafter be considered to refer only to the withdrawing employer, and the
withdrawing employer, not the Retirement Committee, shall be the plan
administrator. If the foregoing provisions of this subsection do not apply, the
Accounts of Participants of the withdrawing employer and their Beneficiaries
shall continue to be held in the Plan for distribution in accordance with the
provisions hereof.
(b) Any discontinuance of participation by a Participating Employer shall be
effected in such manner that each Participant or Beneficiary would (if the Plan
and the plan of the withdrawing employer then terminated) receive a benefit
immediately after such discontinuance of participation which is equal to or
greater than the benefit he or she would have been entitled to receive
immediately before such discontinuance of participation if the Plan had then
terminated. No transfer of assets pursuant to this Section shall be effected
until such statements with respect thereto, if any, required by ERISA to be
filed in advance thereof have been filed.
Section 13.3 Reorganizations of Participating Employers.
In the event two or more Participating Employers are consolidated or merged or
in the event one or more Participating Employers acquires the assets of another
Participating Employer, the Plan shall be deemed to have continued, without
termination and without a complete discontinuance of contributions, as to all
the Participating Employers involved in such reorganization and their employees.
In such event, in administering the Plan, the corporation resulting from the
consolidation, the surviving corporation in the merger, or the employer
acquiring the assets shall be considered as a continuation of all of the
Participating Employers involved in the reorganization.
Section 13.4 Permanent Discontinuance of Contributions.
The Plan Sponsor, by action of its Management Committee, may completely
discontinue contributions in support of the Plan by all Participating Employers.
In such event, notwithstanding any provisions of the Plan to the contrary, no
employee shall become a Participant after such discontinuance, and the Accounts
of each Participant in the employ of the Participating Employers at the time of
such discontinuance shall be nonforfeitable. Subject to the foregoing, all of
the provisions of the Plan shall continue in effect, and upon entitlement
thereto distributions shall be made in accordance with the provisions of Article
X.
Section 13.5 Termination.
The Plan Sponsor, by action of its Management Committee, may terminate the Plan
as applicable to all Participating Employers and their employees. After such
termination no employee shall become a Participant, and no further contributions
shall be made. The Accounts of each Participant in the employ of the
Participating Employers at the time of such termination shall be nonforfeitable,
and the Participant shall be entitled to a benefit equal to the value of those
Accounts determined as of the Valuation Date coincident with or next following
the termination of the Plan. Forfeitures shall be allocated as though the
Valuation Date were the last day of a Plan Year. Distributions shall be made to
Participants and Beneficiaries promptly after the termination of the Plan, but
not before the earliest date permitted under the Code and applicable regulations
and subject to the Retirement Committee's right to delay distributions until
receipt of a favorable determination letter from the Internal Revenue Service
with respect to the termination. The Plan and any related trust agreement or
group annuity contract shall continue in force for the purpose of making such
distributions.
Section 13.6 Partial Termination.
If there is a partial termination of the Plan, either by operation of law, by
amendment of the Plan, or for any other reason, which partial termination shall
be confirmed by the Plan Sponsor, by written action of its duly authorized
officer, the Accounts of each Participant with respect to whom the partial
termination applies shall be nonforfeitable. Subject to the foregoing, all of
the provisions of the Plan shall continue in effect as to each such Participant,
and upon entitlement thereto distributions shall be made in accordance with the
provisions of Article X.
Section 13.7 Merger, Consolidation, or Transfer of Plan Assets.
In the case of any merger or consolidation of the Plan with any other plan, or
in the case of the transfer of assets or liabilities of the Plan to any other
plan, provision shall be made so that each Participant and Beneficiary would (if
such other plan then terminated) receive a benefit immediately after the merger,
consolidation, or transfer which is equal to or greater than the benefit he
would have been entitled to receive immediately before the merger,
consolidation, or transfer (if the Plan had then terminated).
(a) No such merger, consolidation, or transfer shall be effected until such
statements with respect thereto, if any, required by ERISA to be filed in
advance thereof have been filed.
(b) Notwithstanding any provisions of this Plan to the contrary, to the extent
that any optional form of benefit under this Plan permits a distribution prior
to the Participant's retirement, death, disability, or severance from
employment, and prior to Plan termination, the optional form of benefit is not
available with respect to benefits attributable to assets (including the
post-transfer earnings thereon) and liabilities that are transferred, within the
meaning of Code Section 414(l), to this Plan from a money purchase pension plan
qualified under Code Section 401(a) (other than any portion of those assets and
liabilities attributable to voluntary employee contributions).
Section 13.8 Deferral of Distributions.
Notwithstanding any provisions of the Plan to the contrary, in the case of a
complete discontinuance of contributions to the Plan by a Participating Employer
or of a complete or partial termination of the Plan with respect to a
Participating Employer, the Retirement Committee or the Trustee may defer any
distribution of benefit payments to Participants and Beneficiaries with respect
to which such discontinuance or termination applies until after the following
have occurred:
(a) Receipt of a final determination from the Treasury Department or any court
of competent jurisdiction regarding the effect of such discontinuance or
termination on the qualified status of the Plan under Code Section 401(a).
(b) Appropriate adjustment of Accounts to reflect taxes, costs, and expenses, if
any, incident to such discontinuance or termination.
<PAGE>
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 14.1 Discontinuance of Employment.
The establishment and maintenance of this Plan shall not be construed to confer
any right upon any person to a continuation of employment, nor shall it
interfere with the right of a Participating Employer to dismiss any employee and
to treat the employee without regard to the effect such treatment might have
upon his or her status under the Plan.
Section 14.2 Headings.
Headings at the beginning of Articles and Sections hereof are for convenience of
reference, shall not be considered a part of the text of the Plan, and shall not
influence its construction.
Section 14.3 Capitalized Definitions.
Capitalized terms used in the Plan shall have their meaning as defined in the
Plan unless the context clearly indicates to the contrary.
Section 14.4 Gender.
Any references to the masculine gender include the feminine and vice versa.
Section 14.5 Use of Compounds of Word "Here."
Use of the words "hereof," "herein," "hereunder," or similar compounds of the
word "here" shall mean and refer to the entire Plan unless the context clearly
indicates to the contrary.
Section 14.6 Construed as a Whole.
The provisions of the Plan shall be construed as a whole in such manner as to
carry out the provisions thereof and shall not be construed separately without
relation to the context.
Section 14.7 Benefit Under Certain Appendices.
The benefit of a Participant previously employed by the employers listed in any
Appendix to this Plan shall be subject to provisions applicable to the
Participant under any Appendix to this Plan that applies to that employer. The
benefit of a Norwest Participant which is transferred to this Plan pursuant to
Section 1.4 shall be subject to any provisions applicable, under an Appendix to
the Norwest Plan, to that Norwest Participant while he or she was a
"Participant" (as defined in Section 2.25 of the Norwest Plan).
<PAGE>
ARTICLE XV
TOP-HEAVY PLAN PROVISIONS
Section 15.1 Key Employee Defined.
"Key Employee" means any employee or former employee who at any time during the
Plan Year or any of the preceding four Plan Years is an officer of a
Participating Employer or is deemed to have an ownership interest in a
Participating Employer and who is within the definition of key employee in Code
Section 416(i). "Non-key Employee" means any Participant who is not a Key
Employee.
Section 15.2 Determination of Top-Heavy Status.
The top-heavy status of the Plan shall be determined according to the following
standards and definitions:
(a) The Plan is a Top-Heavy Plan if it is not part of a required aggregation
group and the top-heavy ratio for this Plan exceeds 60 percent, or if this Plan
is part of a required aggregation group of plans and the top-heavy ratio for the
group of plans exceeds 60 percent. However, the Plan is not a Top-Heavy Plan
with respect to a Plan Year if it is part of a permissive aggregation group of
plans for which the top-heavy ratio does not exceed 60 percent.
(jjjj) The "top-heavy ratio" shall be determined as follows:
(3) If the ratio is being determined only for this Plan or if the
aggregation group only includes defined contribution plans, the
top-heavy ratio is a fraction, the numerator of which is the sum of
the present values of the account balances of all Key Employees under
the Plan or plans as of the determination date (including any part of
any account balance distributed in the five-year period ending on the
determination date), and the denominator of which is the sum of the
account balances (including any part of any account balance
distributed in the five-year period ending on the determination date)
of all employees under the Plan or plans as of the determination date.
(The "plans" referred to in the preceding sentence are the plans in
the required or permissive aggregation group).
(4) If the determination is being made for a required or permissive
aggregation group which includes one or more defined benefit plans,
the top-heavy ratio is a fraction, the numerator of which is the sum
of account balances of all Key Employees under the defined
contribution plans and the present value of accrued benefits under the
defined benefit plans for all Key Employees as of the determination
date (including any part of any account balance or accrued benefit
distributed in the five-year period ending on the determination date),
and the denominator of which is the sum of the account balances under
the defined contribution plans for all employees and the present value
of accrued benefits under the defined benefit plans for all employees
as of the determination date (including any part of any account
balance or accrued benefit distributed in the five-year period ending
on the determination date). (The "plans" referred to in the preceding
sentence are the plans in the required or permissive aggregation
group). Both the numerator and denominator of the top-heavy ratio
shall be adjusted to reflect any contribution due but unpaid as of the
determination date.
(5) For purposes of paragraphs (1) and (2), the value of account balances
and the present value of accrued benefits will be determined as of the
most recent valuation date that falls within the 12-month period
ending on the determination date. The account balances and accrued
benefits of an employee who is not a Key Employee but who was a Key
Employee in a prior year will be disregarded. The calculation of the
top-heavy ratio and the extent to which distributions, rollovers, and
transfers are taken into account will be made in accordance with Code
Section 416 and the regulations thereunder. When aggregating plans,
the value of account balances and accrued benefits will be calculated
with reference to the determination dates that fall within the same
calendar year.
(kkkk) "Required aggregation group" means (i) each qualified plan of a
Participating Employer or an Affiliate in which at least one Key Employee
participates, and (ii) any other qualified plan of such employers that enables a
plan described in (i) to meet the requirements of Code Sections 401(a)(4) and
410.
(llll) "Permissive aggregation group" means the required aggregation group of
plans plus any other plan or plans of such employers which, when consolidated as
a group with the required aggregation group, would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410.
(mmmm) "Determination date" for any Plan Year means the last day of the
preceding Plan Year.
(nnnn) The "determination period" for a Plan Year is the Plan Year in which the
applicable determination date occurs and the four preceding Plan Years.
(oooo) The "valuation date" is the last day of each Plan Year and is the date as
of which account balances or accrued benefits are valued for purposes of
calculating the top-heavy ratio.
(pppp) For purposes of establishing the "present value" of benefits under a
defined benefit plan to compute the top-heavy ratio, any benefit shall be
discounted only for mortality and interest based on the interest rate and
mortality table specified in the defined benefit plan for this purpose.
(qqqq) If an individual has not performed any services for a Participating
Employer or an Affiliate at any time during the five-year period ending on the
determination date with respect to a Plan Year, any account balance or accrued
benefit for such individual shall not be taken into account for such Plan Year.
Section 15.3 Minimum Contribution Requirement.
For any Plan Year with respect to which the Plan is a Top-Heavy Plan, the
employer contributions allocated to each Non-Key Employee whose Termination of
Employment has not occurred prior to the end of such Plan Year shall not be less
than that percentage of the Participant's compensation (as defined in Section
6.5(e)(2)) for the Plan Year which is the smaller of:
(a) Three percent.
(b) The percentage which is the largest percentage of compensation
allocated to any Key Employee from employer contributions for such Plan Year.
However, this Section shall not apply to any Participant who is covered under
any other plan of the employer under which the minimum contribution or minimum
benefit requirement applicable to Top-Heavy Plans will be satisfied.
Section 15.4 Adjustments in Code Section 415 Limits.
With respect to any Plan Year for which the Plan is a Top-Heavy Plan, Section
6.5 shall be applied by substituting "1.0" for "1.25" and by substituting
"$41,500" for "$51,875" where appropriate in Code Section 415. Notwithstanding
the foregoing provisions of this Section, the provisions of this Section shall
be suspended with respect to any individual so long as there are no
contributions allocated to such individual, and no defined benefit plan accruals
for such individual, either under this plan or under any other plan that is in a
required aggregation group of plans, within the meaning of Code Section
416(g)(2)(A)(i), that includes this Plan.
Section 15.5 Exception For Collective Bargaining Unit.
Sections 15.3 and 15.4 shall not apply with respect to any employee included in
a unit of employees covered by an agreement which the Secretary of Labor finds
to be a collective bargaining agreement between employee representatives and one
or more employers if there is evidence that retirement benefits were the subject
of good faith bargaining between such employee representative and such employer
or employers.
Section 15.6 Definition of Employer.
For purposes of this Article, the term "employer" means the Participating
Employers and any trade or business entity under Common Control with a
Participating Employer. The top-heavy status of the Plan shall be determined
separately for each Controlled Group. If the Plan is a Top-Heavy Plan with
respect to a Controlled Group, then the remedial provisions of Sections 15.3 and
15.4 shall apply only with respect to Participants employed by Participating
Employers in that Controlled Group.
EXHIBIT 5
[LETTERHEAD OF WHITE & CASE LLP]
November 17, 1998
The First American Financial Corporation
114 East Fifth Street
Santa Ana, CA 92701
Ladies and Gentlemen:
We have acted as counsel to The First American Financial Corporation,
a California corporation (the "Company"), and are familiar with the proceedings
and documents relating to the proposed registration by the Company, through a
Registration Statement on Form S-8 (the "Registration Statement"), to be filed
by the Company with the Securities and Exchange Commission, of (a) 300,000
Common shares, $1.00 par value, of the Company and an equal number of Rights to
purchase $1.00 par value Series A Junior Participating Preferred Shares
(collectively, the "Shares"), to be issued and sold under the RELS Savings Plan
(the "Plan") and (b) the interests in the Plan to be issued to those employees
of RELS LLC and its subsidiaries who participate in the Plan (the "Interests").
For the purposes of rendering this opinion, we have examined originals
or photostatic copies of the Plan and certified copies of such corporate
records, agreements and other documents of the Company as we have deemed
relevant and necessary as a basis for the opinion hereinafter set forth.
Based on the foregoing, we are of the opinion that the Shares, when
issued and paid for in accordance with the terms and conditions set forth in the
Plan and the Registration Statement, will be duly authorized, validly issued,
fully paid and nonassessable, and that the Interests, when issued in accordance
with the terms and conditions set forth in the Plan and the Registration
Statement, will be validly issued.
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/S/ White & Case LLP
EXHIBIT 23.1.
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of The First American Financial Corporation
of our report dated February 9, 1998, appearing on page 21 of The First American
Financial Corporation's Annual Report on Form 10-K for the year ended December
31, 1997.
By: /s/ PricewaterhouseCoopers LLP
-----------------------------------
PricewaterhouseCoopers LLP
Costa Mesa, California
Date: November 17, 1998
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors of The
First American Financial Corporation, a California corporation (the
"Corporation"), hereby constitute and appoint Parker S. Kennedy and Mark R
Arnesen, and each of them, the true and lawful agents and attorneys-in-fact of
the undersigned, with full power and authority in said agents and
attorneys-in-fact, and in either or both of them, to sign for the undersigned
and in their respective names as directors of the Corporation the Registration
Statement on Form S-8 to be filed with the United States Securities and Exchange
Commission, Washington, D.C., under the Securities Act of 1933, as amended, and
any amendment or amendments to such Registration Statement, relating to the
Common shares, par value $1.00 per share, of the Corporation to be offered
thereunder, and the undersigned ratify and confirm all acts taken by such agents
and attorneys-in-fact, or either or both of them, as herein authorized.
This Power of Attorney may be executed in one or more counterparts.
Date: November 3, 1998 By: /s/ George L. Argyros
-----------------------------------
George L. Argyros, Director
Date: November 3, 1998 By: /s/ Gary J. Beban
-----------------------------------
Gary J. Beban, Director
Date: November 2, 1998 By:/s/ J. David Chatham
------------------------------------
J. David Chatham, Director
Date: November 3, 1998 By: /s/ William G. Davis
-----------------------------------
William G. Davis, Director
Date: October 31, 1998 By: /s/ James L. Doti
-----------------------------------
James L. Doti, Director
Date: November 2, 1998 By: /s/ Lewis W. Douglas, Jr.
-----------------------------------
Lewis W. Douglas, Jr., Director
Date: November 2, 1998 By: /s/ Paul B. Fay, Jr.
-----------------------------------
Paul B. Fay, Jr., Director
Date: November 3, 1998 By: /s/ Dale F. Frey
-----------------------------------
Dale F. Frey, Director
Date: November 3, 1998 By: /s/ Anthony R. Moiso
-----------------------------------
Anthony R. Moiso, Director
Date: November 3, 1998 By: /s/ Frank O'Bryan
-----------------------------------
Frank O'Bryan, Director
Date: October 31, 1998 By: /s/ Roslyn B. Payne
-----------------------------------
Roslyn B. Payne, Director
Date: November 3, 1998 By: /s/ D. Van Skilling
-----------------------------------
D. Van Skilling, Director
Date: November 3, 1998 By: /s/ Virginia Ueberroth
-----------------------------------
Virginia Ueberroth, Director
