As filed with the Securities and Exchange
Commission on December 22, 1998
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
S & T BANCORP, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1434426
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
800 Philadelphia Street 15701
Indiana, Pennsylvania (Zip Code)
(Address of Principal
Executive Offices)
S & T Bancorp, Inc.
Thrift Plan for Employees of S & T Bank
(Full title of the Plan)
Robert E. Rout
Chief Financial Officer
S & T Bancorp, Inc.
P.O. Box 190, 800 Philadelphia Street
Indiana, Pennsylvania 15701
(724) 465-4825
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
Copy to:
Richard E. Baltz, Esquire
Arnold & Porter
555 Twelfth Street, N.W.
Washington, D.C. 20004
(202) 942-5124
CALCULATION OF
REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title Of Amount Offering Aggregate Amount of
Securities To To be Price Offering Registration
Be Registered Registered Per Share* Price* Fee
Common Stock 1,000,000 $27.10 $27,100,000 $7,533.80
$2.50 Par Value shares
In addition, pursuant to Rule 416(c) under the
Securities Act of 1933, this Registration Statement also
covers an indeterminate amount of interests to be offered
or sold pursuant to the Plan.
* Estimated solely for the purpose of calculating the
registration fee pursuant to Securities Act Rule 457(c)
and (h), on the basis of the average of the high and
low sale prices of the Registrant's Common Stock on the
Nasdaq National Market on December 18, 1998.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by S&T Bancorp,
Inc. (the "Corporation" or the "Registrant") with the
Securities and Exchange Commission ("Commission") are
hereby incorporated herein by reference:
(a) the Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1997;
(b) all other reports filed by the Corporation pursuant
to Sections 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended ("Exchange Act"), subsequent
to December 31, 1997; and
(c) the description of the Corporation's Common Stock
contained in the Corporation's Registration Statement
pursuant to Section 12(g) of the Exchange Act, and
any amendment or report filed for the purposes of
updating such description.
All documents filed by the Corporation after
the date of this Registration Statement pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, prior to the filing of a post-effective amendment
which indicates that all of the Corporation's Common
Stock offered hereby has been sold or which withdraws
from registration such Common Stock then remaining
unsold, shall be deemed to be incorporated in this
Registration Statement by reference and be a part
hereof from the date of filing such documents. Any
statement contained in a document incorporated or
deemed to be incorporated by reference in this
Registration Statement shall be deemed to be modified
or superseded for purposes of this Registration
Statement to the extent that a statement contained
herein or in any other subsequently filed document
which also is or is deemed to be incorporated by
reference in this Registration Statement modifies or
supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as
so modified or so superseded, to constitute a part of
this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The consolidated financial statements of the
Corporation incorporated by reference in the
Corporation's Annual Report (Form 10-K) at December
31, 1997 and for each of the three years in the period
ended December 31, 1997, have been audited by Ernst &
Young, LLP, independent auditors, as set forth in
their report thereon appearing and incorporated by
reference elsewhere herein which, as to the years
December 31, 1996 and 1995 are based in part on the
report of S.R. Snodgrass, independent auditors. The
financial statements referred to above are included in
reliance upon such reports given upon the authority of
such firms as experts in accounting and auditing.
Arnold & Porter, Washington, D.C., has
delivered its legal opinion that the shares of the
Corporation's Common Stock offered pursuant to the
Thrift Plan for Employees of S&T Bank (the "Plan")
have been duly authorized by the Corporation and that
the shares, when issued in accordance with the terms
of the Plan, for the legal consideration of not less
than $2.50 per share, will be validly issued, fully
paid and nonassessable.
Item 6. Indemnification of Directors and Officers.
Section 1741 of the Pennsylvania Business
Corporation Law of 1988 (PBCL) permits, under certain
circumstances, the indemnification of any person with
respect to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, to which such person
was or is a party or is threatened to be made a party
by reason of the fact that such person is or was a
representative of the corporation or was serving in a
similar capacity for another enterprise at the request
of the corporation.
Section 1743 of the PBCL provides that to the
extent that a representative of the corporation has
been successful in defending any such proceeding, such
person shall be indemnified against expenses
(including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
With respect to a proceeding by or in the
right of the corporation, Section 1742 of the PBCL
provides that such person may be indemnified against
expenses (including attorneys' fees) if he acted in
good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the
corporation. The statute further provides, however,
that no indemnification is allowed in such a
proceeding if such person is adjudged liable to the
corporation unless, and only to the extent that, the
court in which the action was brought, or the
appropriate Pennsylvania Court of Common Pleas, upon
application, determines that he is entitled to
indemnification under the circumstances. With respect
to both third party actions and actions brought by or
in the right of the corporation, the representative
may be indemnified against judgments, fines, and
amounts paid in settlement, as well as expenses, if he
acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests
of the corporation and, with respect to any criminal
action, had no reasonable cause to believe his conduct
was unlawful, notwithstanding the outcome of the
proceeding. Except with respect to mandatory
indemnification of expenses to successful defendants
as described in the preceding paragraph or pursuant to
a court order, the indemnification described in this
paragraph may be made only upon a determination
in each specific case by majority vote of a quorum of
directors not parties to the proceeding, by written
opinion of independent legal counsel, or by the
shareholders, that the defendant met the applicable
standard of conduct described above.
The Pennsylvania statutes permit a
corporation to advance expenses incurred by a proposed
indemnitee in advance of final disposition of the
proceeding provided the indemnitee undertakes to
repay such advanced expenses if it is ultimately
determined that he is not entitled to indemnification.
A corporation may purchase insurance on behalf of an
indemnitee against any liability asserted against him
in his designated capacity, whether or not the
corporation itself would be empowered to indemnify him
against such liability.
II-2
Pennsylvania law also provides that the above
rights shall not be deemed exclusive of other rights
of indemnification or advancement of expenses under
any bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise. The
Corporation's Bylaws provide for the mandatory
indemnification of directors and officers in
accordance with and to the full extent permitted by
the laws of Pennsylvania as in effect at the time of
such indemnification, and permit indemnification of
directors and officers in situations where such
indemnification is not mandatory pursuant to the laws
of Pennsylvania. The Corporation has purchased
directors' and officers' liability insurance covering
certain liabilities which may be incurred by its
officers and directors in connection with the
performance of their duties.
The foregoing descriptions are general
summaries only. Reference is made to the full text of
the Corporation's Articles of Incorporation, Bylaws
and Plan incorporated herein by reference.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The exhibits listed on the Index of Exhibits
on page II-8 of this Registration Statement are filed
herewith or are incorporated herein by reference to
other filings.
Pursuant to subsection (b) of this Item, the
Corporation undertakes to submit the Plan (and any
amendments 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, as
amended (the "Securities Act").
(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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered
(if the total dollar value of securities offered would
not exceed that which was registered) and any
deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement.
II-3
(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 (i)
and (ii) do not apply if the information required to
be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by
reference in the Registration Statement;
2. That, for the purpose of determining any
liability under the Securities Act, 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
bonafide 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, each filing of the
Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Exchange Act that is
incorporated by reference in the Registration
Statement shall bee deemed to be a new registration
statement relating to the securities offered
therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide
offering thereof; and
5. Insofar as indemnification for liabilities
arising under the Securities Act 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 Commission such indemnification is
against public policy as expressed in the Securities
Act 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 and will be governed by the final adjudication of
such issue.
II-4
SIGNATURES
Pursuant to the requirements of the
Securities Act, 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 Indiana, Commonwealth of Pennsylvania,
on December 21, 1998.
S & T BANCORP, INC.
By:/s/
James C. Miller
President and
Chief Executive Officer and
Director
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:
Signature Title Date
Principal Officers:
/s/
James C. Miller President and Chief Date: December 21, 1998
Executive Officer
and Director (Principal
Executive Officer)
/s/
James G. Barone Executive Vice President Date: December 21, 1998
and Secretary/Treasurer
/s/
Robert E. Rout Senior Vice President & Date: December 21, 1998
Chief Financial Officer
(Principal Financial Officer
and Accounting Officer)
II-5
Directors:
*
Thomas A. Brice Director
*
Forrest L. Brubaker Director
*
James L. Carino Director
*
John J. Delaney Director
*
Robert D. Duggan Chairman and Director
*
Thomas W. Garges, Jr. Director
*
William J. Gatti Director
*
Ruth M. Grant Director
*
Jeffrey D. Grube Director
*
Herbert L. Hanna Director
*
Frank W. Jones Director
II-6
Directors:
*
Joseph A. Kirk Director
*
Samuel Levy Director
*
James C. Miller President and Chief
Executive Officer
and Director
*
Alan Papernick Director
*
W. Parker Ruddock Director
*
Myles D. Sampson Director
*
Charles A. Spadafora Director
*
Christine J. Torretti Director
*By: /s/ Dated: December 21, 1998
James C. Miller, Attorney-in-Fact
Pursuant to the requirements of the Securities
Act of 1933, the Chairman of the Committee which
administers the Corporation's Thrift Plan for
Employees of S&T Bank has duly caused this
Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the
City of Indiana, Commonwealth of Pennsylvania on
December 21, 1998.
/s/
James G. Barone
II-7
INDEX OF EXHIBITS
Exhibit 4.1 Provisions of the Articles of
Incorporation of S&T Bancorp, Inc. defining the
rights of security holders, incorporated herein by
reference to Exhibit No. 19 to the Corporation's
Quarterly Report on Form 10-Q for the quarter ended
March 31, 1991 and Exhibit 4.1 to the Corporation's
Registration Statement on Form S-3 filed November 22,
1991 (File No. 33-44164).
Exhibit 4.2 Thrift Plan for Employees of
S&T Bank, as amended and restated as of October 1,
1998. Filed herewith.
Exhibit 5 Opinion of Arnold & Porter
with respect to the legality of the Common Stock
being registered, filed herewith.
Exhibit 23.1 Consent of Ernst & Young LLP,
Independent Auditors, filed herewith.
Exhibit 23.2 Consent of Arnold & Porter,
contained in their opinion filed as Exhibit 5 hereto.
Exhibit 23.3 Consent of S.R. Snodgrass, A.C.,
Independent Auditors, filed herewith.
Exhibit 24 Powers of Attorney of certain
officers and directors of the Corporation.
II-8
EXHIBIT 5
December 21, 1998
S&T Bancorp, Inc.
800 Philadelphia Street
Indiana, Pennsylvania 15701
Ladies and Gentlemen:
Reference is made to the Registration
Statement on Form S-8 ("Registration Statement") of
S&T Bancorp, Inc., a Pennsylvania corporation ("S&T"),
with respect to 1,000,000 shares of $2.50 par value
common stock of S&T ("S&T Common Stock") which are to
be offered or sold pursuant to the Thrift Plan for
Employees of S&T Bank (the "Plan").
We have been requested to furnish an opinion
to be included as Exhibit 5 to the Registration
Statement. In conjunction with the furnishing of this
opinion, we have examined such corporate documents and
have made such investigation of matters of fact and
law as we have deemed necessary to render this
opinion. Our opinion is based on our review of the
latest standard compilation available to us of the
Pennsylvania Business Corporation Law of 1988.
The opinions set forth herein are subject
to the following qualifications, which are in
addition to any other qualifications contained
herein:
A. We have assumed without verification the
genuineness of all signatures on all documents,
the authority of the parties executing such
documents, the authenticity of all documents
submitted to us as originals, and the conformity
to original documents of all documents submitted
to us as copies.
B. The opinions set forth herein are based on
existing laws, ordinances, rules, regulations,
court and administrative decisions as they
presently have been interpreted and we can give
no assurances that our opinions would not be
different after any change in any of the
foregoing occurring after the date hereof.
C. We have assumed without verification that,
with respect to the minutes of any meetings of
the Board of Directors or any committees thereof
of S&T or of the stockholders of S&T that we
have examined, due notice of the meetings was
given or duly waived, the minutes accurately and
completely reflect all actions taken at the
meetings and a quorum was present and acting
throughout the meetings.
D. We have assumed without verification the
accuracy and completeness of all corporate
records made available to us by S&T.
E. We express no opinion as to the effect or
application of any laws or regulations other
than the Pennsylvania Business Corporation Law
as in effect on this date. As to matters
governed by the law specified in the foregoing
sentence, we have relied exclusively on the
latest standard compilation of such statute as
reproduced in commonly accepted unofficial
publications available to us.
Based upon such examination and
investigation and upon the assumption that there will
be no material changes in the documents we examined
and the matters investigated, we are of the opinion
that the shares of S&T Common Stock included in the
Registration Statement have been duly authorized by
S&T and that, when issued in accordance with the terms
of the Plan, such shares of S&T Common Stock will be
validly issued, fully paid and nonassessable under the
Pennsylvania Business Corporation Law of 1988 as in
effect on this date.
This letter does not address any matters
other than those expressly addressed herein. This
letter is given for your sole benefit and use. No one
else is entitled to rely hereupon. This letter speaks
only as of the date hereof. We undertake no
responsibility to update or supplement it after such
date. In giving this consent, we do not hereby admit
that we are an "expert" within the meaning of the 1933
Act.
We consent to the filing of this opinion as
an exhibit to the Registration Statement.
Sincerely,
/s/ ARNOLD & PORTER
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the references to our firm under the caption
"Interests of named Experts and Counsel" in the Registration
Statement on Form S-8 pertaining to the Thrift Plan for
Employees of S&T Bank and to the incorporation by reference
therein of our report dated January 16, 1998, with respect
to the consolidated financial statements of S&T Bancorp, Inc.
included in its Annual Report (Form 10-K) for the year ended
December 31, 1997, filed with the Securities and Exchange
Commission.
/s/ ERNST & YOUNG, LLP
Pittsburgh, Pennsylvania
December 17, 1998
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement of S&T Bancorp, Inc. on Form S-8 pertaining to the Thrift
Plan for Employees of S&T Bank, of our report dated February 10, 1997
(as it relates to the financial statements of Peoples Bank of Unity
for the years ended December 31, 1996 and 1995) appearing in the
Annual Report on Form 10-K of S&T Bancorp, Inc. for the year ended
December 31, 1997.
We also consent to the reference to our firm under Item 5 - "Interest
of Named Experts and Counsel" in such Registration Statement.
/s/ S.R. Snodgrass, A.C.
Wexford, PA
December 17, 1998
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and
appoints James C. Miller, James G. Barone and Robert
E. Rout and each of them (with full power of each of
them to act alone), his true and lawful
attorney-in-fact and agent with full power of
substitution and resubstitution, for him and on his
behalf and in his name, place and stead, in any and
all capacities, to sign, execute and file with the
Securities and Exchange Commission (or any other
governmental or regulatory authority) a Registration
Statement on Form S-8, and any and all amendments
(including post-effective amendments) thereto, with
all exhibits and any and all documents required to be
filed with respect thereto, relating to the
registration under the Securities Act of 1933, as
amended, of shares of the Corporation's common stock
authorized to be issued or sold pursuant to the
Corporation's Thrift Plan, and of plan interests in
such plan, granting unto said attorneys, and each of
them, full power and authority to do and to perform
each and every act and thing requisite and necessary
to be done in order to effectuate the same as fully to
all intents and purposes as he himself might or could
do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents,
or any of them, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, each of the undersigned
has, with full power of substitution and
resubstitution, hereunto set his hand as of the date
specified.
Signature Title Date
Principal Officers:
/s/ James C. Miller
James C. Miller President and Chief March 16, 1998
Executive Officer
(Principal Executive
Officer)
/s/ James G. Barone
James G. Barone Executive Vice President March 16, 1998
and Treasurer/Secretary
/s/ Robert E. Rout
Robert E. Rout Senior Vice President March 16, 1998
and Chief Financial
Officer (Principal
Accounting Officer)
Directors:
/s/ Thomas A. Brice
Thomas A. Brice Director March 16, 1998
/s/ Forrest L. Brubaker
Forrest L. Brubaker Director March 16, 1998
/s/ James L. Carino
James L. Carino Director March 16, 1998
/s/ John J. Delaney
John J. Delaney Director March 16, 1998
/s/ Robert D. Duggan
Robert D. Duggan Chairman and March 16, 1998
Director
/s/ Thomas W. Garges, Jr.
Thomas W. Garges, Jr. Director March 16, 1998
/s/ William J. Gatti
William J. Gatti Director March 16, 1998
/s/ Ruth M. Grant
Ruth M. Grant Director March 16, 1998
/s/ Jeffrey D. Grube
Jeffrey D. Grube Director March 16, 1998
/s/ Herbert L. Hanna
Herbert L. Hanna Director March 16, 1998
/s/ Frank W. Jones
Frank W. Jones Director March 16, 1998
/s/ Joseph A. Kirk
Joseph A. Kirk Director March 16, 1998
/s/ Samuel Levy
Samuel Levy Director March 16, 1998
/s/ James C. Miller
James C. Miller Director March 16, 1998
/s/ Alan Papernick
Alan Papernick Director March 16, 1998
/s/ W. Parker Ruddock
W. Parker Ruddock Director March 16, 1998
/s/ Myles D. Sampson
Myles D. Sampson Director March 16, 1998
/s/ Charles A. Spadafora
Charles A. Spadafora Director March 16, 1998
/s/ Christine J. Toretti
Christine J. Toretti Director March 16, 1998
SEPTEMBER 18, 1998
THRIFT PLAN FOR EMPLOYEES OF
S&T BANK
Amended and Restated
Effective October 1, 1998
THRIFT PLAN FOR EMPLOYEES OF S&T BANK
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS
1.01 Accounts...................................................1
1.02 Actual Deferral Percentage.................................1
1.03 Adjustment Factor..........................................2
1.04 Affiliated Employer........................................2
1.05 Annual Dollar Limit........................................2
1.06 Annuity Starting Date......................................3
1.07 Beneficiary................................................3
1.08 Board of Directors.........................................3
1.09 Code.......................................................3
1.10 Committee or Thrift Plan Committee.........................3
1.11 Compensation...............................................3
1.12 Contribution Percentage....................................4
1.13 Disability.................................................4
1.14 Earnings...................................................4
1.15 Effective Date.............................................5
1.16 Employee...................................................5
1.17 Employer...................................................6
1.18 Employer Account...........................................6
1.19 Employer Discretionary Contributions.......................6
1.20 Employer Matching Contributions............................6
1.20 Employer Stock.............................................6
1.21 Enrollment Date............................................6
1.22 ERISA......................................................7
1.23 ESOP Account or Fund G.....................................7
1.24 ESOP Loan Contribution.....................................7
1.25 Exempt Loan................................................7
1.26 Fund or Investment Fund....................................7
1.27 Highly Compensated Employee................................7
1.28 Hour of Service............................................9
1.29 Leased Employee...........................................10
1.30 Member....................................................10
1.31 Member After-Tax Account..................................10
1.32 Member After-Tax Contributions............................10
1.33 Member Pre-Tax Account....................................10
1.34 Member Pre-Tax Contributions..............................10
1.35 Member Rollover Account...................................11
1.36 Member Rollover Contributions.............................11
1.37 Plan......................................................11
1.38 Plan Year.................................................11
1.39 Profits...................................................11
1.40 Qualified Joint and Survivor Annuity......................11
THRIFT PLAN FOR EMPLOYEES OF S&T BANK
TABLE OF CONTENTS
PAGE
Article 1 - Definitions (continued)
1.41 Spousal Consent...........................................11
1.42 Statutory Compensation....................................12
1.43 Suspense Account..........................................12
1.44 Trustees..................................................12
1.45 Valuation Date............................................13
Article 2 - Eligibility and Membership
2.01 Eligibility...............................................14
2.02 Membership................................................14
2.03 Reemployment of Former Employees and Former Members.......15
2.04 Transferred Members.......................................15
2.05 Termination of Membership.................................15
Article 3 - Contributions
3.01 Member Pre-Tax Contributions..............................16
3.02 Member After-Tax Contributions............................18
3.03 Employer Matching Contributions...........................19
3.04 Employer Regular Contributions............................19
3.05 Employer Discretionary Contributions......................20
3.06 Member Rollover Contributions.............................20
3.07 Change in Contributions...................................21
3.08 Suspension of Contributions...............................21
3.09 Limitations Affecting Highly Compensated Employees........22
3.10 Maximum Annual Additions..................................29
3.11 Return of Contributions...................................35
3.12 Contributions Not Contingent Upon Profits.................36
3.13 Valuation of Shares.......................................37
THRIFT PLAN FOR EMPLOYEES OF S&T BANK
TABLE OF CONTENTS
PAGE
Article 4 - Investment of Contributions
4.01 Investment Funds..........................................38
4.02 Investment of Members' Account; Change of Election........39
4.03 Transfers Between Funds...................................40
4.04 Investment of Employer Matching Contributions.............40
4.05 Limitation on Transfers Between Funds.....................40
4.06 Investment of Employer Discretionary Contributions........41
4.07 Diversification of ESOP Account...........................41
4.08 Responsibility for Investments............................41
Article 5 - Employee Stock Ownership Plan
5.01 Purchase of Employer Stock................................42
5.02 Exempt Loan...............................................42
5.03 Suspense Account..........................................43
5.04 Allocation of Employer Stock..............................44
5.05 Dividends.................................................44
5.06 Voting Rights; Offer to Purchase Stock....................45
5.07 ESOP Loan Contributions...................................47
5.08 Trustees' Independence....................................47
5.09 Satisfaction of the Exempt Loan...........................48
Article 6 - Valuation of the Accounts
6.01 Valuation of the Investment Funds.........................49
6.02 Statement of Accounts.....................................49
Article 7 - Vested Portion of Accounts
7.01 Vested Portion of Accounts................................50
THRIFT PLAN FOR EMPLOYEES OF S&T BANK
TABLE OF CONTENTS
PAGE
Article 8 - Withdrawals While Still Employed
8.01 Withdrawal After Age 59 1/2..............................51
8.02 Hardship Withdrawal......................................51
8.03 Procedures and Restrictions..............................54
8.04 Withdrawal from ESOP Account.............................54
8.05 Withdrawal of Member After-Tax Contributions.............55
Article 9 - Distribution of Accounts Upon Termination of Employment
9.01 Eligibility..............................................56
9.02 Forms of Distribution....................................56
9.03 Commencement of Payments.................................59
9.04 Small Benefits...........................................61
9.05 Status of Accounts Pending Distribution..................61
9.06 Method of Payment of ESOP Stock Fund.....................61
9.07 Proof of Death and Right of Beneficiary or Other Person..62
9.08 Distribution Limitation..................................62
9.09 Direct Rollover of Certain Distributions.................63
Article 10 - Administration of Plan
10.01 Appointment of Thrift Plan Committee.....................65
10.02 Duties of Committee......................................65
10.03 Individual Accounts......................................66
10.04 Meetings.................................................66
10.05 Action of Majority.......................................66
10.06 Compensation and Bonding.................................66
10.07 Establishment of Rules...................................66
10.08 Prudent Conduct..........................................67
10.09 Service in More than One Fiduciary Capacity..............67
10.10 Named Fiduciary..........................................67
10.11 Limitation of Liability..................................68
10.12 Indemnification..........................................68
10.13 Appointment of Investment Manager........................68
10.14 Expenses of Administration...............................69
THRIFT PLAN FOR EMPLOYEES OF S&T BANK
TABLE OF CONTENTS
PAGE
Article 11 - Management of Funds
11.01 Trust Agreement.........................................70
11.02 Exclusive Benefit Rule..................................70
Article 12 - General Provisions
12.01 Nonalienation...........................................71
12.02 Conditions of Employment Not Affected by Plan...........72
12.03 Facility of Payment.....................................72
12.04 Information.............................................72
12.05 Prevention of Escheat...................................73
12.06 Construction............................................73
12.07 Written Elections.......................................74
Article 13 - Amendment, Merger and Termination
13.01 Amendment of Plan.......................................75
13.02 Merger of Consolidation.................................75
13.03 Additional Participating Employers......................76
13.04 Termination of Plan.....................................77
13.05 Distribution of Accounts Upon a Sale of Assets..........78
13.06 Distribution of Accounts Upon a Sale of Subsidiary......79
Article 14 - Top-Heavy Provisions
14.01 Top-Heaviness Defined...................................80
14.02 Employer Contributions..................................84
14.03 Vesting.................................................85
14.04 Impact on Maximum Benefits..............................85
Article 15 - Execution..........................................86
THRIFT PLAN FOR EMPLOYEES OF S&T BANK
INTRODUCTION AND PURPOSE
Effective May 1, 1984, Savings and Trust Company of Pennsylvania
(now known as S&T Bank and hereinafter referred to as the
"Employer") adopted the Thrift Plan for Employees of Savings and
Trust Company of Pennsylvania to provide retirement income and
other benefits for the benefit of its eligible employees (herein
after referred to as the "Original Plan").
Effective December 31, 1988, the Original Plan was amended and
restated in its entirety, at which time the Plan was amended to
include a leveraged employee stock ownership plan. Such plan
continued to be known as the Thrift Plan for Employees of
Savings and Trust Company of Pennsylvania.
Effective January 1, 1989, the Original Plan was again amended
and restated in its entirety, to incorporate the provisions of
the Tax Reform Act of 1986 and other relevant subsequent federal
legislation, the issuance of federal rules, certain court
decisions and other changes desired by the Employer. This
document was renamed the Thrift Plan for Employees of S&T Bank
(hereinafter referred to as the "Prior Plan").
Effective October 1, 1998, the Employer desires to amend and
restate the Prior Plan in its entirety, the terms of which
are hereinafter set forth. This restatement shall incorporate
the provisions of the Small Business Job Protections Act of
1996, the Taxpayer Relief Act of 1997, and other relevant
federal legislation, the issuance of federal rules and certain
court decisions, as well as various improvements desired by the
Employer which are deemed to be in the best interests of the
participants and beneficiaries of said plan. Such plan shall
continue to be known as the Thrift Plan for Employees of S&T
Bank (hereinafter referred to as the "Plan"). The purpose of
this Plan continues to be to provide retirement income for the
benefit of the Employer's eligible employees and their
beneficiaries, but limited to those who qualify in accordance
with the terms and conditions of the Plan as set forth herein.
The Employer intends that this Plan, together with the Trust
Agreement, shall meet all the pertinent requirements for
qualification under the Internal Revenue Code of 1986, as
amended, and the Plan and Trust Agreement shall be interpreted,
wherever possible, to comply with the terms of said Code and
all formal regulations and rulings pertinent to the Plan and
Trust Agreement issued thereunder.
Each retired or terminated Member who terminated employment
prior to October 1, 1998, under the Original Plan or Prior
Plan and who had not commenced receiving his benefits on such
date will be eligible to receive benefits on such benefit
commencement date as set forth in the Original Plan or Prior
Plan, whichever is applicable to him.
The provisions of this Plan shall apply only to any employee
who is credited with an Hour of Service on or after October
1, 1998, unless specified otherwise within this document.
THRIFT PLAN FOR EMPLOYEES OF
S&T BANK
Amended and Restated Effective October 1, 1998
ARTICLE 1. DEFINITIONS
1.01 "Accounts" means the Employer Account, the ESOP
Account, the Member After-Tax Account, the Member
Pre-Tax Account and the Member Rollover Account.
1.02 "Actual Deferral Percentage" means, with
respect to a specified group of Employees, the average
of the ratios, calculated separately for each Employee
in that group, of (a) the amount of Member Pre-Tax
Contributions made pursuant to Section 3.01 for a Plan
Year (including Member Pre-Tax Contributions returned
to any Employee pursuant to Section 3.01(c)), to (b)
the Employee's Statutory Compensation for that entire
Plan Year (provided that, upon direction of the
Committee, Statutory Compensation for a Plan Year
shall only be counted if received during the period an
Employee is a Member or is eligible to become a
Member). The Actual Deferral Percentage for each
group and the ratio determined for each Employee in
the group shall be calculated to the nearest one
one-hundredth of 1%. For purposes of determining the
Actual Deferral Percentage for a Plan Year, Member
Pre-Tax Contributions may be taken into account for a
Plan Year only if they:
(a) relate to compensation that either would
have been received by the Employee in the Plan Year
but for the deferral election, or are attributable to
services performed by the Employee in the Plan Year
and would have been received by the Employee within 2 1/2
months after the close of the Plan Year but for the
deferral election,
(b) are allocated to the Employee as of a
date within that Plan Year and the allocation is not
contingent on the participation or performance of
service after such date, and
(c) are actually paid to the Trustee no later
than 12 months after the end of the Plan Year to which
the contributions relate.
PAGE 1
1.03 "Adjustment Factor" means the cost of living
adjustment factor prescribed by the Secretary of the
Treasury under Section 415(d) of the Code as applied
to such items and in such manner as the Secretary
shall provide.
1.04 "Affiliated Employer" means any company not
participating in the Plan which is a member of a
controlled group of corporations (as defined in
Section 414(b) of the Code) which also includes as a
member the Employer; any trade or business under
common control (as defined in Section 414(c) of the
Code) with the Employer; any organization (whether or
not incorporated) which is a member of an affiliated
service group (as defined in Section 414(m) of the
Code) which includes the Employer; and any other
entity required to be aggregated with the Employer
pursuant to regulations under Section 414(o) of the
Code. Notwithstanding the foregoing sentence, for
purposes of Sections 1.30 and 3.10, the definitions in
Sections 414(b) and (c) of the Code shall be modified
by substituting the phrase "more than 50%" for the
phrase "at least 80%" each place it appears in Section
1563(a)(1) of the Code.
1.05 "Annual Dollar Limit" means $150,000, as
adjusted from time to time for cost-of-living in
accordance with Section 401(a)(17)(B) of the Code.
PAGE 2
1.06 "Annuity Starting Date" means the first day of
the first period for which an amount is paid as an
annuity or, any other form following a Member's
retirement or other termination of employment.
1.07 "Beneficiary" means any person, persons or
entity named by a Member by written designation filed
with the Committee to receive benefits payable in the
event of the Member's death. However, if the Member
is married, his spouse shall be deemed to be the
Beneficiary unless or until he elects another
Beneficiary by a written designation filed with the
Committee. Any such designation shall not be
effective without Spousal Consent. If no such
designation is in effect at the time of death of the
Member, or if no person, persons or entity so
designated shall survive the Member, the Member's
surviving spouse, if any, shall be deemed to be the
Beneficiary; otherwise the Beneficiary shall be the
estate of the Member.
1.08 "Board of Directors" means the Board of
Directors of S&T Bank.
1.09 "Code" means the Internal Revenue Code of 1986,
as amended from time to time.
1.10 "Committee" or "Thrift Plan Committee" means
the persons named by the Board of Directors to
administer and supervise the Plan as provided in
Article 10.
1.11 "Compensation" means the total cash
remuneration paid to an Employee for services rendered
to the Employer, including any reduction pursuant to
Section 3.01 or pursuant to a cafeteria plan as
described in Section 125 of the Code. Compensation
shall exclude reimbursement or other expense
allowances, fringe benefits (cash and non-cash),
moving expenses, deferred compensation, and welfare
benefits. Other extraordinary items are excluded even
if not similar to the above. However, Compensation
for a Plan Year shall not exceed the Annual Dollar
Limit.
PAGE 3
1.12 "Contribution Percentage" means, with respect
to a specified group of Employees, the average of the
ratios, calculated separately for each Employee in
that group, of (a) the sum of the Employee's Member
After-Tax Contributions and Employer Matching
Contributions for that Plan Year, excluding any
Employer Matching Contributions forfeited under the
provisions of Sections 3.01 and 3.09, to (b) his
Statutory Compensation for that entire Plan Year
(provided that, upon direction of the Committee,
Statutory Compensation for a Plan Year shall only be
counted if received during the period an Employee is a
Member or is eligible to become a Member). The
Contribution Percentage for each group and the ratio
determined for each Employee in the group shall be
calculated to the nearest one one-hundredth of 1%.
1.13 "Disability" means a disability as evidenced by
receipt of a Social Security disability pension.
1.14 "Earnings" means the amount of earnings to be
returned with any excess deferrals, excess
contributions or excess aggregate contributions under
Section 3.01 or 3.09 for a Plan Year, as determined as
of the last day of such Plan Year under the Plan's
method of allocating income to a Member's Accounts
pursuant to Article 6 in accordance with regulations
prescribed by the Secretary of the Treasury under the
provisions of Sections 402(g), 401(k) and 401(m) of
the Code.
PAGE 4
1.15 "Effective Date" means October 1, 1998, as
amended and restated. The employee stock ownership
plan provisions of the Plan are effective December 31,
1988. The original effective date of the Plan is May
1, 1984.
1.16 "Employee" means a person employed by the
Employer who receives stated compensation other than a
pension, severance pay, retainer, or fee under
contract; however, the term "Employee" shall exclude:
(a) any Leased Employee;
(b) an individual treated as other than a
common law employee on the payroll records of the
Employer;
(c) any person who is included in a unit of
employees covered by a collective bargaining agreement
which does not provide for his membership in the Plan;
and
(d) any person other than a regular employee
who has the intention of ongoing employment with the
Employer, such as a temporary employee.
Notwithstanding any contrary Plan provision,
any person who is classified as an independent
contractor or consultant by the Employer shall, during
the period such person is so classified by the
Employer, be excluded from the definition of Employee
regardless of such person's reclassification for such
period by the Internal Revenue Service or other
controlling authority/court.
PAGE 5
1.17 "Employer" means S&T Bank or any successor by
merger, purchase or otherwise, with respect to its
employees; or any other company participating in the
Plan as provided in Section 13.03, with respect to its
employees.
1.18 "Employer Account" means the account into which
shall be credited the Employer contributions made on a
Member's behalf pursuant to Sections 3.03, 3.04 and
3.05 and earnings on those contributions, unless the
Employer designates those contributions to the ESOP
Account.
1.19 "Employer Discretionary Contributions" means
all amounts contributed pursuant to Section 3.05 of
the Plan.
1.20 "Employer Matching Contributions" means all
amounts contributed pursuant to Section 3.03 of the
Plan.
1.21 "Employer Stock" means the shares of common
stock, par value $2.50 per share, of S&T Bancorp,
Inc., as adjusted for stock splits, stock dividends,
reclassifications or similar changes affecting such
stock, providing such stock is a "qualifying employer
security" within the meaning of Section 4975(e)(8) of
the Code or Treasury Regulation Section 54.4975-12.
PAGE 6
1.22 "Enrollment Date" means date of hire for any
Employee hired on or after October 1, 1998.
1.23 "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.
1.24 "ESOP Account" or "Fund G" means the account
into which shall be credited on a Member's behalf the
Employer Stock released from the Suspense Account as a
result of the payment of the ESOP Loan Contributions
on or after December 31, 1988 and the earnings on said
Employer Stock.
1.25 "ESOP Loan Contribution" means all amounts
contributed pursuant to Section 5.07 of the Plan.
1.26 "Exempt Loan" means any loan to the Plan by the
Employer (or any other "disqualified person" as
defined in Section 4975(e)(2) of the Code) or any loan
to the Plan which is guaranteed by the Employer.
1.27 "Fund" or "Investment Fund" means the separate
funds in which contributions to the Plan are invested
in accordance with Article 4.
PAGE 7
1.28 "Highly Compensated Employee" means for a Plan
Year commencing on or after January 1, 1997, any
employee of the Employer or an Affiliated Employer
(whether or not eligible for membership in the Plan)
who:
(a) was a 5% owner (as defined in Section
416(i) of the Code) for such Plan Year or the prior
Plan Year, or
(b) for the preceding Plan Year received
Statutory Compensation in excess of $80,000 and was
among the highest 20% of employees for the preceding
Plan Year when ranked by Statutory Compensation paid
for that year excluding, for purposes of determining
the number of such employees, such employees as the
Committee may determine on a consistent basis pursuant
to Section 414(q) of the Code. The $80,000 dollar
amount in the preceding sentence shall be adjusted
from time to time for cost-of-living in accordance
with Section 414(q) of the Code.
Notwithstanding the foregoing, employees who
are nonresident aliens and who receive no earned
income from the Employer or an Affiliated Employer
which constitutes income from sources within the
United States shall be disregarded for all purposes
of this Section.
PAGE 8
The Employer's top-paid group election, as
described above, shall be used consistently in
determining Highly Compensated Employees for
determination years of all employee benefit plans of
the Employer and Affiliated Employers for which
Section 414(q) of the Code applies (other than a
multiemployer plan) that begin with or within the same
calendar year. In lieu of determining Highly
Compensated Employees in accordance with the
provisions of paragraph (b) above, the Committee may,
for any Plan Year, elect to determine Highly
Compensated Employees based solely on Statutory
Compensation for the preceding Plan Year in excess of
$80,000 and without reference to the top-paid group
election. Notwithstanding the foregoing, the
consistency provision in the preceding sentence shall
not apply for the Plan Year beginning in 1997, and for
Plan Years beginning in 1998 and 1999, shall apply
only with respect to all qualified retirement plans
(other than a multiemployer plan) of the Employer and
Affiliated Employers.
The provisions of this Section shall be further
subject to such additional requirements as shall be
described in Section 414(q) of the Code and its
applicable regulations, which shall override any
aspects of this Section inconsistent therewith.
PAGE 9
1.29 "Hour of Service" means, with respect to any
applicable computation period,
(a) each hour for which the employee is paid
or entitled to payment for the performance of duties
for the Employer or an Affiliated Employer,
(b) each hour for which the employee is paid
or entitled to payment by the Employer or an
Affiliated Employer on account of a period during
which no duties are performed, whether or not the
employment relationship has terminated, due to
vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave
of absence, but not more than 501 hours for any single
continuous period, and
(c) each hour for which back pay,
irrespective of mitigation of damages, is either
awarded or agreed to by the Employer or an Affiliated
Employer, excluding any hour credited under (a) or
(b), which shall be credited to the computation period
or periods to which the award, agreement or payment
pertains rather than to the computation period in
which the award, agreement or payment is made.
No hours shall be credited on account of any
period during which the employee performs no duties
and receives payment solely for the purpose of
complying with unemployment compensation, workers'
compensation or disability insurance laws. The Hours
of Service credited shall be determined as required by
Title 29 of the Code of Federal Regulations, Section
2530.200b-2(b) and (c).
1.30 "Leased Employee" means any person performing
services for the Employer or an Affiliated Employer as
a leased employee as defined in Section 414(n) of the
Code. In the case of any person who is a Leased
Employee immediately before or after a period of
service as an Employee, the entire period during which
he has performed services as a Leased Employee shall
be counted as service as an Employee for all purposes
of the Plan, except that he shall not, by reason of
that status, become a Member of the Plan.
1.31 "Member" means any person included in the
membership of the Plan as provided in Article 2.
1.32 "Member After-Tax Account" means the account
into which shall be credited the Member After-Tax
Contributions and earnings on those contributions.
1.33 "Member After-Tax Contributions" means all
amounts contributed by a Member pursuant to Section
3.02 of the Plan.
1.34 "Member Pre-Tax Account" means the account into
which shall be credited the Member Pre-Tax
Contributions made on a Member's behalf and earnings
on those contributions.
PAGE 10
1.35 "Member Pre-Tax Contributions" means all
amounts contributed pursuant to Section 3.01 of the
Plan.
1.36 "Member Rollover Account" means the account in
which shall be credited the Member Rollover
Contributions made by a Member and earnings on those
contributions.
1.37 "Member Rollover Contributions" means all
amounts contributed pursuant to Section 3.06 of the
Plan.
1.38 "Plan" means the Thrift Plan for Employees of
S&T Bank as set forth in this document or as amended
from time to time.
1.39 "Plan Year" means the 12-month period beginning
on any January 1.
1.40 "Profits" means both accumulated earnings and
profits and current net taxable income of the Employer
before deduction of Federal, state and local income
taxes and before any contributions made by the
Employer to this or any other employee benefit plan
maintained by the Employer, as determined by its Board
of Directors in such Board's sole and absolute
discretion.
1.41 "Qualified Joint and Survivor Annuity" means an
annuity payable for the life of a Member and after his
death, an annuity payable to his spouse for life at
the rate of not less than 50% nor more than 100% of
the amount payable to the Member.
PAGE 11
1.42 "Spousal Consent" means written consent given
by a Member's spouse to an election made by the Member
of a specified form of benefit or a designation of a
specified Beneficiary. That consent shall be duly
witnessed by a Plan representative or notary public
and shall acknowledge the effect on the spouse of the
Member's election. Any Spousal Consent shall be
effective only with respect to the spouse who granted
it. The Member may revoke an election any number of
times without Spousal Consent at any time prior to the
annuity Starting Date. Any new election will require
Spouse Consent. The requirement for spousal consent
may be waived by the Committee if it is established to
its satisfaction that there is no spouse, or that the
spouse cannot be located, or because of such other
circumstances as may be established by applicable law.
1.43 "Statutory Compensation" means the wages,
salaries, and other amounts paid in respect of an
employee for services actually rendered to an Employer
or an Affiliated Employer, including by way of
example, overtime, bonuses and commissions, but
excluding deferred compensation, stock options and
other distributions which receive special tax benefits
under the Code. For all purposes of the Plan,
Statutory Compensation shall include Member Pre-Tax
Contributions and amounts contributed on a Member's
behalf on a salary reduction basis to a cafeteria plan
under Section 125 of the Code. Statutory Compensation
for a Plan Year shall not exceed the Annual Dollar
Limit, provided that such limit shall not be applied
in determining Highly Compensated Employees under
Section 1.28.
1.44 "Suspense Account" means the account comprised
of unallocated shares of Employer Stock maintained in
accordance with Section 5.03.
PAGE 12
1.45 "Trustees" means the trustees by whom the funds
of the Plan are held as provided in Article 11.
1.46 "Valuation Date" means the last business day of
each calendar month or at more frequent intervals as
determined by the Committee.
PAGE 13
ARTICLE 2. ELIGIBILITY AND MEMBERSHIP
2.01 Eligibility
(a) Each Employee shall automatically become
a Member on the date he is first credited with an Hour
of Service.
2.02 Membership
(a) Each Employee employed by the Employer on
October 1, 1998, who was a Member of the Plan on
September 30, 1998, shall continue as a Member
hereunder as of October 1, 1998, without further
action on his part.
(b) Each other Employee employed by the
Employer on October 1, 1998, who was not a Member of
the Plan on September 30, 1998, shall become a Member
hereunder on the date he files with the Employer the
appropriate form or forms prescribed by the Committee
on which he:
(i) designates the percentage of
Compensation he wishes to contribute under Section
3.02 or makes the election described in Section 3.01,
or both;
(ii) authorizes the Employer to
make regular payroll deductions or to reduce his
Compensation, or both;
(iii) makes an investment election;
and
(iv) names a Beneficiary.
(c) Each Employee hired on or after October
1, 1998 shall become a Member for all purposes of the
Plan on his Enrollment Date or date of rehire, if
applicable.
PAGE 14
2.03 Reemployment of Former Employees and
Former Members
Any person reemployed by the Employer as an
Employee, shall immediately become a Member of the
Plan upon the date of such Employee's rehire (his
"reenrollment date").
2.04 Transferred Members
(a) A Member who remains in the employ of the
Employer or an Affiliated Employer but ceases to be an
Employee shall continue to be a Member of the Plan but
shall not be eligible to make Member After-Tax
Contributions or receive allocations of Member Pre-Tax
Contributions or Employer contributions while his
employment status is other than as an Employee.
(b) An individual who transfers from the
status of an employee ineligible for Plan membership
to an Employee eligible for membership shall become a
Member as of the date such individual becomes an
Employee.
2.05 Termination of Membership
A Member's membership shall terminate on the
date he terminates employment with the Employer or
an Affiliated Employer unless the Member is entitled
to benefits under the Plan, in which event his
membership shall terminate when those benefits are
distributed to him.
PAGE 15
ARTICLE 3. CONTRIBUTIONS
3.01 Member Pre-Tax Contributions
(a) (i) Effective as of a Member's
Enrollment Date or reenrollment date as defined in
Section 2.03, the Member shall have his Compensation
reduced by 6% and that amount shall be contributed on
his behalf to the Plan by the Employer as Member
Pre-Tax Contributions until and unless the Member
elects, in accordance with the procedures and within
such time periods as the Committee shall prescribe to
have his Compensation reduced by a different
percentage which may be from 0% to no more than 15%,
any such election shall be in increments of 1%. Such
reduction in Compensation shall commence as soon as
administratively practicable following:
(A) the Member's Enrollment Date; or
(B) the Member's reenrollment
date, as defined in Section 2.03,
and shall be applied to
Compensation which could have been subsequently
received by the Member. Such Member may elect,
subject to the provisions of paragraphs (b) and (c)
below. Member Pre-Tax Contributions shall be further
limited as provided in Sections 3.08 and 3.09.
Alternatively, a Member who elects
to receive the 6% of Compensation described in the
above paragraph directly from the Employer in cash,
may elect at a later date, subject to the provisions
of paragraphs (b) and (c) below, to have his
subsequent Compensation reduced by no more than 15%,
in increments of 1%, and have that amount contributed
to the Plan by the Employer. Such election shall be
effective with the first payroll on or after the date
as of which the election is to apply or as soon as
administratively practicable thereafter.
(ii) Each Member may elect, except as
otherwise provided in Section 2.04 and subject to the
provisions of paragraphs (b) and (c) below, to have
his subsequent Compensation reduced by no more than
15%, in increments of 1%, and have that amount
contributed to the Plan by the Employer. Such
election shall be effective with the first payroll
period on or after the date as of which the election
is to apply or as soon as administratively practicable
thereafter.
PAGE 16
(b) In no event shall the Member's Pre-Tax
Contributions and similar contributions made on his
behalf by the Employer or an Affiliated Employer to
all plans, contracts or arrangements subject to the
provisions of Section 401(a)(30) of the Code in any
calendar year exceed $7,000 multiplied by the
Adjustment Factor. If a Member's Pre-Tax
Contributions in a calendar year reach that dollar
limitation, his election of Member Pre-Tax
Contributions for the remainder of the calendar year
will be canceled. Each Member affected by this
paragraph (b) shall be afforded an opportunity to
change or suspend the rate at which he makes Member
After-Tax Contributions in a manner to be determined
by the Committee. As of the first pay period of the
following calendar year, the Member's election of
Member Pre-Tax Contributions shall again become
effective in accordance with his previous election.
(c) If a Member makes tax-deferred
contributions under another qualified defined
contribution plan maintained by an employer other than
the Employer or an Affiliated Employer for any
calendar year and those contributions when added to
his Member Pre-Tax Contributions exceed the dollar
limitation under Section 3.01(b) for that calendar
year, the Member may allocate all or a portion of such
excess deferrals to this Plan. In that event, such
excess deferrals, together with Earnings, shall be
returned to the Member no later than the April 15
following the end of the calendar year in which such
excess deferrals were made. However, the Plan shall
not be required to return excess deferrals unless the
Member notifies the Committee, in writing, by March 1
of that following calendar year of the amount of the
excess deferrals allocated to this Plan. The amount
of any such excess deferrals to be returned for any
calendar year shall be reduced by any Member Pre-Tax
Contributions previously returned to the Member under
Section 3.09(a) for that calendar year. In the event
any Member Pre-Tax Contributions returned under this
paragraph (c) were matched by Employer Matching
Contributions under Section 3.03, those Matching
Contributions, together with Earnings, shall be
forfeited and used to reduce Employer contributions.
PAGE 17
3.02 Member After-Tax Contributions
Any Member may make Member After-Tax
Contributions under this Section whether or not he has
elected to have Member Pre-Tax Contributions made on
his behalf pursuant to Section 3.01. The amount of
Member After-Tax Contributions shall be not more than
10% of his Compensation while a Member, in multiples
of 1%, as elected by the Member. The Member After-Tax
Contributions shall be made through payroll deductions
in a manner to be determined by the Committee and
shall be promptly paid to the Trustees.
PAGE 18
3.03 Employer Matching Contributions
The Employer shall contribute on behalf of each
of its Members who elects to make Member Pre-Tax
Contributions an amount equal to 50% of the first 6%
of the Member Pre-Tax Contributions made on behalf of
the Member to the Plan during each payroll period. In
no event, however, shall the Matching Contributions
pursuant to this Section exceed 3% of the Member's
Compensation while a Member with respect to a
particular Plan Year. The Matching Contributions are
made expressly conditional on the Plan satisfying the
provisions of Sections 3.01 and 3.09. If any portion
of the Member Pre-Tax Contribution to which the
Matching Contribution relates is returned to the
Member under Section 3.01 or 3.09, the corresponding
Matching Contribution shall be forfeited and if any
amount of the Matching Contribution is deemed an
excess aggregate contribution under Section 3.09 such
amount shall be forfeited in accordance with the
provisions of that Section. The Matching
Contributions shall be paid to the Trustees as soon as
practicable.
3.04 Employer Regular Contributions
Prior to February 1, 1996, the Employer
contributed on behalf of each of its then eligible
Members an amount equal to 2% of the Member's
Compensation while a Member with respect to a
particular Plan Year. Effective February 1, 1996, the
Employer ceased payment of these Employer Regular
Contributions.
PAGE 19
3.05 Employer Discretionary Contributions
(a) The Employer may make additional
contributions to the Plan on account of any Plan Year,
in an amount to be determined by the Employer as of
the last day of that Plan Year, on behalf of each
eligible Member who is an Employee on the last day of
that Plan Year. In no event, however, shall the
Employer's contributions for any Plan Year exceed the
maximum amount deductible from the Employer's income
for that Plan Year under Section 404(a)(3)(A) of the
Code or any statute of similar import or 25% of the
total aggregate compensation of all Members who are
Employees of the Employer. The Employer Discretionary
Contributions shall be made in cash, property
(including Employer Stock) or a combination of both
cash and property. Notwithstanding the foregoing, in
the event an Exempt Loan is being repaid, the
allocation of Employer Stock released from encumbrance
under Section 5.03 shall be treated as an Employer
Discretionary Contribution under this Section if so
designated by the Board of Directors.
(b) Amounts contributed pursuant to paragraph
(a) above shall be allocated among the Employer
Accounts of all Members who are Employees of the
Employer on December 31 based on the ratio that each
Member's Compensation bears to the total Compensation
of all Members entitled to such allocation.
3.06 Member Rollover Contributions
With the permission of the Committee and
without regard to any limitations on contributions set
forth in this Article 3, the Plan may receive from a
Member, or an Employee who has not yet met the
eligibility requirements for membership, in cash, any
amount previously received by him from a qualified
plan, either directly or indirectly from an individual
retirement account, provided that such amount is
eligible to be rolled over to a qualified trust in
accordance with applicable law and the Member or
Employee provides evidence satisfactory to the
Committee that such amount qualifies for rollover
treatment. The Member Rollover Contributions must be
paid to the Trustees on or before the 60th day after
the day it was received by the Member or Employee.
PAGE 20
3.07 Change in Contributions
The percentages of Compensation designated by a
Member under Sections 3.01 and 3.02 shall
automatically apply to increases and decreases in his
Compensation. Subject to the provisions of Sections
3.01 and 3.02, a Member may change the percentage of
his authorized payroll deduction or reduction at any
time during the Plan Year by giving written notice to
the Committee. The changed percentage shall become
effective as of the first day of the payroll
processing period or as soon as practicable
thereafter, and shall be effective only with respect
to Compensation received subsequent to the Member's
election.
3.08 Suspension of Contributions
(a) A Member may suspend his contributions
under Section 3.02 and/or revoke his election under
Section 3.01 by giving written notice to the
Committee. The suspension or revocation shall become
effective as soon as practicable following such
notice.
(b) A Member who has suspended his
contributions under Section 3.02 may elect to have
them resumed in accordance with Section 3.02 by giving
such advance notice as the Committee shall prescribe.
A Member who has revoked his election under Section
3.01 may apply to the Committee to have his
Compensation reduction resumed in accordance with
Section 3.01 as soon as practicable following such
notice.
PAGE 21
3.09 Limitations Affecting Highly Compensated Employees
(a) Limitation Based on Actual Deferral Percentage:
With respect to each Plan Year commencing on
or after January 1, 1997, the Actual Deferral
Percentage for Highly Compensated Employees who are
Members or eligible to become Members for that Plan
Year shall not exceed the Actual Deferral Percentage
for the preceding Plan Year for all other Employees
(hereinafter referred to as "nonhighly compensated
employees") who were Members or eligible to become
Members during the preceding Plan Year multiplied by
1.25. If the Actual Deferral Percentage for Highly
Compensated Employees does not meet the foregoing
test, the Actual Deferral Percentage for Highly
Compensated Employees may not exceed the Actual
Deferral Percentage for the preceding Plan Year for
all nonhighly compensated employees who were Members
or eligible to become Members during the preceding
Plan Year by more than 2 percentage points, and the
Actual Deferral Percentage for Highly Compensated
Employees may not be more than 2.0 times the Actual
Deferral Percentage for the preceding Plan Year for
all nonhighly compensated employees for the preceding
Plan Year who were Members or eligible to become
Members during the preceding Plan Year (or such lesser
amount as the Committee shall determine to satisfy the
provisions of paragraph (c) below). Notwithstanding
the foregoing, the Employer may elect to use the
Actual Deferral Percentage for nonhighly compensated
employees for the Plan Year being tested rather than
the preceding Plan year provided that such election
once made may not be changed except as provided by the
Secretary of the Treasury.
PAGE 22
The Committee may implement rules limiting the Member
Pre-Tax Contributions which may be made on behalf of
some or all Highly Compensated Employees so that this
limitation is satisfied. If the Committee determines
that the limitation under this paragraph (a) has been
exceeded in any Plan Year, the following provisions
shall apply:
(i) The amount of Member Pre-Tax
Contributions made on behalf of some or all Highly
Compensated Employees shall be reduced until the
provisions of this paragraph are satisfied as follows.
The actual deferral ratio of the Highly Compensated
Employee with the highest amount of Member Pre-Tax
Contributions shall be reduced to the extent necessary
to meet the test or to cause such amount to equal the
amount of the Highly Compensated Employee with the
next highest Member Pre-Tax Contribution amount. This
process will be repeated until the actual deferral
percentage test is passed. Such percentage rates
shall be rounded to the nearest one one-hundredth
of 1% of the Member's Statutory Compensation.
(ii) Member Pre-Tax Contributions
subject to reduction under this paragraph, together
with Earnings thereon ("excess contributions"), shall
be paid to the Member before the close of the Plan
Year following the Plan Year in which the excess
contributions were made and, to the extent
practicable, within 2 1/2 months of the close of the Plan
Year in which the excess contributions were made.
PAGE 23
However, any excess contributions for any Plan Year
shall be reduced by any Member Pre-Tax Contributions
previously returned to the Member under Section
3.01(c) for that Plan Year. In the event any Member
Pre-Tax Contributions returned under this Section 3.09
were matched by Matching Contributions, such
corresponding Matching Contributions, with Earnings
thereon, shall be forfeited and used to reduce
Employer contributions. The Member may elect, in lieu
of a return of the excess contributions, to contribute
all or a portion of the excess contributions to the
Plan as Member After-Tax Contributions for the Plan
Year in which the excess contributions were made,
subject to the limitations of Section 3.02.
Recharacterized excess contributions shall be
considered Member After-Tax Contributions made in the
Plan Year to which the excess contributions relate for
purposes of paragraph (b) below and shall be subject
to the withdrawal provisions applicable to Member
After-Tax Contributions under Article 8. Any Earnings
on such recharacterized excess contributions shall be
credited to that individual's Account. The Member's
election to recharacterize Member Pre-Tax
Contributions shall be made within 2 1/2 months of the
close of the Plan Year in which the excess
contributions were made, or within such shorter period
as the Committee may prescribe. In the absence of a
timely election by the Member, the Committee shall
return his excess contributions, together with
Earnings, as provided in this subparagraph (ii).
(b) Limitation Based on Contribution Percentage:
With respect to each Plan Year commencing on or
after January 1, 1997, the Contribution Percentage for
Highly Compensated Employees who are Members or
eligible to become Members for that Plan Year shall
not exceed the Contribution Percentage for the
preceding Plan Year for all other Employees
(hereinafter referred to a "nonhighly compensated
PAGE 24
employees") who were Members or eligible to become
Members for the preceding Plan Year multiplied by
1.25. If the Contribution Percentage for Highly
Compensated Employees does not meet the foregoing
test, the Contribution Percentage for Highly
Compensated Employees may not exceed the Contribution
Percentage of all nonhighly compensated employees who
were Members or eligible to become Members for the
preceding Plan Year by more than 2 percentage points,
and the Contribution Percentage for Highly Compensated
Employees may not be more than 2.0 times the
Contribution Percentage for the preceding Plan Year
for all nonhighly compensated employees who were
Members or eligible to become Members for the
preceding Plan Year (or such lesser amount as the
Committee shall determine to satisfy the provisions of
paragraph (c) below). Notwithstanding the foregoing,
the Employer may elect to use the Contribution
Percentage for nonhighly compensated employees for the
Plan Year being tested rather than the preceding Plan
Year provided that such election once made may not be
changed except as provided by the Secretary of the
Treasury.
The Committee may implement rules
limiting the Member After-Tax Contributions which may
be made by some or all Highly Compensated Employees so
that this limitation is satisfied. If the Committee
determines that the limitation under this paragraph
(b) has been exceeded in any Plan Year, the following
provisions shall apply:
(i) The amount of Member After-Tax
Contributions and Employer Matching Contributions made
by or on behalf of some or all Highly Compensated
Employees in the Plan Year shall be reduced until the
provisions of this paragraph are satisfied as follows.
PAGE 25
The actual contribution ratio of the Highly
Compensated Employee with the highest amount of Member
After-Tax Contributions and Employer Matching
Contributions shall be reduced to the extent necessary
to meet the test or to cause such amount to equal the
amount of the Highly Compensated Employee with the
next highest amount of Member After-Tax Contributions
and Employer Matching Contributions. This process
will be repeated until the actual contribution
percentage test is passed. Each ratio shall be
rounded to the nearest one one-hundredth of 1% of a
Member's Statutory Compensation.
(ii) Any Member After-Tax Contributions
and Employer Matching Contributions subject to
reduction under this paragraph, together with Earnings
thereon ("excess aggregate contributions"), shall be
reduced and allocated in the following order:
(A) Member After-Tax
Contributions, to the extent of the excess aggregate
contributions, together with Earnings, shall be paid
to the Member; and then, if necessary,
(B) so much of the Employer
Matching Contributions, together with Earnings, as
shall be necessary to equal the balance of the excess
aggregate contributions shall be reduced, with the
Employer Matching Contributions being paid to the
Member.
(iii) Any repayment of excess aggregate
contributions shall be made before the close of the
Plan Year following the Plan Year for which the excess
aggregate contributions were made and, to the extent
practicable, any repayment shall be made within 2 1/2
months of the close of the Plan Year in which the
excess aggregate contributions were made.
PAGE 26
(c) Aggregate Contribution Limitation:
Notwithstanding the provisions of paragraphs (a) and
(b) above, in no event shall the sum of the Actual
Deferral Percentage of the group of eligible Highly
Compensated Employees and the Contribution Percentage
of such group, after applying the provisions of
paragraphs (a) and (b) above, exceed the "aggregate
limit" as provided in Section 401(m)(9) of the Code
and the regulations issued thereunder. In the event
the aggregate limit is exceeded for any Plan Year, the
Contribution Percentages of the Highly Compensated
Employees shall be reduced to the extent necessary to
satisfy the aggregate limit in accordance with the
procedure set forth in paragraph (b) above.
(d) Additional Discrimination Testing Provisions
(i) If any Highly Compensated Employee
is a member of another qualified plan of the Employer
or an Affiliated Employer, other than an employee
stock ownership plan described in Section 4975(e)(7)
of the Code or any other qualified plan which must be
mandatorily disaggregated under Section 410(b) of the
Code, under which deferred cash contributions or
matching contributions are made on behalf of the
Highly Compensated Employee or under which the Highly
Compensated Employee makes member after-tax
contributions, the Committee shall implement rules,
which shall be uniformly applicable to all employees
similarly situated, to take into account all such
contributions for the Highly Compensated Employee
under all such plans in applying the limitations of
this Section. If any other such qualified plan has a
plan year other than the Plan Year defined in Section
1.38, the contributions to be taken into account in
applying the limitations of this Section will be those
made in the plan years ending with or within the same
calendar year.
PAGE 27
(ii) In the event that this Plan is
aggregated with one or more other plans to satisfy the
requirements of Sections 401(a)(4) and 410(b) of the
Code (other than for purposes of the average benefit
percentage test) or if one or more other plans is
aggregated with this Plan to satisfy the requirements
of such sections of the Code, then the provisions of
this Section 3.09 shall be applied by determining the
Actual Deferral Percentage and Contribution Percentage
of employees as if all such plans were a single plan.
If this Plan is permissively aggregated with any other
plan or plans for purposes of satisfying the
provisions of Section 401(k)(3) of the Code, the
aggregated plans must also satisfy the provisions of
Sections 401(a)(4) and 410(b) of the Code as though
they were a single plan. For Plan Years beginning
after December 31, 1989, plans may be aggregated under
this paragraph (ii) only if they have the same plan
year.
(e) The Board of Directors may authorize that
special contributions shall be made for a Plan Year.
Such contributions shall be allocated in such amounts
and to those Members, who are not Highly Compensated
Employees, as the Committee shall determine to prevent
a violation of paragraphs (a) through (c) above. Such
special contributions shall be 100% nonforfeitable
when made and shall not be available for withdrawal
under Article 8. The Committee shall establish such
separate accounts as may be necessary to implement
this paragraph.
(f) The Committee may include some or all of
the qualified nonelective contributions made for the
Plan Year for purposes of the tests described in
paragraphs (a) and (c) above and may include some or
all of such qualified nonelective contributions and
some or all of the Member Pre-Tax Contributions made
for the Plan Year for purposes of the tests described
in paragraphs (b) and (c) above; provided the
requirements of applicable regulations are met. For
purposes of this paragraph (f), the term "qualified
nonelective contributions" shall mean special
contributions authorized under paragraph (e) above.
PAGE 28
3.10 Maximum Annual Additions
(a) The annual addition to a Member's
Accounts for any Plan Year, which shall be considered
the "limitation year" for purposes of Section 415 of
the Code, when added to the Member's annual addition
for that Plan Year under any other qualified defined
contribution plan of an Employer or an Affiliated
Employer shall not exceed an amount which is equal to
the lesser of (i) 25% of a Member's aggregate
remuneration for that Plan Year or (ii) $30,000, as
adjusted pursuant to Section 415(d) of the Code. In
no event shall the annual addition to a Member's
Accounts other than the ESOP Account exceed $30,000
for any limitation year, as so adjusted.
(b) For Limitation Years commencing prior to
January 1, 2000, in the case of a Member who is also a
member of a defined benefit plan sponsored by the
Employer or an Affiliated Employer, the sum of such
Member's defined benefit plan fraction and defined
contribution plan fraction shall not exceed 1.0. If
an adjustment needs to be made with respect to the sum
of a Member's fractions in order to meet the
limitation of the previous sentence, such adjustment
shall initially be made under the provisions of the
Member's defined benefit plan, and any additional
required adjustment shall be made to the annual
addition component of the defined contribution plan
fraction of this Plan in accordance with paragraph (g)
of this Section 3.10.
PAGE 29
(c) For purposes of this Section:
(i) the defined benefit plan fraction
for any Plan Year is a fraction:
(A) the numerator of which is the
projected annual benefit of the Member under the plan
(determined as of the close of that plan's plan year
that ends with or within this Plan's Plan Year), and
(B) the denominator of which is
the lesser of:
(I) the product of 1.25
multiplied by the dollar limitation in effect for
such Year (as determined pursuant to Section
415(b)(1)(B) of the Code), or
(II) the product of 1.4 multiplied by 100% of the
Member's average annual remuneration during
the 3 consecutive Plan Years affording the
highest average, or during all of such
Member's Plan Years if less than 3.
(ii) the defined contribution plan fraction for any Plan
Year is a fraction the numerator of which is the
sum of the annual additions to the Member's Accounts
as of the close of the Plan Year, and the denominator
of which is the lesser of the following amounts
determined for such Plan Year and for each prior Plan
Year (with respect to service for the Employer or an
Affiliated Employer):
(A) the product of 1.25
multiplied by the dollar limitation in effect for
such Plan Year (as determined pursuant to Section
3.10), or
(B) the product of 1.4 multiplied
by 25% of the Member's aggregate remuneration for
such Plan Year (as determined pursuant to Section
3.10).
PAGE 30
(d) For purposes of this Section, the "annual
addition" to a Member's Accounts under this Plan or
any other qualified defined contribution plan
maintained by the Employer or an Affiliated Employer
shall be the sum of:
(i) the total contributions, including
Member Pre-Tax Contributions, made on the Member's
behalf by the Employer and all Affiliated Employers,
(ii) all Member contributions, exclusive
of any Member Rollover Contributions, and
(iii) all ESOP Loan Contributions under
Article 5 used to repay principal in an Exempt Loan;
and
(iv) forfeitures, if applicable,
that have been allocated to the Member's
Accounts under this Plan or his accounts under any
other such qualified defined contribution plan.
Notwithstanding the foregoing, if during any Plan Year
no more than one-third of the ESOP Loan Contributions
which are deductible under Section 404(a)(9) of the
Code are allocated to the ESOP Accounts of Highly
Compensated Employees, then any ESOP Loan
Contributions which are used to pay interest on an
Exempt Loan, and any Employer Stock released pursuant
to Section 5.03 and allocated as a forfeiture, shall
not be an annual addition. For purposes of this
paragraph (d), any Member Pre-Tax Contributions,
Employer Matching Contributions or Member After-Tax
Contributions which may have been distributed or
forfeited under the provisions of Section 3.01(c) or
Section 3.09 shall be included in the annual addition
for the year allocated.
PAGE 31
(e) For purposes of this Section:
(i) a defined contribution plan means a
qualified plan which provides for an individual
account for each member and for benefits based solely
upon the amount contributed to the member's account,
and any income, expenses, gains and losses, and any
forfeitures of accounts of other members which may be
allocated to that member's accounts, subject to (ii)
below; and
(ii) a defined benefit plan means a
qualified pension plan which is not a defined
contribution plan; however, in the case of a defined
benefit plan which provides a benefit which is based
partly on the balance of the separate account of a
member, that plan shall be treated as a defined
contribution plan to the extent benefits are based on
the separate account of a member and as a defined
benefit plan with respect to the remaining portion of
the benefits under the plan.
(f) For purposes of this Section, the term
"remuneration" with respect to any Member shall mean
the wages, salaries and other amounts paid in respect
of that Member by the Employer or an Affiliated
Employer for personal services actually rendered,
determined after any reduction of Compensation
pursuant to Section 3.01 or pursuant to a cafeteria
plan as described in Section 125 of the Code,
including (but not limited to) bonuses, overtime
payments and commissions, but excluding deferred
compensation, stock options and other distributions
which receive special tax benefits under the Code.
Remuneration shall include amounts actually paid or
made available to a Member within a limitation year.
PAGE 32
(g) If the annual addition to a Member's
Accounts for any Plan Year, prior to the application
of the limitation set forth in paragraph (a) above,
exceeds that limitation due to a reasonable error in
estimating a Member's annual compensation or in
determining the amount of Member Pre-Tax Contributions
that may be made with respect to a Member under
Section 415 of the Code, or as the result of the
allocation of forfeitures, the amount of contributions
credited to the Member's Accounts in that Plan Year
shall be adjusted to the extent necessary to satisfy
that limitation by proportionately reducing the
allocations to the Member's various Accounts with the
following order of priority:
(i) That portion of the annual addition
which is attributable to Member After-Tax
Contributions shall be returned to the Member together
with any Earnings on the contributions to be returned.
(ii) That portion of the annual addition
which is attributable to Employer Discretionary
Contributions shall be reallocated to a suspense
account.
(iii) That portion of the annual addition
which is attributable to unmatched Member Pre-Tax
Contributions shall, to the extent permitted under
regulations issued pursuant to the Code, be paid to
the Member, together with any Earnings on the
contributions to be returned.
(iv) The Member's matched Member Pre-Tax
Contributions and corresponding Matching Contributions
shall be reduced to the extent necessary. The amount
of the reduction attributable to the Member's matched
Member Pre-Tax Contributions shall be returned to the
Member, together with any Earnings on those
contributions to be returned, and the amount
attributable to the Matching Contributions shall be
forfeited and used to reduce subsequent contributions
payable by the Employer.
PAGE 33
Any Member Pre-Tax Contributions returned to a Member
under this paragraph (g) shall be disregarded in
applying the dollar limitation on Member Pre-Tax
Contributions under Section 3.01(b), and in performing
the Actual Deferral Percentage Test under Section 3.09.
Any Member After-Tax Contributions returned under this
paragraph (g) shall be disregarded in performing the
Contribution Percentage Test under Section 3.09.
Amounts held in the suspense account
shall, during the current Plan Year, be allocated and
reallocated among the Accounts of other Plan Members
as Employer Discretionary Contributions. If, after
such allocation and reallocation, an amount still
remains in the suspense account no further allocation
for the current Plan Year will be required, and the
amount in the suspense account will be carried over
and allocated in the next Plan Year as an Employer
Matching Contribution. However, no future Employer
Matching Contributions or Employer Discretionary
Contributions shall be permitted until the amount held
in the suspense account is allocated to Member
Accounts.
PAGE 34
3.11 Return of Contributions
(a) If the Commissioner of Internal Revenue,
on timely application made after the initial
establishment of the Plan, determines that the Plan is
not qualified under Section 401(a) of the Code, or
refuses, in writing, to issue a determination as to
whether the Plan is so qualified, the Employer's
contributions made on or after the date on which that
determination or refusal is applicable shall be
returned to the Employer. The return shall be made
within one year after the denial of qualification.
The provisions of this paragraph (a) shall apply only
if the application for the determination is made by
the time prescribed by law for filing the Employer's
return for the taxable year in which the Plan was
adopted, or such later date as the Secretary of the
Treasury may prescribe.
(b) If all or part of the Employer's
deductions under Section 404 of the Code for
contributions to the Plan are disallowed by the
Internal Revenue Service, the portion of the
contributions to which that disallowance applies shall
be returned to the Employer without interest but
reduced by any investment loss attributable to those
contributions provided that the return is made within
one year after the disallowance of deduction. For
this purpose, all contributions made by the Employer
are expressly declared to be conditioned upon their
deductibility under Section 404 of the Code.
(c) The Employer may recover without interest
the amount of its contributions to the Plan made on
account of a mistake of fact, reduced by any
investment loss attributable to those contributions,
if recovery is made within one year after the date of
those contributions.
(d) In the event that Member Pre-Tax
Contributions made under Section 3.01 are returned to
the Employer in accordance with the provisions of this
Section 3.11, the elections to reduce Compensation
which were made by Members on whose behalf those
contributions were made shall be void retroactively to
the beginning of the period for which those
contributions were made. The Member Pre-Tax
Contributions so returned shall be distributed in cash
to those Members for whom those contributions were
made, provided, however, that if the contributions are
returned under the provisions of paragraph (a) above,
the amount of Member Pre-Tax Contributions to be
distributed to Members shall be adjusted to reflect
any investment gains or losses attributable to those
contributions.
PAGE 35
3.12 Contributions Not Contingent Upon Profits
Except as otherwise specifically provided, the
Employer may make contributions to the Plan without
regard to the existence or the amount of Profits.
Notwithstanding the foregoing, however, this Plan is
designed to qualify as a "profit-sharing and stock
bonus plan" for all purposes of the Code.
PAGE 36
3.13 Valuation of Shares
When an Employer Matching Contribution or an
Employer Discretionary Contribution is made in cash to
the ESOP Account of a Member, such Member will be
credited with the cash amount to which he is entitled.
The Trustees will then purchase Employer Stock over a
reasonable period, either from the open market, in
privately negotiated transactions, or from the
Employer. Each such Member will be credited with the
applicable portion of such purchases. When an
Employer Matching Contribution or an Employer
Discretionary Contribution is made in shares of
Employer Stock, the amount of such contribution shall
be deemed to be in the fair market value of the
Employer Stock contributed on the date of such
contribution. When ESOP Loan Contributions result in
the release of shares of Employer Stock from the
Suspense Account upon payment of a portion of an
Exempt Loan, the fair market value of such shares
shall be deemed to be their fair market value on the
date of the ESOP Loan Contribution, which value may
not necessarily be the same as the amount paid for
such shares with respect to the Exempt Loan. The fair
market value of any shares of Employer Stock released
from the Suspense Account shall be determined by the
Trustees. If the Employer Stock is or becomes not
readily tradable on an established securities market,
then for purposes of determining the fair market value
of Employer Stock released from the Suspense Account
or Employer Stock purchased from, or contributed by,
the Employer, the Trustees shall utilize generally
accepted methods of valuing stock of closely-held
companies and shall rely upon a valuation appraisal of
the Employer Stock as shall be determined by an
experienced, independent valuation consultant in
accordance with rules specified under Section
401(a)(28) of the Code.
PAGE 37
ARTICLE 4. INVESTMENT OF CONTRIBUTIONS
4.01 Investment Funds
(a) Contributions to the Plan made pursuant
to Sections 3.01, 3.02 and 3.06 (i.e., Member Pre-Tax
Contributions, Member After-Tax Contributions and
Member Rollover Contributions, respectively) at the
election of the Member shall be invested in one or
more Investment Funds, as authorized by the Committee,
which from time to time may include the following:
Fund A: Bank Stock Fund - A Fund
designed to invest primarily in Employer Stock.
Fund B: Money Market Fund - A Fund
designed to invest primarily in short term obligations
of the United States government or agencies thereof or
of corporations or trusts established by, or pursuant
to the authority of the United States government,
corporate paper, certificates of deposit maturing in 3
years or less and other types of short-term
investments as selected by the Trustees.
Fund C: Diversified Equity Fund - A Fund
designed to invest primarily in corporate common or
preferred stock, convertible debentures, options,
partnerships, joint ventures and other types of equity
investments as selected by the Trustees.
Fund D: Fixed Income Fund - A Fund
designed to invest primarily in government and
corporate bonds, debentures, notes, certificates of
deposit and other types of fixed income investments as
selected by the Trustees.
Fund E: S&P 500 Index Fund - A Fund
designed to invest with the objective of replicating
the performance of the Standard & Poor's 500 stock
index, a broad representation of the United States
stock market.
Fund F: Special Growth Fund - A Fund
designed to maximize total return, primarily through
capital appreciation and by assuming a higher level of
volatility than is ordinarily expected from the S&P
500 index.
PAGE 38
4.02 Investment of Members' Accounts; Change of Election
A Member shall make investment elections
covering his Member After-Tax Account, Member Pre-Tax
Account and Member Rollover Account, in accordance
with one of the following options:
(a) 100% in one of the available Investment
Funds; or
(b) in more than one Investment Fund,
allocated in multiples of 1%, and totaling 100%.
In the event a Member fails to make an
investment election, his Account shall be invested in
Fund B.
A Member may change his investment elections at
any time by giving written notice to the Committee.
Such change shall be effective the next payroll
processing or as soon as practicable thereafter, and
shall be effective only with respect to subsequent
contributions.
PAGE 39
4.03 Transfers Between Funds
A Member may elect at any time to transfer all
or any percentage of all of his Accounts, including
his ESOP Account (i.e., Fund G), between or among the
Investment Funds in multiples of 1%. Such transfer
request will be effective as of the next Valuation
Date.
4.04 Investment of Employer Matching Contributions
The investment of Employer Matching
Contributions shall be allocated among the Investment
Funds according to the Member's election for his
Member Pre-Tax Account pursuant to Section 4.02,
unless the Committee determines that such
contributions are to be used for allocation of
Employer Stock as available from the unallocated ESOP
Suspense Account.
4.05 Limitation on Transfers Between Funds
Notwithstanding Section 4.03, the Trustees, the
Employer or any investment manager appointed by either
the Trustees or the Employer may impose restrictions
upon transfers between funds in order to preserve the
overall investment portfolio of the Trust. In those
instances where restrictions are imposed, the
Committee shall inform all affected Members as soon as
practicable.
PAGE 40
4.06 Investment of Employer Discretionary Contributions
Except for Employer Discretionary Contributions
made as ESOP Loan Contributions, the initial
investment of Employer Discretionary Contributions and
earnings thereon shall be made solely in the Bank
Stock Fund.
4.07 Diversification of ESOP Account
The diversification requirement of Section
401(a)(28) of the Code is satisfied by the provisions
now set forth in Section 4.03 and related Plan
provisions.
4.08 Responsibility for Investments
Each Member is solely responsible for the
selection of the Investment Funds into which his
contributions are deposited and any subsequent
transfer investment decisions. The Trustees, the
Committee, the Employer, and the officers, supervisors
and other employees of the Employer are not empowered
to advise a Member as to the manner in which his
Accounts shall be invested. The fact that an
Investment Fund is available to Members for investment
under the Plan shall not be construed as a
recommendation for investment in that Investment Fund.
The Plan is intended to comply with the provisions of
the Department of Labor Regulation Section
2550.404(c)-1.
PAGE 41
ARTICLE 5. EMPLOYEE STOCK OWNERSHIP PLAN
5.01 Purchase of Employer Stock
(a) The portion of the Plan composed of the
ESOP Accounts and the Suspense Account shall be
considered an employee stock ownership plan (an
"ESOP"), which is designed to be invested primarily in
qualified employer securities. The Board of
Directors, in its discretion, may direct the Trustees
to acquire Employer Stock under the ESOP with the
proceeds of an Exempt Loan.
(b) Employer Stock acquired by the Trustees
hereunder may be purchased on an open market or from
the Employer or any other person or entity. However,
Employer Stock acquired from a "disqualified person"
as defined in Section 4975(e)(2) of the Code may not
be purchased at a price in excess of its fair market
value determined in accordance with Section 3.13.
5.02 Exempt Loan
An Exempt Loan shall be used primarily for the
benefit of Members and their Beneficiaries, shall be
for a specific term, shall bear a reasonable rate of
interest and shall not be payable on demand except in
the event of default. In the event of default, the
value of Plan assets transferred in satisfaction of
the Exempt Loan shall not exceed the amount of
default. An Exempt Loan may be secured by a
collateral pledge of the Employer Stock acquired with
the proceeds of such loan, but no other assets of the
Trust may be pledged as collateral for the Exempt Loan
and no lender shall have recourse against any assets
of the Trust except to the extent permitted under
Section 54.4975-7(b)(5) of the Treasury Regulations.
Any pledge of Employer Stock shall provide for the
release of shares so pledged on a pro rata basis as
principal and interest on the Exempt Loan are repaid
by the Trustees; provided, however, that an
alternative method of releasing such stock from
encumbrance may be utilized if permitted by applicable
regulations under Section 4975 of the Code and the
Committee adopts such method. Such stock shall be
allocated as provided in Section 5.04 below.
PAGE 42
5.03 Suspense Account
(a) Employer Stock acquired with the proceeds
of an Exempt Loan shall be held in the Suspense
Account and shall not be allocated to a Member's ESOP
Account until released from encumbrance under the
terms of the Exempt Loan. During the
term of the Exempt Loan, a number of shares of
Employer Stock shall be released per year equal to (i)
the number of encumbered shares multiplied by a
fraction, the numerator of which shall be the amount
of principal and interest paid by the Trustees on the
Exempt Loan for the year, and the denominator of which
shall be the sum of the numerator and the aggregate
principal and interest to be paid by the Trustees on
the Exempt Loan for all future years; (ii) subject to
the regulations under Section 4975 of the Code and the
terms of the Exempt Loan, the number of encumbered
shares multiplied by a fraction, the numerator of
which shall be the amount of the Exempt Loan principal
payments paid to the Trustees for the year, and the
denominator of which shall be the sum of the numerator
and the aggregate principal payments to be paid by the
Trustees on the Exempt Loan for all future years; or
(iii) an alternative method of releasing such stock
from encumbrance may be utilized if permitted by
applicable regulations under Section 4975 of the Code,
the provisions of the Exempt Loan allow such method
and the Committee adopts such method. For this
purpose, the number of future years under the Exempt
Loan must be definitely ascertainable and must be
determined without taking into account any possible
extensions or renewal periods. If the interest rate
under the Exempt Loan is variable, the interest to be
paid in future years shall be computed by using the
interest rate applicable as of the end of the calendar
year.
(b) Any cash dividends received in any year by the Trustees
on shares of Employer Stock held in the Suspense Account
shall be applied to the payment of outstanding
obligations of the Trust under any Exempt Loan (and
shall be invested in an interest bearing or other fixed
income investment pending such payment).
PAGE 43
5.04 Allocation of Employer Stock
Upon release of Employer Stock from encumbrance
it shall be allocated among the Members' ESOP Accounts
pursuant to Section 3.05(b).
5.05 Dividends
In the sole discretion of the Board of
Directors, dividends that are payable with respect to
Employer Stock that is allocated to a Member's ESOP
Account may be (a) accumulated in the Member's ESOP
Account and used to buy additional Employer Stock, (b)
used to repay the principal and interest due on the
Exempt Loan, (c) paid directly to the Member in cash
(to the extent such direct payment may be
effectuated), or (d) paid to the Trust and distributed
by the Trustees in cash to the Member not later than
90 days after the close of the Plan Year in which paid
to the Trust.
PAGE 44
5.06 Voting Rights; Offer to Purchase Stock
(a) Voting _ On any matter which by
Pennsylvania law or the Employer's charter must be
decided by more than a majority vote of outstanding
shares voted, but only to the extent required by
Sections 401(a)(22) and 409(e) of the Code and the
Regulations thereunder, all Employer Stock (including
fractional shares) allocated to a Member's Accounts
shall be voted by the Trustees in accordance with
instructions from the Member on a one vote per share
basis. The instructions received by the Trustees from
Members shall be held by the Trustees in strict
confidence and shall not be divulged or released to
any person including officers or other Employees of
the Employer or an Affiliated Employer, except as
otherwise required to vote said stock. The Employer
shall provide Members with notices and information
statements when voting rights are to be exercised the
content of which must generally be the same as for all
holders of Employer Stock. Fractional shares may be
voted by the Trustees on a combined basis, in order to
reflect the direction of the Members holding such
shares. The Trustees shall vote any allocated stock
for which it has not received instructions in the same
proportions as shares as to which voting instructions
have been received. All Employer Stock (including
fractional shares) allocated to a Member's Accounts
for which the Member does not have voting rights
hereunder and all unallocated Employer Stock held in
the Suspense Account shall be voted according to the
discretion of the Trustees.
(b) Tender Offer Procedure _ In the event any
offer is made to shareholders of the Employer by any
person, corporation or other entity (the "offerer") to
purchase any or all of the outstanding Employer Stock
including the Stock then held in the Plan, the
Trustees shall accept or reject any such tender,
exchange or purchase offer, in whole or in part, with
respect to Employer Stock held by the Trustees as the
Trustees, in their sole discretion, determine.
PAGE 45
Alternatively, the Trustees may decide to pass the
decision through to the Members as to the Employer
Stock then held in a Member's Accounts. In this case,
the Trustees shall promptly forward to each Member all
materials and written information furnished to the
Trustees by the offerer and/or by the Employer in
connection therewith, and shall notify each Member in
writing of the number of shares of Employer Stock
which is then credited to such Member's Accounts.
Such notice shall also set forth the rights afforded
each Member by this Section 5.06(b) and shall state
that, absent timely instructions from such Member to
the Trustees, no tender to the offerer shall be made
of any of the shares specified in such written notice.
Each Member shall be entitled to instruct the Trustees
as to whether all or part of the shares of Employer
Stock standing to his credit should be tendered by the
Trustees pursuant to such offer. The instructions
received by the Trustees from Members shall be held by
the Trustees in strict confidence and shall not be
divulged or released to any person including officers
or other Employees of an Employer or an Affiliated
Employer, except as otherwise is required to tender
said stock.
(c) Shares Tendered _ If the Trustees decide
to pass the decision on the tender offer through to
Members under paragraph (b) above, the Trustees shall
tender only those shares of Employer Stock held in a
Member's Accounts for which it receives instructions
to so tender from such Member and shall not tender any
shares as to which such instructions are not so
received. In such a case all unallocated Employer
Stock held in the Suspense Account shall be tendered
by the Trustees in the same proportions as the
allocated stock for which the Trustees has received
instructions as to whether or not to tender.
(d) Proceeds - In the event the Employer
Stock held in a Member's Accounts is tendered pursuant
to this Section 5.06, the proceeds received upon the
acceptance of such tender by the offerer shall be
credited to such Member's Accounts (and shall be
subject to the same terms and conditions as were
applicable to the Employer Stock so tendered). The
Trustees shall invest the amounts representing the
proceeds of tendered Employer Stock, and any earnings
thereon, in accordance with instructions from, or
procedures provided by, the Committee, or in
accordance with elections by the Members with respect
to such proceeds pursuant to procedures established by
the Committee.
(e) The Trustees shall discharge his duties
with respect to Employer Stock over which he has
voting authority or the authority to accept or reject
a tender, purchase or exchange offer solely in the
interest of the Members and Beneficiaries of the Plan.
PAGE 46
5.07 ESOP Loan Contributions
The Employer may make a contribution to the
Trust for the purpose of discharging its obligations
under any Exempt Loan. The amount of the Employer's
contribution each year shall be determined by the
Board of Directors.
5.08 Trustees' Independence
Notwithstanding any provision to the contrary,
the Trustees shall discharge their duties hereunder in
accordance with the documents and instruments
governing the Plan insofar as such documents and
instruments are consistent with the provisions of
Title I, Part 4 of ERISA.
PAGE 47
5.09 Satisfaction of the Exempt Loan
Upon payment in full of the Exempt Loan and
following the final allocation of Employer Stock
pursuant to Section 5.04, a Member's ESOP Account
(i.e., Fund G) shall be merged into Fund A as soon as
administratively practicable thereafter.
PAGE 48
ARTICLE 6. VALUATION OF THE ACCOUNTS
6.01 Valuation of the Investment Funds
The Trustees shall value the Investment Funds
and the ESOP Account as of each Valuation Date. On
each Valuation Date there shall be allocated to the
Accounts of each Member his proportionate share of the
increase or decrease in the fair market value of his
Accounts in each of the Funds and the ESOP Account.
Whenever an event requires a determination of the
value of the Member's Accounts, the value shall be
computed as of the Valuation Date coincident with or
immediately following the date of determination.
6.02 Statement of Accounts
At least once a year, each Member shall be
furnished with a statement setting forth the value of
his Accounts.
PAGE 49
ARTICLE 7. VESTED PORTION OF ACCOUNTS
7.01 Vested Portion of Accounts
Any Employee who has one Hour of Service with
the Employer shall at all times be 100% vested in, and
have a nonforfeitable right to his Employer Account,
ESOP Account, Member After-Tax Account, Member Pre-Tax
Account and Member Rollover Account.
PAGE 50
ARTICLE 8. WITHDRAWALS WHILE STILL EMPLOYED
8.01 Withdrawal After Age 59 1/2
Except as provided in Section 3.09(e), a Member
who shall have attained age 59 1/2 as of the effective
date of any withdrawal pursuant to this Section may,
without penalty and no more than once in any Plan
Year, elect to withdraw all or part of his Accounts.
The minimum withdrawal shall be $100, or the value of
his Member Pre-Tax Account if less.
8.02 Hardship Withdrawal
(a) A Member who is not otherwise entitled to
make a withdrawal under Section 8.01 may, without
penalty and no more than once in any Plan Year and
subject to the provisions of Section 8.03, elect to
withdraw all or part of his Accounts (except earnings
credited on the Member Pre-Tax Account after December
31, 1988 and as provided in Section 3.09(e)) upon
furnishing proof of financial hardship satisfactory to
the Committee.
(b) A Member shall be considered to have
incurred a financial hardship if, and only if, he
meets the requirements of paragraphs (c) and (d)
below.
(c) As a condition for Hardship there must
exist with respect to the Member an immediate and
heavy financial need to draw upon his Accounts. The
Committee shall presume the existence of such
immediate and heavy financial need if the requested
withdrawal is on account of any of the following:
(i) expenses for medical care described
in Section 213(d) of the Code previously incurred by
the Member, his spouse or any of his dependents (as
defined in Section 152 of the Code) or necessary for
those persons to obtain such medical care;
(ii) costs directly related to the
purchase of a principal residence of the Member
(excluding mortgage payments);
(iii) payment of tuition and related
educational fees, and room and board expenses, for the
next 12 months of post-secondary education of the
Member, his spouse, children or dependents (as defined
in Section 152 of the Code);
PAGE 51
(iv) payment of amounts necessary to
prevent eviction of the Member from his principal
residence or to avoid foreclosure on the mortgage of
his principal residence; or
(v) the inability of the Member to meet
such other expenses, debts or other obligations
recognized by the Internal Revenue Service as giving
rise to immediate and heavy financial need for
purposes of Section 401(k) of the Code.
The amount of the withdrawal may not be
in excess of the amount of the financial need of the
employee, including any amounts necessary to pay any
federal, state or local taxes and any amounts
necessary to pay any penalties reasonably anticipated
to result from the hardship distribution.
In evaluating the relevant facts and
circumstances, the Committee shall act in a
nondiscriminatory fashion and shall treat uniformly
those Members who are similarly situated. The Member
shall furnish to the Committee such supporting
documents as the Committee may request in accordance
with uniform and nondiscriminatory rules prescribed by
the Committee.
PAGE 52
(d) As a condition for a Hardship withdrawal,
the Member must demonstrate that the requested
withdrawal is necessary to satisfy the financial need
described in paragraph (c) as follows:
(i) If the withdrawal will be made from
a Member's Pre-Tax Account, the Member must certify to
the Committee, on such form as the Committee may
prescribe, that the financial need cannot be fully
relieved (A) through reimbursement or compensation by
insurance or otherwise, (B) by reasonable liquidation
of the Member's assets, (C) by cessation of Member
Pre-Tax Contributions and Member After-Tax
Contributions, or (D) by other distributions or
nontaxable (at the time of the loan) loans from the
Plan or other plans of the Employer or Affiliated
Employers or by borrowing from commercial sources at a
reasonable rate in an amount sufficient to satisfy the
need. The actions listed are required to be taken to
the extent necessary to relieve the hardship but any
action which would have the effect of increasing the
hardship need not be taken. For purposes of this
subparagraph (i), there shall be attributed to the
Member those assets of the Member's spouse and minor
children which are reasonably available to the Member.
The Member shall furnish to the Committee such
supporting documents as the Committee may request in
accordance with uniform and nondiscriminatory rules
prescribed by the Committee. If, on the basis of the
Member's certification and the supporting documents,
the Committee finds it can reasonably rely on the
Member's certification, then the Committee shall find
that the requested withdrawal is necessary to meet the
Member's financial need.
(ii) If a withdrawal will not be made
from a Member's Pre-Tax Account, the Member shall
certify to the Committee, on such form as the
Committee shall prescribe, that the financial need
cannot be met by reimbursement from insurance or by
withdrawing all available amounts under the Plan.
PAGE 53
8.03 Procedures and Restrictions
To make a withdrawal, a Member shall give
adequate prior written notice to the Committee. A
withdrawal shall be made as of the next Valuation Date
after the Committee approves such request, if
applicable, as soon as practicable following such
notice. Unless otherwise specified by the Member on a
form prescribed by the Committee, the amount of the
withdrawal shall be allocated between and among the
Investment Funds in proportion to the value of the
Member's Accounts from which the withdrawal is made in
each Investment Fund as of the date of the withdrawal.
Subject to the provisions of Section 9.09, all
payments to Members under this Article shall be made
in cash as soon as practicable. In the event a
married Member has elected an annuity under Section
9.02(a)(ii) at the time the withdrawal is to be made,
the withdrawal election shall not be effective unless
Spousal Consent to the election is received by the
Committee.
8.04 Withdrawal from ESOP Account
Withdrawals from the ESOP Account shall only be
made in accordance with the diversification
requirement set forth in Section 4.07 or the hardship
withdrawal provisions of Section 8.02.
PAGE 54
8.05 Withdrawal of Member After-Tax Contributions
(a) A Member may, subject to Section 8.03,
elect to withdraw all or part of the Member After-Tax
Contributions in his Member After-Tax Account made
before January 1, 1987, not to exceed his nontaxable
basis, excluding Earnings thereon.
(b) A Member who has withdrawn the amounts
described in paragraph (a) above may,
subject to Section 8.03, elect to withdraw all or part
of his Member After-Tax Account attributable to Member
After-Tax Contributions made on or after January 1,
1987, with Earnings thereon.
(c) A Member who has withdrawn the amounts
described in paragraphs (a) and (b) above may, subject
to Section 8.03, elect to withdraw the remaining
amounts in his Member After-Tax Account attributable
to Member After-Tax Contributions made before January
1, 1987.
PAGE 55
ARTICLE 9. DISTRIBUTION OF ACCOUNTS UPON TERMINATION
OF EMPLOYMENT
9.01 Eligibility
Upon a Member's termination of employment, his
Accounts shall be distributed as provided in this
Article.
9.02 Forms of Distribution
(a) Unless the Member elects otherwise and
subject to the provisions of Section 9.06,
distribution of his Accounts shall be made in a cash
lump sum. A Member may elect, in such manner as the
Committee shall prescribe, to receive an optional form
of benefit described below:
(i) Payments in approximately equal
quarterly or annual installments over a period,
designated by the Member, not to exceed the life
expectancy of the last survivor of the Member and his
Beneficiary. In the event that the Member dies before
all installments have been paid, the remaining balance
in his Accounts shall be paid in an immediate cash
lump sum to his Beneficiary.
(ii) The purchase of a nonforfeitable
fixed annuity, provided that if the annuity form
selected is not a Qualified Joint and Survivor
Annuity, the value of the benefit payable to the
Member under the annuity shall never be less than 51%
of the total value of the benefits payable under the
annuity to the Member and his Beneficiary. If the
Member is married on his Annuity Starting Date, and if
he has not elected otherwise, the benefit shall be in
the form of a Qualified Joint and Survivor Annuity
PAGE 56
providing for a pension payable to the Member during
his life and after his death a pension at the rate of
one-half the pension paid to the Member, payable
during the life of, and to the spouse to whom he was
married on the Annuity Starting Date. A Member may
elect, during the 90-day period preceding his Annuity
Starting Date, not to take the Qualified Joint and
Survivor Annuity and to take instead another form of
annuity. Elections under this clause (ii) shall be in
writing and shall be subject to receipt by the
Committee of Spousal Consent to that election. The
Committee shall furnish each Member no less than 30
days nor more than 90 days before his Annuity Starting
Date a written explanation of the Qualified Joint and
Survivor Annuity in accordance with applicable law.
A Member's Annuity Starting Date may not occur less
than 30 days after receipt of the notice. A Member
may revoke his election and make a new election from
time to time and at any time during the aforesaid
election period. If the annuity form selected is not
a Qualified Joint and Survivor Annuity with the
Member's spouse as the Beneficiary, the annuity
payable to the Member and thereafter to his
Beneficiary shall be subject to the incidental death
benefit rule as described in Section 401(a)(9)(G) of
the Code and its applicable regulations.
Notwithstanding the foregoing, if
the distribution is one to which Code Sections
401(a)(11) and 417 apply, a Member may, after having
received the required notice affirmatively elect to
have his benefit commence sooner than 30 days
following his receipt of the notice, provided all of
the following requirements are met:
PAGE 57
(i) the Committee clearly informs
the Member that he has a period of at least 30 days
after receiving the notice to decide when to have his
benefit begin and, if applicable, to choose a
particular optional form of payment;
(ii) the Member affirmatively elects a date for benefits
to begin and, if applicable, an optional form of
payment, after receiving the notice;
(iii) the Member is permitted to
revoke his election until the later of his Annuity
Starting Date or 7 days following the date he received
the notice;
(iv) the Member's Annuity Starting
Date is after the date the notice is provided; and
(v) payment does not commence less than 7 days following
the day after the notice is received by the Member.
Notwithstanding the foregoing, if a
distribution is one to which Sections 401(a)(11) and
417 of the Code do not apply, such distribution may
commence less than 30 days after the notice required
under Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(i) the Committee clearly informs the Member that
the Member 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
(ii) the Member, after receiving
the notice, affirmatively elects a distribution.
(b) Notwithstanding the preceding, if a
Member dies before his benefits commence, the balance
of his Accounts shall be paid to his Beneficiary in a
lump sum (subject to the provisions of Section 9.06).
However, if a Member has elected an annuity under
Section 9.02(a)(ii) and his spouse is his Beneficiary,
payment shall be made in the form of a life annuity
unless the spouse elects a lump sum.
PAGE 58
9.03 Commencement of Payments
(a) Except as otherwise provided in this
Article, distribution of the Member's Accounts shall
commence as soon as administratively practicable
following the later of (i) the Member's termination of
employment (including Disability termination) or (ii)
the 65th anniversary of the Member's date of birth
(but not more than 60 days after the close of the Plan
Year in which the later of (i) or (ii) occurs).
(b) In lieu of a distribution as described in
paragraph (a) above, a Member may, in accordance with
such procedures as the Committee shall prescribe,
elect to have the distribution of his Accounts
commence as of any Valuation Date coincident with or
following his termination of employment which is
before or after the date described in paragraph (a)
above.
(c) In the case of the death of a Member
before his benefits commence, the balance of his
Accounts shall be distributed to his Beneficiary as
soon as administratively practicable following the
Member's date of death, but not later than one year
after the close of the Plan Year in which the death
occurs (subject to the provisions of Section 9.06(b)).
PAGE 59
(d) In no event, however, shall the
provisions of this Section operate so as to allow the
distribution of a Member's Accounts to begin later
than the April 1 following the calendar year in which
he attains age 70 1/2, provided that such commencement in
active service shall not be required with respect to a
Member (i) who does not own more than 5% of the
outstanding stock of the Employer (or stock possessing
more than 5% of the total combined voting power of all
stock of the Employer), and (ii) who either attained
age 70 1/2 prior to January 1, 1988, or who did not
receive a distribution pursuant to this paragraph (d)
prior to December 31, 1996.
(e) In the event a Member who is a 5% owner
(as defined in Section 416(i) of the Code) is required
to begin receiving payments while in service under the
provisions of paragraph (d) above, the Member may
elect to receive payments while in service in
accordance with option (i) or (ii), as follows:
(i) A Member may receive one lump sum
payment on or before the Member's required beginning
date equal to his entire Account balance and annual
lump sum payments thereafter of amounts accrued during
each calendar year; or
(ii) A Member may receive annual
payments of the minimum amount necessary to satisfy
the minimum distribution requirements of
Section 401(a)(9) of the Code. Such minimum amount
will be determined on the basis of the Member's life
expectancy. Such life expectancy will not be
recalculated. The amount of the withdrawal shall be
allocated between and among the Investment Funds in
proportion to the value of the Member's Accounts as of
the date of each withdrawal.
An election under this Section 9.03(e)
shall be made by a Member by giving written notice to
the Committee within the 90 day period prior to his
required beginning date. The commencement of payments
under this Section 9.03 shall not constitute an
Annuity Starting Date for purposes of Sections 72,
401(a)(11) and 417 of the Code. Upon the Member's
subsequent termination of employment, payment of the
Member's Accounts shall be made in accordance with the
provisions of Section 9.02. In the event a Member
fails to make an election under this Section 9.03(e),
payment shall be made in accordance with clause (ii)
above.
PAGE 60
9.04 Small Benefits
Notwithstanding any provision of the Plan to
the contrary, a lump sum payment shall be made in lieu
of all benefits if the value of the Member's Accounts
as of his termination from employment amounts to
$5,000 or less. The lump sum payment shall
automatically be made as soon as administratively
practicable following the Member's termination of
employment.
9.05 Status of Accounts Pending Distribution
Until completely distributed under Section 9.03
the Accounts of a Member who is entitled to a
distribution shall continue to be invested as part of
the funds of the Plan.
9.06 Method of Payment of ESOP Stock Fund
(a) Notwithstanding the foregoing provisions
and in addition thereto, the Member may elect to have
any distribution from the ESOP Stock Fund and the Bank
Stock Fund made all in cash or all in kind. In the
case of an in kind distribution, fractional shares
shall be converted to cash, and payment of the value
of those fractional shares shall be made in cash.
(b) Subject to the diversification
requirement of Section 4.07, in the event the fair
market value of a Member's ESOP Stock Fund and Bank
Stock Fund equals $50,000 or more at the time the
Member requests distribution in cash, the distribution
from these Funds shall be made in substantially equal
periodic payments (not less frequently than annually)
over a period not longer than 5 years. The Trustees
shall not be required to liquidate the shares of
Employer Stock until such time as it is required to
make the cash distributions.
PAGE 61
9.07 Proof of Death and Right of Beneficiary or Other Person
The Committee may require and rely upon such
proof of death and such evidence of the right of any
Beneficiary or other person to receive the value of
the Accounts of a deceased Member as the Committee may
deem proper and its determination of the right of that
Beneficiary or other person to receive payment shall
be conclusive.
9.08 Distribution Limitation
Notwithstanding any other provision of this
Article 9, all distributions from this Plan shall
conform to the regulations issued under Section
401(a)(9) of the Code, including the incidental death
benefit provisions of Section 401(a)(9)(G) of the
Code. Further, such regulations shall override any
Plan provision that is inconsistent with Section
401(a)(9) of the Code. Life expectancies of Members
and their spouses shall not be recalculated.
PAGE 62
9.09 Direct Rollover of Certain Distributions
This Section applies to distributions made on
or after January 1, 1993. 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 Committee, to have any
portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by
the distributee in a direct rollover. The following
definitions apply to the terms used in this Section:
(a) "Eligible rollover distribution" means
any distribution of all or any portion of the balance
to the credit of the distributee, except that an
eligible rollover distribution does not include any
distribution that is one of a series of substantially
equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of
ten years or more, any distribution to the extent such
distribution is required under Section 401(a)(9) of
the Code, and the portion of any distribution that is
not includible in gross income (determined without
regard to the exclusion of net unrealized appreciation
with respect to employer securities);
(b) "Eligible retirement plan" means an
individual retirement account described in Section
408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity
plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the
Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement
account or individual retirement annuity;
PAGE 63
(c) "Distributee" means an employee or former
employee. In addition, the employee's or former
employee's surviving spouse and the employee's or
former employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations
order as defined in Section 414(p) of the Code, are
distributees with regard to the interest of the spouse
or former spouse; and
(d) "Direct rollover" means a payment by the
Plan to the eligible retirement plan specified by the
distributee.
PAGE 64
ARTICLE 10. ADMINISTRATION OF PLAN
10.01 Appointment of Thrift Plan Committee
The general administration of the Plan and the
responsibility for carrying out the provisions of the
Plan shall be placed in a Thrift Plan Committee of not
less than 3 persons appointed from time to time by the
Board of Directors to serve at the pleasure of the
Board of Directors. Any person who is appointed a
member of the Committee shall signify his acceptance
by filing written acceptance with the Board of
Directors and the Secretary of the Committee. Any
member of the Committee may resign by delivering his
written resignation to the Board of Directors and the
Secretary of the Committee.
10.02 Duties of Committee
The members of the Committee shall elect a
chairman from their number and a secretary who may be
but need not be one of the members of the Committee;
may appoint from their number such subcommittees with
such powers as they shall determine; may authorize one
or more of their number or any agent to execute or
deliver any instrument or make any payment on their
behalf; may retain counsel, employ agents and provide
for such clerical, accounting, and consulting services
as they may require in carrying out the provisions of
the Plan; and may allocate among themselves or
delegate to other persons all or such portion of their
duties under the Plan, other than those granted to the
Trustees under the trust agreement adopted for use in
implementing the Plan, as they, in their sole
discretion, shall decide.
PAGE 65
10.03 Individual Accounts
The Committee shall maintain, or cause to be
maintained, records showing the individual balances in
each Member's Accounts. However, maintenance of those
records and Accounts shall not require any segregation
of the funds of the Plan.
10.04 Meetings
The Committee shall hold meetings upon such
notice, at such place or places, and at such time or
times as it may from time to time determine.
10.05 Action of Majority
Any act which the Plan authorizes or requires
the Committee to do may be done by a majority of its
members. The action of that majority expressed from
time to time by a vote at a meeting or in writing
without a meeting shall constitute the action of the
Committee and shall have the same effect for all
purposes as if assented to by all members of the
Committee at the time in office.
10.06 Compensation and Bonding
No member of the Committee shall receive any
compensation from the Plan for his services as such.
Except as may otherwise be required by law, no bond or
other security need be required of any member in that
capacity in any jurisdiction.
10.07 Establishment of Rules
Subject to the limitations of the Plan, the
Committee from time to time shall establish rules for
the administration of the Plan and the transaction of
its business. The Committee shall have the sole and
unilateral power and discretion to construe the terms
of the Plan and to determine all questions arising in
connection with the administration, interpretation and
application of the Plan, but not limited to,
determination of an individual's eligibility for Plan
participation, the right and amount of any benefit
payable under the Plan and the date on which any
individual ceases to be a Member. Any such
determination of the Committee as to the
interpretation of the Plan or any disputed question
shall be conclusive and binding upon all persons and
shall not be overturned unless such determination, act
and/or decision is arbitrary and capricious.
PAGE 66
10.08 Prudent Conduct
The members of the Committee shall use that
degree of care, skill, prudence and diligence that a
prudent man acting in a like capacity and familiar
with such matters would use in his conduct of a
similar situation.
10.09 Service in More than One Fiduciary Capacity
Any individual, entity or group of persons may
serve in more than one fiduciary capacity with respect
to the Plan and/or the funds of the Plan.
10.10 Named Fiduciary
For purposes of ERISA, the members of the
Committee shall be the named fiduciaries of the Plan.
PAGE 67
10.11 Limitation of Liability
The Employer, the Board of Directors, the
members of the Committee, and any officer,
employee or agent of the Employer shall not incur any
liability individually or on behalf of any other
individuals or on behalf of the Employer for any act
or failure to act, made in good faith in relation to
the Plan or the funds of the Plan. However, this
limitation shall not act to relieve any such
individual or the Employer from a responsibility or
liability for any fiduciary responsibility, obligation
or duty under Part 4, Title I of ERISA.
10.12 Indemnification
The members of the Committee, the Board of
Directors, and the officers, employees and agents of
the Employer shall be indemnified against any and all
liabilities arising by reason of any act, or failure
to act, in relation to the Plan or the funds of the
Plan, including, without limitation, expenses
reasonably incurred in the defense of any claim
relating to the Plan or the funds of the Plan, and
amounts paid in any compromise or settlement relating
to the Plan or the funds of the Plan, except for
actions or failures to act made in bad faith. The
foregoing indemnification shall be from the funds of
the Plan to the extent of those funds and to the
extent permitted under applicable law; otherwise from
the assets of the Employer.
10.13 Appointment of Investment Manager
The Employer may, in its discretion, appoint
one or more investment managers (within the meaning of
Section 3(38) of ERISA) to manage (including the power
to acquire and dispose of) all or part of the assets
of the Plan, as the Employer shall designate. In that
event authority over and responsibility for the
management of the assets so designated shall be the
sole responsibility of that investment manager.
PAGE 68
10.14 Expenses of Administration
All expenses that arise in connection with the
administration of the Plan, including but not limited
to the compensation of the Trustees, administrative
expenses and proper charges and disbursements of the
Trustees and compensation and other expenses and
charges of any counsel, accountant, specialist, or
other person who has been retained by the Employer in
connection with the administration thereof, shall be
paid from the funds of the Plan held by the Trustees
under the trust agreement or insurance or annuity
contract adopted for use in implementing the Plan to
the extent not paid by the Employer.
PAGE 69
ARTICLE 11. MANAGEMENT OF FUNDS
11.01 Trust Agreement
All the funds of the Plan shall be held by
Trustees appointed from time to time by the Board of
Directors under a trust agreement adopted, or as
amended, by the Board of Directors for use in
providing the benefits of the Plan and paying its
expenses not paid directly by the Employer. The
Employer shall have no liability for the payment of
benefits under the Plan nor for the administration of
the funds paid over to the Trustees.
11.02 Exclusive Benefit Rule
Except as otherwise provided in the Plan, no
part of the corpus or income of the funds of the Plan
shall be used for, or diverted to, purposes other than
for the exclusive benefit of Members and other persons
entitled to benefits under the Plan. No person shall
have any interest in or right to any part of the
earnings of the funds of the Plan, or any right in, or
to, any part of the assets held under the Plan, except
as and to the extent expressly provided in the Plan.
PAGE 70
ARTICLE 12. GENERAL PROVISIONS
12.01 Nonalienation
Except as required by any applicable law, no
benefit under the Plan shall in any manner be
anticipated, assigned or alienated, and any attempt to
do so shall be void. Notwithstanding the foregoing,
the Trustees are specifically authorized to comply
with any settlement, judgment, decree or order which
results from the Employee's involvement in a fiduciary
breach or conviction of a crime or other situation
involving the Plan, all as described under Code
Section 401(a)(13); or is related to a domestic
relations order which is determined by the Committee
to be qualified. For this purpose, a "qualified
domestic relations order" means any settlement,
judgment, decree, or order which:
(a) creates for, or assigns to, a spouse,
former spouse, child or other dependent of a Member
the right to receive all or a portion of the Member's
benefits under the Plan for the purpose of providing
child support, alimony payments or marital property
rights to that spouse, child or dependent,
(b) is made pursuant to a State domestic
relations law,
(c) does not require the Plan to provide any
type of benefit, or any option, not otherwise provided
under the Plan, and
(d) otherwise meets the requirements of
Section 206(d) of ERISA, as amended, as a "qualified
domestic relations order," as determined by the
Committee.
Any distribution due an alternate payee under a
qualified domestic relations order may be made as soon
as practicable following the earliest date specified
in such order, or as otherwise permitted under such
order pursuant to an agreement between the Plan and
the alternate payee, provided, however, that if the
amount of the distribution exceeds $5,000, the
alternate payee must consent to the distribution.
No person may create a lien on any Fund,
security or other asset held under the Plan other than
liens permitted pursuant to Section 5.02.
PAGE 71
12.02 Conditions of Employment Not Affected by Plan
The establishment of the Plan shall not confer
any legal rights upon any Employee or other person for
a continuation of employment, nor shall it interfere
with the rights of the Employer to discharge any
Employee and to treat him without regard to the effect
which that treatment might have upon him as a Member
or potential Member of the Plan.
12.03 Facility of Payment
If the Committee shall find that a Member or
other person entitled to a benefit is unable to care
for his affairs because of illness or accident or is a
minor, the Committee may direct that any benefit due
him, unless claim shall have been made for the benefit
by a duly appointed legal representative, be paid to
his spouse, a child, a parent or other blood relative,
or to a person with whom he resides. Any payment so
made shall be a complete discharge of the liabilities
of the Plan for that benefit.
12.04 Information
Each Member, Beneficiary or other person
entitled to a benefit, before any benefit shall be
payable to him or on his account under the Plan, shall
file with the Committee the information that it shall
require to establish his rights and benefits under the
Plan.
PAGE 72
12.05 Prevention of Escheat
If the Committee cannot ascertain the
whereabouts of any person to whom a payment is due
under the Plan, the Committee may, no earlier than 3
years from the date such payment is due, mail a notice
of such due and owing payment to the last known
address of such person, as shown on the records of the
Committee or the Employer. If such person has not
made written claim therefor within 3 months of the
date of the mailing, the Committee may, if it so
elects and upon receiving advice from counsel to the
Plan, direct that such payment and all remaining
payments otherwise due such person be canceled on the
records of the Plan and the amount thereof applied to
reduce the contributions of the Employer. Upon such
cancellation, the Plan and the Trust shall have no
further liability therefor except that, in the event
such person or his beneficiary later notifies the
Committee of his whereabouts and requests the payment
or payments due to him under the Plan, the amount so
applied shall be paid to him in accordance with the
provisions of the Plan.
12.06 Construction
(a) The Plan shall be construed, regulated
and administered under ERISA and the laws of the
Commonwealth of Pennsylvania, except where ERISA
controls.
(b) The masculine pronoun shall mean the
feminine wherever appropriate.
(c) The titles and headings of the Articles
and Sections in this Plan are for convenience only.
In the case of ambiguity or inconsistency, the text
rather than the titles or headings shall control.
PAGE 73
12.07 Written Elections
Any elections, notifications or designations
made by a Member pursuant to the provisions of the
Plan shall be made in writing and filed with the
Committee in a time and manner determined by the
Committee under rules uniformly applicable to all
employees similarly situated. The Committee reserves
the right to change from time to time the time and
manner for making notifications, elections or
designations by Members under the Plan if it
determines after due deliberation that such action is
justified in that it improves the administration of
the Plan. In the event of a conflict between the
provisions for making an election, notification or
designation set forth in the Plan and such new
administrative procedures, those new administrative
procedures shall prevail.
PAGE 74
ARTICLE 13. AMENDMENT, MERGER AND TERMINATION
13.01 Amendment of Plan
The Board of Directors reserves the right at
any time and from time to time, and retroactively if
deemed necessary or appropriate, to amend by action
taken at a meeting held either in person or by
telephone or other electronic means, or by unanimous
written consent in lieu of a meeting, in whole or in
part, any or all of the provisions of the Plan.
However, no amendment shall make it possible for any
part of the funds of the Plan to be used for, or
diverted to, purposes other than for the exclusive
benefit of persons entitled to benefits under the
Plan. No amendment shall be made which has the effect
of decreasing the balance of the Accounts of any
Member or of reducing the nonforfeitable percentage of
the balance of the Accounts of a Member below the
nonforfeitable percentage computed under the Plan or
of eliminating directly or indirectly an optional form
of benefit as in effect on the date on which the
amendment is adopted or, if later, the date on which
the amendment becomes effective.
13.02 Merger or Consolidation
The Plan may not be merged or consolidated
with, and its assets or liabilities may not be
transferred to, any other plan unless each person
entitled to benefits under the Plan would, if the
resulting plan were 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.
PAGE 75
13.03 Additional Participating Employers
(a) If any company is or becomes a subsidiary
of or associated with an Employer, the Board of
Directors may include the employees of that subsidiary
or associated company in the membership of the Plan
upon appropriate action by that company necessary to
adopt the Plan. In that event, or if any persons
become Employees of an Employer as the result of
merger or consolidation or as the result of
acquisition of all or part of the assets or business
of another company, the Board of Directors shall
determine to what extent, if any, previous service
with the subsidiary, associated or other company shall
be recognized under the Plan, but subject to the
continued qualification of the trust for the Plan as
tax-exempt under the Code.
(b) Any subsidiary or associated company may
terminate its participation in the Plan upon
appropriate action by it. In that event the funds of
the Plan held on account of Members in the employ of
that company, and any unpaid balances of the Accounts
of all Members who have separated from the employ of
that company, shall be determined by the Committee.
Those funds shall be distributed as provided in
Section 13.04 if the Plan should be terminated, or
shall be segregated by the Trustees as a separate
trust, pursuant to certification to the Trustees by
the Committee, continuing the Plan as a separate plan
for the employees of that company under which the
board of directors of that company shall succeed to
all the powers and duties of the Board of Directors,
including the appointment of the members of the
Committee.
PAGE 76
13.04 Termination of Plan
(a) The Board of Directors may terminate the
Plan or completely discontinue contributions under the
Plan for any reason at any time. The action of its
Board of Directors to terminate the Plan or
discontinue contributions shall be taken at a meeting
held either in person or by telephone or other
electronic means, or by unanimous written consent in
lieu of a meeting and retroactively if deemed
necessary or appropriate, all of which shall be in
accordance with the normal procedures and authority of
the Board of Directors. In case of termination or
partial termination of the Plan, or complete
discontinuance of Employer contributions to the Plan,
the rights of affected Members to their Accounts under
the Plan as of the date of the termination or
discontinuance shall be nonforfeitable. The total
amount in each Member's Accounts shall be distributed,
as the Committee shall direct, to him or for his
benefit or continued in trust for his benefit.
(b) Upon termination of the Plan, Member
Pre-Tax Contributions, with Earnings thereon, shall
only be distributed to Members if (i) neither the
Employer nor an Affiliated Employer establishes or
maintains a successor defined contribution plan, and
(ii) payment is made to the Members in the form of a
lump sum distribution (as defined in Section 402(d)(4)
of the Code, without regard to clauses (i) through
(iv) of subparagraph (A), subparagraph (B), or
subparagraph (F) thereof). For purposes of this
paragraph, a "successor defined contribution plan" is
a defined contribution plan (other than an employee
stock ownership plan as defined in Section 4975(e)(7)
of the Code ("ESOP") or a simplified employee pension
as defined in Section 408(k) of the Code ("SEP"))
which exists at the time the Plan is terminated or
within the 12 month period beginning on the date all
assets are distributed. However, in no event shall a
defined contribution plan be deemed a successor plan
if fewer than two percent of the employees who are
eligible to participate in the Plan at the time of its
termination are or were eligible to participate under
another defined contribution plan of the Employer or
an Affiliated Employer (other than an ESOP or a SEP)
at any time during the period beginning 12 months
before and ending 12 months after the date of the
Plan's termination.
PAGE 77
13.05 Distribution of Accounts Upon a Sale of Assets
Upon the disposition by the Employer of at
least 85% of the assets (within the meaning of Section
409(d)(2) of the Code) used by the Employer in a trade
or business, Member Pre-Tax Contributions, with
Earnings thereon, may be distributed to those Members
who continue in employment with the employer acquiring
such assets, provided that (a) the Employer continues
to maintain the Plan after the disposition, (b) the
buyer does not adopt the Plan or otherwise become a
participating employer in the Plan and does not accept
any transfer of assets or liabilities from the Plan to
a plan it maintains in a transaction subject to
Section 414(l)(1) of the Code, and (c) payment is made
to the Member in the form of a lump sum distribution
(as defined in Section 402(d)(4) of the Code, without
regard to clauses (i) through (iv) of subparagraph
(A), subparagraph (B), or subparagraph (F) thereof).
PAGE 78
13.06 Distribution of Accounts Upon a Sale of a Subsidiary
Upon the disposition by the Employer of its
interest in a subsidiary (within the meaning of
Section 409(d)(3) of the Code), Member Pre-Tax
Contributions, with Earnings thereon, may be
distributed to those Members who continue in
employment with such subsidiary, provided that (a) the
Employer continues to maintain the Plan after the
disposition, (b) the buyer does not adopt the Plan or
otherwise become a participating employer in the Plan
and does not accept any transfer of assets or
liabilities from the Plan to a plan it maintains in a
transaction subject to Section 414(l)(1) of the Code,
and (c) payment is made to the Member in the form of a
lump sum distribution (as defined in Section 402(d)(4)
of the Code, without regard to clauses (i) through
(iv) of subparagraph (A), subparagraph (B), or
subparagraph (F) thereof).
PAGE 79
ARTICLE 14. TOP-HEAVY PROVISIONS
The provisions of this Article 14 shall become
applicable under the circumstances described in this
Section:
14.01 Top-Heaviness Defined
(a) For purposes of this Article, the Plan
shall be "top-heavy" if, as of the determination date,
(i) the value of the aggregate of the
account balances under the Plan for key employees
exceeds 60% of the value of the aggregate of the
account balances under the Plan for all Employees, or
(ii) the Plan is part of a required
aggregation group, and the sum of the present value of
the aggregate accrued benefits and the cumulative
account balances of key employees in all plans in the
required aggregation group exceeds 60% of a similar
sum determined for all Employees. Notwithstanding the
results of the said 60% text, the Plan shall not be
considered top-heavy for any Plan Year in which the
Plan is in a required aggregation group or the
Employer elects to treat the Plan as a part of a
permissive aggregation group and such group is not
determined to be top-heavy.
(b) For purposes of this Article, the
following terms shall be interpreted according to the
definitions assigned to them:
(i) Account balance means the sum of
(A) the balance of a Member's Accounts as of the most
recent Valuation Date occurring within the 12-month
period ending on the determination date, and (B) the
value of any contributions actually made after the
Valuation Date but on or prior to the determination
date. The term shall include the aggregate
distributions made with respect to such Member under
the Plan during the 5-year period ending on the
determination date but shall not include any rollover
PAGE 80
contributions (or similar transfers) initiated by the
Employee and made after December 31, 1983, and shall
not include the account balance of a non-key employee
who was a key employee for any prior Plan Year, or the
account balance of any Member who has not performed
services for the Employer during the 5-year period
ending on the determination date.
(ii) Remuneration has the same meaning
as "remuneration" in Section 3.10(f) but such amount
shall be deemed not to exceed the Annual Dollar Limit,
as adjusted annually based on the Adjustment Factor as
provided by the Secretary of Treasury.
(iii) Determination date means the last
day of the preceding Plan Year or in the case of the
first Plan Year, the last day of that Plan Year.
(iv) 5% owner of the Employer means any
person who either directly or constructively (as
defined in Section 318 of the Code) owns more than 5%
of either the outstanding stock of S&T Bancorp, Inc.
or the total combined voting power of all of the stock
of S&T Bancorp, Inc.
(v) Employee includes such Beneficiary
or Beneficiaries who obtain an interest in the Plan by
beneficiary designation, will, devise or through the
laws of intestacy.
(vi) Key employee means any Employee or
former Employee in this Plan who, at any time during
the Plan Year ending on the determination date, or
during any of the 4 preceding Plan Years which began
after 1982, was:
PAGE 81
(A) An officer of the Employer,
(B) A 5% owner of the Employer,
(C) One of the top ten owners of S&T Bancorp, Inc., or
(D) A 1% owner of the Employer having an annual Statutory
Compensation of more than $150,000.
The term shall also include Beneficiaries of key
employees.
(vii) Non-key employee means any Employee
who is not a key employee.
(viii)Officer means at any time during
the Plan Year or any 4 preceding Plan Years an
Employee who serves as an administrative executive for
the Employer on a regular and continuous basis and
during the applicable year has annual compensation
greater than 50% of the amount in effect under Section
415(b)(1)(A) of the Code. The maximum number of
Employees who shall be deemed to be officers for
purposes of this Article 14 shall be the lesser of:
(A) 50, or
(B) The greater of 3, or 10% of all Employees.
If the actual number of officers of
the Employer exceeds the maximum number of Employees
who are deemed to be officers under Section
14.01(b)(viii), the maximum number of officers for
purposes of this Section shall include those officers
who had the highest one-year compensation while
serving as an officer of the Employer during any
applicable Plan Year.
PAGE 82
(ix) 1% owner of the Employer means any
person, who either directly or constructively (as
defined in Section 318 of the Code) owns more than 1%
of either the outstanding stock of S&T Bancorp, Inc.
or the total combined voting power of all of the stock
of S&T Bancorp, Inc.
(x) Permissive aggregation group means
each plan in the required aggregation group and any
other defined benefit and defined contribution plan of
the Employer or an Affiliated Employer with
contributions or benefits at least comparable to the
contributions or benefits under this Plan in which all
members are non-key employees, if the resulting
aggregation group continues to meet the requirements
of Section 401(a)(4) and 410 of the Code.
(xi) Required aggregation group includes:
(A) Each defined benefit plan and defined contribution
plan of the Employer (regardless of whether the
Plan terminated within the past 5 years) in which
a key employee is a Member, and
(B) Each other defined benefit and defined contribution
plan (as defined in Section 3.10(e)) of the Employer
which enables any plan described in clause (A) above,
to meet the requirements of Section 401(a)(4) or
410 of the Code.
(xii) Top ten owner means the 10
Employees who own directly or constructively (as
defined in Section 318 of the Code) both more than 1/2%
ownership interest in value and the largest percentage
ownership interest in value of the Employer and any
Affiliated Employer and during the applicable year
have annual Compensation from the Employer or an
Affiliated Employer greater than 100% of the amount in
effect under Section 415(c)(1)(A) of the Code.
PAGE 83
14.02 Employer Contributions
The following provisions shall be applicable to
Members for any Plan Year with respect to which the
Plan is top-heavy:
(a) If the required minimum contribution is
not provided by the Plan for any Member who is a
non-key employee, then in each Plan Year, in addition
to the contributions otherwise provided under the
Plan, the Employer shall make contributions on behalf
of any such Member (or each Employee eligible to
become a Member) who is a non-key employee and who has
not separated from service as of the last day of the
Plan Year (regardless of whether the non-key employee
has less than 1,000 Hours of Service, or his level of
remuneration, or whether he declines to make a
mandatory contribution or whether he elects to make
Member Pre-Tax Contributions) which, when added to the
Employer contributions allocated to the Member's
Accounts for the Plan Year (and not needed to meet the
contribution percentage test set forth in Section
3.09(b)) will be equal to a percentage of the Member's
remuneration for the Plan Year, that percentage to be
the lesser of 3% or the percentage rate, determined
for the key employee for whom that percentage is the
highest, equivalent to the fraction the numerator of
which are the contributions made on behalf of that key
employee by the Employer and the Member's Pre-Tax
Contributions, and the denominator of which is the
remuneration of the key employee for that Plan Year.
(b) For purposes of this Section 14.02, all
defined contribution plans required to be included in
a required aggregation group shall be treated as one
plan. This Section 14.02 shall not apply if this Plan
is required to be included in a required aggregation
group under Section 14.01 and if this Plan enables a
defined benefit plan required to be included in such
group to meet the requirements of Section 401(a)(4) or
410 of the Code.
(c) Notwithstanding the foregoing provisions,
no minimum contribution shall be made with respect to
a Member (or an Employee eligible to become a Member)
if the required minimum benefit under Section
416(c)(1) of the Code is provided under a qualified
plan sponsored by the Employer or Affiliated Employer.
PAGE 84
14.03 Vesting
The immediate vesting schedule in Section 7.01
shall apply at all times.
14.04 Impact on Maximum Benefits
For any Plan Year the Plan is determined to be
top-heavy, the multiplier "1.25" in Section 3.10(c)
shall be reduced to "1.00", except that such
substitution shall not have the effect of reducing any
benefit accrued under a defined benefit plan prior to
the first day of the Plan Year in which this Section
becomes applicable.
PAGE 85
ARTICLE 15. EXECUTION PAGE
As evidence of its adoption of the Plan, as amended
and restated, the Employer has caused this instrument
to be executed by its duly authorized officer and its
corporate seal to be affixed hereto by its Secretary
on this 21st day of September, 1998, but to be
generally effective January 1, 1998, unless specified
herein to the contrary.
PAGE 86
ATTEST: S&T BANK:
By: /s/ James G.Barone /s/ James C. Miller
Secretary President & CEO
