SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended Commission File Number
March 31, 1996 0-11733
CITY HOLDING COMPANY
(Exact name of registrant as specified in its charter)
West Virginia 55-0619957
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3601 MacCorkle Avenue, Southeast
Charleston, West Virginia 25304
(Address of principal offices)
Registrant's telephone number, including area code: (304) 925-6611
Indicate by check mark whether the registrant has (1) filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such report(s), and (2) has been subject to such filing
requirements for the past 90 days.
Yes xx No
The number of shares outstanding of the issuer's common stock as of May 5, 1996:
Common Stock, $2.50 Par Value -- 5,078,406 shares
THIS REPORT CONTAINS 111 PAGES.
EXHIBIT INDEX IS LOCATED ON PAGE 25 .
PAGE 1 OF 111
<PAGE>
Index
City Holding Company and Subsidiaries
PART I FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets -- March 31, 1996 (unaudited)
and December 31, 1995
Consolidated Statements of Income (unaudited) --
Three months ended March 31, 1996 and 1995
Consolidated Statements of Changes in Stockholders'
Equity (unaudited) -- Three months ended March 31,
1996 and 1995
Consolidated Statements of Cash Flows (unaudited)
--Three months ended March 31, 1996 and 1995
Notes to Consolidated Financial Statements (unaudited)
-- March 31, 1996
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Part II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. xhibits and Reports on Form 8-K
Signatures
PAGE 2 OF 111
<PAGE>
PART I. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
CITY HOLDING COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
Item I. MARCH 31 DECEMBER 31
1996 1995
------------ -------------
<S> <C> <C>
ASSETS (unaudited)
Cash and due from banks $ 30,933,000 $ 28,460,000
Securities available for sale, at fair value 121,475,000 143,649,000
Investment securities (approximate market values:
March 31, 1996--$41,911,000; December 31, 1995--$52,183,000) 40,964,000 50,719,000
Loans:
Gross loans 661,542,000 664,886,000
Unearned income (7,576,000) (8,125,000)
Allowance for possible loan losses (6,633,000) (6,566,000)
--------- ---------
NET LOANS 647,333,000 650,195,000
Loans held for sale 165,262,000 122,222,000
Bank premises and equipment 25,905,000 23,651,000
Accrued interest receivable 8,467,000 8,031,000
Other assets 14,672,000 14,042,000
------------ -----------
TOTAL ASSETS $ 1,055,011,000 $ 1,040,969,000
============= =============
LIABILITIES
Deposits:
Noninterest-bearing $ 122,196,000 $ 116,992,000
Interest-bearing 690,601,000 680,423,000
----------- -----------
TOTAL DEPOSITS 812,797,000 797,415,000
Short-term borrowings 134,440,000 141,309,000
Long-term debt 23,200,000 20,000,000
Other liabilities 10,302,000 9,106,000
------------- ------------
TOTAL LIABILITIES 980,739,000 967,830,000
STOCKHOLDERS' EQUITY Preferred stock, par value $25 a share:
Authorized-500,000 shares; none issued
Common stock, par value $2.50 a share: authorized
20,000,000 shares; issued and outstanding 5,092,046 shares as of March 31,
1996 and December 31, 1995, including 13,640 shares in
treasury at March 31, 1996 and December 31, 1995. 12,730,000 12,730,000
Capital surplus 25,942,000 25,942,000
Retained earnings 36,031,000 34,432,000
Cost of common stock in treasury (360,000) (360,000)
Net unrealized (loss) gain on securities available for sale,
net of deferred income taxes (71,000) 395,000
-------------- -------------
TOTAL STOCKHOLDERS' EQUITY 74,272,000 73,139,000
------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,055,011,000 $ 1,040,969,000
============== ==============
</TABLE>
See notes to consolidated financial statements
PAGE 3 OF 111
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
CITY HOLDING COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED
March 31
1996 1995
---------- ----------
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 18,303,000 $ 12,981,000
Interest and dividends on securities:
Taxable 2,253,000 3,206,000
Tax-exempt 532,000 589,000
Other interest income 5,000 11,000
------------ -----------
TOTAL INTEREST INCOME 21,093,000 16,787,000
INTEREST EXPENSE
Interest on deposits 7,233,000 6,094,000
Interest on short-term borrowings 2,153,000 856,000
Interest on long-term debt 297,000 130,000
------------ -----------
TOTAL INTEREST EXPENSE 9,683,000 7,080,000
NET INTEREST INCOME 11,410,000 9,707,000
PROVISION FOR POSSIBLE LOAN LOSSES 271,000 201,000
----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR POSSIBLE LOAN LOSSES 11,139,000 9,506,000
OTHER INCOME
Securities gains(losses) 61,000 3,000
Service charges 839,000 708,000
Other 1,013,000 538,000
----------- ----------
TOTAL OTHER INCOME 1,913,000 1,249,000
OTHER EXPENSES
Salaries and employee benefits 5,254,000 4,036,000
Net occupancy expense 1,370,000 1,245,000
Other 2,887,000 2,521,000
----------- -----------
TOTAL OTHER EXPENSES 9,511,000 7,802,000
INCOME BEFORE INCOME TAXES 3,541,000 2,953,000
INCOME TAXES 1,080,000 913,000
----------- -----------
NET INCOME $ 2,461,000 $ 2,040,000
=========== ===========
Net income per common share $ .48 $ .40
=========== ===========
Average common shares outstanding 5,078,406 5,167,065
=========== ===========
</TABLE>
See notes to consolidated financial statements
PAGE 4 OF 111
<PAGE>
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
CITY HOLDING COMPANY AND SUBSIDIARIES
Three Months Ended March 31, 1996
<TABLE>
<CAPTION>
NET
UNREALIZED
GAIN/(LOSS)
SECURITIES TOTAL
COMMON CAPITAL RETAINED AVAILABLE TREASURY STOCKHOLDERS'
STOCK SURPLUS EARNINGS FOR SALE STOCK EQUITY
------ ------- -------- -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances
at December 31, 1995 $12,730,000 $25,942,000 $34,432,000 $395,000 (360,000) $73,139,000
Net income 2,461,000 2,461,000
Cash dividends
declared ($.17/share) (862,000) (862,000)
Change in unrealized gain/(loss),
net of income taxes of $311,000 (466,000) (466,000)
Balances
at March 31, 1996 $12,730,000 $25,942,000 $36,031,000 ($ 71,000) ($360,000) $74,272,000
---------- ----------- ----------- ----------- ---------- -----------
<CAPTION>
NET
UNREALIZED
Three Months Ended March 31, 1995 GAIN/(LOSS)
SECURITIES TOTAL
COMMON CAPITAL RETAINED AVAILABLE TREASURY STOCKHOLDERS'
STOCK SURPLUS EARNINGS FOR SALE STOCK EQUITY
------ ------- -------- -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances
at December 31, 1994 $11,753,000 $18,366,000 $39,075,000 ($2,863,000) ($ 32,000) $66,299,000
Net income 2,040,000 2,040,000
Cash dividends
declared ($.145/share) (599,000) (599,000)
Cash dividends of acquired
subsidiary (75,000) (75,000)
Changes in net unrealized
gain/(loss), net of income
taxes of $878,000 1,317,000 1,317,000
Cost of 2,313 shares of common
stock acquired for treasury (65,000) (65,000)
Issuance of 428 shares of
treasury stock 12,000 12,000
----------- ----------- ------------ ------------ ----------- -----------
Balances
at March 31, 1995 $11,753,000 $18,366,000 $40,441,000 $(1,546,000) ($ 85,000) $68,929,000
----------- ----------- ----------- ------------ ----------- -----------
</TABLE>
See notes to consolidated financial statements
PAGE 5 OF 111
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
CITY HOLDING COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED
MARCH 31
1996 1995
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $2,461,000 $2,040,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Net amortization 220,000 224,000
Provision for depreciation 743,000 584,000
Provision for loan losses 271,000 201,000
Realized securities gains (61,000) (3,000)
Loan originated for sale (25,708,000) (9,114,000)
Purchases of loans held for sale (219,599,000) (43,448,000)
Proceeds from loans sold 202,535,000 37,998,000
Realized gains on loans sold (268,000) (42,000)
Minority interest in income of subsidiary 0 0
(Increase) decrease in accrued interest receivable (436,000) 261,000
Increase in other assets (482,000) (612,000)
Increase (decrease) in other liabilities 1,196,000 (857,000)
------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (39,128,000) (12,768,000)
INVESTING ACTIVITIES
Proceeds from sales of securities available for sale 17,859,000 10,533,000
Proceeds from maturities of securities available for sale 20,270,000 2,325,000
Purchases of securities available for sale (16,581,000) (11,292,000)
Proceeds from sales of securities 0 3,000,000
Proceeds from maturities of securities 9,608,000 5,024,000
Purchases of securities 0 (3,239,000)
Net decrease (increase) in loans 2,591,000 (25,633,000)
Sale of foreclosed properties 0 7,000
Purchases of premises and equipment (2,997,000) (1,458,000)
------------- ------------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES 30,750,000 (20,733,000)
FINANCING ACTIVITIES
Net increase in noninterest bearing deposits 5,204,000 1,057,000
Net increase in interest-bearing deposits 10,178,000 3,143,000
Net (decrease) increase in short-term borrowings (6,869,000) 24,141,000
Proceeds from long-term-debt 3,200,000 2,150,000
Repayment of long-term debt 0 (4,200,000)
Purchases of treasury stock 0 (65,000)
Proceeds from sales of treasury stock 0 12,000
Cash dividends paid (862,000) (772,000)
------------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 10,851,000 25,466,000
------------ -----------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS 2,473,000 (8,035,000)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 28,460,000 34,284,000
------------ -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $30,933,000 $26,249,000
============ ===========
</TABLE>
See notes to consolidated financial statements
PAGE 6 OF 111
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 1996
NOTE A - BASIS OF PRESENTATION
The accompanying consolidated financial statements, which are
unaudited, include all the accounts of City Holding Company (the Parent Company)
and its wholly owned subsidiaries (collectively, the Company). All material
intercompany transactions have been eliminated. The consolidated financial
statements include all adjustments which, in the opinion of management, are
necessary for a fair presentation of the results of operations and financial
condition for each of the periods presented. Such adjustments are of a normal
recurring nature. The results of operations for the three months ended March 31,
1996, are not necessarily indicative of the results of operations that can be
expected for the year ending December 31, 1996. The Company's accounting and
reporting policies conform with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Such policies require management to make estimates and
develop assumptions that affect the amounts reported in the financial statements
and related footnotes. Actual results could differ from management's estimates.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the City Holding Company annual report on Form
10-K for the year ended December 31, 1995.
NOTE B - INCOME TAXES
The consolidated provision for income taxes is based upon
financial statement earnings. The effective tax rate for the three months ended
March 31, 1996, of 30.50% varied from the statutory federal income tax rate
primarily due to state income taxes and the tax effects of nontaxable interest
income and the amortization of goodwill.
PAGE 7 OF 111
<PAGE>
NOTE C - COMMITMENTS AND CONTINGENT LIABILITIES
In the normal course of business, there are various
commitments and contingent liabilities, such as commitments to extend credit and
standby letters of credit, that are not included in the consolidated financial
statements. These commitments approximate $68,029,000 at March 31, 1996. These
arrangements, consisting principally of unused lines of credit issued in the
normal course of business, have credit risks essentially the same as that
involved in extending loans to customers and are subject to the Company's
standard credit policies. Standby letters of credit, which total $3,567,000,
have historically expired unfunded.
NOTE D - STOCKHOLDERS' EQUITY
The Company maintains an Open Market Stock Purchase Plan (the
Plan) whereby the Board of Directors have allocated $5 million to be used to
purchase shares of the Company's common stock through May 1996. The Plan as of
March 31, 1996 has reacquired approximately 87,000 shares at market prices
ranging from $23.30 to $24.08 per share for total purchases of approximately
$2,286,000.
NOTE E - ACCOUNTING FOR MORTGAGE SERVICING RIGHTS
On January 1, 1996, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 122, "Accounting for Mortgage Servicing Rights,"
which requires that entities recognize rights to service mortgage loans for
others as separate assets, whether those rights are acquired through loan
origination or purchase activities. Additionally, management must periodically
assess its capitalized mortgage servicing rights for impairment based on the
fair value of those rights. The adoption of SFAS No. 122 did not have a material
impact on the Company's financial position or results of operations.
PAGE 8 OF 111
<PAGE>
NOTE F - LONG-TERM BORROWINGS
Long-term debt consists of a $20,000,000 revolving line of credit of
the Parent Company with a variable rate based on the lesser of the adjusted
LIBOR rate plus 1.875% per annum or the lender's base rate less .25% per annum
(7.1875% at March 31, 1996) due on June 30, 1996. As of March 31, 1996, the
outstanding balance was equal to $18,200,000. Interest on this obligation is
payable quarterly, and the Parent Company has pledged the common stock of The
City National Bank of Charleston, The Peoples Bank of Point Pleasant, First
State Bank and Trust, Merchants National Bank and The Home National Bank of
Sutton as security for the loan. Management intends to refinance this loan
according to the provisions provided in the agreement.
During 1995, a subsidiary obtained long-term financing from the Federal
Home Loan Bank (FHLB) in the form of a Long-Term LIBOR Floater with maximum
available credit of $5 million. At March 31, 1996, $5 million was outstanding
with an interest rate of 5.4185%. The agreement matures in December, 1998.
PAGE 9 OF 111
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
HIGHLIGHTS
FINANCIAL POSITION
Total assets increased $14.0 million or approximately 1.3%
during the first three months of 1996. Net loans decreased $2.9 million or 0.4%.
Loans held for sale, consisting primarily of loans received through the
Company's participation in a short-term whole loan bulk purchasing program,
increased $43 million or 35.2%. As of March 31, 1996, program loans owned by the
Company had an outstanding principal balance of approximately $139.8 million.
See LOAN PORTFOLIO. The Company earned interest income of approximately
$3,230,000 on program loans during the first quarter of 1996. See NET INTEREST
INCOME. The increase in loans held for sale was funded primarily by the various
securities sales, calls and maturities of $47.7 million, plus the $15.4 million
increase in deposits. Net stockholders' equity increased $1.1 million during the
first three months of 1996 representing the Company's retained net profits.
QUARTER ENDED MARCH 31, 1996, COMPARED TO QUARTER ENDED MARCH 31, 1995.
The Company reported net income of $2,461,000 for the three
months ended March 31, 1996 compared to net income of $2,040,000 for the quarter
ended March 31, 1995. This increase of $421,000, or 20.6%, was primarily due to
an increase of $1,703,000 in the Company's net interest income during the first
quarter of 1996 as compared to the same period of 1995. However, the increase in
net interest income did not translate into a corresponding
PAGE 10 OF 111
<PAGE>
increase in net income because of the level of non-interest expense associated
with the Company's expansion of its Operations Center, which increased
$1,709,000 or 21.9% during the first quarter of 1996 as compared to the same
period of 1995. See NET INTEREST INCOME. Earnings per share were $.48 and $.40
for the first quarter of 1996 and 1995, respectively.
Total other income, excluding securities transactions,
increased $606,000 or 48.6% primarily due to fees generated from increased loans
held for sale volume and return item fees on deposits collected through the
ordinary course of business.
SELECTED RATIOS
The return on average assets (ROA) for the first quarter of
1996 was .93% compared to .92% in the first quarter of 1995. The return on
average shareholder's equity (ROE) for the first quarter of 1996 was 13.24%
compared to 12.38% ROE for the first quarter of 1995.
The dividend payout ratio of 35.42% for the quarter ended
March 31, 1996 represents a decrease of 2.29% from the dividend payout ratio of
36.25% for the quarter ended March 31, 1995. Since 1988, the Company has paid
dividends on a quarterly basis, and expects to continue to do so in the future.
PAGE 11 OF 111
<PAGE>
LOAN PORTFOLIO
The composition of the Company's loan portfolio is presented
in the following table:
LOAN PORTFOLIO BY TYPE
(Dollars in Thousands)
March 31 December 31
1996 1995
-------- -------
Commercial, financial and
agricultural $ 215,540 $ 214,304
Real Estate-Mortgage 277,702 277,608
Real Estate-Construction 26,175 27,240
Installment and other 142,125 145,734
Unearned Income (7,576) (8,125)
--------- ---------
TOTAL $ 653,966 $ 656,761
========= =========
Loans Held for Sale
Program loans $ 139,799 $ 101,843
Loans Originated for Sale 25,463 20,379
--------- ---------
TOTAL $ 165,262 $ 122,222
========= =========
The Company grants loans to customers generally within the
market areas of its subsidiaries. Loans have been trending up significantly over
the past two years primarily due to the Company's more active solicitation of
commercial business, introduction of new loan products, and continued expansion.
There have been no significant changes in the Company's loan policy or credit
standards. The Company continues to shift its marketing efforts more towards
direct loan business. There are no significant concentrations of credit and
speculative or highly leveraged transactions are insignificant. Also, in order
to increase the repricing frequency of the loan portfolio, the Company has
significantly increased its portfolio of variable rate commercial and
residential mortgage loans.
PAGE 12 OF 111
<PAGE>
ASSET QUALITY AND ALLOWANCE FOR LOAN LOSSES
The following table summarizes the Company's risk elements for
the periods ending March 31, 1996 and December 31, 1995. The Company's coverage
ratio of nonperforming assets and potential problem loans continues to be
strong, at 119% as of March 31, 1996.
Management is of the opinion that the allowance for loan
losses is adequate to provide for probable future losses inherent in the
portfolio.
PAGE 13 OF 111
<PAGE>
RISK ELEMENTS
(in thousands)
<TABLE>
<CAPTION>
Three Months
Ended Year Ended
March 31 December 31
1996 1995
---- ----
<S> <C> <C>
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period $6,566 $ 6,477
Charge-offs (260) (1,331)
Recoveries 56 316
------ -------
Net charge-offs (204) (1,015)
Provision for loan possible losses 271 1,104
------ ------
Balance at end of period $6,633 $6,566
====== ======
AS A PERCENT OF AVERAGE TOTAL LOANS
Net charge-offs 0.03% 0.17%
Provision for possible loan losses 0.04% 0.18%
Allowance for loan losses 1.02% 1.08%
March 31 December 31
1996 1995
---- ----
NON -PERFORMING ASSETS
Other real estate owned $1,038 $1,027
Non-accrual loans 2,703 2,525
Accruing loans past due 90 days
or more 1,448 1,421
Restructured loans 139 141
------ ------
Total Non-performing Assets $5,328 $5,114
POTENTIAL PROBLEM LOANS $264 $266
AS A PERCENT OF NON-PERFORMING ASSETS
AND POTENTIAL PROBLEM LOANS
Allowance for loan losses 118.62% 122.04%
ACCRUING LOANS PAST DUE 90 DAYS OR MORE
AS A PERCENT OF AVERAGE TOTAL LOANS 0.22% 0.23%
</TABLE>
PAGE 14 OF 111
<PAGE>
LIQUIDITY AND INTEREST RATE SENSITIVITY
The Company's cash and cash equivalents, represented by cash
and due from banks and overnight federal funds sold, is a product of its
operating, investing and financing activities. These activities are set forth in
the City Holding Company Consolidated Statements of Cash Flows included
elsewhere herein. Cash was used in operating activities in each period
presented, primarily from loans originated for sale and purchase of loans held
for sale. Net cash was used in investing activities during the first quarter of
1995 funding the Company's loan growth. Net cash was provided by investing
activities during the first quarter of 1996 due primarily to maturing investment
securities. The net cash provided by financing activities in the respective
periods is a result of an increase in interest-bearing deposits. In 1995,
financing activities provided cash due to the increase in short-term borrowings.
The Company seeks to maintain a strong liquidity position to
reduce interest rate risk, which is the susceptibility of assets and liabilities
to decline in value as a result of changes in general market interest rates. The
Company minimizes this risk through asset and liability management, where the
goal is to optimize earnings while managing interest rate risk. The Company
measures this interest rate risk through interest sensitivity gap analysis as
illustrated in the following table. At March 31, 1996, the one year period shows
a negative gap (liability sensitive) of $254 million. This analysis is a "static
gap" presentation and movements in deposit rates offered by the Company's
subsidiary banks lag behind movements in the prime rate. Such time lags affect
the repricing frequency of many items on the Company's balance sheet.
Accordingly, the sensitivity of deposits to changes in market rates may differ
significantly from the related contractual terms. The table is first presented
without adjustment for expected repricing behavior. Then, as presented in the
"management adjustment" line, these balances
PAGE 15 OF 111
<PAGE>
have been notionally distributed over the first three periods to reflect those
portions of such accounts that are expected to reprice fully with market rates
over the respective periods. The distribution of the balances over the repricing
periods represents an aggregation of such allocations by each of the affiliate
banks, and is based upon historical experience with their individual markets and
customers. Management expects to continue the same pricing methodology in
response to future market rate changes; however, management adjustments may
change as customer preferences, competitive market conditions, liquidity, and
loan growth change. Also presented in the management adjustment line are loan
prepayment assumptions which may differ from the related contractual term of the
loans. These balances have been distributed over the four periods to reflect
those loans that are expected to be repaid in full prior to their maturity date
over the respected periods. After management adjustments, the table shows a
negative gap in the one year period of $51 million. A negative gap position is
advantageous when interest rates are falling because interest-bearing
liabilities are being repriced at lower rates and in greater volume, which has a
positive effect on net interest income. Consequently, the Company has
experienced a decline in its net interest margin during the past year and is
somewhat vulnerable to a rapid rise in interest rates during 1996. These
declines in net interest margin did not translate into declines in net interest
income because of increases in the volume of interest-earning assets.
There are no known trends, demands, commitments or
uncertainties that have resulted or are reasonably likely to result in material
changes in liquidity.
PAGE 16 OF 111
<PAGE>
INTEREST RATE SENSITIVITY GAPS
(in thousands)
<TABLE>
<CAPTION>
1 to 3 3 to 12 1 to 5 Over 5
Months Months Years Years Total
------ ------ ----- ----- -----
<S> <C> <C> <C> <C> <C>
ASSETS
Gross loans $167,189 $89,692 $316,357 $85,601 $658,839
Loans held for sale 165,262 0 0 0 165,262
Securities 33,380 19,604 71,607 37,848 162,439
-------- --------- --------- --------- --------
Total interest earning assets 365,831 109,296 387,964 123,449 986,540
-------- --------- --------- --------- --------
LIABILITIES
Savings and NOW Accounts 324,472 0 0 0 324,472
All other interest bearing deposits 96,767 150,446 118,416 500 366,129
Short term and other borrowings 134,440 0 0 0 134,440
Long term borrowings 23,000 0 0 0 23,200
--------- --------- --------- ---------- --------
Total interest bearing liabilities $578,879 $ 150,446 $118,416 $ 500 $848,241
--------- --------- --------- --------- --------
Interest sensitivity gap ($213,048) ($ 41,150) $269,548 $122,949 $138,299
--------- --------- --------- --------- --------
Cumulative sensitivity gap ($213,048) ($254,198) $ 15,350 $138,299
======== ======== ======= =======
Management adjustments $292,505 ($ 89,796) ($192,380) ($10,329)
------- ------- ------- ------
Cumulative management adjusted gap $ 79,457 ($ 51,489) $ 25,679 $138,299
======== ======= ======= =======
</TABLE>
The table above includes various assumptions and estimates by management as to
maturity and repricing patterns. Future interest margins will be impacted by
balances and rates which are subject to change periodically throughout the year.
PAGE 17 OF 111
<PAGE>
CAPITAL RESOURCES
As a bank holding company, City Holding Company is subject to
regulation by the Federal Reserve Board under the Bank Holding Company Act of
1956. In January 1989, the Federal Reserve published risk-based capital
guidelines in final form which are applicable to bank holding companies. Such
guidelines define items in the calculation of risk-weighted assets. At March 31,
1996, the regulatory minimum ratio of qualified total capital to riskweighted
assets (including certain off-balance-sheet items, such as standby letters of
credit) is 8 percent. At least half of the total capital is to be comprised of
"Tier 1 capital", or the Company's common stockholders' equity, and minority
interest in consolidated subsidiary, net of intangibles. The remainder ("Tier 2
capital") may consist of certain other prescribed instruments and a limited
amount of loan loss reserves.
In addition, the Federal Reserve Board has established minimum
leverage ratio (Tier 1 capital to quarterly average tangible assets) guidelines
for bank holding companies. These guidelines provide for a minimum ratio of 3
percent for bank holding companies that meet certain specified criteria,
including that they have the highest regulatory rating. All other bank holding
companies will be required to maintain a leverage ratio of 3 percent plus an
additional cushion of a least 100 to 200 basis points. The guidelines also
provide that banking organizations experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels, without significant reliance on intangible
assets.
The following table presents comparative capital ratios and
related dollar amounts of capital for the Company:
PAGE 18 OF 111
<PAGE>
<TABLE>
<CAPTION>
Dollars in Thousands
March 31 December 31
1996 1995
---- ----
<S> <C> <C> <C>
Capital Components
Tier 1 risk-based capital $67,907 $66,260
Total risk-based capital 74,540 72,826
Capital Ratios
Tier 1 risk-based 8.78% 8.87%
Total risk-based 9.63 9.75
Leverage 6.42 6.45
Regulatory Minimum
Tier 1 risk-based (dollar/ratio) $30,949/4.00% $29,888/4.00%
Total risk-based (dollar/ratio) 61,898/8.00 59,776/8.00
Leverage (dollar/ratio) 31,734/3.00 30,801/3.00
</TABLE>
The strong capital position of the Company is indicative of
management's emphasis on asset quality and a history of retained net income. The
ratios enable the Company to continually pursue acquisitions and other growth
opportunities. Improvements in operating results and a consistent dividend
program, coupled with an effective management of credit risk, have been, and
will be, the key elements in maintaining the Company's present capital position.
The Company does not anticipate any material capital
expenditures in 1996. Earnings from subsidiary bank operations are expected to
remain adequate to fund payment of stockholders' dividends and internal growth.
In management's opinion, subsidiary banks have the capability to upstream
sufficient dividends to meet the cash requirements of the Company.
NET INTEREST INCOME
Net interest income, on a fully federal tax-equivalent basis,
improved from the first quarter of 1995 to the first quarter of 1996 by
approximately $1,674,000 due to an increase in net earning assets. Net yield on
earning assets decreased between periods from 4.84% to
PAGE 19 OF 111
<PAGE>
4.70%, as earning asset yields increased 32 basis points (100 basis points equal
one percent) to 8.59%, and the cost of interest-bearing liabilities increased 56
basis points to 4.49%. The $530,000 decrease in net interest income due to rate,
as shown in the following table, was coupled with a $2,204 000 increase in net
interest income due to volume. The major component of this favorable volume
change was increased average loans and average loans held for sale.
A significant part of the increase in net earning assets for
the first quarter of 1996 is attributable to the Company's participation in a
short-term, whole-loan bulk purchasing program. Under the program, the Company
purchases from a third party whole loans secured by residential mortgages and
partially insured by the Federal Housing Association. The loans typically have
balances of less than $25,000 and are not concentrated geographically.
Additionally, the program permits the Company to require the seller to
repurchase or replace certain non-performing loans. The loans are generally
repurchased from the Company within 30 to 90 days. Although the loans usually
are located outside the Company's primary market areas, management believes that
these loans pose no greater risk than similar "in-market" loans because of the
Company's review of the loans, the credit support associated with the loans, the
short duration of the Company's investment and the other terms of the program.
The loans are generally serviced by third parties and the Company earns a fixed
rate of return on the loans. The Company earned approximately $3,230,000 in
interest income on program loans for the quarter ended March 31, 1996 compared
to $395,000 in interest income for the same period in 1995. These loans are
being funded through short-term borrowings which consist primarily of securities
sold under agreement to repurchase.
PAGE 20 OF 111
<PAGE>
EARNING ASSETS AND INTEREST-BEARING LIABILITIES
(in thousands)
<TABLE>
<CAPTION>
Quarter Ended
March 31
1996 1995
---- ----
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EARNING ASSETS:
Loans (1)
Commercial and industrial $ 210,023 $4,853 9.24% $ 171,329 $3,832 8.95%
Real estate 304,736 6,523 8.56 261,630 5,407 8.27
Consumer obligations 134,888 3,304 9.80 129,547 3,170 9.79
-----------------------------------------------------------------------------------
Total loans 649,647 14,680 9.04 562,506 12,409 8.82
Loans held for sale 161,246 3,623 8.99 25,894 572 8.84
Securities
Taxable 145,355 2,253 6.20 195,128 3,206 6.57
Tax-exempt (2) 37,975 806 8.49 42,424 892 8.41
----------------------------------------------------------------------------------
Total securities 183,330 3,059 6.67 237,552 4,098 6.90
Federal funds sold 396 5 5.05 810 11 5.43
------------------------------------------------------------------------------------
Total earning assets 994,619 21,367 8.59 826,762 17,090 8.27
Cash and due from banks 29,147 25,016
Bank premises and equipment 23,880 21,540
Other assets 22,770 22,196
Less: allowance for possible
loan losses (6,610) (6,417)
--------------------------------------------------------------
Total assets $1,063,806 $889,097
=============================================================
INTEREST BEARING LIABILITIES
Demand deposits $ 110,568 $ 760 2.75% $104,453 $ 774 2.96%
Savings deposits 208,634 1,697 3.25 239,148 1,796 3.00
Time deposits 362,832 4,776 5.27 307,048 3,524 4.59
Short-term borrowings 159,436 2,153 5.40 62,263 856 5.50
Long-term debt 21,042 297 5.65 7,201 130 7.22
--------------------------------------------------------------------------------------
Total interest-bearing liabilities 862,512 9,683 4.49 720,113 7,080 3.93
Demand deposits 117,968 94,401
Other liabilities 8,988 8,650
Stockholders' equity 74,338 65,933
-------------------------------------------------------------
Total liabilities and
stockholders' equity $1,063,806 $889,097
=============================================================
Net interest income $11,684 $10,010
============================================================================
Net yield on earning assets 4.70% 4.84%
========================================================================================
</TABLE>
(1) For purposes of this table, nonaccruing loans have been included in average
balances and loan fees, which are immaterial, have been included in interest
income. (2) Computed on a fully federal tax-equivalent basis assuming a tax rate
of 34% in all years.
PAGE 21 OF 111
<PAGE>
RATE VOLUME ANALYSIS OF
CHANGES IN INTEREST INCOME AND EXPENSE
(in thousands)
<TABLE>
<CAPTION>
Quarter Ended
March 31
1996 VS. 1995
Increase (Decrease)
Due to Change In:
INTEREST INCOME FROM: Volume Rate Net
-------------------------------------------------
<S> <C> <C> <C>
Loans
Commercial and industrial $ 890 $ 131 $ 1,021
Real estate 917 199 1,116
Consumer obligations 131 3 134
-------------------------------------------------
Total loans 1,938 333 2,271
Loans held for sale 3,041 9 3,050
Securities
Taxable (780) (172) (952)
Tax-exempt (1) (138) 52 (86)
--------------------------------------------------
Total Securities (918) (120) (1,038)
Federal funds sold (5) (1) (6)
--------------------------------------------------
Total interest-earning assets $ 4,056 $ 221 $ 4,277
INTEREST EXPENSE ON:
Demand deposits 194 (208) (14)
Savings deposits (783) 684 (99)
Time deposits 692 560 1,252
Short-term borrowings 1,403 (106) 1,297
Long-term debt 354 (187) 167
---------------------------------------------------
Total interest-bearing liabilities $ 1,860 $ 743 $ 2,603
--------------------------------------------------
NET INTEREST INCOME $ 2,196 $ (522) $ 1,674
==================================================
</TABLE>
(1) Fully federal taxable equivalent using a tax rate of 34% in all years.
PAGE 22 OF 111
<PAGE>
<TABLE>
<CAPTION>
PART II OTHER INFORMATION
<S> <C>
Item 1. Legal Proceedings - Not Applicable
Item 2. Changes in Securities - Not Applicable
Item 3. Defaults Upon Seller Securities - Not Applicable
Item 4. Submission of Matters to a Vote
of Security Holders - Not Applicable
Item 5. Other Information - On April 8, 1996, the Company
adopted an Employee Stock
Ownership Plan effective January 1,
1996. This plan modified the
Company's Money Purchase Plan
which was originally effective
January 1, 1995.
Item 6. Exhibits and Reports on 8-K - Not Applicable
</TABLE>
The Company did not file any reports on Form 8-K during the three months
ended March 31, 1996.
PAGE 23 OF 111
<PAGE>
S I G N A T U R E
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CITY HOLDING COMPANY
May 7, 1996 By /s/ Dawn Woolsey
Dawn Woolsey,
Chief Accounting Officer
(Principal Accounting Officer)
PAGE 24 OF 111
<PAGE>
EXHIBIT INDEX
Exhibit Page Number
Index
10 City Holding Company Employee's Stock Ownership Plan dated
April 8, 1996 26
27 Financial Data Schedule for the quarter ending March 31, 1996 110
PAGE 25 OF 111
CITY HOLDING COMPANY
EMPLOYEES' STOCK OWNERSHIP PLAN
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS..................................... 14
2.2 DETERMINATION OF TOP HEAVY STATUS............................... 14
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER..................... 18
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY......................... 19
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES................... 19
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR.......................... 19
2.7 RECORDS AND REPORTS............................................. 21
2.8 APPOINTMENT OF ADVISERS......................................... 21
2.9 INFORMATION FROM EMPLOYER....................................... 21
2.10 PAYMENT OF EXPENSES............................................. 21
2.11 MAJORITY ACTIONS................................................ 21
2.12 CLAIMS PROCEDURE................................................ 22
2.13 CLAIMS REVIEW PROCEDURE......................................... 22
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY....................................... 22
3.2 APPLICATION FOR PARTICIPATION................................... 23
3.3 EFFECTIVE DATE OF PARTICIPATION................................. 23
3.4 DETERMINATION OF ELIGIBILITY.................................... 23
3.5 TERMINATION OF ELIGIBILITY...................................... 23
3.6 OMISSION OF ELIGIBLE EMPLOYEE................................... 24
3.7 INCLUSION OF INELIGIBLE EMPLOYEE................................ 24
3.8 ELECTION NOT TO PARTICIPATE..................................... 24
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION................. 24
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION...................... 25
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND
EARNINGS........................................................ 25
4.4 MAXIMUM ANNUAL ADDITIONS........................................ 29
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS....................... 32
4.6 TRANSFERS FROM QUALIFIED PLANS.................................. 33
4.7 DIRECTED INVESTMENT ACCOUNT..................................... 35
ARTICLE V
FUNDING AND INVESTMENT POLICY
5.1 INVESTMENT POLICY............................................... 36
5.2 TRANSACTIONS INVOLVING COMPANY STOCK............................ 37
ARTICLE VI
VALUATIONS
6.1 VALUATION OF THE TRUST FUND..................................... 38
6.2 METHOD OF VALUATION............................................. 38
ARTICLE VII
DETERMINATION AND DISTRIBUTION OF BENEFITS
7.1 DETERMINATION OF BENEFITS UPON RETIREMENT....................... 38
7.2 DETERMINATION OF BENEFITS UPON DEATH............................ 39
7.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY................ 40
7.4 DETERMINATION OF BENEFITS UPON TERMINATION...................... 40
7.5 DISTRIBUTION OF BENEFITS........................................ 44
7.6 HOW PLAN BENEFIT WILL BE DISTRIBUTED............................ 52
7.7 DISTRIBUTION FOR MINOR BENEFICIARY.............................. 53
7.8 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN.................. 53
7.9 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION................. 53
ARTICLE VIII
TRUSTEE
8.1 BASIC RESPONSIBILITIES OF THE TRUSTEE........................... 54
8.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE..................... 54
8.3 OTHER POWERS OF THE TRUSTEE..................................... 55
8.4 LOANS TO PARTICIPANTS........................................... 58
8.5 VOTING COMPANY STOCK............................................ 60
8.6 DUTIES OF THE TRUSTEE REGARDING PAYMENTS........................ 60
8.7 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES................... 61
8.8 ANNUAL REPORT OF THE TRUSTEE.................................... 61
8.9 AUDIT........................................................... 62
8.10 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE.................. 63
8.11 TRANSFER OF INTEREST............................................ 64
8.12 DIRECT ROLLOVER................................................. 64
ARTICLE IX
AMENDMENT, TERMINATION AND MERGERS
9.1 AMENDMENT....................................................... 65
9.2 TERMINATION..................................................... 66
9.3 MERGER OR CONSOLIDATION......................................... 66
ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS............................................ 66
10.2 ALIENATION...................................................... 66
10.3 CONSTRUCTION OF PLAN............................................ 67
10.4 GENDER AND NUMBER............................................... 67
10.5 LEGAL ACTION.................................................... 68
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS.......................... 68
10.7 BONDING......................................................... 68
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE...................... 69
10.9 INSURER'S PROTECTIVE CLAUSE..................................... 69
10.10 RECEIPT AND RELEASE FOR PAYMENTS................................ 69
10.11 ACTION BY THE EMPLOYER.......................................... 69
10.12 NAMED FIDUCIARIES AND ALLOCATION OF
RESPONSIBILITY.................................................. 69
10.13 HEADINGS........................................................ 70
10.14 APPROVAL BY INTERNAL REVENUE SERVICE............................ 70
10.15 UNIFORMITY...................................................... 71
10.16 WAIVER OF FUNDING............................................... 71
10.17 SECURITIES AND EXCHANGE COMMISSION APPROVAL..................... 72
ARTICLE XI
PARTICIPATING EMPLOYERS
11.1 ADOPTION BY OTHER EMPLOYERS..................................... 72
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS......................... 72
11.3 DESIGNATION OF AGENT............................................ 73
11.4 EMPLOYEE TRANSFERS.............................................. 73
11.5 PARTICIPATING EMPLOYER'S CONTRIBUTION........................... 73
11.6 AMENDMENT....................................................... 74
11.7 DISCONTINUANCE OF PARTICIPATION................................. 74
11.8 ADMINISTRATOR'S AUTHORITY....................................... 74
<PAGE>
CITY HOLDING COMPANY
EMPLOYEES' STOCK OWNERSHIP PLAN
THIS AGREEMENT, hereby made and entered into this __________
day of _________________________, 19____, by and between City Holding Company
(herein referred to as the "Employer") and The City National Bank of Charleston
(herein referred to as the "Trustee").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established a Money
Purchase Plan and Trust effective January 1, 1995 (hereinafter called the
"Effective Date"), known as City Holding Company Money Purchase Plan and which
Plan shall hereinafter be known as City Holding Company Employees' Stock
Ownership Plan (herein referred to as the "Plan") in recognition of the
contribution made to its successful operation by its employees and for the
exclusive benefit of its eligible employees; and
WHEREAS, under the terms of the Plan, the Employer has the
ability to amend the Plan, provided the Trustee joins in such amendment if the
provisions of the Plan affecting the Trustee are amended; and
WHEREAS, contributions to the Plan will be made by the
Employer and such contributions made to the trust will be invested primarily in
the capital stock of the Employer;
NOW, THEREFORE, effective January 1, 1996, except as
otherwise provided, the Employer and the Trustee in accordance with the
provisions of the Plan pertaining to amendments thereof, hereby amend the Plan
in its entirety and restate the Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
1.2 "Administrator" means the person or entity designated by the
Employer pursuant to Section 2.4 to administer the Plan on behalf of the
Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each Participant, the
value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the provisions of
Section 2.2.
1.5 "Anniversary Date" means March 31st, June 30th, September 30th and
December 31st.
1.6 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
7.2 and 7.5.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
1.8 "Company Stock" means common stock issued by the Employer (or by a
corporation which is a member of the controlled group of corporations of which
the Employer is a member) which is readily tradeable on an established
securities market. If there is no common stock which meets the foregoing
requirement, the term "Company Stock" means common stock issued by the Employer
(or by a corporation which is a member of the same controlled group) having a
combination of voting power and dividend rights equal to or in excess of: (A)
that class of common stock of the Employer (or of any other such corporation)
having the greatest voting power, and (B) that class of common stock of the
Employer (or of any other such corporation) having the greatest dividend rights.
Noncallable preferred stock shall be deemed to be "Company Stock" if such stock
is convertible at any time into stock which constitutes "Company Stock"
hereunder and if such conversion is at a conversion price which (as of the date
of the acquisition by the Trust) is reasonable. For purposes of the preceding
sentence, pursuant to Regulations, preferred stock shall be treated as
noncallable if after the call there will be a reasonable opportunity for a
conversion which meets the requirements of the preceding sentence.
1.9 "Company Stock Account" means the account of a Participant which is
credited with the shares of Company Stock purchased and paid for by the Trust
Fund or contributed to the Trust Fund.
A separate accounting shall be maintained with respect to that
portion of the Company Stock Account attributable to the Money Purchase Pension
Plan and the Stock Bonus Plan.
1.10 "Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments of
compensation by the Employer (in the course of the Employer's trade or business)
for a Plan Year for which the Employer is required to furnish the Participant a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052. Compensation
must be determined without regard to any rules under Code Section 3401(a) that
limit the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in Code Section 3401(a)(2)).
For purposes of this Section, the determination of
Compensation shall be made by:
(a) including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which
are not includible in the gross income of the Participant
under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or
457, and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
For a Participant's initial year of participation,
Compensation shall be recognized for the entire Plan Year.
Compensation in excess of $200,000 shall be disregarded. Such
amount shall be adjusted at the same time and in such manner as permitted under
Code Section 415(d), except that the dollar increase in effect on January 1 of
any calendar year shall be effective for the Plan Year beginning with or within
such calendar year and the first adjustment to the $200,000 limitation shall be
effective on January 1, 1990. For any short Plan Year the Compensation limit
shall be an amount equal to the Compensation limit for the calendar year in
which the Plan Year begins multiplied by the ratio obtained by dividing the
number of full months in the short Plan Year by twelve (12). In applying this
limitation, the family group of a Highly Compensated Participant who is subject
to the Family Member aggregation rules of Code Section 414(q)(6) because such
Participant is either a "five percent owner" of the Employer or one of the ten
(10) Highly Compensated Employees paid the greatest "415 Compensation" during
the year, shall be treated as a single Participant, except that for this purpose
Family Members shall include only the affected Participant's spouse and any
lineal descendants who have not attained age nineteen (19) before the close of
the year. If, as a result of the application of such rules the adjusted $200,000
limitation is exceeded, then the limitation shall be prorated among the affected
Family Members in proportion to each such Family Member's Compensation prior to
the application of this limitation, or the limitation shall be adjusted in
accordance with any other method permitted by Regulation.
In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual Compensation of
each Employee taken into account under the Plan shall not exceed the OBRA '93
annual compensation limit. The OBRA '93 annual compensation limit is $150,000,
as adjusted by the Commissioner for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). The cost of living adjustment in
effect for a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12 months, the
OBRA '93 annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under Code Section 401(a)(17) shall
mean the OBRA '93 annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken
into account in determining an Employee's benefits accruing in the current Plan
Year, the Compensation for that prior determination period is subject to the
OBRA '93 annual compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning before the first
day of the first Plan Year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.
If, as a result of such rules, the maximum "annual addition"
limit of Section 4.4(a) would be exceeded for one or more of the affected Family
Members, the prorated Compensation of all affected Family Members shall be
adjusted to avoid or reduce any excess. The prorated Compensation of any
affected Family Member whose allocation would exceed the limit shall be adjusted
downward to the level needed to provide an allocation equal to such limit. The
prorated Compensation of affected Family Members not affected by such limit
shall then be adjusted upward on a pro rata basis not to exceed each such
affected Family Member's Compensation as determined prior to application of the
Family Member rule. The resulting allocation shall not exceed such individual's
maximum "annual addition" limit. If, after these adjustments, an "excess amount"
still results, such "excess amount" shall be disposed of in the manner described
in Section 4.5(a) pro rata among all affected Family Members.
For purposes of this Section, if the Plan is a plan described
in Code Section 413(c) or 414(f) (a plan maintained by more than one Employer),
the $200,000 limitation applies separately with respect to the Compensation of
any Participant from each Employer maintaining the Plan.
If, in connection with the adoption of this amendment and
restatement, the definition of Compensation has been modified, then, for Plan
Years prior to the Plan Year which includes the adoption date of this amendment
and restatement, Compensation means compensation determined pursuant to the Plan
then in effect.
1.11 "Contract" or "Policy" means any life insurance policy, retirement
income or annuity policy, or annuity contract (group or individual) issued
pursuant to the terms of the Plan.
1.12 "Early Retirement Date" means the date on which a Participant or
Former Participant attains age 60. A Participant shall become fully Vested upon
satisfying this requirement if still employed at his Early Retirement Age.
A Former Participant who terminates employment and who
thereafter reaches the age requirement contained herein shall be entitled to
receive his benefits under this Plan.
1.13 "Eligible Employee" means any Employee.
Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have specifically
adopted this Plan in writing.
1.14 "Employee" means any person who is employed by the Employer or
Affiliated Employer, but excludes any person who is an independent contractor.
Employee shall include Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and such Leased Employees do not constitute
more than 20% of the recipient's non-highly compensated work force.
1.15 "Employer" means City Holding Company and any Participating
Employer (as defined in Section 11.1) which shall adopt this Plan; any successor
which shall maintain this Plan; and any predecessor which has maintained this
Plan. The Employer is a corporation with principal offices in the State of West
Virginia.
1.16 "ESOP" means an employee stock ownership plan that meets the
requirements of Code Section 4975(e)(7) and Regulation 54.4975-11.
1.17 "Family Member" means, with respect to an affected Participant,
such Participant's spouse and such Participant's lineal descendants and
ascendants and their spouses, all as described in Code Section 414(q)(6)(B).
1.18 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
1.19 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on January 1st of each year and ending the following December 31st.
1.20 "Forfeiture" means that portion of a Participant's Account that is
not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of
a Terminated Participant's Account, or
(b) the last day of the Plan Year in which the
Participant incurs five (5) consecutive 1-Year Breaks in
Service.
Furthermore, for purposes of paragraph (a) above, in the case
of a Terminated Participant whose Vested benefit is zero, such Terminated
Participant shall be deemed to have received a distribution of his Vested
benefit upon his termination of employment. Restoration of such amounts shall
occur pursuant to Section 7.4(g)(2). In addition, the term Forfeiture shall also
include amounts deemed to be Forfeitures pursuant to any other provision of this
Plan.
1.21 "Former Participant" means a person who has been a Participant,
but who has ceased to be a Participant for any reason.
1.22 "415 Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments of
compensation by the Employer (in the course of the Employer's trade or business)
for a Plan Year for which the Employer is required to furnish the Participant a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052. "415
Compensation" must be determined without regard to any rules under Code Section
3401(a) that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)).
If, in connection with the adoption of this amendment and
restatement, the definition of "415 Compensation" has been modified, then, for
Plan Years prior to the Plan Year which includes the adoption date of this
amendment and restatement, "415 Compensation" means compensation determined
pursuant to the Plan then in effect.
1.23 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder, and generally means an Employee
who performed services for the Employer during the "determination year" and is
in one or more of the following groups:
(a) Employees who at any time during the
"determination year" or "look-back year" were "five percent
owners" as defined in Section 1.28(c).
(b) Employees who received "415 Compensation" during
the "look-back year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during
the "look-back year" from the Employer in excess of $50,000
and were in the Top Paid Group of Employees for the Plan Year.
(d) Employees who during the "look-back year" were
officers of the Employer (as that term is defined within the
meaning of the Regulations under Code Section 416) and
received "415 Compensation" during the "look-back year" from
the Employer greater than 50 percent of the limit in effect
under Code Section 415(b)(1)(A) for any such Plan Year. The
number of officers shall be limited to the lesser of (i) 50
employees; or (ii) the greater of 3 employees or 10 percent of
all employees. For the purpose of determining the number of
officers, Employees described in Section 1.51(a), (b), (c) and
(d) shall be excluded, but such Employees shall still be
considered for the purpose of identifying the particular
Employees who are officers. If the Employer does not have at
least one officer whose annual "415 Compensation" is in excess
of 50 percent of the Code Section 415(b)(1)(A) limit, then the
highest paid officer of the Employer will be treated as a
Highly Compensated Employee.
(e) Employees who are in the group consisting of the
100 Employees paid the greatest "415 Compensation" during the
"determination year" and are also described in (b), (c) or (d)
above when these paragraphs are modified to substitute
"determination year" for "look-back year."
The "determination year" shall be the Plan Year for which
testing is being performed, and the "look-back year" shall be the immediately
preceding twelve-month period.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457, and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions. Additionally, the
dollar threshold amounts specified in (b) and (c) above shall be adjusted at
such time and in such manner as is provided in Regulations. In the case of such
an adjustment, the dollar limits which shall be applied are those for the
calendar year in which the "determination year" or "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees
who are non-resident aliens and who received no earned income (within the
meaning of Code Section 911(d)(2)) from the Employer constituting United States
source income within the meaning of Code Section 861(a)(3) shall not be treated
as Employees. Additionally, all Affiliated Employers shall be taken into account
as a single employer and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are not
covered in any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination year."
1.24 "Highly Compensated Former Employee" means a former Employee who
had a separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. Notwithstanding the foregoing, an
Employee who separated from service prior to 1987 will be treated as a Highly
Compensated Former Employee only if during the separation year (or year
preceding the separation year) or any year after the Employee attains age 55 (or
the last year ending before the Employee's 55th birthday), the Employee either
received "415 Compensation" in excess of $50,000 or was a "five percent owner."
For purposes of this Section, "determination year," "415 Compensation" and "five
percent owner" shall be determined in accordance with Section 1.23. Highly
Compensated Former Employees shall be treated as Highly Compensated Employees.
The method set forth in this Section for determining who is a "Highly
Compensated Former Employee" shall be applied on a uniform and consistent basis
for all purposes for which the Code Section 414(q) definition is applicable.
1.25 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.26 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period; (2) each
hour for which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period; (3) each hour for
which back pay is awarded or agreed to by the Employer without regard to
mitigation of damages. These hours will be credited to the Employee for the
computation period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement or payment is made.
The same Hours of Service shall not be credited both under (1) or (2), as the
case may be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours of
Service are required to be credited to an Employee on account of any single
continuous period during which the Employee performs no duties (whether or not
such period occurs in a single computation period); (ii) an hour for which an
Employee is directly or indirectly paid, or entitled to payment, on account of a
period during which no duties are performed is not required to be credited to
the Employee if such payment is made or due under a plan maintained solely for
the purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be
made by or due from the Employer regardless of whether such payment is made by
or due from the Employer directly, or indirectly through, among others, a trust
fund, or insurer, to which the Employer contributes or pays premiums and
regardless of whether contributions made or due to the trust fund, insurer, or
other entity are for the benefit of particular Employees or are on behalf of a
group of Employees in the aggregate.
An Hour of Service must be counted for the purpose of
determining a Year of Service, a year of participation for purposes of accrued
benefits, a 1-Year Break in Service, and employment commencement date (or
reemployment commencement date). In addition, Hours of Service will be credited
for employment with other Affiliated Employers. The provisions of Department of
Labor regulations 2530.200b-2(b) and (c) are incorporated herein by reference.
1.27 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.28 "Key Employee" means an Employee as defined in Code Section 416(i)
and the Regulations thereunder. Generally, any Employee or former Employee (as
well as each of his Beneficiaries) is considered a Key Employee if he, at any
time during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is
defined within the meaning of the Regulations under Code
Section 416) having annual "415 Compensation" greater than 50
percent of the amount in effect under Code Section
415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415
Compensation" from the Employer for a Plan Year greater than
the dollar limitation in effect under Code Section
415(c)(1)(A) for the calendar year in which such Plan Year
ends and owning (or considered as owning within the meaning of
Code Section 318) both more than one-half percent interest and
the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five
percent owner" means any person who owns (or is considered as
owning within the meaning of Code Section 318) more than five
percent (5%) of the outstanding stock of the Employer or stock
possessing more than five percent (5%) of the total combined
voting power of all stock of the Employer or, in the case of
an unincorporated business, any person who owns more than five
percent (5%) of the capital or profits interest in the
Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers.
(d) a "one percent owner" of the Employer having an
annual "415 Compensation" from the Employer of more than
$150,000. "One percent owner" means any person who owns (or is
considered as owning within the meaning of Code Section 318)
more than one percent (1%) of the outstanding stock of the
Employer or stock possessing more than one percent (1%) of the
total combined voting power of all stock of the Employer or,
in the case of an unincorporated business, any person who owns
more than one percent (1%) of the capital or profits interest
in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under
Code Sections 414(b), (c), (m) and (o) shall be treated as
separate employers. However, in determining whether an
individual has "415 Compensation" of more than $150,000, "415
Compensation" from each employer required to be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be taken
into account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary
reduction agreement and which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457, and
Employee contributions described in Code Section 414(h)(2) that are treated as
Employer contributions.
1.29 "Late Retirement Date" means the first day of the month coinciding
with or next following a Participant's actual Retirement Date after having
reached his Normal Retirement Date.
1.30 "Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are of a type historically performed by employees in the
business field of the recipient employer. Contributions or benefits provided a
Leased Employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer. A Leased Employee shall not be considered an Employee of the
recipient:
(a) if such employee is covered by a money purchase
pension plan providing:
(1) a non-integrated employer contribution rate of at
least 10% of compensation, as defined in Code Section
415(c)(3), but including amounts which are
contributed by the Employer pursuant to a salary
reduction agreement and which are not includible in
the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457,
and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
(2) immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than
20% of the recipient's non-highly compensated work force.
1.31 "Money Purchase Pension Plan" means the portion of the Plan that
is designed to qualify as such pursuant to Code Section 401(a).
1.32 "Non-Highly Compensated Participant" means any Participant who is
neither a Highly Compensated Employee nor a Family Member.
1.33 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.34 "Normal Retirement Age" means the Participant's 65th birthday. A
Participant shall become fully Vested in his Participant's Account upon
attaining his Normal Retirement Age.
1.35 "Normal Retirement Date" means the Participant's Normal Retirement
Age.
1.36 "1-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and paternity
leaves of absence." Years of Service and 1-Year Breaks in Service shall be
measured on the same computation period.
"Authorized leave of absence" means an unpaid, temporary
cessation from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
A "maternity or paternity leave of absence" means, for Plan
Years beginning after December 31, 1984, an absence from work for any period by
reason of the Employee's pregnancy, birth of the Employee's child, placement of
a child with the Employee in connection with the adoption of such child, or any
absence for the purpose of caring for such child for a period immediately
following such birth or placement. For this purpose, Hours of Service shall be
credited for the computation period in which the absence from work begins, only
if credit therefore is necessary to prevent the Employee from incurring a 1-Year
Break in Service, or, in any other case, in the immediately following
computation period. The Hours of Service credited for a "maternity or paternity
leave of absence" shall be those which would normally have been credited but for
such absence, or, in any case in which the Administrator is unable to determine
such hours normally credited, eight (8) Hours of Service per day. The total
Hours of Service required to be credited for a "maternity or paternity leave of
absence" shall not exceed 501.
1.37 "Other Investments Account" means the account of a Participant
which is credited with his share of the net gain (or loss) of the Plan,
Forfeitures and Employer contributions in other than Company Stock and which is
debited with payments made to pay for Company Stock.
A separate accounting shall be maintained with respect to that
portion of the Other Investments Account attributable to the Money Purchase
Pension Plan and the Stock Bonus Plan.
1.38 "Participant" means any Eligible Employee who participates in the
Plan as provided in Sections 3.2 and 3.3, and has not for any reason become
ineligible to participate further in the Plan.
1.39 "Participant's Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer's contributions.
1.40 "Plan" means this instrument, including all amendments thereto.
1.41 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December 31st.
1.42 "Pre-Retirement Survivor Annuity" is an immediate annuity for the
life of the Participant's spouse, the payments under which must be equal to the
amount of benefit which can be purchased with the all pension contributions used
to provide the death benefit under the Plan.
1.43 "Regulation" means the Income Tax Regulations as promulgated by
the Secretary of the Treasury or his delegate, and as amended from time to time.
1.44 "Retired Participant" means a person who has been a Participant,
but who has become entitled to retirement benefits under the Plan.
1.45 "Retirement Date" means the date as of which a Participant retires
for reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date, Early or Late Retirement Date
(see Section 7.1).
1.46 "Stock Bonus Plan" means the portion of the Plan that is designed
to qualify as such pursuant to Code Section 401(a).
1.47 "Super Top Heavy Plan" means a plan described in Section 2.2(b).
1.48 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death, Total
and Permanent Disability or retirement.
1.49 "Top Heavy Plan" means a plan described in Section 2.2(a).
1.50 "Top Heavy Plan Year" means a Plan Year during which the Plan is a
Top Heavy Plan.
1.51 "Top Paid Group" means the top 20 percent of Employees who
performed services for the Employer during the applicable year, ranked according
to the amount of "415 Compensation" (determined for this purpose in accordance
with Section 1.23) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such Leased Employees are covered by a plan described in Code
Section 414(n)(5) and are not covered in any qualified plan
maintained by the Employer. Employees who are non-resident aliens and who
received no earned income (within the meaning of Code Section 911(d)(2)) from
the Employer constituting United States source income within the meaning of Code
Section 861(a)(3) shall not be treated as Employees. Additionally, for the
purpose of determining the number of active Employees in any year, the following
additional Employees shall also be excluded; however, such Employees shall still
be considered for the purpose of identifying the particular Employees in the Top
Paid Group:
(a) Employees with less than six (6) months of
service;
(b) Employees who normally work less than 17 1/2
hours per week;
(c) Employees who normally work less than six (6)
months during a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the
Employer are covered under agreements the Secretary of Labor finds to be
collective bargaining agreements between Employee representatives and the
Employer, and the Plan covers only Employees who are not covered under such
agreements, then Employees covered by such agreements shall be excluded from
both the total number of active Employees as well as from the identification of
particular Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be
applied on a uniform and consistent basis for all purposes for which the Code
Section 414(q) definition is applicable.
1.52 "Total and Permanent Disability" means a physical or mental
condition of a Participant resulting from bodily injury, disease, or mental
disorder which renders him incapable of continuing any gainful occupation and
which condition constitutes total disability under the federal Social Security
Acts.
1.53 "Trustee" means the person or entity named as trustee herein or in
any separate trust forming a part of this Plan, and any successors.
1.54 "Trust Fund" means the assets of the Plan and Trust as the same
shall exist from time to time.
1.55 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.56 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least 1000
Hours of Service.
For purposes of eligibility for participation, the initial
computation period shall begin with the date on which the Employee first
performs an Hour of Service. The participation computation period beginning
after a 1-Year Break in Service shall be measured from the date on which an
Employee again performs an Hour of Service. The participation computation period
shall shift to the Plan Year which includes the anniversary of the date on which
the Employee first performed an Hour of Service. An Employee who is credited
with the required Hours of Service in both the initial computation period (or
the computation period beginning after a 1-Year Break in Service) and the Plan
Year which includes the anniversary of the date on which the Employee first
performed an Hour of Service, shall be credited with two (2) Years of Service
for purposes of eligibility to participate.
For vesting purposes, the computation period shall be the Plan
Year, including periods prior to the Effective Date of the Plan.
For all other purposes, the computation period shall be the
Plan Year.
Notwithstanding the foregoing, for any short Plan Year, the
determination of whether an Employee has completed a Year of Service shall be
made in accordance with Department of Labor regulation 2530.203-2(c). However,
in determining whether an Employee has completed a Year of Service for benefit
accrual purposes in the short Plan Year, the number of the Hours of Service
required shall be proportionately reduced based on the number of full months in
the short Plan Year.
Years of Service with The City National Bank of Charleston,
The Peoples Bank of Point Pleasant, First State Bank & Trust, Bank of Ripley,
The Home National Bank of Sutton, Blue Ridge Bank, Inc., City Financial
Corporation, City Mortgage Corporation, The First National Bank of Hinton,
Peoples State Bank and The Merchants National Bank of Montgomery shall be
recognized.
Years of Service with any Affiliated Employer shall be
recognized.
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the
special vesting requirements of Code Section 416(b) pursuant to Section 7.4 of
the Plan and the special minimum allocation requirements of Code Section 416(c)
pursuant to Section 4.3 of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any
Plan Year in which, as of the Determination Date, (1) the
Present Value of Accrued Benefits of Key Employees and (2)
the sum of the Aggregate Accounts of Key Employees under
this Plan and all plans of an Aggregation Group,
exceeds sixty percent (60%) of the Present Value of Accrued
Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation
Group.
If any Participant is a Non-Key Employee
for any Plan Year, but such Participant was a Key Employee
for any prior Plan Year, such Participant's Present Value of
Accrued Benefit and/or Aggregate Account balance shall not
be taken into account for purposes of determining whether
this Plan is a Top Heavy or Super Top Heavy Plan (or whether
any Aggregation Group which includes this Plan is a Top
Heavy Group). In addition, if a Participant or Former
Participant has not performed any services for any Employer
maintaining the Plan at any time during the five year period
ending on the Determination Date, any accrued benefit for
such Participant or Former Participant shall not be taken
into account for the purposes of determining whether this
Plan is a Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for
any Plan Year in which, as of the Determination Date, (1)
the Present Value of Accrued Benefits of Key Employees and
(2) the sum of the Aggregate Accounts of Key Employees under
this Plan and all plans of an Aggregation Group, exceeds
ninety percent (90%) of the Present Value of Accrued
Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation
Group.
(c) Aggregate Account: A Participant's Aggregate
Account as of the Determination Date is the sum of:
(1) his Participant's Account balance as of the
most recent valuation occurring within a twelve
(12) month period ending on the Determination Date;
(2) an adjustment for any contributions due as of
the Determination Date. Such adjustment shall be
the amount of any contributions actually made after
the valuation date but due on or before the
Determination Date, except for the first Plan Year
when such adjustment shall also reflect the amount
of any contributions made after the Determination
Date that are allocated as of a date in that first
Plan Year.
(3) any Plan distributions made within the Plan
Year that includes the Determination Date or within
the four (4) preceding Plan Years. However, in the
case of distributions made after the valuation date
and prior to the Determination Date, such
distributions are not included as distributions for
top heavy purposes to the extent that such
distributions are already included in the
Participant's Aggregate Account balance as of the
valuation date. Notwithstanding anything
herein to the contrary, all distributions,
including distributions made prior to January 1,
1984, and distributions under a terminated plan
which if it had not been terminated would have been
required to be included in an Aggregation Group,
will be counted. Further, distributions from the
Plan (including the cash value of life insurance
policies) of a Participant's account balance
because of death shall be treated as a distribution
for the purposes of this paragraph.
(4) any Employee contributions, whether voluntary
or mandatory. However, amounts attributable to tax
deductible qualified voluntary employee
contributions shall not be considered to be a part
of the Participant's Aggregate Account balance.
(5) with respect to unrelated rollovers and
plan-to-plan transfers (ones which are both
initiated by the Employee and made from a plan
maintained by one employer to a plan maintained by
another employer), if this Plan provides the
rollovers or plan-to-plan transfers, it shall
always consider such rollovers or plan-to-plan
transfers as a distribution for the purposes of
this Section. If this Plan is the plan accepting
such rollovers or plan-to-plan transfers, it shall
not consider such rollovers or plan-to-plan
transfers as part of the Participant's Aggregate
Account balance.
(6) with respect to related rollovers and
plan-to-plan transfers (ones either not initiated
by the Employee or made to a plan maintained by the
same employer), if this Plan provides the rollover
or plan-to-plan transfer, it shall not be counted
as a distribution for purposes of this Section. If
this Plan is the plan accepting such rollover or
plan-to-plan transfer, it shall consider such
rollover or plan-to-plan transfer as part of the
Participant's Aggregate Account balance,
irrespective of the date on which such rollover or
plan-to-plan transfer is accepted.
(7) For the purposes of determining whether two
employers are to be treated as the same employer in
(5) and (6) above, all employers aggregated under
Code Section 414(b), (c), (m) and (o) are treated
as the same employer.
(d) "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as
hereinafter determined.
(1) Required Aggregation Group: In determining a
Required Aggregation Group hereunder, each plan of
the Employer in which a Key Employee is a
participant in the Plan Year containing the
Determination Date or any of the four preceding
Plan Years, and each other plan of the Employer
which enables any plan in which a Key Employee
participates to meet the requirements of Code
Sections 401(a)(4) or 410, will be required to be
aggregated. Such group shall be known as a Required
Aggregation Group.
In the case of a Required Aggregation Group, each
plan in the group will be considered a Top Heavy
Plan if the Required Aggregation Group is a Top
Heavy Group. No plan in the Required Aggregation
Group will be considered a Top Heavy Plan if the
Required Aggregation Group is not a Top Heavy
Group.
(2) Permissive Aggregation Group: The Employer may
also include any other plan not required to be
included in the Required Aggregation Group,
provided the resulting group, taken as a whole,
would continue to satisfy the provisions of Code
Sections 401(a)(4) and 410. Such group shall be
known as a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only
a plan that is part of the Required Aggregation
Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is a Top Heavy Group.
No plan in the Permissive Aggregation Group will be
considered a Top Heavy Plan if the Permissive
Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar
year shall be aggregated in order to determine
whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any
terminated plan of the Employer if it was
maintained within the last five (5) years ending on
the Determination Date.
(e) "Determination Date" means (a) the last day of
the preceding Plan Year, or (b) in the case of the first
Plan Year, the last day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case
of a defined benefit plan, the Present Value of Accrued
Benefit for a Participant other than a Key Employee, shall
be as determined using the single accrual method used for
all plans of the Employer and Affiliated Employers, or if no
such single method exists, using a method which results in
benefits accruing not more
rapidly than the slowest accrual rate permitted under Code
Section 411(b)(1)(C). The determination of the Present Value
of Accrued Benefit shall be determined as of the most recent
valuation date that falls within or ends with the 12-month
period ending on the Determination Date except as provided
in Code Section 416 and the Regulations thereunder for the
first and second plan years of a defined benefit plan.
(g) "Top Heavy Group" means an Aggregation Group in
which, as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all defined benefit plans included
in the group, and
(2) the Aggregate Accounts of Key Employees under
all defined contribution plans included in the
group,
exceeds sixty percent (60%) of a similar sum
determined for all Participants.
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and
remove the Trustee and the Administrator from time to time
as it deems necessary for the proper administration of the
Plan to assure that the Plan is being operated for the
exclusive benefit of the Participants and their
Beneficiaries in accordance with the terms of the Plan, the
Code, and the Act.
(b) The Employer shall establish a "funding policy
and method," i.e., it shall determine whether the Plan has a
short run need for liquidity (e.g., to pay benefits) or
whether liquidity is a long run goal and investment growth
(and stability of same) is a more current need, or shall
appoint a qualified person to do so. The Employer or its
delegate shall communicate such needs and goals to the
Trustee, who shall coordinate such Plan needs with its
investment policy. The communication of such a "funding
policy and method" shall not, however, constitute a
directive to the Trustee as to investment of the Trust
Funds. Such "funding policy and method" shall be consistent
with the objectives of this Plan and with the requirements
of Title I of the Act.
(c) The Employer shall periodically review the
performance of any Fiduciary or other person to whom duties
have been delegated or allocated by it under the provisions
of this Plan or pursuant to procedures established
hereunder. This requirement may be satisfied by formal
periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day
conduct and evaluation, or through other appropriate ways.
(d) The Employer will furnish Plan Fiduciaries and
Participants with notices and information statements when
voting rights must be exercised pursuant to Section 8.5.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any
person, including, but not limited to, the Employees of the Employer, shall be
eligible to serve as an Administrator. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. An Administrator may
resign by delivering his written resignation to the Employer or be removed by
the Employer by delivery of written notice of removal, to take effect at a date
specified therein, or upon delivery to the Administrator if no date is
specified.
The Employer, upon the resignation or removal of an
Administrator, shall promptly designate in writing a successor to this position.
If the Employer does not appoint an Administrator, the Employer will function as
the Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer and
accepted in writing by each Administrator. In the event that no such delegation
is made by the Employer, the Administrators may allocate the responsibilities
among themselves, in which event the Administrators shall notify the Employer
and the Trustee in writing of such action and specify the responsibilities of
each Administrator. The Trustee thereafter shall accept and rely upon any
documents executed by the appropriate Administrator until such time as the
Employer or the Administrators file with the Trustee a written revocation of
such designation.
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to
administer the Plan for the exclusive benefit of the Participants and their
Beneficiaries, subject to the specific terms of the Plan. The Administrator
shall administer the Plan in accordance with its terms and shall have the power
and discretion to construe the terms of the Plan and to determine all questions
arising in connection with the administration, interpretation, and application
of the Plan. Any such determination by the Administrator shall be conclusive and
binding upon all persons. The Administrator may establish procedures, correct
any defect, supply any information, or reconcile any inconsistency in such
manner and to such extent as shall be deemed necessary or advisable to carry out
the purpose of the Plan; provided, however, that any procedure, discretionary
act, interpretation or construction shall be done in a nondiscriminatory manner
based upon uniform principles consistently applied and shall be consistent with
the intent that the Plan shall continue to be deemed a qualified plan under the
terms of Code Section 401(a), and shall comply with the terms of the Act and all
regulations issued pursuant thereto. The Administrator shall have all powers
necessary or appropriate to accomplish his duties under this Plan.
The Administrator shall be charged with the duties of the
general administration of the Plan, including, but not limited to, the
following:
(a) the discretion to determine all questions
relating to the eligibility of Employees to participate or
remain a Participant hereunder and to receive benefits under
the Plan;
(b) to compute, certify, and direct the Trustee with
respect to the amount and the kind of benefits to which any
Participant shall be entitled hereunder;
(c) to authorize and direct the Trustee with respect
to all nondiscretionary or otherwise directed disbursements
from the Trust;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and to
make and publish such rules for regulation of the Plan as are
consistent with the terms hereof;
(f) to determine the size and type of any Contract to
be purchased from any insurer, and to designate the insurer
from which such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or
desirable to be contributed to the Plan;
(h) to consult with the Employer and the Trustee
regarding the short and long-term liquidity needs of the
Plan in order that the Trustee can exercise any investment
discretion in a manner designed to accomplish specific
objectives;
(i) to establish and communicate to Participants a
procedure for allowing each Participant to direct the Trustee
as to the distribution of his Company Stock Account pursuant
to Section 4.7;
(j) to establish and communicate to Participants a
procedure and method to insure that each Participant will
vote Company Stock allocated to such Participant's Company
Stock Account pursuant to Section 8.5;
(k) to assist any Participant regarding his rights,
benefits, or elections available under the Plan.
(l) to prepare and distribute to Employees a
procedure for notifying Participants and Beneficiaries of
their rights to elect joint and survivor annuities and
Pre-Retirement Survivor Annuities as required by the Act and
Regulations thereunder.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken
and shall keep all other books of account, records, and other data that may be
necessary for proper administration of the Plan and shall be responsible for
supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, and other persons as
the Administrator or the Trustee deems necessary or desirable in connection with
the administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the
Employer shall supply full and timely information to the Administrator on all
matters relating to the Compensation of all Participants, their Hours of
Service, their Years of Service, their retirement, death, disability, or
termination of employment, and such other pertinent facts as the Administrator
may require; and the Administrator shall advise the Trustee of such of the
foregoing facts as may be pertinent to the Trustee's duties under the Plan. The
Administrator may rely upon such information as is supplied by the Employer and
shall have no duty or responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust
Fund unless paid by the Employer. Such expenses shall include any expenses
incident to the functioning of the Administrator, including, but not limited to,
fees of accountants, counsel, and other specialists and their agents, and other
costs of administering the Plan. Until paid, the expenses shall constitute a
liability of the Trust Fund.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.5, if there shall be more than
one Administrator, they shall act by a majority of their number, but may
authorize one or more of them to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing
with the Administrator. Written notice of the disposition of a claim shall be
furnished to the claimant within 90 days after the application is filed. In the
event the claim is denied, the reasons for the denial shall be specifically set
forth in the notice in language calculated to be understood by the claimant,
pertinent provisions of the Plan shall be cited, and, where appropriate, an
explanation as to how the claimant can perfect the claim will be provided. In
addition, the claimant shall be furnished with an explanation of the Plan's
claims review procedure.
2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who
has been denied a benefit by a decision of the Administrator pursuant to Section
2.12 shall be entitled to request the Administrator to give further
consideration to his claim by filing with the Administrator (on a form which may
be obtained from the Administrator) a request for a hearing. Such request,
together with a written statement of the reasons why the claimant believes his
claim should be allowed, shall be filed with the Administrator no later than 60
days after receipt of the written notification provided for in Section 2.12. The
Administrator shall then conduct a hearing within the next 60 days, at which the
claimant may be represented by an attorney or any other representative of his
choosing and at which the claimant shall have an opportunity to submit written
and oral evidence and arguments in support of his claim. At the hearing (or
prior thereto upon 5 business days written notice to the Administrator) the
claimant or his representative shall have an opportunity to review all documents
in the possession of the Administrator which are pertinent to the claim at issue
and its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed one (1) Year of
Service and has attained age 21 shall be eligible to participate hereunder as of
the date he has satisfied such requirements. However, any Employee who was a
Participant in the Plan prior to the effective
date of this amendment and restatement shall continue to participate in the
Plan. The Employer shall give each prospective Eligible Employee written notice
of his eligibility to participate in the Plan prior to the close of the Plan
Year in which he first becomes an Eligible Employee.
3.2 APPLICATION FOR PARTICIPATION
In order to become a Participant hereunder, each Eligible
Employee shall make application to the Employer for participation in the Plan
and agree to the terms hereof. Upon the acceptance of any benefits under this
Plan, such Employee shall automatically be deemed to have made application and
shall be bound by the terms and conditions of the Plan and all amendments
hereto.
3.3 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as
of the first day of the calendar quarter coinciding with or next following the
date such Employee met the eligibility requirements of Section 3.1, provided
said Employee was still employed as of such date (or if not employed on such
date, as of the date of rehire if a 1-Year Break in Service has not occurred).
3.4 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each
Employee for participation in the Plan based upon information furnished by the
Employer. Such determination shall be conclusive and binding upon all persons,
as long as the same is made pursuant to the Plan and the Act. Such determination
shall be subject to review per Section 2.13.
3.5 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a
classification of an Eligible Employee to an ineligible
Employee, such Former Participant shall continue to vest in
his interest in the Plan for each Year of Service completed
while a noneligible Employee, until such time as his
Participant's Account shall be forfeited or distributed
pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings
of the Trust Fund.
(b) In the event a Participant is no longer a
member of an eligible class of Employees and becomes
ineligible to participate but has not incurred a 1-Year
Break in Service, such Employee will participate immediately
upon returning to an eligible class of Employees. If such
Participant incurs a 1-Year Break in Service, eligibility
will be determined under the break in service rules of the
Plan.
3.6 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as
a Participant in the Plan is erroneously omitted and discovery of such omission
is not made until after a contribution by his Employer for the year has been
made, the Employer shall make a subsequent contribution with respect to the
omitted Employee in the amount which the said Employer would have contributed
with respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any taxable
year under applicable provisions of the Code.
3.7 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been
included as a Participant in the Plan is erroneously included and discovery of
such incorrect inclusion is not made until after a contribution for the year has
been made, the Employer shall not be entitled to recover the contribution made
with respect to the ineligible person regardless of whether or not a deduction
is allowable with respect to such contribution. In such event, the amount
contributed with respect to the ineligible person shall constitute a Forfeiture
for the Plan Year in which the discovery is made.
3.8 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer,
elect voluntarily not to participate in the Plan. The election not to
participate must be communicated to the Employer, in writing, at least thirty
(30) days before the beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
(a) For each Plan Year, the Employer shall
contribute to the Stock Bonus Plan such amount as shall be
determined by the Employer.
(b) The Employer shall make contributions to the
Money Purchase Pension Plan over such period of years as the
Employer may determine on the following basis. On behalf of
each Participant eligible to share in allocations, for each
year of his participation in this Plan, the Employer shall
contribute 9% of his annual Compensation.
Only Participants who have completed a Year of
Service during the Plan Year and are actively employed on
the last day of the Plan Year shall be eligible to share in
the Employer contribution to the Money Purchase Pension Plan
for the year.
(c) Notwithstanding the foregoing, however, the
Employer's contributions for any Plan Year shall not exceed
the maximum amount allowable as a deduction to the Employer
under the provisions of Code Section 404. All contributions
by the Employer shall be made in cash, Company Stock or in
such property as is acceptable to the Trustee.
(d) Except, however, to the extent necessary to
provide the top heavy minimum allocations, the Employer
shall make a contribution even if it exceeds the amount
which is deductible under Code Section 404.
(e) Should the Employer, for any reason, fail to
make a contribution to the Money Purchase Pension Plan as
provided for herein, then such deficiency shall be made up
in subsequent years pursuant to Section 10.16.
(f) This Plan shall be deemed a "qualified
replacement plan" under Section 4980(d), and shall be
eligible to receive reversionary monies from a terminating
defined benefit plan sponsored by any bank or financial
organization acquired by City Holding Company. Such
reversionary monies shall first be used to fund the money
purchase funding obligation in the year of receipt by this
Plan. Any such amounts transferred to this Plan under
Section 4980(d) shall be allocated in accordance with
Section 4980(d)(2)(c).
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
Employer contributions will be paid in cash, Company Stock
or other property as the Employer may from time to time determine. Company Stock
and other property will be valued at their then fair market value. The Employer
shall pay to the Trustee its contribution to the Plan for each Plan Year within
the time prescribed by law, including extensions of time, for the filing of the
Employer's federal income tax return for the Fiscal Year.
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain
an account in the name of each Participant to which the
Administrator shall credit as of each Anniversary Date all
amounts allocated to each such Participant as set forth
herein.
(b) The Employer shall provide the Administrator
with all information required by the Administrator to make a
proper allocation of the Employer's Stock Bonus Plan
contributions for each Plan Year. Within a reasonable period
of time after the date of receipt by the Administrator of
such information, the Administrator shall allocate such
contribution to each
Participant's Account in the same proportion that each such
Participant's Compensation for the year bears to the total
Compensation of all Participants for such year.
Only Participants who have completed a Year
of Service during the Plan Year and are actively employed on
the last day of the Plan Year shall be eligible to share in
the discretionary contribution for the year.
(c) The Employer shall provide the Administrator
with all information required by the Administrator to make a
proper allocation of the Employer's Money Purchase Pension
Plan contributions for each Plan Year. Within a reasonable
period of time after the date of receipt by the
Administrator of such information, the Administrator shall
allocate such contribution to each eligible Participant's
Account in accordance with Section 4.1.
(d) The Company Stock Account of each Participant
shall be credited as of each Anniversary Date with
Forfeitures of Company Stock and his allocable share of
Company Stock (including fractional shares) purchased and
paid for by the Plan or contributed in kind by the Employer.
Stock dividends on Company Stock held in his Company Stock
Account shall be credited to his Company Stock Account when
paid. Cash dividends on Company Stock held in his Company
Stock Account shall be credited to his Other Investments
Account when paid.
(e) As of each Anniversary Date or other valuation
date, any earnings or losses (net appreciation or net
depreciation) of the Trust Fund shall be allocated in the
same proportion that each Participant's and Former
Participant's time weighted average nonsegregated accounts
(other than each Participant's Company Stock Account) bear
to the total of all Participants' and Former Participants'
time weighted average nonsegregated accounts (other than
Participants' Company Stock Accounts) as of such date.
Participants' transfers from other
qualified plans deposited in the general Trust Fund shall
share in any earnings and losses (net appreciation or net
depreciation) of the Trust Fund in the same manner provided
above. Each segregated account maintained on behalf of a
Participant shall be credited or charged with its separate
earnings and losses.
(f) As of each Anniversary Date any amounts which
became Forfeitures since the last Anniversary Date shall
first be made available to reinstate previously forfeited
account balances of Former Participants, if any, in
accordance with Section 7.4(g)(2). The remaining Forfeitures
with respect to the Employer discretionary contributions, if
any, shall be added to the Employer's discretionary
contribution pursuant to Section 4.1(a) and for the Plan
Year in which such Forfeitures occur allocated among the
Participants'
Accounts in the same manner as the Employer's discretionary
contribution for the current year. Forfeitures, if any, with
respect to any money purchase contributions pursuant to
Section 4.1(b) shall be used to reduce the Employers pension
contributions for the Plan Year in which such forfeiture
occurs.
Provided, however, that in the event the
allocation of Forfeitures provided herein shall cause the
"annual addition" (as defined in Section 4.4) to any
Participant's Account to exceed the amount allowable by the
Code, the excess shall be reallocated in accordance with
Section 4.5.
(g) For any Top Heavy Plan Year, Employees not
otherwise eligible to share in the allocation of
contributions and Forfeitures as provided above, shall
receive the minimum allocation provided for in Section
4.3(i) if eligible pursuant to the provisions of Section
4.3(k).
(h) Notwithstanding the foregoing, Participants who
are not actively employed on the last day of the Plan Year
due to Retirement (Early, Normal or Late), Total and
Permanent Disability or death shall share in the allocation
of contributions and Forfeitures for that Plan Year.
(i) Minimum Allocations Required for Top Heavy Plan
Years: Notwithstanding the foregoing, for any Top Heavy Plan
Year, the sum of the Employer's contributions and
Forfeitures allocated to the Participant's Account of each
Employee shall be equal to at least three percent (3%) of
such Employee's "415 Compensation" (reduced by contributions
and forfeitures, if any, allocated to each Employee in any
defined contribution plan included with this plan in a
Required Aggregation Group). However, if (1) the sum of the
Employer's contributions and Forfeitures allocated to the
Participant's Account of each Key Employee for such Top
Heavy Plan Year is less than three percent (3%) of each Key
Employee's "415 Compensation" and (2) this Plan is not
required to be included in an Aggregation Group to enable a
defined benefit plan to meet the requirements of Code
Section 401(a)(4) or 410, the sum of the Employer's
contributions and Forfeitures allocated to the Participant's
Account of each Employee shall be equal to the largest
percentage allocated to the Participant's Account of any Key
Employee.
(j) For purposes of the minimum allocations set
forth above, the percentage allocated to the Participant's
Account of any Key Employee shall be equal to the ratio of
the sum of the Employer's contributions and Forfeitures
allocated on behalf of such Key Employee divided by the "415
Compensation" for such Key Employee.
(k) For any Top Heavy Plan Year, the minimum
allocations set forth above shall be allocated to the
Participant's Account of all Employees who are Participants
and who are employed by the Employer on the last day
of the Plan Year, including Employees who have (1) failed to
complete a Year of Service; and (2) declined to make
mandatory contributions (if required) to the Plan.
(l) For the purposes of this Section, "415
Compensation" shall be limited to $200,000. Such amount
shall be adjusted at the same time and in the same manner as
permitted under Code Section 415(d), except that the dollar
increase in effect on January 1 of any calendar year shall
be effective for the Plan Year beginning with or within such
calendar year and the first adjustment to the $200,000
limitation shall be effective on January 1, 1990. For any
short Plan Year the "415 Compensation" limit shall be an
amount equal to the "415 Compensation" limit for the
calendar year in which the Plan Year begins multiplied by
the ratio obtained by dividing the number of full months in
the short Plan Year by twelve (12).
In addition to other applicable limitations
set forth in the Plan, and notwithstanding any other
provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual
Compensation of each Employee taken into account under the
Plan shall not exceed the OBRA '93 annual compensation
limit. The OBRA '93 annual compensation limit is $150,000,
as adjusted by the Commissioner for increases in the cost of
living in accordance with Code Section 401(a)(17)(B). The
cost of living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of
fewer than 12 months, the OBRA '93 annual compensation limit
will be multiplied by a fraction, the numerator of which is
the number of months in the determination period, and the
denominator of which is 12.
For Plan Years beginning on or after
January 1, 1994, any reference in this Plan to the
limitation under Code Section 401(a)(17) shall mean the OBRA
'93 annual compensation limit set forth in this provision.
If Compensation for any prior determination
period is taken into account in determining an Employee's
benefits accruing in the current Plan Year, the Compensation
for that prior determination period is subject to the OBRA
'93 annual compensation limit in effect for that prior
determination period. For this purpose, for determination
periods beginning before the first day of the first Plan
Year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.
(m) If a Former Participant is reemployed after
five (5) consecutive 1-Year Breaks in Service, then separate
accounts shall be maintained as follows:
(1) one account for nonforfeitable benefits
attributable to pre-break service; and
(2) one account representing his status in the Plan
attributable to post-break service.
4.4 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum
"annual additions" credited to a Participant's accounts for
any "limitation year" shall equal the lesser of: (1) $30,000
(or, if greater, one-fourth of the dollar limitation in
effect under Code Section 415(b)(1)(A)) or (2) twenty-five
percent (25%) of the Participant's "415 Compensation" for
such "limitation year." For any short "limitation year," the
dollar limitation in (1) above shall be reduced by a
fraction, the numerator of which is the number of full
months in the short "limitation year" and the denominator of
which is twelve (12).
(b) For purposes of applying the limitations of
Code Section 415, "annual additions" means the sum credited
to a Participant's accounts for any "limitation year" of (1)
Employer contributions, (2) Employee contributions, (3)
forfeitures, (4) amounts allocated, after March 31, 1984, to
an individual medical account, as defined in Code Section
415(l)(2) which is part of a pension or annuity plan
maintained by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable
to post-retirement medical benefits allocated to the
separate account of a key employee (as defined in Code
Section 419A(d)(3)) under a welfare benefit plan (as defined
in Code Section 419(e)) maintained by the Employer. Except,
however, the "415 Compensation" percentage limitation
referred to in paragraph (a)(2) above shall not apply to:
(1) any contribution for medical benefits (within the
meaning of Code Section 419A(f)(2)) after separation from
service which is otherwise treated as an "annual addition,"
or (2) any amount otherwise treated as an "annual addition"
under Code Section 415(l)(1).
(c) For purposes of applying the limitations of
Code Section 415, the transfer of funds from one qualified
plan to another is not an "annual addition." In addition,
the following are not Employee contributions for the
purposes of Section 4.4(b)(2): (1) rollover contributions
(as defined in Code Sections 402(a)(5), 403(a)(4), 403(b)(8)
and 408(d)(3)); (2) repayments of loans made to a
Participant from the Plan; (3) repayments of distributions
received by an Employee pursuant to Code Section
411(a)(7)(B) (cash-outs); (4) repayments of distributions
received by an Employee pursuant to Code Section
411(a)(3)(D) (mandatory contributions); and (5) Employee
contributions to a simplified employee pension excludable
from gross income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of
Code Section 415, the "limitation year" shall be the Plan
Year.
(e) The dollar limitation under Code Section
415(b)(1)(A) stated in paragraph (a)(1) above shall be
adjusted annually as provided in Code Section 415(d)
pursuant to the Regulations. The adjusted limitation is
effective as of January 1st of each calendar year and is
applicable to "limitation years" ending with or within that
calendar year.
(f) For the purpose of this Section, all qualified
defined benefit plans (whether terminated or not) ever
maintained by the Employer shall be treated as one defined
benefit plan, and all qualified defined contribution plans
(whether terminated or not) ever maintained by the Employer
shall be treated as one defined contribution plan.
(g) For the purpose of this Section, if the
Employer is a member of a controlled group of corporations,
trades or businesses under common control (as defined by
Code Section 1563(a) or Code Section 414(b) and (c) as
modified by Code Section 415(h)), is a member of an
affiliated service group (as defined by Code Section
414(m)), or is a member of a group of entities required to
be aggregated pursuant to Regulations under Code Section
414(o), all Employees of such Employers shall be considered
to be employed by a single Employer.
(h) For the purpose of this Section, if this Plan
is a Code Section 413(c) plan, all Employers of a
Participant who maintain this Plan will be considered to be
a single Employer.
(i)(1) If a Participant participates in more than
one defined contribution plan maintained by the Employer
which have different Anniversary Dates, the maximum "annual
additions" under this Plan shall equal the maximum "annual
additions" for the "limitation year" minus any "annual
additions" previously credited to such Participant's
accounts during the "limitation year."
(2) If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a
defined contribution plan not subject to Code
Section 412 maintained by the Employer which have
the same Anniversary Date, "annual additions" will
be credited to the Participant's accounts under the
defined contribution plan subject to Code Section
412 prior to crediting "annual additions" to the
Participant's accounts under the defined
contribution plan not subject to Code Section 412.
(3) If a Participant participates in more than one
defined contribution plan not subject to Code
Section 412 maintained by the Employer which have
the same Anniversary Date, the maximum "annual
additions" under this Stock Bonus Plan shall equal
the product
of (A) the maximum "annual additions" for the
"limitation year" minus any "annual additions"
previously credited under subparagraphs (1) or (2)
above, multiplied by (B) a fraction (i) the
numerator of which is the "annual additions" which
would be credited to such Participant's accounts
under this Stock Bonus Plan without regard to the
limitations of Code Section 415 and (ii) the
denominator of which is such "annual additions" for
all plans described in this subparagraph.
(j) If an Employee is (or has been) a Participant
in one or more defined benefit plans and one or more defined
contribution plans maintained by the Employer, the sum of
the defined benefit plan fraction and the defined
contribution plan fraction for any "limitation year" may not
exceed 1.0.
(k) The defined benefit plan fraction for any
"limitation year" is a fraction, the numerator of which is
the sum of the Participant's projected annual benefits under
all the defined benefit plans (whether or not terminated)
maintained by the Employer, and the denominator of which is
the lesser of 125 percent of the dollar limitation
determined for the "limitation year" under Code Sections
415(b) and (d) or 140 percent of the highest average
compensation, including any adjustments under Code Section
415(b).
Notwithstanding the above, if the
Participant was a Participant as of the first day of the
first "limitation year" beginning after December 31, 1986,
in one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such plans
which the Participant had accrued as of the close of the
last "limitation year" beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the
plan after May 5, 1986. The preceding sentence applies only
if the defined benefit plans individually and in the
aggregate satisfied the requirements of Code Section 415 for
all "limitation years" beginning before January 1, 1987.
(l) The defined contribution plan fraction for any
"limitation year" is a fraction, the numerator of which is
the sum of the annual additions to the Participant's Account
under all the defined contribution plans (whether or not
terminated) maintained by the Employer for the current and
all prior "limitation years" (including the annual additions
attributable to the Participant's nondeductible Employee
contributions to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the annual
additions attributable to all welfare benefit funds, as
defined in Code Section 419(e), and individual medical
accounts, as defined in Code Section 415(l)(2), maintained
by the Employer), and the denominator of which is the sum of
the maximum aggregate amounts for the current and all prior
"limitation years" of service with the Employer (regardless
of whether a defined contribution plan was maintained by the
Employer). The maximum aggregate amount in any
"limitation year" is the lesser of 125 percent of the dollar
limitation determined under Code Sections 415(b) and (d) in
effect under Code Section 415(c)(1)(A) or 35 percent of the
Participant's Compensation for such year.
If the Employee was a Participant as of the
end of the first day of the first "limitation year"
beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction
will be adjusted if the sum of this fraction and the defined
benefit fraction would otherwise exceed 1.0 under the terms
of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over
1.0 times (2) the denominator of this fraction, will be
permanently subtracted from the numerator of this fraction.
The adjustment is calculated using the fractions as they
would be computed as of the end of the last "limitation
year" beginning before January 1, 1987, and disregarding any
changes in the terms and conditions of the Plan made after
May 5, 1986, but using the Code Section 415 limitation
applicable to the first "limitation year" beginning on or
after January 1, 1987. The annual addition for any
"limitation year" beginning before January 1, 1987 shall not
be recomputed to treat all Employee contributions as annual
additions.
(m) Notwithstanding the foregoing, for any
"limitation year" in which the Plan is a Top Heavy Plan, 100
percent shall be substituted for 125 percent in Sections
4.4(k) and 4.4(l) unless the extra minimum allocation is
being provided pursuant to Section 4.3. However, for any
"limitation year" in which the Plan is a Super Top Heavy
Plan, 100 percent shall be substituted for 125 percent in
any event.
(n) Notwithstanding anything contained in this
Section to the contrary, the limitations, adjustments and
other requirements prescribed in this Section shall at all
times comply with the provisions of Code Section 415 and the
Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of the allocation of
Forfeitures, a reasonable error in estimating a
Participant's Compensation, a reasonable error in
determining the amount of elective deferrals (within the
meaning of Code Section 402(g)(3)) that may be made with
respect to any Participant under the limits of Section 4.4
or other facts and circumstances to which Regulation
1.415-6(b)(6) shall be applicable, the "annual additions"
under this Plan would cause the maximum "annual additions"
to be exceeded for any Participant, the Administrator shall
(1) distribute any elective deferrals (within the meaning of
Code Section 402(g)(3)) or return any voluntary Employee
contributions credited for the "limitation year" to the
extent that the return would reduce
the "excess amount" in the Participant's accounts (2) hold
any "excess amount" remaining after the return of any
elective deferrals or voluntary Employee contributions in a
"Section 415 suspense account" (3) allocate and reallocate
the "Section 415 suspense account" in the next "limitation
year" (and succeeding "limitation years" if necessary) to
all Participants in the Plan before any Employer or Employee
contributions which would constitute "annual additions" are
made to the Plan for such "limitation year" (4) reduce
Employer contributions to the Plan for such "limitation
year" by the amount of the "Section 415 suspense account"
allocated and reallocated during such "limitation year."
(b) For purposes of this Article, "excess amount"
for any Participant for a "limitation year" shall mean the
excess, if any, of (1) the "annual additions" which would be
credited to his account under the terms of the Plan without
regard to the limitations of Code Section 415 over (2) the
maximum "annual additions" determined pursuant to Section
4.4.
(c) For purposes of this Section, "Section 415
suspense account" shall mean an unallocated account equal to
the sum of "excess amounts" for all Participants in the Plan
during the "limitation year." The "Section 415 suspense
account" shall not share in any earnings or losses of the
Trust Fund.
(d) The Plan may not distribute "excess amounts,"
other than voluntary Employee contributions, to Participants
or Former Participants.
4.6 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts
may be transferred from other qualified plans by Employees,
provided that the trust from which such funds are
transferred permits the transfer to be made and the transfer
will not jeopardize the tax exempt status of the Plan or
Trust or create adverse tax consequences for the Employer.
The amounts transferred shall be set up in a separate
account herein referred to as a "Participant's Rollover
Account." Such account shall be fully Vested at all times
and shall not be subject to Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account
shall be held by the Trustee pursuant to the provisions of
this Plan and may not be withdrawn by, or distributed to the
Participant, in whole or in part, except as provided in
paragraphs (c) and (d) of this Section.
(c) Except as permitted by Regulations (including
Regulation 1.411(d)-4), amounts attributable to elective
contributions (as defined in Regulation 1.401(k)-1(g)(3)),
including amounts treated as elective contributions, which
are transferred from another qualified plan in a
plan-to-plan transfer shall be subject to the distribution
limitations provided for in Regulation 1.401(k)-1(d).
(d) At Normal Retirement Date, or such other date
when the Participant or his Beneficiary shall be entitled to
receive benefits, the fair market value of the Participant's
Rollover Account shall be used to provide additional
benefits to the Participant or his Beneficiary. Any
distributions of amounts held in a Participant's Rollover
Account shall be made in a manner which is consistent with
and satisfies the provisions of Section 7.5, including, but
not limited to, all notice and consent requirements of Code
Section 411(a)(11) and the Regulations thereunder.
Furthermore, such amounts shall be considered as part of a
Participant's benefit in determining whether an involuntary
cash-out of benefits without Participant consent may be
made.
(e) The Administrator may direct that employee
transfers made after a valuation date be segregated into a
separate account for each Participant in a federally insured
savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other
short term debt security acceptable to the Trustee until
such time as the allocations pursuant to this Plan have been
made, at which time they may remain segregated or be
invested as part of the general Trust Fund, to be determined
by the Administrator.
(f) For purposes of this Section, the term
"qualified plan" shall mean any tax qualified plan under
Code Section 401(a). The term "amounts transferred from
other qualified plans" shall mean: (i) amounts transferred
to this Plan directly from another qualified plan; (ii)
distributions from another qualified plan which are eligible
rollover distributions and which are either transferred by
the Employee to this Plan within sixty (60) days following
his receipt thereof or are transferred pursuant to a direct
rollover; (iii) amounts transferred to this Plan from a
conduit individual retirement account provided that the
conduit individual retirement account has no assets other
than assets which (A) were previously distributed to the
Employee by another qualified plan as a lump-sum
distribution (B) were eligible for tax-free rollover to a
qualified plan and (C) were deposited in such conduit
individual retirement account within sixty (60) days of
receipt thereof and other than earnings on said assets; and
(iv) amounts distributed to the Employee from a conduit
individual retirement account meeting the requirements of
clause (iii) above, and transferred by the Employee to this
Plan within sixty (60) days of his receipt thereof from such
conduit individual retirement account.
(g) Prior to accepting any transfers to which this
Section applies, the Administrator may require the Employee
to establish that the amounts to be transferred to this Plan
meet the requirements of this Section and may also require
the Employee to provide an opinion of counsel satisfactory
to the Employer that the amounts to be transferred meet the
requirements of this Section.
(h) This Plan shall not accept any direct or
indirect transfers (as that term is defined and interpreted
under Code Section 401(a)(11) and the Regulations
thereunder) from a defined benefit plan, money purchase plan
(including a target benefit plan), stock bonus or profit
sharing plan which would otherwise have provided for a life
annuity form of payment to the Participant.
(i) Notwithstanding anything herein to the
contrary, a transfer directly to this Plan from another
qualified plan (or a transaction having the effect of such a
transfer) shall only be permitted if it will not result in
the elimination or reduction of any "Section 411(d)(6)
protected benefit" as described in Section 9.1.
4.7 DIRECTED INVESTMENT ACCOUNT
(a) Each "Qualified Participant" may elect within
ninety (90) days after the close of each Plan Year during
the "Qualified Election Period" to direct the Trustee in
writing as to the distribution in cash and/or Company Stock
of 25 percent of the total number of shares of Company Stock
acquired by or contributed to the Plan that have ever been
allocated to such "Qualified Participant's" Company Stock
Account (reduced by the number of shares of Company Stock
previously distributed in cash and/or Company Stock pursuant
to a prior election). In the case of the election year in
which the Participant can make his last election, the
preceding sentence shall be applied by substituting "50
percent" for "25 percent". If the "Qualified Participant"
elects to direct the Trustee as to the distribution of his
Company Stock Account, such direction shall be effective no
later than 180 days after the close of the Plan Year to
which such direction applies.
Notwithstanding the above, if the fair
market value (determined pursuant to Section 6.1 at the Plan
valuation date immediately preceding the first day on which
a "Qualified Participant" is eligible to make an election)
of Company Stock acquired by or contributed to the Plan and
allocated to a "Qualified Participant's" Company Stock
Account is $500 or less, then such Company Stock shall not
be subject to this paragraph. For purposes of determining
whether the fair market value exceeds $500, Company Stock
held in accounts of all employee stock ownership plans (as
defined in Code Section 4975(e)(7)) and tax credit employee
stock ownership plans (as defined in Code Section 409(a))
maintained by the Employer or any Affiliated Employer shall
be considered as held by the Plan.
(b) For the purposes of this Section the following
definitions shall apply:
(1) "Qualified Participant" means any Participant
or Former Participant who has attained age 55. (2)
"Qualified Election Period" means the six (6) Plan
Year period beginning with the later of (i) the
first Plan Year in which the Participant first
became a "Qualified Participant", or (ii) the first
Plan Year beginning after December 31, 1986.
ARTICLE V
FUNDING AND INVESTMENT POLICY
5.1 INVESTMENT POLICY
(a) The Plan is designed to invest primarily in
Company Stock.
(b) With due regard to subparagraph (a) above, the
Administrator may also direct the Trustee to invest funds
under the Plan in other property described in the Trust or
in life insurance policies to the extent permitted by
subparagraph (c) below, or the Trustee may hold such funds
in cash or cash equivalents.
(c) With due regard to subparagraph (a) above, the
Administrator may also direct the Trustee to invest funds
under the Plan in insurance policies on the life of any
"keyman" Employee. The proceeds of a "keyman" insurance
policy may not be used for the repayment of any indebtedness
owed by the Plan which is secured by Company Stock. In the
event any "keyman" insurance is purchased by the Trustee,
the premiums paid thereon during any Plan Year, net of any
policy dividends and increases in cash surrender values,
shall be treated as the cost of Plan investment and any
death benefit or cash surrender value received shall be
treated as proceeds from an investment of the Plan.
(d) The Plan may not obligate itself to acquire
Company Stock from a particular holder thereof at an
indefinite time determined upon the happening of an event
such as the death of the holder.
(e) The Plan may not obligate itself to acquire
Company Stock under a put option binding upon the Plan.
However, at the time a put option is exercised, the Plan may
be given an option to assume the rights and obligations of
the Employer under a put option binding upon the Employer.
(f) All purchases of Company Stock shall be made at
a price which, in the judgment of the Administrator, does
not exceed the fair market value thereof. All sales of
Company Stock shall be made at a price which, in the
judgment of the Administrator, is not less than the fair
market value thereof. The valuation rules set forth in
Article VI shall be applicable.
5.2 TRANSACTIONS INVOLVING COMPANY STOCK
(a) No portion of the Trust Fund attributable to
(or allocable in lieu of) Company Stock acquired by the Plan
in a sale to which Code Section 1042 applies may accrue or
be allocated directly or indirectly under any plan
maintained by the Employer meeting the requirements of Code
Section 401(a):
(1) during the "Nonallocation Period", for the
benefit of
(i) any taxpayer who makes an election
under Code Section 1042(a) with respect to
Company Stock,
(ii) any individual who is related to the
taxpayer (within the meaning of Code
Section 267(b)), or
(2) for the benefit of any other person who owns
(after application of Code Section 318(a) applied
without regard to the employee trust exception in
Code Section 318(a)(2)(B)(i)) more than 25 percent
of
(i) any class of outstanding stock of the
Employer or Affiliated Employer which
issued such Company Stock, or
(ii) the total value of any class of
outstanding stock of the Employer or
Affiliated Employer.
(b) Except, however, subparagraph (a)(1)(ii) above
shall not apply to lineal descendants of the taxpayer,
provided that the aggregate amount allocated to the benefit
of all such lineal descendants during the "Nonallocation
Period" does not exceed more than five (5) percent of the
Company Stock (or amounts allocated in lieu thereof) held by
the Plan which are attributable to a sale to the Plan by any
person related to such descendants (within the meaning of
Code Section 267(c)(4)) in a transaction to which Code
Section 1042 is applied.
(c) A person shall be treated as failing to meet
the stock ownership limitation under paragraph (a)(2) above
if such person fails such limitation:
(1) at any time during the one (1) year period
ending on the date of sale of Company Stock to the
Plan, or
(2) on the date as of which Company Stock is
allocated to Participants in the Plan.
(d) For purposes of this Section, "Nonallocation
Period" means the period beginning on the date of the sale
of the Company Stock and ending on the date which is ten
(10) years after the date of sale.
ARTICLE VI
VALUATIONS
6.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each
Anniversary Date, and at such other date or dates deemed necessary by the
Administrator, herein called "valuation date," to determine the net worth of the
assets comprising the Trust Fund as it exists on the "valuation date." In
determining such net worth, the Trustee shall value the assets comprising the
Trust Fund at their fair market value as of the "valuation date" and shall
deduct all expenses for which the Trustee has not yet obtained reimbursement
from the Employer or the Trust Fund.
6.2 METHOD OF VALUATION
Valuations must be made in good faith and based on all
relevant factors for determining the fair market value of securities. In the
case of a transaction between a Plan and a disqualified person, value must be
determined as of the date of the transaction. For all other Plan purposes, value
must be determined as of the most recent "valuation date" under the Plan. An
independent appraisal will not in itself be a good faith determination of value
in the case of a transaction between the Plan and a disqualified person.
However, in other cases, a determination of fair market value based on at least
an annual appraisal independently arrived at by a person who customarily makes
such appraisals and who is independent of any party to the transaction will be
deemed to be a good faith determination of value. Company Stock not readily
tradeable on an established securities market shall be valued by an independent
appraiser meeting requirements similar to the requirements of the Regulations
prescribed under Code Section 170(a)(1).
ARTICLE VII
DETERMINATION AND DISTRIBUTION OF BENEFITS
7.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the
Employer and retire for the purposes hereof on his Normal Retirement Date or
Early Retirement Date. However, a Participant may postpone the termination of
his employment with the Employer to a later date, in which event the
participation of such Participant in the Plan, including the right to receive
allocations pursuant to Section 4.3, shall continue until his Late Retirement
Date. Upon a Participant's Retirement Date or attainment of his Normal
Retirement Date without termination of employment with the Employer, or as soon
thereafter as is practicable, the Trustee shall distribute all amounts credited
to such Participant's Account in accordance with Sections 7.5 and 7.6. 7.2
DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his
Retirement Date or other termination of his employment, all
amounts credited to such Participant's Account shall become
fully Vested. If elected, distribution of the Participant's
Account shall commence not later than one (1) year after the
close of the Plan Year in which such Participant's death
occurs. The Administrator shall direct the Trustee, in
accordance with the provisions of Sections 7.5 and 7.6, to
distribute the value of the deceased Participant's accounts
to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance with
the provisions of Sections 7.5 and 7.6, to distribute any
remaining Vested amounts credited to the accounts of a
deceased Former Participant to such Former Participant's
Beneficiary.
(c) Any security interest held by the Plan by
reason of an outstanding loan to the Participant or Former
Participant shall be taken into account in determining the
amount of the death benefit.
(d) The Administrator may require such proper proof
of death and such evidence of the right of any person to
receive payment of the value of the account of a deceased
Participant or Former Participant as the Administrator may
deem desirable. The Administrator's determination of death
and of the right of any person to receive payment shall be
conclusive.
(e) The Beneficiary of the death benefit payable
pursuant to this Section shall be the Participant's spouse.
Except, however, the Participant may designate a Beneficiary
other than his spouse if:
(1) the spouse has waived the right to be the
Participant's Beneficiary, or
(2) the Participant and his spouse have validly
waived the Pre-Retirement Survivor Annuity and the
spouse has waived his or her right to be the
Participant's Beneficiary, or
(3) the Participant is legally separated or has
been abandoned (within the meaning of local law)
and the Participant has a court order to such
effect (and there is no "qualified domestic
relations order" as defined in Code Section 414(p)
which provides otherwise), or
(4) the Participant has no spouse, or
(5) the spouse cannot be located.
In such event, the designation of a
Beneficiary shall be made on a form satisfactory to the
Administrator. A Participant may at any time revoke his
designation of a Beneficiary or change his Beneficiary by
filing written notice of such revocation or change with the
Administrator. However, the Participant's spouse must again
consent in writing to any change in Beneficiary unless the
original consent acknowledged that the spouse had the right
to limit consent only to a specific Beneficiary and that the
spouse voluntarily elected to relinquish such right. In the
event no valid designation of Beneficiary exists at the time
of the Participant's death, the death benefit shall be
payable to his estate.
(f) Any consent by the Participant's spouse to
waive any rights to the death benefit must be in writing,
must acknowledge the effect of such waiver, and be witnessed
by a Plan representative or a notary public. Further, the
spouse's consent must be irrevocable and must acknowledge
the specific nonspouse Beneficiary.
7.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent
Disability prior to his Retirement Date or other termination of his employment,
all amounts credited to such Participant's Account shall become fully Vested. In
the event of a Participant's Total and Permanent Disability, the Trustee, in
accordance with the provisions of Sections 7.5 and 7.6, shall distribute to such
Participant all amounts credited to such Participant's Account as though he had
retired. If such Participant elects, distribution shall commence not later than
one (1) year after the close of the Plan Year in which Total and Permanent
Disability occurs.
7.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date coinciding
with or subsequent to the termination of a Participant's
employment for any reason other than death, Total and
Permanent Disability or retirement, the Administrator may
direct the Trustee to segregate the amount of the Vested
portion of such Terminated Participant's Account and invest
the aggregate amount thereof in a separate, federally
insured savings account, certificate of deposit, common or
collective trust fund of a bank or a deferred annuity. In
the event the Vested portion of a Participant's Account is
not segregated, the amount shall remain in a separate
account for the Terminated Participant and share in
allocations pursuant to Section 4.3 until such time as a
distribution is made to the Terminated Participant.
If a portion of a Participant's Account is
forfeited, Company Stock allocated to the Participant's
Company Stock Account must be forfeited only after the
Participant's Other Investments Account has been depleted.
If interest in more than one class of Company Stock has been
allocated to a Participant's Account, the Participant must
be treated as forfeiting the same proportion of each such
class.
Distribution of the funds due to a
Terminated Participant shall be made on the occurrence of an
event which would result in the distribution had the
Terminated Participant remained in the employ of the
Employer (upon the Participant's death, Total and Permanent
Disability, Early or Normal Retirement). However, at the
election of the Participant, the Administrator shall direct
the Trustee to cause the entire Vested portion of the
Terminated Participant's Account to be payable to such
Terminated Participant on or after the Anniversary Date
coinciding with or next following termination of employment.
Any distribution under this paragraph shall be made in a
manner which is consistent with and satisfies the provisions
of Sections 7.5 and 7.6, including, but not limited to, all
notice and consent requirements of Code Section 411(a)(11)
and 417 and the Regulations thereunder.
If the value of a Terminated Participant's
Vested benefit derived from Employer and Employee
contributions does not exceed $3,500 and has never exceeded
$3,500 at the time of any prior distribution, the
Administrator shall direct the Trustee to cause the entire
Vested benefit to be paid to such Participant in a single
lump sum.
For purposes of this Section 7.4, if the
value of a Terminated Participant's Vested benefit is zero,
the Terminated Participant shall be deemed to have received
a distribution of such Vested benefit.
(b) The Vested portion of any Participant's Account
shall be a percentage of the total amount credited to his
Participant's Account determined on the basis of the
Participant's number of Years of Service according to the
following schedule:
Vesting Schedule
Years of Service Percentage
Less than 3
3 20 %
4 40 %
5 60 %
6 80 %
7 100 %
(c) Notwithstanding the vesting schedule provided
for in paragraph (b) above, for any Top Heavy Plan Year, the
Vested portion of the Participant's Account of any
Participant who has an Hour of Service after the
Plan becomes top heavy shall be a percentage of the total
amount credited to his Participant's Account determined on
the basis of the Participant's number of Years of Service
according to the following schedule:
Vesting Schedule
Years of Service Percentage
Less than 2
2 20 %
3 40 %
4 60 %
5 80 %
6 100 %
If in any subsequent Plan Year, the Plan
ceases to be a Top Heavy Plan, the Administrator shall
revert to the vesting schedule in effect before this Plan
became a Top Heavy Plan. Any such reversion shall be treated
as a Plan amendment pursuant to the terms of the Plan.
(d) Notwithstanding the vesting schedule above, the
Vested percentage of a Participant's Account shall not be
less than the Vested percentage attained as of the later of
the effective date or adoption date of this amendment and
restatement.
(e) Notwithstanding the vesting schedule above,
upon the complete discontinuance of the Employer's
contributions to the Plan or upon any full or partial
termination of the Plan, all amounts credited to the account
of any affected Participant shall become 100% Vested and
shall not thereafter be subject to Forfeiture.
(f) The computation of a Participant's
nonforfeitable percentage of his interest in the Plan shall
not be reduced as the result of any direct or indirect
amendment to this Plan. For this purpose, the Plan shall be
treated as having been amended if the Plan provides for an
automatic change in vesting due to a change in top heavy
status. In the event that the Plan is amended to change or
modify any vesting schedule, a Participant with at least
three (3) Years of Service as of the expiration date of the
election period may elect to have his nonforfeitable
percentage computed under the Plan without regard to such
amendment. If a Participant fails to make such election,
then such Participant shall be subject to the new vesting
schedule. The Participant's election period shall commence
on the adoption date of the amendment and shall end 60 days
after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written
notice of the amendment from the Employer or
Administrator.
(g)(1) If any Former Participant shall be
reemployed by the Employer before a 1-Year Break in Service
occurs, he shall continue to participate in the Plan in the
same manner as if such termination had not occurred.
(2) If any Former Participant shall be reemployed
by the Employer before five (5) consecutive 1-Year
Breaks in Service, and such Former Participant had
received, or was deemed to have received, a
distribution of his entire Vested interest prior to
his reemployment, his forfeited account shall be
reinstated only if he repays the full amount
distributed to him before the earlier of five (5)
years after the first date on which the Participant
is subsequently reemployed by the Employer or the
close of the first period of five (5) consecutive
1-Year Breaks in Service commencing after the
distribution, or in the event of a deemed
distribution, upon the reemployment of such Former
Participant. In the event the Former Participant
does repay the full amount distributed to him, or
in the event of a deemed distribution, the
undistributed portion of the Participant's Account
must be restored in full, unadjusted by any gains
or losses occurring subsequent to the Anniversary
Date or other valuation date coinciding with or
preceding his termination. The source for such
reinstatement shall first be any Forfeitures
occurring during the year. If such source is
insufficient, then the Employer shall contribute an
amount which is sufficient to restore any such
forfeited Accounts provided, however, that if a
discretionary contribution is made for such year,
such contribution shall first be applied to restore
any such Accounts and the remainder shall be
allocated in accordance with Section 4.3.
(3) If any Former Participant is reemployed after a
1-Year Break in Service has occurred, Years of
Service shall include Years of Service prior to his
1-Year Break in Service subject to the following
rules:
(i) If a Former Participant has a 1-Year
Break in Service, his pre-break and
post-break service shall be used for
computing Years of Service for eligibility
and for vesting purposes only after he has
been employed for one (1) Year of Service
following the date of his reemployment with
the Employer;
(ii) Any Former Participant who under the
Plan does not have a nonforfeitable right
to any interest in the Plan resulting from
Employer contributions shall lose credits
otherwise allowable under (i) above if his
consecutive 1-Year Breaks in Service equal
or exceed the greater of (A) five (5) or
(B) the aggregate number of his pre-break
Years of Service; (iii) After five (5)
consecutive 1-Year Breaks in Service, a
Former Participant's Vested Account balance
attributable to pre-break service shall not
be increased as a result of post-break
service;
(iv) If a Former Participant who has not
had his Years of Service before a 1-Year
Break in Service disregarded pursuant to
(ii) above completes one (1) Year of
Service for eligibility purposes following
his reemployment with the Employer, he
shall participate in the Plan retroactively
from his date of reemployment;
(v) If a Former Participant who has not had
his Years of Service before a 1-Year Break
in Service disregarded pursuant to (ii)
above completes a Year of Service (a 1-Year
Break in Service previously occurred, but
employment had not terminated), he shall
participate in the Plan retroactively from
the first day of the Plan Year during which
he completes one (1) Year of Service.
7.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of
the Participant (or if no election has been made prior to
the Participant's death, by his Beneficiary), shall direct
the Trustee to distribute to a Participant or his
Beneficiary any amount to which he is entitled under the
Plan in one or more of the following methods:
(1) One lump-sum payment;
(2) Payments over a period certain in monthly,
quarterly, semiannual, or annual installments. The
period over which such payment is to be made shall
not extend beyond the earlier of the Participant's
life expectancy (or the life expectancy of the
Participant and his designated Beneficiary) or the
limited distribution period provided for in Section
7.5(b).
(b) Unless the Participant elects in writing a
longer distribution period, distributions to a Participant
or his Beneficiary attributable to Company Stock shall be in
substantially equal monthly, quarterly, semiannual, or
annual installments over a period not longer than five (5)
years. In the case of a Participant with an account balance
attributable to Company Stock in excess of $500,000, the
five (5) year period shall be extended one (1) additional
year (but not more than five (5) additional years) for each
$100,000
or fraction thereof by which such balance exceeds $500,000.
The dollar limits shall be adjusted at the same time and in
the same manner as provided in Code Section 415(d).
(c)(1) Unless otherwise elected as provided in (a)
of this Section, a Participant who is married on the
"annuity starting date" and who does not die before the
"annuity starting date" shall receive the value of all of
his benefits from the pension contributions in the form of a
joint and survivor annuity. The joint and survivor annuity
is an annuity that commences immediately and shall be equal
in value to a single life annuity. Such joint and survivor
benefits following the Participant's death shall continue to
the spouse during the spouse's lifetime at a rate equal to
50% of the rate at which such benefits were payable to the
Participant. This joint and 50% survivor annuity shall be
considered the designated qualified joint and survivor
annuity shall be considered the designated qualified joint
and survivor annuity and automatic form of payment for the
purposes of this Plan. However, the Participant may elect to
receive a smaller annuity benefit with continuation of
payments to the spouse at a rate of seventy-five percent
(75%) or one hundred percent (100%) of the rate payable to a
Participant during his lifetime, which alternative joint and
survivor annuity shall be equal in value to the automatic
joint and 50% survivor annuity. An unmarried Participant
shall receive the value of his benefit in the form of a life
annuity. Such unmarried Participant, however, may elect in
writing to waive the life annuity. The election must comply
with the provisions of this Section as if it were an
election to waive the joint and survivor annuity by a
married Participant, but without the spousal consent
requirements. The Participant may elect to have any annuity
provided for in this Section distributed upon the attainment
of the "earliest retirement age" under the Plan. The
"earliest retirement age" is the earliest date on which,
under the Plan, the Participant could elect to receive
retirement benefits.
(2) Any election to waive the joint and survivor
annuity must be made by the Participant in writing
during the election period and be consented to by
the Participant's spouse. If the spouse is legally
incompetent to give consent, the spouse's legal
guardian, even if such guardian is the Participant,
may give consent. Such election shall designate a
Beneficiary (or a form of benefits) that may not be
changed without spousal consent (unless the consent
of the spouse expressly permits designations by the
Participant without the requirement of further
consent by the spouse). Such spouse's consent shall
be irrevocable and must acknowledge the effect of
such election and be witnessed by a Plan
representative or a notary public. Such consent
shall not be required if it is established to the
satisfaction of the Administrator that the required
consent cannot be obtained because there is no
spouse, the spouse cannot be located, or other
circumstances that may be prescribed by
Regulations. The election
made by the Participant and consented to by his
spouse may be revoked by the Participant in writing
without the consent of the spouse at any time
during the election period. The number of
revocations shall not be limited. Any new election
must comply with the requirements of this
paragraph. A former spouse's waiver shall not be
binding on a new spouse.
(3) The election period to waive the joint and
survivor annuity shall be the 90 day period ending
on the "annuity starting date."
(4) For purposes of this Section, the "annuity
starting date" means the first day of the first
period for which an amount is paid as an annuity,
or, in the case of a benefit not payable in the
form of an annuity, the first day on which all
events have occurred which entitle the Participant
to such benefit.
(5) With regard to the election, the Administrator
shall provide to the Participant no less than 30
days and no more than 90 days before the "annuity
starting date" a written explanation of:
(i) the terms and conditions of the joint
and survivor annuity, and
(ii) the Participant's right to make, and
the effect of, an election to waive the
joint and survivor annuity, and
(iii) the right of the Participant's spouse
to consent to any election to waive the
joint and survivor annuity, and
(iv) the right of the Participant to revoke
such election, and the effect of such
revocation.
(d) The present value of a Participant's joint and
survivor annuity derived from the pension contributions may
not be paid without his written consent if the value
exceeds, or has ever exceeded, $3,500 at the time of any
prior distribution. Further, the spouse of a Participant
must consent in writing to any immediate distribution. If
the value of the Participant's benefit derived from pension
contributions does not exceed $3,500 and has never exceeded
$3,500 at the time of any prior distribution, the
Administrator may immediately distribute such benefit
without such Participant's consent. No distribution may be
made under the preceding sentence after the "annuity
starting date" unless the Participant and his spouse consent
in writing to such distribution. Any written consent
required under this Paragraph must be obtained not more than
90 days before commencement of the distribution and shall be
made in a manner consistent with Section 7.5(c)(2).
(e) Unless otherwise elected as provided in (a) of
this Section, a Vested Participant who dies before the
annuity starting date and who has a surviving spouse shall
have his death benefit from any pension contribution under
this Plan paid to his surviving spouse in the form of a
Pre-Retirement Survivor Annuity. The Participant's spouse
may direct that payment of the Pre-Retirement Survivor
Annuity commence within a reasonable period after the
Participant's death. If the spouse does not so direct
payment of such benefit will commence at the time the
Participant would have attained the later of his Normal
Retirement Age or age 62. However, the spouse may elect a
later commencement date. Any distribution to the
Participant's spouse shall be subject to the rules specified
in Section 7.5(m).
(f) Any election to waive the Pre-Retirement
Survivor Annuity before the Participant's death must be made
by the Participant in writing during the election period and
shall require the spouse's irrevocable consent in the same
manner provided for in Section 7.5(c)(2). Further, the
spouse's consent must acknowledge the specific nonspouse
Beneficiary. Notwithstanding the foregoing, the nonspouse
Beneficiary need not be acknowledged, provided the consent
of the spouse acknowledges that the spouse has the right to
limit consent only to a specific Beneficiary and that the
spouse voluntarily elects to relinquish such right.
(g) The election period to waive the Pre-Retirement
Survivor Annuity shall begin on the first day of the Plan
Year in which the Participant attains age 35 and end on the
date of the Participant's death. An earlier waiver (with
spousal consent) may be made provided a written explanation
of the Pre-Retirement Survivor Annuity is given to the
Participant and such waiver becomes invalid at the beginning
of the Plan Year in which the Participant turns age 35. In
the event a Vested Participant separates from service prior
to the beginning of the election period, the election period
shall begin on the date of such separation from service.
(h) With regard to the election, the Administrator
shall provide each Participant within the applicable period,
with respect to such Participant (and consistent with
Regulations), a written explanation of the Pre-Retirement
Survivor Annuity containing comparable information to that
required pursuant to Section 7.5(c)(5). For the purposes of
this paragraph, the term "applicable period" means, with
respect to a Participant, whichever of the following periods
ends last.
(1) The period beginning with the first day of the
Plan Year in which the Participant attains age 32
and ending with the close of the Plan Year
preceding the Plan Year in which the Participant
attains age 35.
(2) A reasonable period after the individual
becomes a Participant. For this purpose, in the
case of an individual who becomes a Participant
after age 32, the explanation must be provided by
the end of the three-year period beginning with the
first day of the first Plan Year for which the
individual is a Participant;
(3) A reasonable period ending after the Plan no
longer fully subsidized the cost of the
Pre-Retirement Survivor Annuity with respect to the
Participant;
(4) A reasonable period ending after Code Section
401(a)(11) applies to the Participant; or
(5) A reasonable period after separation from
service in the case of a Participant who separates
before attaining age 35. For this purpose, the
Administrator must provide the explanation
beginning one year before the separation from
service and ending one year after such separation.
(i) If the value of the Pre-Retirement Survivor
Annuity from the Participant's pension contributions does
not exceed $3,500 and has never exceeded $3,500 at the time
of any prior distribution, the Administrator shall direct
the immediate distribution of such amount to the
Participant's spouse. No distribution may be made under the
preceding sentence after the annuity starting date unless
the spouse consents in writing. If the value exceeds, or has
ever exceeded, $3,500 at the time of any prior distribution,
an immediate distribution of the entire amount may be made
to the surviving spouse, provided such surviving spouse
consents in writing to such distribution. Any written
consent required under this paragraph must be obtained not
more than 90 days before commencement of the distribution
and shall be made in a manner consistent with Section
7.5(c)(2).
(j) Any distribution to a Participant who has a
benefit which exceeds, or has ever exceeded, $3,500 at the
time of any prior distribution shall require such
Participant's consent if such distribution commences prior
to the later of his Normal Retirement Age or age 62. With
regard to this required consent:
(1) The Participant must be informed of his right
to defer receipt of the distribution. If a
Participant fails to consent, it shall be deemed an
election to defer the commencement of payment of
any benefit. However, any election to defer the
receipt of benefits shall not apply with respect to
distributions which are required under Section
7.5(m).
(2) Notice of the rights specified under this
paragraph shall be provided no less than 30 days
and no more than 90 days before the first day on
which all events have occurred which entitle the
Participant to such benefit.
(3) Written consent of the Participant to the
distribution must not be made before the
Participant receives the notice and must not be
made more than 90 days before the first day on
which all events have occurred which entitle the
Participant to such benefit.
(4) No consent shall be valid if a significant
detriment is imposed under the Plan on any
Participant who does not consent to the
distribution.
If a distribution is one to which Code Sections
401(a)(11) and 417 do not apply, such distribution
may commence less than 30 days after the notice
required under Regulation 1.411(a)-11(c) is given,
provided that: (1) the Administrator clearly
informs the Participant that the Participant has a
right to a period of at least 30 days after
receiving the notice to consider the decision of
whether or not to elect a distribution (and, if
applicable, a particular distribution option), and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
(k) Notwithstanding anything herein to the
contrary, the Administrator, in his sole discretion, may
direct that cash dividends on shares of Company Stock
allocable to Participants' or Former Participants' Company
Stock Accounts be distributed to such Participants or Former
Participants within 90 days after the close of the Plan Year
in which the dividends are paid.
(l) Any part of a Participant's benefit which is
retained in the Plan after the Anniversary Date on which his
participation ends will continue to be treated as a Company
Stock Account or as an Other Investments Account (subject to
Section 7.4(a)) as provided in Article IV. However, neither
account will be credited with any further Employer
contributions or Forfeitures.
(m) Notwithstanding any provision in the Plan to
the contrary, the distribution of a Participant's benefits
shall be made in accordance with the following requirements
and shall otherwise comply with Code Section 401(a)(9) and
the Regulations thereunder (including Regulation
1.401(a)(9)-2), the provisions of which are incorporated
herein by reference:
(1) A Participant's benefits shall be distributed
to him not later than April 1st of the calendar
year following the later of (i) the calendar year
in which the Participant attains age 70 1/2 or (ii)
the
calendar year in which the Participant retires,
provided, however, that this clause (ii) shall not
apply in the case of a Participant who is a "five
(5) percent owner" at any time during the five (5)
Plan Year period ending in the calendar year in
which he attains age 70 1/2 or, in the case of a
Participant who becomes a "five (5) percent owner"
during any subsequent Plan Year, clause (ii) shall
no longer apply and the required beginning date
shall be the April 1st of the calendar year
following the calendar year in which such
subsequent Plan Year ends. Alternatively,
distributions to a Participant must begin no later
than the applicable April 1st as determined under
the preceding sentence and must be made over a
period certain measured by the life expectancy of
the Participant (or the life expectancies of the
Participant and his designated Beneficiary) in
accordance with Regulations. Notwithstanding the
foregoing, clause (ii) above shall not apply to any
Participant unless the Participant had attained age
70 1/2 before January 1, 1988 and was not a "five
(5) percent owner" at any time during the Plan Year
ending with or within the calendar year in which
the Participant attained age 66 1/2 or any
subsequent Plan Year.
(2) Distributions to a Participant and his
Beneficiaries shall only be made in accordance with
the incidental death benefit requirements of Code
Section 401(a)(9)(G) and the Regulations
thereunder.
(n) Notwithstanding any provision in the Plan to
the contrary, distributions upon the death of a Participant
shall be made in accordance with the following requirements
and shall otherwise comply with Code Section 401(a)(9) and
the Regulations thereunder. If it is determined pursuant to
Regulations that the distribution of a Participant's
interest has begun and the Participant dies before his
entire interest has been distributed to him, the remaining
portion of such interest shall be distributed at least as
rapidly as under the method of distribution selected
pursuant to Section 7.5 as of his date of death. If a
Participant dies before he has begun to receive any
distributions of his interest under the Plan or before
distributions are deemed to have begun pursuant to
Regulations, then his death benefit shall be distributed to
his Beneficiaries by December 31st of the calendar year in
which the fifth anniversary of his date of death occurs.
However, the 5-year distribution
requirement of the preceding paragraph shall not apply to
any portion of the deceased Participant's interest which is
payable to or for the benefit of a designated Beneficiary.
In such event, such portion may, at the election of the
Participant (or the Participant's designated Beneficiary),
be distributed over a period not extending beyond the life
expectancy of such designated Beneficiary provided such
distribution begins not later than December 31st of the
calendar year immediately following the calendar year in
which the Participant died. However, in the event the
Participant's spouse (determined as of the date of the
Participant's
death) is his Beneficiary, the requirement that
distributions commence within one year of a Participant's
death shall not apply. In lieu thereof, distributions must
commence on or before the later of: (1) December 31st of the
calendar year immediately following the calendar year in
which the Participant died; or (2) December 31st of the
calendar year in which the Participant would have attained
age 70 1/2. If the surviving spouse dies before
distributions to such spouse begin, then the 5-year
distribution requirement of this Section shall apply as if
the spouse was the Participant.
(o) For purposes of Section 7.5(n), the election by
a designated Beneficiary to be excepted from the 5-year
distribution requirement must be made no later than December
31st of the calendar year following the calendar year of the
Participant's death. Except, however, with respect to a
designated Beneficiary who is the Participant's surviving
spouse, the election must be made by the earlier of: (1)
December 31st of the calendar year immediately following the
calendar year in which the Participant died or, if later,
the calendar year in which the Participant would have
attained age 70 1/2; or (2) December 31st of the calendar
year which contains the fifth anniversary of the date of the
Participant's death. An election by a designated Beneficiary
must be in writing and shall be irrevocable as of the last
day of the election period stated herein. In the absence of
an election by the Participant or a designated Beneficiary,
the 5-year distribution requirement shall apply.
(p) For purposes of this Section, the life
expectancy of a Participant and a Participant's spouse may,
at the election of the Participant or the Participant's
spouse, be redetermined in accordance with Regulations. The
election, once made, shall be irrevocable. If no election is
made by the time distributions must commence, then the life
expectancy of the Participant and the Participant's spouse
shall not be subject to recalculation. Life expectancy and
joint and last survivor expectancy shall be computed using
the return multiples in Tables V and VI of Regulation
1.72-9.
(q) Except as limited by Sections 7.5 and 7.6,
whenever the Trustee is to make a distribution or to
commence a series of payments on or as of an Anniversary
Date, the distribution or series of payments may be made or
begun on such date or as soon thereafter as is practicable.
However, unless a Former Participant elects in writing to
defer the receipt of benefits (such election may not result
in a death benefit that is more than incidental), the
payment of benefits shall begin not later than the 60th day
after the close of the Plan Year in which the latest of the
following events occurs:
(1) the date on which the Participant attains the
earlier of age 65 or the Normal Retirement Age
specified herein;
(2) the 10th anniversary of the year in which the
Participant commenced participation in the Plan; or
(3) the date the Participant terminates his service
with the Employer.
(r) If a distribution is made at a time when a
Participant is not fully Vested in his Participant's Account
(employment has not terminated) and the Participant may
increase the Vested percentage in such account:
(1) a separate account shall be established for the
Participant's interest in the Plan as of the time
of the distribution; and
(2) at any relevant time, the Participant's Vested
portion of the separate account shall be equal to
an amount ("X") determined by the formula:
X equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the
Vested percentage at the relevant time, AB is the
account balance at the relevant time, D is the
amount of distribution, and R is the ratio of the
account balance at the relevant time to the account
balance after distribution.
7.6 HOW PLAN BENEFIT WILL BE DISTRIBUTED
(a) Distribution of a Participant's benefit may be
made in cash or Company Stock or both, provided, however,
that if a Participant or Beneficiary so demands, such
benefit shall be distributed only in the form of Company
Stock. Prior to making a distribution of benefits, the
Administrator shall advise the Participant or his
Beneficiary, in writing, of the right to demand that
benefits be distributed solely in Company Stock.
(b) If a Participant or Beneficiary demands that
benefits be distributed solely in Company Stock,
distribution of a Participant's benefit will be made
entirely in whole shares or other units of Company Stock.
Any balance in a Participant's Other Investments Account
will be applied to acquire for distribution the maximum
number of whole shares or other units of Company Stock at
the then fair market value. Any fractional unit value
unexpended will be distributed in cash. If Company Stock is
not available for purchase by the Trustee, then the Trustee
shall hold such balance until Company Stock is acquired and
then make such distribution, subject to Sections 7.5(q) and
7.5(m).
(c) The Trustee will make distribution from the
Trust only on instructions from the Administrator.
(d) Notwithstanding anything contained herein to
the contrary, if the Employer's charter or by-laws restrict
ownership of substantially all shares of Company Stock to
Employees and the Trust Fund, as described in Code Section
409(h)(2), the Administrator shall distribute a
Participant's Account entirely in cash without granting the
Participant the right to demand distribution in shares of
Company Stock.
(e) Except as otherwise provided herein, Company
Stock distributed by the Trustee may be restricted as to
sale or transfer by the by-laws or articles of incorporation
of the Employer, provided restrictions are applicable to all
Company Stock of the same class. If a Participant is
required to offer the sale of his Company Stock to the
Employer before offering to sell his Company Stock to a
third party, in no event may the Employer pay a price less
than that offered to the distributee by another potential
buyer making a bona fide offer and in no event shall the
Trustee pay a price less than the fair market value of the
Company Stock.
7.7 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then
the Administrator may direct that such distribution be paid to the legal
guardian, or if none, to a parent of such Beneficiary or a responsible adult
with whom the Beneficiary maintains his residence, or to the custodian for such
Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act, if such
is permitted by the laws of the state in which said Beneficiary resides. Such a
payment to the legal guardian, custodian or parent of a minor Beneficiary shall
fully discharge the Trustee, Employer, and Plan from further liability on
account thereof.
7.8 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution
payable to a Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored.
7.9 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the "earliest
retirement age" under the Plan. For the purposes of this Section, "alternate
payee," "qualified domestic relations order" and "earliest retirement age" shall
have the meaning set forth under Code Section 414(p).
ARTICLE VIII
TRUSTEE
8.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of
responsibilities:
(a) Consistent with the "funding policy and method"
determined by the Employer, to invest, manage, and control
the Plan assets subject, however, to the direction of an
Investment Manager if the Trustee should appoint such
manager as to all or a portion of the assets of the Plan;
(b) At the direction of the Administrator, to pay
benefits required under the Plan to be paid to Participants,
or, in the event of their death, to their Beneficiaries;
(c) To maintain records of receipts and
disbursements and furnish to the Employer and/or
Administrator for each Plan Year a written annual report per
Section 8.8; and
(d) If there shall be more than one Trustee, they
shall act by a majority of their number, but may authorize
one or more of them to sign papers on their behalf.
8.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust
Fund to keep the Trust Fund invested without distinction
between principal and income and in such securities or
property, real or personal, wherever situated, as the
Trustee shall deem advisable, including, but not limited to,
stocks, common or preferred, bonds and other evidences of
indebtedness or ownership, and real estate or any interest
therein. The Trustee shall at all times in making
investments of the Trust Fund consider, among other factors,
the short and long-term financial needs of the Plan on the
basis of information furnished by the Employer. In making
such investments, the Trustee shall not be restricted to
securities or other property of the character expressly
authorized by the applicable law for trust investments;
however, the Trustee shall give due regard to any
limitations imposed by the Code or the Act so that at all
times the Plan may qualify as an Employee Stock Ownership
Plan and Trust.
(b) The Trustee may employ a bank or trust company
pursuant to the terms of its usual and customary bank agency
agreement, under which the duties of such bank or trust
company shall be of a custodial, clerical and record-keeping
nature.
(c) The Trustee may from time to time with the
consent of the Employer transfer to a common, collective, or
pooled trust fund maintained by any corporate Trustee
hereunder, all or such part of the Trust Fund as the Trustee
may deem advisable, and such part or all of the Trust Fund
so transferred shall be subject to all the terms and
provisions of the common, collective, or pooled trust fund
which contemplate the commingling for investment purposes of
such trust assets with trust assets of other trusts. The
Trustee may, from time to time with the consent of the
Employer, withdraw from such common, collective, or pooled
trust fund all or such part of the Trust Fund as the Trustee
may deem advisable.
(d) In the event the Trustee invests any part of
the Trust Fund, pursuant to the directions of the
Administrator, in any shares of stock issued by the
Employer, and the Administrator thereafter directs the
Trustee to dispose of such investment, or any part thereof,
under circumstances which, in the opinion of counsel for the
Trustee, require registration of the securities under the
Securities Act of 1933 and/or qualification of the
securities under the Blue Sky laws of any state or states,
then the Employer at its own expense, will take or cause to
be taken any and all such action as may be necessary or
appropriate to effect such registration and/or
qualification.
8.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under
common law, statutory authority, including the Act, and other provisions of the
Plan, shall have the following powers and authorities, to be exercised in the
Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities
or other property and to retain the same. In conjunction
with the purchase of securities, margin accounts may be
opened and maintained;
(b) To sell, exchange, convey, transfer, grant
options to purchase, or otherwise dispose of any securities
or other property held by the Trustee, by private contract
or at public auction. No person dealing with the Trustee
shall be bound to see to the application of the purchase
money or to inquire into the validity, expediency, or
propriety of any such sale or other disposition, with or
without advertisement;
(c) To vote upon any stocks, bonds, or other
securities; to give general or special proxies or powers of
attorney with or without power of substitution; to exercise
any conversion privileges, subscription rights or other
options, and to make any payments incidental thereto; to
oppose, or to consent to, or otherwise participate in,
corporate reorganizations or other changes affecting
corporate securities, and to delegate discretionary powers,
and to pay any assessments or charges in connection
therewith; and generally to exercise any of the powers of an
owner with respect to stocks, bonds, securities, or other
property;
(d) To cause any securities or other property to be
registered in the Trustee's own name or in the name of one
or more of the Trustee's nominees, and to hold any
investments in bearer form, but the books and records of the
Trustee shall at all times show that all such investments
are part of the Trust Fund;
(e) To borrow or raise money for the purposes of
the Plan in such amount, and upon such terms and conditions,
as the Trustee shall deem advisable; and for any sum so
borrowed, to issue a promissory note as Trustee, and to
secure the repayment thereof by pledging all, or any part,
of the Trust Fund; and no person lending money to the
Trustee shall be bound to see to the application of the
money lent or to inquire into the validity, expediency, or
propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash
or cash balances as the Trustee may, from time to time, deem
to be in the best interests of the Plan, without liability
for interest thereon;
(g) To accept and retain for such time as the
Trustee may deem advisable any securities or other property
received or acquired as Trustee hereunder, whether or not
such securities or other property would normally be
purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any
and all documents of transfer and conveyance and any and all
other instruments that may be necessary or appropriate to
carry out the powers herein granted;
(i) To settle, compromise, or submit to arbitration
any claims, debts, or damages due or owing to or from the
Plan, to commence or defend suits or legal or administrative
proceedings, and to represent the Plan in all suits and
legal and administrative proceedings;
(j) To employ suitable agents and counsel and to
pay their reasonable expenses and compensation, and such
agent or counsel may or may not be agent or counsel for the
Employer;
(k) To apply for and procure from responsible
insurance companies, to be selected by the Administrator, as
an investment of the Trust Fund such annuity, or other
Contracts (on the life of any Participant) as the
Administrator shall deem proper; to exercise, at any time or
from time to time, whatever rights and privileges may be
granted under such annuity, or
other Contracts; to collect, receive, and settle for the
proceeds of all such annuity or other Contracts as and when
entitled to do so under the provisions thereof;
(l) To invest funds of the Trust in time deposits
or savings accounts bearing a reasonable rate of interest in
the Trustee's bank;
(m) To invest in Treasury Bills and other forms of
United States government obligations;
(n) To invest in shares of investment companies
registered under the Investment Company Act of 1940;
(o) To deposit monies in federally insured savings
accounts or certificates of deposit in banks or savings and
loan associations;
(p) To vote Company Stock as provided in Section
8.5;
(q) To consent to or otherwise participate in
reorganizations, recapitalizations, consolidations, mergers
and similar transactions with respect to Company Stock or
any other securities and to pay any assessments or charges
in connection therewith;
(r) To deposit such Company Stock (but only if such
deposit does not violate the provisions of Section 8.5
hereof) or other securities in any voting trust, or with any
protective or like committee, or with a trustee or with
depositories designated thereby;
(s) To sell or exercise any options, subscription
rights and conversion privileges and to make any payments
incidental thereto;
(t) To exercise any of the powers of an owner, with
respect to such Company Stock and other securities or other
property comprising the Trust Fund. The Administrator, with
the Trustee's approval, may authorize the Trustee to act on
any administrative matter or class of matters with respect
to which direction or instruction to the Trustee by the
Administrator is called for hereunder without specific
direction or other instruction from the Administrator;
(u) To sell, purchase and acquire put or call
options if the options are traded on and purchased through a
national securities exchange registered under the Securities
Exchange Act of 1934, as amended, or, if the options are not
traded on a national securities exchange, are guaranteed by
a member firm of the New York Stock Exchange;
(v) To do all such acts and exercise all such
rights and privileges, although not specifically mentioned
herein, as the Trustee may deem necessary to carry out the
purposes of the Plan.
8.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's discretion,
make loans to Participants and Beneficiaries under the
following circumstances: (1) loans shall be made available
to all Participants and Beneficiaries on a reasonably
equivalent basis; (2) loans shall not be made available to
Highly Compensated Employees in an amount greater than the
amount made available to other Participants and
Beneficiaries; (3) loans shall bear a reasonable rate of
interest; (4) loans shall be adequately secured; and (5)
shall provide for repayment over a reasonable period of
time.
(b) Loans made pursuant to this Section (when added
to the outstanding balance of all other loans made by the
Plan to the Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the
highest outstanding balance of loans from the Plan
to the Participant during the one year period
ending on the day before the date on which such
loan is made, over the outstanding balance of loans
from the Plan to the Participant on the date on
which such loan was made, or
(2) one-half (1/2) of the present value of the
non-forfeitable accrued benefit of the Participant
under the Plan.
For purposes of this limit, all plans of
the Employer shall be considered one plan. In addition there
will be a limit of three (3) loans for each Participant in
the aggregate with the Employee's 401(k) Plan.
(c) Loans shall provide for level amortization with
payments to be made not less frequently than quarterly over
a period not to exceed five (5) years. However, loans used
to acquire any dwelling unit which, within a reasonable
time, is to be used (determined at the time the loan is
made) as a principal residence of the Participant shall
provide for periodic repayment over a reasonable period of
time that may exceed five (5) years.
(d) Any loans granted or renewed shall be made
pursuant to a Participant loan program. Such loan program
shall be established in writing and must include, but need
not be limited to, the following:
(1) the identity of the person or positions
authorized to administer the Participant loan
program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or
denied;
(4) limitations, if any, on the types and amounts
of loans offered;
(5) the procedure under the program for determining
a reasonable rate of interest;
(6) the types of collateral which may secure a
Participant loan; and
(7) the events constituting default and the steps
that will be taken to preserve Plan assets.
Such Participant loan program shall be
contained in a separate written document which, when
properly executed, is hereby incorporated by reference and
made a part of the Plan. Furthermore, such Participant loan
program may be modified or amended in writing from time to
time without the necessity of amending this Section.
(e) The following are the circumstances under which
a Participant may request a loan in this Plan:
(1) medical emergencies; or
(2) payment of medical expenses; or
(3) prevent foreclosure on mortgage or eviction
from primary residence; or
(4) educational expenses; or
(5) purchase of primary residence; or
(6) home repairs.
(f) Any loan made pursuant to this Section where
the Vested interest of the Participant relating to any
pension contribution is used to secure such loan shall
require the written consent of the Participant's spouse in a
manner consistent with Section 7.5. Such written consent
must be obtained within the 90 day period prior to the date
the loan is made. However, no spousal consent shall be
required under this paragraph if the total accrued benefit
subject to security is not in excess of $3,500.
8.5 VOTING COMPANY STOCK
The Trustee shall vote all Company Stock held by it as part
of the Plan assets at such time and in such manner as the Administrator shall
direct. Provided, however, that if any agreement entered into by the Trust
provides for voting of any shares of Company Stock pledged as security for any
obligation of the Plan, then such shares of Company Stock shall be voted in
accordance with such agreement. If the Administrator fails or refuses to give
the Trustee timely instructions as to how to vote any Company Stock as to which
the Trustee otherwise has the right to vote, the Trustee shall not exercise its
power to vote such Company Stock and shall consider the Administrator's failure
or refusal to give timely instructions as an exercise of the Administrator's
rights and a directive to the Trustee not to vote said Company Stock. If the
Trustee does not timely receive voting directions from a Participant or
Beneficiary with respect to any Company Stock allocated to that Participant's or
Beneficiary's Company Stock Account, the Trustee shall vote on such Company
Stock.
Notwithstanding the foregoing, if the Employer has a
registration-type class of securities, each Participant or Beneficiary shall be
entitled to direct the Trustee as to the manner in which the Company Stock which
is entitled to vote and which is allocated to the Company Stock Account of such
Participant or Beneficiary is to be voted. If the Employer does not have a
registration-type class of securities, each Participant or Beneficiary in the
Plan shall be entitled to direct the Trustee as to the manner in which voting
rights on shares of Company Stock which are allocated to the Company Stock
Account of such Participant or Beneficiary are to be exercised with respect to
any corporate matter which involves the voting of such shares with respect to
the approval or disapproval of any corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of
substantially all assets of a trade or business, or such similar transaction as
prescribed in Regulations. For purposes of this Section the term
"registration-type class of securities" means: (A) a class of securities
required to be registered under Section 12 of the Securities Exchange Act of
1934; and (B) a class of securities which would be required to be so registered
except for the exemption from registration provided in subsection (g)(2)(H) of
such Section 12.
If the Employer does not have a registration-type class of
securities and the by-laws of the Employer require the Plan to vote an issue in
a manner that reflects a one-man, one-vote philosophy, each Participant or
Beneficiary shall be entitled to cast one vote on an issue and the Trustee shall
vote the shares held by the Plan in proportion to the results of the votes cast
on the issue by the Participants and Beneficiaries.
8.6 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
(a) The Trustee shall make distributions from the
Trust Fund at such times and in such numbers of shares or
other units of Company Stock and amounts of cash to or for
the benefit of the person entitled thereto under the Plan as
the Administrator directs in writing. Any undistributed part
of a Participant's interest in his accounts shall be
retained in the Trust Fund until the Administrator directs
its distribution. Where distribution is directed in
Company Stock, the Trustee shall cause an appropriate
certificate to be issued to the person entitled thereto and
mailed to the address furnished it by the Administrator. Any
portion of a Participant's Account to be distributed in cash
shall be paid by the Trustee mailing its check to the same
person at the same address. If a dispute arises as to who is
entitled to or should receive any benefit or payment, the
Trustee may withhold or cause to be withheld such payment
until the dispute has been resolved.
(b) As directed by the Administrator, the Trustee
shall make payments out of the Trust Fund. Such directions
or instructions need not specify the purpose of the payments
so directed and the Trustee shall not be responsible in any
way respecting the purpose or propriety of such payments
except as mandated by the Act.
(c) In the event that any distribution or payment
directed by the Administrator shall be mailed by the Trustee
to the person specified in such direction at the latest
address of such person filed with the Administrator, and
shall be returned to the Trustee because such person cannot
be located at such address, the Trustee shall promptly
notify the Administrator of such return. Upon the expiration
of sixty (60) days after such notification, such direction
shall become void and unless and until a further direction
by the Administrator is received by the Trustee with respect
to such distribution or payment, the Trustee shall
thereafter continue to administer the Trust as if such
direction had not been made by the Administrator. The
Trustee shall not be obligated to search for or ascertain
the whereabouts of any such person.
8.7 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as
shall from time to time be agreed upon in writing by the Employer and the
Trustee. An individual serving as Trustee who already receives full-time pay
from the Employer shall not receive compensation from the Plan. In addition, the
Trustee shall be reimbursed for any reasonable expenses, including reasonable
counsel fees incurred by it as Trustee. Such compensation and expenses shall be
paid from the Trust Fund unless paid or advanced by the Employer. All taxes of
any kind and all kinds whatsoever that may be levied or assessed under existing
or future laws upon, or in respect of, the Trust Fund or the income thereof,
shall be paid from the Trust Fund.
8.8 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer's contribution for each Plan Year,
the Trustee shall furnish to the Employer and Administrator a written statement
of account with respect to the Plan Year for which such contribution was made
setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust
Fund upon sales or other disposition of the assets;
(c) the increase, or decrease, in the value of the
Trust Fund;
(d) all payments and distributions made from the
Trust Fund; and
(e) such further information as the Trustee and/or
Administrator deems appropriate. The Employer, forthwith
upon its receipt of each such statement of account, shall
acknowledge receipt thereof in writing and advise the
Trustee and/or Administrator of its approval or disapproval
thereof. Failure by the Employer to disapprove any such
statement of account within thirty (30) days after its
receipt thereof shall be deemed an approval thereof. The
approval by the Employer of any statement of account shall
be binding as to all matters embraced therein as between the
Employer and the Trustee to the same extent as if the
account of the Trustee had been settled by judgment or
decree in an action for a judicial settlement of its account
in a court of competent jurisdiction in which the Trustee,
the Employer and all persons having or claiming an interest
in the Plan were parties; provided, however, that nothing
herein contained shall deprive the Trustee of its right to
have its accounts judicially settled if the Trustee so
desires.
8.9 AUDIT
(a) If an audit of the Plan's records shall be
required by the Act and the regulations thereunder for any
Plan Year, the Administrator shall direct the Trustee to
engage on behalf of all Participants an independent
qualified public accountant for that purpose. Such
accountant shall, after an audit of the books and records of
the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the
Plan Year, furnish to the Administrator and the Trustee a
report of his audit setting forth his opinion as to whether
any statements, schedules or lists that are required by Act
Section 103 or the Secretary of Labor to be filed with the
Plan's annual report, are presented fairly in conformity
with generally accepted accounting principles applied
consistently. All auditing and accounting fees shall be an
expense of and may, at the election of the Administrator, be
paid from the Trust Fund.
(b) If some or all of the information necessary to
enable the Administrator to comply with Act Section 103 is
maintained by a bank, insurance company, or similar
institution, regulated and supervised and subject to
periodic examination by a state or federal agency, it shall
transmit and certify the accuracy of that information to the
Administrator as provided in Act Section 103(b) within one
hundred twenty (120) days after the end of the Plan Year or
by such other date as may be prescribed under regulations of
the Secretary of Labor.
8.10 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by
delivering to the Employer, at least thirty (30) days before
its effective date, a written notice of his resignation.
(b) The Employer may remove the Trustee by mailing
by registered or certified mail, addressed to such Trustee
at his last known address, at least thirty (30) days before
its effective date, a written notice of his removal.
(c) Upon the death, resignation, incapacity, or
removal of any Trustee, a successor may be appointed by the
Employer; and such successor, upon accepting such
appointment in writing and delivering same to the Employer,
shall, without further act, become vested with all the
estate, rights, powers, discretions, and duties of his
predecessor with like respect as if he were originally named
as a Trustee herein. Until such a successor is appointed,
the remaining Trustee or Trustees shall have full authority
to act under the terms of the Plan.
(d) The Employer may designate one or more
successors prior to the death, resignation, incapacity, or
removal of a Trustee. In the event a successor is so
designated by the Employer and accepts such designation, the
successor shall, without further act, become vested with all
the estate, rights, powers, discretions, and duties of his
predecessor with the like effect as if he were originally
named as Trustee herein immediately upon the death,
resignation, incapacity, or removal of his predecessor.
(e) Whenever any Trustee hereunder ceases to serve
as such, he shall furnish to the Employer and Administrator
a written statement of account with respect to the portion
of the Plan Year during which he served as Trustee. This
statement shall be either (i) included as part of the annual
statement of account for the Plan Year required under
Section 8.8 or (ii) set forth in a special statement. Any
such special statement of account should be rendered to the
Employer no later than the due date of the annual statement
of account for the Plan Year. The procedures set forth in
Section 8.8 for the approval by the Employer of annual
statements of account shall apply to any special statement
of account rendered hereunder and approval by the Employer
of any such special statement in the manner provided in
Section 8.8 shall have the same effect upon the statement as
the Employer's approval of an annual statement of account.
No successor to the Trustee shall have any duty or
responsibility to investigate the acts or transactions of
any predecessor who has rendered all statements of account
required by Section 8.8 and this subparagraph.
8.11 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan,
the Trustee at the direction of the Administrator shall transfer the Vested
interest, if any, of such Participant in his account to another trust forming
part of a pension, profit sharing or stock bonus plan maintained by such
Participant's new employer and represented by said employer in writing as
meeting the requirements of Code Section 401(a), provided that the trust to
which such transfers are made permits the transfer to be made.
8.12 DIRECT ROLLOVER
(a) 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 Plan Administrator,
to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.
(b) For purposes of this Section the following
definitions shall apply:
(1) An eligible rollover distribution is any
distribution of all or any portion of the balance
to the credit of the distributee, except that an
eligible rollover distribution does not include:
any distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life (or
life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the
distributee and the distributee's designated
beneficiary, or for a specified period of ten years
or more; any distribution to the extent such
distribution is required under Code Section
401(a)(9); and the portion of any distribution that
is not includible in gross income (determined
without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(2) An eligible retirement plan is an individual
retirement account described in Code Section
408(a), an individual retirement annuity described
in Code Section 408(b), an annuity plan described
in Code Section 403(a), or a qualified trust
described in Code Section 401(a), that accepts the
distributee's eligible rollover distribution.
However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account
or individual retirement annuity.
(3) A distributee includes an Employee or former
Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is
the alternate payee under a qualified domestic
relations order, as defined in Code Section 414(p),
are distributees with regard to the interest of the
spouse or former spouse.
(4) A direct rollover is a payment by the plan to
the eligible retirement plan specified by the
distributee.
ARTICLE IX
AMENDMENT, TERMINATION AND MERGERS
9.1 AMENDMENT
(a) The Employer shall have the right at any time
to amend the Plan, subject to the limitations of this
Section. Any such amendment shall be adopted by formal
action of the Employer's board of directors and executed by
an officer authorized to act on behalf of the Employer.
However, any amendment which affects the rights, duties or
responsibilities of the Trustee and Administrator may only
be made with the Trustee's and Administrator's written
consent. Any such amendment shall become effective as
provided therein upon its execution. The Trustee shall not
be required to execute any such amendment unless the Trust
provisions contained herein are a part of the Plan and the
amendment affects the duties of the Trustee hereunder.
(b) No amendment to the Plan shall be effective if
it authorizes or permits any part of the Trust Fund (other
than such part as is required to pay taxes and
administration expenses) to be used for or diverted to any
purpose other than for the exclusive benefit of the
Participants or their Beneficiaries or estates; or causes
any reduction in the amount credited to the account of any
Participant; or causes or permits any portion of the Trust
Fund to revert to or become property of the Employer.
(c) Except as permitted by Regulations, no Plan
amendment or transaction having the effect of a Plan
amendment (such as a merger, plan transfer or similar
transaction) shall be effective to the extent it eliminates
or reduces any "Section 411(d)(6) protected benefit" or adds
or modifies conditions relating to "Section 411(d)(6)
protected benefits" the result of which is a further
restriction on such benefit unless such protected benefits
are preserved with respect to benefits accrued as of the
later of the adoption date or effective date of the
amendment. "Section 411(d)(6) protected benefits" are
benefits described in Code Section 411(d)(6)(A), early
retirement benefits and retirement-type subsidies, and
optional forms of benefit.
9.2 TERMINATION
(a) The Employer shall have the right at any time
to terminate the Plan by delivering to the Trustee and
Administrator written notice of such termination. Upon any
full or partial termination, all amounts credited to the
affected Participants' Accounts shall become 100% Vested as
provided in Section 7.4 and shall not thereafter be subject
to forfeiture, and all unallocated amounts shall be
allocated to the accounts of all Participants in accordance
with the provisions hereof.
(b) Upon the full termination of the Plan, the
Employer shall direct the distribution of the assets of the
Trust Fund to Participants in a manner which is consistent
with and satisfies the provisions of Sections 7.5 and 7.6.
Except as permitted by Regulations, the termination of the
Plan shall not result in the reduction of "Section 411(d)(6)
protected benefits" in accordance with Section 9.1(c).
9.3 MERGER OR CONSOLIDATION
This Plan and Trust may be merged or consolidated with, or
its assets and/or liabilities may be transferred to any other plan and trust
only if the benefits which would be received by a Participant of this Plan, in
the event of a termination of the plan immediately after such transfer, merger
or consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 9.1(c).
ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract
between the Employer and any Participant or to be a consideration or an
inducement for the employment of any Participant or Employee. Nothing contained
in this Plan shall be deemed to give any Participant or Employee the right to be
retained in the service of the Employer or to interfere with the right of the
Employer to discharge any Participant or Employee at any time regardless of the
effect which such discharge shall have upon him as a Participant of this Plan.
10.2 ALIENATION
(a) Subject to the exceptions provided below, no
benefit which shall be payable out of the Trust Fund to any
person (including a Participant or his Beneficiary) shall be
subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, and
any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, or charge the same shall be void; and no
such benefit shall in any manner be liable for, or subject
to, the debts, contracts, liabilities, engagements, or torts
of any such person, nor shall it be subject to attachment or
legal process for or against such person, and the same shall
not be recognized by the Trustee, except to such extent as
may be required by law.
(b) This provision shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan, as a
result of a loan from the Plan. At the time a distribution
is to be made to or for a Participant's or Beneficiary's
benefit, such proportion of the amount distributed as shall
equal such loan indebtedness shall be paid by the Trustee to
the Trustee or the Administrator, at the direction of the
Administrator, to apply against or discharge such loan
indebtedness. Prior to making a payment, however, the
Participant or Beneficiary must be given written notice by
the Administrator that such loan indebtedness is to be so
paid in whole or part from his Participant's Account. If the
Participant or Beneficiary does not agree that the loan
indebtedness is a valid claim against his Vested
Participant's Account, he shall be entitled to a review of
the validity of the claim in accordance with procedures
provided in Sections 2.12 and 2.13.
(c) This provision shall not apply to a "qualified
domestic relations order" defined in Code Section 414(p),
and those other domestic relations orders permitted to be so
treated by the Administrator under the provisions of the
Retirement Equity Act of 1984. The Administrator shall
establish a written procedure to determine the qualified
status of domestic relations orders and to administer
distributions under such qualified orders. Further, to the
extent provided under a "qualified domestic relations
order," a former spouse of a Participant shall be treated as
the spouse or surviving spouse for all purposes under the
Plan.
10.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced
according to the Act and the laws of the State of West Virginia, other than its
laws respecting choice of law, to the extent not preempted by the Act.
10.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine,
feminine or neuter gender, they shall be construed as though they were also used
in another gender in all cases where they would so apply, and whenever any words
are used herein in the singular or plural form, they shall be construed as
though they were also used in the other form in all cases where they would so
apply.
10.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which the Trustee or
the Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee or Administrator, they shall be entitled to be
reimbursed from the Trust Fund for any and all costs, attorney's fees, and other
expenses pertaining thereto incurred by them for which they shall have become
liable.
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise
specifically permitted by law, it shall be impossible by
operation of the Plan or of the Trust, by termination of
either, by power of revocation or amendment, by the
happening of any contingency, by collateral arrangement or
by any other means, for any part of the corpus or income of
any trust fund maintained pursuant to the Plan or any funds
contributed thereto to be used for, or diverted to, purposes
other than the exclusive benefit of Participants, Retired
Participants, or their Beneficiaries.
(b) In the event the Employer shall make an
excessive contribution under a mistake of fact pursuant to
Act Section 403(c)(2)(A), the Employer may demand repayment
of such excessive contribution at any time within one (1)
year following the time of payment and the Trustees shall
return such amount to the Employer within the one (1) year
period. Earnings of the Plan attributable to the excess
contributions may not be returned to the Employer but any
losses attributable thereto must reduce the amount so
returned.
10.7 BONDING
Every Fiduciary, except a bank or an insurance company,
unless exempted by the Act and regulations thereunder, shall be bonded in an
amount not less than 10% of the amount of the funds such Fiduciary handles;
provided, however, that the minimum bond shall be $1,000 and the maximum bond,
$500,000. The amount of funds handled shall be determined at the beginning of
each Plan Year by the amount of funds handled by such person, group, or class to
be covered and their predecessors, if any, during the preceding Plan Year, or if
there is no preceding Plan Year, then by the amount of the funds to be handled
during the then current year. The bond shall provide protection to the Plan
against any loss by reason of acts of fraud or dishonesty by the Fiduciary alone
or in connivance with others. The surety shall be a corporate surety company (as
such term is used in Act Section 412(a)(2)), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of and may, at the election
of the Administrator, be paid from the Trust Fund or by the Employer.
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors,
shall be responsible for the validity of any Contract issued hereunder or for
the failure on the part of the insurer to make payments provided by any such
Contract, or for the action of any person which may delay payment or render a
Contract null and void or unenforceable in whole or in part.
10.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not
have any responsibility for the validity of this Plan or for the tax or legal
aspects of this Plan. The insurer shall be protected and held harmless in acting
in accordance with any written direction of the Trustee, and shall have no duty
to see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the insurer.
10.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such Participant or
Beneficiary in accordance with the provisions of the Plan, shall, to the extent
thereof, be in full satisfaction of all claims hereunder against the Trustee and
the Employer, either of whom may require such Participant, legal representative,
Beneficiary, guardian or committee, as a condition precedent to such payment, to
execute a receipt and release thereof in such form as shall be determined by the
Trustee or Employer.
10.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is
permitted or required to do or perform any act or matter or thing, it shall be
done and performed by a person duly authorized by its legally constituted
authority.
10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer,
(2) the Administrator and (3) the Trustee. The named Fiduciaries shall have only
those specific powers, duties, responsibilities, and obligations as are
specifically given them under the Plan. In general, the Employer shall have the
sole responsibility for making the contributions provided for under Section 4.1;
and shall have the sole authority to appoint and remove the Trustee and the
Administrator; to formulate the Plan's "funding policy and method"; and to amend
or terminate, in whole or in part, the Plan. The Administrator shall have the
sole responsibility for the administration of the Plan, which responsibility is
specifically described
in the Plan. The Trustee shall have the sole responsibility of management of the
assets held under the Trust, except those assets, the management of which has
been assigned to an Investment Manager, who shall be solely responsible for the
management of the assets assigned to it, all as specifically provided in the
Plan. Each named Fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the provisions of
the Plan, authorizing or providing for such direction, information or action.
Furthermore, each named Fiduciary may rely upon any such direction, information
or action of another named Fiduciary as being proper under the Plan, and is not
required under the Plan to inquire into the propriety of any such direction,
information or action. It is intended under the Plan that each named Fiduciary
shall be responsible for the proper exercise of its own powers, duties,
responsibilities and obligations under the Plan. No named Fiduciary shall
guarantee the Trust Fund in any manner against investment loss or depreciation
in asset value. Any person or group may serve in more than one Fiduciary
capacity. In the furtherance of their responsibilities hereunder, the "named
Fiduciaries" shall be empowered to interpret the Plan and Trust and to resolve
ambiguities, inconsistencies and omissions, which findings shall be binding,
final and conclusive.
10.13 HEADINGS
The headings and subheadings of this Plan have been inserted
for convenience of reference and are to be ignored in any construction of the
provisions hereof.
10.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the
contrary, contributions to this Plan are conditioned upon
the initial qualification of the Plan under Code Section
401. If the Plan receives an adverse determination with
respect to its initial qualification, then the Plan may
return such contributions to the Employer within one year
after such determination, provided the application for the
determination is made by the time prescribed by law for
filing the Employer's return for the taxable year in which
the Plan was adopted, or such later date as the Secretary of
the Treasury may prescribe.
(b) Notwithstanding any provisions to the contrary,
except Sections 3.6, 3.7, and 4.1(d), any contribution by
the Employer to the Trust Fund is conditioned upon the
deductibility of the contribution by the Employer under the
Code and, to the extent any such deduction is disallowed,
the Employer may, within one (1) year following the
disallowance of the deduction, demand repayment of such
disallowed contribution and the Trustee shall return such
contribution within one (1) year following the disallowance.
Earnings of the Plan attributable to the excess contribution
may not be returned to the Employer, but any losses
attributable thereto must reduce the amount so returned.
10.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied
in a uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
10.16 WAIVER OF FUNDING
(a) In the event that the minimum funding
requirement for a particular Plan Year has been waived in
whole or in part, then, an Adjusted Account Balance shall be
established for each Participant which shall reflect the
Account balance the Participant would have had, had the
waived amount been contributed. The Adjusted Account Balance
shall remain in effect until such time as the value of the
Participant's Account equals the value of the Participant's
Adjusted Account Balance:
(1) The excess of the value of each Participant's
Adjusted Account Balance over the value of the
Participant's Account balance will be credited with
earnings equal to 150 percent of the Federal
mid-term rate (as in effect under Code Section 1274
for the first month of such Plan Year).
(2) The waiver payment to be made by the Employer
in the year after the waiver is granted shall at
least equal the amount necessary to amortize over 5
years, at the appropriate interest rate, the excess
of the sum of the Adjusted Account Balances over
the total value of the Trust Fund attributable to
Employer contributions. In the next year, the
excess for such subsequent year, if any, is
amortized over 4 years. In each succeeding year the
amortization period is reduced by one year. The
Employer may, however, make such larger payments at
any time as the Employer shall deem appropriate.
(3) An unallocated Waiver Suspense Account shall be
created, to which shall be made all payments
designed to reduce the waived deficiency. If at the
time of a distribution, the nonforfeitable portion
of
a Participant's Adjusted Account Balance exceeds
that Participant's actual Account balance, that
Participant will receive the larger amount to the
extent that there are then funds in the unallocated
Waiver Suspense Account to cover the excess. If at
any time, a Participant may not be able to receive
a total distribution of the entire nonforfeitable
portion of his Adjusted Account Balance, such
Participant would receive subsequent distributions
derived from future waiver payments.
(b) When the total value of the Trust Fund equals
the sum of the Adjusted Account Balances, the Waiver
Suspense Account shall be allocated to the affected
Participants so that each Participant's actual Account
balance equals that Participant's Adjusted Account Balance.
10.17 SECURITIES AND EXCHANGE COMMISSION APPROVAL
The Employer may request an interpretative letter from the
Securities and Exchange Commission stating that the transfers of Company Stock
contemplated hereunder do not involve transactions requiring a registration of
such Company Stock under the Securities Act of 1933. In the event that a
favorable interpretative letter is not obtained, the Employer reserves the right
to amend the Plan and Trust retroactively to their Effective Dates in order to
obtain a favorable interpretative letter or to terminate the Plan.
ARTICLE XI
PARTICIPATING EMPLOYERS
11.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the
consent of the Employer and Trustee, any other corporation or entity, whether an
affiliate or subsidiary or not, may adopt this Plan and all of the provisions
hereof, and participate herein and be known as a Participating Employer, by a
properly executed document evidencing said intent and will of such Participating
Employer.
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be
required to use the same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to,
commingle, hold and invest as one Trust Fund all
contributions made by Participating Employers, as well as
all increments thereof. However, the assets of the Plan
shall, on an ongoing basis, be available to pay benefits to
all Participants and Beneficiaries under the Plan without
regard to the Employer or Participating Employer who
contributed such assets.
(c) The transfer of any Participant from or to an
Employer participating in this Plan, whether he be an
Employee of the Employer or a Participating Employer, shall
not affect such Participant's rights under the Plan, and all
amounts credited to such Participant's Account as well as
his accumulated service time with the transferor or
predecessor, and his length of participation in the Plan,
shall continue to his credit.
(d) All rights and values forfeited by termination
of employment shall inure only to the benefit of the
Participants of the Employer or Participating Employer by
which the forfeiting Participant was employed,
except if the Forfeiture is for an Employee whose Employer
is an Affiliated Employer, then said Forfeiture shall be
allocated to the Participants employed by the Employer or
Participating Employers who are Affiliated Employers.
Should an Employee of one ("First") Employer be transferred
to an associated ("Second") Employer which is an Affiliated
Employer, such transfer shall not cause his account balance
(generated while an Employee of "First" Employer) in any
manner, or by any amount to be forfeited. Such Employee's
Participant Account balance for all purposes of the Plan,
including length of service, shall be considered as though
he had always been employed by the "Second" Employer and as
such had received contributions, forfeitures, earnings or
losses, and appreciation or depreciation in value of assets
totaling the amount so transferred.
(e) Any expenses of the Trust which are to be paid
by the Employer or borne by the Trust Fund shall be paid by
each Participating Employer in the same proportion that the
total amount standing to the credit of all Participants
employed by such Employer bears to the total standing to the
credit of all Participants.
11.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a party to
this Plan; provided, however, that with respect to all of its relations with the
Trustee and Administrator for the purpose of this Plan, each Participating
Employer shall be deemed to have designated irrevocably the Employer as its
agent. Unless the context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each Participating Employer as related to
its adoption of the Plan.
11.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred
between Participating Employers, and in the event of any such transfer, the
Employee involved shall carry with him his accumulated service and eligibility.
No such transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
11.5 PARTICIPATING EMPLOYER'S CONTRIBUTION
Any contribution subject to allocation during each Plan Year
shall be allocated only among those Participants of the Employer or
Participating Employer making the contribution, except if the contribution is
made by an Affiliated Employer, in which event such contribution shall be
allocated among all Participants of all Participating Employers who are
Affiliated Employers in accordance with the provisions of this Plan. On the
basis of the information furnished by the Administrator, the Trustee shall keep
separate books and records concerning the affairs of each Participating Employer
hereunder and as to the accounts and
credits of the Employees of each Participating Employer. The Trustee may, but
need not, register Contracts so as to evidence that a particular Participating
Employer is the interested Employer hereunder, but in the event of an Employee
transfer from one Participating Employer to another, the employing Employer
shall immediately notify the Trustee thereof.
11.6 AMENDMENT
Amendment of this Plan by the Employer at any time when
there shall be a Participating Employer hereunder shall only be by the written
action of each and every Participating Employer and with the consent of the
Trustee where such consent is necessary in accordance with the terms of this
Plan.
11.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to discontinue
or revoke its participation in the Plan. At the time of any such discontinuance
or revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Contracts and other Trust Fund assets allocable to
the Participants of such Participating Employer to such new Trustee as shall
have been designated by such Participating Employer, in the event that it has
established a separate pension plan for its Employees, provided however, that no
such transfer shall be made if the result is the elimination or reduction of any
"Section 411(d)(6) protected benefits" in accordance with Section 9.1(c). If no
successor is designated, the Trustee shall retain such assets for the Employees
of said Participating Employer pursuant to the provisions of Article VII hereof.
In no such event shall any part of the corpus or income of the Trust as it
relates to such Participating Employer be used for or diverted to purposes other
than for the exclusive benefit of the Employees of such Participating Employer.
11.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all
necessary rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
<PAGE>
IN WITNESS WHEREOF, this Plan has been executed the day and
year first above written.
Signed, sealed, and delivered in the presence of:
City Holding Company
<TABLE>
<S> <C>
______________________________ By__________________________
EMPLOYER
- ------------------------------
WITNESSES AS TO EMPLOYER
The Peoples Bank of Point Pleasant
______________________________ By__________________________
EMPLOYER
- ------------------------------
WITNESSES AS TO EMPLOYER
First State Bank & Trust
______________________________ By__________________________
EMPLOYER
- ------------------------------
WITNESSES AS TO EMPLOYER
Bank of Ripley
______________________________ By__________________________
EMPLOYER
- ------------------------------
WITNESSES AS TO EMPLOYER
The Home National Bank of Sutton
______________________________ By__________________________
EMPLOYER
- ------------------------------
WITNESSES AS TO EMPLOYER
Blue Ridge Bank, Inc.
______________________________ By__________________________
EMPLOYER
- ------------------------------
WITNESSES AS TO EMPLOYER
City Financial Corporation
______________________________ By__________________________
EMPLOYER
- ------------------------------
WITNESSES AS TO EMPLOYER
City Mortgage Corporation
______________________________ By__________________________
EMPLOYER
- ------------------------------
WITNESSES AS TO EMPLOYER
The First National Bank of Hinton
______________________________ By__________________________
EMPLOYER
- ------------------------------
WITNESSES AS TO EMPLOYER
Peoples State Bank
______________________________ By__________________________
EMPLOYER
- ------------------------------
WITNESSES AS TO EMPLOYER
The Merchants National Bank of
Montgomery
______________________________ By__________________________
EMPLOYER
- ------------------------------
WITNESSES AS TO EMPLOYER
The City National Bank of Charleston
______________________________ By__________________________
TRUSTEE
- ------------------------------
WITNESSES AS TO TRUSTEE
ATTEST______________________
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 30,933
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<DEPOSITS> 812,797
<SHORT-TERM> 134,440
<LIABILITIES-OTHER> 10,302
<LONG-TERM> 23,200
<COMMON> 12,730
0
0
<OTHER-SE> 61,542
<TOTAL-LIABILITIES-AND-EQUITY> 1,055,011
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</TABLE>
