As filed with the Securities and Exchange Commission on
November 20, 1997. Registration No.333-__________
=================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TOWER BANCORP, INC.
(Exact name of Registrant as specified in its charter)
Pennsylvania 25-1445946
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Center Square, P.O. Box 8 17225-0008
Greencastle, Pennsylvania ----------
- --------------------------------------- (Zip Code)
(Address of Principal
Executive Offices)
_______________________________
TOWER BANCORP, INC. 1995 NON-QUALIFIED STOCK OPTION PLAN,
TOWER BANCORP, INC. STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
AND FIRST NATIONAL BANK OF GREENCASTLE
EMPLOYEES' STOCK OWNERSHIP PLAN
(Full title of the plans)
______________________________
Jeff B. Shank Copies To:
President and Chief Nicholas Bybel, Jr., Esquire
Executive Officer B. Tyler Lincoln, Esquire
TOWER BANCORP. INC. Shumaker Williams, P.C.
Center Square, P.O. Box 8 Post Office Box 88
Greencastle, Harrisburg,
Pennsylvania 17225-0008 Pennsylvania 17108
(717) 597-2137 (717) 763-1121
----------------
(Name, address, including
zip code, and telephone
number, including area code,
of agent for service)
_______________________________
<TABLE>
CALCULATION OF REGISTRATION FEE
_________________________________________________________________
<CAPTION>
Title of Each Class
of Securities to Amount to be Proposed Maximum
be Registered Registered<F1><F2> Offering Price
_________________________________________________________________
<S> <C> <C>
Common Stock
$2.50 par value 275,000 $ 40.50
_________________________________________________________________
<CAPTION>
Title of Each Class Proposed Maximum
of Securities to Aggregate Offering Amount of
be Registered Price <F3> Registration Fee
_________________________________________________________________
<S> <C> <C>
Common Stock
$2.50 par value $ 11,137,500.00 $ 3,375.00
_________________________________________________________________
<FN>
<F1> Based on the maximum number of shares of Tower Bancorp,
Inc. common stock, par value $2.50 per share ( the "Common
Stock") authorized for issuance under the Tower Bancorp, Inc.
1995 Non-Qualified Stock Option Plan (25,000 shares), the Tower
Bancorp, Inc. Stock Option Plan for Outside Directors (50,000
shares) and The First National Bank of Greencastle Employees'
Stock Ownership Plan (200,000 shares) (Collectively, the
"Plans").
<F2> Includes 816 options to purchase shares of Common Stock
previously issued under the Tower Bancorp, Inc. 1995 Non-Qualified Stock Option Plan. Includes 4,182 options to purchase
shares of Common Stock previously issued under the Tower Bancorp,
Inc. Stock Option Plan for Outside Directors. Includes 33,950
shares of Common Stock previously issued under First National
Bank of Greencastle Employees' Stock Ownership Plan.
<F3> Estimated pursuant to Rule 457(c) and (h)(1) solely for the
purpose of calculating the amount of the registration fee based
upon the average of the closing bid and asked prices of
Registrant's Common Stock on November 18, 1997, with respect to
the 275,000 shares of Common Stock issuable under the Plans.
</FN>
</TABLE>
<PAGE>
TO PARTICIPANTS IN
THE TOWER BANCORP, INC. 1995 NON-QUALIFIED STOCK OPTION PLAN,
THE TOWER BANCORP, INC. STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
AND
THE FIRST NATIONAL BANK OF GREENCASTLE
EMPLOYEES' STOCK OWNERSHIP PLAN
Tower Bancorp, Inc. (the "Company") has filed a Registration
Statement concerning shares of common stock, $2.50 par value (the
"Common Stock") that may, from time to time, be issued pursuant
to the Tower Bancorp, Inc. 1995 Non-Qualified Stock Option Plan,
the Tower Bancorp, Inc. Stock Option Plan for Outside Directors
and the First National Bank of Greencastle Employees' Stock
Ownership Plan (collectively, the "Plans"). The Prospectus
deemed to form a part of the Registration Statement consists of
certain documents and explanatory memoranda regarding the Plans.
The following documents are also deemed to comprise part of the
Prospectus, are each specifically incorporated by reference into
the Registration Statement and are each on file with the
Securities and Exchange Commission (the "SEC"):
(a) Annual Report on Form 10-K, for the year ended December
31, 1996;
(b) Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997, and September 30, 1997;
and
(c) Description of the Company's Common Stock appearing in
the Company's Registration Statement on Form S-14
(Registration No. 2-89573).
All documents filed with the SEC by the Company (Periodic
File No. 0-12826) pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 after the date of the
Prospectus and prior to the termination of this offering shall be
deemed to be incorporated by reference in the Prospectus and to
be a part thereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of the Prospectus to the extent that a
statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of the
Prospectus.
The Company will provide without charge to each Plan
participant, who so requests, a copy of any or all of the
documents mentioned above, as well as, all documentation
relating to the Plans required to be delivered to Plan
participants pursuant to the rules adopted under the Securities
Act of 1933, as amended. Requests for such copies should be
addressed in writing to the attention of the Corporate
Secretary, Tower Bancorp, Inc., Centre Square, Post Office Box 8,
Greencastle, Pennsylvania 17225-0008, or addressed by telephone
to (717) 597-2137.
November 20, 1997
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents are hereby incorporated by reference
in this Registration Statement and filed by the Company (File No.
0-12826) with the SEC:
(a) Annual Report on Form 10-K, for the year ended December
31, 1996;
(b) Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997, and September 30, 1997;
and
(c) Description of the Company's Common Stock appearing in
the Company's Registration Statement on Form S-14
(Registration No. 2-89573).
All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act, and prior to the
filing of a post-effective amendment that indicates that all
securities offered have been sold or that deregisters all
securities then remaining unsold shall be deemed to be
incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Registration
Statement, to the extent that a statement contained herein or in
any other subsequently filed document that also is or is deemed
to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
The documents containing the information specified in Items
1 and 2 of Part I of this Form S-8 will be sent or given to the
respective plan participants as specified in Rule 428(b)(1) and,
in accordance with the instructions to Part I of Form S-8, are
not filed with the SEC as part of this Registration Statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
II-1
<PAGE>
Item 6. Indemnification of Directors and Officers
The general corporate law of the Commonwealth of
Pennsylvania, as applicable to the Company, together with the
Company's By-laws, provides the Company's officers and directors
with a broad range of limitation from liability and
indemnification for actions and inactions in connection with the
performance of their duties. Aside from matters involving
criminal statutes or tax laws, directors are not personally
liable for monetary damages for any action or inaction taken
unless the director has breached or failed to perform his or her
duties of office and such breach or failure constitutes willful
misconduct or recklessness. The Company's officers and directors
are entitled to be indemnified if they are named as a party or
threatened to be named as a party to any type of proceeding as a
result of actions or inactions taken while in the course of their
association with the Company provided that such action or
inaction was in good faith and in a manner reasonably believed to
be in, or not opposed to, the best interests of the Company.
Officers and directors of the Company will be presumed to be
entitled to this indemnification absent breaches of fiduciary
duty, lack of good faith or self-dealing and will be entitled to
be indemnified unless their conduct is determined by a court to
have constituted willful misconduct or recklessness.
To the extent that a director or officer of the Company has
been successful on the merits or otherwise in defense of any
action or proceeding relating to third party actions or relating
to derivative actions or in defense of any, claim, issue or
matter therein, he or she shall be indemnified against expenses
(including attorneys' fees) actually and reasonable incurred in
connection therewith.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the
Company has been informed that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore
unenforceable.
Item 7. Exemption From Registration Claimed
Not applicable.
Items 8. Exhibits
Exhibit No.
- -----------
3(i)(a) Articles of Incorporation of the Registrant(Incorporated
by reference to Exhibit C to Registrant's Registration
Statement No. 2-89573 on Form S-14,filed with the SEC).
3(i)(b) Articles of Amendment to the Articles of Incorporation
of the Registrant. (Incorporated by reference to
Exhibit 3(i) to Registrants Current Report on Form 8-K,
filed with the SEC on May 28, 1996).
II-2
<PAGE>
3(ii) Bylaws of the Registrant (Incorporated by reference to
Exhibit D to Registrant's Registration Statement
No. 2-89573 on Form S-14, filed with the SEC).
4.1 Articles of Incorporation of the Registrant
(Included herein at Exhibits 3(i)(a) and 3(i)(b)).
4.2 Bylaws of the Registrant (Included herein at
Exhibit 3(ii)).
5 Opinion of Shumaker Williams, P.C.
23.1 Consent of Smith Elliott Kearns & Company.
23.2 Consent of Shumaker Williams, P.C.
(Included in Exhibit 5).
24 Power of Attorney of Directors and Officers
(Included on Signature Page).
99.1 Tower Bancorp, Inc. 1995 Non-Qualified Stock Option
Plan.
99.2 Tower Bancorp, Inc. Stock Option Plan for Outside
Directors.
99.3 First National Bank of Greencastle Employees' Stock
Ownership Plan, Stipulation of Amendment and Amendment
Number Two to First National Bank of Greencastle
Employees' Stock Ownership Plan.
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
Registration Statement (or the most recent post-
effective amendment thereof) which, individually
or in the aggregate, represent a fundamental
change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement; PROVIDED, HOWEVER, that
paragraphs (a)(1)(i) and (a)(1)(ii) shall not
apply if the information required to be included
in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d)
II-3
<PAGE>
of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each post-effective
amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein,
and the offering of such securities at the time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's Annual Report
pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934, and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934, that is
incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant
to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities, other than the
payment of the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in
the successful defense of any action suit or proceeding, is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized in
the City of Greencastle, Commonwealth of Pennsylvania on October
22, 1997.
TOWER BANCORP, INC.
By:/s/ Jeff B. Shank
----------------------------
Jeff B. Shank
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Jeff B. Shank
and Donald Chlebowski, Jr., and each of them, his true and lawful
attorney-in-fact, as agent with full power of substitution and
resubstitution for him and in his name, place and stead, in any
and all capacity, to sign any or all amendments to this
Registration Statement and to file the same, will all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact
and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done
in and about the premises, as fully and to all intents and
purposes as they might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or
their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Capacity Date
/s/Jeff B. Shank President, Chief October 22,1997
- --------------------- Executive Officer
Jeff B. Shank and Director
(Principal Executive
Officer)
/s/Donald Chlebowski, Jr. Treasurer October 22, 1997
- -------------------------(Principal
Donald Chlebowski, Jr. Accounting Officer)
/s/James H. Craig, Jr. Director October 22, 1997
- ------------------------
James H. Craig, Jr.
/s/Lois Easton Director October 22, 1997
- ------------------------
Lois Easton
/s/Harold C. Gayman Vice Chairman October 22, 1997
- ------------------------ and Director
Harold C. Gayman
/s/Kermit G. Hicks Chairman October 22, 1997
- ------------------------ and Director
Kermit G. Hicks
/s/Betty J. Lehman Director October 22, 1997
- ------------------------
Betty J. Lehman
/s/Robert L. Pensinger Director October 22, 1997
- ------------------------
Robert L. Pensinger
<PAGE>
INDEX TO EXHIBITS
Page Number
in Sequentially
Exhibit No. Numbered Original
- ----------- -----------------
3(i)(a) Articles of Incorporation of the
Registrant(Incorporated by
reference to Exhibit C to
Registrant's Registration
Statement No. 2-89573 on
Form S-14, filed with the SEC).
3(i)(b) Articles of Amendment to the
Articles of Incorporation
of the Registrant. (Incorporated
by reference to Exhibit 3(i) to
Registrants Current Report on
Form 8-K, filed with the SEC
on May 28, 1996).
3(ii) Bylaws of the Registrant
(Incorporated by reference to
Exhibit D to Registrant's
Registration Statement No. 2-89573
on Form S-14, filed with the SEC).
4.1 Articles of Incorporation of the
Registrant (Included herein at
Exhibits 3(i)(a) and 3(i)(b)).
4.2 Bylaws of the Registrant (Included
herein at Exhibit 3(ii)).
5 Opinion of Shumaker Williams, P.C. 10
23.1 Consent of Smith Elliott Kearns & Company. 13
23.2 Consent of Shumaker Williams, P.C.
(Included in Exhibit 5).
24 Power of Attorney of Directors
and Officers
(Included on Signature Page).
99.1 Tower Bancorp, Inc. 1995 15
Non-Qualified Stock Option Plan.
99.2 Tower Bancorp, Inc. Stock Option 27
Plan for Outside Directors.
99.3 First National Bank of Greencastle 34
Employees' Stock Ownership
Plan, Stipulation of Amendment
and Amendment Number Two
to First National Bank of Greencastle
Employees' Stock Ownership Plan.
EXHIBIT 5
Opinion of Shumaker Williams, P.C.
<PAGE>
SHUMAKER WILLIAMS, P.C.
P. O. Box 88
HARRISBURG, PA 17108
(717) 763-1121
November 20, 1997
Mr. Jeff B. Shank
President and Chief Executive Officer
TOWER BANCORP, INC.
Centre Square
Post Office Box 8
Greencastle, Pennsylvania 17225-0008
RE: Tower Bancorp, Inc.
Registration Statement on Form S-8
Our File No.: 616-97
Dear Mr. Shank:
We have acted as special counsel to Tower Bancorp, Inc.
(the "Corporation") in connection with preparation of the
Corporation's Registration Statement on Form S-8 relating to the
Tower Bancorp, Inc. 1995 Non-Qualified Stock Option Plan, the
Tower Bancorp, Inc. Stock Option Plan for Outside Directors and
the First National Bank of Greencastle Employees' Stock
Ownership Plan ( collectively, the "Plans").
In connection with this matter, we, as special counsel to
the Corporation, have reviewed the following:
1. the Pennsylvania Business Corporation Law of 1988, as
amended;
2. the Corporation's Articles of Incorporation, as amended;
3. the Corporation's By-Laws, as amended;
4. Resolutions adopted by the Corporation's Board of
Directors on August 20, 1997; and
5. the Plans.
<PAGE>
Mr. Jeff B. Shank
President and Chief Executive Officer
TOWER BANCORP, INC.
November 20, 1997
Page 2
Based upon such review, it is our opinion that the
Corporation's common stock, $2.50 par value, (the "Common Stock")
issuable under the Plans, when and as issued in accordance with
the provisions of the Plans, will be duly and validly issued,
fully paid and nonassessable. In giving the foregoing opinion,
we have assumed that the Corporation will have, at the time of
the issuance of Common Stock under the Plans, a sufficient number
of authorized shares available for issue.
We hereby consent to the use of this opinion as an exhibit
to the Registration Statement on Form S-8, filed by the
Corporation, relating to the Plans.
Very truly yours,
SHUMAKER WILLIAMS, P.C.
/s/ B. Tyler Lincoln
----------------------
By B. Tyler Lincoln
BTL/cmc:74718
EXHIBIT 23.1
Consent of Smith Elliott Kearns & Company, LLC
<PAGE>
S E K & Co
---------------
Smith Elliott Kearns & Company, LLC
Certified Public Accountants & Consultants
Consent of Independent Auditors
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 of Tower Bancorp, Inc. ( the
"Corporation"), relating to the Tower Bancorp, Inc. 1995 Non-Qualified
Stock Option Plan, the Tower Bancorp, Inc. Stock Option
Plan for Outside Directors, and the First National Bank of
Greencastle Employees' Stock Ownership Plan, of our report dated
January 30, 1997, with respect to the consolidated financial
statements incorporated by reference in the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1996, and
filed with the Securities and Exchange Commission.
/s/ Smith Elliott Kearns & Company, LLC
---------------------------------------
Smith Elliott Kearns & Company, LLC
Chambersburg, Pennsylvania
November 17 , 1997
EXHIBIT 99.1
TOWER BANCORP, INC.
1995 NON-QUALIFIED STOCK OPTION PLAN
<PAGE>
TOWER BANCORP, INC.
1995 NON-QUALIFIED STOCK OPTION PLAN
1. PURPOSE OF THE PLAN. The purpose of this Non-Qualified
Stock Option Plan (the "Plan") is to advance the interests of
Tower Bancorp, Inc. by stimulating superior performance through
rewards to individual key employees for extraordinary achievement
and by encouraging and enabling these employees to enlarge their
proprietary interests in the Corporation, thereby establishing
closer identification of their interests with those of the
Corporation and stimulating their desire to remain with the
Corporation.
2. DEFINITIONS. For purpose of the Plan, the following
words or phrases have the meanings assigned to them below:
(a) BOARD: means the Board of Directors of the
Corporation.
(b) CODE: means the Internal Revenue Code of 1986, as
amended.
(c) COMMITTEE: means the Committee designated by the
Board to administer the Plan, which Committee shall
at all times consist of three or more directors. The
members of the Committee shall not be employees of
the Corporation or subsidiary.
(d) CORPORATION: means Tower Bancorp, Inc.
(e) DATE OF GRANT: means in respect of any option granted
under the Plan the date on which that option is granted by
the Committee.
(f) DATE OF EXERCISE: means in respect of any option
granted under the Plan the date specified by the Committee
in its rules and regulations governing the exercise of
options granted under the Plan.
(g) PARENT: means any corporation (other than the
Corporation) in an unbroken chain of corporations ending
with the Corporation if, at the time of the grant of an
option, each of the corporations other than the Corporation
owns stock possessing 50 percent (50%) or more of the total
combined voting power of all classes of stock in one of the
other corporations in such chain.
(h) PLAN: means this Non-Qualified Stock Option Plan.
(i) STOCK: means the common stock of the Corporation.
(j) SUBSIDIARY: means any corporation (other than the
Corporation) in an unbroken chain of corporations beginning
with the Corporation if, at the time of the grant of an
<PAGE>
option under the Plan, each of the corporations other than
the last corporation in the unbroken chain owns stock
possessing 50 percent (50%) or more of the total combined
voting power of all classes of stock in one of the other
corporations in such chain.
3. ADMINISTRATION OF THE PLAN. (a) COMMITTEE MEMBERS. The
Plan shall be administered by the Committee, which, except as
otherwise determined by the Board, shall be composed of each of
those members of the Compensation Committee of the Board who has
not been eligible to participate in the Plan for a period of at
least one year prior to his election to the Committee, who is not
eligible to participate in the Plan during the period he is
serving on the Committee, and who is not an employee of the
Corporation or subsidiary.
(b) COMMITTEE AUTHORITY. The Committee shall be vested
with full authority to grant options under the Plan, to
adopt, amend and rescind such rules, regulations and
procedures as it deems necessary or desirable to administer
the Plan, to interpret the provisions of the Plan, and to
make all other determinations necessary in connection with
the administration of the Plan. Any determination, decision
or action of the Committee in connection with the
construction, interpretation, administration or application
of the Plan shall be final, conclusive and binding. No
member of the Committee or of the Board shall be liable for
any determination, decision or action made in good faith
with respect to the Plan or any option granted under the
Plan.
4. STOCK SUBJECT TO THE PLAN. The shares of Stock that may
be issued pursuant to options granted under the Plan shall be
determined annually by the Board and shall consist of treasury or
authorized, but unissued, shares of Stock. Shares issuable
pursuant to an option which, by reason of the expiration,
cancellation or other termination of such option prior to
issuance, are not issued shall again be available for issuance
pursuant to the award of options under the Plan.
5. ELIGIBILITY. Options may be granted under the Plan only
to select key employees of the Corporation and to select key
employees of a Subsidiary.
6. OPTION PRICE. (a) GENERAL RULE: The option price per
share of the Stock that may be granted pursuant to each option
shall be determined by the Committee and be subject to approval
by the Board.
(b) FAIR MARKET VALUE: For purposes of the Plan, the fair
market value of the Stock shall be determined as follows:
(i) EXCHANGE TRADED: In the event that the Stock is
listed on an established stock exchange, the fair market
value shall be deemed to be the closing price of the
Stock on such exchange on the applicable date or, if no
trade occurred on that day, on the next preceding day on
which a trade occurred.
2
<PAGE>
(ii) NASDAQ LISTED: In the event that the Stock is
not listed on an established stock exchange, but is then
quoted on NASDAQ, the fair market value per share shall
be the average of the average of the closing bid and
asked quotations of the Stock for the five (5) trading
days immediately preceding the applicable date, except
that if no closing bid or asked quotation is available on
one or more of such trading days, fair market value shall
be determined by reference to the five (5) trading days
immediately preceding the applicable date on which
closing bid and asked quotations are available.
(iii) OTC TRADED: In the event that the Stock is not
listed on an established stock exchange and is not quoted
on NASDAQ, the fair market value per share shall be the
average of the average of the closing bid and asked
quotations of the Stock for the five (5) trading days
immediately preceding the applicable date as reported by
two (2) brokerage firms to be selected by the Committee
which are then making a market in the Stock, except that
if no closing bid or asked quotation is available on one
or more of such trading days, fair market value shall be
determined by reference to the five (5) trading days
immediately preceding the applicable date on which
closing bid and asked quotations are available.
(iv) OTHER: In the event that the Stock is not listed
on an established stock exchange, is not quoted on NASDAQ
and no closing bid and asked quotations are available,
then fair market value per share shall be determined in
good faith by the Committee.
7. TERMS AND CONDITIONS OF OPTIONS. (a) WRITTEN STOCK
OPTION AGREEMENT: Each option shall be evidenced by a written
stock option agreement specifying the maximum number of shares of
Stock that may be purchased pursuant to the option, the option
term, and other such terms and conditions established by the
Committee as are consistent with the terms of the Plan.
(b) TERMS OF OPTIONS: Each option granted under the Plan
shall expire on the date determined by the Committee.
(c) OTHER TERMS AND CONDITIONS: The Committee may from
time to time establish such further terms, conditions and
limitations on the exercise of options granted under the
Plan as it may, in its sole discretion, deem appropriate.
(d) TERMINATION OF EMPLOYMENT: An option granted pursuant
to the Plan may be exercised by the holder thereof for a
period of one year following termination of employment.
(e) LIMITATION ON TRANSFER OF OPTIONS: During the
lifetime of an optionee, an option granted pursuant to the
Plan shall be exercisable only by the optionee and shall not
be assignable or transferable by him other than by will or
the laws of descent and distribution.
3
<PAGE>
(f) TRANSFER DUE TO DEATH: Upon death of the holder of
the option, the transferee of the option shall have a period
of one year from the date of death to exercise the option.
8. EXERCISE OF OPTIONS. Each person who elects to exercise
an option granted pursuant to this Plan shall comply with such
rules, regulations and procedures regarding the exercise of
options as the Committee shall from time to time establish.
9. RIGHTS. Except as otherwise provided in the Plan, an
employee who is granted an option shall have no rights as a
holder of the stock subject thereto unless and until one or more
certificates for the shares of such stock are issued and
delivered to the employee. No adjustments shall be made for
dividends, either ordinary or extraordinary, or any other
distributions with respect thereto, for which the record date is
prior to the date that any certificates for stock subject to an
option are issued to the employee pursuant to his or her exercise
thereof. No option, or the grant thereof, shall limit or affect
the right or power of the Corporation or its affiliates to
adjust, reclassify, recapitalize, reorganize or otherwise change
its or their capital or business structure, or to merge,
consolidate, dissolve, liquidate or sell any or all of its or
their business, property or assets.
10. ADJUSTMENTS. (a) RECAPITALIZATION: In the event of any
change in the number of issued and outstanding shares of Stock
which results from a stock split, reverse stock split, payment of
a stock dividend or any other change in the capital structure of
the Corporation, the Committee shall proportionately adjust the
maximum number of shares subject to each outstanding option (but
not the total option price), so that upon exercise or realization
of such option, the employee shall receive the same number of
shares he or she would have received had he or she been the
holder of all shares subject to his or her outstanding option
immediately before the effective date of such change in the
number of issued and outstanding shares of Stock. Such
adjustments shall not, however, result in the issuance of
fractional shares. Any adjustment under this paragraph 10 shall
be made by the Committee, subject to approval by the Board.
(b) MERGER: In the event the Corporation is a party to
any merger, consolidation or other reorganization, any and
all outstanding options shall apply and relate to the
securities to which a holder of stock is entitled after such
merger, consolidation or other reorganization. Upon any
liquidation or dissolution of the Corporation, any and all
outstanding options shall terminate upon consummation of
such liquidation or dissolution, but prior to such
consummation shall be exercisable to the extent that the
same otherwise are exercisable under the Plan.
11. AMENDMENT OR TERMINATION OF THE PLAN: (a) AMENDMENT AND
TERMINATION: The term of the Plan shall be perpetual, however,
the Board may at any time amend, modify, suspend or terminate the
Plan.
12. GENERAL PROVISIONS. (a) EFFECT ON EMPLOYMENT. The
grant of an option under the Plan shall not be construed as
giving the holder thereof the right to be retained in the employ
4
<PAGE>
of the Corporation or any Subsidiary. Neither the adoption of
the Plan, its operation, nor any documents describing or
referring to the Plan, including, without limitation, any stock
option agreement, shall in any way affect any right and power of
the Corporation or any Subsidiary to terminate the employment of
any person at any time with or without assigning a reason
therefor.
(b) INDEMNIFICATION. With respect to liabilities arising
under or relating to the Plan, the Corporation shall
indemnify each member of the Committee and each other
officer or employee of the Company to whom any duty or power
relating to the Plan may be allocated or delegated, to the
fullest extent permitted under the laws of the Commonwealth
of Pennsylvania and the Bylaws of the Corporation.
(c) GOVERNING LAW. All questions pertaining to
construction, validity and effect of the provisions of the
Plan and the rights of all persons hereunder shall be
governed by the laws of the Commonwealth of Pennsylvania.
(d) RULES OF CONSTRUCTION. Headings are given to the
sections of the Plan solely as a convenience to facilitate
reference. The reference to any statute, regulation, or
other provisions of law shall be construed to refer to any
amendment to or successor of such provisions of law. All
words herein shall be construed to be of such number and
gender as the context requires.
13. EFFECTIVE DATE. The Plan shall become effective on
________________, 1995, the date on which it was adopted by the
Board.
<PAGE>
TOWER BANCORP, INC.
1995 NON-QUALIFIED STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
By this Agreement, pursuant to the Tower Bancorp, Inc.
1995 Stock Option Plan (the "Plan"), Tower Bancorp, Inc. grants
and gives to ___________, an adult individual (the "Recipient"),
the option and right, but not the obligation, to purchase from
Tower Bancorp, Inc. up to ____ shares of its common stock (having
a par value of $2.50 per share), at the purchase price of $1.00
for each such share, under and subject to the terms and
provisions set forth in this Agreement and the Plan. It is
intended that the option granted by this Agreement is and shall
be a Non-Qualified Option as defined in the Plan.
Subject to the other provisions of this Agreement and
the Plan, the option hereby granted shall become and be
exercisable on and after (but not before) _______, 199__.
The option granted by this Agreement shall be
exercisable during the lifetime of the Recipient only by the
Recipient and shall not be salable, transferable, or assignable
by the Recipient except by his or her Will or pursuant to
applicable laws of descent and distribution and pursuant to the
terms of said Plan.
If the Recipient desires to exercise his or her option
under this Agreement, the Recipient shall do so by properly
completing, signing, and returning to the Secretary of Tower
Bancorp, Inc., or to the person designated by said corporate
Secretary, the Notice of Exercise in the form attached to and
made a part of this Agreement, together with full payment by the
Recipient for the common shares being purchased hereunder in
legal tender of the United States of America. Tower Bancorp,
Inc. may withhold issuance and delivery to the Recipient of any
or all stock certificate or certificates for such shares being
purchased hereunder until full collection by Tower Bancorp, Inc.
or its depository of full payment for such shares and until there
is full compliance with and satisfaction of all applicable terms
and provisions of and under the Plan and this Agreement. Tower
Bancorp, Inc. may require the Recipient to remit to Tower
Bancorp, Inc. an amount sufficient to satisfy fully any federal,
state and other jurisdictions' income and other tax withholding
requirements prior to its issuance and delivery of any stock
certificate or certificates for such shares hereunder. The
Recipient shall have no rights or powers with respect to any
shares of such common stock that may be or are being purchased
hereunder unless and until one or more stock certificates for
such shares are issued and delivered to the Recipient.
Nothing in this Agreement or the Plan shall or does
confer upon the Recipient any right to continue in the employment
of, or maintain any particular relationship with Tower Bancorp,
Inc. or its affiliates, or limit or affect any rights, powers or
privileges that Tower Bancorp, Inc. or its affiliates may have to
supervise, discipline and terminate the Recipient and his or her
employment and other relationships.
The option granted by this Agreement is and shall be
under and subject to all of the provisions of this Agreement and
the Plan, and may be exercised only as, when, during the time or
<PAGE>
times, and in the manner provided in this Agreement and the Plan.
The provisions of the Plan are hereby incorporated by reference
in and as a part of this Agreement, and this Agreement in all
respects shall be interpreted and construed in accordance with
the Plan. Words and phrases that are assigned definitions in the
Plan shall have the same respective meanings when used in this
Agreement. The Recipient acknowledges that he or she has
received a complete copy of the Plan and has read and is familiar
with its provisions. The provisions of this Non-Qualified Stock
Option Agreement shall be interpreted and construed under and
enforced in accordance with the laws of the Commonwealth of
Pennsylvania, except to the extent preempted by the laws of the
United States of America which, to that extent, shall govern.
Tower Bancorp, Inc. has duly executed this Non-Qualified Stock
Option Agreement as of the ____ day of _____, 199__.
Witness/Attest: TOWER BANCORP, INC.
____________________________ By____________________________
(Authorized Signature)
Name: Kermit G. Hicks
Title: Chairman
<PAGE>
Acceptance by Recipient
The undersigned Recipient, intending to be legally
bound, hereby accepts and agrees to the terms and provisions of
the preceding Non-Qualified Stock Purchase Option Agreement and
the Tower Bancorp, Inc. 1995 Non-Qualified Stock Option Plan.
Date:___________________, 199__ _____________________________
(Signature)
_____________________________
(Name)
Social Security Number:
____________________________
<PAGE>
[type on stationery of Tower Bancorp, Inc.]
[date]
[Addressee's name and address]
Dear ____________:
I am pleased to inform you that the Committee
administering the Tower Bancorp, Inc. 1995 Non-Qualified Stock
Option Plan (the "Plan") has awarded you a non-qualified option
to purchase from Tower Bancorp, Inc. up to _________ shares of
its common stock (having a par value of $ per share) under
and subject to the terms and provisions of the Plan and the
enclosed Non-Qualified Stock Option Agreement ("Agreement")
reflecting this award.
Attached to the enclosed Agreement is the form of the
Notice of Exercise that should be used if and when you decide to
exercise your stock option under the Agreement. You should note
that you are not required to purchase all at once the entire
number of shares available for your purchase under the option;
rather, you may purchase fewer than the total number of shares
available for your purchase under the option, and purchase some
or all of the remaining shares available under the option at a
later date or dates, to the extent permitted by the Plan and the
enclosed Agreement. When you choose to exercise your option, you
should complete the Notice of Exercise with the number of shares
that you wish to purchase, the total purchase price, and the
other information requested in the Notice, sign the Notice, and
then deliver the completed Notice, together with good and proper
payment of the full purchase price entered in the Notice, to the
corporate Secretary of Tower Bancorp, Inc. or the person
designated by our corporate Secretary, at its address given at
the beginning of the Notice. Upon determination that there has
been full compliance with and satisfaction of the terms and
provisions of the Plan and the enclosed Agreement, you will be
treated as having exercised your stock option to the extent
indicated in your completed and returned Notice.
Please complete, sign and date your Acceptance of this
1995 Non-Qualified Stock Option Agreement at the end of each of
the two enclosed copies of the Agreement, and return one fully
signed copy to us, retaining the second copy for your records.
<PAGE>
Full name
[date]
Page 2
If you have any questions concerning the Plan or the
enclosed Agreement, please do not hesitate to contact us.
Sincerely,
___________, Chairman of Committee
under Tower Bancorp, Inc. 1995
Non-Qualified Stock Option Plan
Enclosures: 2
<PAGE>
NOTICE OF EXERCISE
OF NON-QUALIFIED STOCK OPTION
UNDER TOWER BANCORP, INC.
1995 NON-QUALIFIED STOCK OPTION PLAN
TO: Secretary
TOWER BANCORP, INC.
Post Office Box 8
Green Castle, PA 17225
I, the undersigned, the Recipient and holder of that
certain Non-Qualified Stock Option Agreement, dated ___________,
199__, (the "Agreement") to purchase from Tower Bancorp, Inc. up
to a total of _______ shares of its common stock (having as of
the date of said Agreement a par value of $___ per share), for
the purchase price of $1.00 for each such share, under and
subject to the provisions of that Agreement and the Tower
Bancorp, Inc. 1995 Non-Qualified Stock Option Plan (the "Plan"),
hereby do notify you of my intention and election to exercise
hereby my option under said Agreement to purchase ________ shares
of such common stock of Tower Bancorp, Inc. as provided in said
Agreement and the Plan. I am enclosing for the sum of $_____,
representing full payment for such shares being purchased
hereunder at the above stated purchase price for each such share
under said Agreement. I understand and agree that: (a) Tower
Bancorp, Inc. may withhold issuance and delivery to me of any or
all stock certificate or certificates for such shares of common
stock being purchased hereunder until full collection by Tower
Bancorp, Inc. or its depository of full payment for such shares
and until there is full compliance with and satisfaction of all
applicable terms and provisions of and under the Plan and said
Agreement; (b) Tower Bancorp, Inc. may require me to remit to
Tower Bancorp, Inc. an amount sufficient to satisfy fully any
federal, state and other jurisdictions' income and other tax
withholding requirements prior to its issuance and delivery to me
of any stock certificate or certificates for such shares being
purchased hereunder; and (c) I will have no rights or powers with
respect to any shares of such common stock being purchased
hereunder unless and until one or more stock certificates for
such shares are issued and delivered to me.
I intend to be legally bound by this Notice and my
exercise of my stock option hereunder, which are and shall be
irrevocable.
Social Security Number: ______________________________
(Signature)
__________________________
______________________________
(Name)
Date: _________________, 199__
EXHIBIT 99.2
TOWER BANCORP, INC.
STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
<PAGE>
TOWER BANCORP, INC.
STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
I. Purpose
The purpose of the Tower Bancorp, Inc. (the
"Corporation") Stock Option Plan for Outside Directors of the
Corporation and its affiliate, (the "Directors' Option Plan") is
to promote the growth and profitability of the Corporation by
providing outside directors of the Corporation and its affiliate
with an incentive to achieve long-term objectives of the
Corporation and to attract and retain non-employee directors of
outstanding competence by providing such outside directors with
an opportunity to acquire an equity interest in the Corporation.
II. Grant of Options
(a) INITIAL GRANT. Each outside director (for purposes
of this Directors' Option Plan, the term "Outside Director" shall
mean a member of the Board of Directors of the Corporation or its
affiliate not also serving as an employee of the Corporation or
its affiliate), who is serving in such capacity on the effective
date of this Directors' Option Plan, shall be granted non-statutory
stock options to purchase shares of the common stock of
the Corporation ("Common Stock"), subject to adjustment as
provided in Section IV hereof. The effective date of these
initial grants shall be the effective date of the Directors'
Option plan as defined in Section VI hereof ("Effective Date").
(b) GRANTS TO SUBSEQUENT OUTSIDE DIRECTORS. To the
extent options are available for grant under the Directors'
Option Plan, each Outside Director who is first elected as a
director subsequent to the Effective Date ("Subsequent Outside
Director") is hereby granted, as of the date on which such
Subsequent Outside Director is qualified and first begins to
serve as an Outside Director, non-statutory stock options to
purchase shares of Common Stock, subject to adjustment pursuant
to Section IV, or to purchase such lesser number of shares of
Common Stock as remain in this Directors' Option Plan. The
purchase price per share of the Common Stock deliverable upon
exercise of such option shall equal the Fair Market Value of the
Common Stock on the date the grant of this option is effective as
determined under paragraph (d) of this Section II.
If options for sufficient shares are not available
under the Directors' Option Plan to fulfill the grant of options
under Section II(b) hereof to any Subsequent Outside Director
first elected subsequent to the Effective Date, and thereafter
options become available, such Common Stock, determined by
dividing pro rata among each Subsequent Outside Director, options
for the number of shares then available under the Outside
Directors' Plan, not to exceed options for shares with the values
set forth in the preceding paragraphs with respect to Subsequent
Outside Directors, subject to adjustment as to any on Subsequent
Outside director. The date of grant shall be the date options
for such shares become available. The purchase price per share
of the Common Stock deliverable upon exercise of such options
shall equal the Fair Market Value of the Common Stock on the date
the option is granted as determined under paragraph (d) of this
Section II.
-1-
<PAGE>
(c) INELIGIBILITY. An option under the Directors'
Option Plan shall not be granted to any Outside Director who at
any previous time was an employee of either the Corporation or
its affiliates and in such capacity was eligible to receive any
options to purchase Common Stock.
(d) FAIR MARKET VALUE. For purposes of the Directors'
Option Plan, the fair market value of the stock shall be
determined as follows:
(i) EXCHANGE TRADED: In the event that the Stock
is listed on an established stock exchange, the fair market value
shall be deemed to be the closing price of the Stock on such
exchange on the applicable date or, if no trade occurred on that
day, on the next preceding day on which a trade occurred.
(ii) NASDAQ LISTED: In the event that the Stock is
not listed on an established stock exchange but is not quoted on
NASDAQ, the fair market value per share shall be the average of
the average of the closing bid and asked quotations of the Stock
for the five (5) trading days immediately preceding the
applicable date, except that if no closing bid or asked quotation
is available on one or more of such trading days, fair market
value shall be determined by reference to the five (5) trading
days immediately preceding the applicable date on which closing
bid and asked quotations are available.
(iii) OTC TRADED: In the event that the Stock is
not listed on an established stock exchange and is not quoted on
NASDAQ, the fair market value per share shall be the average of
the average of the closing bid and asked quotations of the Stock
for the five (5) trading days immediately preceding the
applicable date as reported by two (2) brokerage firms to be
selected by the Committee which are then making a market in the
Stock, except that if no closing bid or asked quotation is
available on one or more of such trading days, fair market value
shall be determined by reference to the five (5) trading days
immediately preceding the applicable date on which closing bid
and asked quotations are available.
(iv) OTHER: In the event that the Stock is not
listed on an established stock exchange, is not quoted on NASDAQ
and no closing bid and asked quotations are available, then fair
market value per share shall be determined in good faith by the
Committee.
III. Terms and Conditions
(a) VESTING OF OPTIONS. All options granted hereunder
shall vest and become exercisable one (1) year after the date of
grant, provided, however, that in the event of death, retirement,
disability or change in control of the Corporation or its
affiliates all options shall vest immediately.
-2-
<PAGE>
(b) OPTION AGREEMENT. Each option shall be evidenced
by a written option agreement between the Corporation and the
outside director specifying the number of shares of Common Stock
that may be acquired through its exercise and containing such
other terms and conditions which are not inconsistent with the
terms of this grant.
(c) TERMINATION OF OPTION. Each option shall expire
upon the earlier of (i) one hundred and twenty (120) months
following the date of grant, or (ii) one (1) year following the
date on which the outside director ceases to serve in such
capacity for any reason other than removal for cause. If the
Outside Director dies before fully exercising any portion of an
option then exercisable, such option may be exercised by such
Outside Director's personal representative(s), heir(s) or
devisee(s) at any time within the one (1) year period following
his or her death; provided, however, that in no event shall the
option be exercisable more than one hundred and twenty (120)
months after the date of its grant. If the Outside Director is
removed for cause all options awarded to him shall expire upon
such termination.
(d) MANNER OF EXERCISE. The options may be exercised
from time to time, in whole or in part, by delivering a written
notice of exercise to the Chief Executive Officer of the
Corporation. Such notice is irrevocable and must be accompanied
by full payment of the exercise price (as determined in Section
II(d) hereof) in cash or shares of previously acquired Common
Stock of the Corporation at the Fair Market Value of such shares
determined on the exercise date by the manner described in
Paragraph II(b) above or by such other means as determined by the
Board of Directors. If previously acquired shares of Common
Stock are tendered in payment of all or part of the exercise
price, the value of such shares shall be determined as of the
date of such exercise.
(e) TRANSFERABILITY. Each option granted hereby may be
exercised only by the Outside Director to whom it is issued or in
the event of the Outside Director's death, his or her personal
representative(s) or designee(s), heir(s) or devisee(s) pursuant
to the terms of Section III(c) hereof.
(f) TERMINATION OF SERVICE. Upon the termination of a
recipient's service for any reason other than disability,
retirement, Change in Control, death or removal for cause, the
participant's stock options shall be exercisable only as to those
shares which were immediately purchasable by the recipient at the
date of termination.
In the event of death or disability of any recipient,
all stock options held by such recipient, whether or not
exercisable at such time, shall become immediately exercisable by
the recipient or the recipient's legal representatives or
beneficiaries. Upon termination of the recipient's service due
to retirement, or a Change in Control, all stock options held by
such recipient, whether or not exercisable at such time, shall
become immediately exercisable. For purposes of this plan the
following terms are defined:
(i) "Change in Control" for purposes of this Plan, a
"Change in Control" of the Corporation or its affiliate shall
include a plan of reorganization, merger, merger conversion,
-3-
<PAGE>
consolidation or sale of all or substantially all of the assets
of the Corporation or its affiliate or a similar transaction
occurs in which the Corporation or its affiliate is not the
resulting entity; or if individuals who constitute the board of
directors of the Corporation or the board of directors of its
affiliates on the date hereof cease for any reason to constitute
a majority thereof.
(ii) "Disability" means the permanent and total
inability by reason of mental or physical infirmity, or both, of
an outside director to perform the work customarily assigned to
him. Additionally, a medical doctor selected or approved by the
Board of Directors must advise the Board that it is either not
possible to determine when such disability will terminate or that
it appears probable that such disability will be permanent during
the remainder of said recipient's lifetime.
(iii) "Retirement" means the termination of service
from the board of directors of the Corporation following written
notice to the Board as a whole of such Director's intention to
retire.
IV. Common Stock Subject to the Directors' Option Plan
The shares which shall be issued and delivered upon
exercise of options granted under the Directors' Option Plan may
be either authorized and unissued shares of Common Stock or
authorized and issued shares of Common Stock held by the
Corporation as treasury stock. The number of shares of Common
Stock reserved for issuance under the Directors' Option Plan
shall not exceed 50,000 shares of Common Stock of the
Corporation, par value $2.50 per share, subject to adjustments
pursuant to this Section IV. Any share of Common Stock subject
to any option which for any reason either terminates unexercised
or expires, shall again be available for issuance under the
Directors' Option Plan.
In the event of any change or changes in the
outstanding Common Stock of the Corporation by reason of any
stock dividend or split, recapitalization, reorganization,
merger, consolidation, spin-off, combination or any similar
corporate change, or other increase or decrease in such shares
effected without receipt or payment of consideration by the
Corporation, the number of shares of Common Stock subject to
options granted under this Directors' Option Plan and the option
price of such options, shall be automatically adjusted to prevent
dilution or enlargement of the rights granted to an Outside
Director under the Directors' Option Plan.
V. Termination of the Plan
The right to grant options under the Directors' Option
Plan will terminate ten years after the Effective Date of the
Plan. A majority of the outstanding shares of the Common Stock
entitled to vote is required to terminate the Directors' Option
Plan; PROVIDED, HOWEVER, no such termination shall, without the
consent of the affected individual, affect such individual's
rights under a previously granted option.
-4-
<PAGE>
VI. Amendment of the Plan
The Directors' Option Plan may be amended from time to
time by the Board of Directors of the Corporation provided that
Section II and Section III hereof, "shall not be amended more
than once every six months other than to comport with the
Internal Revenue Code of 1986, as amended, or the Employee
Retirement Income Security Act of 1974, as amended, or the rules
thereunder. Except as provided in Section IV hereof, rights and
obligations under any option granted before an amendment shall
not be altered or impaired by such amendment without the written
consent of the optionee. If the Directors' Option Plan becomes
qualified under 17 C.F.R. Section 16(b)-3 of the rules and
regulations promulgated under the Exchange Act and an amendment
would require shareholder approval under such rule 16(b)-3 to
retain the Plan's qualification, then such amendment shall be
presented to shareholders for ratification, provided, however,
that the failure to obtain shareholder ratification shall not
affect the validity of this Plan as so amended and the options
granted thereunder.
VII. Applicable Law
The Plan will be administered in accordance with the
laws of the Commonwealth of Pennsylvania.
VIII. Compliance with Section 16
If this Plan is qualified under 17 C.F.R. 240.16b-3 of
the Securities Exchange Act of 1934 Rules, transactions under
this Plan are intended to comply with all applicable conditions
of Rule 16b-3 or its successors under the Exchange Act. To the
extent any provisions of the Plan fail to so comply, it shall be
deemed null and void, to the extent permitted by law.
/s/ Kermit G. Hicks
-------------------------
Date Adopted By Board: Kermit G. Hicks
March 6, 1996 Chairman of the Board
-5-
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the Board of Directors of Tower Bancorp,
Inc. caused this Agreement to be executed by their duly
authorized officers, and Executives have signed this Agreement,
on the 6th day of March, 1996.
ATTEST: TOWER BANCORP, INC.
/s/ Donald F. Chlebowski, Jr. /s/ Jeff B. Shank
- ---------------------------- -----------------------
Donald F. Chlebowski, Jr. Jeff B. Shank
SEAL
TOWER BANCORP, INC,
ATTEST: (Guarantor)
/s/ Donald F. Chlebowski, Jr. BY: /s/ Jeff B. Shank
- ----------------------------- -----------------------
Donald F. Chlebowski, Jr. Jeff B. Shank
SEAL
WITNESS:
/s/ Georgia L. King BY: /s/ John H. McDowell
- ------------------- ----------------------
Georgia L. King John H. McDowell
EXHIBIT 99.3
FIRST NATIONAL BANK OF GREENCASTLE
EMPLOYEES' STOCK OWNERSHIP PLAN
<PAGE>
FIRST NATIONAL BANK OF GREENCASTLE
EMPLOYEES' STOCK OWNERSHIP PLAN
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I - DEFINITIONS
ARTICLE II - TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS 16
2.2 DETERMINATION OF TOP HEAVY STATUS 16
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER 19
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY 20
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES 20
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR 20
2.7 RECORDS AND REPORTS 21
2.8 APPOINTMENT OF ADVISERS 22
2.9 INFORMATION FROM EMPLOYER 22
2.10 PAYMENT OF EXPENSES 22
2.11 MAJORITY ACTIONS 22
2.12 CLAIMS PROCEDURE 22
2.13 CLAIMS REVIEW PROCEDURE 23
ARTICLE III - ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY 23
3.2 APPLICATION FOR PARTICIPATION 23
3.3 EFFECTIVE DATE OF PARTICIPATION 24
3.4 DETERMINATION OF ELIGIBILITY 24
3.5 TERMINATION OF ELIGIBILITY 24
3.6 OMISSION OF ELIGIBLE EMPLOYEE 24
3.7 INCLUSION OF INELIGIBLE EMPLOYEE 25
3.8 ELECTION NOT TO PARTICIPATE 25
ARTICLE IV - CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION 25
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION 25
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS 25
4.4 ACTUAL CONTRIBUTION PERCENTAGE TESTS 29
4.5 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS 31
4.6 MAXIMUM ANNUAL ADDITIONS 33
4.7 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS 37
4.8 TRANSFERS FROM QUALIFIED PLANS 38
4.9 VOLUNTARY CONTRIBUTIONS 39
1
<PAGE>
4.10 DIRECTED INVESTMENT ACCOUNT 40
ARTICLE V - FUNDING AND INVESTMENT POLICY
5.1 INVESTMENT POLICY 41
5.2 TRANSACTIONS INVOLVING COMPANY STOCK 42
ARTICLE VI - VALUATIONS
6.1 VALUATION OF THE TRUST FUND 43
6.2 METHOD OF VALUATION 43
ARTICLE VII - DETERMINATION AND DISTRIBUTION OF BENEFITS
7.1 DETERMINATION OF BENEFITS UPON RETIREMENT 43
7.2 DETERMINATION OF BENEFITS UPON DEATH 44
7.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY 45
7.4 DETERMINATION OF BENEFITS UPON TERMINATION 45
7.5 DISTRIBUTION OF BENEFITS 50
7.6 HOW PLAN BENEFIT WILL BE DISTRIBUTED 53
7.7 DISTRIBUTION FOR MINOR BENEFICIARY 54
7.8 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN 54
7.9 RIGHT OF FIRST REFUSALS 55
7.10 STOCK CERTIFICATE LEGEND 55
7.11 PRE-RETIREMENT DISTRIBUTION 56
7.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS 56
ARTICLE VIII - TRUSTEE
8.1 BASIC RESPONSIBILITIES OF THE TRUSTEE 56
8.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE 57
8.3 OTHER POWERS OF THE TRUSTEE 58
8.4 VOTING COMPANY STOCK 60
8.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS 61
8.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES 61
8.7 ANNUAL REPORT OF THE TRUSTEE 62
8.8 AUDIT 62
8.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE 63
8.10 TRANSFER OF INTEREST 64
2
<PAGE>
ARTICLE IX - AMENDMENT, TERMINATION AND MERGERS
9.1 AMENDMENT 64
9.2 TERMINATION 65
9.3 MERGER OR CONSOLIDATION 65
ARTICLE X - MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS 65
10.2 ALIENATION 65
10.3 CONSTRUCTION OF PLAN 66
10.4 GENDER AND NUMBER 66
10.5 LEGAL ACTION 66
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS 67
10.7 BONDING 67
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE 67
10.9 INSURER'S PROTECTIVE CLAUSE 67
10.10 RECEIPT AND RELEASE FOR PAYMENTS 68
10.11 ACTION BY THE EMPLOYER 68
10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY 68
10.13 HEADINGS 69
10.14 APPROVAL BY INTERNAL REVENUE SERVICE 69
10.15 UNIFORMITY 69
10.16 SECURITIES AND EXCHANGE COMMISSION APPROVAL 69
3
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FIRST NATIONAL BANK OF GREENCASTLE
EMPLOYEES' STOCK OWNERSHIP PLAN
THIS AGREEMENT, hereby made and entered into this 28th day
of March 1992, by and between FIRST NATIONAL BANK OF GREENCASTLE
(herein referred to as the "Employer") and FIRST NATIONAL BANK OF
GREENCASTLE (herein referred to as the "Trustee").
WITNESSETH:
WHEREAS, the Employer heretofore established an Employee
Stock Ownership Plan and Trust effective JANUARY 1, 1986
(hereinafter called the "Effective Date"), known as FIRST
NATIONAL BANK OF GREENCASTLE 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, 1989, 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 designated by the
Employer pursuant to Section 2.4 to administer the Plan on behalf
of the Employer.
1.3 "Affiliated Employer" means the Employer and 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).
4
<PAGE>
1.4 "Aggregate Account" means, with respect to each
Participant, the value of all accounts maintained on behalf of a
Participant, whether attributable to Employer or Employee
contributions, subject to the provisions of Section 2.2.
1.5 "Anniversary Date" means DECEMBER 31st.
1.6 "Beneficiary" means the person to whom 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 stock of the Employer (or of
any other such corporation) having the greatest dividend rights.
Noncallable preferred stock shall be deemed to be "Company Stock"
if such stock is convertible at any time into stock which
constitutes "Company Stock" hereunder and if such conversion is
at a conversion price which (as of the date of the acquisition by
the Trust) is reasonable. For purposes of the preceding
sentence, pursuant to Regulations, preferred stock shall be
treated as noncallable if after the call there will be a
reasonable opportunity for a conversion which meets the
requirements of the preceding sentence.
1.9 "Company Stock Account" means the account of a
Participant which is credited with the shares of Company Stock
purchased and paid for by the Trust Fund or contributed to the
Trust Fund.
1.10 "Compensation" with respect to any Participant means
total compensation paid or accrued by the Employer for a Plan
Year. Amounts contributed by the Employer under the within Plan
and any non-taxable fringe benefits provided by the Employer
shall not be considered as Compensation.
For purposes of this Section, the determination of
Compensation shall be made by including salary reduction
contributions made on behalf of an Employee to a plan maintained
under Code Sections 125 and 401(k)(2).
Compensation shall be recognized as of an Employee's
effective date of participation pursuant to Section 3.3.
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<PAGE>
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). 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.
For Plan Years beginning prior to January 1, 1989, the
$200,000 limit (without regard to Family Member aggregation)
shall apply only for Top Heavy Plan Years and shall not be
adjusted.
1.11 "Contract" or "Policy" means a life insurance policy
or annuity contract (group or individual) issued by the insurer
as elected.
1.12 "Early Retirement Date" means any Anniversary Date
(prior to the Normal Retirement Date) coinciding with or
following the date on which a Participant or Former Participant
attains age 55 and has completed at least 10 Years of Service
with the Employer (Early Retirement Age). A Participant shall
become fully Vested upon satisfying this requirement if still
employed at his Early Retirement Age.
A Former Participant who terminates employment after
satisfying the service requirement for Early Retirement and who
thereafter reaches the age requirement contained herein shall be
entitled to receive his benefits under this Plan.
1.13 "Eligible Employee" means any Employee.
Employees whose employment is governed by the terms of a
collective bargaining agreement between Employee representatives
(within the meaning of Code Section 7701(a)(46)) and the Employer
under which retirement benefits were the subject of good faith
bargaining between the parties, unless such agreement expressly
provides for such coverage in this Plan, will not be eligible to
participate in this Plan.
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.
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1.15 "Employer" means FIRST NATIONAL BANK OF GREENCASTLE
and any successor which shall maintain this Plan; and any
predecessor which has maintained this Plan. The Employer is a
corporation with principal offices in the Commonwealth of
Pennsylvania.
1.16 "Excess Aggregate Contributions" means, with respect
to any Plan Year, the excess of the aggregate amount of the
voluntary Employee contributions made pursuant to Section 4.9 and
any qualified non-elective contributions or elective deferrals
taken into account pursuant to Section 4.4(c) on behalf of Highly
Compensated Participants for such Plan Year, over the maximum
amount of such contributions permitted under the limitations of
Section 4.4(a).
1.17 "ESOP" means an employee stock ownership plan that
meets the requirements of Code Section 4975(e)(7) and Regulation
54.4975-11.
1.18 "Family Member" means, with respect to an affected
Participant, such Participant's spouse, such Participant's lineal
descendants and ascendants and their spouses, all as described in
Code Section 414(q)(6)(B).
1.19 "Fiduciary" means any person who (a) exercises any
discretionary authority or discretionary control respecting
management of the Plan or exercises any authority or control
respecting management or disposition of its assets, (b) renders
investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the
Plan or has any authority or responsibility to do so, or (c) has
any discretionary authority or discretionary responsibility in
the administration of the Plan, including, but not limited to,
the Trustee, the Employer and its representative body, and the
Administrator.
1.20 "Fiscal Year" means the Employer's accounting year of
12 months commencing on January 1st of each year and ending the
following December 31st.
1.21 "Forfeiture" means that portion of a Participant's
Account that is not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
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. In addition, the term Forfeiture shall also include
amounts deemed to be Forfeitures pursuant to any other provision
of this Plan.
1.22 "Former Participant" means a person who has been a
Participant, but who has ceased to be a Participant for any
reason.
7
<PAGE>
1.23 "415 Compensation" means compensation as defined in
Section 4.6(e).
1.24 "414(s) Compensation" with respect to any Employee
means his "415 Compensation" paid during a Plan Year. The amount
of "414(s) Compensation" with respect to any Employee shall
include "414(s) Compensation" during the entire twelve (12) month
period ending on the last day of such Plan Year, except that for
Plan Years beginning prior to the later of January 1, 1992 or the
date that is sixty (60) days after the date final Regulations are
issued, "414(s) Compensation" shall only be recognized as of an
Employee's effective date of participation.
For purposes of this Section, the determination of "414(s)
Compensation" shall be made by including salary reduction
contributions made on behalf of an Employee to a plan maintained
under Code Sections 125 and 401(k)(2).
"414(s) 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). However,
for Plan Years beginning prior to January 1, 1989, the $200,000
limit shall apply only for Top Heavy Plan Years and shall not be
adjusted.
1.25 "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 1.31(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 1.50(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.
8
<PAGE>
(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 based only on "415 Compensation" which is
actually paid and shall be made by including amounts that would
otherwise be excluded from a Participant's gross income by reason
of the application of Code Sections 125,402(a)(8), 402(h)(1)(B)
and, in the case of Employer contributions made pursuant to a
salary reduction agreement, by including amounts that would
otherwise be excluded from a Participant's gross income by reason
of the application of Code Section 403(b). 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".
1.26 "Highly Compensated Former Employee" means a former
Employee who had a separation year prior to the "determination
year" and was a Highly Compensated Employee in the year of
separation from service or in any "determination year" after
attaining age 55. Notwithstanding the foregoing, an Employee who
separated from service prior to 1987 will be treated as a Highly
Compensated Former Employee only if during the separation year
(or year preceding the separation year) or any year after the
Employee attains age 55 (or the last year ending before the
Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner".
For purposes of this Section, "determination year", "415
Compensation" and "five percent owner" shall be determined in
accordance with Section 1.25. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees. The
method set forth in this Section for determining who is a "Highly
Compensated Former Employee" shall be applied on a uniform and
consistent basis for all purposes for which the Code Section
414(q) definition is applicable.
9
<PAGE>
1.27 "Highly Compensated Participant" means any Highly
Compensated Employee who is eligible to participate in the Plan.
1.28 "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.
1.29 "Income" means the income allocable to Excess
Aggregate Contributions which shall equal the sum of the
allocable gain or loss for the Plan Year and the allocable gain
or loss for the period between the end of the Plan Year and the
date of distribution ("gap period"). The income allocable to
Excess Aggregate Contributions for the Plan Year and the "gap
period" is calculated separately and is determined by multiplying
the income for the Plan Year or the "gap period" by a fraction.
The numerator of the fraction is the Excess Aggregate
Contributions for the Plan Year. The denominator of the fraction
is the total account balance attributable to and any qualified
10
<PAGE>
non-elective contributions or elective deferrals taken into
account pursuant to Section 4.4(c) as of the end of the Plan Year
or the "gap period", reduced by the gain allocable to such total
amount for the Plan Year or the "gap period" and increased by the
loss allocable to such total amount for the Plan Year or the "gap
period".
In lieu of the "fractional method" described above, a "safe
harbor method" may be used to calculate the allocable Income for
the "gap period". Under such "safe harbor method", allocable
Income for the "gap period" shall be deemed to equal ten percent
(10%) of the Income allocable to Excess Aggregate Contributions
for the Plan Year multiplied by the number of calendar months in
the "gap period". For purposes of determining the number of
calendar months in the "gap period", a distribution occurring on
or before the fifteenth day of the month shall be treated as
having been made on the last day of the preceding month and a
distribution occurring after such fifteenth day shall be treated
as having been made on the first day of the next subsequent
month.
Notwithstanding the above, for Plan Years which began in
1987, Income during the "gap period" shall not be taken into
account.
1.30 "Investment Manager" means an entity that (a) has the
power to manage, acquire, or dispose of Plan assets and (b)
acknowledges fiduciary responsibility to the Plan in writing.
Such entity must be a person, firm, or corporation registered as
an investment adviser under the Investment Advisers Act of 1940,
a bank, or an insurance company.
1.31 "Key Employee" means an Employee as defined in Code
Section 416(i) and the Regulations thereunder. Generally, any
Employee or former Employee (as well as each of his
Beneficiaries) is considered a Key Employee if he, at any time
during the Plan Year that contains the "Determination Date" or
any of the preceding four (4) Plan Years, has been included in
one of the following categories:
(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.
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<PAGE>
(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 based only on "415 Compensation" which is
actually paid and shall be made by including amounts that would
otherwise be excluded from a Participant's gross income by reason
of the application of Code Sections 125, 402(a)(8), 402(h)(1)(B)
and, in the case of Employer contributions made pursuant to a
salary reduction agreement, by including amounts that would
otherwise be excluded from a Participant's gross income by reason
of the application of Code Section 403(b).
1.32 "Late Retirement Date" means the Anniversary Date
coinciding with or next following a Participant's actual
Retirement Date after having reached his Normal Retirement Date.
1.33 "Leased Employee" means any person (other than an
Employee of the recipient) who pursuant to an agreement between
the recipient and any other person ("leasing organization") has
performed services for the recipient (or for the recipient and
related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at
least one year, and such services are of a type historically
performed by employees in the business field of the recipient
employer. Contributions or benefits provided a Leased Employee
by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided
by the recipient employer. A Leased Employee shall not be
considered an Employee of the recipient if:
(a) 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 contributed pursuant to a
salary reduction agreement which are excludable from the
employee's gross income under Code Sections 125,
402(a)(8), 402(h) or 403(b);
(2) immediate participation; and
(3) full and immediate vesting.
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<PAGE>
(b) Leased Employees do not constitute more than 20% of
the recipient's non-highly compensated work force.
1.34 "Non-Highly Compensated Participant" means any
Participant who is neither a Highly Compensated Employee nor a
Family Member.
1.35 "Non-Key Employee" means any Employee or former
Employee (and his Beneficiaries) who is not a Key Employee.
1.36 "Normal Retirement Date" means the Anniversary Date
nearest the Participant's Normal Retirement Age (65th birthday).
A Participant shall become fully Vested in his Account upon
attaining his Normal Retirement Age.
1.37 "1-Year Break in Service" means the applicable
computation period during which an Employee has not completed
more than 500 Hours of Service with the Employer. Further,
solely for the purpose of determining whether a Participant has
incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and
paternity leaves of absence." Years of Service and 1-Year Breaks
in Service shall be measured on the same computation period.
"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.
1.38 "Other Investments Account" means the account of a
Participant which is credited with his share of the net gain (or
loss) of the Plan, Forfeitures and Employer contributions in
other than Company Stock and which is debited with payments made
to pay for Company Stock.
1.39 "Participant" means any Eligible Employee who
participates in the Plan as provided in Sections 3.2 and 3.3, and
has not for any reason become ineligible to participate further
in the Plan.
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1.40 "Participant's Account" means the account established
and maintained by the Administrator for each Participant with
respect to his total interest in the Plan and Trust resulting
from the Employer's contributions.
1.41 "Plan" means this instrument, including all amendments
thereto.
1.42 "Plan Year" means the Plan's accounting year of twelve
(12) months commencing on January 1st of each year and ending the
following December 31st.
1.43 "Regulation" means the Income Tax Regulations as
promulgated by the Secretary of the Treasury or his delegate, and
as amended from time to time.
1.44 "Retired Participant" means a person who has been a
Participant, but who has become entitled to retirement benefits
under the Plan.
1.45 "Retirement Date" means the date as of which a
Participant retires for reasons other than Total and Permanent
Disability, whether such retirement occurs on a Participant's
Normal Retirement Date, Early or Late Retirement Date (see
Section 7.1).
1.46 "Super Top Heavy Plan" means a plan described in
Section 2.2(b).
1.47 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than
by death, Total and Permanent Disability or retirement.
1.48 "Top Heavy Plan" means a plan described in Section
2.2(a).
1.49 "Top Heavy Plan Year" means a Plan Year commencing
after December 31, 1983 during which the Plan is a Top Heavy
Plan.
1.50 "Top Paid Group" means the top 20 percent of Employees
who performed services for the Employer during the applicable
year, ranked according to the amount of "415 Compensation"
(determined for this purpose in accordance with Section 1.25)
received from the Employer during such year. 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;
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(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.
1.51 "Total and Permanent Disability" means a physical or
mental condition of a Participant resulting from bodily injury,
disease, or mental disorder which renders him incapable of
continuing any gainful occupation and which condition constitutes
total disability under the federal Social Security Acts.
1.52 "Trustee" means the person or entity named as trustee
herein or in any separate trust forming a part of this Plan, and
any successors.
1.53 "Trust Fund" means the assets of the Plan and Trust as
the same shall exist from time to time.
1.54 "Vested" means the nonforfeitable portion of any
account maintained on behalf of a Participant.
1.55 "Voluntary Contribution Account" means the account
established and maintained by the Administrator for each
Participant with respect to his total interest in the Plan
resulting from the Participant's nondeductible voluntary
contributions made pursuant to Section 4.9.
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.
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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.
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
commencing after December 31, 1983 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, for Plan Years
beginning after December 31, 1984, if a Participant or Former
Participant has not performed any services for any Employer
maintaining the Plan at any time during the five year period
ending on the Determination Date, any accrued benefit for such
Participant or Former Participant shall not be taken into account
for the purposes of determining whether this Plan is a Top Heavy
or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan
Year commencing after December 31, 1983 in which, as of the
Determination Date, (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:
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(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 accepted after December 31, 1983 as part
of the Participant's Aggregate Account balance. However,
rollovers or plan-to-plan transfers accepted prior to
January 1, 1984 shall be considered as part of the
Participant's Aggregate Account balance;
(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;
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(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
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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 8.4.
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<PAGE>
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:
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(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 4.10;
(j) to establish and communicate to Participants a
procedure and method to insure that each Participant will vote
Company Stock allocated to such Participant's Company Stock
Account pursuant to Section 8.4;
(k) to enter into a written agreement with regard to the
payment of federal estate tax pursuant to Code Section 2210(b);
(l) to assist any Participant regarding his rights,
benefits, or elections available under the Plan.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken
and shall keep all other books of account, records, and other
data that may be necessary for proper administration of the Plan
and shall be responsible for supplying all information and
reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.
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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. However, the Employer
may reimburse the Trust Fund for any administration expense
incurred. Any administration expense paid to the Trust Fund as a
reimbursement shall not be considered an Employer contribution.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.5, if there shall
be more than one Administrator, they shall act by a majority of
their number, but may authorize one or more of them to sign all
papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed with the
Administrator on forms supplied by the Employer. Written notice
of the disposition of a claim shall be furnished to the claimant
within 90 days after the application is filed. In the event the
claim is denied, the reasons for the denial shall be specifically
set forth in the notice in language calculated to be understood
by the claimant, pertinent provisions of the Plan shall be cited,
and, where appropriate, an explanation as to how the claimant can
perfect the claim will be provided. In addition, the claimant
shall be furnished with an explanation of the Plan's claims
review procedure.
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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 five (5) business days written notice to the
Administrator) the claimant or his representative shall have an
opportunity to review all documents in the possession of the
Administrator which are pertinent to the claim at issue and its
disallowance. Either the claimant or the Administrator may cause
a court reporter to attend the hearing and record the
proceedings. In such event, a complete written transcript of the
proceedings shall be furnished to both parties by the court
reporter. The full expense of any such court reporter and such
transcripts shall be borne by the party causing the court
reporter to attend the hearing. 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 20 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.
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3.3 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as
of the earlier of the first day of the Plan Year or the first day
of the seventh month of such Plan Year 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.
(c) In the event an Employee who is not a member of an
eligible class of Employees becomes a member of an eligible
class, such Employee will participate immediately if such
Employee has satisfied the minimum age and service requirements
and would have otherwise previously become a Participant.
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.
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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 Plan such amount as shall be determined by the Employer.
(b) 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.
(c) 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.
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.
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(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper
allocation of the Employer's contributions for each Plan Year.
Within a reasonable period of time after the date of receipt by
the Administrator of such information, the Administrator shall
allocate such contribution to each Participant's Account in the
same proportion that each such Participant's Compensation for the
year bears to the total Compensation of all Participants for such
year.
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 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.
(d) As of each Anniversary Date or other valuation date,
before allocation of Employer contributions and Forfeitures, any
earnings or losses (net appreciation or net depreciation) of the
Trust Fund shall be allocated in the same proportion that each
Participant's and Former Participant's nonsegregated accounts
(other than each Participant's Company Stock Account) bear to the
total of all Participants' and Former Participants' nonsegregated
accounts (other than Participants' Company Stock Accounts) as of
such date. Cash dividends on Company Stock allocated to each
Participant's or Former Participant's nonsegregated accounts
after the first month of the Plan Year shall not share in any
earnings or losses of the Trust Fund for such year. However, the
Administrator may direct that cash dividends on Company Stock
allocated to each Participant's or Former Participant's Company
Stock Account 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, or such cash dividends be distributed pursuant to
Section 7.5(d). Earnings or losses include the increase (or
decrease) in the fair market value of assets of the Trust Fund
(other than Company Stock in the Participants' Company Stock
Accounts) since the preceding Anniversary Date.
Participants' transfers from other qualified plans and
voluntary contributions deposited in the general Trust Fund after
a valuation date shall not share in any earnings and losses (net
appreciation or net depreciation) of the Trust Fund for such
period. Each segregated account maintained on behalf of a
Participant shall be credited or charged with its separate
earnings and losses.
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<PAGE>
(e) Participants' accounts shall be debited for any
insurance or annuity premiums paid, if any, and credited with any
dividends received on insurance contracts.
(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(h).
The remaining Forfeitures, if any, shall be allocated among the
Participants' Accounts of Participants otherwise eligible to
share in the allocation of discretionary contributions in the
same proportion that each such Participant's Compensation for the
year bears to the total Compensation of all such Participants for
the year.
Provided, however, that in the event the allocation of
Forfeitures provided herein shall cause the "annual addition" (as
defined in Section 4.6) to any Participant's Account to exceed
the amount allowable by the Code, the excess shall be reallocated
in accordance with Section 4.7.
(g) For any Top Heavy Plan Year, Non-Key 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 Non-Key Employee shall be equal
to at least three percent (3%) of such Non-Key Employee's "415
Compensation" (reduced by contributions and forfeitures, if any,
allocated to each Non-Key Employee in any defined contribution
plan included with this plan in a Required Aggregation Group).
However, if (i) 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 (ii) 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 Non-Key
Employee shall be equal to the largest percentage allocated
to the Participant's Account of any Key Employee.
However, no such minimum allocation shall be required in
this Plan for any Non-Key Employee who participates in another
defined contribution plan subject to Code Section 412 providing
such benefits included with this Plan in a Required Aggregation
Group.
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<PAGE>
(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 Non-Key Employees who are Participants and who are
employed by the Employer on the last day of the Plan Year,
including Non-Key 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 (unless adjusted in such manner as
permitted under Code Section 415(d)). However, for Plan Years
beginning prior to January 1, 1989, the $200,000 limit shall
apply only for Top Heavy Plan Years and shall not be adjusted.
(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.
(n) Notwithstanding anything to the contrary, for Plan
Years beginning after December 31, 1989, if this is a Plan that
would otherwise fail to meet the requirements of Code Sections
401(a)(26), 410(b)(1) or 410 (b)(2)(A)(i) and the Regulations
thereunder because Employer contributions have not been allocated
to a sufficient number or percentage of Participants for a Plan
Year, then the following rules shall apply:
(1) The group of Participants eligible to share in the
Employer's contribution and Forfeitures for the Plan Year
shall be expanded to include the minimum number of
Participants who would not otherwise be eligible as are
necessary to satisfy the applicable test specified above.
The specific Participants who shall become eligible under
the terms of this paragraph shall be those who are
actively employed on the last day of the Plan Year and,
when compared to similarly situated Participants, have
completed the greatest number of Hours of Service in the
Plan Year.
(2) If after application of paragraph (1) above, the
applicable test is still not satisfied, then the group of
Participants eligible to share in the Employer's
contribution and Forfeitures for the Plan Year shall be
further expanded to include the minimum number of
Participants who are not actively employed on the last day
of the Plan Year as are necessary to satisfy the
applicable test. The specific Participants who shall
become eligible to share shall be those Participants, when
compared to similarly situated Participants, who have
completed the greatest number of Hours of Service in the
Plan Year before terminating employment.
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<PAGE>
(3) Nothing in this Section shall permit the reduction of
a Participant's accrued benefit. Therefore any amounts
that have previously been allocated to Participants may
not be reallocated to satisfy these requirements. In such
event, the Employer shall make an additional contribution
equal to the amount such affected Participants would have
received had they been included in the allocations, even
if it exceeds the amount which would be deductible under
Code Section 404. Any adjustment to the allocations
pursuant to this paragraph shall be considered a
retroactive amendment adopted by the last day of the Plan
Year.
4.4 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for Plan Years
beginning after December 31, 1986 for the Highly Compensated
Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly
Compensated Participant group; or
(2) the lesser of 200 percent of such percentage for the
Non-Highly Compensated Participant group, or such
percentage for the Non-Highly Compensated Participant
group plus 2 percentage points. However, for Plan Years
beginning after December 31, 1988, to prevent the multiple
use of the alternative method described in this paragraph
and Code Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals pursuant
to any cash or deferred arrangement maintained by the
Employer or an Affiliated Employer and to make Employee
contributions or to receive matching contributions under
this Plan or under any plan maintained by the Employer or
an Affiliated Employer shall have his actual contribution
ratio reduced pursuant to Regulation 1.401(m)-2. The
provisions of Code Section 401(m) and Regulations
1.401(m)-1(b) and 1.401(m)-2 are incorporated herein by
reference.
(b) For the purposes of this Section and Section 4.5,
"Actual Contribution Percentage" for a Plan Year means, with
respect to the Highly Compensated Participant group and Non-Highly
Compensated Participant group, the average of the ratios
(calculated separately for each Participant in each group) of:
(1) the sum of voluntary Employee contributions made
pursuant to Section 4.9 on behalf of each such Participant
for such Plan Year; to
(2) the Participant's "414(s) Compensation" for such
Plan Year.
(c) For purposes of determining the "Actual Contribution
Percentage" and the amount of Excess Aggregate Contributions
pursuant to Section 4.5(c), the Administrator may elect to take
into account, with respect to Employees eligible to have
voluntary Employee contributions pursuant to Section 4.9
allocated to their accounts, elective deferrals (as defined in
Regulation 1.402(g)-1(b)) and qualified non-elective
29
<PAGE>
contributions (as defined in Code Section 401 (m)(4)(C))
contributed to any plan maintained by the Employer. Such
elective deferrals and qualified non-elective contributions shall
be treated as Employer matching contributions subject to
Regulation 1.401(m)-1(b)(2) which is incorporated herein by
reference. However, for Plan Years beginning after December 31,
1988, the Plan Year must be the same as the plan year of the plan
to which the elective deferrals and the qualified non-elective
contributions are made.
(d) For the purpose of determining the actual contribution
ratio of a Highly Compensated Employee who is subject to the
Family Member aggregation rules of Code Section 414(q)(6) because
such Employee is either a "five percent owner" of the Employer or
one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, the following shall
apply:
(1) The combined actual contribution ratio for the family
group (which shall be treated as one Highly Compensated
Participant) shall be the greater of: (i) the ratio
determined by aggregating voluntary Employee contributions
made pursuant to Section 4.9 and "414(s) Compensation" of
all eligible Family Members who are Highly Compensated
Participants without regard to family aggregation; and
(ii) the ratio determined by aggregating voluntary
Employee contributions made pursuant to Section 4.9 and
"414(s) Compensation" of all eligible Family Members
(including Highly Compensated Participants). However, in
applying the $200,000 limit to "414(s) Compensation" for
Plan Years beginning after December 31, 1988, Family
Members shall include only the affected Employee's spouse
and any lineal descendants who have not attained age 19
before the close of the Plan Year.
(2) The voluntary Employee contributions made pursuant to
Section 4.9 and "414(s) Compensation" of all Family
Members shall be disregarded for purposes of determining
the "Actual Contribution Percentage" of the Non-Highly
Compensated Participant group except to the extent taken
into account in paragraph (l) above.
(3) If a Participant is required to be aggregated as a
member of more than one family group in a plan, all
Participants who are members of those family groups that
include the Participant are aggregated as one family group
in accordance with paragraphs (1) and (2) above.
(e) For purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(m), if two or more plans of the
Employer to which matching contributions, Employee contributions,
or both, are made are treated as one plan for purposes of Code
Sections 401(a)(4) or 410(b) (other than the average benefits
test under Code Section 410(b)(2)(A)(ii) as in effect for Plan
Years beginning after December 31, 1988), such plans shall be
treated as one plan. In addition, two or more plans of the
Employer to which matching contributions, Employee contributions,
or both, are made may be considered as a single plan for purposes
of determining whether or not such plans satisfy Code Sections
401(a)(4), 410(b) and 401(m). In such a case, the aggregated
plans must satisfy this Section and Code Sections 401(a)(4),
410(b) and 401(m) as though such aggregated plans were a single
plan.
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<PAGE>
Notwithstanding the above, for Plan Years beginning after
December 31, 1988, this Plan may not be aggregated with any other
plan for purposes of determining whether this Plan or any other
plan satisfies this Section and Code Sections 401(a)(4), 410(b)
and 401(m).
(f) If a Highly Compensated Participant is a Participant
under two or more plans which are maintained by the Employer or
an Affiliated Employer to which matching contributions, Employee
contributions, or both, are made, all such contributions on
behalf of such Highly Compensated Participant shall be aggregated
for purposes of determining such Highly Compensated Participant's
actual contribution ratio. However, for Plan Years beginning
after December 31, 1988, no such aggregation is required.
(g) For purposes of Sections 4.4(a) and 4.5, a Highly
Compensated Participant and Non-Highly Compensated Participant
shall include any Employee eligible to have voluntary Employee
contributions pursuant to Section 4.9 (whether or not voluntary
Employee contributions are made) allocated to his account for the
Plan Year.
4.5 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that, for Plan Years beginning after
December 31, 1986, the "Actual Contribution Percentage" for the
Highly Compensated Participant group exceeds the "Actual
Contribution Percentage" for the Non-Highly Compensated
Participant group pursuant to Section 4.4(a), the Administrator
(on or before the fifteenth day of the third month following the
end of the Plan Year, but in no event later than the close of the
following Plan Year) shall direct the Trustee to distribute to
the Highly Compensated Participant having the highest actual
contribution ratio, his portion of Excess Aggregate Contributions
(and Income allocable to such contributions) until either one of
the tests set forth in Section 4.4(a) is satisfied, or until his
actual contribution ratio equals the actual contribution ratio of
the Highly Compensated Participant having the second highest
actual contribution ratio. This process shall continue until one
of the tests set forth in Section 4.4(a) is satisfied.
(b) Any distribution of less than the entire amount of
Excess Aggregate Contributions (and Income) shall be treated as a
pro rata distribution of Excess Aggregate Contributions and
Income. Distribution of Excess Aggregate Contributions shall be
designated by the Employer as a distribution of Excess Aggregate
Contributions (and Income).
(c) For each Highly Compensated Participant, the amount of
Excess Aggregate Contributions is equal to the total voluntary
Employee contributions made pursuant to Section 4.9 and any
qualified non-elective contributions or elective deferrals taken
into account pursuant to Section 4.4(c) on behalf of the Highly
Compensated Participant (determined prior to the application of
this paragraph) minus the amount determined by multiplying the
Highly Compensated Participant's actual contribution ratio
(determined after application of this paragraph) by his "414(s)
Compensation." The actual contribution ratio must be rounded to
the nearest one-hundredth of one percent for Plan Years beginning
after December 31, 1988. In no case shall the amount of Excess
Aggregate Contribution with respect to any Highly Compensated
Participant exceed the amount of voluntary Employee contributions
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<PAGE>
made pursuant to Section 4.9 and any qualified non-elective
contributions or elective deferrals taken into account pursuant
to Section 4.4(c) on behalf of such Highly Compensated
Participant for such Plan Year.
(d) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after
first determining the Excess Contributions (as defined in
Regulation 1.401(k)-l(g)(13)), if any, to be treated as voluntary
Employee contributions due to recharacterization for the plan
year of any qualified cash or deferred arrangement (as defined in
Code Section 401(k)) maintained by the Employer that ends with or
within the Plan Year.
(e) If the determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual
contribution ratio is determined under the family aggregation
rules, then the actual contribution ratio shall be reduced and
the Excess Aggregate Contributions for the family unit shall be
allocated among the Family Members in proportion to the sum of
and any qualified non-elective contributions or elective
deferrals taken into account pursuant to Section 4.4(c) of each
Family Member that were combined to determine the group actual
contribution ratio. Notwithstanding the foregoing, with respect
to Plan Years beginning prior to January 1, 1990, compliance with
the Regulations then in effect shall be deemed to be compliance
with this paragraph.
(1) If the actual contribution ratio for the Highly
Compensated Participant is determined in accordance with
Section 4.4(d)(l)(ii), then the actual contribution ratio
shall be reduced and the Excess Aggregate Contributions
for the family unit shall be allocated among the Family
Members in proportion to the sum of voluntary Employee
contributions made pursuant to Section 4.9 and any
qualified non-elective contributions or elective deferrals
taken into account pursuant to Section 4.4(c) of each
Family Member that were combined to determine the group
actual contribution ratio.
(2) If the actual contribution ratio for the Highly
Compensated Participant is determined under Section
4.4(d)(l)(i), then the actual contribution ratio shall
first be reduced, as required herein, but not below the
actual contribution ratio of the group of Family Members
who are not Highly Compensated Participants without regard
to family aggregation. The Excess Aggregate Contributions
resulting from this initial reduction shall be allocated
among the Highly Compensated Participants whose voluntary
Employee contributions made pursuant to Section 4.9 and
any qualified non-elective contributions or elective
deferrals taken into account pursuant to Section 4.4(c)
were combined to determine the actual contribution ratio.
If further reduction is still required, then Excess
Aggregate Contributions resulting from this further
reduction shall be determined by taking into account the
contributions of all Family Members and shall be allocated
among them in proportion to their respective voluntary
Employee contributions made pursuant to Section 4.9 and
any qualified non-elective contributions or elective
deferrals taken into account pursuant to Section 4.4(c).
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<PAGE>
(f) Notwithstanding the above, within twelve (12) months
after the end of the Plan Year, the Employer may make a qualified
non-elective contribution (as defined in Code Section
401(m)(4)(C)) on behalf of Non-Highly Compensated Participants in
an amount sufficient to satisfy one of the tests set forth in
Section 4.4(a). Such contribution shall be allocated to the
Participant's Account of each Non-Highly Compensated Participant
in the same proportion that each Non-Highly Compensated
Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants. A
separate accounting shall be maintained with respect to such
contributions.
4.6 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".
(b) For "limitation years" beginning prior to July 13,
1989, the dollar amount provided for in paragraph (a)(1) above
shall be increased by the lesser of the dollar amount determined
under paragraph (a)(1) above or the amount of Company Stock
contributed, or purchased with cash contributed. The dollar
amount shall be increased provided no more than one-third of the
Employer's contributions for the year are allocated to Highly
Compensated Participants. In applying this limitation, the
family group of a Highly Compensated Participant who is subject
to the Family Member aggregation rules of Code Section 414(q)(6)
shall be determined pursuant to Regulations.
(c) 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 for "limitation years"
beginning after December 31, 1986, (3) forfeitures, (4) amounts
allocated, after March 31, 1984, to an individual medical
account, as defined in Code Section 415 (1)(2) which is part of a
pension or annuity plan maintained by the Employer and (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).
(d) 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
4.6(c)(2): (1) rollover contributions (as defined in Code
Sections 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3)); (2)
33
<PAGE>
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).
(e) For purposes of applying the limitations of Code
Section 415, "415 Compensation" shall include the Participant's
wages, salaries, fees for professional service and other amounts
received (without regard to whether or not an amount is paid in
cash) for personal services actually rendered in the course of
employment with an Employer maintaining the Plan to the extent
that the amounts are includable in gross income (including, but
not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on
insurance premiums, tips, bonuses, fringe benefits,
reimbursements, and expense allowances, and in the case of a
Participant who is an Employee within the meaning of Code Section
401(c)(1) and the regulations thereunder, the Participant's
earned income (as described in Code Section 401(c)(2) and the
regulations thereunder)) paid or accrued during the "limitation
year". However, for "limitation years" beginning after December
31, 1991, accrued "415 Compensation" (subject to de minimis
accrued "415 Compensation" pursuant to Regulation 1.415-2(d)(4)(ii))
shall not be used.
"415 Compensation" shall exclude (1)(A) contributions made
by the Employer to a plan of deferred compensation to the extent
that, before the application of the Code Section 415 limitations
to the Plan, the contributions are not includable in the gross
income of the Employee for the taxable year in which contributed,
(B) contributions made by the Employer to a plan of deferred
compensation to the extent that all or a portion of such
contributions are recharacterized as a voluntary Employee
contribution, (C) Employer contributions made on behalf of an
Employee to a simplified employee pension plan described in Code
Section 408(k) to the extent such contributions are excludable
from the Employee's gross income, (D) any distributions from a
plan of deferred compensation regardless of whether such amounts
are includable in the gross income of the Employee when
distributed except any amounts received by an Employee pursuant
to an unfunded non-qualified plan to the extent such amounts are
includable in the gross income of the Employee; (2) amounts
realized from the exercise of a non-qualified stock option or
when restricted stock (or property) held by an Employee either
becomes freely transferable or is no longer subject to a
substantial risk of forfeiture; (3) amounts realized from the
sale, exchange or other disposition of stock acquired under a
qualified stock option; and (4) other amounts which receive
special tax benefits, such as premiums for group term life
insurance (but only to the extent that the premiums are not
includable in the gross income of the Employee), or contributions
made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of any annuity contract described
in Code Section 403(b) (whether or not the contributions are
excludable from the gross income of the Employee). For the
purposes of this Section, the determination of "415 Compensation"
shall be made by not including amounts that would otherwise be
excluded from a Participant's gross income by reason of the
application of Code Sections 125, 402(a)(8), 402(h)(1)(B) and, in
the case of Employer contributions made pursuant to a salary
reduction agreement, Code Section 403(b).
(f) For purposes of applying the limitations of Code
Section 415, the "limitation year" shall be the Plan Year.
(g) 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.
(h) 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.
(i) 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.
(j) 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.
(k) (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 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"
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<PAGE>
which would be credited to such Participant's accounts
under this Plan without regard to the limitations of
Code Section 415 and (ii) the denominator of which is
such "annual additions" for all plans described in this
subparagraph.
(l) 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.
(m) 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.
(n) 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
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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 6, 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.
(o) Notwithstanding the foregoing, for any "limitation
year" in which the Plan is a Top Heavy Plan, 100% shall be
substituted for 125% in Sections 4.6(m) and 4.6(n) 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% shall be substituted for 125% in any
event.
(p) 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.
4.7 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's Compensation 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) 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 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 4.6.
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(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.
4.8 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)-l(g)(4)),
including amounts treated as elective contributions, which are
transferred from another qualified plan in a plan-to-plan
transfer shall be subject to the distribution limitations
provided for in Regulation 1.401(k)-l(d).
(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.
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(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) lump-sum distributions received by an
Employee from another qualified plan which are eligible for tax
free rollover to a qualified plan and which are transferred by
the Employee to this Plan within sixty (60) days following his
receipt thereof; (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.
4.9 VOLUNTARY CONTRIBUTIONS
(a) In order to allow Participants the opportunity to
increase their retirement income, each Participant may, at the
discretion of the Administrator, elect to voluntarily contribute
a portion of his compensation earned while a Participant under
this Plan. Such contributions shall be paid to the Trustee
within a reasonable period of time but in no event later than
ninety (90) days after the receipt of the contribution. The
balance in each Participant's Voluntary Contribution Account
shall be fully Vested at all times and shall not be subject to
Forfeiture for any reason.
(b) A Participant may elect to withdraw his voluntary
contributions from his Voluntary Contribution Account and the
actual earnings thereon 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. If the
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Administrator maintains sub-accounts with respect to voluntary
contributions (and earnings thereon) which were made on or before
a specified date, a Participant shall be permitted to designate
which sub-account shall be the source for his withdrawal.
In the event such a withdrawal is made, or in the event a
Participant has received a hardship distribution pursuant to
Regulation 1.401(k)-l(d)(2)(iii)(B) from any other plan
maintained by the Employer, then such Participant shall be barred
from making any voluntary contributions to the Trust Fund for a
period of twelve (12) months after receipt of the withdrawal or
distribution.
(c) 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 Voluntary Contribution
Account shall be used to provide additional benefits to the
Participant or his Beneficiary.
(d) The Administrator may direct that voluntary
contributions made after a valuation date be segregated into a
separate account for each Participant in a federally insured
savings account, certificate of deposit in a bank or savings and
loan association, money market certificate, or other short term
debt security acceptable to the Trustee until such time as the
allocations pursuant to this Plan have been made, at which time
they may remain segregated or be invested as part of the general
Trust Fund, to be determined by the Administrator.
4.10 DIRECTED INVESTMENT ACCOUNT
(a) Each "Qualified Participant", for Plan Years beginning
after December 31, 1986, 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
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<PAGE>
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 completed ten (10) Plan
Years of Service as a Participant and 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.
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(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 after
October 22, 1986 in a sale to which Code Section 1042 or, for
estates of decedents who died prior to December 20, 1989, Code
Section 2057 applies may accrue or be allocated directly or
indirectly under any plan maintained by the Employer meeting the
requirements of Code Section 401(a):
(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 or
any decedent if the executor of the estate of the
decedent makes a qualified sale to which Code
Section 2057 applies,
(ii) any individual who is related to the taxpayer
or the decedent (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 or Code Section 2057 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
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(2) on the date as of which Company Stock is allocated
to Participants in the Plan.
(d) For purposes of this Section, "Nonallocation Period",
for Plan Years beginning after December 31, 1986, means the
period beginning on the date of the sale of the Company Stock and
ending on the 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" prior to taking into
consideration any contribution to be allocated for that Plan
Year. 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. Upon such Normal
Retirement Date or Early Retirement Date, all amounts credited to
such Participant's Account shall become distributable. 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
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Retirement Date. Upon a Participant's Retirement Date, 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 the
Participant elects, 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
amounts credited to the accounts of a deceased Former Participant
to such Former Participant's Beneficiary.
(c) 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.
(d) 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 is legally separated or has been
abandoned (within the meaning of local law) and the
Participant has a court order to such effect (and there
is no "qualified domestic relations order" as defined in
Code Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
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
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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.
(e) 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.
In the event that the amount of the Vested portion of the
Terminated Participant's Account equals or exceeds the fair
market value of any insurance Contracts, the Trustee, when so
directed by the Administrator and agreed to by the Terminated
Participant, shall assign, transfer, and set over to such
Terminated Participant all Contracts on his life in such form or
with such endorsements so that the settlement options and forms
of payment are consistent with the provisions of Section 7.5. In
the event that the Terminated Participant's Vested portion does
not at least equal the fair market value of the Contracts, if
any, the Terminated Participant may pay over to the Trustee the
sum needed to make the distribution
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<PAGE>
equal to the value of the Contracts being assigned or
transferred, or the Trustee, pursuant to the Participant's
election, may borrow the cash value of the Contracts from the
insurer so that the value of the Contracts is equal to the Vested
portion of the Terminated Participant's Account and then assign
the Contracts to the Terminated Participant.
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 months after 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 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
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:
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Vesting Schedule
Years of Service Percentage
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) 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 and restatement. 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.
Except, however, any Employee who was a Participant as of
the later of the effective date or adoption date of this
amendment and restatement and who completed three (3) Years of
Service shall be subject to the pre-amendment vesting schedule
provided such schedule is more liberal than the new vesting
schedule.
Pre-Amendment Vesting Schedule
------------------------------
Years of Service Percentage
3 30%
4 40%
5 50%
6 60%
7 70%
8 80%
9 90%
10 100%
(g) 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.
(h) (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. If a
distribution occurs for any reason other than a
separation from service, the time for repayment may not
end earlier than five (5) years after the date of
distribution. In the event the Former Participant does
repay the full amount distributed to him, or in the
event of a deemed distribution, the undistributed
portion
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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.
(i) In determining Years of Service for purposes of vesting
under the Plan, Years of Service prior to the vesting computation
period in which an Employee attained his eighteenth birthday
shall be excluded.
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7.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, in his sole discretion if the amount
to be distributed has been held by the ESOP for the five year
period prior to the Administrator's discretion (or if the amount
to be distributed has been held in an ESOP throughout the entire
period of its existence), otherwise, 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) 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(f).
(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.
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(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.
(d) Notwithstanding anything herein to the contrary, cash
dividends on shares of Company Stock allocable to Participants'
Company Stock Accounts may be paid pursuant to Section 4.3(d) to
Participants or their Beneficiaries within 90 days after the
close of the Plan Year in which the dividend is paid.
(e) 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.
(f) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits made on or
after January 1, 1985 shall be made in accordance with the
following requirements and shall otherwise comply with Code
Section 401(a)(9) and the Regulations thereunder (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.
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Additionally, for calendar years beginning before 1989,
distributions may also be made under an alternative method which
provides that the then present value of the payments to be made
over the period of the Participant's life expectancy exceeds
fifty percent (50%) of the then present value of the total
payments to be made to the Participant and his Beneficiaries.
(g) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant made on
or after January 1, 1985 shall be made in accordance with the
following requirements and shall otherwise comply with Code
Section 401 (a)(9) and the Regulations thereunder. 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, in the event that the Participant's spouse
(determined as of the date of the Participant's death) is his
Beneficiary, then in lieu of the preceding rules, distributions
must be made over a period not extending beyond the life
expectancy of the spouse and must commence on or before the later
of: (1) December 31st of the calendar year immediately following
the calendar year in which the Participant died; or (2) December
31st of the calendar year in which the Participant would have
attained age 70-1/2. If the surviving spouse dies before
distributions to such spouse begin, then the 5-year distribution
requirement of this Section shall apply as if the spouse was the
Participant.
(h) 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.
(i) 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 it
practicable, but in no event later than 180 days after
the Anniversary Date. 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:
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(1) the date on which the Participant attains the
earlier or 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.
(j) The restrictions imposed by this Section shall not
apply if a Participant has, prior to January 1, 1984, made a
written designation to have his retirement benefit paid in an
alternative method acceptable under Code Section 401(a) as in
effect prior to the enactment of the Tax Equity and Fiscal
Responsibility Act of 1982. Any such written designation made by
a Participant shall be binding upon the Plan Administrator
notwithstanding any contrary provision of Section 7.5.
(k) Subject to the spouse's right of consent afforded under
the Plan, the restrictions imposed by this Section shall not
apply if a Participant has, prior to January 1, 1984, made a
written designation to have his death benefits paid in an
alternative method acceptable under Code Section 401(a) as in
effect prior to the enactment of the Tax Equity and Fiscal
Responsibility Act of 1982.
(l) If a distribution is made at a time when a Participant
is not fully Vested in his Participant's Account 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 (RxD)) - (RxD)
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.
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<PAGE>
(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(i) and 7.5(f).
(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.
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7.9 RIGHT OF FIRST REFUSALS
(a) If any Participant, his Beneficiary or any other person
to whom shares of Company Stock are distributed from the Plan
(the "Selling Participant") shall, at any time, desire to sell
some or all of such shares (the "Offered Shares") to a third
party (the "Third Party"), the Selling Participant shall give
written notice of such desire to the Employer and the
Administrator, which notice shall contain the number of shares
offered for sale, the proposed terms of the sale and the names
and addresses of both the Selling Participant and Third Party.
Both the Trust Fund and the Employer shall each have the right of
first refusal for a period of fourteen (14) days from the date
the Selling Participant gives such written notice to the Employer
and the Administrator (such fourteen (14) day period to run
concurrently against the Trust Fund and the Employer) to acquire
the Offered Shares. As between the Trust Fund and the Employer,
the Trust Fund shall have priority to acquire the shares pursuant
to the right of first refusal. The selling price and terms shall
be the same as offered by the Third Party.
(b) If the Trust Fund and the Employer do not exercise
their right of first refusal within the required fourteen (14)
day period provided above, the Selling Participant shall have the
right, at any time following the expiration of such fourteen (14)
day period, to dispose of the Offered Shares to the Third Party;
provided, however, that (i) no disposition shall be made to the
Third Party on terms more favorable to the Third Party than those
set forth in the written notice delivered by the Selling
Participant above, and (ii) if such disposition shall not be
made to a third party on the terms offered to the Employer and
the Trust Fund, the Offered Shares shall again be subject to the
right of first refusal set forth above.
(c) The closing pursuant to the exercise of the right of
first refusal under Section 7.9(a) above shall take place at such
place agreed upon between the Administrator and the Selling
Participant, but not later than ten (10) days after the Employer
or the Trust Fund shall have notified the Selling Participant of
the exercise of the right of first refusal. At such closing, the
Selling Participant shall deliver certificates representing the
Offered Shares duly endorsed in blank for transfer, or with stock
powers attached duly executed in blank with all required transfer
tax stamps attached or provided for, and the Employer or the
Trust Fund shall deliver the purchase price, or an appropriate
portion thereof, to the Selling Participant.
7.10 STOCK CERTIFICATE LEGEND
Certificates for shares distributed pursuant to the Plan
shall contain the following legend:
"The shares represented by this certificate are transferable
only upon compliance with the terms of FIRST NATIONAL BANK OF
GREENCASTLE EMPLOYEES' STOCK OWNERSHIP PLAN effective as of
January 1, 1989, which grants to FIRST NATIONAL BANK OF
GREENCASTLE a right of first refusal, a copy of said Plan being
on file in the office of the Company."
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7.11 PRE-RETIREMENT DISTRIBUTION
At such time as a Participant shall have attained the age of
65 years, the Administrator, at the election of the Participant,
shall direct the Trustee to distribute all or a portion of the
amount then credited to the accounts maintained on behalf of the
Participant. However, no distribution from the Participant's
Account shall occur prior to 100% vesting. In the event that the
Administrator makes such a distribution, the Participant shall
continue to be eligible to participate in the Plan on the same
basis as any other Employee. Any distribution made pursuant to
this Section shall be made in a manner consistent with Sections
7.5 and 7.6, including, but not limited to, all notice and
consent requirements of Code Section 411(a)(11) and the
Regulations thereunder.
7.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
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 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 8.7; 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.
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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.
(e) The Trustee, at the direction of the Administrator,
shall ratably apply for, own, and pay premiums on Contracts on
the lives of the Participants. If a life insurance policy is to
be purchased for a Participant, the aggregate premium for
ordinary life insurance for each Participant must be less than
50% of the aggregate of the contributions and Forfeitures to the
credit of the Participant at any particular time. If term
insurance is purchased with such contributions, the aggregate
premium must be less than 25% of the aggregate contributions and
Forfeitures allocated to a Participant's Account. If both term
insurance and ordinary life insurance are purchased with such
contributions, the amount expended for term insurance plus one-half
of the premium for ordinary life insurance may not in the
aggregate exceed
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25% of the aggregate contributions and Forfeitures allocated to a
Participant's Account. The Trustee must convert the entire value
of the life insurance contracts at or before retirement into cash
or provide for a periodic income so that no portion of such value
may be used to continue life insurance protection beyond
retirement, or distribute the Contracts to the Participant. In
the event of any conflict between the terms of this Plan and the
terms of any insurance Contract purchased hereunder, the Plan
provisions shall control.
8.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under
common law, statutory authority, including the Act, and other
provisions of the Plan, shall have the following powers and
authorities, to be exercised in the Trustee's sole discretion:
(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;
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(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 deposit monies in federally insured savings accounts
or certificates of deposit in banks or savings and loan
associations;
(o) To vote Company Stock as provided in Section 8.4;
(p) 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;
(q) To deposit such Company Stock (but only if such deposit
does not violate the provisions of Section 8.4 hereof) or other
securities in any voting trust, or with any protective or like
committee, or with a trustee or with depositories designated
thereby;
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(r) To sell or exercise any options, subscription rights
and conversion privileges and to make any payments incidental
thereto;
(s) 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;
(t) 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;
(u) To do all such acts and exercise all such rights and
privileges, although not specifically mentioned herein, as the
Trustee may deem necessary to carry out the purposes of the Plan.
8.4 VOTING COMPANY STOCK
The Trustee shall vote all Company Stock held by it as part
of the Plan assets. Provided, however, that if any agreement
entered into by the Trust provides for voting of any shares of
Company Stock pledged as security for any obligation of the Plan,
then such shares of Company Stock shall be voted in accordance
with such agreement. The Trustee shall not vote Company Stock
which a Participant or Beneficiary fails to exercise pursuant to
this Section.
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.
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If the Employer does not have a registration-type class of
securities and the by-laws of the Employer require the Plan to
vote an issue in a manner that reflects a one-man, one-vote
philosophy, each Participant or Beneficiary shall be entitled to
cast one vote on an issue and the Trustee shall vote the shares
held by the Plan in proportion to the results of the votes cast
on the issue by the Participants and Beneficiaries.
8.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
(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.
8.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as
shall from time to time be agreed upon in writing by the Employer
and the Trustee. An individual serving as Trustee who already
receives full-time pay from the Employer shall not receive
compensation from the Plan. In addition, the Trustee shall be
reimbursed for any reasonable expenses, including reasonable
counsel fees incurred by it as Trustee. Such compensation and
expenses shall be paid from the Trust Fund unless
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paid or advanced by the Employer. All taxes of any kind and all
kinds whatsoever that may be levied or assessed under existing or
future laws upon, or in respect of, the Trust Fund or the income
thereof, shall be paid from the Trust Fund.
8.7 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer's contribution for
each Plan Year, the Trustee shall furnish to the Employer and
Administrator a written statement of account with respect to the
Plan Year for which such contribution was made 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.
8.8 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
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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.
8.9 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 8.7 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 8.7 for the approval by the
Employer of annual statements of account shall apply to any
special statement of account rendered hereunder and approval by
the Employer of any such special statement in the manner provided
in Section 8.7 shall have the same effect upon the statement as
the Employer's approval of an annual
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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 8.7 and this subparagraph.
8.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan,
the Trustee at the direction of the Administrator shall transfer
the Vested interest, if any, of such Participant in his account
to another trust forming part of a pension, profit sharing or
stock bonus plan maintained by such Participant's new employer
and represented by said employer in writing as meeting the
requirements of Code Section 401(a), provided that the trust to
which such transfers are made permits the transfer to be made.
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. 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
if 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.
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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
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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 Commonwealth of
Pennsylvania, 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.
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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
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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.
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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(c), any contribution by the Employer
to the Trust Fund is conditioned upon the deductibility of the
contribution by the Employer under the Code and, to the extent
any such deduction is disallowed, the Employer may, within one
(1) year following the disallowance of the deduction, demand
repayment of such disallowed contribution and the Trustee shall
return such contribution within one (1) year following the
disallowance. Earnings of the Plan attributable to the excess
contribution may not be returned to the Employer, but any losses
attributable thereto must reduce the amount so returned.
10.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied
in a uniform, nondiscriminatory manner. In the event of any
conflict between the terms of this Plan and any Contract
purchased hereunder, the Plan provisions shall control.
10.16 SECURITIES AND EXCHANGE COMMISSION APPROVAL
The Employer may request an interpretative letter from the
Securities and Exchange Commission stating that the transfers of
Company Stock contemplated hereunder do not involve transactions
requiring a registration of such Company Stock under the
Securities Act of 1933. In the event that a favorable
interpretative letter is not obtained, the Employer reserves the
right to amend the Plan and Trust retroactively to their
Effective Dates in order to obtain a favorable interpretative
letter or to terminate the Plan.
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IN WITNESS WHEREOF, this Plan has been executed the day and
year first above written. Signed, sealed, and delivered in the
presence of:
FIRST NATIONAL BANK OF GREENCASTLE
BY: /s/_______________________________
Employer
WITNESSES AS TO EMPLOYER:
__________________________ ATTEST:___________________________
__________________________
FIRST NATIONAL BANK OF GREENCASTLE
BY: /s/_______________________________
Trustee
WITNESSES AS TO TRUSTEE:
____________________________ ATTEST:__________________________
____________________________
<PAGE>
STIPULATION OF AMENDMENT
FIRST NATIONAL BANK OF GREENCASTLE
EMPLOYEES' STOCK OWNERSHIP PLAN AND TRUST AGREEMENT
WHEREAS, a Stock Ownership Plan and Trust Agreement was
adopted and made effective the 1st day of January 1986 by and
between First National Bank of Greencastle (hereinafter referred
to as "Employer"), party of the first part, and First National
Bank of Greencastle, who is serving as Trustee, (hereinafter
referred to as "Trustee"), party of the second part; and
WHEREAS, the Agreement was amended March 18, 1992 and
effected January 1, 1989; and
WHEREAS, the terms of the Agreement provide that such
Agreement and the Trust created thereby may be amended from time
to time;
NOW THEREFORE, the First National Bank of Greencastle
Employees' Stock Ownership Plan and Trust Agreement shall be
amended by adding Section 10.17 effective as of January 1, 1989
to read as follows:
10.17 Security Transactions
Transactions under this plan by persons subject to Section
16 of the Securities Exchange Act of 1934 ("1934 Act"), as
amended, are intended to comply with all applicable conditions of
Rule 16b-3 or its successors under the 1934 Act. To the extent
any provision of the Plan or action by Plan Administrators fails
to so comply, it shall be deemed null and void to the extent
permitted by law.
IN WITNESS WHEREOF, the Employer has caused this Agreement
to be executed by his duly appointed officer and the corporate
seal to be hereunto affixed this 31st day of December 1992.
ATTEST: FIRST NATIONAL BANK OF GREENCASTLE
BY: /s/_________________________________
Employer
FIRST NATIONAL BANK OF GREENCASTLE
(CORPORATE SEAL)
BY: /s/_________________________________
Trustee
<PAGE>
AMENDMENT NUMBER TWO TO
FIRST NATIONAL BANK OF GREENCASTLE
EMPLOYEES' STOCK OWNERSHIP PLAN
BY THIS AGREEMENT, FIRST NATIONAL BANK OF GREENCASTLE
EMPLOYEES' STOCK OWNERSHIP PLAN (herein referred to as the
"Plan") is hereby amended as follows, effective as of JANUARY 1,
1994:
1. Section 1.10, Section 1.24 and the calculation of "415
Compensation" for the purpose of the minimum allocations required
for Top Heavy Plan Years, are amended by the addition of the
following paragraphs:
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.
2. Section 7.5(c) is amended by the addition of the following
paragraph:
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)-ll(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.
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<PAGE>
3. Article VII is amended by the addition of the following
section after Section 7.12:
DIRECT ROLLOVER
(a) This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a distributee's election
under this Section, a distributee may elect, at the time and in
the manner prescribed by the 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 the 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 distributee 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.
4. The Article of the Plan concerning amendment and termination
is amended by the addition of the following sentence:
Any amendment to the Plan 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.
2
<PAGE>
IN WITNESS WHEREOF, this Amendment has been executed this
31st day of December, 1994. Signed, sealed, and delivered in the
presence of:
FIRST NATIONAL BANK OF GREENCASTLE
BY: /s/_________________________________
Employer
________________________
WITNESS AS TO EMPLOYER
FIRST NATIONAL BANK OF GREENCASTLE
BY: /s/__________________________________
Trustee
_______________________
WITNESS AS TO TRUSTEE
ATTEST
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