<PAGE> 1
As filed with the Securities and Exchange Commission on June 20, 1997
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
FNB FINANCIAL SERVICES CORPORATION
(Exact name of Registrant as specified in its charter)
North Carolina 56-1382275
(State of Incorporation) (I.R.S. Employer Identification No.)
202 South Main Street
Reidsville, North Carolina 27320
(910) 342-3346
(Address of Registrant's principal executive offices)
---------------------------
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT SHARING PLAN
(full title of the Plan)
---------------------------
Ernest J. Sewell, President
FNB Financial Services Corporation
202 South Main Street
Reidsville, North Carolina 27320
(910) 342-3346
(Name of agent for service)
---------------------------
(Facing Page continued on the following page)
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(Continuation of Facing Page)
---------------------------------------
Copies to:
C. Marcus Harris, Esq. Robert F. Albright
Poyner & Spruill, L.L.P. Senior Vice President
100 North Tryon Street, Suite 400 FNB Financial Services Corporation
Charlotte, North Carolina 28202-4010 202 South Main Street
(704) 342-5250 Reidsville, North Carolina 27320
(910) 342-3346
---------------------------------------
In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this Registration Statement also covers an indeterminate amount of interests to
be offered and sold pursuant to the Plan.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Title of Amount Proposed Maximum Proposed Maximum Amount
Shares to be to be Offering Price Aggregate Offering of Registration
Registered Registered(1) Per Unit(2) Price(2) Fee
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 100,000 $29.75 $2,975,000 $901.52
($1.00 par value) shares
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416, this Registration Statement also covers such
additional number of shares of Common Stock that may become issuable in the
event of a stock dividend, split-up of shares, recapitalization, or other
similar change in the Common Stock.
(2) Estimated pursuant to Rule 457 solely for the purpose of calculating the
registration fee, upon the basis of the average of the high and low prices
of the Common Stock as reported on the Nasdaq National Market tier of The
Nasdaq Stock Market on June 13, 1997.
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
This Registration Statement relates to the registration of One Hundred
Thousand (100,000) shares of the $1.00 par value common stock ("Common Stock")
of FNB Financial Services Corporation (the "Registrant") for issuance or
delivery under the FNB Financial Services Corporation Employees' Savings Plus
and Profit Sharing Plan (the "Plan"). This Registration Statement also relates
to an indeterminant amount of interests to be offered or sold pursuant to the
Plan and to an indeterminant number of additional shares that may be necessary
to adjust the number of shares reserved for issuance pursuant to the Plan as a
result of a reclassification, reorganization, recapitalization, stock split,
stock dividend, or similar occurrence that makes an adjustment of shares just
and appropriate. Documents containing the information specified in Part I of
Form S-8 will be sent or given to participants under the Plan as specified by
Rule 428(b)(1).
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
See response to Item 1 above.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") are incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-KSB for the year
ended December 31, 1996.
(b) The Registrant's Quarterly Reports on Form 10-QSB filed with
the Commission since December 31, 1996.
(c) The Registrant's Current Reports, if any, on Form 8-KSB filed
with the Commission since December 31, 1996.
(d) The description of the Registrant's Common Stock contained in
the Registrant's registration statement filed under the
Exchange Act, including any other amendment or report filed
for the purpose of updating such description.
(e) The Plan's Annual Report on Form 11-K for the year ended
December 31, 1996.
<PAGE> 4
All documents subsequently filed by the Registrant and the Plan
pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
registered hereby have been sold or which deregisters all securities then
remaining unsold, shall be deemed incorporated by reference herein and to be a
part hereof from the date of the filing of such documents.
Any information included or incorporated by reference in the
Registrant's Annual Report on Form 10-KSB in response to Items 402(a)(7) or (h)
of Regulation S-B of the Commission is not incorporated herein and is not part
of this Registration Statement.
Any statement contained herein or 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 which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
The Registrant's Common Stock is registered under Section 12 of the
Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 55-8-50 through 55-8-58 of the General Statutes of North
Carolina provide for indemnification of directors, officers, employees, and
agents of a North Carolina corporation. Subject to certain exceptions, a
corporation may indemnify an individual made a party to a proceeding because he
is or was a director against liability incurred in the proceeding if (i) he
conducted himself in good faith; and (ii) he reasonably believed (a) in the case
of conduct in his official capacity with the corporation, that his conduct was
in its best interests and (b) in all other cases, that his conduct was at least
not opposed to its best interests; and (iii) in the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful.
Moreover, unless limited by its articles of incorporation, a corporation must
indemnify a director who was wholly successful, on the merits or otherwise, in
the defense of any proceeding to which he was a party because he is or was a
director of the corporation against reasonable expenses incurred by him in
connection with the proceeding. Expenses incurred by a director in defending a
proceeding may be paid by the corporation in advance of the final disposition of
such proceeding as authorized by the board of directors in the specific case or
as authorized or required under any provision in the articles of incorporation
or bylaws or by any applicable resolution or contract upon receipt of an
undertaking by or on behalf of a director to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation against such expenses. A director may also apply for court-ordered
indemnification under certain circumstances.
<PAGE> 5
Unless a corporation's articles of incorporation provide otherwise, (i)
an officer of a corporation is entitled to mandatory indemnification and is
entitled to apply for court-ordered indemnification to the same extent as a
director; (ii) the corporation may indemnify or advance expenses to an officer,
employee, or agent of a corporation to the same extent as to a director; and
(iii) a corporation may also indemnify or advance expenses to an officer,
employee, or agent who is not a director to the extent, consistent with public
policy, that may be provided by its articles of incorporation, bylaws, general
or specific action of its board of directors, or contract.
In addition and separate and apart from the indemnification rights
discussed above, the above-cited statutes further provide that a corporation
may, in its articles of incorporation or bylaws, or by contract or resolution,
indemnify or agree to indemnify any one of its directors, officers, employees,
or agents against liability and expenses in any proceeding (including without
limitation a proceeding brought by or on behalf of the corporation itself)
arising out of their status as such or their activities in any of the foregoing
capacities; provided, however, that a corporation may not indemnify or agree to
indemnify a person against liability or expenses he may incur on account of his
activities which were at the time taken known or believed by him to be clearly
in conflict with the best interests of the corporation. A corporation may
likewise and to the same extent indemnify or agree to indemnify any person who,
at the request of the corporation, is or was serving as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust, or other enterprise or as a trustee or
administrator under an employee benefit plan. Any such provision for
indemnification may also include provisions for recovery from the corporation of
reasonable costs, expenses, and attorneys' fees in connection with the
enforcement of rights to indemnification and may further include provisions
establishing reasonable procedures for determining and enforcing the rights
granted therein.
As permitted by the North Carolina statutory provisions explained
above, Article 3 (last paragraph) of the Articles of Incorporation of the
Registrant provide that the Board of Directors of the Registrant "shall have the
authority to adopt resolutions approving the indemnification, to the fullest
extent permitted by Chapter 55 of the North Carolina General Statutes, of any
person made a party to any action or proceeding, whether civil, criminal or
administrative, by reason of the fact that such person was serving as a
director, officer, employee or agent of the corporation."
As permitted by applicable statutes, the Registrant has purchased a
standard directors' and officers' liability policy which will, subject to
certain limitations, indemnify the Registrant and its officers and directors for
damages they become legally obligated to pay as a result of any negligent act,
error, or omission committed by directors or officers while acting in their
capacities as such.
The indemnification provisions in the Articles of Incorporation and
Bylaws of the Company, as amended, may be sufficiently broad to permit
indemnification of the Registrant's officers and directors for liabilities
arising under the Securities Act of 1933, as amended (the "1933 Act").
<PAGE> 6
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit No. Description Reference
- ----------- ----------- ---------
4.1 Excerpts from the Registrant's Articles of Incorporated
Incorporation and Bylaws relating to rights of By Reference
holders of the Registrant's capital stock
(incorporated by reference to Exhibits 3 and 4 of the
Registrant's Form 10-K and Form 10-KSB for the
fiscal years ended December 31, 1988, 1991, 1992, and
1996 and the Registrant's Form S-8 Registration
Statement No. 33-33186 previously filed with the
Commission).
4.2 FNB Financial Services Corporation Employees' Savings Filed herewith
Plus and Profit Sharing Plan.
5 Opinion of Poyner & Spruill, L.L.P. Filed herewith
23.1 Consent of Poyner & Spruill, L.L.P. (included in Filed herewith
Exhibit 5).
23.2 Consent of Cherry, Bekaert & Holland, L.L.P. Filed herewith
24 Power of Attorney from Certain Directors and Officers Filed herewith
of Registrant.
In reference to Exhibit 5, the Registrant undertakes that it will submit (and
has submitted) the Plan and any amendment thereto to the Internal Revenue
Service ("IRS") in a timely manner and has made or will make all changes
required by the IRS in order to qualify the Plan.
<PAGE> 7
ITEM 9. UNDERTAKINGS.
The undersigned Registrant will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
1933 Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the Registration Statement;
(iii) Include any additional or changed material information
on the plan of distribution.
Provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
in a post-effective amendment is incorporated by reference from periodic reports
filed by the Registrant under the Exchange Act.
(2) For determining liability under the 1933 Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at the time to be the initial bona
fide offering thereof.
(3) File a post-effective amendment to remove from registration any of
the securities being registered that remain unsold at the end of the offering.
<PAGE> 8
SIGNATURES AND POWER OF ATTORNEY
THE REGISTRANT. 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 Reidsville, State of North Carolina, on the 12th
day of June, 1997.
FNB FINANCIAL SERVICES CORPORATION
Registrant
By: /s/ Ernest J. Sewell
----------------------------
Ernest J. Sewell, President
POWER OF ATTORNEY. Each person whose signature appears below appoints
W.B. Apple, Jr., Ernest J. Sewell, and Robert F. Albright, or any one of them,
as attorney-in-fact to execute in their respective names on their behalf
individually, and in each capacity stated below, the Registration Statement and
one or more amendments (including post-effective amendments) to the Registration
Statement as the attorney-in-fact and to file any such Registration Statement
and any amendment to the Registration Statement with the Securities and Exchange
Commission.
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.
Signature Capacity Date
- --------- -------- ----
/s/ Ernest J. Sewell President and June 12, 1997
- ----------------------- Director (Principal
Ernest J. Sewell Executive Officer)
* Senior Vice President
- ----------------------- (Principal Financial
Robert F. Albright & Accounting
Officer)
* Director
- -----------------------
W. B. Apple, Jr.
* Director
- -----------------------
Charles A. Britt
<PAGE> 9
* Director
- -----------------------
O. E. Green
* Director
- -----------------------
Joseph H. Kinnarney
* Director
- -----------------------
Phillip J. Lambeth
* Director
- -----------------------
Clifton G. Payne
* Director
- -----------------------
Elton H. Trent, Jr.
* Director
- -----------------------
Kenan C. Wright
* Director
- -----------------------
B.Z. Dodson
By: /s/ Ernest J. Sewell June 12, 1997
----------------------------
Ernest J. Sewell
Attorney-in-Fact
THE PLAN. Pursuant to the requirements of the Securities Act of 1933,
the Trustees of the Plan have duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Reidsville, State of North Carolina, on the 12th day of June, 1997.
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT SHARING PLAN
Plan
By: /s/ Robert F. Albright
-----------------------------
Robert F. Albright, Trustee
By: /s/ Richard L. Powell
-----------------------------
Richard L. Powell, Trustee
<PAGE> 10
EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered Page
- ----------- ----------- -------------
4.1 Excerpts from the Registrant's Articles of Incorporated
Incorporation and Bylaws relating to rights of by Reference
holders of the Registrant's capital stock
(incorporated by reference to Exhibits 3 and 4 of the
Registrant's Form 10-K and Form 10-KSB for the
fiscal years ended December 31, 1988, 1991, 1992, and
1996 and the Registrant's Form S-8 Registration
Statement No. 33-33186 previously filed with the
Commission).
4.2 FNB Financial Services Corporation Employees' Savings
Plus and Profit Sharing Plan.
5 Opinion of Poyner & Spruill, L.L.P.
23.1 Consent of Poyner & Spruill, L.L.P. (included in Included in
Exhibit 5). Exhibit 5
23.2 Consent of Cherry, Bekaert & Holland, L.L.P.
24 Power of Attorney from Certain Directors and Officers
of Registrant.
<PAGE> 1
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT SHARING PLAN
(REIDSVILLE, NC)
AMENDED AND RESTATED
EFFECTIVE
JULY 1, 1994
<PAGE> 2
TABLE OF CONTENTS
ARTICLE
I Nature of Plan......................................... 1
II Definitions and Construction........................... 2
III Eligibility and Participation.......................... 12
IV Employee Contributions................................. 14
V Employer Contributions................................. 21
VI Allocations............................................ 27
VII Termination of Service-Participant Vesting............. 35
VIII Time and Method of Payment of Benefits................. 39
IX Employer Administrative Provisions..................... 48
X Retirement Committee................................... 49
XI Participant Administrative Provisions.................. 53
XII Fiduciaries Duties..................................... 57
XIII Discontinuance, Amendment, and Termination............. 62
XIV The Trust Fund......................................... 67
XV Participation by Affiliate of Company and
Employment with a Member of a Controlled Group......... 68
XVI Directed Investment Options............................ 70
XVII Top-Heavy Rules........................................ 72
XVIII Miscellaneous.......................................... 77
<PAGE> 3
ARTICLE I
NATURE OF PLAN
The Board of Directors of FNB Financial Services Corporation
("Employer"), the parent company of First National Bank of Reidsville, has by
appropriate resolution of said Board adopted the amended and restated First
National Bank of Reidsville 401(k) Plan ("Plan") as hereinafter stated to be
effective as of July 1, 1994.
The purpose of this Plan is to provide additional incentive and
retirement security for eligible Employees of the Employer.
WHEREAS, effective January 1, 1987, the Employer adopted the original
Plan known originally as the First National Bank of Reidsville 401(k) Plan;
WHEREAS, the Plan was amended and restated January 1, 1989;
WHEREAS, effective July 1, 1994, the Employer has adopted this
amended and restated Plan;
WHEREAS, it is the intention of the Employer to establish a Savings and
Profit Sharing Plan and Trust for the sole and exclusive benefit of its eligible
Employees who qualify as Participants hereunder and their beneficiaries, as
herein provided, under the provisions of Section 401 of the Internal Revenue
Code, as amended by the Employee Retirement Income Security Act of 1974, and to
make contributions thereto under the provisions of Section 404 of said Internal
Revenue Code, as amended; and
WHEREAS, it is the intention of the Employer and the Trustees to
operate this Plan and Trust in accordance with the provisions of the Internal
Revenue Code as amended by the Employee Retirement Income Security Act of 1974,
as interpreted by regulations prescribed by the Department of the Treasury and
the Secretary of Labor; and
WHEREAS, the benefits provided under the amended Plan will in no event
be less than the benefits accrued and vested by the Participant in the original
Plan; and
WHEREAS, this Plan embodied herein has been duly approved and
authorized by the Board of Directors of said Company;
NOW, THEREFORE, THIS AGREEMENT,
CREATION AND NAME
This Plan is amended and restated effective July 1, 1994. The name of
the Plan shall be designated as FNB Financial Services Corporation Employees'
Savings Plus and Profit Sharing Plan, hereafter referred to as "Plan".
1
<PAGE> 4
ARTICLE II
DEFINITIONS AND CONSTRUCTION
Definitions. For the purpose of this Plan, the following definitions shall apply
unless the context requires otherwise:
2.01 "Accounts" shall mean the separate accounts maintained to record
the interest of a Participant under the Plan, consisting of the
following Accounts:
(a) Employee Savings Plus Account - shall mean a separate
account maintained for each Participant consisting of all
Employee Salary Deferral Contributions, earnings of the
Trust, adjustments for withdrawals, and realized and
unrealized gains and losses attributable thereto.
(b) Employer Matching Account - shall mean a separate account
maintained for each Participant who makes an Employee
Salary Deferral Contribution and consisting of his
allocable share of required Employer Matching Contributions
and earnings of the Trust, and realized and unrealized
gains and losses allocable to such account.
(c) Employer Profit Sharing Account - shall mean a separate
account maintained for each Participant and consisting of
his allocable share of Employer Profit Sharing
Contributions, earnings of the Trust, forfeitures, realized
and unrealized gains and losses allocable to such account.
2.02 "Accrued Benefit" shall mean the amount in all of a Participant's
Accounts as defined in Section 2.01. The benefits provided under
the amended Plan will in no event be less than the benefits accrued
and vested by a Participant in the Plan as of June 30, 1994.
2.03 "Act" shall mean the "Employee Retirement Income Security Act
of 1974", as amended.
2.04 "Adjustment Factor" shall mean the cost of living adjustment factor
prescribed by the Secretary of the Treasury under Section 415(d) of
the Code for Plan Years beginning after December 31, 1987, as
applied to such items and in such manner as the Secretary shall
provide.
2.05 "Affiliated Employer" shall mean the Employer and any corporation
which is a member of a controlled group of corporations (as defined
in Section 414(b) of the Code) which includes the Employer; any
trade or business (whether or not incorporated) which is under
common control (as defined in Section 414(c) of the Code) with the
Employer; any organization (whether or not incorporated) which
2
<PAGE> 5
is a member of an affiliated service group (as defined in Section
414(m) of the Code) which includes the Employer; and any other
entity required to be aggregated with the Employer pursuant to
regulations under Section 414(o) of the Code.
For purposes of this Section 2.05, the term "controlled group"
means any two or more corporations, trades or businesses under
common control of which the Employer is a member, or two or more
"affiliated organizations" under Code Section 414(m). The term "two
or more corporations, trades or businesses under common control"
will include any group of corporations, trades or businesses which
is either:
(a) a parent-subsidiary group, or
(b) a brother-sister group, or
(c) a combined group
within the meaning under Code Sections 414(b), 414(c), and 414(m)
and their Regulations.
All Employees of a controlled group will be treated as employed by
a single Employer for purposes of applying the provisions of
qualification of this Plan; of minimum participation standards of
this Plan; of minimum vesting standards of this Plan; and of
limitation of benefits and contributions under this Plan.
2.06 "Annual Addition" shall mean the sum of the following
additions to a Participant's Account for the Limitation Year:
(a) Employer Contributions,
(b) Forfeitures,
(c) Employee Contributions, and
(d) Amounts allocated, after March 31, 1984, to an individual
medical account, as defined in Section 415(l)(2) of the
Code, which is part of a pension or annuity plan maintained
by the Employer and 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 Section 419(A)(d)(3) of the
Code, under a welfare benefit fund, as defined in Section
419(e) of the Code, maintained by the Employer.
3
<PAGE> 6
2.07 "Beneficiary" shall mean any person or fiduciary designated by a
Participant who is or may become entitled to a benefit under the
Plan following the death of the Participant.
2.08 "Board of Directors" shall mean the Board of Directors of FNB
Financial Services Corporation unless otherwise indicated or the
context otherwise requires.
2.09 "Break-in-Service" shall mean a Plan Year in which an Employee is
credited with not more than 500 Hours of Service, as measured by
the Vesting Computation Period.
2.10 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.11 "Company" shall mean the Employer as defined in Section 2.17.
2.12 "Compensation" shall mean an Employee's Compensation for any Plan
Year consisting of the total annual compensation actually paid to
the Employee by the Employer for the Plan Year concerned, including
any amount of earnings deferred under any other qualified Employer
sponsored plan under Code Sections 125, 401(k), 403(b), 408(k), or
any other qualified Cash or Deferred Arrangement, but excluding any
reimbursements for the use of an automobile, any reimbursements due
to moving expenses, and the taxable value of any Employer paid
group term life insurance, or other taxable fringe benefit provided
by the Employer. For Plan Years beginning after December 31, 1988,
annual Compensation used shall not exceed $200,000, (or other
amount as approved by the Secretary of the Treasury).
Notwithstanding the foregoing, Compensation shall not include
deferred compensation, stock options, and other distributions which
receive special Federal income tax benefit within the meaning of
Section 415 of the Code. For the purposes of a contribution or an
allocation under the Plan based on compensation, Compensation shall
only include amounts actually paid an Employee during the period he
is a Participant in the Plan.
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
section 401(a)(17)(B) of the Internal Revenue Code. 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.
4
<PAGE> 7
For plan years beginning on or after January 1, 1994, any reference
in this plan to the limitation under section 401(a)(17) of the Code
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.
2.13 "Computation Periods":
(a) Eligibility Computation Period - the 12 consecutive month
period in which the Employee is credited with at least
1,000 Hours of Service. The initial period begins on the
employment or re-employment commencement date on which an
Employee first performs one "Hour of Service" for the
Employer. His subsequent Eligibility Computation Period
shall be measured from succeeding Plan Years, the first of
which begins with the first day of the Plan Year that
includes the first anniversary of such Employee's
Employment Commencement Date. An Employee who is credited
with 1,000 Hours of Service in both the initial Eligibility
Computation Period and the first Plan Year which commences
prior to the first anniversary of the Employee's initial
Eligibility Computation Period will be credited with two
(2) Years of Service for purposes of eligibility to
Participate.
(b) Vesting Computation Period - the 12 consecutive month
period beginning with the first day of the Plan Year and
ending with the last day of the Plan Year in which an
Employee is credited with at least 1,000 Hours of Service.
Thus, if an Employee is not credited with at least 1,000
Hours of Service during a Plan Year, he is not given credit
for a Year of Service for vesting purposes.
2.14 "Contributions" shall mean contributions to this Plan from one of
the following sources:
(a) Employee Salary Deferral Contribution - shall mean the
amount which the Employee contributes under Section 4.01 of
the Plan.
(b) Employer Matching Contribution - shall mean the Employer's
required Contributions to the Plan under Section 5.01(a)
for Participants making Employee Salary Deferral
Contributions.
5
<PAGE> 8
(c) Employer Profit Sharing Contribution - shall mean the
Employer's discretionary contribution to the Plan under
Section 5.01(b).
2.15 "Dates":
(a) Effective Date - The original effective date of the Plan
was January 1, 1987. This restatement is effective July 1,
1994.
(b) Anniversary Date - means each December 31.
(c) Plan Entry Dates - means each January 1 and July 1.
(d) Allocation Dates of Assets - each June 30 and December 31.
2.16 "Employee" shall mean any person on the payroll of the Employer
(including "leased" employees as defined by Code Section
414(n)(2)), or on approved Leave of Absence who is subject to
withholding for purposes of Federal income taxes and for purposes
of the Federal Insurance Contributions Act with the following
exceptions:
(a) leased employees shall not be included if such employees
constitute less than 20% of the Employer's non-highly
compensated work force within the meaning of Code Section
414(n)(1)(C)(ii), and
(b) any Employee of the Employer who is included in a unit of
employees covered by an agreement which the Secretary of
Labor finds to be a collective bargaining agreement between
employee representatives and the Employer, if there is
evidence that retirement benefits were the subject of good
faith bargaining between such employee representatives and
the Employer.
2.17 "Employer" shall mean FNB Financial Services Corporation, a
corporation. The term Employer shall also apply to any subsidiary
or Affiliated Employer who adopts the Plan and who, at the time
such reference applies, are included in the list of Affiliated
Employers set forth below. For the purpose of this Plan, FNB
Financial Services Corporation shall deal exclusively with the
funding agent and shall be deemed the representative of each
Employer, and any action taken by FNB Financial Services
Corporation shall be binding on all Employers.
List of Affiliated Employers Date of Plan Adoption
---------------------------- ---------------------
First National Bank of Reidsville January 1, 1987
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An Employer may be removed from the above list as of the date on
which it ceases to be subsidiary to, affiliated with, or allied
with FNB Financial Services Corporation, or such Employer loses its
status as a legal entity by means of dissolution, merger,
consolidation, bankruptcy, or otherwise. An Employer shall also be
removed from the list of Employers upon the termination of the Plan
for that Employer.
As used in the further provisions of the Plan, the term Employer
shall be deemed to apply to each Employer independently. The
requirement that FNB Financial Services Corporation deal
exclusively with the funding agent is for administrative
convenience only. In no event shall this Plan be interpreted to be
a multiemployer plan as defined in Section 3(37) of the Employee
Retirement Income Security Act of 1974.
2.18 "Employment Commencement Date" shall mean the date on which an
Employee first performs an Hour of Service for the Employer.
2.19 "Fiscal Year" shall mean the Employer's taxable year for Federal
income tax purposes.
2.20 "Forfeiture" shall mean the portion of a Participant's Employer
funded Account which does not become part of the Participant's
vested Accrued Benefit when his employment with the Employer ends.
2.21 "Hour of Service" shall mean:
(a) Each Hour of Service for which the Employer, either
directly or indirectly, pays an Employee, or for which the
Employee is entitled to payment, for the performance of
duties during the Plan Year. The Retirement Committee shall
credit Hours of Service under this paragraph (a) to the
Employee for the Plan Year in which the Employee performs
the duties, irrespective of when paid.
(b) Each Hour of Service for back pay, (irrespective of
mitigation of damages), to which the Employer has agreed or
for which the Employee has received an award. The
Retirement Committee shall credit Hours of Service under
this paragraph (b) to the Employee for the Plan Year(s) to
which the award or the agreement pertains rather than for
the Plan Year in which the award, agreement or payment is
made; and
(c) Each Hour of Service for which the Employer, either
directly or indirectly, pays an Employee, or for which the
Employee is entitled to payment (irrespective of whether
the employment relationship is terminated), for reasons
other than for the performance of duties during a Plan
Year, such as Leave of Absence, vacation, holiday, sick
leave, illness, incapacity
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(including disability), layoff, jury duty or military duty.
Notwithstanding the preceding provisions of this paragraph
(c), the Retirement Committee shall not credit:
(1) More than five hundred one (501) Hours of Service
under this paragraph (c) to an Employee on account
of any single continuous period during which the
Employee does not perform any duties (whether or not
such period occurs during a single Plan Year);
(2) An Hour of Service to an Employee on account of a
period during which the Employee does not perform
any duties if the payment the Employer makes (or the
payment due) is under a plan maintained solely for
the purpose of complying with the applicable
workman's compensation law, unemployment
compensation law or disability insurance law; and
(3) An Hour of Service for a payment to an Employee
which solely reimburses the Employee for medical or
medically related expenses incurred by the Employee.
(d) The Retirement Committee shall not credit an Hour of
Service under more than one (1) of the above paragraphs.
Furthermore, if the Retirement Committee is to credit Hours
of Service to an Employee for the twelve (12) month period
beginning with the Employee's Employment Commencement Date,
then the twelve (12) month period shall be substituted for
the term "Plan Year" wherever the latter term appears in
this paragraph. The Retirement Committee shall resolve any
ambiguity with respect to the crediting of an Hour of
Service in favor of the Employee. Furthermore, in crediting
Hours of Service under this paragraph, the Retirement
Committee shall apply the rules of paragraphs (b) and (c)
of Labor Reg. Section 2530.200b-2, which the Plan, by this
reference, specifically incorporates in full within this
paragraph.
(e) An Employee or Participant for whom hourly records are not
maintained shall be credited with ninety-five (95) Hours of
Service semi-monthly, if compensated semi-monthly, or one
hundred ninety (190) Hours of Service monthly, if
compensated on a monthly basis, for each period described
above which if the Employee were hourly rated would have
been credited with one Hour of Service under paragraphs
(a), (b) or (c).
(f) Maternity - Solely for purposes of determining whether a
Break in Service (as defined in Section 2.09) for
participation and vesting purposes, has occurred in a
Computation Period, an individual who is absent from work
for maternity or paternity reasons shall receive credit for
the Hours of Service which would otherwise have been
credited to such individual but
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for such absence, or in any case in which such hours cannot
be determined, 8 Hours of Service per day of such absence
subject to a maximum of 501 Hours of Service for such Plan
Year. For purposes of this paragraph, an absence from work
for maternity or paternity reasons means an absence (1) by
reason of the pregnancy of the individual, (2) by reason of
a birth of a child of the individual, (3) by reason of the
placement of a child with the individual in connection with
the adoption of such child by such individual, or (4) for
purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of
Service credited under this paragraph shall be credited (1)
in the computation period in which the absence begins if
the crediting is necessary to prevent a Break in Service in
that period, or (2) in all other cases, in the following
computation period.
2.22 "Leave of Absence" shall mean any period of absence from the active
employment of the Employer due to jury duty and compulsory service
in the Armed Forces of the United States if the Employee returns to
active Service with the Employer within 90 days after he first
becomes eligible for release from such active duty. A Leave of
Absence may be granted by the Employer for sickness, vacations,
disability, or other similar reasons under rules established by it
and uniformly applied by it to all individuals similarly situated.
If the Employee does not return to active Service with the Employer
within ninety (90) days of the termination of his Leave of Absence,
his Service will be deemed to have ceased on the date his absence
first commenced.
2.23 "Limitation Year" shall mean each 12 month period beginning January
1 and ending the following December 31. Execution of this Plan (or
any amendment to this Plan changing the Limitation Year)
constitutes adopting a written resolution by the Employer electing
a Limitation Year pursuant to governmental regulations.
2.24 "Net Profits" shall mean the Employer's current or accumulated
earnings as determined in accordance with generally accepted
accounting practices.
2.25 "Normal Retirement Date" shall mean the Allocation Date coinciding
with or next following the Participant's 65th birthday.
2.26 "Participant" shall mean any Employee who becomes a participant as
provided in Article III and has not for any reason become
ineligible to participate further in the Plan. An "Inactive
Participant" shall mean any Employee or former Employee who has
ceased to be a Participant but on whose behalf an Account is still
maintained under the Plan.
2.27 "Party in Interest" shall mean:
(a) the Trustee of the Plan;
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(b) a person providing services to the Plan;
(c) an Employer, any of whose Employees are covered by the
Plan;
(d) an Employee organization, any of whose members are covered
by the Plan;
(e) an owner of the Employer as defined in Section 3(14)(E) of
the Employee Retirement Income Security Act of 1974;
(f) a relative (as defined in Section 3(15) of the Employee
Retirement Income Security Act of 1974) of any individual
referred to in (a) through (e) above;
(g) an Employee, officer, director or 10% or more shareholder
of a person described in (b), (c), (d), and (e) above;
(h) any other person, individual, corporation, partnership,
trust or estate who is considered a "party in interest"
within the meaning of Section 3(14) of the Employee
Retirement Income Security Act of 1974.
2.28 "Plan" shall mean the FNB Financial Services Corporation Employees'
Savings Plus and Profit Sharing Plan as established herein and
amended from time to time.
2.29 "Plan Administrator" shall mean the Employer or the person or
persons who have been or are in the future named by the Employer to
administer the Plan.
2.30 "Plan Year" shall mean the 12 consecutive-month period beginning
January 1st and ending 12 months later on December 31.
2.31 "Qualifying Year of Service" shall mean an Eligibility Computation
Period as defined in Section 2.13(a) during which an Employee
completes at least 1,000 Hours of Service and shall commence on
such Employee's latest date of employment.
2.32 "Service" shall mean any period of time the Employee is in the
employ of the Employer, including any period the Employee is on
Leave of Absence authorized by the Employer under a uniform
non-discriminatory policy applicable to all Employees. Service with
any predecessor Employer that maintained this Plan shall be
recognized for all purposes hereunder.
2.33 "Suspense Account" shall mean an account established pursuant to
Section 6.05.
2.34 "Trust" shall mean the trust established to hold, administer, and
invest the contributions made under the Plan.
2.35 "Trust Agreement" shall mean the agreement between the Employer and
the Trustee or any successor Trustee establishing the Trust and
specifying the duties of the Trustee.
2.36 "Trustee" shall mean the person, persons or entity from time to
time appointed a Trustee under the Trust Agreement.
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2.37 "Trust Fund" shall mean all property of every kind held or acquired
by the Trustee under the Trust Agreement.
2.38 "Vested Interest" shall mean a nonforfeitable right to all or a
portion of the Accrued Benefit.
2.39 "Year of Service" - The term "Year of Service" means a 12
consecutive month period during the applicable computation period
in which the Employee has completed at least 1,000 Hours of
Service.
Word Usage. Words used in the masculine shall apply to the feminine where
applicable, and wherever the context of the Plan dictates, the plural shall be
read as the singular and the singular as the plural.
Construction. It is the intention of the Employer that the Plan be qualified
under the provisions of the Code and the Act and all provisions hereof shall be
construed to that result.
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ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.01 Eligibility. An Employee, who as of June 30, 1994 was a Participant
in the prior Plan, shall be eligible to continue to participate as
of July 1 in this amended and restated Plan. Effective July 1,
1994, all Employees shall be eligible to participate in this Plan
on July 1, 1994, or any subsequent Plan Entry Date coincident with
or next following the later of the attainment of age twenty-one
(21) or the completion of a Qualifying Year of Service.
3.02 Participation Upon Re-Employment. Any former Participant
re-employed by the Employer prior to incurring a Break-in-Service
shall continue to participate in the Plan in the same manner as if
such termination had not occurred. A former Participant whose
employment terminates and who is re-employed after a
Break-in-Service shall re-enter the Plan as of his re-employment
commencement date after he performs his first Hour of Service as a
result of his re-employment. Any other Employee whose employment
terminates and who is subsequently re-employed shall commence
participation in accordance with the provisions of Section 3.01.
3.03 Employee Salary Deferral Contribution Application. Participation in
the Employee Salary Deferral Contribution option of the Plan shall
not be compulsory. A Participant as a condition for participation
must file an Employee Salary Deferral Contribution election on a
written form provided by the Retirement Committee on or before the
time prescribed by the Retirement Committee before each Plan Entry
Date. A Participant who elects not to make an Employee Salary
Deferral Contribution will not participate in any Employer Matching
Contributions.
3.04 Transferred Participants:
(a) A Participant who is transferred to any Affiliated Employer
which is not an Employer as defined in Section 2.17 or to a
class of employees not covered by this Plan shall be
considered a Transferred Participant. The Accrued Benefit
of such Transferred Participant shall be determined as of
the date of transfer and shall be held under the Plan until
such time as the Transferred Participant becomes eligible
to receive it. If such Transferred Participant is not fully
vested in his Accrued Benefit as of the date of transfer,
such service after the date of transfer shall be used in
determining Vesting Service. In no event, however, shall
service with the Affiliated Employer or in a class of
employees not covered by this Plan be used to accrue
further benefits under this Plan.
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(b) A Participant whose employment changes to a class of
employment which is not covered by this Plan shall be
considered a Transferred Participant and shall be treated
as described in Section 3.04(a) above.
(c) An Employee, previously excluded from coverage under the
Plan because his employment with the Employer was
employment not covered by this Plan, shall enter (or
re-enter, as the case may be) the Plan in the Plan Year
during which he no longer has this excluded employment. All
such Employees shall accrue benefits under this Plan only
with respect to those Years of Service not deemed to be
performed while under such excluded employment.
If such Employee is not fully vested in his Accrued Benefit
as of the date on which he no longer has this excluded
employment, service while the Employee was previously
excluded from Participation will be counted for vesting
purposes.
If an Employee transfers from employment not covered under
this Plan, and if such transfer occurs at any time during a
Plan Year, all Hours of Service earned during such Plan
Year, regardless of whether or not they were worked under
excluded employment, shall be considered in determining
Service for such year.
3.05 Provisions Relating to Leased Employees:
(a) Safe Harbor. Notwithstanding any other provisions of the
Plan, for purposes of the pension requirements of Section
414(n)(3) of the Code, the employees of the Employer shall
include individuals defined as Employees in Section 2.16 of
this Plan.
(b) Participation and Accrual. A leased employee within the
meaning of Section 414(n)(2) of the Code shall become a
Participant in, or accrue benefits under, this Plan based
on service as a leased employee only as provided in
provisions of this Plan other than this Section 3.05.
(c) Effective Date. This Section 3.05 shall be effective for
services performed after December 31, 1986.
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ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.01 Employee Contributions shall consist of:
Employee Salary Deferral Contributions. A Participant may elect to
defer receipt of a portion of his Compensation, and have the
Employer contribute to the Plan on his behalf for each Limitation
Year an Employee Salary Deferral Contribution of from two percent
(2%) to fifteen percent (15%) of his Compensation, in accordance
with this Section and such other rules as the Retirement Committee
may prescribe; provided, however, all such Employee Salary Deferral
Contributions shall be subject to the provisions of Section 4.05
and Section 6.09.
(1) No Participant shall be permitted to have Employee Salary
Deferral Contributions made under this Plan, or any other
qualified plan maintained by the Employer during any
taxable year, in excess of the dollar limitation contained
in Section 402(g) of the Code in effect at the beginning of
the Plan Year.
(2) "Employee Salary Deferral Contribution" shall mean any
Employer contributions made to the Plan at the election of
the Participant, in lieu of cash compensation, and shall
include contributions made pursuant to a salary reduction
agreement or other deferral mechanism. With respect to any
taxable year, a Participant's Employee Salary Deferral
Contribution is the sum of all Employer contribution made
on behalf of such Participant pursuant to an election to
defer under any qualified CODA, as described in Section
401(k) of the Code, any simplified employee pension cash or
deferred arrangement, as described in Section 402(h)(1)(B),
any eligible deferred compensation plan under Section 457,
any plan as described under Section 501(c)(18), and any
employer contributions made on behalf of a Participant for
the purchase of an annuity contract under Section 403(b)
pursuant to a salary reduction agreement.
4.02 How Paid or Deducted. Employee Salary Deferral Contributions may
be made by regular payroll deductions from the Participant's
Compensation, or in any other manner approved by the Retirement
Committee.
4.03 Modification of Employee Contributions. A Participant may modify
his Employee Salary Deferral Contributions at any time on such
forms as the Retirement Committee may prescribe, and such
modification shall become effective upon the next following Plan
Entry Date and will have prospective effect only for the Employee
Salary Deferral Contributions. Such modification shall be in
accordance with such rules as the Retirement Committee may
prescribe.
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4.04 Termination of Employee Contributions. A Participant may terminate
his Salary Deferral Agreement at any time with respect to
Compensation not yet earned by delivering written notice of
termination to the Plan Administrator. Any Participant who
terminates his Salary Deferral Agreement may be permitted, in
accordance with uniform and nondiscriminatory rules prescribed by
the Plan Administrator, to execute a new Salary Deferral Agreement
and resume having Salary Deferral Contributions made to the Trust
on his behalf on the next following Plan Entry Date.
4.05 Maximum Deferral Percentage. The Average Actual Deferral Percentage
for Highly Compensated Participants for each Plan Year shall not
exceed the relationship to the Average Actual Deferral Percentage
of all Non-Highly Compensated Participants for the Plan Year of
either of the following specified tests:
(a) Primary Test:
The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the Average Actual Deferral
Percentage for Eligible Participants who are Non-Highly
Compensated Employees for the Plan Year multiplied by 1.25;
or
(b) Alternate Test:
The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the Average Actual Deferral
Percentage for Eligible Participants who are Non-Highly
Compensated Employees for the Plan Year multiplied by 2,
provided that the Average Actual Deferral Percentage for
Eligible Participants who are Highly Compensated Employees
does not exceed the Average Actual Deferral Percentage for
Eligible Participants who are Non-Highly Compensated
Employees by more than two (2) percentage points or such
lesser amount as the Secretary of the Treasury shall
prescribe to prevent the multiple use of this alternative
limitation with respect to any Highly Compensated Employee.
Definitions: For purposes of this Section 4.05, and for
purposes of this Plan, the following definitions shall be
used:
(1) "Actual Deferral Percentage" shall mean the ratio
(expressed as a percentage), of Employee Salary
Deferral Contributions and Qualified Employer
Deferral Contributions on behalf of the Eligible
Participant for the Plan Year to the Eligible
Participant's Compensation for the Plan Year.
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(2) "Average Actual Deferral Percentage" shall mean the
average (expressed as a percentage) of the Actual
Deferral Percentage of the Eligible Participants in
a group.
(3) "Qualified Employer Deferral Contributions" shall
mean Employer Contributions which are allocated to a
Participant's Employer Contribution Account that are
non-forfeitable when contributed by the Employer as
a matching Employer contribution.
(4) "Eligible Participant" shall mean any Employee of
the Employer who is otherwise eligible under the
terms of the Plan to have Employee Salary Deferral
Contributions or Qualified Employer Deferral
Contributions allocated to his account for the Plan
Year.
(5) "Family Member" shall mean any person as described
in Section 414(q)(6)(B) of the Code who is the
spouse of the Employee, the lineal ascendant or
descendent of the Employee or spouse of a lineal
ascendant or descendent of the Employee.
(6) "Highly Compensated Participant" means any
Participant, or former Participant, who at any time
during the determination year, or look-back year, is
a Highly Compensated Employee, as defined in Code
Section 414(q), who:
(i) Owned 5% or more of the Employer (subject to
the attribution rules of Code Section 318),
(ii) Earned more than $75,000 (as adjusted by a
Cost of Living Index as approved by the
Secretary of the Treasury),
(iii) Earned more than $50,000 (as adjusted by a
Cost of Living Index as approved by the
Secretary of the Treasury) and was one of the
top 20% paid Employees for the year,
(iv) Was an officer of the Employer and was paid
more than 50% of the annual dollar limitation
for defined benefit plans, as indexed,
pursuant to Section 415(b)(1)(A). If no
officer earned more than this amount during
the determination year or the look-back year,
then the highest paid officer will be
considered highly compensated.
(v) Notwithstanding subsections (ii), (iii), and
(iv) above, if, during the look-back year a
Participant did not fall under any of
subparagraphs (ii), (iii) or (iv), then he
shall not fall under those subparagraphs
during the determination year regardless
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of his Compensation unless during the
determination year he is one of the 100
highest paid Participants.
(vi) A Highly Compensated Employee shall include a
former Employee who had a "separation year"
prior to the determination year and who was a
Highly Compensated active Employee for
either: (1) such Employee's "separation year"
or (2) any determination year ending on or
after the Employee's 55th birthday. A
"separation year" is the determination year
the Employee separates from service. With
respect to an Employee who separated from
service before January 1, 1987, such Employee
will be included as a Highly Compensated
Employee only if the Employee was a 5% owner
or received compensation in excess of $50,000
during: (1) the Employee's separation year
(or the year preceding such separation year),
or (2) any year ending on or after such
individual's 55th birthday (or the last year
ending before such Employee's 55th birthday).
The "determination year" shall be the Plan Year. The
"look-back year" shall be the twelve month period
immediately preceding the determination year.
The determination of who is a Highly Compensated
Employee, including the determinations of the number
and identity of the Employees in the top-paid group,
the top 100 Employees, the number of Employees
treated as officers and the compensation that is
considered, will be made in accordance with Section
414(q) of the Code and the regulations thereunder.
(7) "Non-Highly Compensated Employee" shall mean an
Employee of the Employer who is neither a Highly
Compensated Employee nor a Family Member.
If an Employee is, during the current or immediately
preceding Plan Year, a Family Member of either a 5-percent
owner or one of the 10 most Highly-Compensated Employees
ranked on the basis of Compensation paid by the Employer
during such year, then said Employee shall not be treated
as a separate eligible Employee, but shall be subject to
the family aggregation rules of Section 414(q)(6) of the
Code.
(c) Special Rules.
(1) For purposes of this Section 4.05, the Actual
Deferral Percentage for any Eligible Participant who
is a Highly Compensated Employee for
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the Plan Year and who is eligible to have Employee
Salary Deferral or Qualified Employer Deferral
Contributions allocated to his Account under two or
more plans or arrangements described in Section
401(k) of the Code that are maintained by the
Employer or an Affiliated Employer shall be
determined as if all such Employee Salary Deferral
Contributions and Qualified Employer Deferral
Contributions were made under a single arrangement.
(2) For purposes of determining the Actual Deferral
Percentage of a Participant who is a Highly
Compensated Employee, because he is either a 5% or
more owner of the Employer, or because he is one of
the ten highest paid Employees during the
determination year or the look-back year, the
Employee Salary Deferral Contributions, Qualified
Employer Deferral Contributions and Compensation of
such Participant shall include the Employee Salary
Deferral Contributions, Qualified Employer Deferral
Contributions and Compensation of Family Members,
and such Family Members shall be disregarded in
determining the Actual Deferral Percentage for
Participants who are Non-Highly Compensated
Employees.
(3) In the event that this Plan satisfies the
requirements of Section 410(b) of the Code only if
aggregated with one or more other plans, or if one
or more other plans satisfy the requirements of
Section 410(b) of the Code only if aggregated with
this Plan, then this Section 4.05 shall be applied
by determining the Actual Deferral Percentages of
Eligible Participants as if all such plans were a
single plan.
(4) The determination and treatment of the Employee
Salary Deferral Contributions, Qualified Nonelective
Contributions and Actual Deferral Percentage of any
Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
(5) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Average Actual
Deferral Percentage test of this Section 4.05,
satisfaction of the Average Actual Contribution
Percentage test of Section 5.05, and the amount of
Qualified Employer Deferral Contribution used in
such test.
4.06 Automatic Adjustments to Employee Salary Deferral Contributions.
Within a reasonable period after the beginning of each Plan Year,
the Retirement Committee shall cause the Employee Salary Deferral
Contributions to be tested for electing Participants to determine
if the Maximum Deferral Percentage of Section 4.05 has not been
exceeded. Should it be determined that the Actual Deferral
Percentage of Highly Compensated Participants exceeds the Maximum
Deferral Percentage as set forth in Section 4.05, the Retirement
Committee shall,
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beginning with the Highly Compensated Participant having the
highest "Actual Deferral Percentage", reduce the Employee Salary
Deferral Contribution of each Highly Compensated Participant
electing to participate whose deferred amount exceeds the Maximum
Deferral Percentage in order to comply with the maximum permissible
Actual Deferral Percentage for the Plan Year. Any adjustments that
are made to the Accounts of Family Members who are aggregated
pursuant to Section 4.05(c)(2) shall be made in accordance with
regulations under Code Section 401(k). The Retirement Committee
shall again, prior to the end of the Plan Year, cause the Employee
Salary Deferral Contributions of Participants to be tested under
Section 4.05 to determine if the Actual Deferral Percentage for
Highly Compensated Participants does not exceed the Maximum
Deferral Percentage set forth in Section 4.05. To the extent the
Retirement Committee deems necessary to insure that the specified
tests set forth in Section 4.05 are satisfied, the Retirement
Committee may further reduce the Employee Salary Deferral
Contribution of each Highly Compensated Participant in the same
manner as set forth in this Section and shall also have the
specific right to refund Employee Salary Deferral Contributions of
such Participants under the Plan within 75 days after the end of
the Plan Year as provided in Section 4.07 below. The Retirement
Committee shall have the authority to adopt such additional rules
and procedures as it deems necessary to insure that the Plan meets
the specified tests as set forth in Section 4.05.
4.07 Distribution of Excess Employee Salary Deferral Contributions:
(a) In General. Notwithstanding any other provision of this
Plan, Excess Employee Salary Deferral Contribution Amounts
and income allocable thereto shall be distributed no later
than each April 15 to Participants who claim such allocable
Excess Employee Salary Deferral Contribution
Amounts for the preceding calendar year.
(b) Excess Employer Salary Deferral Contribution Amount. For
purposes of this Plan, the "Excess Employer Salary Deferral
Contribution Amount" shall mean the amount of Employee
Salary Deferral Contributions for a calendar year that the
Participant requests be allocated to and distributed from
this Plan pursuant to the claim procedure set forth in
Section 4.07 (c).
(c) Claims. The Participant's claim shall be in writing, shall
be submitted to the Plan Administrator no later than March
1; shall specify the Participant's Excess Employee Salary
Deferral Contribution Amount for the preceding calendar
year; and shall be accompanied by the Participant's written
statement that if such amounts are not distributed, such
Excess Employee Salary Deferral Contribution Amount, when
added to amounts deferred under other plans or arrangements
described in Sections 401(k), 408(k) or 403(b) of the Code,
exceeds the limit imposed on the Participant by Section
402(g) of the Code for the year in which deferral occurred.
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(d) Maximum Distribution Amount. The Excess Employee Salary
Deferral Contribution Amount distributed to a Participant
with respect to a calendar year shall be adjusted for
income and, if there is a loss allocable to the Excess
Employer Salary Deferral Contribution, shall in no event be
less than the lesser of the Participant's Account under the
Plan or the Participant's Employee Salary Deferral
Contributions for the Plan Year.
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ARTICLE V
EMPLOYER CONTRIBUTIONS
5.01 Employer Contributions:
(a) Employer Matching Contribution. Subject to the limitations
of Sections 5.05 and 6.09, the Employer shall contribute to
the Trust an amount equal to $.50 for each $1.00 a
Participant defers of the first six percent (6%) of the
Participant's Compensation deferred as an Employee Salary
Deferral Contribution under Section 4.01(a). The total
amount of such Employer Matching Contributions shall be
reduced by any forfeitures arising under Section 7.09.
(b) Employer Profit Sharing Contribution. Subject to the
limitations of Section 6.09, for each Plan Year that ends
with or within the Employer's taxable Year, the Employer
may contribute to the Trust from its current or accumulated
Net Profits an amount that the Board of Directors may from
time to time deem advisable.
5.02 Determination of Contribution. The Employer, from its records,
shall determine the amount of any contributions to be made by it
to the Trust under the terms of the Plan.
5.03 Time and Method of Payment of Contribution. The Employer may pay
its contribution for each Limitation Year in one (1) or more
installments. The Employer's contribution for any Limitation Year
shall be due on the last day of its taxable year coinciding with or
within which such Limitation Year ends, and, unless paid before,
shall be payable then or as soon thereafter as practicable, but not
later than the time prescribed by law for filing the Employer's
Federal income tax return (including extensions thereof) for such
taxable year, without interest. If the contribution is on account
of the Employer's preceding taxable year, the contribution shall be
accompanied by the Employer's signed statement to the Trustee that
payment is on account of such taxable year. Contributions may be
paid in cash. All contributions for each Limitation Year shall be
deemed to be paid as of the last day of such Limitation Year if not
allocated before the last day of the Limitation Year.
5.04 Return of Employer Contributions. Notwithstanding any provision
herein to the contrary, upon the Employer's request, a contribution
which was made upon a mistake of fact, or conditioned upon initial
qualification of the Plan, shall be returned to the Employer within
one year after payment of the contribution, or denial of the
qualification, as the case may be.
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5.05 Maximum Contribution Percentage. The Average Contribution
Percentage for Eligible Participants who are Highly Compensated
Participants for the Plan Year shall not exceed the relationship to
the Average Actual Contribution Percentage of all Non-Highly
Compensated Participants for the Plan Year of either of the
following specified tests:
(a) Primary Test: The Average Actual Contribution Percentage
for Eligible Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the Average
Actual Contribution Percentage for Eligible Participants
who are Non-Highly Compensated Employees for the Plan Year
multiplied by 1.25, or
(b) Alternative Test: The Average Actual Contribution
Percentage for Eligible Participants who are Highly
Compensated Employees for the Plan Year shall not exceed
the Average Actual Contribution Percentage for Eligible
Participants who are Non-Highly Compensated Employees for
the Plan Year multiplied by 2, provided that the Average
Actual Contribution Percentage for Eligible Participants
who are Highly Compensated Employees does not exceed the
Average Actual Contribution Percentage for Eligible
Participants who are Non-Highly Compensated Employees by
more than two (2) percentage points or such lesser amount
as the Secretary of the Treasury shall prescribe to prevent
the multiple use of this alternative limitation with
respect to any Highly Compensated Employee.
Definitions: For purposes of this Section 5.05, and for
purposes of this Plan, the following definitions shall be
used:
(1) "Average Contribution Percentage" shall mean the
average (expressed as a percentage) of the
Contribution Percentages of the Eligible
Participants in a group.
(2) "Actual Contribution Percentage" shall mean the
ratio (expressed as a percentage), of the sum of the
Employee Non-Deductible Contributions and Employer
Matching Contributions under the Plan on behalf of
the Eligible Participant for the Plan Year to the
Eligible Participant's Compensation for the Plan
Year.
(3) "Eligible Participant" shall mean any Employee of
the Employer who is otherwise authorized under the
terms of the Plan to have Non-Deductible
Contributions or Employer Matching Contributions
allocated to his Account for the Plan Year.
(4) "Qualified Nonelective Contributions" shall mean
contributions (other than Matching Contributions)
made by the Employer and allocated to Participants'
accounts that the Participant may not elect to
receive in
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cash until distributed from the plan; that are 100
percent vested and nonforfeitable when made, and
that are not distributable under the terms of the
plan to Participants or their beneficiaries earlier
than the earlier of:
(i) separation from service, death, or disability
of the Participant;
(ii) attainment of the age 59 1/2 by the
Participant;
(iii) termination of the Plan without establishment
of a successor plan;
(iv) the events specified in those of Section
13.10, 13.11, or 13.12 of this Plan adopted
by the Employer; or,
(v) for Plan Years beginning before January 1
1989, upon hardship of the Participant.
(c) Special Rules.
(1) For purposes of this Section 5.05, the Actual
Contribution Percentage for any Eligible Participant
who is a Highly Compensated Employee for the Plan
Year and who is eligible to make Non-Deductible
Employee Contributions or to receive Employer
Matching Contributions, Qualified Non-Elective
Contributions or have Employee Salary Deferral
Contributions allocated to his Account under two or
more plans as described in Section 401(a) of the
Code or arrangements described in Section 401(k) of
the Code that are maintained by the Employer or an
Affiliated Employer shall be determined as if all
such contributions and Employee Salary Deferral
Contributions were made under a single Plan.
(2) In the event that this Plan satisfies the
requirements of Section 410(b) of the Code only if
aggregated with one or more other plans, or if one
or more other plans satisfy the requirements of
Section 410(b) of the Code only if aggregated with
this Plan, then this Section 5.05 shall be applied
by determining the Actual Contribution Percentages
of Eligible Participants as if all such plans were a
single plan.
(3) For purposes of determining the Actual Contribution
Percentage of an Eligible Participant who is a
Highly Compensated Employee, the Non-Deductible
Employee Contributions, Employer Matching
Contributions and Compensation of such Participant
shall include the Non-Deductible Employee
Contributions, Employer Matching Contributions and
Compensation of Family Members, and such Family
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<PAGE> 26
Members shall be disregarded in determining the
Actual Contribution Percentage for Participants who
are Non-Highly Compensated Employees.
(4) The determination and treatment of the Actual
Contribution Percentage of any Participant shall
satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
5.06 Adjustment for Excessive Average Actual Contribution Percentage. In
the event that the Average Actual Contribution Percentage for the
Highly Compensated Participant group exceeds the Average Actual
Contribution Percentage for the Non-Highly Compensated Participant
group pursuant to Section 5.05, the Plan 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 group the amount of "Excess
Aggregate Contributions" (and any income allocable to such
contributions) or, if forfeitable, forfeit such "Excess Aggregate
Contributions". Such distribution or Forfeiture shall be made on
behalf of the Highly Compensated Participant group in order of
their Average Actual Contribution Percentages beginning with the
highest of such percentages. Forfeitures of "Excess Aggregate
Contributions" shall be treated in accordance with Section 7.07.
However, no such Forfeiture may be allocated to a Highly
Compensation Participant whose contributions are reduced pursuant
to this Section. If there is a loss allocable to such excess
amount, the distribution or Forfeiture shall in no event be less
than the lesser of the Participant's Account attributable to
Employer Matching Contributions and the Participant's Voluntary
Contribution Account or the Employer's Matching Contributions and
the Participant's voluntary contributions for the Plan Year.
5.07 Distribution of Excess Contributions:
(a) In General. Notwithstanding any other provision of the
Plan, Excess Contributions and income allocable thereto
shall be distributed, to Participants on whose behalf such
Excess Contributions were made, no later than the end of
the Plan Year next following the Plan Year for which they
were made.
(b) Excess Contributions. For purposes of this Section 5.07,
"Excess Contributions" shall mean the amount described in
Section 401(k)(8)(B) of the Code.
(c) Determination of Income. The income allocable to Excess
Contributions shall be determined by multiplying income
allocable to the Participant's Employee Salary Deferral
Contributions and Qualified Employer Deferral Contributions
for the Plan Year by a fraction, the numerator of which is
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<PAGE> 27
the Excess Contribution on behalf of the Participant for
the preceding Plan Year and denominator of which is the sum
of the Participant's Account Balances attributable to
Employee Salary Deferral Contributions and Qualified
Employer Deferral Contributions on the last day of the
preceding
Plan Year.
(d) Maximum Distribution Amount. The Excess Contributions which
would otherwise be distributed to the Participant shall be
adjusted for income; shall be reduced, in accordance with
regulations, by the amount of Excess Deferrals distributed
to the Participant; shall, if there is a loss allocable to
the Excess Contributions, in no event be less than the
lesser of the Participant's Account under the Plan or the
Participant's Employee Salary Deferral Contributions and
Qualified Employer Deferral Contributions for the Plan
Year.
(e) Accounting for Excess Contributions. Amounts distributed
under this Section 5.07 shall first be treated as
distributions from the Participant's Employee Savings Plus
Account and shall be treated as distributed from the
Qualified Employer Deferral Contribution Account only to
the extent such Excess Contributions exceed the balance in
the Participant's Employee Savings Plus Account.
(f) The amount of Excess Contributions to be distributed (or
recharacterized, if the Plan so permits), shall be reduced
by Excess Contributions previously distributed for the
taxable year ending in the same Plan Year and Excess
Contributions to be distributed for a taxable year shall be
reduced by Excess Contributions previously distributed (or
recharacterized, if applicable) for the Plan Year beginning
in such taxable year.
5.08 Distribution of Excess "Aggregate" Contributions.
(a) In General. Excess Aggregate Contributions and income
allocable thereto, attributed to Employer Matching
Contributions or Employee Non-Deductible Contributions,
shall be forfeited, if otherwise forfeitable under the
terms of this Plan, or if not forfeitable, distributed to
Participants on whose behalf such Aggregate Excess
Contributions were made, no later than the end of the Plan
Year next following the Plan Year for which they were made.
(b) Excess Aggregate Contributions. For purposes of this
Section 5.08, "Excess Aggregate Contributions" shall mean
the amount described in Section 401(m)(6)(B) of the Code.
(c) Determination of Income. The income allocable to Excess
Aggregate Contributions shall be determined by multiplying
the income allocable to
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<PAGE> 28
the Participant's Employee Non-Deductible Contributions and
Employer Matching Contributions for the Plan Year by a
fraction, the numerator of which is the Excess Aggregate
Contributions on behalf of the Participant for the
preceding Plan Year and the denominator of which is the sum
of the Participant's account balances attributable to
Employee Non-Deductible Contributions and Employer Matching
Contributions on the last day of the preceding Plan Year.
(d) Maximum Distribution Amount. The Excess Aggregate
Contributions to be distributed to a Participant shall be
adjusted for income, and, if there is a loss allocable to
the Excess Aggregate Contribution, shall in no event be
less than the lesser of the Participant's Account under the
Plan or the Participant's Employee Non-Deductible
Contributions and Employer Matching Contributions for
the Plan Year.
(e) Accounting for Excess Aggregate Contributions. Excess
Aggregate Contributions shall be distributed from the
Participant's Employee Non-Deductible Account, and
forfeited if otherwise forfeitable under the terms of the
Plan (or, if not forfeitable), distributed from the
Participant's Employer Matching Contribution Account, in
proportion to the Participant's Employer Non-Deductible
Contributions and Employer Matching Contributions for the
Plan Year.
(f) Allocation of Forfeitures under this Section 5.08. Amounts
forfeited by Highly Compensated Employees under this
Section shall be applied to reduce Employer Matching
Contributions.
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<PAGE> 29
ARTICLE VI
ALLOCATIONS
6.01 Participant's Accounts. For each Participant, the Retirement
Committee shall establish an:
(a) Employee Savings Plus Account
(b) Employer Matching Account
(c) Employer Profit Sharing Account
which will reflect the Participant's share of contributions and the
income, losses, appreciation, depreciation, and forfeitures, if
applicable, attributable to all such Accounts. The establishment of
separate Accounts shall not require a separation of the Trust
assets.
6.02 Allocation of Accounts. As of each Allocation Date, prior to
allocating contributions and forfeitures, if any, for the Plan
Year, the Retirement Committee shall:
(a) First, charge to the proper Accounts all payments or
distributions made from Participants' Accounts since the
last preceding Allocation Date that have not been charged
previously, as provided in Section 6.03;
(b) Next, adjust the net credit balances in Participants'
Accounts upward or downward, on a time-weighted pro rata
basis, according to the net credit balances so that the
totals of the net credit balances will equal the then net
worth of the Trust Fund, less an amount equal to the sum of
contributions, if any, paid to the Trustee for the period
elapsed since the last preceding Allocation Date.
The Suspense Account, if any, shall not be adjusted to reflect any
Trust earnings or losses.
6.03 Charging of Payments and Distributions. As of each Allocation Date,
all payments and distributions made under the Plan since the last
preceding Allocation Date to or for the benefit of a Participant or
his Beneficiary will be charged to the proper Account of such
Participant.
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<PAGE> 30
6.04 Method for Allocating and Crediting Employee and Employer
Contributions. Subject to the conditions and limitations of
this Article VI, as of each Allocation Date:
(a) The Employee Salary Deferral Contributions shall be
credited to each Employee Savings Plus Account.
(b) The Employer's Matching Contribution shall be credited to
each Participant's Employer Matching Account in an amount
equal to 50% of the first 6% of the Participant's
Compensation deferred as an Employee Salary Deferral
Contribution.
(c) The Employer's Profit Sharing Contribution plus any
Forfeitures, shall be allocated among and credited to
Employer Profit Sharing Accounts of eligible Participants
who during the Limitation Year completed at least 1,000
Hours of Service and are in the employ (includes Employees
granted a Leave of Absence) of the Employer on the last day
of the Plan Year. Any Profit Sharing Contribution shall be
allocated pro-rata to each Participant, based on the ratio
of the Participant's Compensation to the Compensation of
all Participants eligible for a Profit Sharing
Contribution.
However, subject to the exception of Section 17.02(a) for a
top-heavy Plan Year, a Participant who completes less than
1,000 Hours of Service during any Plan Year, or who is not
employed on the last day of the Plan Year, shall not share
in the Employer's contribution for that Plan Year.
Provided, however, if the Participant terminated employment
with the Employer during the Plan Year due to death,
disability, or retirement, his Employer Profit Sharing
Account shall receive an allocable share of any Employer
Profit Sharing Contribution and forfeitures regardless of
his number of Hours of Service performed during the Plan
Year.
(d) Separate Accounts - Breaks in Service. If a Participant
re-enters the Plan subsequent to his having incurred 5
consecutive 1-Year Breaks in Service, the Retirement
Committee shall maintain, or cause to be maintained, a
separate Employer Profit Sharing Contribution Account for
the Participant's pre-Break in Service Accrued Benefit
derived from Employer Profit Sharing Contributions and
Forfeitures, and a separate Employer Profit Sharing
Contribution Account for his post-Break in Service Accrued
Benefit derived from Employer Profit Sharing Contributions
and Forfeitures unless the Participant's entire Accrued
Benefit under the Plan is one hundred percent (100%)
nonforfeitable.
6.05 Suspense Account. The excess amount allocated to each Participant
shall by reason of Section 6.09 be held in this Account and not
distributed to a Participant
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<PAGE> 31
but shall be reapplied to reduce further Employer Matching
Contributions or Employer Profit Sharing Contributions under the
Plan for the next Limitation Year (and for each succeeding
Limitation Year, if necessary) for such Participant, so that in
each such year the sum of actual Employer Matching Contributions or
Employer Profit Sharing Contributions which would otherwise be
allocated to each Participant's Employer Matching Account or
Employer Profit Sharing Account will be made from this Suspense
Account. In the event the Participant is not employed by the
Employer at the end of any Limitation Year, then the excess amounts
shall not be distributed to the Participant but shall be reapplied
to reduce future such Employer Matching Contributions for all
remaining Participants in the Limitation Year and each succeeding
year, if necessary.
6.06 Employer Contributions Considered Made on Last Day of Plan Year.
For purposes of this Article VI, the Employer's contribution which
remains unallocated on the last day of any Plan Year will be
considered to have been made on the last day of that year,
regardless of when paid to the Trustee.
6.07 Accrual of Benefits. The Retirement Committee shall determine a
Participant's Accrued Benefit on the basis of the Limitation Year.
The Retirement Committee shall only take into account the
Compensation earned during that part of the Limitation Year the
Employee is actually a Participant in the Plan.
6.08 Equitable Allocations. If the Retirement Committee determines in
making a valuation, an allocation, or by adding interest to any
Account under the provisions of the Plan, that the strict
application of the provisions of the Plan will not produce an
equitable and nondiscriminatory allocation among the Accounts of
the Participants, it may modify any procedure specified in the Plan
for the purpose of achieving an equitable and nondiscriminatory
allocation in accordance with the general concepts of the Plan;
provided, however, that any such modification shall not reduce any
Participant's Accrued Benefits and shall be consistent with the
provisions of Section 401(a)(4) of the Code. Should the Retirement
Committee in good faith determine that certain expenses of
administration paid by the Trustee during the Plan Year under
consideration are not general, ordinary, and usual, and should not
equitably be borne by all Participants, but should be borne only by
one or more Participants, for whom or because of whom such specific
expenses were incurred, the net earnings and adjustments in value
of the Accounts shall be increased by the amounts of such expenses,
and the Retirement Committee shall make suitable adjustments by
debiting the particular Account or Accounts of such one or more
Participants, Former Participants, or Beneficiaries; provided,
however, that any such adjustment must be nondiscriminatory and
consistent with the provisions of Section 401(a) of the Code.
6.09 Maximum Annual Additions. Notwithstanding any other provision of
the Plan, the Annual Addition to a Participant's Account for any
Limitation Year may not exceed in any Limitation Year an amount
equal to the lesser of the:
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<PAGE> 32
(a) Defined Contribution Dollar Limitation (which means the
greater of $30,000 (or such larger amount as the
Commissioner of Internal Revenue may prescribe) or 25% of
the Defined Benefit Dollar Limitation set forth in Code
Section 415(b)(1) as in effect for the Limitation Year); or
(b) Twenty-five percent (25%) of the Compensation (within the
meaning of Code Section 415(c)(3)). However, the
compensation limitation in this subsection (ii) shall not
apply to (a) any contributions for medical benefits (within
the meaning of Code Section 419(A)(f)(2)) after separation
from service which is otherwise treated as an Annual
Addition, or (b) any amount otherwise treated as an Annual
Addition under Code Section 415(l)(1).
If the Participant does not participate in, and never has
participated in another Qualified Plan maintained by the Employer,
or a welfare benefit fund, as defined in Section 419(e) of the Code
maintained by the Employer, or an individual medical account, as
defined in Section 415(l)(2) of the Code, maintained by the
Employer, the amount of Annual Additions which the Committee may
allocate under this Plan on a Participant's behalf for a Limitation
Year shall not exceed the Maximum Annual Addition. If the amount
the Employer otherwise would contribute to the Participant's
Account would cause the Annual Additions for the Limitation Year to
exceed the Maximum Annual Addition, the Employer will reduce the
amount of its contribution so the Annual Additions for the
Limitation Year will be equal to the Maximum Annual Addition.
Special Rules for Plans Subject to Overall Limitations Under Code
Section 415(e).
(a) Recomputation Not Required. The Annual Addition for any
Limitation Year beginning prior to January 1, 1987 shall
not be recomputed to treat all Employee Contributions as an
Annual Addition.
(b) Adjustment of Defined Contribution Plan Fraction. If the
Plan satisfied the applicable requirements of Section 415
of the Code as in effect for all Limitation Years beginning
before January 1, 1987, an amount shall be subtracted from
the numerator of the Defined Contribution Plan Fraction
(not exceeding such numerator) as prescribed by the
Secretary of the Treasury so that the sum of the Defined
Benefit Plan Fraction and Defined Contribution Plan
Fraction computed under Section 415(e)(1) of the Code (as
revised by this Section 6.09) does not exceed 1.0 for such
Limitation Year.
If the Participant presently participates, or has ever participated
under a Defined Benefit Plan maintained by the Employer, then the
sum of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction for the Participant for that Limitation
Year shall not exceed 1.0. If in any Limitation Year the sum of
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<PAGE> 33
the Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction on behalf of a Participant does exceed 1.0, then the
Employer shall reduce its contribution on behalf of such
Participant to the Defined Contribution Plan to the extent
necessary to prevent the sum of the Defined Contribution Plan
Fraction and the Defined Benefit Plan fraction from exceeding 1.0.
For purposes of this Section, the following terms shall mean:
(a) "Defined Benefit Plan" A retirement plan which does not
provide for individual accounts for Employer contributions.
The Retirement Committee shall treat all defined benefit
plans (whether or not terminated) maintained by the
Employer as a single plan and the Retirement Committee
shall treat all defined contribution plans (whether or not
terminated) maintained by the Employer as a single plan.
(b) "Defined Benefit Plan Fraction"
projected annual benefit of the Participant
under the defined benefit plan(s) (divided by)
The lesser of (i) 125% of the dollar
limitation in effect under Code Section 415(b)(1)(A)
for the Limitation Year, or (ii) 140% of the
Participant's average Compensation for his
highest paid three (3) consecutive Years of Service
If the Employee was a Participant in one or more defined
benefit plans maintained by the Employer which were in
existence on July 1, 1982, the denominator of this fraction
will not be less than 125% of the sum of the annual
benefits under such plans which the Employee had accrued as
of the end of the 1982 Limitation Year (the last Limitation
Year beginning before January 1, 1983). The preceding
sentence only applies if the defined benefit plans
individually and in the aggregate satisfied the
requirements of Code Section 415 as in effect at the end of
the 1982 Limitation Year.
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 end 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
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<PAGE> 34
in the aggregate satisfied the requirements of Code Section
415 for all Limitation Years beginning before January 1,
1987.
(c) "Defined Contribution Plan Fraction"
the sum of the Annual Additions to the Participant's
Account under the defined contribution plan(s)
as of the close of the Limitation Year (divided by)
the sum of the lesser of the following amounts
determined for the Limitation Year and for each
prior Year of Service with the Employer: (i) 125%
of the dollar limitation in effect under Code
Section 415(c)(1)(A) for the Limitation Year (determined
without regard to the special dollar limitations
for employee stock ownership plans), or (ii) 35%
of the Participant's Compensation for the
Limitation Year
If the Employee was a Participant in one or more defined
contribution plans maintained by the Employer which were in
existence on July 1, 1982, the Retirement Committee will
redetermine the Defined Contribution Plan Fraction and the
Defined Benefit Plan Fraction, as of the end of the 1982
Limitation Year (the last Limitation Year beginning before
January 1, 1983), under this Section. If the sum of the
redetermined fractions exceeds 1.0, the Retirement
Committee will subtract permanently from the numerator of
this fraction 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. The Retirement Committee also
may use any transitional rules (see Section 6.09(d) below)
provided by law which are applicable in computing the
Participant's Defined Contribution Plan Fraction.
The Retirement Committee will make a similar adjustment to
the numerator of this fraction if the sum of the fractions
exceeds 1.0, as of the end of the 1983 Limitation Year (the
last Limitation Year beginning before January 1, 1984),
because (a) the Plan is Top-Heavy in the first Plan Year
beginning after December 31, 1983, and the Retirement
Committee must apply Article XVII or (b) the terms of one
or more July 1, 1982, plans required Annual Additions or
accruals during the 1983 Limitation Year in excess of the
Code Section 415 limitations as amended by the Tax Equity
and Fiscal Responsibility Act of 1982.
Notwithstanding the above, if the Employee was a
Participant as 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
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<PAGE> 35
adjusted if the sum of this fraction and the Defined
Benefit Fraction would otherwise exceed 1.0 under the terms
of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over
1.0 times (2) the denominator of this fraction, will be
permanently subtracted from the numerator of this fraction.
The adjustment is calculated using the fractions as they
would be computed as of the end of the last Limitation Year
beginning before January 1, 1987, and disregarding any
changes in the terms and conditions of the Plan made after
May 5, 1986, but using the Code Section 415 limitation
applicable to the first Limitation Year beginning on or
after January 1, 1987. The 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.
(d) "Projected Annual Benefit". The annual retirement benefit
(adjusted to an actuarially equivalent straight life
annuity if the plan expresses such benefit in a form other
than a straight life annuity or qualified joint and
survivor annuity) of the Participant under the terms of the
Defined Benefit Plan on the assumptions he continues
employment until his normal retirement age as stated in the
Defined Benefit Plan, his compensation continues at the
same rate as in effect in the Limitation Year under
consideration until the date of his normal retirement age
and all other relevant factors used to determine benefits
under the Defined Benefit Plan remain constant as of the
current Limitation Year for all future Limitation Years.
(e) "Compensation" - The Participant's earned income, wages,
salaries, fees for professional service and other amounts
received for personal services actually rendered in the
course of employment with the Employer maintaining the Plan
(including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips and
bonuses). The term "Compensation" shall not include:
(1) Employer contributions to a plan of deferred
compensation to the extent the contributions are not
included in the gross income of the Employee for the
taxable year in which contributed, on behalf of an
Employee to a Simplified Employee Pension Plan
described in Code Sec. 408(k) to the extent such
contributions are deductible by the Employee under
Code Sec. 219(b)(7), and any distributions from a
plan of deferred compensation, regardless of whether
such amounts are includible in the gross income of
the Employee when distributed.
(2) Amounts realized from the exercise of a
non-qualified stock option, or when restricted stock
(or property) held by an Employee either
33
<PAGE> 36
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.
(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
includible in the gross income of the Employee), or
contributions made by an Employer (whether or not
under a salary reduction agreement) towards the
purchase of an annuity contract described in Code
Sec. 403(b) (whether or not the contributions are
excludible from the gross income of the Employee).
For purposes of applying the limitations of Section
6.04 through this Section 6.09, amounts included as
Compensation are those amounts actually paid to a
Participant or includible in his gross income within
the Limitation Year.
(f) "Employer" - The Employer that adopts this Plan. In the
case of a group of employers which constitutes a controlled
group of corporations (as defined in Code Sec. 414(b) as
modified by Code Sec. 415(h)), which constitutes trades or
businesses (whether or not incorporated) which are under
common control (as defined in Code Sec. 414(c) as modified
by Code Sec. 415(h)), which constitutes an "affiliated
service" group within the meaning of Code Sec. 414(m), the
Committee shall consider all such employers as a single
employer for purposes of applying the limitations of this
Article 6.
(g) "Limitation Year" - For purposes of this Section 6.09,
"Limitation Year" shall mean the limitation year specified
in the Plan, or if none is specified, the Calendar Year.
(h) "Effective Date of Section 6.09 Provisions" - The
provisions of this Section 6.09 shall be effective for
Limitation Years beginning after December 31, 1986.
(i) The preceding Sections of this Article VI are intended to
comply with the provisions of Code Section 415 and the
Regulations thereunder. Code Section 415 and the relevant
Regulations are hereby incorporated by reference.
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ARTICLE VII
TERMINATION OF SERVICE-PARTICIPANT VESTING
7.01 Normal Retirement. A Participant's Normal Retirement Age under the
Plan is age 65. At such time he shall be 100% vested in, and shall
have a nonforfeitable right to his Accrued Benefit. A Participant
who remains in the employ of the Employer after attaining Normal
Retirement Age shall continue to participate in Employer
contributions until the date of his actual retirement. Upon
termination of a Participant's employment for any reason after
attaining Normal Retirement Age, the Retirement Committee shall
direct the Trustee to make payment of the full value of the
Participant's Accrued Benefit to him at such times and in such
manner as provided in Article VIII hereof. The value of the
Participant's Accrued Benefit shall be determined as of the
Allocation Date which coincides with, or next follows the date of
the Participant's employment termination.
7.02 Early Retirement. A Participant may retire prior to his Normal
Retirement Age upon the earlier of completion of (a) 10 or more
Years of Service and (b) the attainment of age 55. Such retirement
may begin on or after the beginning of the Plan Year following the
completion of requirements (a) and (b). Upon such Early Retirement,
the Retirement Committee shall direct the Trustee to make payment
of the non-forfeitable value of the Participant's vested Accrued
Benefit to him at such times and in such manner as provided in
Article VIII hereof. The value of the Participant's Accrued Benefit
shall be determined as of the Allocation Date which coincides with,
or, which next follows the date of the Participant's employment
termination.
7.03 Disability. A Participant who becomes permanently disabled shall be
100% vested in and shall have a nonforfeitable right to his Accrued
Benefit paid to him at such time and in such manner as provided in
Article VIII hereof. The value of a disabled Participant's Accrued
Benefit shall be determined as of the Allocation Date which
coincides with, or which next follows the date of the Participant's
termination of employment due to disability. A Participant shall be
considered "disabled" when the Retirement Committee determines the
Participant is not able to engage in any gainful activity by reason
of any medically determinable physical or mental impairment, which
the Retirement Committee expects to result in death or which the
Retirement Committee expects to last for a continuous period of not
less than twelve (12) months. Furthermore, the disabling condition
must exist for a period of at least six (6) months before the
Retirement Committee makes a determination of disability, and the
Participant must be eligible for and must actually receive
disability benefits under the Social Security Act. The Retirement
Committee shall apply the provisions of this Section 7.03 in a
non-discriminatory, consistent and uniform manner.
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<PAGE> 38
7.04 Death. Upon the death of a Participant, his Accrued Benefit shall
be 100% vested, and his Surviving Spouse, if he is married, or in
the event there is no surviving Spouse, or if the Spouse has
waived, in writing, the right to such death benefits, his other
named Beneficiary shall be entitled to receive the full value of
the deceased Participant's Accrued Benefit (reduced by any security
interest held by the Plan by reason of a loan outstanding to such
Participant) determined as of the Allocation Date which coincides
with, or which next follows the date of such Participant's death.
The death benefit so provided shall be payable at such time and in
such manner as provided in Article VIII hereof. In the event the
Spouse completes a valid Waiver, and a beneficiary is named other
than the Spouse, the Spouse must consent to and acknowledge the
specific nonspouse beneficiary. The nonspouse beneficiary so named
may not be subsequently changed without the Spouse's written
consent. The number of revocations of prior beneficiary
designations made by the Participant and so consented to by the
Spouse shall not be limited.
7.05 Distribution to Certain Terminated Participants. A Participant who
has satisfied the service requirements for Early Retirement under
7.02(a) but who separates from service with any nonforfeitable
right to an Accrued Benefit prior to satisfying the age requirement
under 7.02(b) for such Early Retirement, shall be entitled, upon
satisfaction of such age requirement, to receive a distribution of
his Accrued Benefit as if he were retiring under Early Retirement.
7.06 No Distributions Prior to Separation From Service. Except as
provided in Sections 8.01, 8.09, 13.10, 13.11 and 13.12 a
Participant shall receive no distribution from the Plan or Trust
prior to separation from Service.
7.07 Vesting on Termination of Employment - If a Participant shall
terminate employment for reasons other than death, disability or
retirement, his Accounts shall be vested as follows:
(a) Employee Savings Plus Account - shall be 100% Vested and
Non-forfeitable at all times.
(b) Employer Profit Sharing and Employer Matching Accounts -
the amount of these Accounts funded by the Employer shall
be vested based on the following schedule:
Years of Service Match Profit Sharing
---------------- ----- --------------
Less than 1 Year 0% 0%
1 Year 20% 0%
2 Years 40% 0%
3 Years 60% 0%
4 Years 80% 0%
5 Years or more 100% 100%
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Provided, however, any Employer Matching Contributions not
already 100% vested, will be 100% vested immediately, if
they are Qualified Employer Deferral Contributions that are
taken into account for purposes of meeting the Actual
Deferral Percentage test described in Section 4.05.
7.08 Years of Service for Vesting - For purposes of determining his
vested percentage an Employee shall be credited with one Year of
Service as follows:
(a) Years of Service prior to January 1, 1987, shall mean all
full years of continuous employment.
(b) Years of Service on or after January 1, 1987, shall mean
all Plan Years during which a Participant completed 1,000
or more Hours of Service with the Employer or any
Affiliated Employer of the Employer provided that the
following special provisions shall apply:
With respect to an Employee who shall have a Break in
Service after January 1, 1987 and before he shall have any
Vested Interest in his Accrued Benefit under the Plan, all
such Years of Service prior to such break shall be
disregarded if the number of consecutive Plan Years in
which the Break in Service continues, equals or exceeds the
greater of (a) five (5) consecutive one Year Breaks in
Service, or (b) the aggregate number of Years of Service
earned before the consecutive Breaks in Service. For the
purpose of determining Years of Service prior to such
break, there shall be excluded any Years of Service
previously disregarded under this paragraph (2).
(c) Service of any Employee who is a leased Employee to any
Employer aggregated under Section 414(b), (c), or (m) of
the Internal Revenue Code must be credited for vesting
purposes whether or not such individual is eligible to
participate in the Plan.
(d) If a Participant returns to work before incurring a Break
in Service, he will continue to vest starting at the point
in the vesting schedule where he left employment in both
his pre-separation and post-separation accrued benefit.
7.09 Forfeiture - If a Participant terminates employment, and is not
100% vested in his Accrued Benefit, his non-vested Accounts shall
be held until the earlier of: (1) the Anniversary Date coincident
with or next following the distribution to the Participant of his
entire vested portion of his Account, or (2) the last day of the
Plan Year in which the Participant incurs five (5) consecutive
1-Year Breaks in Service. At such time, the nonvested amount
(Forfeiture) in the Employer Matching Account will be used to
reduce the Employer Matching Contribution. Any non-vested amount in
the Employer Profit Sharing Account shall become a
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<PAGE> 40
Forfeiture and shall be reallocated to remaining eligible
Participants' Profit Sharing Accounts.
A lump sum cash payment may be made to the Participant, within a
reasonable time after the Allocation Date coinciding with or
immediately following the date the Participant terminated
employment. However, if the present value of the Participant's
vested Accrued Benefit derived from Employer and Employee
contributions is more than $3,500, the written consent of the
Participant and his Spouse is necessary before such lump sum cash
payment can be made.
However, if any former Participant shall be re-employed by the
Employer before he has incurred five (5) consecutive 1-Year
Breaks-in-Service, and such former Participant had received a
distribution of all or part of his vested interest prior to his
re-employment, his forfeited Account balance shall be reinstated
only if he repays the full amount distributed to him from his
Employer funded Accounts. Provided, however, such repayment shall
not be required before the earlier of a period of (a) five
consecutive 1-year Breaks-in-Service or (b) five (5) years after
the former Participant is rehired. In the event the former
Participant does repay the full amount distributed to him, the
previously forfeited portion of the Participant's Account must be
restored in full, unadjusted by any gains or losses occurring
subsequent to the Allocation Date preceding his termination. The
amount necessary to restore such previously forfeited non-vested
amounts shall be provided, in order, from the following sources:
(a) other non-vested Accounts currently being forfeited, (b) the
Employer's current contribution and, to the extent necessary, (c)
an additional Employer contribution.
If a distribution is made at a time when a Participant is less than
100% vested in his Account balances derived from Employer
Contributions, a Separate Account shall be established for the
Participant's interest in the Plan as of the time of distribution
and at any relevant time the Participant's nonforfeitable portion
of Employer derived Account shall be equal to an amount ("X")
determined by the formula:
X = P [AB + (R*D)] - (R*D)
For the purposes of applying the formula: P is the nonforfeitable
percentage at the relevant time; AB is the "Account balances" at
the relevant time; D is the amount of the distribution; and R is
the ratio of the "Account balances" at the relevant time to the
"Account balances" after distribution.
7.10 No Divestment for Cause - Under no circumstances shall a
Participant be divested of any vested benefit for any cause.
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<PAGE> 41
ARTICLE VIII
TIME AND METHOD OF PAYMENT OF BENEFITS
8.01 Time of Payment. - Subject to the exceptions found in Sections
8.09, 13.10, 13.11 and 13.12, no distribution of a Participant's
Savings Plus Account (comprised of Employee Salary Deferral
Contributions) shall occur prior to age 59 1/2 except for
Retirement, Death, Disability, or termination of employment.
(a) Retirement. In the event of Normal or Early Retirement,
payment of a Participant's Accrued Benefit shall commence
within a reasonable time after the Allocation Date the
Participant becomes eligible to receive benefits, unless
the Participant otherwise elects.
(b) Death or Disability. In the event of death or permanent
disability, payment of the Participant's Accrued Benefit
shall commence within a reasonable time after the
Allocation Date (unless the Participant or his Beneficiary
otherwise elects) following receipt by the Retirement
Committee of proof of death, or after the determination by
the Retirement Committee that permanent disability exists.
(c) Other Termination of Service. Upon a Participant's
termination of employment for any reason other than
retirement, permanent disability, or death, the Trustee
shall continue to hold the Participant's Accrued Benefit in
Trust until the Allocation Date which coincides with, or
immediately follows the date the Participant terminated
employment with payment of his vested Accrued Benefit to
commence within a reasonable time after the end of the
Allocation Date, unless the Participant's vested Accrued
Benefit is in excess of $3,500, and the Participant elects
to defer payment and not receive his distribution at that
time.
If the Participant dies or becomes permanently disabled
after terminating employment, but prior to receiving his
Accrued Benefit, the Retirement Committee, upon
confirmation of the death or disability, shall direct the
Trustee to make payment of the Accrued Benefit to the
Participant (or to his Beneficiary if the Participant is
deceased) in accordance with the provisions of Section 8.02
within sixty (60) days after the Allocation Date, following
receipt by the Retirement Committee of proof of death, or
after the determination by the Retirement Committee that
permanent disability exists.
(d) Time of Payment of Benefits - Unless the Participant elects
otherwise, payment of benefits must begin no later than 60
days after the close of the Plan Year in which the latest
of the following events occur:
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<PAGE> 42
(1) the Participant attains age 65 or earlier Normal
Retirement Age specified under the Plan,
(2) the termination of the Participant's service with
the Employer,
(3) the 10th anniversary of the year in which the
Participant commenced participation in the Plan (the
5th anniversary of the year in which the Participant
commenced participation in the Plan, in the case of
a Participant who commences participation in the
Plan within 5 years before attaining Normal
Retirement Age under the Plan), or
(4) a later date elected by the Participant.
(e) Distributions: Notwithstanding subsection (d) immediately
preceding, distribution to a Participant must commence no
later than the first day of April following the calendar
year in which the Participant attains age 70-1/2,
regardless as to whether he has retired.
(f) Death Distribution Provisions: Upon the death of the
Participant, the following distribution provisions shall
take effect:
(1) If the Participant dies after distribution of his or
her interest has commenced, the remaining portion of
such interest will continue to be distributed at
least as rapidly as under the method of distribution
being used prior to the Participant's death.
(2) If the Participant dies before distribution of his
or her interest commences, the Participant's entire
interest will be distributed no later than five (5)
years after the Participant's death except to the
extent that an election is made to receive
distributions in accordance with (i) or (ii) below:
(i) If any portion of the Participant's
interest is payable to a designated
Beneficiary, distributions may be made in
substantially equal installments over the
life or life expectancy of the designated
Beneficiary commencing no later than one
(1) year after the Participant's death;
(ii) If the designated Beneficiary is the
Participant's surviving Spouse, the date
distributions are required to begin in
accordance with (i) above shall not be
earlier than the date on which the
Participant would have attained age 70 1/2,
and, if the Spouse dies before payments
begin, subsequent distributions shall be
made as if the Spouse had been the
Participant.
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(3) For purposes of 8.01(f)(2) above, payments will be
calculated by use of the return multiples specified
in section 1.72-9 of the regulations. Life
expectancy of a surviving Spouse may be recalculated
annually; however, in the case of any other
designated Beneficiary, such life expectancy will be
calculated at the time payment first commences
without further recalculation.
(4) For purposes of (1), (2) and (3) above, any amount
paid to a child of the Participant will be treated
as if it had been paid to the surviving Spouse if
the amount becomes payable to the surviving Spouse
when the child reaches the age of majority.
(g) Transitional Rule: Notwithstanding the above distribution
requirements of Section 8.01, distribution on behalf of any
Employee, including a Five Percent (5%) Owner, may be made
in accordance with all of the following requirements
(regardless of when such distribution commences):
(1) The distribution by the Plan and Trust is one which
would not have disqualified such Trust under section
401(a)(9) of the Code as in effect prior to
amendment by the Deficit Reduction Act of 1984.
(2) The distribution is in accordance with a method of
distribution designated by the Participant whose
interest in the Trust is being distributed or, if
the Participant is deceased, by a Beneficiary of
such Participant.
(3) Such designation was in writing, was signed by the
Participant or the Beneficiary and was made before
January 1, 1984.
(4) The Participant had accrued a benefit under the plan
as of December 31, 1983.
(5) The method of distribution designated by the
Participant or the Beneficiary specifies the time at
which distribution will commence, the period over
which distributions will be made and in the case of
any distribution upon the Participant's death, the
Beneficiaries of the Participant listed in order of
priority.
Unless paid to a surviving Spouse under a Qualified Joint
and Survivor Annuity, the method of distribution selected
must assure that more than fifty percent (50%) of the
present value of the amount available for distribution is
paid within the life expectancy of the Participant.
A distribution upon death will not be covered by this
Transitional Rule unless the information in the designation
contains the required information
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<PAGE> 44
described above, with respect to the distributions to be
made upon the death of the Employee.
For any distribution which commences before January 1,
1984, but continues after December 31, 1983, the
Participant, or the Beneficiary, to whom such distribution
is being made, will be presumed to have designated the
method of distribution under which the distribution is
being made if the method of distribution was specified in
writing and the distribution satisfies the requirements in
subsections (1) and (5) above.
If a designation is revoked, any subsequent distribution
must satisfy the requirements of section 401(a)(9) of the
Code as amended. Any changes in the designation will be
considered to be a revocation of the designation. However,
the mere substitution or addition of another beneficiary
(one not named in the designation) under the designation
will not be considered to be a revocation of the
designation, so long as such substitution or addition does
not alter the period over which distributions are to be
made under the designation, directly or indirectly (for
example, by altering the relevant measuring life).
8.02 Method of Payment. After all required accounting adjustments, the
Trustee, in accordance with the direction of the Retirement
Committee, shall make payment of the Participant's Accrued Benefit
in a lump sum, or at the request of a Participant, in substantially
equal monthly, quarterly, or annual installments over a fixed
reasonable period of time, or by the purchase of a term certain
nontransferable annuity.
Limitation on Settlement Options: The Distributions, if not made
in a lump sum, may only be made over one of the following periods
(or a combination thereof):
(a) a period certain not extending beyond the life expectancy
of the Participant, or
(b) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
beneficiary.
If the Participant's entire interest is to be distributed in other
than a lump sum, then the amount to be distributed each year must
be at least an amount equal to the quotient obtained by dividing
the Participant's entire interest by the life expectancy of the
Participant or joint and last survivor expectancy of the
Participant and designated beneficiary. Life expectancy and joint
and last survivor expectancy are computed by the use of the return
multiples contained in section 1.72-9 of the Income Tax
Regulations. For purposes of this computation, a Participant's life
expectancy may be recalculated no more frequently than annually;
however, the life expectancy of a non-spouse beneficiary may not be
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<PAGE> 45
recalculated. If the Participant's spouse is not the designated
beneficiary, the method of distribution selected must assure that
more than fifty percent (50%) of the present value of the amount
available for distribution is paid within the life expectancy of
the Participant.
A Participant may not elect an optional form of payment providing
monthly benefits to a contingent annuitant who is other than his
Spouse, or to a Beneficiary, unless the actuarial value of the
payments expected to be made to the Participant at the time the
payment is to commence is more than 50% of the actuarial value of
the total payments expected to be made under such optional form. In
no event, however, can the amount of each monthly payment to a
contingent annuitant or Beneficiary exceed that payable to the
Participant.
8.03 Deferral of Payments. Should a Participant's Accounts be retained
in the Trust after the date on which his participation ends, the
Accounts may continue to be treated as a part of the Trust Fund.
The Accounts will be credited (or debited) with their share of the
net income (or loss) attributable to the investments of such
Accounts. Notwithstanding the foregoing, the Retirement Committee
at its sole discretion may direct that the Former Participant's
Accounts be segregated and placed in insured interest-bearing
savings accounts or time deposit(s) (or a combination of both), or
invested in a single premium deferred nontransferable annuity. Once
Accounts are segregated, they will no longer share in income,
increases, or decreases, if any, of the Trust. A segregated account
alone shall share in any income it earns, and it alone shall bear
any expense or loss it incurs.
8.04 Limitation on Distributions. Except as otherwise provided in this
Article VIII, a Participant, Former Participant, or Beneficiary is
not entitled to any payment, withdrawal, or distribution under the
Plan.
8.05 Payment in the Event of Legal Disability. Payments to any
Participant, Former Participant, or Beneficiary shall be made to
the recipient entitled thereto in person or upon his personal
receipt, in form satisfactory to the Retirement Committee, except
when the recipient entitled thereto shall be under a legal
disability, or, in the sole judgment of the Retirement Committee,
shall otherwise be unable to apply such payment in furtherance of
his own interest and advantage. The Retirement Committee may, in
such event, at its sole discretion, direct all or any portion of
such payments to be made in any one or more of the following ways:
(a) To such person directly;
(b) To the guardian of his person or his estate;
(c) To a relative or friend of such person, to be expended for
his benefit; or
(d) To a custodian for such person under any Uniform Gifts to
Minors Act.
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<PAGE> 46
The decision of the Retirement Committee, in each case, will be
final, binding, and conclusive upon all persons ever interested
hereunder. The Retirement Committee shall not be obliged to see to
the proper application or expenditure of any payment so made. Any
payment made pursuant to the power herein conferred upon the
Retirement Committee shall operate as a complete discharge of all
obligations of the Trustee and the Retirement Committee, to the
extent of the distributions so made.
8.06 Accounts Charged. The Retirement Committee shall charge all
distributions made to a Participant or to his Beneficiary from his
Accounts against the Accounts of the Participant when made.
8.07 Payments Only from Trust Fund. All benefits of the Plan shall be
payable solely from the Trust Fund and neither the Employer,
Retirement Committee, nor Trustee shall have any liability or
responsibility therefor excepts expressly provided herein.
8.08 Participant Benefit Payment Election. The Retirement Committee may
permit a Participant who terminates employment after attaining
Normal Retirement Age to elect any of the forms of payment of
retirement benefits prescribed by Section 8.02. Upon the
Participant's request, the Retirement Committee shall furnish the
Participant an appropriate form for the making of the election. The
Participant shall make an election under this Section 8.08 by
filing the election form with the Plan Administrator on or before
the last day of the Plan Year following which the Trustee would
otherwise commence to pay a Participant's vested Accrued Benefit in
accordance with the requirements of Section 8.01. The Participant
shall not make any election for an optional form of retirement
benefit under which the present value of the retirement benefits
payable solely to the Participant will not be greater than fifty
percent (50%) of the present value of the total retirement benefits
payable to the Participant and his Beneficiaries. The Retirement
Committee shall determine "present value" as of the date the
Trustee is to commence payment of the retirement benefits to the
Participant. The Retirement Committee shall charge the electing
Participant's Account for any expense incurred in making the
"present value" determination. If the Retirement Committee
determines not to permit the Participant's election, it shall
direct the Trustee in writing to make distribution of the
Participant's Vested Accrued Benefit to him in accordance with
Section 8.02. The Retirement Committee shall apply the Provisions
of this Section 8.08 in a nondiscriminatory and uniform manner.
Should the Retirement Committee reject the Participant's claim in
whole or in part the appeal procedures in Section 11.09 shall
apply.
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<PAGE> 47
8.09 Hardship Withdrawals.
(a) Definition of Hardship. A Participant shall be entitled to
a Hardship Withdrawal from his separate Employee Saving
Plus Account established for Employee Salary Deferral
Contributions if:
(1) There is an immediate and heavy financial need, and
(2) Other resources are not reasonably available to meet
the need.
With regard to satisfaction of requirement 8.09(a)(1)
above, the following expenses are deemed to constitute
immediate and heavy financial needs:
(i) Medical expenses incurred by the Employee, the
Employee's Spouse, or any dependents of the Employee
(as defined in Code Section 213(d);
(ii) Purchase (excluding mortgage payments) of a
principal residence for the Employee;
(iii) Payment of tuition for the next semester or quarter
for post-secondary education for the Employee, his
Spouse or children; and
(iv) Payments of amounts necessary to prevent the
eviction of the Employee from his principal
residence or foreclosure on the mortgage of the
Employee's principal residence.
In determining whether expenses constitute an "immediate
and heavy financial need", or if the requirement of
8.09(a)(2) above is met, the Retirement Committee, acting
in a uniform and nondiscriminatory manner, can reasonably
rely upon the representations of the Employee regarding the
Employee's financial affairs, and the Retirement Committee
shall not be required to make an independent investigation
of the Employee's financial affairs.
The Retirement Committee in so relying upon such financial
representations of the Employee shall consider all relevant
facts and circumstances. A distribution will be treated as
necessary to satisfy a financial need of an Employee if
such need cannot be relieved by:
(1) Reimbursement or compensation by insurance or
otherwise,
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<PAGE> 48
(2) Reasonable liquidation of the Employee's assets to
the extent such liquidation would not itself cause
an immediate and heavy financial need,
(3) Cessation of elective contributions or Employee
Contributions under the Plan, or
(4) Other distribution or nontaxable (at the time of the
loan) loans from plans maintained by the Employer or
any other employer, or by borrowing from commercial
sources on reasonable terms.
The above listed possible sources of other financial
remedies available to the Employee shall be deemed to
include those assets of the Employee's Spouse and minor
children that are reasonably available to the Employee,
excluding such property held for the Employee's child under
an irrevocable trust or under the Uniform Gifts to Minors
Act.
(b) Amount of Hardship Withdrawal. The amount of any approved
Hardship Withdrawal shall not exceed the lesser of the
Participant's:
(1) Employee Savings Plus Account balance, without
earnings, or
(2) his cumulative Employee Salary Deferral
Contributions, or
(3) the amount of the Employee's immediate and heavy
financial need.
The minimum Hardship withdrawal is $500.
(c) Manner of Making Withdrawals. Any request for a Hardship
Withdrawal by a Participant must be filed with the
Retirement Committee in writing specifying the nature of
the withdrawal (and the reasons therefore, if a Hardship
Withdrawal), the amount of funds requested to be withdrawn,
and the investment Account (if applicable) which should be
redeemed to make the withdrawal. Upon approving any
withdrawal, the Plan Administrator shall furnish the
Trustee with written instructions directing the Trustee to
make the withdrawal in a lump sum payment of cash to the
Participant. In making any such withdrawal payment, the
Trustee shall be fully entitled to rely on the instructions
furnished by the Plan Administrator, and shall be under no
duty to make any inquiry or investigation with respect
thereto.
8.10 Portability of Participant Accounts - Notwithstanding any other
provision of the Plan, upon the direction of the Retirement
Committee, the Trustee shall transfer the amount allocated to the
credit of a Participant in the Trust (including also for this
purpose, the amount, if any, in his Employee Rollover Account) to
the
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<PAGE> 49
Trustee of any tax exempt trust which forms part of a tax-qualified
retirement plan under Section 401 of the Code.
8.11 Direct Rollover. 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.
Definitions.
(l) Eligible rollover distribution: 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 section
401(a)(9) of the Code; and the portion of any distribution
that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation
with respect to employer securities).
(2) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a)
of the Code, an individual retirement annuity described in
section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust described
in section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity.
(3) Distributee: 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 section
414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(4) Direct rollover: A direct rollover is a payment by the plan
to the eligible retirement plan specified by the
distributee.
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ARTICLE IX
EMPLOYER ADMINISTRATIVE PROVISIONS
9.01 Information. The Employer shall, upon request, or as may be
specifically required hereunder, furnish or cause to be furnished,
all of the information or documentation which is necessary or
required by the Retirement Committee and Trustee to perform their
respective duties and functions under the Plan. The Employer's
records as to the current information the Employer furnishes to the
Retirement Committee and Trustee shall be conclusive to all
persons.
9.02 No Liability. Subject to Article XII hereof, the Employer assumes
no obligation or responsibility to any of the Employees,
Participants, or Beneficiaries for any act of, or failure to act,
on the part of the Retirement Committee or the Trustee.
9.03 Employer Action. Any action required of the Employer shall be by
resolution of its Board of Directors or by a person authorized to
act by Board resolution.
9.04 Indemnity. The Employer agrees it will indemnify and hold harmless
the Board of Directors, individual Trustee(s), and the members of
the Retirement Committee, and each of them, from and against any
and all loss resulting from liability to which the Board of
Directors, individual Trustee(s), and the Retirement Committee, or
the members of the Board of Directors and Retirement Committee, may
be subjected by reason of any act or conduct (except willful or
reckless misconduct) in their official capacities in the
administration of this Plan or Trust or both, including all
expenses reasonably incurred in their defense, in case the Employer
fails to provide such defense. The indemnification provisions of
this Section 9.04 shall not relieve the Board of Directors,
individual Trustee(s), or any members of the Retirement Committee
from any liability they may have under the Act for breach of a
fiduciary duty.
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ARTICLE X
RETIREMENT COMMITTEE
10.01 Appointment of Committee. The Employer's Board of Directors shall
appoint an Administrative (Retirement) Committee consisting of not
less than three (3) members to administer the Plan, the members of
which may also be Participants in the Plan.
10.02 Term. Each member of the Retirement Committee shall serve until his
successor is appointed. Any member of the Retirement Committee may
be removed by the Board of Directors, with or without cause. The
Board of Directors shall have the power to fill any vacancy which
may occur. An Retirement Committee member may resign upon written
notice to the Employer.
10.03 Compensation. The members of the Retirement Committee shall serve
without compensation for services in behalf of the Plan, but the
Employer shall pay all expenses, including the expenses for any
bond required under Act Section 412. To the extent such expenses
are not paid by the Employer, they shall be paid by the Trustee
from the Trust Fund.
10.04 Powers of Retirement Committee. Subject to Article XII hereof, the
Retirement Committee shall have the following powers and duties:
(a) To direct the administration of the Plan in accordance with
the provisions herein set forth;
(b) To adopt rules of procedure and regulations necessary for
the administration of the Plan, provided the rules are not
inconsistent with the terms of the Plan;
(c) To determine all questions with regard to rights of
Employees, Participants, and Beneficiaries under the Plan,
including but not limited to rights of eligibility of an
Employee to participate in the Plan and the value of the
Accrued Benefit of each Participant;
(d) To enforce the terms of the Plan and the rules and
regulations it adopts;
(e) To direct the Trustee as respects the crediting and
distribution of the Trust and all other matters within its
discretion as provided in the Trust Agreement;
(f) To review and render decisions respecting a claim for (or
denial of a claim for) a benefit under the Plan;
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(g) To furnish the Employer with information which the Employer
may require for tax or other purposes;
(h) To engage the service of counsel (who may, if appropriate,
be counsel for the Employer) and agents whom it may deem
advisable to assist it with the performance of its duties;
(i) To prescribe procedures to be followed by distributees in
obtaining benefits;
(j) To receive from the Employer and from Employees such
information as shall be necessary for the proper
administration of the Plan;
(k) To receive and review reports of the financial condition
and of the receipts and disbursements of the Trust Fund
from the Trustee;
(l) To establish a nondiscriminatory policy which the Trustee
shall observe in making loans, if any, to Participants;
(m) To maintain, or cause to be maintained, separate Accounts
in the name of each Participant to reflect the
Participant's Accrued Benefits under the Plan;
(n) To select a secretary, who need not be a member of the
Retirement Committee;
(o) To interpret and construe the Plan;
(p) To select the issuing company or companies from which
Insurance Contracts shall be purchased as may be provided
herein; and to determine the form, type, and kind of such
contract;
(q) To engage the services of an Investment Manager or Managers
(as defined in Act Section 3 (38)) each of whom shall have
full power and authority to manage, acquire or dispose (or
direct the Trustee with respect to acquisition or
disposition) of any Plan Asset under its control; and
(r) To direct the Trustee in the investment, reinvestment, and
disposition of the Trust Fund as provided in the Trust
Agreement.
10.05 Manner of Action. The decision of a majority of the members of the
Retirement Committee appointed and qualified shall control. In case
of a vacancy in the membership of the Retirement Committee, the
remaining members of the Retirement Committee may exercise any and
all of the powers, authorities, duties, and discretions conferred
upon such Retirement Committee, pending the filling
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of the vacancy. The Retirement Committee may, but need not, call or
hold formal meetings. Any decisions made or action taken pursuant
to written approval of a majority of the then members shall be
sufficient. The Retirement Committee shall maintain adequate
records of its decisions.
10.06 Authorized Representative. The Retirement Committee may authorize
any one of its members, or its secretary, to sign on its behalf any
notices, directions, applications, certificates, consents,
approvals, waivers, letters, or other documents. The Retirement
Committee must evidence this authority by an instrument signed by
all its respective members and filed with the Trustee.
10.07 Nondiscrimination. The Retirement Committee shall administer the
Plan in a uniform, nondiscriminatory manner for the exclusive
benefit of the Participants and their Beneficiaries.
10.08 Interested Member. No member of the Retirement Committee may decide
or determine any matter concerning the distribution, nature, or
method of settlement of his own benefits under the Plan unless
there is only one person acting alone in the capacity as the
Retirement Committee.
10.09 Funding Policy. The Retirement Committee shall review, not less
often than annually, all pertinent Employee information and Plan
data in order to establish the funding policy of the Plan to
determine the appropriate methods of carrying out the Plan's
objectives. The Retirement Committee shall communicate annually to
the Trustee or to any Plan Investment Manager (herein so-called),
if any, the Plan's short-term and long-term financial needs so
investment policy can be coordinated with Plan financial
requirements.
10.10 Individual Statement. As soon as practicable after the Allocation
Dates of each Plan Year, but within the time prescribed by the Act
and the regulations under the Act, the Retirement Committee will
deliver to each Participant (and to each Beneficiary) a statement
reflecting the condition of his Accrued Benefit in the Trust as of
that date, and such other information the Act requires be furnished
the Participant or Beneficiary. No Participant, except a member of
the Retirement Committee, shall have the right to inspect the
records reflecting the Account of any other Participant.
10.11 Books and Records. The Retirement Committee shall maintain, or
cause to be maintained, records which will adequately disclose at
all times the state of the Trust Fund and of each separate interest
therein. The books, forms, and methods of accounting shall be the
responsibility of the Retirement Committee.
10.12 Unclaimed Account Procedure. Neither the Trustee nor the
Retirement Committee shall be obliged to search for, or ascertain
the whereabouts of, any Participant or Beneficiary. The Retirement
Committee, by certified or registered
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mail addressed to his last known address of record with the
Retirement Committee or the Employer, shall notify any Participant,
or Beneficiary, that he is entitled to a distribution under this
Plan, and the notice shall quote the provisions of this section. If
the Participant, or Beneficiary, fails to claim his distributive
share or make his whereabouts known in writing to the Retirement
Committee within six (6) months from the date of mailing of the
notice, or before this Plan is terminated or discontinued,
whichever should first occur, the Retirement Committee shall direct
the Trustee to segregate the Participant's unclaimed Accrued
Benefit in a nontransferable deferred annuity or in a segregated
interest bearing Account in the name of the Participant or
Beneficiary. The Retirement Committee shall then notify the Social
Security Administration of the Participant's (or Beneficiary's)
failure to claim the distribution to which he is entitled. The
Retirement Committee shall request the Social Security
Administration to notify the Participant (or Beneficiary) in
accordance with procedures it has established for this purpose. The
segregated Account shall be entitled to all income it earns and
shall bear all expense or loss it incurs.
10.13 Allocation. Within a reasonable time after the close of each Plan
Year, the Trustee shall prepare or cause to be prepared a statement
of the condition of the Trust Fund, setting forth all investments,
receipts, and disbursements, and other transactions effected by it
during such Plan Year, and showing all the assets of the Trust Fund
and the cost and fair market value thereof. This statement shall be
delivered to the Retirement Committee. The Retirement Committee
shall then cause to be prepared, and shall deliver to each
Participant or Former Participant an annual report disclosing the
status of his Accounts in the Trust. The Trustee's determination of
the fair market value of the assets of the Trust Fund and the
Retirement Committee charges or credits to Accounts shall be final
and conclusive on all persons ever interested hereunder, subject to
Section 11.09.
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ARTICLE XI
PARTICIPANT ADMINISTRATIVE PROVISIONS
11.01 Beneficiary Designation. Each Participant may from time to time
designate, in writing, a Beneficiary and/or a Contingent
Beneficiary to whom the Trustee shall pay his Accrued Benefit in
the Trust Fund in the event of his death. The Retirement Committee
shall prescribe the form for the written designation of Beneficiary
and, upon the Participant's filing the form with the Retirement
Committee, it effectively shall revoke all designations filed prior
to that date by the same Participant. As a condition to any married
Participant designating a Beneficiary other than his spouse, the
Retirement Committee shall require the spouse's written consent.
The spouse's signature must be notarized by a notary public or
witnessed by a plan representative. The spouse's consent must
acknowledge the effect of waiving his (her) rights under the Plan
and specifically consent to the election of any alternate
beneficiary other than the spouse.
11.02 No Beneficiary Designation. With respect to any death benefit
provided hereunder, the Participant shall file a beneficiary
designation with the Committee and the Participant, during his
lifetime, shall have the right, which may be successively exercised
by written instrument filed with and received by the Committee, to
request a change of his designated beneficiary. In the event the
designated beneficiary is not living at the death of the
Participant, or if no beneficiary has been designated, the death
benefit shall be payable to the spouse of the Participant, if
living; otherwise to his children, equally per stirpes; if none,
then to the estate of the Participant.
11.03 Personal Data to Retirement Committee. Each Participant and
Beneficiary must furnish to the Retirement Committee evidence,
data, or information as the Retirement Committee considers
necessary or desirable for the purpose of administering the Plan.
The provisions of this Plan are effective for the benefit of each
Participant upon the condition precedent that each Participant will
furnish promptly full, true, and complete evidence, data, and
information when requested by the Retirement Committee, provided
the Retirement Committee shall advise each Participant of the
effect of his failure to comply with its request.
11.04 Address for Notification. Each Participant and each Beneficiary of
a deceased Participant shall file with the Retirement Committee, in
writing, his post office address, and each subsequent change of
such post office address. Any payment or distribution hereunder,
and any communication addressed to a Participant or his
Beneficiary, shall be sent to the last address filed with the
Retirement Committee, or if no such address has been filed, then
the last address indicated on the records of the Employer, shall be
deemed to have been delivered to the
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Participant or his Beneficiary on the date that such distribution
or communication is deposited in the United States mail, postage
prepaid.
11.05 Assignment or Alienation. To the extent permitted by law, the
Participant may not anticipate, encumber, alienate or assign any of
his rights, claims, or interests in this Plan or any part thereof,
or any payments, benefits, or rights arising by reason of this Plan
shall in any way be subject to the Participant's debts, contracts,
or engagements, or to any judicial processes to levy upon or attach
the same for payment thereof.
Notwithstanding the above, in the event of a Qualified Domestic
Relations Order - no violation of the non-alienation provisions of
ERISA occurs where a portion of the benefits of a Participant is
required to be paid to the Participant's spouse pursuant to a
Qualified Domestic Relations Order. A "Qualified Domestic Relations
Order" is a judgment or decree (including approval of a property
settlement agreement) that relates to the provisions of child
support, alimony payments or marital property, rights to a spouse,
former spouse, child or other dependent of a Participant and is
made pursuant to a state domestic relations law. The Qualified
Domestic Relations Order may not alter the amount, time, or form of
payment of plan benefits.
11.06 Litigation Against the Trust. If any legal action is filed against
the Trustee, Board of Directors, or the Committee, or against any
member or members of the Committee or Board of Directors, by or on
behalf of any Participant or Beneficiary, the Employer shall
reimburse the Trust, the Board of Directors, Retirement Committee,
and any member or members of the Retirement Committee or Board of
Directors, for all costs and fees expended by it or them by
surcharging all costs and fees against the same payable under the
Plan to the Participant or to the Beneficiary, but only to the
extent a court of competent jurisdiction specifically authorizes
and directs any such surcharges.
11.07 Information Available. Any Participant in the Plan or any
Beneficiary may examine copies of the summary plan description,
latest annual report, any bargaining agreement, this Plan, trust,
or any other instrument under which the Plan was established or is
operated. The Retirement Committee will maintain all of the items
listed in this Section in its office, or in such other place or
places as it may designate from time to time in order to comply
with the regulations issued under the Act for examination during
reasonable business hours. Upon the written request of a
Participant or Beneficiary, the Retirement Committee shall furnish
him with a copy of any item listed in this Section. The Retirement
Committee may make a reasonable charge to the requesting person
for the copy so furnished.
11.08 Beneficiary's Right to Information. A Beneficiary's right to (and
the Retirement Committee's duty to provide to the Beneficiary)
information or data concerning
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the Plan shall not arise until he first becomes entitled to receive
a benefit under the Plan.
11.09 Appeal Procedure for Denial of Benefits. The Retirement Committee
shall provide adequate notice in writing to any Participant or to
any Beneficiary (claimant) whose claim for benefits under this Plan
has been denied. The Retirement Committee's notice to the claimant
shall set forth:
(a) The specific reason for the denial;
(b) Specific reference to pertinent Plan provisions on which
the Retirement Committee based its denial;
(c) A description of any additional material and information
needed for the claimant to perfect his claim and an
explanation of why the material or information is needed;
(d) A statement that the claimant may:
(1) request a review upon written application to the
Committee;
(2) review pertinent Plan documents; and
(3) submit issues and comments in writing; and
(e) That any appeal the claimant wishes to make of the adverse
determination must be in writing to the Retirement
Committee within seventy-five (75) days after receipt of
the Retirement Committee's notice of denial of benefits.
The Retirement Committee's notice must further advise the
claimant that his failure to appeal the action to the
Retirement Committee in writing within the seventy-five
(75) day period will render the Retirement Committee's
determination final, binding, and conclusive.
If the claimant should appeal to the Retirement Committee, he, or
his duly authorized representative, may submit, in writing,
whatever issues and comments he, or his duly authorized
representative, feels are pertinent. The Retirement Committee shall
re-examine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified
under the circumstances. The Retirement Committee shall advise the
claimant of its decision within sixty (60) days of the claimant's
written request for review, unless special circumstances (such as a
hearing) would make the rendering of a decision within the sixty
(60) day limit infeasible, but in no event shall the Retirement
Committee render a decision respecting a denial for a claim for
benefits later than one hundred twenty (120) days after its receipt
of a request for review. A written statement stating the decision
on review, the specific reasons for the decision, and
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the specific Plan provisions on which the decision is based shall
be mailed or delivered to the claimant within such sixty (60) (or
one hundred twenty (120)) day period.
The Retirement Committee's notice of denial of benefits shall
identify the name of each member of the Retirement Committee and
the name and address of the Retirement Committee member to whom the
claimant may forward his appeal.
11.10 No Rights Implied. Nothing contained in this Plan, or any
modification or amendment to the Plan, or in the creation of any
benefit, or the payment of any benefit, shall give any Employee,
Participant, or any Beneficiary any right to continue employment,
any legal or equitable right against the Employer or any officer,
director, or Employee of the Employer, or its agents or employees.
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ARTICLE XII
FIDUCIARIES DUTIES
12.01 Named Fiduciary. The "Named Fiduciary" of the Plan shall consist
of the following:
(a) The Employer;
(b) The Retirement Committee;
(c) The Trustee; and
(d) Such other person or persons that are designated to carry
out fiduciary responsibilities under the Plan in accordance
with Section 12.03 (c) hereof.
Any person or group of persons may serve in more than one fiduciary
capacity with respect to the Plan. A Named Fiduciary may employ one
or more persons to render advice with regard to any responsibility
such Named Fiduciary has under the Plan.
12.02 Allocation of Responsibilities. The powers and responsibilities
of the Named Fiduciary are hereby allocated as indicated below:
(a) Employer. The Employer shall be responsible for all
functions assigned or reserved to it under the Plan and
Trust Agreement. Any authority assigned or reserved to the
Employer under the Plan and Trust Agreement shall be
exercised by resolution of the Employer's Board of
Directors.
(b) Retirement Committee. The Retirement Committee shall have
the responsibility and authority to control the operation
and administration of the Plan in accordance with the terms
of the Plan and Trust Agreement, except with respect to
duties and responsibilities specifically allocated to other
fiduciaries. The Retirement Committee shall have the
authority to issue written directions to the Trustee to the
extent provided in the Trust Agreement. The Trustee shall
follow the Retirement Committee's directions, unless it is
clear that the actions to be taken under those directions
would be violations of applicable fiduciary standards, or
would be contrary to the terms of the Plan or Trust
Agreement.
The Retirement Committee shall have the responsibility and
authority to control the investment of the Trust Fund in
accordance with the terms of the Plan and Trust Agreement,
except with respect to duties and responsibilities
specifically allocated to other fiduciaries. The Retirement
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Committee shall have the authority to issue written
directions to the Trustee to the extent provided in the
Trust Agreement.
The Trustee shall follow the Retirement Committee's
directions, unless it is clear that the actions to be taken
under those directions would be violations of applicable
fiduciary standards or would be contrary to the terms of
the Plan or Trust Agreement.
(c) Trustee. The Trustee shall have the duties and
responsibilities set out in the Trust Agreement, subject,
however, to direction by the Committee as set out in the
Trust Agreement.
(d) Allocation. Powers and responsibilities may be allocated to
other Fiduciaries in accordance with Section 12.03 hereof,
or as otherwise provided herein or in the Trust Agreement.
This Article is intended to allocate to each Named Fiduciary the
individual responsibility for the prudent execution of the
functions assigned to it, and none of such responsibilities or any
other responsibility shall be shared by two or more of such Named
Fiduciaries, unless such sharing shall be provided by a specified
provision of the Plan or Trust Agreement.
12.03 Procedures for Delegation and Allocation of Responsibilities.
Fiduciary responsibilities may be allocated as follows:
(a) The Retirement Committee may specifically allocate
responsibilities to a specified member or members of the
Retirement Committee.
(b) The Retirement Committee may designate a person or persons
other than a Named Fiduciary to carry out fiduciary
responsibilities under the Plan (this authority shall not
cause any person or persons employed to perform ministerial
acts and services for the Plan to be deemed fiduciaries of
the Plan).
(c) The Retirement Committee may appoint an Investment Manager
or managers to manage (including the power to acquire and
dispose of) the assets of the Plan (or a portion thereof).
(d) If at any time there be more than one Trustee serving under
the Trust Agreement, such Trustees may allocate specific
responsibilities, obligations, or duties among themselves
in such manner as they shall agree.
Any allocation of responsibilities pursuant to this Section shall
be made by filing a written notice thereof with the Retirement
Committee specifically designating the person or persons to whom
such responsibilities or duties are allocated and
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specifically setting out the particular duties and responsibilities
with respect to which the allocation or designation is made.
12.04 General Fiduciary Standards. Subject to Section 12.05 hereof, a
Named Fiduciary shall discharge his duties with respect to the
Plan solely in the interest of the Participants and their
Beneficiaries and:
(a) For the exclusive purpose of providing benefits to
Participants and their Beneficiaries and paying reasonable
expenses of administering the Plan;
(b) With the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in
a like capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and with
like aims;
(c) By diversifying the investments of the Plan so as to
minimize the risk of large losses, unless under the
circumstances it is deemed prudent not to do so; and
(d) In accordance with documents and instruments governing the
Plan, insofar as such documents and instruments are
consistent with the provisions of Title I of the Act.
12.05 Liability Among Co-Named Fiduciaries.
(a) General. Except for any liability which he may have under
the Act, a fiduciary shall not be liable for the breach of
a fiduciary duty or responsibility by another fiduciary of
the Plan except in the following circumstances:
(1) He participates knowingly in, or knowingly
undertakes to conceal, an act or omission of such
other fiduciary, knowing such act or omission is a
breach;
(2) By his failure to comply with the general fiduciary
standards set out in Section 12.04 hereof in the
administration of his specific responsibilities
which give rise to his status as a fiduciary to
commit a breach; or
(3) He has knowledge of a breach by such other fiduciary
and he does not undertake reasonable efforts under
the circumstances to remedy the breach.
(b) Co-Trustees. In the event that there are two or more
Trustees serving under the Trust Agreement each should use
reasonable care to prevent a Co-Trustee from committing a
breach of fiduciary responsibility and they
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shall jointly manage and control assets of the Plan, except
that in the event of an allocation of responsibilities,
obligations, or duties, a Trustee to whom such
responsibilities, obligations, or duties have not been
allocated shall not be liable to any person by reason of
this Section, either individually or as a Trustee, for any
loss resulting to the Plan arising from the acts or
omissions on the part of the Trustee to whom such
responsibilities, obligations, or duties have been
allocated.
(c) Liability Where Allocation is in Effect. To the extent that
fiduciary responsibilities are specifically allocated by a
Named Fiduciary, or pursuant to the express terms hereof,
to any person or persons, then such Named Fiduciary shall
not be liable for any act or omission of such person in
carrying out such responsibility, except to the extent that
the Named Fiduciary violated Section 12.04 hereof (i) with
respect to such allocation or designation, (ii) with
respect to the establishment or implementation of the
procedure for making such an allocation or designation,
(iii) in continuing the allocation or designation or (iv)
the Named Fiduciary would otherwise be liable in accordance
with this Section 12.05.
(d) Liability of Trustee Following Retirement Committee
Directions. No Trustee shall be liable for following
instructions of the Retirement Committee given pursuant to
Section 12.02 (b) and (c) hereof.
(e) No Responsibility for Employer Action. Neither the Trustee,
nor the Retirement Committee, shall have any obligation nor
responsibility with respect to any action required by the
Plan to be taken by the Employer, any Participant or
eligible Employee, nor the failure of any of the above
persons to act or make any payment or contribution, or to
otherwise provide any benefit contemplated under this Plan,
nor shall the Trustee, nor the Retirement Committee be
required to collect any contribution required under the
Plan, or determine the correctness of the amount of any
Employer contribution.
(f) No Duty to Inquire. Neither the Trustee nor the Retirement
Committee shall have any obligation to inquire into or be
responsible for any action or failure to act on the part of
others.
(g) Liability of Trustee Where Investment Manager Appointed. If
an Investment Manager has been appointed pursuant to
Section 12.03 (c) hereof, then neither the Trustee nor the
Retirement Committee shall be liable for the acts or
omissions of such Investment Manager, or be under any
obligation to invest or otherwise manage any assets of the
Plan which are subject to the management of such Investment
Manager.
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(h) Successor Fiduciary. No Named Fiduciary shall be liable
with respect to any breach of fiduciary duty if such breach
was committed before he became a Named Fiduciary or after
he ceased to be a Named Fiduciary.
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ARTICLE XIII
DISCONTINUANCE, AMENDMENT, AND TERMINATION
13.01 Discontinuance. The Employer shall have the right, at any time, to
suspend or discontinue its contributions under the Plan.
13.02 Amendment. The Employer shall have the right at any time to amend
the Plan in any manner it deems necessary or advisable in order to
qualify (or maintain qualification of) the Plan and Trust under the
provisions of Code Section 401(a) and to amend the Plan in any
other manner, provided no amendment shall:
(a) Authorize or permit any of the Trust Fund (other than the
part which is required to pay taxes and administration
expenses) to be used for or diverted to purposes other than
for the exclusive benefit of the Participants or their
Beneficiaries;
(b) Cause or permit any portion of the Trust Fund to revert to
or become the property of the Employer;
(c) Increase duties or responsibilities of the Trustee or the
Retirement Committee without the written consent of the
affected Trustee or the affected member of the Retirement
Committee.
(d) Revise the vesting schedule under the Plan unless each
Participant having three (3) Years or more of Service is
permitted to elect within a reasonable period after the
adoption of such amendment to have his vested benefit
computed under the Plan without regard to such amendment; a
reasonable period for purposes of this Section shall be a
period which begins no later than the date the Plan
amendment is adopted and ends no later than the last to
occur of the following:
(1) sixty (60) days after the date of Plan amendment is
adopted;
(2) sixty (60) days after the day on which the Plan
amendment becomes effective; or
(3) sixty (60) days after a Participant is issued
written notice of the Plan amendment.
(e) Revise the vested benefit of a Participant determined as of
the later of the date such amendment is adopted, or the
date such amendment becomes effective, if such revised
vested benefit is less than that computed under the Plan
without regard to such amendment.
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(f) Procedure
(1) All proposed amendments shall be set forth in a
written instrument, detailing any and all changes to
the Plan.
(2) All proposed amendments shall be presented to the
Board of Directors for its consideration and shall
be enacted by a vote of the Board of Directors.
(3) All actions taken by the Board of Directors shall be
set forth in enabling documentation (e.g., minutes
of meetings setting forth appropriate resolutions
adopted therein or appropriate certification of
actions taken by the Board of Directors in lieu of a
formal meeting).
(4) The Board of Directors shall authorize, in the
documentation referred to under (3), above, an
officer or officers of the Company to execute said
amendment or amendments on behalf of the Company and
to certify as to the date on which the steps set
forth under (1), (2), and (3) took place (e.g., a
Certificate of Resolution).
The Employer shall make all amendments in writing. Each amendment
shall state the date to which it is either retroactively or
prospectively effective.
13.03 Termination. The Employer shall have the right to terminate the
Plan at any time. The Plan shall terminate upon the first to occur
of the following:
(a) The date terminated by action of the Board of
[Directors/Trustees];
(b) The date the Employer shall be judicially declared bankrupt
or insolvent; or
(c) The dissolution, merger, consolidation, or reorganization
of the Employer or the sale by the Employer of all or
substantially all of its assets, unless the successor or
purchaser makes provisions to continue the Plan, in which
event the successor or purchaser shall be substituted as
the Employer under this Plan.
(d) Termination Procedure
(1) A proposal to terminate the Plan shall be set forth
in a written instrument, detailing said action to
the Board of Directors.
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(2) A proposal to terminate the Plan shall be presented
to the Board of Directors for its consideration and
shall be enacted by a vote of the Board of
Directors.
(3) All actions taken by the Board of Directors to
terminate the Plan shall be set forth in enabling
documentation (e.g., minutes of meetings setting
forth appropriate resolutions adopted therein or
appropriate certification of actions taken by the
Board of Directors in lieu of a formal meeting).
(4) The Board of Directors shall authorize, in the
documentation referred to under (3), above, an
officer or officers of the Company to execute such
instruments and take such actions as are necessary
to effectuate the termination of the Plan on behalf
of the Company and to certify as to the date on
which the steps set forth under (1), (2), and (3)
took place (e.g., a Certificate of Resolution).
13.04 Vesting on Termination or Suspension. Notwithstanding any other
provision of the Plan to the contrary, upon the date of full or
partial termination of the Plan, or, upon complete discontinuance
of contributions to the Plan, an affected Participant's right to
his Accrued Benefit shall be one hundred percent (100%) vested and
nonforfeitable. The Retirement Committee shall interpret and
administer this Section 13.04 in accordance with the intent and
scope of the Regulations issued under Code Section 411 (d) (3).
13.05 Procedure on Termination. In the event of termination of the Plan
or permanent discontinuance of Employer contributions, the Employer
shall, at its sole discretion, authorize any one of the following
procedures:
(a) Continue Trust. To continue the Trust in operation in all
respects until the Trustee has distributed all benefits
under the Plan, except that no further persons shall become
Participants, no further contributions shall be made, all
Accounts shall be fully vested, and no further payments
shall be made, except in distribution of the Trust Fund and
payment of administration expenses; or
(b) Liquidate Plan. To wind up and liquidate the Plan and Trust
and distribute the assets thereof after deduction of all
expenses to the Participants, Former Participants, and
Beneficiaries in accordance with their respective Accounts
as then constituted. If the Employer makes no election
before termination, then this subsection (b) will govern
distribution of the Trust Fund.
13.06 Merger. The Trustee shall not consent to, or be a party to, any
merger or consolidation with another plan, unless immediately
after the merger,
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consolidation, or transfer, the surviving Plan provides each
Participant a benefit equal to or greater than the benefit each
Participant would have received had the Plan terminated immediately
before the merger, consolidation, or transfer.
13.07 Notice of Change in Terms. The Retirement Committee, within the
time prescribed by the Act and applicable regulations, shall
furnish all Participants and Beneficiaries a summary plan
description of any material amendment to the Plan or notice of
discontinuance of the Plan and all other information required by
the Act to be furnished without charge.
13.08 Initial Qualification. Notwithstanding any other provisions of this
Plan, the Employer's adoption of this Plan is subject to the
condition precedent that the Plan initially shall be approved and
deemed qualified by the Internal Revenue Service as satisfying the
requirements of Section 401(a) of the Code and that the Trust shall
be entitled to exemption under the provisions of Section 501(a). In
the event the Employer shall fail to secure such initial
determination, the contributions made by the Employer together with
any income received or accrued thereon less any expenses paid shall
be returned to the Employer and the Plan and Trust shall terminate.
No Participant or Beneficiary shall have any right or claim to the
Trust Fund, or to any benefit under the Plan, before the Internal
Revenue Service initially determines that the Plan and Trust
qualify under the provisions of Sections 401(a) and 501(a) of the
Code.
13.09 Reversion of Suspense Account. Notwithstanding any provisions
contained herein to the contrary, the Employer reserves the right
to recover, upon the termination of the Plan and Trust Fund, any
amounts held in a Suspense Account that cannot be allocated to the
accounts of Participants and their Beneficiaries in the year of
termination, because of the limitations contained in Section 6.09
of the Plan and Section 415 of the Code, after the satisfaction of
all fixed and contingent obligations to Participants and their
Beneficiaries under the Plan.
13.10 Distributions Upon Plan Termination. All Elective Deferrals,
Qualified Employer Deferral Contributions, and income attributable
thereto, shall be distributed to Participants or their
Beneficiaries as soon as administratively feasible after the
termination of the Plan, provided that neither the Employer nor an
Affiliated Employer maintains a successor plan.
13.11 Distributions Upon Sale Of Assets. All Elective Deferrals,
Qualified Employer Deferral Contributions, and income attributable
thereto, shall be distributed to Participants as soon as
administratively feasible after the sale, to an entity that is not
an Affiliated Employer, of substantially all of the assets used by
the Employer in the trade or business in which the Participant is
employed.
13.12 Distributions Upon Sale Of Subsidiary. All Elective Deferrals,
Qualified Employer Deferral Contributions, and income attributable
thereto shall be
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distributed to Participants as soon as administratively feasible
after the sale, to an entity that is not an Affiliated Employer, of
an incorporated Affiliated Employer's interest in a subsidiary to
Participants employed by such subsidiary.
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ARTICLE XIV
THE TRUST FUND
14.01 Purpose of the Trust Fund. A Trust Fund has been created and will
be maintained for the purposes of the Plan, and the assets thereof
shall be invested in accordance with the terms of the Trust
Agreement or Group Annuity Contract. All contributions will be paid
into the Trust Fund, and all benefits under the Plan will be paid
from the Trust Fund.
14.02 Appointment of Trustee. (If applicable) Trustee(s) shall be
appointed by the Board of Directors to administer the Trust Fund.
The Trustees' obligations, duties, and responsibilities shall be
governed solely by the terms of the Trust Agreement.
14.03 Exclusive Benefit of Participants. Subject to Sections 5.04 and
13.08 hereof, the Trust Fund will be used and applied only in
accordance with the provisions of the Plan to provide the benefits
thereof, and no part of the corpus or income of the Trust Fund
shall be used for or diverted to purposes other than for the
exclusive benefit of the Participants and their Beneficiaries or
for expenses of administration. Notwithstanding the preceding
sentence, as provided in Section 13.09 hereof, the Employer
reserves the right to recover any amounts held in a Suspense
Account at the termination of the Trust Fund that cannot be
allocated to the Accounts of Participants and their Beneficiaries
in the year of termination because of the limitations contained in
Section 6.09 of the Plan and Section 415 of the Code.
14.04 Benefits Supported Only By the Trust Fund. Any person having any
claim under the Plan will look solely to the assets of the Trust
Fund for satisfaction.
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ARTICLE XV
PARTICIPATION BY AFFILIATE OF COMPANY AND
EMPLOYMENT WITH A MEMBER OF A CONTROLLED GROUP
15.01 Employment With a Member of a Controlled Group. Any employment
service completed by an Employee with an Affiliated Employer, shall
be credited as service with the Employer for purposes of
determining "participation" and "vesting" under the Plan.
Determination of membership within the controlled group shall be
determined under the provisions of Section 1563(a) of the Code, but
without regard to Section 1563(a) (4) and (e) (3) (c).
15.02 Adoption by Affiliates. Any corporation or other business entity
which is a member of an affiliated group (as defined in Section
1504(a) of the Code, or any successor provision), which includes
the Company, may, with the consent of the Company, adopt the Plan
for its Employees. Such adoption shall be made by resolution of
such corporation's Board of Directors and an instrument executed by
its officers pursuant thereto. The provisions of the Plan shall
apply to each Employer, except as provided in the instrument
adopting the Plan and Trust otherwise specifically provided herein.
15.03 Amendment. If the Plan and Trust are amended by the Company, after
they are adopted by such affiliate, unless otherwise expressly
provided, they shall be treated as so amended by such other
business entity without the necessity of any action on its part.
15.04 Withdrawal by Affiliated Employers
(a) Any one or more of the Employers included in the Plan may
withdraw from the Plan at any time by giving six months'
advance notice in writing of the intention to withdraw,
(unless a shorter notice shall be agreed to by the Board of
Directors).
(b) After an Employer has given notice as provided in
subsection (a), the Plan Administrator shall establish an
amount of the Trust Fund to be allocated to such Employer's
portion of the Plan. No Participant of the Plan, including
Participants who are Employees of the withdrawing Employer,
shall receive a benefit immediately after such withdrawal,
determined as if the Plan had terminated at that time,
which is less than the benefit such Participants would have
received immediately prior to such withdrawal had the Plan
terminated at that time.
(c) If the Trust is not to be terminated with respect to the
withdrawing Employer, then as of the date of withdrawal,
the Trustee shall distribute
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securities, property, or money of the Trust Fund
representing the portion of the Trust Fund allocated to the
withdrawing Employer and such securities, property or money
shall thereafter be held and invested as a separate trust
fund pursuant to the terms of the plan adopted by the
withdrawing Employer.
(d) If the Plan is to be terminated with respect to the
withdrawing Employer, then the amount set aside pursuant to
subsection (b) shall be dealt with according to the
provisions of Article XIII.
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ARTICLE XVI
DIRECTED INVESTMENT OPTIONS
16.01 Authorized Investment Funds. The Retirement Committee may provide
for the investment of Plan assets. Investment funds will be
developed by the Trustee to accommodate this direction. Should the
Retirement Committee authorize such Participant directed investment
options, the investment funds to accommodate this direction shall
include at least the following:
(a) "Money Market Fund" which is a fund which may consist of
various Money Market instruments such as commercial paper,
certificates of deposit and U.S. Treasury bills. The
investment goal of this fund is to provide income or cash
reserves while preserving capital and maintaining
liquidity.
(b) "Income Fund" which is a pooled fund of various investments
consisting of a portfolio of United States Government
obligations, Certificates of Deposit, and investment grade
corporate bonds of reasonably short maturity, and from time
to time, money market investments. The investment goal of
this fund is to earn a competitive rate of return with the
preservation of capital.
(c) "Equity Fund" which is a broadly diversified portfolio of
common stock and similar equities, and from time to time,
money market investments. The investment goal of this fund
is long-term growth.
(d) Other funds as may from time to time be authorized by the
Retirement Committee.
16.02 Participant Direction. If authorized in accordance with Section
16.01 above, each Participant may direct, on forms provided by the
Retirement Committee, that Salary Deferral Contributions to his
Savings Plus Account be invested in the various investment funds
provided under Section 16.01. A Participant may redirect the
investment of his Accounts as well as future contributions. The
election to direct or redirect the investment of Accounts will be
made during such times as the Retirement Committee shall determine,
after consultation with the Trustee. The Retirement Committee may
impose such limitations on such direction of Account investments as
it deems appropriate, for example, limitations on minimum
percentage investments in an investment fund or minimum notice
periods when Accounts may be redirected.
16.03 Participant Non-Direction. Should the Retirement Committee not
permit Participant investment direction, or if the Participant
fails to direct the investment of his Accounts, his entire
Accounts will be invested in the "Income Fund".
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16.04 Notwithstanding any other provisions of Sections 16.01, 16.02, or
16.03, the Employer Profit Sharing Contributions shall be invested
as the Retirement Committee may direct. Participants shall neither
direct nor redirect the investment of any such Employer Profit
Sharing Contributions or Profit Sharing Accounts.
16.05 Employer Matching Contribution. Effective July 1, 1994 all Employer
Matching Contributions allocated to Participants' Employer Matching
Accounts after June 30, 1994 shall be invested in the FNB Financial
Services Corporation Common Stock Fund. This fund shall be invested
in Qualifying Employer Securities.
"FNB Financial Services Corporation Common Stock Fund" (FNB Fund)
which is a fund set up to invest primarily in Qualifying Employer
Securities to be purchased in the open market at its market value.
The FNB Fund may also invest in various Deposit Accounts with the
Employer until such time that there are Qualifying Employer
Securities available to be purchased in the open market.
16.06 "Qualifying Employer Security" shall mean an Employer Security that
is a stock or a marketable obligation. For purposes of this
section, the term "marketable obligation" means a bond, debenture,
note, certificate, or other evidence of indebtedness ("obligation")
if such obligation is acquired:
(a) on the market, either
(1) at the price of the obligation prevailing on a
national securities exchange that is registered with
the Securities and Exchange Commission, or
(2) if the obligation is not traded on such a national
securities exchange, a price not less favorable to
the Plan than the offering price for the obligation
established by current bid and asked prices quoted
by persons independent of the issuer;
(b) from an underwriter, at a price
(1) not in excess of the public offering price for the
obligation set forth in a prospectus or offering
circular filed with the Securities and Exchange
Commission, and
(2) at which a substantial portion of the same issue is
acquired by persons independent of the issuer, or
(c) directly from the issuer, at a price not less favorable to
the Plan than the price paid currently for a substantial
portion of the same issue by persons independent of the
issuer.
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ARTICLE XVII
TOP-HEAVY RULES
17.01 Top-Heavy Status. If the Plan is or becomes Top-Heavy in any Plan
Year beginning after December 31, 1983, the provisions of this
Article will supersede any conflicting provision in the Plan. The
following definitions apply in making this determination:
(a) Key Employee: Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the
determination period was (i) an officer of the Employer,
(if such officer's Compensation exceeds 50% of the annual
benefit limit for defined benefit plans, as indexed,
pursuant to Section 415(b)(1)(A)), (ii) an owner (or
considered an owner under Section 318 of the Code) of one
of the ten largest interests in the Employer, (if such
individual's Compensation exceeds the dollar limit on
Annual Additions to a Defined Contribution Plan under
Section 415 of the Code), (iii) a five percent Owner of the
Employer, or (iv) a one percent Owner of the Employer who
has an annual Compensation of more than $150,000. The
determination period is the Plan Year containing the
Determination Date and the four preceding Plan Years. The
determination of who is a Key Employee will be made in
accordance with Section 416(i) (1) of the Code and the
regulations thereunder. A Non-Key Employee is any
Employee who does not meet the definition of Key
Employee contained herein.
(b) Top-Heavy Plan: For any Plan Year after December 31, 1983,
this Plan is Top-Heavy if any of the following conditions
exists:
(1) If the Top-Heavy Ratio for this Plan exceeds 60
percent, and this Plan is not part of any Required
Aggregation Group or Permissive Aggregation Group of
plans, or
(2) If this Plan is a part of a Required Aggregation
Group of plans, but not part of a Permissive
Aggregation Group, and the Top-Heavy Ratio for the
group of plans exceeds 60 percent, or
(3) If this Plan is a part of a Required Aggregation
Group, and part of a Permissive Aggregation Group of
plans, and the Top-Heavy Ratio for the Permissive
Aggregation Group exceeds 60 percent.
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(c) Top-Heavy Ratio:
(1) If the Employer maintains one or more Defined
Contribution Plans (including any Simplified
Employee Pension Plan) and the Employer has never
maintained any Defined Benefit Plan which has
covered or could cover a Participant in this Plan,
the Top-Heavy Ratio is a fraction, the numerator of
which is the sum of the Account balances of all Key
Employees as of the Determination Date (including
any part of any Account balance distributed in the
five-year period ending on the Determination Date),
and the denominator of which is the sum of all
Account balances (including any part of any Account
balance distributed in the five-year period ending
on the Determination Date) of all Participants as of
the Determination Date. Both the numerator and
denominator of the Top-Heavy Ratio are adjusted to
reflect any distributions of any Account balances or
any Accrued Benefits made in the five-year period
ending on the Determination Date and contribution
which is due but unpaid as of the Determination
Date.
(2) If the Employer maintains one or more Defined
Contribution Plans (including any Simplified
Employee Pension Plan) and the Employer maintains or
has maintained one or more Defined Benefit Plans,
which have covered or could cover a Participant in
this Plan, the Top-Heavy Ratio is a fraction, the
numerator of which is the sum of the Account
balances under the Defined Contribution Plans for
all Key Employees and the present value of Accrued
Benefits under the Defined Benefit Plans for all Key
Employees, and the denominator of which is the sum
of the Account balances under the Defined
Contribution Plans for all Participants and the
present value of the Accrued Benefits under the
Defined Benefit Plans for all Participants. Both the
numerator and denominator of the Top-Heavy Ratio are
adjusted for any distributions of any Account
balances or any Accrued Benefits made in the
five-year period ending on the Determination Date
and any contribution due but unpaid as of the
Determination Date.
(3) For purposes of (2) and (3) above, the value of
Account balances and the Present Value of Accrued
Benefits will be determined as of the most recent
Allocation Date that falls within or ends with the
twelve-month period ending on the Determination
Date. The Account balances and Accrued Benefits of a
Participant who is not a Key Employee but who was a
Key Employee in a prior year will be disregarded,
provided he had performed no service with the
Employer during the last five Plan Years. The
calculation of the Top-Heavy Ratio, and the extent
to which distributions, rollovers, and the transfers
are taken into account will be made in accordance
with Section 416 of the Code and the regulations
thereunder. Deductible employee
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contributions will not be taken into account for
purposes of computing the Top-Heavy Ratio. When
aggregating plans, the value of Account balances and
Accrued Benefits will be calculated with reference
to the Determination Dates that fall within the same
calendar year.
(d) Permissive Aggregation Group: The Required
Aggregation Group of plans plus any other plan or
plans of the Employer, which when considered as a
group with the Required Aggregation Group, would
continue to satisfy the requirements of Sections 401
(a) (4) 410 of the Code.
(e) Required Aggregation Group: (i) Each qualified plan
of the Employer in which at least one Key Employee
participates, and (ii) any other qualified plan of
the Employer which enables a plan described in (i)
to meet the requirements of sections 401 (a) (4) and
410 of the Code.
Solely for the purpose of determining if the Plan,
or any other plan included in a Required Aggregation
Group of which this Plan is a part, is Top-Heavy,
the Accrued Benefit of an Employee other than a Key
Employee (within the meaning of Section 416(i)(1) of
the Code) shall be determined under (a) the method,
if any, that uniformly applies for accrual purposes
under all plans maintained by the Affiliated
Employers, or (b) if there is no such method, as if
such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional
accrual rate of Section 411(b)(1)(C) of the Code.
(f) Determination Date: For any Plan Year subsequent to
the first Plan Year, the last day of the preceding
Plan Year. For the first Plan Year of the Plan, the
last day of that year.
(g) Allocation Date: The last day of the Limitation Year
for which Account balances or Accrued Benefits are
valued for purposes of calculating the Top-Heavy
Ratio.
(h) Present Value: Present value shall be based upon
assumptions provided for under Section 416 of the
Code and regulations.
17.02 Minimum Allocation.
(a) Except as otherwise provided in (c) and (d) below, the
Employer Profit Sharing Contributions, and Forfeitures
attributed to previously allocated Employer Profit Sharing
Contribution, allocated on behalf of any Participant who is
not a Key Employee shall not be less than the lesser of 3%
of such Participant's Compensation, or in the case where
the Employer has no Defined Benefit Plan which designates
this plan to satisfy section
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401 of the Code, the largest percentage of Employer
Contributions and Forfeitures, as a percentage of the Key
Employee's Compensation, allocated on behalf of any Key
Employee for that year. If the highest rate allocated to a
Key Employee for a year in which the Plan is Top-Heavy is
less than 3%, then amounts contributed as a result of a
Salary Deferral Agreement must be included in determining
contributions made on behalf of Key Employees. The Minimum
Allocation is determined without regard to any Social
Security contribution. This Minimum Allocation shall be
made even though, under other Plan provisions, the
Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation for
the Plan Year because of (i) the Participant's failure to
complete 1,000 Hours of Service (or any equivalent provided
in the Plan), or (ii) the Participant's failure to make
mandatory Employee Contributions to the Plan, or (iii)
Compensation less than a stated amount.
(b) For purposes of computing the Minimum Allocation,
Compensation will mean Compensation as defined in Section
2.12.
(c) The provision in (a) above shall not apply to any
Participant who was not employed by the Employer on the
last day of the Plan Year.
(d) The provision in (a) above shall not apply to any
Participant to the extent the Participant is covered under
any other plan or plans of the Employer and the Employer
has provided the Minimum Allocation or benefit requirement
applicable to Top-Heavy plans will be met in the other plan
or plans.
17.03 Minimum Vesting. For any Plan Year in which this Plan is Top-Heavy,
one of the minimum vesting schedules will automatically apply to
the Plan. The minimum vesting schedule applies to all benefits
within the meaning of Section 411(a)(7) of the Code, including
benefits accrued before the effective date of Section 416 and
benefits accrued before the Plan became Top-Heavy.
Further, no reduction in vested benefits may occur in the event the
Plan's status as Top-Heavy changes for any Plan Year. However, this
Section does not apply to the Account balances of any Employee who
does not have an Hour of Service after the Plan has initially
become Top-Heavy, and such Employee's Account balance attributable
to Employer Contributions and Forfeitures will be determined
without regard to this Section.
The nonforfeitable interest of each Employee in his or her Account
balance attributable to Employer Contributions shall be determined
on the basis of the following:
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Years of Service Vesting Percentage
---------------- ------------------
Less than 2 Years 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 years or more 100%
Provided, however, if the Plan should become Top-Heavy, for
purposes of applying the above listed table, any Employer
Contributions not already 100% vested will be 100% vested
immediately, for such Plan Year, if such contributions are
Qualified Employer Deferral Contributions that are taken into
account for purposes of meeting the Actual Deferral Percentage test
described in Section 4.05.
If the vesting schedule under the plan shifts in or out of the
preceding schedule for any Plan Year because of the Plan's
Top-Heavy status, such shift is an amendment to the vesting
schedule, and the election in Section 13.02(d) of the Plan applies.
17.04 Limitation on Allocations. If, during any Limitation Year, the
Participant is a participant in both a Defined Contribution Plan
and a Defined Benefit Plan, which are a part of a Top-Heavy group,
the Retirement Committee shall apply the limitations of Article VI
to such Participant by substituting "100%" for "125%" each place it
appears in Section 6.09. This Section 17.04 shall not apply if:
(a) The Plan would satisfy Section 17.02 if the guaranteed
minimum contribution was one percent (1%) greater than the
guaranteed minimum contribution the Retirement Committee
otherwise would calculate; and
(b) The Top-Heavy Ratio does not exceed ninety percent (90%).
17.05 Compensation Limitations. Shall mean the first $150,000 (or
beginning January 1, 1994, such larger amount as the Commissioner
of Internal Revenue may prescribe) of Compensation pursuant to
Code Section 401(a)(17).
17.06 Participation In More Than One Plan. If a Non-Key Employee
participates in a Top-Heavy Defined Benefit or another Defined
Contribution Plan maintained by the Employer, Section 17.02 will
apply to the Non-Key Employee and this Defined Contribution Plan
will provide the "minimum benefit accrual."
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ARTICLE XVIII
MISCELLANEOUS
18.01 Execution of Receipts and Releases. Any payment to any Participant,
or to his legal representative 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 Plan and Trust
Fund. The Retirement Committee may require such a Participant,
legal representative, or Beneficiary, as a condition precedent to
such payment, to execute a receipt and release therefore in such
form as it shall determine.
18.02 No Guarantee of Interests. Neither the Trustee (if applicable), the
Insurer, the Retirement Committee, nor the Employer guarantee the
Trust Fund from loss or depreciation. The Employer does not
guarantee the payment of any money which may be or becomes due to
any person from the Trust Fund. The liability of the Retirement
Committee and the Trustee or Insurer to make any payment from the
Trust Fund is limited to the then available assets of the Trust
Fund.
18.03 Payment of Expenses. All expenses incident to the administration,
termination, protection of the Plan and Trust Fund, including but
not limited to legal, accounting, and Trustee or investment
management fees, shall be paid by the Employer, except that in case
of failure of Employer to pay the expenses, they will be paid from
the Trust Fund, and until paid, shall constitute a first and prior
claim and lien against the Trust Fund.
18.04 Employer Records. Records of the Employer as to an Employee's or
Participant's period of employment, termination of employment and
the reason therefore, leaves of absence, re-employment, and
compensation will be conclusive for all persons, unless determined
to be incorrect.
18.05 Interpretations and Adjustments. To the extent permitted by law, an
interpretation of the Plan and a decision of any matter within the
Named Fiduciary's discretion made in good faith is binding on all
persons. A misstatement or other mistake of fact shall be corrected
when it becomes known and the person responsible shall make such
adjustment on account thereof as he considers equitable and
practicable.
18.06 Uniform Rules. In the administration of the Plan, uniform rules
will be applied to all Participants similarly situated.
18.07 Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document, or other information, which the
person acting on it considers pertinent and reliable, and signed,
made or presented by the proper party or parties.
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18.08 Severability. In the event any provision of the Plan shall be held
to be illegal or invalid for any reason, the illegal or invalid
provisions of the Plan shall be fully severable and the Plan shall
be construed and enforced as if the illegal or invalid provision
had never been included herein.
18.09 Notice. Any notice required to be given herein by the Trustee, the
Employer, or the Retirement Committee, shall be deemed delivered,
when personally delivered, or placed in the United States mail, in
an envelope addressed to the last known address of the person to
whom the notice is given.
18.10 Waiver of Notice. Any person entitled to notice under the Plan
may waive the notice.
18.11 Successors. The Plan shall be binding upon all persons entitled to
benefits under the Plan, their respective heirs and legal
representatives, upon the Employer, its successors and assigns, and
upon the Trustee, the Retirement Committee, and their successors.
18.12 Headings. The titles and headings of Articles and sections are
included for convenience of reference only and are not to be
considered in construction of the provisions hereof.
18.13 Governing Law. All questions arising with respect to the provisions
of this Agreement shall be determined by application of the laws of
the State of North Carolina, except to the extent North Carolina
law is preempted by Federal statute.
Signed the day of , 1994, but effective as of
--------- ----------------------
July 1, 1994.
FNB FINANCIAL SERVICES CORPORATION
------------------------------------
President
ATTEST:
- ------------------------------------
- Secretary
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<PAGE> 1
EXHIBIT 5
<PAGE> 2
POYNER & SPRUILL, L.L.P.
ATTORNEYS AT LAW
P. O. BOX 10096
RALEIGH, NORTH CAROLINA 27605-0096
June 20, 1997
FNB Financial Services Corporation
202 South Main Street
Reidsville, North Carolina 27320
Gentlemen:
This opinion is rendered for use in connection with the Registration
Statement on Form S-8, prescribed pursuant to the Securities Act of 1933, filed
by FNB Financial Services Corporation (the "Company") with the Securities and
Exchange Commission, under which 100,000 shares of the Company's common stock,
$1.00 par value per share (the "Common Stock"), are to be registered.
As counsel to the Company, we have examined and are familiar with
originals or copies certified or otherwise identified to our satisfaction, of
such statutes, documents, corporate records, certificates of public officials,
and other instruments as we have deemed necessary for the purpose of this
opinion, including the Company's Articles of Incorporation and By-laws, both as
amended to date, and the record of proceedings of the shareholders and directors
of the Company. Based upon the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing
and in good standing as a corporation under the laws of the
State of North Carolina.
2. When the Registration Statement shall have become effective
and up to 100,000 shares of the Common Stock to be originally
issued for sale shall have been originally issued and sold
under the terms set forth in the Registration Statement, such
shares will be legally and validly issued, fully paid, and
nonassessable.
We hereby consent to the filing of this Opinion as Exhibit 5 and 23.1
to the Registration Statement.
Very truly yours,
/s/ POYNER & SPRUILL, L.L.P.
<PAGE> 1
EXHIBIT 23.2
<PAGE> 2
CONSENT OF INDEPENDENT AUDITORS
We consent to incorporation by reference in the Registration Statement of
FNB Financial Services Corporation on Form S-8 relating to the FNB Financial
Services Corporation Employees' Savings Plus and Profit Sharing Plan of our
report dated January 22, 1997, relating to the consolidated balance sheets of
FNB Financial Services Corporation and Subsidiary as of December 31, 1996 and
1995, and the related consolidated statements of income, changes in
shareholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1996, which report appears in the 1996 Annual Report
of FNB Financial Services Corporation.
We consent to the incorporation by reference in the Registration Statement of
FNB Financial Services Corporation on Form S-8 relating to the FNB Financial
Services Corporation Employees' Savings Plus and Profit Sharing Plan of our
report dated June 13, 1997, relating to the statements of net assets available
for benefits of the FNB Financial Services Corporation Employees' Savings Plus
and Profit Sharing Plan as of December 31, 1996 and 1995, and the related
statements of changes in net assets available for benefits with fund information
for each of the years in the three-year period ended December 31, 1996, which
report appears in the 1996 Annual Report on Form 11-K of FNB Financial Services
Corporation Employees' Savings Plus and Profit Sharing Plan.
/s/ CHERRY, BEKAERT & HOLLAND, L.L.P.
Reidsville, North Carolina
June 13, 1997
<PAGE> 1
EXHIBIT 24
<PAGE> 2
FNB FINANCIAL SERVICES CORPORATION
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of FNB FINANCIAL SERVICES CORPORATION, a North Carolina
corporation (the "Company"), hereby constitutes and appoints W.B. APPLE, JR.,
ERNEST J. SEWELL, and ROBERT F. ALBRIGHT, and each of them with full power to
act without the other, as his true and lawful attorneys and agents, for him and
in his name, place, and stead, in any and all capacities, to do any and all acts
and things and execute any and all instruments that said attorneys and agents
may deem necessary or advisable to enable the Company to comply with the
Securities Act of 1933 and any rules and regulations and requirements of the
Securities and Exchange Commission in respect thereof in connection with the
registration under the Securities Act of 1933 of securities of the Company
issuable or deliverable pursuant to the Company's 401(k) Plan, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign the name of the undersigned, in any capacity, to a Company
registration statement on Form S-8 to be filed with the Securities and Exchange
Commission in respect of such securities, and any and all amendments to the said
registration statement, and any and all instruments and documents filed as a
part of or executed in connection with the said registration statement or any
amendments thereto, and to file the same with the Securities and Exchange
Commission; hereby ratifying and confirming all that the said attorneys and
agents, or any of them, shall do or cause to be done by virtue thereof. Any
prior powers of attorney previously granted by us for the above purpose are
hereby revoked.
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IN WITNESS WHEREOF, each of the undersigned has subscribed these
presents as of May 19, 1997.
/s/ Ernest J. Sewell /s/ Robert F. Albright
- ---------------------------------- ---------------------------------
Ernest J. Sewell Robert F. Albright
President and Director Senior Vice President (Principal
(Principal Executive Officer) Financial & Accounting Officer)
/s/ W.B. Apple /s/ Charles A. Britt
- ---------------------------------- ---------------------------------
W.B. Apple Charles A. Britt
Director Director
/s/ O.E. Green /s/ Joseph H. Kinnarney
- ---------------------------------- ---------------------------------
O.E. Green Joseph H. Kinnarney
Director Director
/s/ Phillip J. Lambeth /s/ Clifton G. Payne
- ---------------------------------- ---------------------------------
Phillip J. Lambeth Clifton G. Payne
Director Director
/s/ Kenan C. Wright /s/ Elton H. Trent, Jr.
- ---------------------------------- ---------------------------------
Kenan C. Wright Elton H. Trent, Jr.
Director Director
/s/ B.Z. Dodson
- ----------------------------------
B.Z. Dodson
Director
