As filed with the Securities and Exchange
Commission on December 30, 1998
Registration No. 333-
------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
-------------------------------------
New England Community Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Delaware 06-1116165
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
176 Broad Street,
Windsor, Connecticut 06095
(Address, including zip code, of principal executive offices)
New England Community Bancorp 401(k) Plan
(Full title of the plan)
David Lentini
Chairman, President and Chief Executive Officer
New England Community Bancorp, Inc.
176 Broad Street
Windsor, Connecticut 06095
860-683-4601
(Name and address, including telephone number and area code, of agent for
service)
--------------------------------------------------------------------------
Copies to:
Robert M. Taylor III, Esquire
Day, Berry & Howard LLP
CityPlace I
Hartford, Connecticut 06103-3499
--------------------------------------------------------------------------
Calculation of Registration Fee
<TABLE>
<CAPTION>
Title of securities to be Amount to be Proposed maximum Proposed maximum Amount of
registered registered offering price per aggregate offering Registration Fee
unit(3) price(3)
<S> <C> <C> <C> <C>
Common Stock, par value 250,000 shares (1)(2) $20.00 $5,000,000.00 $1,390.00
$.10 per share (1)
</TABLE>
(1) In addition, pursuant to Rule 416(c), this Registration Statement also
covers an indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described herein.
(2) In addition, pursuant to Rule 416(a), this Registration Statement also
covers such indeterminate number of additional shares of Common Stock as
is necessary to eliminate any dilutive effect of any future stock split,
stock dividend or similar transaction.
(3) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) and (h), based on the average of the high and
low prices of the Common Stock reported on the Nasdaq National Market
System on December 28, 1998.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION
STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by New England Community Bancorp, Inc. (the
"Company") with the Securities and Exchange Commission (the "Commission") are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ending
December 31, 1997;
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ending March 31, 1998, June 30, 1998 and September 30, 1998, and Amendment No.
1 to the Company's Quarterly Report for the quarter ended March 31, 1998, on
Form 10-Q/A, filed with the Commission on June 12, 1998;
(c) The Company's Current Reports on Form 8-K filed with the Commission
on January 7, 1998, February 26, 1998, March 24, 1998, June 25, 1998, July 17,
1998, August 26, 1998 and October 21, 1998, and amended current reports on Form
8-K/A filed with the Commission on March 13, 1998 and October 19, 1998; and
(d) The description of the Company's Common Stock contained in the
Registration Statement on Form 8-A filed by the Company to register its Common
Stock pursuant to Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), including any amendments or reports filed for the
purposes of updating such description.
All documents filed by the Company or the New England Community Bancorp
401(k) Plan (the "Plan") pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act after the date of this Registration Statement and prior to the
filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities.
This item is not applicable to the securities to be registered hereby.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Company is incorporated under the laws of the State of Delaware.
Section 145 of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a Delaware corporation may indemnify any person who is,
or is threatened to be made, a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise.
The indemnity may include expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding provided such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. A Delaware corporation may also indemnify any person who
is, or is threatened to be made, a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that such person is or was a
director, officer, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses
(including attorneys' fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit, provided such
person acted in good faith and in a manner he reasonably believed to be in or
not opposed to the corporation's best interests, except that no indemnification
is permitted without judicial approval if the officer, director, employee or
agent is adjudged to be liable to the corporation. In addition, Section 145(c)
of the DGCL provides that when an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director has actually and reasonably incurred.
The Company's Amended and Restated Certificate of Incorporation and By-
laws contain provisions requiring indemnification of its officers and directors
to the maximum extent permitted by Delaware law and allowing such
indemnification of its employees and agents and persons serving at its request
as a director, officer, employee or agent of another entity.
Section 145(e) of the DGCL provides that expenses (including attorneys'
fees) incurred by an officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that such
director or officer is not entitled to be indemnified by the corporation. The
Company's insurance policy provides that such expenses incurred by former
directors and officers or other employees and agents may be paid by the Company
in advance.
The indemnification and advancement of expenses provided by, or granted
pursuant to, Section 145 of the DGCL are not deemed to be exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office. In addition, Section 145 of the DGCL authorizes a corporation to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such person's status as such, whether
or not the corporation would have the power to indemnify such person against
such liability under Section 145 of the DGCL. The Company maintains an
insurance policy under which directors and officers are insured, within the
limits and subject to the limitation of such insurance policy, against certain
liabilities which may be imposed in connection with such persons' service as
such directors or officers.
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duties as a director, except for liability (i) for any
breach of a director's duty of loyalty to the company or its stockholders, (ii)
for acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of the law, (iii) for improper payment of dividends,
stock purchases or redemptions of shares or (iv) for any transaction from which
the director derives an improper personal benefit. The Company's Amended and
Restated Certificate of Incorporation includes such a provision.
Item 7. Exemption from Registration Claimed.
This item is not applicable to the securities to be registered hereunder.
Item 8. Exhibits.
Exhibit No. Description
4.1 New England Community Bancorp 401(k) Plan.
4.2 Amended and Restated Certificate of Incorporation of
New England Community Bancorp, Inc. (incorporated
herein by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-4 (File No. 333-
57899)).
4.3 Amended and Restated Bylaws of New England Community
Bancorp, Inc. (incorporated herein by reference to
Exhibit 3(ii) to the Company's Annual Report on Form
10-K for fiscal year ended December 31, 1997 (File No.
0-14550)).
5 Opinion of Day, Berry & Howard LLP as to the legality
of the securities registered hereby including the
consent of such counsel.*
23.1 Consent of Shatswell, MacLeod & Company, P.C.
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Day, Berry & Howard LLP (See Exhibit 5).
24 Power of Attorney (See signature page).
* The registrant will submit the Plan, as amended, to the Internal Revenue
Service ("IRS") in a timely manner and will make all changes required by
the IRS in order to qualify the Plan.
Item 9. Undertakings.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
PROVIDED, HOWEVER, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
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 Windsor, State of Connecticut, on this 29
day of December, 1998.
New England Community Bancorp, Inc.
By: /s/David A. Lentini
Name: David A. Lentini
Title: Chairman, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated. Each person whose signature appears below hereby constitutes
Anson C. Hall and David A. Lentini and each of them singly, such person's true
and lawful attorneys, with full power to them and each of them to sign for such
person and in such person's name and capacity indicated below any and all
amendments to this Registration Statement, hereby ratifying and confirming such
person's signature as it may be signed by said attorneys to any and all such
amendments.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/S/ DAVID A. LENTINI Chairman, President and Chief December 29, 1998
David A. Lentini Executive Officer
(Principal Executive Officer)
/S/ ANSON C. HALL Vice President, Chief December 29, 1998
Anson C. Hall Financial Officer and Treasurer
(Principal Financial and
Accounting Officer)
/S/ JOHN C. CARMON Director December 29, 1998
John C. Carmon
/S/ GARY J. DENINO Director December 29, 1998
Gary J. DeNino
/S/ FRANK A. FALVO Director December 29, 1998
Frank A. Falvo
/S/ DOMINIC J. FERRAINA Director December 17, 1998
Dominic J. Ferraina
/S/ P. ANTHONY GIORGIO, PH.D Director December 17, 1998
P. Anthony Giorgio, Ph.D
/S/ JOHN R. HARVEY Director December 17, 1998
John R. Harvey
/S/ ANGELINA J. MCGILLIVRAY Director and Secretary December 29, 1998
Angelina J. McGillivray
/S/ JAMES A. COTTER, JR. Director December 29, 1998
James A. Cotter, Jr.
/S/ SOLOMON KERENSKY Director December 17, 1998
Solomon Kerensky
/S/ J. BRIAN SMITH Director December 17, 1998
J. Brian Smith
</TABLE>
<PAGE>
The Plan:
Pursuant to the requirements of the Securities Act of 1933, the Trustee
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Des Moines, State of
Iowa, on December 30th 1998.
New England Community Bancorp 401(k) Plan
By: /s/Patty Ashbaugh
Name: Patty Ashbaugh
Title: Vice President & Trust Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
4.1 New England Community Bancorp 401(k) Plan.
4.2 Amended and Restated Certificate of Incorporation of
New England Community Bancorp, Inc. (incorporated
herein by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-4 (File No. 333-
57899)).
4.3 Amended and Restated Bylaws of New England Community
Bancorp, Inc. (incorporated herein by reference to
Exhibit 3(ii) to the Company's Annual Report on Form
10-K for fiscal year ended December 31, 1997 (File No.
0-14550)).
5 Opinion of Day, Berry & Howard LLP as to the legality
of the securities registered hereby including the
consent of such counsel.*
23.1 Consent of Shatswell, MacLeod & Company, P.C.
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Day, Berry & Howard LLP (See Exhibit 5).
24 Power of Attorney (See signature page).
__________
* The registrant will submit the Plan, as amended, to the Internal Revenue
Service ("IRS") in a timely manner and will make all changes required by
the IRS in order to qualify the Plan.
Exhibit 4.1
NEW ENGLAND COMMUNITY BANCORP
401(K) PLAN
Defined Contribution Plan 7.7
Restated January 1, 1999
<PAGE>
TABLE OF CONTENTS
INTRODUCTION
ARTICLE I FORMAT AND DEFINITIONS
Section 1.01 ---- Format
Section 1.02 ---- Definitions
ARTICLE II PARTICIPATION
Section 2.01 ---- Active Participant
Section 2.02 ---- Inactive Participant
Section 2.03 ---- Cessation of Participation
Section 2.04 ---- Adopting Employers Single Plan
ARTICLE III CONTRIBUTIONS
Section 3.01 ---- Employer Contributions
Section 3.01A ---- Rollover Contributions
Section 3.02 ---- Forfeitures
Section 3.03 ---- Allocation
Section 3.04 ---- Contribution Limitation
Section 3.05 ---- Excess Amounts
ARTICLE IV INVESTMENT OF CONTRIBUTIONS
Section 4.01 ---- Investment of Contributions
Section 4.01A ---- Investment in Qualifying Employer Securities
Section 4.01B ---- Limitation on Investment in Qualifying Employer
Securities by Some Participants
Section 4.02 ---- Purchase of Insurance
Section 4.03 ---- Transfer of Ownership
Section 4.04 ---- Termination of Insurance
ARTICLE V BENEFITS
Section 5.01 ---- Retirement Benefits
Section 5.02 ---- Death Benefits
Section 5.03 ---- Vested Benefits
Section 5.04 ---- When Benefits Start
Section 5.05 ---- Withdrawal Privileges
Section 5.06 ---- Loans to Participants
ARTICLE VI DISTRIBUTION OF BENEFITS
Section 6.01 ---- Automatic Forms of Distribution
Section 6.02 ---- Optional Forms of Distribution and Distribution
Requirements
Section 6.02A ---- Distributions in Qualifying Employer Securities
Section 6.03 ---- Election Procedures
Section 6.04 ---- Notice Requirements
ARTICLE VII TERMINATION OF PLAN
ARTICLE VIII ADMINISTRATION OF PLAN
Section 8.01 ---- Administration
Section 8.02 ---- Records
Section 8.03 ---- Information Available
Section 8.04 ---- Claim and Appeal Procedures
Section 8.05 ---- Unclaimed Vested Account Procedure
Section 8.06 ---- Delegation of Authority
ARTICLE IX GENERAL PROVISIONS
Section 9.01 ---- Amendments
Section 9.02 ---- Direct Rollovers
Section 9.03 ---- Mergers and Direct Transfers
Section 9.04 ---- Provisions Relating to the Insurer and Other Parties
Section 9.05 ---- Employment Status
Section 9.06 ---- Rights to Plan Assets
Section 9.07 ---- Beneficiary
Section 9.08 ---- Nonalienation of Benefits
Section 9.09 ---- Construction
Section 9.10 ---- Legal Actions
Section 9.11 ---- Small Amounts
Section 9.12 ---- Word Usage
Section 9.13 ---- Transfers Between Plans
ARTICLE X TOPHEAVY PLAN REQUIREMENTS
Section 10.01 ---- Application
Section 10.02 ---- Definitions
Section 10.03 ---- Modification of Vesting Requirements
Section 10.04 ---- Modification of Contributions
Section 10.05 ---- Modification of Contribution Limitation
PLAN EXECUTION
<PAGE>
INTRODUCTION
The Primary Employer previously established a 401(k) plan on January 1,
1991.
The Primary Employer is of the opinion that the plan should be changed.
The restatement, effective January 1, 1999, is set forth in this document and
is substituted in lieu of the prior documents.
The restated plan continues to be for the exclusive benefit of employees
of the Employer. All persons covered under the plan on December 31, 1998,
shall continue to be covered under the restated plan with no loss of benefits.
It is intended that the plan, as restated, shall qualify as a profit
sharing plan under the Internal Revenue Code of 1986, including any later
amendments to the Code.
<PAGE>
ARTICLE I
FORMAT AND DEFINITIONS
SECTION 1.01 -- FORMAT.
Words and phrases defined in the DEFINITIONS SECTION of Article I shall
have that defined meaning when used in this Plan, unless the context clearly
indicates otherwise.
These words and phrases have an initial capital letter to aid in
identifying them as defined terms.
SECTION 1.02 -- DEFINITIONS.
ACCOUNT means, for a Participant, the sum of the cash value of any
Insurance Policy for him plus his share of the Investment Fund. Separate
accounting records are kept for those parts of his Account that result
from:
(a) Elective Deferral Contributions
(b) Matching Contributions
(c) Other Employer Contributions
(d) Rollover Contributions
A Participant's Account shall be reduced by any distribution of his Vested
Account. A Participant's Account will participate in the earnings
credited, expenses charged and any appreciation or depreciation of the
Investment Fund. His Account is subject to any minimum guarantees
applicable under the Group Contract or other investment arrangement.
ACTIVE PARTICIPANT means an Eligible Employee who is actively
participating in the Plan according to the provisions in the ACTIVE
PARTICIPANT SECTION of Article II.
ADOPTING EMPLOYER means an employer controlled by or affiliated with the
Employer and listed in the ADOPTING EMPLOYERS SINGLE PLAN SECTION of
Article II.
AFFILIATED SERVICE GROUP means any group of corporations, partnerships or
other organizations of which the Employer is a part and which is
affiliated within the meaning of Code Section 414(m) and regulations
thereunder. Such a group includes at least two organizations one of which
is either a service organization (that is, an organization the principal
business of which is performing services), or an organization the
principal business of which is performing management functions on a
regular and continuing basis. Such service is of a type historically
performed by employees. In the case of a management organization, the
Affiliated Service Group shall include organizations related, within the
meaning of Code Section 144(a)(3), to either the management organization
or the organization for which it performs management functions. The term
Controlled Group, as it is used in this Plan, shall include the term
Affiliated Service Group.
ANNUAL COMPENSATION means, on any given date, the Employee's Compensation
for the latest Compensation Year ending on or before the given date.
ANNUITY STARTING DATE means, for a Participant, the first day of the first
period for which an amount is payable as an annuity or any other form.
BENEFICIARY means the person or persons named by a Participant to receive
any benefits under this Plan upon the Participant's death. See the
BENEFICIARY SECTION of Article IX.
CLAIMANT means any person who has made a claim for benefits under this
Plan. See the CLAIM AND APPEAL PROCEDURES SECTION of Article VIII.
CODE means the Internal Revenue Code of 1986, as amended.
COMPENSATION means, except as modified in this definition, the total
earnings paid or made available to an Employee by the Employer during any
specified period.
"Earnings" in this definition means Compensation as defined in the
CONTRIBUTION LIMITATION SECTION of Article III.
Compensation shall also include elective contributions. Elective
contributions are amounts excludable from the Employee's gross income
under Code Sections 125, 402(e)(3), 402(h) or 403(b), and contributed by
the Employer, at the Employee's election, to a Code Section 401(k)
arrangement, a simplified employee pension, cafeteria plan or tax-sheltered
annuity. Elective contributions also include Compensation deferred under
a Code Section 457 plan maintained by the Employer and Employee
contributions "picked up" by a governmental entity and, pursuant to Code
Section 414(h)(2), treated as Employer contributions.
For purposes of the EXCESS AMOUNTS SECTION of Article III, the Employer
may elect to use an alternative nondiscriminatory definition of
Compensation in accordance with the regulations under Code Section 414(s).
Compensation shall exclude reimbursements or other expense allowances,
fringe benefits (cash and noncash), moving expenses, deferred compensation
and welfare benefits.
For Plan Years beginning after December 31, 1988, and before January 1,
1994, the annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any year shall not
exceed $200,000. For Plan Years beginning on or after January 1, 1994,
the annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any year shall not
exceed $150,000.
The $200,000 limit shall be adjusted by the Secretary at the same time and
in the same manner as under Code Section 415(d). The $150,000 limit shall
be adjusted by the Commissioner for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). The cost of living adjustment
in effect for a calendar year applies to any period, not exceeding 12
months, over which pay is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer than 12
months, the 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.
In determining the Compensation of a Participant for purposes of the
annual compensation limit, the rules of Code Section 414(q)(6) shall
apply, except that in applying such rules, the term "family" shall include
only the spouse of the Participant and any lineal descendants of the
Participant who have not attained age 19 before the close of the year.
If, as a result of the application of such rules the adjusted annual
compensation limit is exceeded, then (except for purposes of determining
the portion of Compensation up to the integration level if this Plan
provides for permitted disparity) the limitation shall be prorated among
the affected individuals in proportion to each such individual's
Compensation as determined under this definition prior to the application
of this limitation.
If Compensation for any prior determination period is taken into account
in determining a Participant's benefits accruing in the current Plan Year,
the Compensation for that prior determination period is subject to the
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, 1989, which are
used to determine benefits in Plan Years beginning after December 31, 1988
and before January 1, 1994, the annual compensation limit is $200,000.
For this purpose, for determination periods beginning before the first day
of the first Plan Year beginning on or after January 1, 1994, which are
used to determine benefits in Plan Years beginning on or after January 1,
1994, the annual compensation limit is $150,000.
Compensation means, for an Employee who is a Leased Employee, the
Employee's Compensation for the services he performs for the Employer,
determined in the same manner as the Compensation of Employees who are not
Leased Employees, regardless of whether such Compensation would be
received directly from the Employer or from the leasing organization.
COMPENSATION YEAR means each one-year period ending on the last day of the
Plan Year, including corresponding periods before January 1, 1991.
CONTINGENT ANNUITANT means an individual named by the Participant to
receive a lifetime benefit after the Participant's death in accordance
with a survivorship life annuity.
CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Discretionary Contributions
Rollover Contributions
as set out in Article III, unless the context clearly indicates otherwise.
CONTROLLED GROUP means any group of corporations, trades or businesses of
which the Employer is a part that are under common control. A Controlled
Group includes any group of corporations, trades or businesses, whether or
not incorporated, which is either a parent-subsidiary group, a brother-
sister group, or a combined group within the meaning of Code Section 414(b),
Code Section 414(c) and regulations thereunder and, for purposes of
determining contribution limitations under the CONTRIBUTION LIMITATION
SECTION of Article III, as modified by Code Section 415(h) and,
for the purpose of identifying Leased Employees, as modified by Code
Section 144(a)(3). The term Controlled Group, as it is used in this Plan,
shall include the term Affiliated Service Group and any other employer
required to be aggregated with the Employer under Code Section 414(o) and
the regulations thereunder.
DIRECT ROLLOVER means a payment by the Plan to the Eligible Retirement
Plan specified by the Distributee.
DISCRETIONARY CONTRIBUTIONS means discretionary contributions made by the
Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of
Article III.
DISTRIBUTEE means an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the alternate payee under
a qualified domestic relations order, as defined in Code Section 414(p),
are Distributees with regard to the interest of the spouse or former
spouse.
EARLY RETIREMENT DATE means the first day of any month before a
Participant's Normal Retirement Date which the Participant selects for the
start of his retirement benefit. This day shall be on or after the date
on which he ceases to be an Employee and the date he meets the following
requirement(s):
(a) He has attained age 55.
ELECTIVE DEFERRAL CONTRIBUTIONS means Contributions made by the Employer
to fund this Plan in accordance with a qualified cash or deferred
arrangement as described in Code Section 401(k). See the EMPLOYER
CONTRIBUTIONS SECTION of Article III.
ELIGIBILITY SERVICE means an Employee's Period of Service. If he has more
than one Period of Service, or if all or a part of a Period of Service is
not counted, his Eligibility Service shall be determined by adjusting his
Employment Commencement Date so that he has one continuous period of
Eligibility Service equal to the aggregate of all his countable Periods of
Service. An Employee's Eligibility Service shall be determined on the
basis that 30 days equal one month and 365 days equal one year.
However, Eligibility Service is modified as follows:
Predecessor Employer service included:
An Employee's service with a Predecessor Employer shall be included as
service with the Employer. If this Plan is not a continuation of a
plan of that Predecessor Employer, an Employee's service with that
Predecessor Employer shall be counted only if service continued with
the Employer without interruption. This service excludes service
performed while a proprietor or partner.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited.
Period of Severance included (service spanning rule):
A Period of Severance shall be deemed to be a Period of Service under
either of the following conditions:
(a) the Period of Severance immediately follows a period during which
an Employee is not absent from work and ends within 12 months; or
(b) the Period of Severance immediately follows a period during which
an Employee is absent from work for any reason other than
quitting, being discharged or retiring (such as a leave of absence
or layoff) and ends within 12 months of the date he was first
absent.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
ELIGIBLE EMPLOYEE means any Employee of the Employer.
ELIGIBLE RETIREMENT PLAN means an individual retirement account described
in Code Section 408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code Section 403(a) or a
qualified trust described in Code Section 401(a), that accepts the
Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
ELIGIBLE ROLLOVER DISTRIBUTION means any distribution of all or any
portion of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include:
(a) 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.
(b) Any distribution to the extent such distribution is required under
Code Section 401(a)(9).
(c) 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).
EMPLOYEE means an individual who is employed by the Employer or any other
employer required to be aggregated with the Employer under Code Sections
414(b), (c), (m) or (o). A Controlled Group member is required to be
aggregated with the Employer.
The term Employee shall also include any Leased Employee deemed to be an
employee of any employer described in the preceding paragraph as provided
in Code Sections 414(n) or 414(o).
EMPLOYER means the Primary Employer. This will also include any successor
corporation or firm of the Employer which shall, by written agreement,
assume the obligations of this Plan or any predecessor corporation or firm
of the Employer (absorbed by the Employer, or of which the Employer was
once a part) which became a predecessor because of a change of name,
merger, purchase of stock or purchase of assets and which maintained this
Plan.
EMPLOYER CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Discretionary Contributions
as set out in Article III, unless the context clearly indicates otherwise.
EMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service.
ENTRY DATE means the date an Employee first enters the Plan as an Active
Participant. See the ACTIVE PARTICIPANT SECTION of Article II.
FISCAL YEAR means the Primary Employer's taxable year. The last day of
the Fiscal Year is December 31.
FORFEITURE means the part, if any, of a Participant's Account that is
forfeited. See the FORFEITURES SECTION of Article III.
GROUP CONTRACT means the group annuity contract or contracts into which
the Primary Employer enters with the Insurer for the investment of
Contributions and the payment of benefits under this Plan. The term Group
Contract as it is used in this Plan is deemed to include the plural unless
the context clearly indicates otherwise.
HIGHLY COMPENSATED EMPLOYEE means a highly compensated active Employee or
a highly compensated former Employee.
A highly compensated active Employee means any Employee who performs
service for the Employer during the determination year and who, during the
look-back year is:
(a) An Employee who is a 5% owner, as defined in Section 416(i)(1)(B)(i),
at any time during the determination year or the look-back year.
(b) An Employee who receives compensation in excess of $75,000 (indexed in
accordance with Section 415(d)) during the look-back year.
(c) An Employee who receives compensation in excess of $50,000 (indexed in
accordance with Section 415(d)) during the look-back year and is a
member of the top-paid group for the look-back year.
(d) An Employee who is an officer, within the meaning of Section 416(i),
during the look-back year and who receives compensation in the
look-back year greater than 50% of the dollar limitation in effect
under Section 415(b)(1)(A) for the calendar year in which the
look-back year begins. The number of officers is limited to 50 (or,
if lesser, the greater of 3 employees or 10% of employees) excluding
those employees who may be excluded in determining the top-paid group.
(e) An Employee who is both described in paragraph b, c or d above when
these paragraphs are modified to substitute the determination year for
the look-back year and one of the 100 Employees who receive the most
compensation from the Employer during the determination year.
If no officer has satisfied the compensation requirement of (c) above
during either a determination year or look-back year, the highest paid
officer for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year.
A highly compensated former Employee means any Employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the Employer during the determination year, and
was a highly compensated active Employee for either the separation year or
any determination year ending on or after the Employee's 55th birthday.
Compensation is compensation within the meaning of Code Section 415(c)(3),
including elective or salary reduction contributions to a cafeteria plan,
cash or deferred arrangement or tax-sheltered annuity. The top-paid group
consists of the top 20% of employees ranked on the basis of compensation
received during the year.
Employers aggregated under Section 414(b), (c), (m) or (o) are treated as
a single Employer.
HOUR-OF-SERVICE means, for an Employee, each hour for which he is paid, or
entitled to payment, for performing duties for the Employer.
Hours-of-Service shall be credited for employment with any other employer
required to be aggregated with the Employer under Code Sections 414(b),
(c), (m) or (o) and the regulations thereunder for purposes of eligibility
and vesting. Hours-of-Service shall also be credited for any individual who
is considered an employee for purposes of this Plan pursuant to Code
Section 414(n) or Code Section 414(o) and the regulations thereunder.
INACTIVE PARTICIPANT means a former Active Participant who has an Account.
See the INACTIVE PARTICIPANT SECTION of Article II.
INSURANCE POLICY means, for a Participant, the life insurance policy or
policies on his life issued by the Insurer as provided in Article IV. The
term Insurance Policy as it is used in this Plan is deemed to include the
plural unless the context clearly indicates otherwise.
INSURER means Principal Mutual Life Insurance Company and any other
insurance company or companies named by the Trustee or Primary Employer.
INVESTMENT FUND means the total assets, excluding the cash values of any
Insurance Policy, held for the purpose of providing benefits for
Participants. These funds result from Contributions made under the Plan.
INVESTMENT MANAGER means any fiduciary (other than a trustee or Named
Fiduciary)
(a) who has the power to manage, acquire, or dispose of any assets of the
Plan; and
(b) who (1) is registered as an investment adviser under the Investment
Advisers Act of 1940, or (2) is a bank, as defined in the Investment
Advisers Act of 1940, or (3) is an insurance company qualified to
perform services described in subparagraph (a) above under the laws of
more than one state; and
(c) who has acknowledged in writing being a fiduciary with respect to the
Plan.
LATE RETIREMENT DATE means the first day of any month which is after a
Participant's Normal Retirement Date and on which retirement benefits
begin. If a Participant continues to work for the Employer after his
Normal Retirement Date, his Late Retirement Date shall be the earliest
first day of the month on or after he ceases to be an Employee. An
earlier or a later Retirement Date may apply if the Participant so elects.
An earlier Retirement Date may apply if the Participant is age 70 1/2.
See the WHEN BENEFITS START SECTION of Article V.
LEASED EMPLOYEE means any person (other than an employee of the recipient)
who pursuant to an agreement between the recipient and any other person
("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code
Section 414(n)(6)) on a substantially full time basis for a period of at
least one year, and such services are of a type historically performed by
employees in the business field of the recipient employer. Contributions
or benefits provided a Leased Employee by the leasing organization which
are attributable to service performed for the recipient employer shall be
treated as provided by the recipient employer.
A Leased Employee shall not be considered an employee of the recipient if:
(a) such employee is covered by a money purchase pension plan providing
(1) a nonintegrated employer contribution rate of at least 10 percent
of compensation, as defined in Code Section 415(c)(3), but including
amounts contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under Code Sections 125,
402(e)(3), 402(h) or 403(b), (2) immediate participation, and (3) full
and immediate vesting and
(b) Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce.
LOAN ADMINISTRATOR means the person or positions authorized to administer
the Participant loan program.
The Loan Administrators are Anson Hall and Mary Soucy.
MATCHING CONTRIBUTIONS means matching contributions made by the Employer
to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article III.
MONTHLY DATE means each Yearly Date and the same day of each following
month during the Plan Year beginning on such Yearly Date.
NAMED FIDUCIARY means the person or persons who have authority to control
and manage the operation and administration of the Plan.
The Named Fiduciary is the Employer.
NONHIGHLY COMPENSATED EMPLOYEE means an Employee of the Employer who is
neither a Highly Compensated Employee nor a family member.
NORMAL FORM means a single life annuity with installment refund.
NORMAL RETIREMENT AGE means the age at which the Participant's normal
retirement benefit becomes nonforfeitable. A Participant's Normal
Retirement Age is 65.
NORMAL RETIREMENT DATE means the earliest first day of the month on or
after the date the Participant reaches his Normal Retirement Age. Unless
otherwise provided in this Plan, a Participant's retirement benefits shall
begin on a Participant's Normal Retirement Date if he has ceased to be an
Employee on such date and has a Vested Account. Even if the Participant
is an Employee on his Normal Retirement Date, he may choose to have his
retirement benefit begin on such date. See the WHEN BENEFITS START
SECTION of Article V.
PARENTAL ABSENCE means an Employee's absence from work which begins on or
after the first Yearly Date after December 31, 1984,
(a) by reason of pregnancy of the Employee,
(b) by reason of birth of a child of the Employee,
(c) by reason of the placement of a child with the Employee in connection
with adoption of such child by such Employee, or
(d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
PARTICIPANT means either an Active Participant or an Inactive Participant.
PERIOD OF MILITARY DUTY means, for an Employee
(a) who served as a member of the armed forces of the United States, and
(b) who was reemployed by the Employer at a time when the Employee had a
right to reemployment in accordance with seniority rights as protected
under Section 2021 through 2026 of Title 38 of the U. S. Code,
the period of time from the date the Employee was first absent from active
work for the Employer because of such military duty to the date the
Employee was reemployed.
PERIOD OF SERVICE means a period of time beginning on an Employee's
Employment Commencement Date or Reemployment Commencement Date (whichever
applies) and ending on his Severance from Service Date.
PERIOD OF SEVERANCE means a period of time beginning on an Employee's
Severance from Service Date and ending on the date he again performs an
Hour-of-Service.
A one-year Period of Severance means a Period of Severance of 12
consecutive months.
Solely for purposes of determining whether a one-year Period of Severance
has occurred for eligibility or vesting purposes, the 12-consecutive month
period beginning on the first anniversary of the first date of a Parental
Absence shall not be a one-year Period of Severance.
PLAN means the 401(k) plan of the Employer set forth in this document,
including any later amendments to it.
PLAN ADMINISTRATOR means the person or persons who administer the Plan.
The Plan Administrator is the Employer.
PLAN YEAR means a period beginning on a Yearly Date and ending on the day
before the next Yearly Date.
PREDECESSOR EMPLOYER means a firm absorbed by the Employer by change of
name, merger, acquisition or a change of corporate status, or a firm of
which the Employer was once a part.
PRIMARY EMPLOYER means NEW ENGLAND COMMUNITY BANCORP, INC.
QUALIFIED JOINT AND SURVIVOR FORM means, for a Participant who has a
spouse, an immediate survivorship life annuity with installment refund,
where the survivorship percentage is 50% and the Contingent Annuitant is
the Participant's spouse. A former spouse will be treated as the spouse
to the extent provided under a qualified domestic relations order as
described in Code Section 414(p). If a Participant does not have a
spouse, the Qualified Joint and Survivor Form means the Normal Form.
The amount of benefit payable under the Qualified Joint and Survivor Form
shall be the amount of benefit which may be provided by the Participant's
Vested Account.
QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a single life annuity with
installment refund payable to the surviving spouse of a Participant who
dies before his Annuity Starting Date. A former spouse will be treated as
the surviving spouse to the extent provided under a qualified domestic
relations order as described in Code Section 414(p).
QUALIFYING EMPLOYER SECURITY means any instrument issued by the Employer
and meeting the requirements of Section 4975(e)(8) of the Code.
QUALIFYING EMPLOYER SECURITIES ACCOUNT means for a Participant, his share
of Qualifying Employer Securities.
REEMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs
an Hour-of-Service following a Period of Severance.
REENTRY DATE means the date a former Active Participant reenters the Plan.
See the ACTIVE PARTICIPANT SECTION of Article II.
RETIREMENT DATE means the date a retirement benefit will begin and is a
Participant's Early, Normal or Late Retirement Date, as the case may be.
ROLLOVER CONTRIBUTIONS means the Rollover Contributions which are made by
or for a Participant according to the provisions of the ROLLOVER
CONTRIBUTIONS SECTION of Article III.
SEVERANCE FROM SERVICE DATE means the earlier of
(a) the date on which an Employee quits, retires, dies or is discharged,
or
(b) the first anniversary of the date an Employee begins a one-year absence
from service (with or without pay). This absence may be the result of
any combination of vacation, holiday, sickness, disability, leave of
absence or layoff.
Solely to determine whether a one-year Period of Severance has occurred for
eligibility or vesting purposes for an Employee who is absent from service
beyond the first anniversary of the first day of a Parental Absence,
Severance from Service Date is the second anniversary of the first day of
the Parental Absence. The period between the first and second
anniversaries of the first day of the Parental Absence is not a Period of
Service and is not a Period of Severance.
TEFRA means the Tax Equity and Fiscal Responsibility Act of 1982.
TEFRA COMPLIANCE DATE means the date a plan is to comply with the
provisions of TEFRA. The TEFRA Compliance Date as used in this Plan is,
(a) for purposes of contribution limitations, Code Section 415,
(1) if the plan was in effect on July 1, 1982, the first day of the
first limitation year which begins after December 31, 1982, or
(2) if the plan was not in effect on July 1, 1982, the first day of
the first limitation year which ends after July 1, 1982.
(b) for all other purposes, the first Yearly Date after December 31, 1983.
TRUST means an agreement of trust between the Primary Employer and Trustee
established for the purpose of holding and distributing the Trust Fund
under the provisions of the Plan. The Trust may provide for the
investment of all or any portion of the Trust Fund in the Group Contract
and any Insurance Policy.
TRUST FUND means the total funds held under the Trust for the purpose of
providing benefits for Participants. These funds result from
Contributions made under the Plan which are forwarded to the Trustee to be
deposited in the Trust Fund.
TRUSTEE means the trustee or trustees under the Trust. The term Trustee
as it is used in this Plan is deemed to include the plural unless the
context clearly indicates otherwise.
VALUATION DATE means for the purposes of the date on which the value of
the assets of the trust is determined. The value of each Account which is
maintained under this Plan shall be determined on the Valuation Date. In
each Plan Year, the Valuation Date shall be the close of each business
day.
VESTED ACCOUNT means the vested part of a Participant's Account including
the cash values of any Insurance Policy for him. The Participant's Vested
Account is equal to his Account.
The Participant's Vested Account is nonforfeitable. The percentage used
to determine that portion of a Participant's Account attributable to
Employer Contributions which is nonforfeitable is 100%.
YEARLY DATE means January 1, 1991, and the same day of each following
year.
YEARS OF SERVICE means an Employee's Period of Service. If he has more
than one Period of Service or if all or a part of a Period of Service is
not counted, his Years of Service shall be determined by adjusting his
Employment Commencement Date so that he has one continuous period of Years
of Service equal to the aggregate of all his countable Periods of Service.
This period of Years of Service shall be expressed as whole years and
fractional parts of a year (to two decimal places) on the basis that 365
days equal one year.
However, Years of Service is modified as follows:
Predecessor Employer service included:
An Employee's service with a Predecessor Employer shall be included as
service with the Employer. If this Plan is not a continuation of a
plan of that Predecessor Employer, an Employee's service with that
Predecessor Employer shall be counted only if service continued with
the Employer without interruption. This service excludes service
performed while a proprietor or partner.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited.
Period of Severance included (service spanning rule):
A Period of Severance shall be deemed to be a Period of Service under
either of the following conditions:
(a) the Period of Severance immediately follows a period during which
an Employee is not absent from work and ends within 12 months; or
(b) the Period of Severance immediately follows a period during which
an Employee is absent from work for any reason other than
quitting, being discharged or retiring (such as a leave of absence
or layoff) and ends within 12 months of the date he was first
absent.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
<PAGE>
ARTICLE II
PARTICIPATION
SECTION 2.01 -- ACTIVE PARTICIPANT.
(a) An Employee shall first become an Active Participant (begin active
participation in the Plan) on the first day of the pay period on or
after January 1, 1999, on which he is an Eligible Employee and has met
both of the eligibility requirements set forth below. This date is
his Entry Date.
(1) He has completed one year of Eligibility Service before his Entry
Date.
(2) He is age 21 or older.
Each Employee who was an Active Participant under the Plan on December
31, 1998, shall continue to be an Active Participant if he is still an
Eligible Employee on January 1, 1999, and his Entry Date shall not
change.
If a person has been an Eligible Employee who has met all the
eligibility requirements above, but is not an Eligible Employee on the
date which would have been his Entry Date, he shall become an Active
Participant on the date he again becomes an Eligible Employee. This
date is his Entry Date.
(b) An Inactive Participant shall again become an Active Participant
(resume active participation in the Plan) on the date he again
performs an Hour-of-Service as an Eligible Employee. This date is his
Reentry Date.
Upon again becoming an Active Participant, he shall cease to be an
Inactive Participant.
(c) A former Participant shall again become an Active Participant (resume
active participation in the Plan) on the date he again performs an
Hour-of-Service as an Eligible Employee. This date is his Reentry Date.
There shall be no duplication of benefits for a Participant under this
Plan because of more than one period as an Active Participant.
SECTION 2.02 -- INACTIVE PARTICIPANT.
An Active Participant shall become an Inactive Participant (stop accruing
benefits under the Plan) on the earlier of the following:
(a) The date on which he ceases to be an Eligible Employee (on his
Retirement Date if the date he ceases to be an Eligible Employee
occurs within one month of his Retirement Date).
(b) The effective date of complete termination of the Plan.
An Employee or former Employee who was an Inactive Participant under the
Plan on December 31, 1998, shall continue to be an Inactive Participant on
January 1, 1999. Eligibility for any benefits payable to him or on his behalf
and the amount of the benefits shall be determined according to the provisions
of the prior document, unless otherwise stated in this document.
SECTION 2.03 -- CESSATION OF PARTICIPATION.
A Participant shall cease to be a Participant on the date he is no longer
an Eligible Employee and his Account is zero.
SECTION 2.04 -- ADOPTING EMPLOYERS - SINGLE PLAN.
Each of the employers controlled by or affiliated with the Employer and
listed below is an Adopting Employer. Each Adopting Employer listed below
participates with the Employer in this Plan. An Adopting Employer's agreement
to participate in this Plan shall be in writing.
If the Adopting Employer did not maintain its plan before its date of
adoption specified below, its date of adoption shall be the Entry Date for any
of its employees who have met the requirements in the ACTIVE PARTICIPANT
SECTION of Article II as of that date. Service with and earnings from an
Adopting Employer shall be included as service with and earnings from the
Employer. Transfer of employment, without interruption, between an Adopting
Employer and another Adopting Employer or the Employer shall not be considered
an interruption of service.
Contributions made by an Adopting Employer shall be treated as
Contributions made by the Employer. Forfeitures arising from those
Contributions shall be used for the benefit of all Participants.
An employer shall not be an Adopting Employer if it ceases to be
controlled by or affiliated with the Employer. Such an employer may continue
a retirement plan for its employees in the form of a separate document. This
Plan shall be amended to delete a former Adopting Employer from the list
below.
If an employer ceases to be an Adopting Employer and does not continue a
retirement plan for the benefit of its employees, partial termination may
result and the provisions of Article VII apply.
<TABLE>
<CAPTION>
ADOPTING EMPLOYERS
NAME FISCAL YEAR END DATE OF ADOPTION
<S> <C> <C>
New England Bank & Trust Company December 31 September 1, 1996
The Equity Bank December 31 September 1, 1996
Community Bank December 31 January 1, 1999
Olde Port Bank & Trust Company December 31 January 1, 1999
</TABLE>
<PAGE>
ARTICLE III
CONTRIBUTIONS
SECTION 3.01 -- EMPLOYER CONTRIBUTIONS.
Employer Contributions for Plan Years which end on or after January 1,
1999, may be made without regard to current or accumulated net income,
earnings, or profits of the Employer. Notwithstanding the foregoing, the Plan
shall continue to be designed to qualify as a profit sharing plan for purposes
of Code Sections 401(a), 402, 412, and 417. Such Contributions will be equal
to the Employer Contributions as described below:
(a) The amount of each Elective Deferral Contribution for a Participant
shall be equal to any percentage (not less than 1% nor more than 15%)
of his Compensation as elected in his elective deferral agreement. An
Employee who is eligible to participate in the Plan may file an
elective deferral agreement with the Employer. The elective deferral
agreement to start Elective Deferral Contributions may be effective on
a Participant's Entry Date (Reentry Date, if applicable) or any
following date. The Participant shall make any change or terminate
the elective deferral agreement by filing a new elective deferral
agreement. A Participant's elective deferral agreement making a
change may be effective on any date an elective deferral agreement to
start Elective Deferral Contributions could be effective. A
Participant's elective deferral agreement to stop Elective Deferral
Contributions may be effective on any date. The elective deferral
agreement must be in writing and effective before the beginning of the
pay period in which Elective Deferral Contributions are to start,
change or stop.
Elective Deferral Contributions are fully (100%) vested and
nonforfeitable.
(b) The amount of each Matching Contribution for a Participant shall be
equal to a percentage (not more than 100%) as determined by the
Employer, of the Elective Deferral Contributions made for him,
disregarding Elective Deferral Contributions in excess of a percentage
as determined by the Employer, of his Compensation.
At the end of the Plan Year, if the Employer so determines, the
Employer may make another Matching Contribution for a Participant
eligible for an allocation at the end of the Plan Year. If made, the
amount of this Matching Contribution for a Participant shall be equal
to a percentage (not more than 100%) as determined by the Employer, of
the Elective Deferral Contributions made for him for the Plan Year,
disregarding any Elective Deferral Contributions in excess of a
percentage (not more than 15%) as determined by the Employer, of his
Compensation for the Plan Year, reduced by the amount of the Matching
Contributions made for him above.
Total Matching Contributions for a Participant for the Plan Year shall
not exceed 100% of the Elective Deferral Contributions for him for the
Plan Year.
Matching Contributions are fully (100%) vested and nonforfeitable.
(c) The amount of each Discretionary Contribution shall be determined by
the Employer.
Discretionary Contributions are fully (100%) vested and
nonforfeitable.
No Participant shall be permitted to have Elective Deferral Contributions,
as defined in the EXCESS AMOUNTS SECTION of Article III, 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 Code Section 402(g) in
effect at the beginning of such taxable year.
In any Plan Year, the Employer may make all or a part of the following
Contributions for such Plan Year in advance of the last day of the Plan Year:
Discretionary Contributions
Such Contributions shall be allocated when made in a manner which approximates
the allocation which would otherwise have been made as of the last day of the
Plan Year. Succeeding allocations shall take into account amounts previously
allocated for the Plan Year. The percentage of the Employer Contribution
allocated to the Participant for the Plan Year shall be the same percentage
which would have been allocated to him if the entire allocation had been made
as of the last day of the Plan Year. Excess allocations shall be forfeited
and reallocated as necessary to provide the percentage applicable to each
Participant.
The Employer shall pay to the Insurer its Elective Deferral Contributions
as soon as administratively feasible after the amount otherwise would have
been payable to the Participant, but not later than the 15th business day of
the following month. Employer shall pay its other Contributions to the
Insurer within the time prescribed for filing Employer's Federal income tax
return for the Plan Year, including extensions.
A portion of the Plan assets resulting from Employer Contributions (but
not more than the original amount of those Contributions and reduced
proportionately for losses, if applicable) may be returned if the Employer
Contributions are made because of a mistake of fact or are more than the
amount deductible under Code Section 404 (excluding any amount which is not
deductible because the Plan is disqualified). The amount involved must be
returned to the Employer within one year after the date the Employer
Contributions are made by mistake of fact or the date the deduction is
disallowed, whichever applies. Except as provided under this paragraph and
Article VII, the assets of the Plan shall never be used for the benefit of the
Employer and are held for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and for defraying reasonable expenses of
administering the Plan.
SECTION 3.01A -- ROLLOVER CONTRIBUTIONS.
A Rollover Contribution may be made by or for an Eligible Employee if the
following conditions are met:
(a) The Contribution is a rollover contribution which the Code permits to
be transferred to a plan that meets the requirements of Code Section
401(a).
(b) If the Contribution is made by the Eligible Employee, it is made
within sixty days after he receives the distribution.
(c) The Eligible Employee furnishes evidence satisfactory to the Plan
Administrator that the proposed transfer is in fact a rollover
contribution that meets conditions (a) and (b) above.
The Rollover Contribution may be made by the Eligible Employee or the
Eligible Employee may direct the trustee or named fiduciary of another plan to
transfer the funds which would otherwise be a Rollover Contribution directly
to this Plan. Such transferred funds shall be called a Rollover Contribution.
The Contribution shall be made according to procedures set up by the Plan
Administrator.
If the Eligible Employee is not an Active Participant at the time the
Rollover Contribution is made, he shall be deemed to be a Participant only for
the purposes of investment and distribution of the Rollover Contribution. He
shall not share in the allocation of Employer Contributions No Employer
Contributions shall be made for him until the time he meets all the
requirements to become an Active Participant.
Rollover Contributions made by or for an Eligible Employee shall be
credited to his Account. The part of the Participant's Account resulting from
Rollover Contributions is fully (100%) vested and nonforfeitable at all times.
A separate accounting record shall be maintained for that part of his Rollover
Contribution which consists of voluntary contributions that were deducted from
the Participant's gross income for Federal income tax purposes.
SECTION 3.02 -- FORFEITURES.
A Forfeiture shall occur as described in the EXCESS AMOUNTS SECTION of
Article III.
Forfeitures of Matching Contributions which relate to excess amounts shall
be applied as provided in the EXCESS AMOUNTS SECTION of Article III.
SECTION 3.03 -- ALLOCATION.
The following Contributions for the Plan Year shall be allocated among all
eligible persons:
Matching Contributions made at the end of the Plan Year
Discretionary Contributions
The eligible persons are all Participants and former Participants who were
Active Participants at any time in the Plan Year. The amount allocated to
such a person shall be determined below and under Article X.
The following Contributions for each Plan Year shall be allocated to each
Participant for whom such Contributions were made under the EMPLOYER
CONTRIBUTIONS SECTION of Article III:
Elective Deferral Contributions
Matching Contributions made before the end of the Plan Year
These Contributions shall be allocated when made and credited to the
Participant's Account.
The following Contributions are allocated as of the last day of the Plan
Year to each eligible person for whom they are made and credited to his
Account:
Matching Contributions made at the end of the Plan Year
Discretionary Contributions are allocated as of the last day of each Plan
Year. The amount allocated to each eligible person for the Plan Year shall be
equal to the Discretionary Contributions for the Plan Year, multiplied by the
ratio of (a) his Annual Compensation as of the last day of the Plan Year to
(b) the total of such compensation for all eligible persons. This amount is
credited to his Account.
In determining the amount of Employer Contributions to be allocated to a
Participant who is a Leased Employee, contributions and benefits provided by
the leasing organization which are attributable to services such Leased
Employee performs for the Employer shall be treated as provided by the
Employer and there shall be no duplication of those contributions or benefits
under this Plan.
SECTION 3.04 -- CONTRIBUTION LIMITATION.
(a) For the purpose of determining the contribution limitation set forth
in this section, the following terms are defined:
AGGREGATE ANNUAL ADDITION means, for a Participant with respect to any
Limitation Year, the sum of his Annual Additions under all defined
contribution plans of the Employer, as defined in this section, for
such Limitation Year. The nondeductible participant contributions
which the Participant makes to a defined benefit plan shall be treated
as Annual Additions to a defined contribution plan. The Contributions
the Employer, as defined in this section, made for the Participant for
a Plan Year beginning on or after March 31, 1984, to an individual
medical benefit account, as defined in Code Section 415(l)(2), under a
pension or annuity plan of the Employer, as defined in this section,
shall be treated as Annual Additions to a defined contribution plan.
Also, amounts derived from contributions paid or accrued after
December 31, 1985, in Fiscal Years ending after such date, which are
attributable to postretirement medical benefits allocated to the
separate account of a key employee, as defined in Code Section
419A(d)(3), under a welfare benefit fund, as defined in Code Section
419(e), maintained by the Employer, as defined in this section, are
treated as Annual Additions to a defined contribution plan. The 25%
of Compensation limit under Maximum Permissible Amount does not apply
to Annual Additions resulting from contributions made to an individual
medical account, as defined in Code Section 415(l)(2), or to Annual
Additions resulting from contributions for medical benefits, within
the meaning of Code Section 419A, after separation from service.
ANNUAL ADDITION means the amount added to a Participant's account for
any Limitation Year which may not exceed the Maximum Permissible
Amount. The Annual Addition under any plan for a Participant with
respect to any Limitation Year, shall be equal to the sum of (1) and
(2) below:
(1) Employer contributions and forfeitures credited to his account for
the Limitation Year.
(2) Participant contributions made by him for the Limitation Year.
Before the first Limitation Year beginning after December 31, 1986,
the amount under (2) above is the lesser of (i) 1/2 of his
nondeductible participant contributions made for the Limitation Year,
or (ii) the amount, if any, of his nondeductible participant
contributions made for the Limitation Year which is in excess of six
percent of his Compensation, as defined in this section, for such
Limitation Year.
COMPENSATION means all wages for Federal income tax withholding
purposes, as defined under Code Section 3401(a) (for purposes of
income tax withholding at the source), disregarding any rules limiting
the remuneration included as wages based on the nature or location of
the employment or the services performed. Compensation also includes
all other payments to an Employee in the course of the Employer's
trade or business, for which the Employer must furnish the Employee a
written statement under Code Sections 6041(d) and 6051(a)(3). The
"Wages, Tips and Other Compensation" box on Form W-2 satisfies this
definition.
For any self-employed individual Compensation will mean earned income.
For purposes of applying the limitations of this section, Compensation
for a Limitation Year is the Compensation actually paid or made
available during such Limitation Year.
DEFINED BENEFIT PLAN FRACTION means, with respect to a Limitation Year
for a Participant who is or has been a participant in a defined
benefit plan ever maintained by the Employer, as defined in this
section, the quotient, expressed as a decimal, of
(1) the Participant's Projected Annual Benefit under all such plans as
of the close of such Limitation Year, divided by
(2) on and after the TEFRA Compliance Date, the lesser of (i) or (ii)
below:
(i) 1.25 multiplied by the maximum dollar limitation which
applies to defined benefit plans determined for the
Limitation Year under Code Sections 415(b) or (d) or
(ii) 1.4 multiplied by the Participant's highest average
compensation as defined in the defined benefit plan(s),
including any adjustments under Code Section 415(b).
Before the TEFRA Compliance Date, this denominator is the
Participant's Projected Annual Benefit as of the close of the
Limitation Year if the plan(s) provided the maximum benefit
allowable.
The Defined Benefit Plan Fraction shall be modified as follows:
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, as defined in this
section, which were in existence on May 6, 1986, the denominator of
this fraction will not be less than 125 percent of the sum of the
annual benefits under such plans which the Participant had accrued as
of the close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the plan
after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the
requirements of Code Section 415 for all Limitation Years beginning
before January 1, 1987.
DEFINED CONTRIBUTION PLAN FRACTION means, for a Participant with
respect to a Limitation Year, the quotient, expressed as a decimal, of
(1) the Participant's Aggregate Annual Additions for such Limitation
Year and all prior Limitation Years, under all defined
contribution plans (including the Aggregate Annual Additions
attributable to nondeductible accounts under defined benefit plans
and attributable to all welfare benefit funds, as defined in Code
Section 419(e) and attributable to individual medical accounts, as
defined in Code Section 415(l)(2)) ever maintained by the
Employer, as defined in this section, divided by
(2) on and after the TEFRA Compliance Date, the sum of the amount
determined for the Limitation Year under (i) or (ii) below,
whichever is less, and the amounts determined in the same manner
for all prior Limitation Years during which he has been an
Employee or an employee of a predecessor employer:
(i) 1.25 multiplied by the maximum permissible dollar amount for
each such Limitation Year, or
(ii) 1.4 multiplied by the maximum permissible percentage of the
Participant's Compensation, as defined in this section, for
each such Limitation Year.
Before the TEFRA Compliance Date, this denominator is the sum of
the maximum allowable amount of Annual Addition to his account(s)
under all the plan(s) of the Employer, as defined in this section,
for each such Limitation Year.
The Defined Contribution Plan Fraction shall be modified as follows:
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 contribution plans maintained by the Employer, as defined in
this section, which were in existence on May 6, 1986, the numerator of
this fraction shall be adjusted if the sum of the Defined Contribution
Plan Fraction and Defined Benefit Plan Fraction would otherwise exceed
1.0 under the terms of this Plan. Under the adjustment, the dollar
amount determined below shall be permanently subtracted from the
numerator of this fraction. The dollar amount is equal to the excess
of the sum of the two fractions, before adjustment, over 1.0
multiplied by the denominator of his Defined Contribution Plan
Fraction. The adjustment is calculated using his Defined Contribution
Plan Fraction and Defined Benefit Plan Fraction 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 limitations applicable to the first Limitation Year
beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all employee
contributions as Annual Additions.
For a plan that was in existence on July 1, 1982, for purposes of
determining the Defined Contribution Plan Fraction for any Limitation
Year ending after December 31, 1982, the Plan Administrator may elect,
in accordance with the provisions of Code Section 415, that the
denominator for each Participant for all Limitation Years ending
before January 1, 1983, will be equal to
(1) the Defined Contribution Plan Fraction denominator which would
apply for the last Limitation Year ending in 1982 if an election
under this paragraph were not made, multiplied by.
(2) a fraction, equal to (i) over (ii) below:
(i) the lesser of (A) $51,875, or (B) 1.4, multiplied by 25% of
the Participant's Compensation, as defined in this section,
for the Limitation Year ending in 1981;
(ii) the lesser of (A) $41,500, or (B) 25% of the Participant's
Compensation, as defined in this section, for the Limitation
Year ending in 1981.
The election described above is applicable only if the plan
administrators under all defined contribution plans of the Employer,
as defined in this section, also elect to use the modified fraction.
EMPLOYER means any employer that adopts this Plan and all Controlled
Group members and any other entity required to be aggregated with the
employer pursuant to regulations under Code Section 414(o).
LIMITATION YEAR means the 12-consecutive month period within which it
is determined whether or not the limitations of Code Section 415 are
exceeded. Limitation Year means each 12-consecutive month period
ending on December 31. If the Limitation Year is other than the
calendar year, execution of this Plan (or any amendment to this Plan
changing the Limitation Year) constitutes the Employer's adoption of a
written resolution electing the Limitation Year. If the Limitation
Year is changed, the new Limitation Year shall begin within the
current Limitation Year, creating a short Limitation Year.
MAXIMUM PERMISSIBLE AMOUNT means, for a Participant with respect to
any Limitation Year, the lesser of (1) or (2) below:
(1) The greater of $30,000 or one-fourth of the maximum dollar
limitation which applies to defined benefit plans set forth in
Code Section 415(b)(1)(A) as in effect for the Limitation Year.
(Before the TEFRA Compliance Date, $25,000 multiplied by the cost
of living adjustment factor permitted by Federal regulations.)
(2) 25% of his Compensation, as defined in this section, for such
Limitation Year.
The compensation limitation referred to in (2) shall not apply to any
contribution for medical benefits (within the meaning of Code Section
401(h) or Code Section 419A(f)(2)) which is otherwise treated as an
annual addition under Code Section 415(l)(1) or Code Section
419A(d)(2).
If there is a short Limitation Year because of a change in Limitation
Year, the Maximum Permissible Amount will not exceed the maximum
dollar limitation which would otherwise apply multiplied by the
following fraction:
NUMBER OF MONTHS IN THE SHORT LIMITATION YEAR
---------------------------------------------
12
PROJECTED ANNUAL BENEFIT means a Participant's expected annual benefit
under all defined benefit plan(s) ever maintained by the Employer, as
defined in this section. The Projected Annual Benefit shall be
determined assuming that the Participant will continue employment
until the later of current age or normal retirement age under such
plan(s), and that the Participant's compensation for the current
Limitation Year and all other relevant factors used to determine
benefits under such plan(s) will remain constant for all future
Limitation Years. Such expected annual benefit shall be adjusted to
the actuarial equivalent of a straight life annuity if expressed in a
form other than a straight life or qualified joint and survivor
annuity.
(b) The Annual Addition under this Plan for a Participant during a
Limitation Year shall not be more than the Maximum Permissible Amount.
(c) Contributions which would otherwise be credited to the Participant's
Account shall be limited or reallocated to the extent necessary to
meet the restrictions of subparagraph (b) above for any Limitation
Year in the following order. Discretionary Contributions shall be
reallocated in the same manner as described in the ALLOCATION SECTION
of Article III to the remaining Participants to whom the limitations
do not apply for the Limitation Year. The Discretionary Contributions
shall be limited if there are no such remaining Participants.
Elective Deferral Contributions that are not the basis for Matching
Contributions shall be limited. Matching Contributions shall be
limited to the extent necessary to limit the Participant's Annual
Addition under this Plan to his maximum amount. If Matching
Contributions are limited because of this limit, Elective Deferral
Contributions that are the basis for Matching Contributions shall be
reduced in proportion.
If, due to (i) an error in estimating a Participant's Compensation as
defined in this section, (ii) as a result of a reasonable error in
determining the amount of elective deferrals (within the meaning of
Code Section 402(g)(3)) that may be made with respect to any
individual under the limits of Code Section 415, or (iii) other
limited facts and circumstances, a Participant's Annual Addition is
greater than the amount permitted in (b) above, such excess amount
shall be applied as follows. Elective Deferral Contributions which are
not the basis for Matching Contributions will be returned to the
Participant. If an excess still exists, Elective Deferral
Contributions that are the basis for Matching Contributions will be
returned to the Participant. Matching Contributions based on Elective
Deferral Contributions which are returned shall be forfeited. If
after the return of Elective Deferral Contributions, an excess amount
still exists, and the Participant is an Active Participant as of the
end of the Limitation Year, the excess amount shall be used to offset
Employer Contributions for him in the next Limitation Year. If after
the return of Elective Deferral Contributions, an excess amount still
exists, and the Participant is not an Active Participant as of the end
of the Limitation Year, the excess amount will be held in a suspense
account which will be used to offset Employer Contributions for all
Participants in the next Limitation Year. No Employer Contributions
that would be included in the next Limitation Year's Annual Addition
may be made before the total suspense account has been used.
(d) A Participant's Aggregate Annual Addition for a Limitation Year shall
not exceed the Maximum Permissible Amount.
If, for the Limitation Year, the Participant has an Annual Addition
under more than one defined contribution plan or a welfare benefit
fund, as defined in Code Section 419(e), or an individual medical
account, as defined in Code Section 415(l)(2), maintained by the
Employer, as defined in this section, and such plans and welfare
benefit funds and individual medical accounts do not otherwise limit
the Aggregate Annual Addition to the Maximum Permissible Amount, any
reduction necessary shall be made first to the profit sharing plans,
then to all other such plans and welfare benefit funds and individual
medical accounts and, if necessary, by reducing first those that were
most recently allocated. Welfare benefit funds and individual medical
accounts shall be deemed to be allocated first. However, elective
deferral contributions shall be the last contributions reduced before
the welfare benefit fund or individual medical account is reduced.
If some of the Employer's defined contribution plans were not in
existence on July 1, 1982, and some were in existence on that date,
the Maximum Permissible Amount which is based on a dollar amount may
differ for a Limitation Year. The Aggregate Annual Addition for the
Limitation Year in which the dollar limit differs shall not exceed the
lesser of (1) 25% of Compensation as defined in this section, (2)
$45,475, or (3) the greater of $30,000 or the sum of the Annual
Additions for such Limitation Year under all the plan(s) to which the
$45,475 amount applies.
(e) If a Participant is or has been a participant in both defined benefit
and defined contribution plans (including a welfare benefit fund or
individual medical account) ever maintained by the Employer, as
defined in this section, the sum of the Defined Benefit Plan Fraction
and the Defined Contribution Plan Fraction for any Limitation Year
shall not exceed 1.0 (1.4 before the TEFRA Compliance Date).
After all other limitations set out in the plans and funds have been
applied, the following limitations shall apply so that the sum of the
Participant's Defined Benefit Plan Fraction and Defined Contribution
Plan Fraction shall not exceed 1.0 (1.4 before the TEFRA Compliance
Date). The Projected Annual Benefit shall be limited first. If the
Participant's annual benefit(s) equal his Projected Annual Benefit, as
limited, then Annual Additions to the defined contribution plan(s)
shall be limited to the extent needed to reduce the sum to 1.0 (1.4).
First, the voluntary contributions the Participant may make for the
Limitation Year shall be limited. Next, in the case of a profit
sharing plan, any forfeitures allocated to the Participant shall be
reallocated to remaining participants to the extent necessary to
reduce the decimal to 1.0 (1.4). Last, to the extent necessary,
employer contributions for the Limitation Year shall be reallocated or
limited, and any required and optional employee contributions to which
such employer contributions were geared shall be reduced in
proportion.
If, for the Limitation Year, the Participant has an Annual Addition
under more than one defined contribution plan or welfare benefit fund
or individual medical account maintained by the Employer, as defined
in this section, any reduction above shall be made first to the profit
sharing plans, then to all other such plans and welfare benefit plans
and individual medical accounts and, if necessary, by reducing first
those that were most recently allocated. However, elective deferral
contributions shall be the last contributions reduced before the
welfare benefit fund or individual medical account is reduced. The
annual addition to the welfare benefit fund and individual medical
account shall be limited last.
SECTION 3.05 -- EXCESS AMOUNTS.
(a) For the purposes of this section, the following terms are defined:
ACTUAL DEFERRAL PERCENTAGE means the ratio (expressed as a percentage)
of Elective Deferral Contributions under this Plan on behalf of the
Eligible Participant for the Plan Year to the Eligible Participant's
Compensation for the Plan Year. In modification of the foregoing,
Compensation shall be limited to the Compensation received while an
Active Participant. The Elective Deferral Contributions used to
determine the Actual Deferral Percentage shall include Excess Elective
Deferrals (other than Excess Elective Deferrals of Nonhighly
Compensated Employees that arise solely from Elective Deferral
Contributions made under this Plan or any other plans of the Employer
or a Controlled Group member), but shall exclude Elective Deferral
Contributions that are used in computing the Contribution Percentage
(provided the Average Actual Deferral Percentage test is satisfied
both with and without exclusion of these Elective Deferral
Contributions). Under such rules as the Secretary of the Treasury
shall prescribe in Code Section 401(k)(3)(D), the Employer may elect
to include Qualified Nonelective Contributions and Qualified Matching
Contributions under this Plan in computing the Actual Deferral
Percentage. For an Eligible Participant for whom such Contributions
on his behalf for the Plan Year are zero, the percentage is zero.
AGGREGATE LIMIT means the greater of (1) or (2) below:
(1) The sum of
(i) 125 percent of the greater of the Average Actual Deferral
Percentage of the Nonhighly Compensated Employees for the
Plan Year or the Average Contribution Percentage of Nonhighly
Compensated Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the Plan
Year of the cash or deferred arrangement and
(ii) the lesser of 200% or two plus the lesser of such Average
Actual Deferral Percentage or Average Contribution
Percentage.
(2) The sum of
(i) 125 percent of the lesser of the Average Actual Deferral
Percentage of the Nonhighly Compensated Employees for the
Plan Year or the Average Contribution Percentage of Nonhighly
Compensated Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the Plan
Year of the cash or deferred arrangement and
(ii) the lesser of 200% or two plus the greater of such Average
Actual Deferral Percentage or Average Contribution
Percentage.
AVERAGE ACTUAL DEFERRAL PERCENTAGE means the average (expressed as a
percentage) of the Actual Deferral Percentages of the Eligible
Participants in a group.
AVERAGE CONTRIBUTION PERCENTAGE means the average (expressed as a
percentage) of the Contribution Percentages of the Eligible
Participants in a group.
CONTRIBUTION PERCENTAGE means the ratio (expressed as a percentage) of
the Eligible Participant's Contribution Percentage Amounts to the
Eligible Participant's Compensation for the Plan Year. In
modification of the foregoing, Compensation shall be limited to the
Compensation received while an Active Participant. For an Eligible
Participant for whom such Contribution Percentage Amounts for the Plan
Year are zero, the percentage is zero.
CONTRIBUTION PERCENTAGE AMOUNTS means the sum of the Participant
Contributions and Matching Contributions (that are not Qualified
Matching Contributions) under this Plan on behalf of the Eligible
Participant for the Plan Year. Such Contribution Percentage Amounts
shall not include Matching Contributions that are forfeited either to
correct Excess Aggregate Contributions or because the Contributions to
which they relate are Excess Elective Deferrals, Excess Contributions
or Excess Aggregate Contributions. Under such rules as the Secretary
of the Treasury shall prescribe in Code Section 401(k)(3)(D), the
Employer may elect to include Qualified Nonelective Contributions and
Qualified Matching Contributions under this Plan which were not used
in computing the Actual Deferral Percentage in computing the
Contribution Percentage. The Employer may also elect to use Elective
Deferral Contributions in computing the Contribution Percentage so
long as the Average Actual Deferral Percentage test is met before the
Elective Deferral Contributions are used in the Average Contribution
Percentage test and continues to be met following the exclusion of
those Elective Deferral Contributions that are used to meet the
Average Contribution Percentage test.
ELECTIVE DEFERRAL CONTRIBUTIONS means employer contributions made on
behalf of a participant pursuant to an election to defer under any
qualified cash or deferred arrangement as described in Code Section
401(k), any simplified employee pension cash or deferred arrangement
as described in Code Section 402(h)(1)(B), any eligible deferred
compensation plan under Code Section 457, any plan as described under
Code Section 501(c)(18), and any employer contributions made on behalf
of a participant for the purchase of an annuity contract under Code
Section 403(b) pursuant to a salary reduction agreement. Elective
Deferral Contributions shall not include any deferrals properly
distributed as excess Annual Additions.
ELIGIBLE PARTICIPANT means, for purposes of the Actual Deferral
Percentage, any Employee who is eligible to make an Elective Deferral
Contribution, and shall include the following: any Employee who would
be a plan participant if he chose to make required contributions; any
Employee who can make Elective Deferral Contributions but who has
changed the amount of his Elective Deferral Contribution to 0%, or
whose eligibility to make an Elective Deferral Contribution is
suspended because of a loan, distribution or hardship withdrawal; and,
any Employee who is not able to make an Elective Deferral Contribution
because of Code Section 415(c)(1) - Annual Additions limits. The
Actual Deferral Percentage for any such included Employee is zero.
Eligible Participant means, for purposes of the Average Contribution
Percentage, any Employee who is eligible to make a Participant
Contribution or to receive a Matching Contribution, and shall include
the following: any Employee who would be a plan participant if he
chose to make required contributions; any Employee who can make a
Participant Contribution or receive a matching contribution but who
has made an election not to participate in the Plan; and any Employee
who is not able to make a Participant Contribution or receive a
matching contribution because of Code Section 415(c)(1) or 415(e)
limits. The Average Contribution Percentage for any such included
Employee is zero.
EXCESS AGGREGATE CONTRIBUTIONS means, with respect to any Plan Year,
the excess of:
(1) The aggregate Contributions taken into account in computing the
numerator of the Contribution Percentage actually made on behalf
of Highly Compensated Employees for such Plan Year, over
(2) The maximum amount of such Contributions permitted by the Average
Contribution Percentage test (determined by reducing Contributions
made on behalf of Highly Compensated Employees in order of their
Contribution Percentages beginning with the highest of such
percentages).
Such determination shall be made after first determining Excess
Elective Deferrals and then determining Excess Contributions.
EXCESS CONTRIBUTIONS means, with respect to any Plan Year, the excess
of:
(1) The aggregate amount of Contributions actually taken into account
in computing the Actual Deferral Percentage of Highly Compensated
Employees for such Plan Year, over
(2) The maximum amount of such Contributions permitted by the Actual
Deferral Percentage test (determined by reducing Contributions
made on behalf of Highly Compensated Employees in order of the
Actual Deferral Percentages, beginning with the highest of such
percentages).
A Participant's Excess Contributions for a Plan Year will be reduced
by the amount of Excess Elective Deferrals, if any, previously
distributed to the Participant for the taxable year ending in that
Plan Year.
EXCESS ELECTIVE DEFERRALS means those Elective Deferral Contributions
that are includible in a Participant's gross income under Code Section
402(g) to the extent such Participant's Elective Deferral
Contributions for a taxable year exceed the dollar limitation under
such Code section. Excess Elective Deferrals shall be treated as
Annual Additions, as defined in the CONTRIBUTION LIMITATION SECTION of
Article III, under the Plan, unless such amounts are distributed no
later than the first April 15 following the close of the Participant's
taxable year.
FAMILY MEMBER means an Employee, or former employee; the spouse of the
Employee or former employee, and the lineal ascendants or descendants
and the spouses of such lineal ascendants or descendants of any such
Employee or former employee. In determining if an individual is a
family member as to an Employee or former employee, legal adoptions
are taken into account.
MATCHING CONTRIBUTIONS means employer contributions made to this or
any other defined contribution plan, or to a contract described in
Code Section 403(b), on behalf of a participant on account of a
Participant Contribution made by such participant, or on account of a
participant's Elective Deferral Contributions, under a plan maintained
by the employer.
PARTICIPANT CONTRIBUTIONS means contributions made to any plan by or
on behalf of a participant that are included in the participant's
gross income in the year in which made and that are maintained under a
separate account to which earnings and losses are allocated.
QUALIFIED MATCHING CONTRIBUTIONS means Matching Contributions which
are subject to the distribution and nonforfeitability requirements
under Code Section 401(k) when made.
QUALIFIED NONELECTIVE CONTRIBUTIONS means any employer contributions
(other than Matching Contributions) which an employee may not elect to
have paid to him in cash instead of being contributed to the plan and
which are subject to the distribution and nonforfeitability
requirements under Code Section 401(k) when made.
(b) A Participant may assign to this Plan any Excess Elective Deferrals
made during a taxable year by notifying the Plan Administrator in
writing on or before the first following March 1 of the amount of the
Excess Elective Deferrals to be assigned to the Plan. A Participant
is deemed to notify the Plan Administrator of any Excess Elective
Deferrals that arise by taking into account only those Elective
Deferral Contributions made to this Plan and any other plans of the
Employer or a Controlled Group member and reducing such Excess
Elective Deferrals by the amount of Excess Contributions, if any,
previously distributed for the Plan Year beginning in that taxable
year. The Participant's claim for Excess Elective Deferrals shall be
accompanied by the Participant's written statement that if such
amounts are not distributed, such Excess Elective Deferrals, when
added to amounts deferred under other plans or arrangements described
in Code Sections 401(k), 408(k) or 403(b), will exceed the limit
imposed on the Participant by Code Section 402(g) for the year in
which the deferral occurred. The Excess Elective Deferrals assigned
to this Plan can not exceed the Elective Deferral Contributions
allocated under this Plan for such taxable year.
Notwithstanding any other provisions of the Plan, Elective Deferral
Contributions in an amount equal to the Excess Elective Deferrals
assigned to this Plan, plus any income and minus any loss allocable
thereto, shall be distributed no later than April 15 to any
Participant to whose Account Excess Elective Deferrals were assigned
for the preceding year and who claims Excess Elective Deferrals for
such taxable year.
The income or loss allocable to such Excess Elective Deferrals shall
be equal to the income or loss allocable to the Participant's Elective
Deferral Contributions for the taxable year in which the excess
occurred multiplied by a fraction. The numerator of the fraction is
the Excess Elective Deferrals. The denominator of the fraction is the
closing balance without regard to any income or loss occurring during
such taxable year (as of the end of such taxable year) of the
Participant's Account resulting from Elective Deferral Contributions.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Elective Deferrals, plus
any income and minus any loss allocable thereto, shall be forfeited.
These Forfeitures shall be used to offset the earliest Employer
Contribution due after the Forfeiture arises.
(c) As of the end of each Plan Year after Excess Elective Deferrals have
been determined, one of the following tests must be met:
(1) The Average Actual Deferral Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year is not more
than the Average Actual Deferral Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 1.25.
(2) The Average Actual Deferral Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year is not more
than the Average Actual Deferral Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 2 and the difference between the Average Actual
Deferral Percentages is not more than 2.
The Actual Deferral Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to
have Elective Deferral Contributions (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if used in
computing the Actual Deferral Percentage) allocated to his account
under two or more plans or arrangements described in Code Section
401(k) that are maintained by the Employer or a Controlled Group
member shall be determined as if all such Elective Deferral
Contributions (and, if applicable, such Qualified Nonelective
Contributions or Qualified Matching Contributions, or both) were made
under a single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have
different Plan Years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under the regulations
under Code Section 401(k) or permissibly disaggregated as provided.
In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of such Code sections only if aggregated with this Plan,
then this section shall be applied by determining the Actual Deferral
Percentage of employees as if all such plans were a single plan.
Plans may be aggregated in order to satisfy Code Section 401(k) only
if they have the same Plan Year.
For purposes of determining the Actual Deferral Percentage of an
Eligible Participant who is a five-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if used in computing the Actual
Deferral Percentage) and Compensation of such Eligible Participant
include the Elective Deferral Contributions (and, if applicable,
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both) and Compensation for the Plan Year of Family
Members. Family Members, with respect to such Highly Compensated
Employees, shall be disregarded as separate employees in determining
the Actual Deferral Percentage both for Participants who are Nonhighly
Compensated Employees and for Participants who are Highly Compensated
Employees.
For purposes of determining the Actual Deferral Percentage, Elective
Deferral Contributions, Qualified Nonelective Contributions and
Qualified Matching Contributions must be made before the last day of
the 12-month period immediately following the Plan Year to which
contributions relate.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Actual Deferral Percentage test and the
amount of Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
The determination and treatment of the Contributions used in computing
the Actual Deferral Percentage shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
If the Plan Administrator should determine during the Plan Year that
neither of the above tests is being met, the Plan Administrator may
adjust the amount of future Elective Deferral Contributions of the
Highly Compensated Employees.
Notwithstanding any other provisions of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than the last day of each Plan Year to
Participants to whose Accounts such Excess Contributions were
allocated for the preceding Plan Year. If such excess amounts are
distributed more than 2 1/2 months after the last day of the Plan Year
in which such excess amounts arose, a ten (10) percent excise tax will
be imposed on the employer maintaining the plan with respect to such
amounts. Such distributions shall be made beginning with the Highly
Compensated Employee(s) who has the greatest Actual Deferral
Percentage, reducing his Actual Deferral Percentage to the next
highest Actual Deferral Percentage level. Then, if necessary,
reducing the Actual Deferral Percentage of the Highly Compensated
Employees at the next highest level, and continuing in this manner
until the average Actual Deferral Percentage of the Highly Compensated
Group satisfies the Actual Deferral Percentage test. Excess
Contributions of Participants who are subject to the family member
aggregation rules shall be allocated among the Family Members in
proportion to the Elective Deferral Contributions (and amounts treated
as Elective Deferral Contributions) of each Family Member that is
combined to determine the combined Actual Deferral Percentage.
Excess Contributions shall be treated as Annual Additions, as defined
in the CONTRIBUTION LIMITATION SECTION of Article III, under the Plan.
The Excess Contributions shall be adjusted for income or loss. The
income or loss allocable to such Excess Contributions shall be equal
to the income or loss allocable to the Participant's Elective Deferral
Contributions (and, if applicable, Qualified Nonelective Contributions
or Qualified Matching Contributions, or both) for the Plan Year in
which the excess occurred multiplied by a fraction. The numerator of
the fraction is the Excess Contributions. The denominator of the
fraction is the closing balance without regard to any income or loss
occurring during such Plan Year (as of the end of such Plan Year) of
the Participant's Account resulting from Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if used in computing the Actual
Deferral Percentage).
Excess Contributions shall be distributed from the Participant's
Account resulting first from Elective Deferral Contributions not the
basis for Matching Contributions, then if necessary, from Elective
Deferral Contributions which are the basis for Matching Contributions.
If such Excess Contributions exceed the balance in the Participant's
Account resulting from Elective Deferral Contributions, the balance
shall be distributed from the Participant's Account resulting from
Qualified Matching Contributions (if applicable) and Qualified
Nonelective Contributions, respectively.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Contributions, plus any
income and minus any loss allocable thereto, shall be forfeited.
These Forfeitures shall be used to offset the earliest Employer
Contribution due after the Forfeiture arises.
(d) As of the end of each Plan Year, one of the following tests must be
met:
(1) The Average Contribution Percentage for Eligible Participants who
are Highly Compensated Employees for the Plan Year is not more
than the Average Contribution Percentage for Eligible Participants
who are Nonhighly Compensated Employees for the Plan Year
multiplied by 1.25.
(2) The Average Contribution Percentage for Eligible Participants who
are Highly Compensated Employees for the Plan Year is not more
than the Average Contribution Percentage for Eligible Participants
who are Nonhighly Compensated Employees for the Plan Year
multiplied by 2 and the difference between the Average
Contribution Percentages is not more than 2.
If one or more Highly Compensated Employees participate in both a cash
or deferred arrangement and a plan subject to the Average Contribution
Percentage test maintained by the Employer or a Controlled Group
member and the sum of the Average Actual Deferral Percentage and
Average Contribution Percentage of those Highly Compensated Employees
subject to either or both tests exceeds the Aggregate Limit, then the
Contribution Percentage of those Highly Compensated Employees who also
participate in a cash or deferred arrangement will be reduced
(beginning with such Highly Compensated Employees whose Contribution
Percentage is the highest) so that the limit is not exceeded. The
amount by which each Highly Compensated Employee's Contribution
Percentage is reduced shall be treated as an Excess Aggregate
Contribution. The Average Actual Deferral Percentage and Average
Contribution Percentage of the Highly Compensated Employees are
determined after any corrections required to meet the Average Actual
Deferral Percentage and Average Contribution Percentage tests.
Multiple use does not occur if either the Average Actual Deferral
Percentage or Average Contribution Percentage of the Highly
Compensated Employees does not exceed 1.25 multiplied by the Average
Actual Deferral Percentage and Average Contribution Percentage of the
Nonhighly Compensated Employees.
The Contribution Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to
have Contribution Percentage Amounts allocated to his account under
two or more plans described in Code Section 401(a) or arrangements
described in Code Section 401(k) that are maintained by the Employer
or a Controlled Group member shall be determined as if the total of
such Contribution Percentage Amounts was made under each plan. If a
Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement. Notwithstanding the
foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under the regulations under Code Section 401(m) or
permissibly disaggregated as provided.
In the event that this Plan satisfies the requirements of Code
Sections 401(m), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of Code sections only if aggregated with this Plan, then
this section shall be applied by determining the Contribution
Percentages of Eligible Participants as if all such plans were a
single plan. Plans may be aggregated in order to satisfy Code Section
401(m) only if they have the same Plan Year.
For purposes of determining the Contribution Percentage of an Eligible
Participant who is a five-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Contribution Percentage
Amounts and Compensation of such Participant shall include
Contribution Percentage Amounts and Compensation for the Plan Year of
Family Members. Family Members, with respect to Highly Compensated
Employees, shall be disregarded as separate employees in determining
the Contribution Percentage both for employees who are Nonhighly
Compensated Employees and for employees who are Highly Compensated
Employees.
For purposes of determining the Contribution Percentage, Participant
Contributions are considered to have been made in the Plan Year in
which contributed to the Plan. Matching Contributions and Qualified
Nonelective Contributions will be considered made for a Plan Year if
made no later than the end of the 12-month period beginning on the day
after the close of the Plan Year.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Contribution Percentage test and the
amount of Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
The determination and treatment of the Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
Notwithstanding any other provisions of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if not vested, or distributed, if vested, no later
than the last day of each Plan Year to Participants to whose Accounts
such Excess Aggregate Contributions were allocated for the preceding
Plan Year. If such Excess Aggregate Contributions are distributed
more than 2 1/2 months after the last day of the Plan Year in which
such excess amounts arose, a ten (10) percent excise tax will be
imposed on the employer maintaining the plan with respect to those
amounts. Excess Aggregate Contributions will be distributed beginning
with the Highly Compensated Employee(s) who has the greatest
Contribution Percentage, reducing his contribution percentage to the
next highest level. Then, if necessary, reducing the Contribution
Percentage of the Highly Compensated Employee at the next highest
level, and continuing in this manner until the Actual Contribution
Percentage of the Highly Compensated Group satisfies the Actual
Contribution Percentage Test. Excess Aggregate Contributions of
Participants who are subject to the family member aggregation rules
shall be allocated among the Family Members in proportion to the
Employee and Matching Contributions (or amounts treated as Matching
Contributions) of each Family Member that is combined to determine the
combined Contribution Percentage. Excess Aggregate Contributions
shall be treated as Annual Additions, as defined in the CONTRIBUTION
LIMITATION SECTION of Article III, under the Plan.
The Excess Aggregate Contributions shall be adjusted for income or
loss. The income or loss allocable to such Excess Aggregate
Contributions shall be equal to the income or loss allocable to the
Participant's Contribution Percentage Amounts for the Plan Year in
which the excess occurred multiplied by a fraction. The numerator of
the fraction is the Excess Aggregate Contributions. The denominator of
the fraction is the closing balance without regard to any income or
loss occurring during such Plan Year (as of the end of such Plan Year)
of the Participant's Account resulting from Contribution Percentage
Amounts.
Excess Aggregate Contributions shall be distributed from the
Participant's Account resulting from Participant Contributions that
are not required as a condition of employment or participation or for
obtaining additional benefits from Employer Contributions. If such
Excess Aggregate Contributions exceed the balance in the Participant's
Account resulting from such Participant Contributions, the balance
shall be forfeited, if not vested, or distributed, if vested, on a
pro-rata basis from the Participant's Account resulting from
Contribution Percentage Amounts. These Forfeitures shall be used to
offset the earliest Employer Contribution due after the Forfeiture
arises.
<PAGE>
ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
SECTION 4.01 - INVESTMENT OF CONTRIBUTIONS.
All Contributions are forwarded by the Employer to the Insurer to be
deposited under the Group Contract or forwarded to the Trustee to be deposited
in the Trust Fund.
Investment of Contributions is governed by the provisions of the Trust,
the Group Contract and any other funding arrangement in which the Trust Fund
is or may be invested. To the extent permitted by the Trust, Group Contract
or other funding arrangement, the parties named below shall direct the
Contributions to any of the accounts available under the Trust or Group
Contract and may request the transfer of assets resulting from those
Contributions between such accounts. A Participant may not direct the Trustee
to invest the Participant's Account in collectibles. Collectibles means any
work of art, rug or antique, metal or gem, stamp or coin, alcoholic beverage
or other tangible personal property specified by the Secretary of Treasury.
To the extent that a Participant does not direct the investment of his
Account, such Account shall be invested ratably in the accounts available
under the Trust or Group Contract in the same manner as the undirected
Accounts of all other Participants. The Vested Accounts of all Inactive
Participants may be segregated and invested separately from the Accounts of
all other Participants.
The Trust Fund shall be valued at current fair market value as of the last
day of the last calendar month ending in the Plan Year and, at the discretion
of the Trustee, may be valued more frequently. The valuation shall take into
consideration investment earnings credited, expenses charged, payments made
and changes in the value of the assets held in the Trust Fund. The Account of
a Participant shall be credited with its share of the gains and losses of the
Trust Fund. That part of a Participant's Account invested in a funding
arrangement which establishes an account or accounts for such Participant
thereunder shall be credited with the gain or loss from such account or
accounts. That part of a Participant's Account which is invested in other
funding arrangements shall be credited with a proportionate share of the gain
or loss of such investments. The share shall be determined by multiplying the
gain or loss of the investment by the ratio of the part of the Participant's
Account invested in such funding arrangement to the total of the Trust Fund
invested in such funding arrangement.
At least annually, the Named Fiduciary shall review all pertinent Employee
information and Plan data in order to establish the funding policy of the Plan
and to determine appropriate methods of carrying out the Plan's objectives.
The Named Fiduciary shall inform the Trustee and any Investment Manager of the
Plan's short-term and long-term financial needs so the investment policy can be
coordinated with the Plan's financial requirements.
(a) Employer Contributions other than Elective Deferral Contributions:
The Participant shall direct the investment of such Employer
Contributions and transfer of assets resulting from those
Contributions.
(b) Elective Deferral Contributions: The Participant shall direct the
investment of Elective Deferral Contributions and transfer of assets
resulting from those Contributions.
(c) Rollover Contributions: The Participant shall direct the investment
of Rollover Contributions and transfer of assets resulting from those
Contributions.
However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and Plan assets which are not subject
to Participant direction.
SECTION 4.01A -- INVESTMENT IN QUALIFYING EMPLOYER SECURITIES.
Participants in the Plan shall be entitled to invest all or any portion of
their Account in Qualifying Employer Securities.
Once investment in Qualifying Employer Securities is made available to
Eligible Employees, then it shall continue to be available unless the Plan and
Trust is amended to disallow such available investment. In the absence of
such election, such Eligible Employees shall be deemed to have elected to have
their Accounts invested wholly in the Investment Funds. Once an election is
made, it shall be considered to continued until a new election is made.
Any dividends payable on the Qualifying Employer Securities shall be
invested according to the Participant's current investment election.
If the securities of the Employer are not publicly traded and if no market
or an extremely thin market exists for the Qualifying Employer Securities, so
that a reasonable valuation may not be obtained from the market place, then
such Qualifying Employer Securities must be valued at least annually by an
independent appraiser who is not associated with the employer, the Plan
Administrator, the Trustee, or any person related to any fiduciary under the
Plan. The independent appraiser may be associated with a person who is merely
a contract administrator with respect to the Plan, but who exercises no
discretionary authority and is not a Plan fiduciary.
If there is a public market for Qualifying Employer Securities of the type
held by the Plan, then the Plan Administrator may use as the value of the
shares the price at which such shares traded in such market, or an average of
the bid and asked prices for such shares in such market, provided that such
value is representative of the fair market value of such shares in the opinion
of the Plan Administrator. If the Qualifying Employer Securities do not trade
on the annual valuation date or if the market is very thin on such date, then
the Plan Administrator may use the average of trade prices for a period of
time ending on such date, provided that such value is representative of the
fair market value of such shares in the opinion of the Plan Administrator.
The value of a Participant's Qualifying Employer Securities Account may be
expressed in units.
For purposes of determining the annual valuation of the Plan and for
reporting to Participants and regulatory authorities, the assets of the Plan
shall be valued at least annually on the Valuation Date which corresponds to
the last day of the Plan Year. The fair market value of Qualifying Employer
Securities shall be determined on such a Valuation Date. The average of the
bid and asked prices of Qualifying Employer Securities as of the date of the
transaction shall apply for purposes of valuing distributions and other
transactions of the Plan to the extent such value is representative of the
fair market value of such shares in the opinion of the Plan Administrator.
All purchases of Qualifying Employer Securities shall be made at a price,
or prices, which, in the judgment of the Plan Administrator, do not exceed the
fair market value of such Qualifying Employer Securities.
In the event that the Trustee acquires shares of Qualifying Employer
Securities by purchase from a "disqualified person" as defined in Code
Section 4975(e) (2), in exchange for cash or other assets of the Trust, the
terms of such purchase shall contain the provision that in the event that
there is a final determination by the Internal Revenue Service or court of
competent jurisdiction that the fair market value of such shares of Qualifying
Employer Securities as of the date of purchase was less than the purchase
price paid by the Trustee, then the seller shall pay or transfer, as the case
may be, to the Trustee an amount of cash, shares of Qualifying Employer
Securities, or any combination thereof equal in value to the difference
between the purchase price and said fair market value for all such shares. In
the event that cash and/or shares of Qualifying Employer Securities are paid
and/or transferred to the Trustee under this provision, shares of Qualifying
Employer Securities shall be valued at their fair market value as of the date
of said purchase, and interest at a reasonable rate from the date of purchase
to the date of payment shall be paid by the seller on the amount of cash paid.
The Plan Administrator may direct the Trustee to sell, resell or otherwise
dispose of Qualifying Employer Securities to any person, including the
Employer, provided that any such sales to any disqualified person, including
the Employer, will be made at not less than the fair market value and no
commission is charged. Any such sale shall be made in conformance with
Section 408(e) of ERISA.
In the event the Plan Administrator directs the Trustee to dispose of any
Qualifying Employer Securities held as Trust Assets under circumstances which
require registration and/or qualification of the securities under applicable
Federal or state securities laws, then the Employer, at its own expense, will
take or cause to be taken any and all such action as may be necessary or
appropriate to effect such registration and/or qualification.
If SEC filing is required, the Qualifying Employer Securities provisions
set forth in this Plan restatement will not be made available to Participants
until the later of the effective date of the Plan restatement or the date the
Plan and any other necessary documentation has been filed for registration
with the SEC by the Employer.
SECTION 4.01B -- LIMITATION ON INVESTMENT IN QUALIFYING EMPLOYER
SECURITIES BY SOME PARTICIPANTS.
Participants who are directors, officers, or beneficial owners of 10% or
more of the outstanding securities of the Employer, and any other persons
subject to Section 16 of the Securities Exchange Act of 1934 as amended
("Exchange Act") shall not be permitted to increase AND decrease or decrease
AND increase the level of investment in the Qualifying Employer Securities
Account in any six month period, but shall be permitted to increase such level
one or more times OR decrease such level one or more times during any six
month period. Additionally, such Participants who cease participation in the
Qualifying Employer Securities Account, or who reduce their participation in
such account to a nominal level, may not participate (e.g., direct that
investments be made on their behalf) under the Qualifying Employer Securities
Account again for at least six months. Any transfers of funds by such
Participants into or from the Qualifying Employer Securities Account may only
be made during time periods permitted by securities regulations and only after
approval by the Employer. In general, any transfer into the Qualifying
Employer Securities Account shall not be permitted within six months of any
transfer or distribution from the Qualifying Employer Securities Account, and
vice versa, but multiple transfers into OR multiple transfers or distributions
from the Qualifying Employer Securities Account may be permissible. Subject
to certain limited exceptions, Participants who are directors, officers,
beneficial owners of 10% or more of the outstanding securities by the
Employer, and other persons subject to Section 16 of the Exchange Act making
withdrawals of investments under the Qualifying Employer Securities Account
must cease further purchases/investment under the Qualifying Employer
Securities Account for six months.
With respect to Participants who are directors, officers, beneficial
owners of 10% or more of the outstanding securities of the Employer, and other
persons subject to Section 16 of the Exchange Act, transactions under this
Plan are intended to comply with all applicable conditions of Rule 16b-3 or
its successors under the Exchange Act. To the extent any provisions of the
Plan or action by the Plan Administrator fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed advisable by
the Plan Administrator.
SECTION 4.02 -- PURCHASE OF INSURANCE.
The purchase of life insurance is available under this Plan for the
purpose of providing incidental death benefits.
An Active Participant may elect to have any part of his Account which
results from Employer Contributions applied to purchase life insurance
coverage on his life.
The Trustee shall apply for and will be the owner of any Insurance Policy
purchased under the terms of the Plan. The purchase shall be subject to the
provisions of this section, the distribution of benefits provisions of
Article VI, and the beneficiary provisions of the BENEFICIARY SECTION of
Article IX. If the Participant has a spouse to whom he has been continuously
married for at least one year, such spouse shall be his Beneficiary under the
Insurance Policy on the Participant's life unless (a) a qualified election has
been made according to the provisions of the ELECTION PROCEDURES SECTION of
Article VI or (b) the Trustee has been named as Beneficiary. If the Trustee
is named as Beneficiary, upon the death of the Participant, the Trustee shall
be required to pay over all proceeds of the Insurance Policy to the
Participant's Beneficiary or spouse, as the case may be, according to the
distribution of benefits provisions of Article VI. Under no circumstances
shall the Trust retain any part of the proceeds. In the event of any conflict
between the terms of this Plan and the terms of any Insurance Policy purchased
hereunder, the Plan provisions shall control.
The purchase of insurance shall be subject to the limitations that may be
imposed by the Insurer under the applicable Insurance Policy. The Insurance
Policy may provide for waiver of premium for disability and for substandard
extra insurance coverage if the insured is not a standard risk.
The total of all insurance premiums provided by Employer Contributions for
a Participant shall be limited to a percentage of all Employer Contributions
made for him. All such ordinary life insurance premiums shall be limited to a
percentage which is less than 50%. All such term life and universal life
insurance premiums shall be limited to a percentage which is not more than
25%. If both ordinary life insurance and term life or universal life
insurance is purchased, 1/2 of all such ordinary life insurance premiums and
all such other life insurance premiums shall be limited to a percentage which
is not more than 25%. Ordinary life insurance policies are policies with both
nondecreasing death benefits and nonincreasing premiums.
Any dividends declared under an Insurance Policy for a Participant may,
within the terms of the Insurance Policy, be applied to reduce the earliest
premium due, purchase paid-up insurance coverage, accumulate under the policy
to provide additional death benefit or be credited to the Participant's
Account which is included in the Investment Fund. In the absence of any
direction, such dividends shall be applied to reduce the earliest premium due
for such amount of insurance.
A Participant may elect to have amounts deducted from his Account to pay
insurance premiums. The total amount deducted cannot exceed the amount of
Contributions credited to his Account which were not used to purchase
insurance, but could have been.
If a decrease in the amount of life insurance is necessary, any cash
values of the terminated insurance shall be retained in the Participant's
Account and added to the Investment Fund.
SECTION 4.03 -- TRANSFER OF OWNERSHIP.
Any transfer of ownership under this section shall be subject to the
distribution of benefits provisions of Article VI.
Upon the request of a Participant, the Employer may purchase for its cash
value a personal life insurance policy issued to, and insuring the life of,
the Participant. Such policy shall be immediately transferred from the
Employer to the Trustee. The cash value of the purchased policy shall be a
part of the Employer Contribution for the Plan Year. Any such purchase shall
be accomplished only under an appropriate written agreement between the
Participant, the Trustee and the Employer. In lieu of the Employer's purchase
of such policy and at the Employer's direction, the Trustee may purchase the
policy directly from the Participant. These provisions shall not be available
if the policy is subject to a policy loan or similar lien. The purchase of
and future premiums for any such policy shall be subject to the limitations in
the PURCHASE OF INSURANCE SECTION of Article IV.
If the Insurance Policy allows, a Participant may pay the Trustee an
amount equal to the cash values of any Insurance Policy for him. Such payment
shall become a part of his Account. Upon receiving the payment, the Trustee
shall transfer ownership of the policy to the Participant. This transfer of
ownership is not a distribution from the Plan. This option shall only be
available to a Participant if the policy would, but for the sale, be
surrendered by the Plan.
If a distribution of a Participant's Vested Account would include the cash
values of an Insurance Policy for him, the Participant may have ownership of
such policy transferred to himself without making payment to the Trustee if
permitted by such Insurance Policy. Any Insurance Policy transferred to the
Participant for which he has not made payment to the Trustee is a distribution
from the Plan.
In applying the provisions of this section, all Participants in similar
circumstances shall be treated in a similar manner. Participants who are
highly compensated employees, as defined in Code Section 414(q),(officers,
shareholders or highly compensated Employees before the first Yearly Date
after December 31, 1988) shall not be treated in a manner more favorable than
that afforded all other Participants.
SECTION 4.04 -- TERMINATION OF INSURANCE.
The termination of insurance under this section shall be subject to the
distribution of benefits provisions of Article VI.
No premium payments shall be made under this Plan for an Inactive
Participant. If a Participant becomes an Inactive Participant before
Retirement Date, the Trustee may either use the cash values of the Insurance
Policy for the Participant to provide paid-up insurance or may surrender the
Insurance Policy. The cash values of a surrendered Insurance Policy are
retained in the Participant's Account and added to the Investment Fund. The
purchase of paid-up insurance shall be subject to the provisions of the
Insurance Policy. If the Participant ceases to be an Employee before
Retirement Date, the Participant may elect to have the ownership of the
Insurance Policy transferred as provided in the TRANSFER OF OWNERSHIP SECTION
of Article IV.
On a Participant's Retirement Date, all or a part of any Insurance Policy
for him, the ownership of which has not been transferred to him, shall
terminate. The cash values shall be paid to the Participant in cash or
applied to provide an income for him according to the provisions of the
Insurance Policy. In any event, no portion of the value of any Insurance
Policy shall be used to continue life insurance protection under the Plan
beyond actual retirement.
<PAGE>
ARTICLE V
BENEFITS
SECTION 5.01 -- RETIREMENT BENEFITS.
On a Participant's Retirement Date, his Vested Account shall be
distributed to him according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX.
SECTION 5.02 -- DEATH BENEFITS.
If a Participant dies before his Annuity Starting Date, his Vested Account
shall be distributed according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX.
SECTION 5.03 -- VESTED BENEFITS.
A Participant may receive a distribution of his Vested Account at any time
after he ceases to be an Employee, provided he has not again become an
Employee. If such amount is not payable under the provisions of the SMALL
AMOUNTS SECTION of Article IX, it will be distributed only if the Participant
so elects. The Participant's election shall be subject to the requirements in
the ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit.
If a Participant does not receive an earlier distribution according to the
provisions of this section or the SMALL AMOUNTS SECTION of Article IX, upon
his Retirement Date or death, his Vested Account shall be applied according to
the provisions of the RETIREMENT BENEFITS SECTION or the DEATH BENEFITS
SECTION of Article V.
SECTION 5.04 -- WHEN BENEFITS START.
Benefits under the Plan begin when a Participant retires, dies or ceases
to be an Employee, whichever applies, as provided in the preceding sections of
this article. The start of benefits is subject to the qualified election
procedures of Article VI.
Unless otherwise elected, benefits shall begin before the sixtieth day
following the close of the Plan Year in which the latest date below occurs:
(a) The date the Participant attains age 65 (Normal Retirement Age, if
earlier).
(b) The tenth anniversary of the Participant's Entry Date.
(c) The date the Participant ceases to be an Employee.
Notwithstanding the foregoing, the failure of a Participant and spouse to
consent to a distribution while a benefit is immediately distributable, within
the meaning of the ELECTION PROCEDURES SECTION of Article VI, shall be deemed
to be an election to defer commencement of payment of any benefit sufficient
to satisfy this section.
The Participant may elect to have his benefits begin after the latest date
for beginning benefits described above, subject to the provisions of this
section. The Participant shall make the election in writing and deliver the
signed statement of election to the Plan Administrator before Normal
Retirement Date or the date he ceases to be an Employee, if later. The
election must describe the form of distribution and the date the benefits will
begin. The Participant shall not elect a date for beginning benefits or a
form of distribution that would result in a benefit payable when he dies which
would be more than incidental within the meaning of governmental regulations.
Benefits shall begin by the Participant's Required Beginning Date, as
defined in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS
SECTION of Article VI.
Contributions which are used to compute the Actual Deferral Percentage, as
defined in the EXCESS AMOUNTS SECTION of Article III, may be distributed upon
disposition by the Employer of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) used by the Employer in a trade or business
or disposition by the Employer of the Employer's interest in a subsidiary
(within the meaning of Code Section 409(d)(3)) if the transferee corporation
is not a Controlled Group member, the Employee continues employment with the
transferee corporation and the transferor corporation continues to maintain
the Plan. Such distributions made after March 31, 1988, must be made in a
single sum.
SECTION 5.05 -- WITHDRAWAL PRIVILEGES.
A Participant who has attained age 59 1/2 may withdraw all or any portion
of his Vested Account which results from the following Contributions:
Elective Deferral Contributions
Matching Contributions
Discretionary Contributions
Rollover Contributions
A Participant may make only two such withdrawals in any 12-month period.
A Participant may withdraw all or any portion of his Vested Account which
results from the following Contributions
Elective Deferral Contributions
Matching Contributions
Discretionary Contributions
Rollover Contributions
in the event of hardship due to an immediate and heavy financial need.
Withdrawals from the Participant's Account resulting from Elective Deferral
Contributions shall be limited to the amount of the Participant's Elective
Deferral Contributions. Immediate and heavy financial need shall be limited
to: (i) expenses incurred or necessary for medical care, described in Code
Section 213(d), of the Participant, the Participant's spouse, or any
dependents of the Participant (as defined in Code Section 152); (ii) purchase
(excluding mortgage payments) of a principal residence for the Participant;
(iii) payment of tuition and related educational fees and the payment of room
and board expenses for the next 12 months of post-secondary education for the
Participant, his spouse, children or dependents; (iv) the need to prevent the
eviction of the Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence; or (v) any other
distribution which is deemed by the Commissioner of Internal Revenue to be
made on account of immediate and heavy financial need as provided in Treasury
regulations. The Participant's request for a withdrawal shall include his
written statement that an immediate and heavy financial need exists and
explain its nature.
No withdrawal shall be allowed which is not necessary to satisfy such
immediate and heavy financial need. Such withdrawal shall be deemed necessary
only if all of the following requirements are met: (i) the distribution is
not in excess of the amount of the immediate and heavy financial need of the
Participant (including amounts necessary to pay any Federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution); (ii) the Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available under all
plans maintained by the Employer; (iii) the Plan, and all other plans
maintained by the Employer, provide that the Participant's elective
contributions and employee contributions will be suspended for at least 12
months after receipt of the hardship distribution; and (iv) the Plan, and all
other plans maintained by the Employer, provide that the Participant may not
make elective contributions for the Participant's taxable year immediately
following the taxable year of the hardship distribution in excess of the
applicable limit under Code Section 402(g) for such next taxable year less the
amount of such Participant's elective contributions for the taxable year of
the hardship distribution. The Plan will suspend elective contributions and
employee contributions for 12 months and limit elective deferrals as provided
in the preceding sentence. A Participant shall not cease to be an Eligible
Participant, as defined in the EXCESS AMOUNTS SECTION of Article III, merely
because his elective contributions or employee contributions are suspended.
A request for withdrawal shall be in writing on a form furnished for that
purpose and delivered to the Plan Administrator before the withdrawal is to
occur. The Participant's request shall be subject to the requirements in the
ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit payable in a form other than a Qualified Joint and Survivor
Form.
A forfeiture shall not occur solely as a result of a withdrawal.
SECTION 5.06 - LOANS TO PARTICIPANTS.
Loans shall be made available to all Participants on a reasonably
equivalent basis. For purposes of this section, Participant means any
Participant or Beneficiary who is a party-in-interest, within the meaning of
Section 3(14) of the Employee Retirement Income Security Act of 1974 (ERISA).
Loans shall not be made to highly compensated employees, as defined in Code
Section 414(q), in an amount greater than the amount made available to other
Participants.
No loans will be made to any shareholder-employee or owner-employee. For
purposes of this requirement, a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns (or
is considered as owning within the meaning of Code Section 318(a)(1)), on any
day during the taxable year of such corporation, more than 5% of the
outstanding stock of the corporation.
A loan to a Participant shall be a Participant-directed investment of his
Account. No Account other than the borrowing Participant's Account shall
share in the interest paid on the loan or bear any expense or loss incurred
because of the loan.
The number of outstanding loans shall be limited to one. No more than one
loan will be approved for any Participant in any 12-month period. The minimum
amount of any loan shall be $1,000.
Loans must be adequately secured and bear a reasonable rate of interest.
The amount of the loan shall not exceed the maximum amount that may be
treated as a loan under Code Section 72(p)(rather than a distribution) to the
Participant and shall be equal to the lesser of (a) or (b) below:
(a) $50,000 reduced by the highest outstanding loan balance of loans
during the one-year period ending on the day before the new loan is
made.
(b) The greater of (1) or (2), reduced by (3) below:
(1) One-half of the Participant's Vested Account.
(2) $10,000.
(3) Any outstanding loan balance on the date the new loan is made.
For purposes of this maximum, a Participant's Vested Account does not include
any accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and all qualified employer plans, as defined in Code Section
72(p)(4), of the Employer and any Controlled Group member shall be treated as
one plan.
The foregoing notwithstanding, the amount of such loan shall not exceed
50% of the amount of the Participant's Vested Account. For purposes of this
maximum, a Participant's Vested Account does not include any accumulated
deductible employee contributions, as defined in Code Section 72(o)(5)(B). No
collateral other than a portion of the Participant's Vested Account (as
limited above) shall be accepted. The Loan Administrator shall determine if
the collateral is adequate for the amount of the loan requested.
A Participant must obtain the consent of the Participant's spouse, if any,
to the use of the Vested Account as security for the loan. Spousal consent
shall be obtained no earlier than the beginning of the 90-day period that ends
on the date on which the loan to be so secured is made. The consent must be
in writing, must acknowledge the effect of the loan, and must be witnessed by
a plan representative or a notary public. Such consent shall thereafter be
binding with respect to the consenting spouse or any subsequent spouse with
respect to that loan. A new consent shall be required if the Vested Account
is used for collateral upon renegotiation, extension, renewal, or other
revision of the loan.
If a valid spousal consent has been obtained in accordance with the above,
then, notwithstanding any other provision of this Plan, the portion of the
Participant's Vested Account used as a security interest held by the Plan by
reason of a loan outstanding to the Participant shall be taken into account
for purposes of determining the amount of the Vested Account payable at the
time of death or distribution, but only if the reduction is used as repayment
of the loan. If less than 100% of the Participant's Vested Account
(determined without regard to the preceding sentence) is payable to the
surviving spouse, then the Vested Account shall be adjusted by first reducing
the Vested Account by the amount of the security used as repayment of the
loan, and then determining the benefit payable to the surviving spouse.
Each loan shall bear a reasonable fixed rate of interest to be determined
by the Loan Administrator. In determining the interest rate, the Loan
Administrator shall take into consideration fixed interest rates currently
being charged by commercial lenders for loans of comparable risk on similar
terms and for similar durations, so that the interest will provide for a
return commensurate with rates currently charged by commercial lenders for
loans made under similar circumstances. The Loan Administrator shall not
discriminate among Participants in the matter of interest rates; but loans
granted at different times may bear different interest rates in accordance
with the current appropriate standards.
The loan shall by its terms require that repayment (principal and
interest) be amortized in level payments, not less frequently than quarterly,
over a period not extending beyond five years from the date of the loan. The
period of repayment for any loan shall be arrived at by mutual agreement
between the Loan Administrator and the Participant.
The Participant shall make a written application for a loan from the Plan
on forms provided by the Loan Administrator. The application must specify the
amount and duration requested. No loan will be approved unless the
Participant is creditworthy. The Participant must grant authority to the Loan
Administrator to investigate the Participant's creditworthiness so that the
loan application may be properly considered.
Information contained in the application for the loan concerning the
income, liabilities, and assets of the Participant will be evaluated to
determine whether there is a reasonable expectation that the Participant will
be able to satisfy payments on the loan as due. Additionally, the Loan
Administrator will pursue any appropriate further investigations concerning
the creditworthiness and/or credit history of the Participant to determine
whether a loan should be approved.
Each loan shall be fully documented in the form of a promissory note
signed by the Participant for the face amount of the loan, together with
interest determined as specified above.
There will be an assignment of collateral to the Plan executed at the time
the loan is made.
In those cases where repayment through payroll deduction by the Employer
is available, installments are so payable, and a payroll deduction agreement
will be executed by the Participant at the time of making the loan.
Where payroll deduction is not available, payments are to be timely made.
Any payment that is not by payroll deduction shall be made payable to the
Employer or Trustee, as specified in the promissory note, and delivered to the
Loan Administrator, including prepayments, service fees and penalties, if any,
and other amounts due under the note.
The promissory note may provide for reasonable late payment penalties
and/or service fees. Any penalties or service fees shall be applied to all
Participants in a nondiscriminatory manner. If the promissory note so
provides, such amounts may be assessed and collected from the Account of the
Participant as part of the loan balance.
Each loan may be paid prior to maturity, in part or in full, without
penalty or service fee, except as may be set out in the promissory note.
If any amount remains unpaid for more than 31 days after due, a default is
deemed to occur.
Upon default, the Plan has the right to pursue any remedy available by law
to satisfy the amount due, along with accrued interest, including the right to
enforce its claim against the security pledged and execute upon the collateral
as allowed by law.
If any payment of principal or interest or any other amount due under the
promissory note, or any portion thereof, is not made for a period of 90 days
after due, the entire principal balance whether or not otherwise then due,
shall become immediately due and payable without demand or notice, and subject
to collection or satisfaction by any lawful means, including specifically but
not limited to the right to enforce the claim against the security pledged and
to execute upon the collateral as allowed by law.
In the event of default, foreclosure on the note and attachment of
security or use of amounts pledged to satisfy the amount then due, will not
occur until a distributable event occurs in accordance with the Plan, and will
not occur to an extent greater than the amount then available upon any
distributable event which has occurred under the Plan.
All reasonable costs and expenses, including but not limited to attorney's
fees, incurred by the Plan in connection with any default or in any proceeding
to enforce any provision of a promissory note or instrument by which a
promissory note for a Participant loan is secured, shall be assessed and
collected from the Account of the Participant as part of the loan balance.
If payroll deduction is being utilized, in the event that a Participant's
available payroll deduction amounts in any given month are insufficient to
satisfy the total amount due, there will be an increase in the amount taken
subsequently, sufficient to make up the amount that is then due. If the
subsequent deduction is also insufficient to satisfy the amount due within 31
days, a default is deemed to occur as above. If any amount remains past due
more than 90 days, the entire principal amount, whether or not otherwise then
due, along with interest then accrued and any other amount then due under the
promissory note, shall become due and payable, as above.
If the Participant ceases to be a party-in-interest (as defined in this
section) the balance of the outstanding loan becomes due and payable, and the
Participant's Vested Account will be used as available for distribution(s) to
pay the outstanding loan. The Participant's Vested Account will not be used
to pay any amount due under the outstanding loan before the date which is 31
days after the date he ceased to be an Employee, and the Participant may elect
to repay the outstanding loan with interest on the day of repayment. If no
distributable event has occurred under the Plan at the time that the
Participant's Vested Account would otherwise be used under this provision to
pay any amount due under the outstanding loan, this will not occur until the
time, or in excess of the extent to which, a distributable event occurs under
the Plan.
<PAGE>
ARTICLE VI
DISTRIBUTION OF BENEFITS
SECTION 6.01 -- AUTOMATIC FORMS OF DISTRIBUTION.
Unless a qualified election of an optional form of benefit has been made
within the election period (see the ELECTION PROCEDURES SECTION of
Article VI), the automatic form of benefit payable to or on behalf of a
Participant is determined as follows:
(a) The automatic form of retirement benefit for a Participant who does
not die before his Annuity Starting Date shall be the Qualified Joint
and Survivor Form.
(b) The automatic form of death benefit for a Participant who dies before
his Annuity Starting Date shall be:
(1) A Qualified Preretirement Survivor Annuity for a Participant who
has a spouse to whom he has been continuously married throughout
the one-year period ending on the date of his death. The spouse
may elect to start receiving the death benefit on any first day of
the month on or after the Participant dies and before the date the
Participant would have been age 70 1/2. If the spouse dies before
benefits start, the Participant's Vested Account, determined as of
the date of the spouse's death, shall be paid to the spouse's
Beneficiary.
(2) A single-sum payment to the Participant's Beneficiary for a
Participant who does not have a spouse who is entitled to a
Qualified Preretirement Survivor Annuity.
Before a death benefit will be paid on account of the death of a
Participant who does not have a spouse who is entitled to a Qualified
Preretirement Survivor Annuity, it must be established to the
satisfaction of a plan representative that the Participant does not
have such a spouse.
SECTION 6.02 -- OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS.
(a) For purposes of this section, the following terms are defined:
APPLICABLE LIFE EXPECTANCY means Life Expectancy (or Joint and Last
Survivor Expectancy) calculated using the attained age of the
Participant (or Designated Beneficiary) as of the Participant's (or
Designated Beneficiary's) birthday in the applicable calendar year
reduced by one for each calendar year which has elapsed since the date
Life Expectancy was first calculated. If Life Expectancy is being
recalculated, the Applicable Life Expectancy shall be the Life
Expectancy so recalculated. The applicable calendar year shall be the
first Distribution Calendar Year, and if Life Expectancy is being
recalculated such succeeding calendar year.
DESIGNATED BENEFICIARY means the individual who is designated as the
beneficiary under the Plan in accordance with Code Section 401(a)(9)
and the regulations thereunder.
DISTRIBUTION CALENDAR YEAR means a calendar year for which a minimum
distribution is required. For distributions beginning before the
Participant's death, the first Distribution Calendar Year is the
calendar year immediately preceding the calendar year which contains
the Participant's Required Beginning Date. For distributions
beginning after the Participant's death, the first Distribution
Calendar Year is the calendar year in which distributions are required
to begin pursuant to (e) below.
JOINT AND LAST SURVIVOR EXPECTANCY means joint and last survivor
expectancy computed by use of the expected return multiples in Table
VI of section 1.729 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the case of
distributions described in (e)(2)(ii) below) by the time distributions
are required to begin, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the Participant
(or spouse) and shall apply to all subsequent years. The life
expectancy of a nonspouse Beneficiary may not be recalculated.
LIFE EXPECTANCY means life expectancy computed by use of the expected
return multiples in Table V of section 1.729 of the Income Tax
Regulations.
Unless otherwise elected by the Participant (or spouse, in the case of
distributions described in (e)(2)(ii) below) by the time distributions
are required to begin, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the Participant
(or spouse) and shall apply to all subsequent years. The life
expectancy of a nonspouse Beneficiary may not be recalculated.
PARTICIPANT'S BENEFIT means
(1) The Account balance as of the last valuation date in the calendar
year immediately preceding the Distribution Calendar Year
(valuation calendar year) increased by the amount of any
contributions or forfeitures allocated to the Account balance as
of the dates in the valuation calendar year after the valuation
date and decreased by distributions made in the valuation calendar
year after the valuation date.
(2) For purposes of (1) above, if any portion of the minimum
distribution for the first Distribution Calendar Year is made in
the second Distribution Calendar Year on or before the Required
Beginning Date, the amount of the minimum distribution made in the
second Distribution Calendar Year shall be treated as if it had
been made in the immediately preceding Distribution Calendar Year.
REQUIRED BEGINNING DATE means, for a Participant, the first day of
April of the calendar year following the calendar year in which the
Participant attains age 70 1/2, unless otherwise provided in (1), (2)
or (3) below:
(1) The Required Beginning Date for a Participant who attains age
70 1/2 before January 1, 1988, or after December 31, 1996, and who
is not a 5-percent owner is the first day of April of the calendar
year following the calendar year in which the later of retirement
or attainment of age 70 1/2 occurs.
(2) The Required Beginning Date for a Participant who attains age
70 1/2 before January 1, 1988, and who is a 5-percent owner is the
first day of April of the calendar year following the later of
(i) the calendar year in which the Participant attains age
70 1/2, or
(ii) the earlier of the calendar year with or within which ends
the Plan Year in which the Participant becomes a 5-percent
owner, or the calendar year in which the Participant retires.
(3) The Required Beginning Date of a Participant who is not a 5-percent
owner and who attains age 70 1/2 during 1988 and who has not
retired as of January 1, 1989, is April 1, 1990.
A Participant is treated as a 5-percent owner for purposes of this
section if such Participant is a 5-percent owner as defined in Code
Section 416(i) (determined in accordance with Code Section 416 but
without regard to whether the Plan is top-heavy) at any time during the
Plan Year ending with or within the calendar year in which such owner
attains age 66 1/2 or any subsequent Plan Year.
Once distributions have begun to a 5-percent owner under this section,
they must continue to be distributed, even if the Participant ceases
to be a 5-percent owner in a subsequent year.
(b) The optional forms of retirement benefit shall be the following: a
straight life annuity; single life annuities with certain periods of
five, ten or fifteen years; a single life annuity with installment
refund; survivorship life annuities with installment refund and
survivorship percentages of 50, 66 2/3 or 100; fixed period annuities
for any period of whole months which is not less than 60 and does not
exceed the Life Expectancy of the Participant and the named
Beneficiary as provided in (d) below where the Life Expectancy is not
recalculated; and a series of installments chosen by the Participant
with a minimum payment each year beginning with the year the
Participant turns age 70 1/2. The payment for the first year in which
a minimum payment is required will be made by April 1 of the following
calendar year. The payment for the second year and each successive
year will be made by December 31 of that year. The minimum payment
will be based on a period equal to the Joint and Last Survivor
Expectancy of the Participant and the Participant's spouse, if any, as
provided in (d) below where the Joint and Last Survivor Expectancy is
recalculated. The balance of the Participant's Vested Account, if
any, will be payable on the Participant's death to his Beneficiary in
a single sum. The Participant may also elect to receive his Vested
Account in a single-sum payment.
Election of an optional form is subject to the qualified election
provisions of Article VI.
Any annuity contract distributed shall be nontransferable. The terms
of any annuity contract purchased and distributed by the Plan to a
Participant or spouse shall comply with the requirements of this Plan.
(c) The optional forms of death benefit are a single-sum payment and any
annuity that is an optional form of retirement benefit. However, a
series of installments shall not be available if the Beneficiary is
not the spouse of the deceased Participant.
(d) Subject to the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI,
joint and survivor annuity requirements, the requirements of this
section shall apply to any distribution of a Participant's interest
and will take precedence over any inconsistent provisions of this
Plan. Unless otherwise specified, the provisions of this section apply
to calendar years beginning after December 31, 1984.
All distributions required under this section shall be determined and
made in accordance with the proposed regulations under Code Section
401(a)(9), including the minimum distribution incidental benefit
requirement of section 1.401(a)(9)2 of the proposed regulations.
The entire interest of a Participant must be distributed or begin to
be distributed no later than the Participant's Required Beginning
Date.
As of the first Distribution Calendar Year, distributions, if not made
in a single sum, may only be made over one of the following periods
(or combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a Designated Beneficiary,
(3) a period certain not extending beyond the Life Expectancy of the
Participant, or
(4) a period certain not extending beyond the Joint and Last Survivor
Expectancy of the Participant and a Designated Beneficiary.
If the Participant's interest is to be distributed in other than a
single sum, the following minimum distribution rules shall apply on or
after the Required Beginning Date:
(5) Individual account:
(i) If a Participant's Benefit is to be distributed over
(a) a period not extending beyond the Life Expectancy of the
Participant or the Joint Life and Last Survivor
Expectancy of the Participant and the Participant's
Designated Beneficiary or
(b) a period not extending beyond the Life Expectancy of the
Designated Beneficiary,
the amount required to be distributed for each calendar year
beginning with the distributions for the first Distribution
Calendar Year, must be at least equal to the quotient
obtained by dividing the Participant's Benefit by the
Applicable Life Expectancy.
(ii) For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the Designated Beneficiary, the
method of distribution selected must assure that at least 50%
of the present value of the amount available for distribution
is paid within the Life Expectancy of the Participant.
(iii) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with
distributions for the first Distribution Calendar Year shall
not be less than the quotient obtained by dividing the
Participant's Benefit by the lesser of
(a) the Applicable Life Expectancy or
(b) if the Participant's spouse is not the Designated
Beneficiary, the applicable divisor determined from the
table set forth in Q&A-4 of section 1.401(a)(9)2 of the
proposed regulations.
Distributions after the death of the Participant shall be
distributed using the Applicable Life Expectancy in (5)(i)
above as the relevant divisor without regard to Proposed
Regulations section 1.401(a)(9)2.
(iv) The minimum distribution required for the Participant's first
Distribution Calendar Year must be made on or before the
Participant's Required Beginning Date. The minimum
distribution for the Distribution Calendar Year for other
calendar years, including the minimum distribution for the
Distribution Calendar Year in which the Participant's
Required Beginning Date occurs, must be made on or before
December 31 of that Distribution Calendar Year.
(6) Other forms:
(i) If the Participant's Benefit is distributed in the form of an
annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements
of Code Section 401(a)(9) and the proposed regulations
thereunder.
(e) Death distribution provisions:
(1) Distribution beginning before death. If the Participant dies
after distribution of his interest has begun, 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) Distribution beginning after death. If the Participant dies
before distribution of his interest begins, distribution of the
Participant's entire interest shall be completed by December 31 of
the calendar year containing the fifth anniversary of 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 over the
life or over a period certain not greater than the Life
Expectancy of the Designated Beneficiary commencing on or
before December 31 of the calendar year immediately following
the calendar year in which the Participant died;
(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 later
of
(a) December 31 of the calendar year immediately following
the calendar year in which the Participant died and
(b) December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If the Participant has not made an election pursuant to this
(e)(2) by the time of his death, the Participant's Designated
Beneficiary must elect the method of distribution no later than
the earlier of
(iii) December 31 of the calendar year in which distributions
would be required to begin under this subparagraph, or
(iv) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant.
If the Participant has no Designated Beneficiary, or if the
Designated Beneficiary does not elect a method of distribution,
distribution of the Participant's entire interest must be
completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
(3) For purposes of (e)(2) above, if the surviving spouse dies after
the Participant, but before payments to such spouse begin, the
provisions of (e)(2) above, with the exception of (e)(2)(ii)
therein, shall be applied as if the surviving spouse were the
Participant.
(4) For purposes of this (e), 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.
(5) For purposes of this (e), distribution of a Participant's interest
is considered to begin on the Participant's Required Beginning
Date (or if (e)(3) above is applicable, the date distribution is
required to begin to the surviving spouse pursuant to (e)(2)
above). If distribution in the form of an annuity irrevocably
commences to the Participant before the Required Beginning Date,
the date distribution is considered to begin is the date
distribution actually commences.
SECTION 6.02A -- DISTRIBUTION IN QUALIFYING EMPLOYER SECURITIES.
In lieu of the cash distributions permitted under Section 6.02 above, any
portion of the Participant's Vested Account held in Qualifying Employer
Securities may be distributed in kind. Fractional shares shall be paid in
cash valued as of the most recent Valuation Date; the distribution shall
include any dividends (cash or stock) on such whole shares or any additional
shares received as a result of a stock split or any other preceding the date
of distribution.
Election of such distribution is subject to the qualified election
provisions of Article VI.
SECTION 6.03 -- ELECTION PROCEDURES.
The Participant, Beneficiary, or spouse shall make any election under this
section in writing. The Plan Administrator may require such individual to
complete and sign any necessary documents as to the provisions to be made.
Any election permitted under (a) and (b) below shall be subject to the
qualified election provisions of (c) below.
(a) Retirement Benefits. A Participant may elect his Beneficiary or
Contingent Annuitant and may elect to have retirement benefits
distributed under any of the optional forms of retirement benefit
described in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI.
(b) Death Benefits. A Participant may elect his Beneficiary and may elect
to have death benefits distributed under any of the optional forms of
death benefit described in the OPTIONAL FORMS OF DISTRIBUTION AND
DISTRIBUTION REQUIREMENTS SECTION of Article VI.
If the Participant has not elected an optional form of distribution
for the death benefit payable to his Beneficiary, the Beneficiary may,
for his own benefit, elect the form of distribution, in like manner as
a Participant.
The Participant may waive the Qualified Preretirement Survivor Annuity
by naming someone other than his spouse as Beneficiary.
In lieu of the Qualified Preretirement Survivor Annuity described in
the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI, the spouse
may, for his own benefit, waive the Qualified Preretirement Survivor
Annuity by electing to have the benefit distributed under any of the
optional forms of death benefit described in the OPTIONAL FORMS OF
DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of Article VI.
(c) Qualified Election. The Participant, Beneficiary or spouse may make
an election at any time during the election period. The Participant,
Beneficiary, or spouse may revoke the election made (or make a new
election) at any time and any number of times during the election
period. An election is effective only if it meets the consent
requirements below.
The election period as to retirement benefits is the 90-day period
ending on the Annuity Starting Date. An election to waive the
Qualified Joint and Survivor Form may not be made before the date he
is provided with the notice of the ability to waive the Qualified
Joint and Survivor Form. If the Participant elects the series of
installments, he may elect on any later date to have the balance of
his Vested Account paid under any of the optional forms of retirement
benefit available under the Plan. His election period for this
election is the 90-day period ending on the Annuity Starting Date for
the optional form of retirement benefit elected.
A Participant may make an election as to death benefits at any time
before he dies. The spouse's election period begins on the date the
Participant dies and ends on the date benefits begin. The
Beneficiary's election period begins on the date the Participant dies
and ends on the date benefits begin. An election to waive the
Qualified Preretirement Survivor Annuity may not be made by the
Participant before the date he is provided with the notice of the
ability to waive the Qualified Preretirement Survivor Annuity. A
Participant's election to waive the Qualified Preretirement Survivor
Annuity which is made before the first day of the Plan Year in which
he reaches age 35 shall become invalid on such date. An election made
by a Participant after he ceases to be an Employee will not become
invalid on the first day of the Plan Year in which he reaches age 35
with respect to death benefits from that part of his Account resulting
from Contributions made before he ceased to be an Employee.
If the Participant's Vested Account has at any time exceeded $3,500,
any benefit which is (1) immediately distributable or (2) payable in a
form other than a Qualified Joint and Survivor Form or a Qualified
Preretirement Survivor Annuity requires the consent of the Participant
and the Participant's spouse (or where either the Participant or the
spouse has died, the survivor). The consent of the Participant or
spouse to a benefit which is immediately distributable must not be
made before the date the Participant or spouse is provided with the
notice of the ability to defer the distribution. Such consent shall
be made in writing. The consent shall not be made more than 90 days
before the Annuity Starting Date. Spousal consent is not required for
a benefit which is immediately distributable in a Qualified Joint and
Survivor Form. Furthermore, if spousal consent is not required
because the Participant is electing an optional form of retirement
benefit that is not a life annuity pursuant to (d) below, only the
Participant need consent to the distribution of a benefit payable in a
form that is not a life annuity and which is immediately
distributable. Neither the consent of the Participant nor the
Participant's spouse shall be required to the extent that a
distribution is required to satisfy Code Section 401(a)(9) or Code
Section 415. In addition, upon termination of this Plan if the Plan
does not offer an annuity option (purchased from a commercial
provider), the Participant's Account balance may, without the
Participant's consent, be distributed to the Participant or
transferred to another defined contribution plan (other than an
employee stock ownership plan as defined in Code Section 4975(e)(7))
within the same Controlled Group. A benefit is immediately
distributable if any part of the benefit could be distributed to the
Participant (or surviving spouse) before the Participant attains (or
would have attained if not deceased) the older of Normal Retirement
Age or age 62. If the Qualified Joint and Survivor Form is waived,
the spouse has the right to limit consent only to a specific
Beneficiary or a specific form of benefit. The spouse can relinquish
one or both such rights. Such consent shall be made in writing. The
consent shall not be made more than 90 days before the Annuity
Starting Date. If the Qualified Preretirement Survivor Annuity is
waived, the spouse has the right to limit consent only to a specific
Beneficiary. Such consent shall be in writing. The spouse's consent
shall be witnessed by a plan representative or notary public. The
spouse's consent must acknowledge the effect of the election,
including that the spouse had the right to limit consent only to a
specific Beneficiary or a specific form of benefit, if applicable, and
that the relinquishment of one or both such rights was voluntary.
Unless the consent of the spouse expressly permits designations by the
Participant without a requirement of further consent by the spouse,
the spouse's consent must be limited to the form of benefit, if
applicable, and the Beneficiary (including any Contingent Annuitant),
class of Beneficiaries, or contingent Beneficiary named in the
election. Spousal consent is not required, however, if the
Participant establishes to the satisfaction of the plan representative
that the consent of the spouse cannot be obtained because there is no
spouse or the spouse cannot be located. A spouse's consent under this
paragraph shall not be valid with respect to any other spouse. A
Participant may revoke a prior election without the consent of the
spouse. Any new election will require a new spousal consent, unless
the consent of the spouse expressly permits such election by the
Participant without further consent by the spouse. A spouse's consent
may be revoked at any time within the Participant's election period.
(d) Special Rule for Profit Sharing Plan. As provided in the preceding
provisions of the Plan, if a Participant has a spouse to whom he has
been continuously married throughout the one-year period ending on the
date of his death, the Participant's Vested Account, including the
proceeds payable under any Insurance Policy on the Participant's life,
shall be paid to such spouse. However, if there is no such spouse or
if the surviving spouse has already consented in a manner conforming
to the qualified election requirements in (c) above, the Vested
Account shall be payable to the Participant's Beneficiary in the event
of the Participant's death.
The Participant may waive the spousal death benefit described above at
any time provided that no such waiver shall be effective unless it
satisfies the conditions of (c) above (other than the notification
requirement referred to therein) that would apply to the Participant's
waiver of the Qualified Preretirement Survivor Annuity.
Because this is a profit sharing plan which pays death benefits as
described above, this subsection (d) applies if the following
condition is met: with respect to the Participant, this Plan is not a
direct or indirect transferee after December 31, 1984, of a defined
benefit plan, money purchase plan (including a target plan), stock
bonus plan or profit sharing plan which is subject to the survivor
annuity requirements of Code Section 401(a)(11) and Code Section 417.
If the above condition is met, spousal consent is not required for
electing a benefit payable in a form that is not a life annuity. If
the above condition is not met, the consent requirements of this
article shall be operative.
SECTION 6.04 -- NOTICE REQUIREMENTS.
(a) Optional forms of retirement benefit. The Plan Administrator shall
furnish to the Participant and the Participant's spouse a written
explanation of the optional forms of retirement benefit in the
OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION
of Article VI, including the material features and relative values of
these options, in a manner that would satisfy the notice requirements
of Code Section 417(a)(3) and the right of the Participant and the
Participant's spouse to defer distribution until the benefit is no
longer immediately distributable. The Plan Administrator shall
furnish the written explanation by a method reasonably calculated to
reach the attention of the Participant and the Participant's spouse no
less than 30 days and no more than 90 days before the Annuity Starting
Date.
(b) Qualified Joint and Survivor Form. The Plan Administrator shall
furnish to the Participant a written explanation of the following:
the terms and conditions of the Qualified Joint and Survivor Form; the
Participant's right to make, and the effect of, an election to waive
the Qualified Joint and Survivor Form; the rights of the Participant's
spouse; and the right to revoke an election and the effect of such a
revocation. The Plan Administrator shall furnish the written
explanation by a method reasonably calculated to reach the attention
of the Participant no less than 30 days and no more than 90 days
before the Annuity Starting Date.
After the written explanation is given, a Participant or spouse may
make written request for additional information. The written
explanation must be personally delivered or mailed (first class mail,
postage prepaid) to the Participant or spouse within 30 days from the
date of the written request. The Plan Administrator does not need to
comply with more than one such request by a Participant or spouse.
The Plan Administrator's explanation shall be written in nontechnical
language and will explain the terms and conditions of the Qualified
Joint and Survivor Form and the financial effect upon the
Participant's benefit (in terms of dollars per benefit payment) of
electing not to have benefits distributed in accordance with the
Qualified Joint and Survivor Form.
(c) Qualified Preretirement Survivor Annuity. As required by the Code and
Federal regulation, the Plan Administrator shall furnish to the
Participant a written explanation of the following: the terms and
conditions of the Qualified Preretirement Survivor Annuity; the
Participant's right to make, and the effect of, an election to waive
the Qualified Preretirement Survivor Annuity; the rights of the
Participant's spouse; and the right to revoke an election and the
effect of such a revocation. The Plan Administrator shall furnish the
written explanation by a method reasonably calculated to reach the
attention of the Participant within the applicable period. The
applicable period for a Participant is whichever of the following
periods ends last:
(1) the period beginning one year before the date the individual
becomes a Participant and ending one year after such date; or
(2) the period beginning one year before the date the Participant's
spouse is first entitled to a Qualified Preretirement Survivor
Annuity and ending one year after such date.
If such notice is given before the period beginning with the first day
of the Plan Year in which the Participant attains age 32 and ending
with the close of the Plan Year preceding the Plan Year in which the
Participant attains age 35, an additional notice shall be given within
such period. If a Participant ceases to be an Employee before
attaining age 35, an additional notice shall be given within the
period beginning one year before the date he ceases to be an Employee
and ending one year after such date.
After the written explanation is given, a Participant or spouse may
make written request for additional information. The written
explanation must be personally delivered or mailed (first class mail,
postage prepaid) to the Participant or spouse within 30 days from the
date of the written request. The Plan Administrator does not need to
comply with more than one such request by a Participant or spouse.
The Plan Administrator's explanation shall be written in nontechnical
language and will explain the terms and conditions of the Qualified
Preretirement Survivor Annuity and the financial effect upon the
spouse's benefit (in terms of dollars per benefit payment) of electing
not to have benefits distributed in accordance with the Qualified
Preretirement Survivor Annuity.
<PAGE>
ARTICLE VII
TERMINATION OF PLAN
The Employer expects to continue the Plan indefinitely but reserves the
right to terminate the Plan in whole or in part at any time upon giving
written notice to all parties concerned. Complete discontinuance of
Contributions under the Plan constitutes complete termination of Plan.
The Account of each Participant shall be fully (100%) vested and
nonforfeitable as of the effective date of complete termination of Plan. The
Account of each Participant who is included in the group of Participants
deemed to be affected by the partial termination of the Plan shall be fully
(100%) vested and nonforfeitable as of the effective date of the partial Plan
termination. The Participant's Account shall continue to participate in the
earnings credited, expenses charged and any appreciation or depreciation of
the Investment Fund until the Vested Account is distributed. A distribution
under this article will be a retirement benefit and shall be distributed to
the Participant according to the provisions of Article VI.
A Participant's Account which does not result from Contributions which are
used to compute the Actual Deferral Percentage, as defined in the EXCESS
AMOUNTS SECTION of Article III, may be distributed to the Participant after
the effective date of the complete or partial Plan termination. A
Participant's Account resulting from Contributions which are used to compute
such percentage may be distributed upon termination of the Plan without the
establishment or maintenance of another defined contribution plan, other than
an employee stock ownership plan (as defined in Code Section 4975(e) or Code
Section 409) or a simplified employee pension plan (as defined in Code Section
408(k)). Such a distribution made after March 31, 1988, must be in a single
sum.
Upon complete termination of Plan, no more Employees shall become
Participants and no more Contributions shall be made.
The assets of this Plan shall not be paid to the Employer at any time,
except that, after the satisfaction of all liabilities under the Plan, any
assets remaining may be paid to the Employer. The payment may not be made if
it would contravene any provision of law.
<PAGE>
ARTICLE VIII
ADMINISTRATION OF PLAN
SECTION 8.01 -- ADMINISTRATION.
Subject to the provisions of this article, the Plan Administrator has
complete control of the administration of the Plan. The Plan Administrator
has all the powers necessary for it to properly carry out its administrative
duties. Not in limitation, but in amplification of the foregoing, the Plan
Administrator has the power to construe the Plan, including ambiguous
provisions, and to determine all questions that may arise under the Plan,
including all questions relating to the eligibility of Employees to
participate in the Plan and the amount of benefit to which any Participant,
Beneficiary, spouse or Contingent Annuitant may become entitled. The Plan
Administrator's decisions upon all matters within the scope of its authority
shall be final.
Unless otherwise set out in the Plan or Group Contract, the Plan
Administrator may delegate recordkeeping and other duties which are necessary
for the administration of the Plan to any person or firm which agrees to
accept such duties. The Plan Administrator shall be entitled to rely upon all
tables, valuations, certificates and reports furnished by the consultant or
actuary appointed by the Plan Administrator and upon all opinions given by any
counsel selected or approved by the Plan Administrator.
The Plan Administrator shall receive all claims for benefits by
Participants, former Participants, Beneficiaries, spouses, and Contingent
Annuitants. The Plan Administrator shall determine all facts necessary to
establish the right of any Claimant to benefits and the amount of those
benefits under the provisions of the Plan. The Plan Administrator may
establish rules and procedures to be followed by Claimants in filing claims
for benefits, in furnishing and verifying proofs necessary to determine age,
and in any other matters required to administer the Plan.
Each Participant shall be entitled to direct the Trustee as to the
exercise of all voting powers over shares allocated to his Account with
respect to any corporate matter which involves the voting of such shares
allocated to the Participant's Account with respect to the approval or
disapproval of any corporate merger or consolidation, recapitalization,
reclassification, liquidation, dissolution, sale of substantially all assets
of a trade or business, or such similar transaction as may be prescribed in
the Treasury Regulations. The Trustee shall vote all Qualifying Employer
Securities allocated to a Participant's Qualifying Employer Securities Account
which are not voted by the Participant, because the Participant has not
directed (or not timely directed) the Trustee as to the manner in which such
Qualifying Employer Securities are to be voted, in the same proportion as
those shares of Qualifying Employer Securities for which the Trustee has
received proper direction on such matter.
In the event that a tender offer is made for some or all of the shares of
the Employer, each Participant shall have the right to direct whether those
shares allocated to his Account, whether or not vested, shall be tendered.
This right shall be exercised in the manner set forth herein. In the absence
of a written directive from or election by a Participant to the Plan
Administrator, the Plan Administrator shall direct the Trustee not to tender
such shares. Because the choice is to be given to the Participants, the Plan
Administrator and the Trustee shall not have fiduciary responsibility with
respect to the decision to tender or not or whether to tender all of such
shares or only a portion thereof.
In order to facilitate the decision of Participants whether to tender
their shares in a tender offer (or how many shares to tender), the Plan
Administrator shall provide election forms for the Participants, whereby they
may elect to tender or not and whereby they may elect to tender all or a
portion of such shares. Unless otherwise limited by Federal securities law,
such election may be made or changed at any time prior to the date before the
expiration date of the tender offer (with extensions); and election or change
in election must be received by the Plan Administrator, or designated
representative of the Plan Administrator, on or before the day preceding the
expiration date of the tender offer (with extensions, if any). The Plan
Administrator may develop procedures to facilitate Participants' choices, such
as the use of facsimile transmissions for the Employees located in areas
physically remote from the Plan Administrator. The election shall be binding
on the Plan Administrator and the Trustee. The Plan Administrator shall make
every effort to distribute the notice of the tender, election forms and other
communications related to the tender offer to all Participants as soon as
practicable following the announcement of the tender offer, including mailing
such notice and form to Participants and posting such notice in places
designed to be reviewed by Participants.
As to shares which are not allocated to the Accounts of any Participant,
all such shares (in the aggregate) shall be tendered or not as the majority of
the shares held by Participants and directed by Participants are tendered or
not. The Plan Administrator shall direct the Trustee to tender all such
unallocated shares or not, in accordance with the elections of the
Participants having an allocation of the majority of the shares under the
Plan.
SECTION 8.02 -- RECORDS.
All acts and determinations of the Plan Administrator shall be duly
recorded. All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator's
custody.
Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording or other
forms of data compilation shall be acceptable means of keeping records.
SECTION 8.03 -- INFORMATION AVAILABLE.
Any Participant in the Plan or any Beneficiary may examine copies of the
Plan description, latest annual report, any bargaining agreement, this Plan,
the Group Contract or any other instrument under which the Plan was
established or is operated. The Plan Administrator shall maintain all of the
items listed in this section in its office, or in such other place or places
as it may designate in order to comply with governmental regulations. These
items may be examined during reasonable business hours. Upon the written
request of a Participant or Beneficiary receiving benefits under the Plan, the
Plan Administrator will furnish him with a copy of any of these items. The
Plan Administrator may make a reasonable charge to the requesting person for
the copy.
SECTION 8.04 -- CLAIM AND APPEAL PROCEDURES.
A Claimant must submit any required forms and pertinent information when
making a claim for benefits under the Plan.
If a claim for benefits under the Plan is denied, the Plan Administrator
shall provide adequate written notice to the Claimant whose claim for benefits
under the Plan has been denied. The notice must be furnished within 90 days
of the date that the claim is received by the Plan Administrator. The
Claimant shall be notified in writing within this initial 90-day period if
special circumstances require an extension of time needed to process the claim
and the date by which the Plan Administrator's decision is expected to be
rendered. The written notice shall be furnished no later than 180 days after
the date the claim was received by the Plan Administrator.
The Plan Administrator's notice to the Claimant shall specify the reason
for the denial; specify references to pertinent Plan provisions on which
denial is based; describe any additional material and information needed for
the Claimant to perfect his claim for benefits; explain why the material and
information is needed; inform the Claimant that any appeal he wishes to make
must be in writing to the Plan Administrator within 60 days after receipt of
the Plan Administrator's notice of denial of benefits and that failure to make
the written appeal within such 60-day period shall render the Plan
Administrator's determination of such denial final, binding and conclusive.
If the Claimant appeals to the Plan Administrator, the Claimant, or his
authorized representative, may submit in writing whatever issues and comments
the Claimant, or his representative, feels are pertinent. The Claimant, or
his authorized representative may review pertinent Plan documents. The Plan
Administrator shall reexamine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The Plan Administrator shall advise the Claimant of its
decision within 60 days of his written request for review, unless special
circumstances (such as a hearing) would make rendering a decision within the
60-day limit unfeasible. The Claimant must be notified within the 60-day limit
if an extension is necessary. The Plan Administrator shall render a decision
on a claim for benefits no later than 120 days after the request for review is
received.
SECTION 8.05 -- UNCLAIMED VESTED ACCOUNT PROCEDURE.
At the time the Participant's Vested Account is distributable to the
Participant, spouse or Beneficiary without his consent according to the
provisions of Article VI or Article IX, the Plan Administrator, by certified
or registered mail addressed to his last known address and in accordance with
the notice requirements of Article VI, will notify him of his entitlement to a
benefit. If the Participant, spouse or Beneficiary fails to claim the Vested
Account or make his whereabouts known in writing within six months from the
date of mailing the notice, the Plan Administrator may treat such unclaimed
Vested Account as a forfeiture and apply it according to the forfeiture
provisions of Article III. If Article III contains no forfeiture provisions,
such amount will be applied to reduce the earliest Employer Contributions due
after the forfeiture arises.
If a Participant's Vested Account is forfeited according to the provisions
of the above paragraph and the Participant, his spouse or his Beneficiary at
any time make a claim for benefits, the forfeited Vested Account shall be
reinstated, unadjusted for any gains or losses occurring after the date it was
forfeited. The reinstated Vested Account shall then be distributed to the
Participant, spouse or Beneficiary according to the preceding provisions of
the Plan.
SECTION 8.06 -- DELEGATION OF AUTHORITY.
All or any part of the administrative duties and responsibilities under
this article may be delegated by the Plan Administrator to a retirement
committee. The duties and responsibilities of the retirement committee shall
be set out in a separate written agreement.
<PAGE>
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01 -- AMENDMENTS.
The Employer may amend this Plan at any time, including any remedial
retroactive changes (within the specified period of time as may be determined
by Internal Revenue Service regulations) to comply with the requirements of
any law or regulation issued by any governmental agency to which the Employer
is subject. An amendment may not diminish or adversely affect any accrued
interest or benefit of Participants or their Beneficiaries or eliminate an
optional form of distribution with respect to benefits attributable to service
before the amendment nor allow reversion or diversion of Plan assets to the
Employer at any time, except as may be necessary to comply with the
requirements of any law or regulation issued by any governmental agency to
which the Employer is subject. No amendment to this Plan shall be effective
to the extent that it has the effect of decreasing a Participant's accrued
benefit. However, a Participant's Account may be reduced to the extent
permitted under Code Section 412(c)(8). For purposes of this paragraph, a
Plan amendment which has the effect of decreasing a Participant's Account or
eliminating an optional form of benefit, with respect to benefits attributable
to service before the amendment shall be treated as reducing an accrued
benefit. Furthermore, if the vesting schedule of the Plan is amended, in the
case of an Employee who is a Participant as of the later of the date such
amendment is adopted or the date it becomes effective, the nonforfeitable
percentage (determined as of such date) of such Employee's employer-derived
accrued benefit will not be less than his percentage computed under the Plan
without regard to such amendment.
An amendment shall not decrease a Participant's vested interest in the
Plan. If an amendment to the Plan, or a deemed amendment in the case of a
change in top-heavy status of the Plan as provided in the MODIFICATION OF
VESTING REQUIREMENTS SECTION of Article X, changes the computation of the
percentage used to determine that portion of a Participant's Account
attributable to Employer Contributions which is nonforfeitable (whether
directly or indirectly), each Participant or former Participant
(a) who has completed at least three Years of Service on the date the
election period described below ends (five Years of Service if the
Participant does not have at least one Hour-of-Service in a Plan Year
beginning after December 31, 1988) and
(b) whose nonforfeitable percentage will be determined on any date after
the date of the change
may elect, during the election period, to have the nonforfeitable percentage
of his Account that results from Employer Contributions determined without
regard to the amendment. This election may not be revoked. An election does
not need to be provided for any Participant or former Participant whose
nonforfeitable percentage, determined according to the Plan provisions as
changed, cannot at any time be less than the percentage determined without
regard to such change. The election period shall begin no later than the date
the Plan amendment is adopted, or deemed adopted in the case of a change in
the top-heavy status of the Plan, and end no earlier than the sixtieth day
after the latest of the date the amendment is adopted (deemed adopted) or
becomes effective, or the date the Participant is issued written notice of the
amendment (deemed amendment) by the Employer or the Plan Administrator.
SECTION 9.02 -- DIRECT ROLLOVERS.
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.
SECTION 9.03 -- MERGERS AND DIRECT TRANSFERS.
The Plan may not be merged or consolidated with, nor have its assets or
liabilities transferred to, any other retirement plan, unless each Participant
in the plan would (if the plan then terminated) receive a benefit immediately
after the merger, consolidation or transfer which is equal to or greater than
the benefit the Participant would have been entitled to receive immediately
before the merger, consolidation or transfer (if this Plan had then
terminated). The Employer may enter into merger agreements or direct transfer
of assets agreements with the employers under other retirement plans which are
qualifiable under Code Section 401(a), including an elective transfer, and may
accept the direct transfer of plan assets, or may transfer plan assets, as a
party to any such agreement. The Employer shall not consent to, or be a party
to a merger, consolidation or transfer of assets with a defined benefit plan
if such action would result in a defined benefit feature being maintained
under this Plan.
The Plan may accept a direct transfer of plan assets on behalf of an
Eligible Employee. If the Eligible Employee is not an Active Participant when
the transfer is made, the Eligible Employee shall be deemed to be an Active
Participant only for the purpose of investment and distribution of the
transferred assets. Employer Contributions shall not be made for or allocated
to the Eligible Employee, until the time he meets all of the requirements to
become an Active Participant.
The Plan shall hold, administer and distribute the transferred assets as a
part of the Plan. The Plan shall maintain a separate account for the benefit
of the Employee on whose behalf the Plan accepted the transfer in order to
reflect the value of the transferred assets. Unless a transfer of assets to
the Plan is an elective transfer, the Plan shall apply the optional forms of
benefit protections described in the AMENDMENTS SECTION of Article IX to all
transferred assets. A transfer is elective if: (1) the transfer is
voluntary, under a fully informed election by the Participant; (2) the
Participant has an alternative that retains his Code Section 411(d)(6)
protected benefits (including an option to leave his benefit in the transferor
plan, if that plan is not terminating); (3) if the transferor plan is subject
to Code Sections 401(a)(11) and 417, the transfer satisfies the applicable
spousal consent requirements of the Code; (4) the notice requirements under
Code Section 417, requiring a written explanation with respect to an election
not to receive benefits in the form of a qualified joint and survivor annuity,
are met with respect to the Participant and spousal transfer election; (5) the
Participant has a right to immediate distribution from the transferor plan
under provisions in the plan not inconsistent with Code Section 401(a); (6)
the transferred benefit is equal to the Participant's entire nonforfeitable
accrued benefit under the transferor plan, calculated to be at least the
greater of the single sum distribution provided by the transferor plan (if
any) or the present value of the Participant's accrued benefit under the
transferor plan payable at the plan's normal retirement age and calculated
using an interest rate subject to the restrictions of Code Section 417(e) and
subject to the overall limitations of Code Section 415; (7) the Participant
has a 100% nonforfeitable interest in the transferred benefit; and (8) the
transfer otherwise satisfies applicable Treasury regulations.
SECTION 9.04 -- PROVISIONS RELATING TO THE INSURER AND OTHER PARTIES.
The obligations of an Insurer shall be governed solely by the provisions
of the Group Contract or Insurance Policy. The Insurer shall not be required
to perform any act not provided in or contrary to the provisions of the Group
Contract or Insurance Policy. See the CONSTRUCTION SECTION of this article.
Any issuer or distributor of investment contracts or securities is
governed solely by the terms of its policies, written investment contract,
prospectuses, security instruments, and any other written agreements entered
into with the Trustee.
Such Insurer, issuer or distributor is not a party to the Plan, nor bound
in any way by the Plan provisions. Such parties shall not be required to look
to the terms of this Plan, nor to determine whether the Employer, the Plan
Administrator, the Trustee, or the Named Fiduciary have the authority to act
in any particular manner or to make any contract or agreement.
Until notice of any amendment or termination of this Plan or a change in
Trustee has been received by the Insurer at its home office or an issuer or
distributor at their principal address, they are and shall be fully protected
in assuming that the Plan has not been amended or terminated and in dealing
with any party acting as Trustee according to the latest information which
they have received at their home office or principal address.
SECTION 9.05 -- EMPLOYMENT STATUS.
Nothing contained in this Plan gives an Employee the right to be retained
in the Employer's employ or to interfere with the Employer's right to
discharge any Employee.
SECTION 9.06 -- RIGHTS TO PLAN ASSETS.
No Employee shall have any right to or interest in any assets of the Plan
upon termination of his employment or otherwise except as specifically
provided under this Plan, and then only to the extent of the benefits payable
to such Employee in accordance with Plan provisions.
Any final payment or distribution to a Participant or his legal
representative or to any Beneficiaries, spouse or Contingent Annuitant of such
Participant under the Plan provisions shall be in full satisfaction of all
claims against the Plan, the Named Fiduciary, the Plan Administrator, the
Trustee, the Insurer, and the Employer arising under or by virtue of the Plan.
SECTION 9.07 -- BENEFICIARY.
Each Participant may name a Beneficiary to receive any death benefit
(other than any income payable to a Contingent Annuitant) that may arise out
of his participation in the Plan. The Participant may change his Beneficiary
from time to time. Unless a qualified election has been made, for purposes of
distributing any death benefits before Retirement Date, the Beneficiary of a
Participant who has a spouse who is entitled to a Qualified Preretirement
Survivor Annuity shall be the Participant's spouse. The Participant's
Beneficiary designation and any change of Beneficiary shall be subject to the
provisions of the ELECTION PROCEDURES SECTION of Article VI. It is the
responsibility of the Participant to give written notice to the Insurer of the
name of the Beneficiary on a form furnished for that purpose.
With the Employer's consent, the Plan Administrator may maintain records
of Beneficiary designations for Participants before their Retirement Dates.
In that event, the written designations made by Participants shall be filed
with the Plan Administrator. If a Participant dies before his Retirement
Date, the Plan Administrator shall certify to the Insurer the Beneficiary
designation on its records for the Participant.
If, at the death of a Participant, there is no Beneficiary named or
surviving, any death benefit under the Group Contract or Insurance Policy
shall be paid under the applicable provisions of the respective documents.
SECTION 9.08 -- NONALIENATION OF BENEFITS.
Benefits payable under the Plan are not subject to the claims of any
creditor of any Participant, Beneficiary, spouse or Contingent Annuitant. A
Participant, Beneficiary, spouse or Contingent Annuitant does not have any
rights to alienate, anticipate, commute, pledge, encumber or assign any of
such benefits, except in the case of a loan as provided in the LOANS TO
PARTICIPANTS SECTION of Article V. The preceding sentences shall also apply
to the creation, assignment, or recognition of a right to any benefit payable
with respect to a Participant according to a domestic relations order, unless
such order is determined by the Plan Administrator to be a qualified domestic
relations order, as defined in Code Section 414(p), or any domestic relations
order entered before January 1, 1985.
SECTION 9.09 -- CONSTRUCTION.
The validity of the Plan or any of its provisions is determined under and
construed according to Federal law and, to the extent permissible, according
to the laws of the state in which the Employer has its principal office. In
case any provision of this Plan is held illegal or invalid for any reason,
such determination shall not affect the remaining provisions of this Plan, and
the Plan shall be construed and enforced as if the illegal or invalid
provision had never been included.
In the event of any conflict between the provisions of the Plan and the
terms of any contract or policy issued hereunder, the provisions of the Plan
control the operation and administration of the Plan.
SECTION 9.10 -- LEGAL ACTIONS.
The Plan, the Plan Administrator, the Trustee and the Named Fiduciary are
the necessary parties to any action or proceeding involving the assets held
with respect to the Plan or administration of the Plan or Trust. No person
employed by the Employer, no Participant, former Participant or their
Beneficiaries or any other person having or claiming to have an interest in
the Plan is entitled to any notice of process. A final judgment entered in
any such action or proceeding shall be binding and conclusive on all persons
having or claiming to have an interest in the Plan.
SECTION 9.11 -- SMALL AMOUNTS.
If the Vested Account of a Participant has never exceeded $3,500, the
entire Vested Account shall be payable in a single sum as of the earliest of
his Retirement Date, the date he dies, or the date he ceases to be an Employee
for any other reason. This is a small amounts payment. If a small amount is
payable as of the date the Participant dies, the small amounts payment shall
be made to the Participant's Beneficiary (spouse if the death benefit is
payable to the spouse). If a small amount is payable while the Participant is
living, the small amounts payment shall be made to the Participant. The small
amounts payment is in full settlement of all benefits otherwise payable. The
service credited to a Participant who is reemployed by the Employer is not
diminished as a result of receiving a small amounts payment.
No other small amounts payments shall be made.
SECTION 9.12 -- WORD USAGE.
The masculine gender, where used in this Plan, shall include the feminine
gender and the singular words as used in this Plan may include the plural,
unless the context indicates otherwise.
SECTION 9.13 -- TRANSFERS BETWEEN PLANS.
If an Employee previously participated in another plan of the Employer
which credited service under the elapsed time method for any purpose which
under this Plan is determined using the hours method, then the Employee's
service shall be equal to the sum of (a), (b) and (c) below:
(a) The number of whole years of service credited to him under the other
plan as of the date he became an Eligible Employee under this Plan.
(b) One year or a part of a year of service for the applicable service
period in which he became an Eligible Employee if he is credited with
the required number of Hours-of-Service. If the Employer does not have
sufficient records to determine the Employee's actual Hours-of-Service
in that part of the service period before the date he became an
Eligible Employee, the Hours-of-Service shall be determined using an
equivalency. For any month in which he would be required to be
credited with one Hour-of-Service, the Employee shall be deemed for
purposes of this section to be credited with 190 Hours-of-Service.
(c) The Employee's service determined under this Plan using the hours
method after the end of the applicable service period in which he
became an Eligible Employee.
If an Employee previously participated in another plan of the Employer
which credited service under the hours method for any purpose which under this
Plan is determined using the elapsed time method, then the Employee's service
shall be equal to the sum of (d), (e) and (f) below:
(d) The number of whole years of service credited to him under the other
plan as of the beginning of the applicable service period under that
plan in which he became an Eligible Employee under this Plan.
(e) The greater of (1) the service that would be credited to him for that
entire service period using the elapsed time method or (2) the service
credited to him under the other plan as of the date he became an
Eligible Employee under this Plan.
(f) The Employee's service determined under this Plan using the elapsed
time method after the end of the applicable service period under the
other plan in which he became an Eligible Employee.
Any modification of service contained in this Plan shall be applicable to
the service determined pursuant to this section.
If the Employee previously participated in the plan of a Controlled Group
member which credited service under a different method than is used in this
Plan, for purposes of determining eligibility and vesting the provisions above
shall apply as though the plan of the Controlled Group member were a plan of
the Employer.
<PAGE>
ARTICLE X
TOP-HEAVY PLAN REQUIREMENTS
SECTION 10.01 -- APPLICATION.
The provisions of this article shall supersede all other provisions in the
Plan to the contrary.
For the purpose of applying the Top-heavy Plan requirements of this
article, all members of the Controlled Group shall be treated as one Employer.
The term Employer as used in this article shall be deemed to include all
members of the Controlled Group unless the term as used clearly indicates only
the Employer is meant.
The accrued benefit or account of a participant which results from
deductible voluntary contributions shall not be included for any purpose under
this article.
The minimum vesting and contribution provisions of the MODIFICATION OF
VESTING REQUIREMENTS and MODIFICATION OF CONTRIBUTIONS SECTIONS of Article X
shall not apply to any Employee who is included in a group of Employees
covered by a collective bargaining agreement which the Secretary of Labor
finds to be a collective bargaining agreement between employee representatives
and one or more employers, including the Employer, if there is evidence that
retirement benefits were the subject of good faith bargaining between such
representatives. For this purpose, the term "employee representatives" does
not include any organization more than half of whose members are employees who
are owners, officers, or executives.
SECTION 10.02 -- DEFINITIONS.
The following terms are defined for purposes of this article.
AGGREGATION GROUP means
(a) each of the Employer's retirement plans in which a Key Employee is a
participant during the Year containing the Determination Date or one
of the four preceding Years,
(b) each of the Employer's other retirement plans which allows the plan(s)
described in (a) above to meet the nondiscrimination requirement of
Code Section 401(a)(4) or the minimum coverage requirement of Code
Section 410, and
(c) any of the Employer's other retirement plans not included in (a) or
(b) above which the Employer desires to include as part of the
Aggregation Group. Such a retirement plan shall be included only if
the Aggregation Group would continue to satisfy the requirements of
Code Section 401(a)(4) and Code Section 410.
The plans in (a) and (b) above constitute the "required" Aggregation
Group. The plans in (a), (b) and (c) above constitute the "permissive"
Aggregation Group.
COMPENSATION means, as to an Employee for any period, compensation as
defined in the CONTRIBUTION LIMITATION SECTION of Article III. For
purposes of determining who is a Key Employee, Compensation shall include,
in addition to compensation as defined in the CONTRIBUTION LIMITATION
SECTION of Article III, elective contributions. Elective contributions
are amounts excludable from the Employee's gross income under Code
Sections 125, 402(e)(3), 402(h) or 403(b), and contributed by the
Employer, at the Employee's election, to a Code Section 401(k)
arrangement, a simplified employee pension, cafeteria plan or tax-sheltered
annuity.
For purposes of Compensation as defined in this section, Compensation
shall be limited to the maximum dollar amount, as adjusted, in the same
manner and in the same time as the Compensation defined in the DEFINITION
SECTION of Article I.
DETERMINATION DATE means as to this Plan for any Year, the last day of the
preceding Year. However, if there is no preceding Year, the Determination
Date is the last day of such Year.
KEY EMPLOYEE means any Employee or former Employee (including
Beneficiaries of deceased Employees) who at any time during the
determination period was
(a) one of the Employer's officers (subject to the maximum below) whose
Compensation (as defined in this section) for the Year exceeds 50
percent of the dollar limitation under Code Section 415(b)(1)(A),
(b) one of the ten Employees who owns (or is considered to own, under Code
Section 318) more than a half percent ownership interest and one of
the largest interests in the Employer during any Year of the
determination period if such person's Compensation (as defined in this
section) for the Year exceeds the dollar limitation under Code Section
415(c)(1)(A),
(c) a five-percent owner of the Employer, or
(d) a one-percent owner of the Employer whose Compensation (as defined in
this section) for the Year is more than $150,000.
Each member of the Controlled Group shall be treated as a separate
employer for purposes of determining ownership in the Employer.
The determination period is the Year containing the Determination Date and
the four preceding Years. If the Employer has fewer than 30 Employees, no
more than three Employees shall be treated as Key Employees because they
are officers. If the Employer has between 30 and 500 Employees, no more
than ten percent of the Employer's Employees (if not an integer, increased
to the next integer) shall be treated as Key Employees because they are
officers. In no event will more than 50 Employees be treated as Key
Employees because they are officers if the Employer has 500 or more
Employees. The number of Employees for any Plan Year is the greatest
number of Employees during the determination period. Officers who are
employees described in Code Section 414(q)(8) shall be excluded. If the
Employer has more than the maximum number of officers to be treated as Key
Employees, the officers shall be ranked by amount of annual Compensation
(as defined in this section), and those with the greater amount of annual
Compensation during the determination period shall be treated as Key
Employees. To determine the ten Employees owning the largest interests in
the Employer, if more than one Employee has the same ownership interest,
the Employee(s) having the greater annual Compensation shall be treated as
owning the larger interest(s). The determination of who is a Key Employee
shall be made according to Code Section 416(i)(1) and the regulations
thereunder.
NON-KEY EMPLOYEE means a person who is a non-key employee within the meaning
of Code Section 416 and regulations thereunder.
PRESENT VALUE means the present value of a participant's accrued benefit
under a defined benefit plan as of his normal retirement age (attained age
if later) or, if the plan provides nonproportional subsidies, the age at
which the benefit is most valuable. The accrued benefit of any Employee
(other than a Key Employee) shall be determined under the method which is
used for accrual purposes for all plans of the Employer or if there is no
one method which is used for accrual purposes for all plans of the
Employer, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under Code Section 411(b)(1)(C). For purposes of
establishing Present Value, any benefit shall be discounted only for 7.5%
interest and mortality according to the 1971 Group Annuity Table (Male)
without the 7% margin but with projection by Scale E from 1971 to the
later of (a) 1974, or (b) the year determined by adding the age to 1920,
and wherein for females the male age six years younger is used. If the
Present Value of accrued benefits is determined for a participant under
more than one defined benefit plan included in the Aggregation Group, all
such plans shall use the same actuarial assumptions to determine the
Present Value.
TOP-HEAVY PLAN means a plan which is a top-heavy plan for any plan year
beginning after December 31, 1983. This Plan shall be a Topheavy Plan if
(a) the Top-heavy Ratio for this Plan alone exceeds 60 percent and this
Plan is not part of any required Aggregation Group or permissive
Aggregation Group.
(b) this Plan is a part of a required Aggregation Group, but not part of a
permissive Aggregation Group, and the Top-heavy Ratio for the required
Aggregation Group exceeds 60 percent.
(c) this Plan is a part of a required Aggregation Group and part of a
permissive Aggregation Group and the Top-heavy Ratio for the permissive
Aggregation Group exceeds 60 percent.
TOP-HEAVY RATIO means the ratio calculated below for this Plan or for the
Aggregation Group.
(a) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer has
not maintained any defined benefit plan which during the five-year
period ending on the determination date has or has had accrued
benefits, the Top-heavy Ratio for this Plan alone or for the required
or permissive Aggregation Group as appropriate is a fraction, the
numerator of which is the sum of the account balances of all Key
Employees as of the determination date and the denominator of which is
the sum of all account balances of all employees as of the
determination date. Both the numerator and denominator of the
Top-heavy Ratio are adjusted for any distribution of an account balance
(including those made from terminated plan(s) of the Employer which
would have been part of the required Aggregation Group had such
plan(s) not been terminated) made in the five-year period ending on the
determination date. Both the numerator and denominator of the
Top-heavy Ratio are increased to reflect any contribution not actually
made as of the Determination Date, but which is required to be taken
into account on that date under Code Section 416 and the regulations
thereunder.
(b) 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
during the five-year period ending on the determination date has or has
had accrued benefits, the Top-heavy Ratio for any required or
permissive Aggregation Group as appropriate is a fraction, the
numerator of which is the sum of the account balances under the
defined contribution plan(s) of all Key Employees and the Present
Value of accrued benefits under the defined benefit plan(s) for all
Key Employees, and the denominator of which is the sum of the account
balances under the defined contribution plan(s) for all employees and
the Present Value of accrued benefits under the defined benefit plans
for all employees. Both the numerator and denominator of the Top-heavy
Ratio are adjusted for any distribution of an account balance or an
accrued benefit (including those made from terminated plan(s) of the
Employer which would have been part of the required Aggregation Group
had such plan(s) not been terminated) made in the five-year period
ending on the determination date.
(c) For purposes of (a) and (b) above, the value of account balances and
the Present Value of accrued benefits will be determined as of the
most recent valuation date that falls within or ends with the 12-month
period ending on the determination date, except as provided in Code
Section 416 and the regulations thereunder for the first and second
plan years of a defined benefit plan. The account balances and
accrued benefits of an employee who is not a Key Employee but who was
a Key Employee in a prior year will be disregarded. The calculation
of the Top-heavy Ratio and the extent to which distributions, rollovers
and transfers during the five-year period ending on the determination
date are to be taken into account, shall be determined according to
the provisions of Code Section 416 and regulations thereunder. The
account balances and accrued benefits of an individual who has
performed no service for the Employer during the five-year period
ending on the determination date shall be excluded from the Top-heavy
Ratio until the time the individual again performs service for the
Employer. Deductible employee 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.
Account, as used in this definition, means the value of an employee's
account under one of the Employer's retirement plans on the latest
valuation date. In the case of a money purchase plan or target benefit
plan, such value shall be adjusted to include any contributions made for
or by the employee after the valuation date and on or before such
determination date or due to be made as of such determination date but not
yet forwarded to the insurer or trustee. In the case of a profit sharing
plan, such value shall be adjusted to include any contributions made for
or by the employee after the valuation date and on or before such
determination date. During the first Year of any profit sharing plan such
adjustment in value shall include contributions made after such
determination date that are allocated as of a date in such Year. The
nondeductible employee contributions which an employee makes under a
defined benefit plan of the Employer shall be treated as if they were
contributions under a separate defined contribution plan.
VALUATION DATE means, as to this Plan, the last day of the last calendar
month ending in a Year.
YEAR means the Plan Year unless another year is specified by the Employer
in a separate written resolution in accordance with regulations issued by
the Secretary of the Treasury or his delegate.
SECTION 10.03 -- MODIFICATION OF VESTING REQUIREMENTS.
A Participant's nonforfeitable percentage is 100%. Such percentage is at
all times at least as great as the nonforfeitable percentage required to
satisfy the requirements of Code Section 416.
The part of the Participant's Vested Account resulting from the minimum
contributions required pursuant to the MODIFICATION OF CONTRIBUTIONS SECTION
of Article X shall not be forfeited because of a period of reemployment after
benefit payments have begun.
SECTION 10.04 -- MODIFICATION OF CONTRIBUTIONS.
During any Year in which this Plan is a Top-heavy Plan, the Employer shall
make a minimum contribution or allocation on the last day of the Year for each
person who is a Non-key Employee on that day and who either was or could have
been an Active Participant during the Year. A Non-key Employee is not required
to have a minimum number of hours-of-service or minimum amount of Compensation,
or to have had any Elective Deferral Contributions made for him in order to be
entitled to this minimum. The minimum contribution or allocation for such
person shall be equal to the lesser of (a) or (b) below:
(a) Three percent of such person's Compensation (as defined in this
article).
(b) The "highest percentage" of Compensation (as defined in this article)
for such Year at which the Employer's contributions are made for or
allocated to any Key Employee. The highest percentage shall be
determined by dividing the Employer Contributions made for or
allocated to each Key Employee during such Year by the amount of his
Compensation (as defined in this article), which is not more than the
maximum set out above, and selecting the greatest quotient (expressed
as a percentage). To determine the highest percentage, all of the
Employer's defined contribution plans within the Aggregation Group
shall be treated as one plan. The provisions of this paragraph shall
not apply if this Plan and a defined benefit plan of the Employer are
required to be included in the Aggregation Group and this Plan enables
the defined benefit plan to meet the requirements of Code Section
401(a)(4) or Code Section 410.
If the Employer's contributions and allocations otherwise required under
the defined contribution plan(s) are at least equal to the minimum above, no
additional contribution or reallocation shall be required. If the Employer's
contributions and allocations are less than the minimum above and Employer
Contributions under this Plan are allocated to Participants, any Employer
Contributions (other than those which are allocated on the basis of the amount
made for such person) shall be reallocated to provide the minimum. The
remaining Contributions shall be allocated as provided in the preceding
articles of this Plan taking into account any amount which was reallocated to
provide the minimum. If the Employer's total contributions and allocations
are less than the minimum above after any reallocation provided above, the
Employer shall contribute the difference for the Year.
The minimum contribution or allocation applies to all of the Employer's
defined contribution plans in the aggregate which are Top-heavy Plans. If an
additional contribution or allocation is required to meet the minimum above,
it shall be provided in this Plan.
A minimum allocation under a profit sharing plan shall be made without
regard to whether or not the Employer has profits.
If a person who is otherwise entitled to a minimum contribution or
allocation above is also covered under a defined benefit plan of the
Employer's which is a Top-heavy Plan during that same Year, the minimum
benefits for him shall not be duplicated. The defined benefit plan shall
provide an annual benefit for him on, or adjusted to, a straight life basis of
the lesser of (c) two percent of his average pay multiplied by his years of
service or (d) twenty percent of his average pay. Average pay and years of
service shall have the meaning set forth in such defined benefit plan for this
purpose.
For purposes of this section, any employer contribution made according to
a salary reduction or similar arrangement shall not apply before the first
Yearly Date in 1985. On and after the first Yearly Date in 1989, any such
employer contributions and employer contributions which are matching
contributions, as defined in Code Section 401(m), shall not apply in
determining if the minimum contribution requirement has been met, but shall
apply in determining the minimum contribution required. Forfeitures credited
to a Participant's Account are treated as employer contributions.
The requirements of this section shall be met without regard to
contributions under Chapter 2 of the Code (relating to tax on self-employment),
Chapter 21 of the Code (relating to Federal Insurance Contributions Act),
Title II of the Social Security Act or any other Federal or state law.
SECTION 10.05 - MODIFICATION OF CONTRIBUTION LIMITATION.
If the provisions of subsection (e) of the CONTRIBUTION LIMITATION SECTION
of Article III are applicable for any Limitation Year during which this Plan
is a Top-heavy Plan, the benefit limitations shall be modified. The
definitions of Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction in the CONTRIBUTION LIMITATION SECTION of Article III shall be
modified by substituting "1.0" in lieu of "1.25." The optional denominator for
determining the Defined Contribution Plan Fraction shall be modified by
substituting "$41,500" in lieu of "$51,875." In addition, an adjustment shall
be made to the numerator of the Defined Contribution Plan Fraction. The
adjustment is a reduction of that numerator similar to the modification of the
Defined Contribution Plan Fraction described in the CONTRIBUTION LIMITATION
SECTION of Article III, and shall be made with respect to the last Plan Year
beginning before January 1, 1984.
The modifications in the paragraph above shall not apply with respect to a
Participant so long as employer contributions, forfeitures or nondeductible
employee contributions are not credited to his account under this or any of
the Employer's other defined contribution plans and benefits do not accrue for
such Participant under the Employer's defined benefit plan(s), until the sum
of his Defined Contribution and Defined Benefit Plan Fractions is less than
1.0.
<PAGE>
By executing this Plan, the Primary Employer acknowledges having counseled
to the extent necessary with selected legal and tax advisors regarding the
Plan's legal and tax implications.
Executed this 24th day of December, 1998.
NEW ENGLAND COMMUNITY BANCORP, INC.
By: David A. Lentini
President and Chairman
Title
<PAGE>
The Adopting Employer must agree to participate in or adopt the Plan in
writing. If this has not already been done, it may be done by signing below.
NEW ENGLAND BANK & TRUST COMPANY
By: /s/ David A. Lentini
President and Chief Executive Officer
Title
December 24, 1998
Date
THE EQUITY BANK
By: /s/ Frank A. Falvo
President and Chief Executive Officer
Title
December 24, 1998
Date
COMMUNITY BANK
By: /s/ Giacomo L. Acquarulo
Pres. & C.E.O.
Title
12-23-98
Date
OLDE PORT BANK & TRUST COMPANY
By: /s/ Michael E. Kenslea
Chairman & CEO
Title
12/28/98
Date
Exhibit 5
December 29, 1998
New England Community Bancorp, Inc.
176 Broad Street
Windsor, Connecticut 06095
Ladies and Gentlemen:
We are counsel for New England Community Bancorp, Inc., a Delaware
corporation (the "Company"), and issue the following opinion in connection
with a Registration Statement on Form S-8 (the "Registration Statement"),
to be filed by the Company under the Securities Act of 1933, as amended
(the "Act"), with respect to the proposed offering by the Company of up to
250,000 shares of its Common Stock, par value $.10 per share (the
"Shares"), and interests in the New England Community Bancorp 401(k) Plan
(the "Plan").
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of the Plan, the Amended and Restated
Certificate of Incorporation and Amended and Restated Bylaws of the
Company, and such other documents, corporate records, certificates of
public officials and instruments as we have considered necessary or
advisable for the purpose of this opinion. We have assumed the
authenticity of all documents submitted to us as originals and the
conformity to original documents of all documents submitted to us as
copies. We have not independently verified such information and
assumptions.
We are members of the Bar of the State of Connecticut and we express
no opinion as to the law of any jurisdiction other than the laws of the
State of Connecticut and Delaware corporate law.
Subject to the foregoing and based on such examination and review, we
are of the opinion that, when the Registration Statement has become
effective under the Act and the Shares have been issued and delivered
against payment therefor in accordance with the applicable provisions of
the Plan and proper resolutions of the Board of Directors of the Company
relating thereto, any Shares originally issued pursuant to the Plan will be
duly authorized, validly issued, fully paid and non-assessable (assuming
that, at the time of such issuance, the Company has a sufficient number of
authorized shares available for such issuance).
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving the foregoing consent, we do not thereby
admit that we are in the category of persons whose consent is required
under Section 7 of the Act, or the rules and regulations of the Securities
and Exchange Commission thereunder.
Very truly yours,
/s/ Day, Berry & Howard LLP
DAY, BERRY & HOWARD LLP
Exhibit 23.1
SHATSWELL, MacLEOD & COMPANY, P.C.
Certified Public Accountants
83 Pine Street
West Peabody, Massachusetts 01960-3635
Telephone (978) 535-0206
Facsimile (978) 535-9908
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
on Form S-8 of New England Community Bancorp, Inc., of our report dated
January 29, 1998, except for Note 2, as to which the date is February 10,
1998, on our audits of the consolidated financial statements of New England
Community Bancorp, Inc. and Subsidiaries as of December 31, 1997 and 1996
and for each of the three years in the period ended December 31, 1997,
which report is included in New England Community Bancorp, Inc.'s 1997
Annual Report on Form 10-K.
/s/ Shatswell, MacLeod & Company, P.C.
Shatswell, MacLeod & Company. P.C.
West Peabody, Massachusetts
December 29, 1998
EXHIBIT NO. 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of New England Community
Bancorp, Inc. of our reports dated January 23, 1998, except for Note 15, as
to which the date is March 19, 1998, included in Bank of South Windsor's
Form 10-K for the year ended December 31, 1997 and to all references to our
Firm included in this registration statement.
/s/ Arthur Andersen LLP
Hartford, Connecticut
December 29, 1998
