SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM N-lA
1940 Act File No. 811-4421
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 16
CO-OPERATIVE BANK INVESTMENT FUND
d/b/a Bank Investment Fund
(Exact Name of Registrant as Specified in Charter)
75 Park Plaza
Boston, Massachusetts 02116-3934
(Address of Principal Executive Offices)
(617) 695-0415
(Registrant's Telephone Number)
JAMES L. BURNS, JR.
President and Chief Executive Officer
Bank Investment Fund
75 Park Plaza
Boston, Massachusetts 02116-3934
(Name and Address of Agent for Service)
Copies to:
ROBERT E. McLAUGHLIN, ESQ.
Steptoe & Johnson
1330 Connecticut Avenue, N.W.
Washington, D.C. 20036
Dated: March 27, 1997
(267 Pages, including Exhibits)<PAGE>
PART A
Items 1-3.
Not applicable, as this Registration Statement is filed
only under the Investment Company Act of 1940 (the 1940 Act")
and does not relate to the registration of any securities of the
Registrant under the Securities Act of 1933.
Item 4. General Description of Registrant; Risk Factors
(a) (i) The Registrant is a corporation organized
effective April 7, 1985 pursuant to a special act of the
Commonwealth of Massachusetts (Massachusetts Acts of 1984,
Chapter 482, as amended by Massachusetts Acts of 1986, Chapter
244, Massachusetts Acts of 1990, Chapter 277, Massachusetts
Acts of 1991, Chapter 285, and Massachusetts Acts of 1993,
Chapter 147) (collectively, the "Charter"). The
Registrant's chartered name is the Co-operative Bank Investment
Fund, and the Registrant does business under the name Bank
Investment Fund. The Registrant commenced active operations on
October 18, 1985. The Registrant was established to provide one
or more mutual investment funds for Massachusetts cooperative
banks and other institutions as described in Item 6(a). From
October 18, 1985 through October 12, 1988, the Registrant's
operations were performed through a single investment fund. On
October 12, 1988, the Registrant organized a second fund as a
money market fund. The Registrant is regulated by the
Massachusetts Commissioner of Banks.
The Registrant is an open-end management company.
The Registrant operates as a diversified management
company, but reserves the freedom of action to change
its portfolio concentration to that of a nondiversified
management company.
(ii) The Registrant's current operation is
performed through a no-load, diversified, open-end
investment fund ("Fund One") and a no-load,
diversified, open-end money market fund (the "Liquidity
Fund") (Fund One and the Liquidity Fund are hereinafter
referred to collectively as the "Funds"). The
objective of each of the Funds is to maximize current
income consistent with liquidity of assets and safety
of principal. The fundamental restrictions and
investment policies of the Registrant for Fund One and
Liquidity Fund are described in the following two
paragraphs.
The Registrant has a policy of investing
Fund One's assets principally in (A) cash on hand and
due from banks, (B) balances payable upon demand or
certificates of deposits due from a Massachusetts trust
company or a national banking association or banking
company, (C) bonds and other direct obligations of the
United States or obligations unconditionally guaranteed
as to principal and interest by the United States,
(D)bonds and notes of the Commonwealth of Massachusetts
or any political subdivision thereof, which when
purchased was rated A-1 by Standard & Poor's
Corporation ("Standard & Poor's) or Prime-1 by
Moody's Investors Service, Inc.("Moody's") or, if not
rated, have been determined under procedures adopted
and supervised by the Registrant's Board of Directors
to be of comparable high quality, (E) certain federal
agency obligations which have unexpired terms of five
years or less, to include obligations of, or
instruments issued by and fully guaranteed by, the
Federal National Mortgage Association, debentures,
bonds or other obligations issued by a Federal Home
Loan Bank or consolidated Federal Home Loan Bank
debentures or bonds issued by the Federal Home Loan
Bank Board under the Federal Home Loan Bank Act,
debentures issued by the federal central bank for
co-operatives, or consolidated debentures issued by
said Central Bank and the 12 regional Banks for
co-operatives under the Farm Credit Act of 1933
or any successors thereto, collateral trust
debentures or other similar obligations issued by
any federal intermediate credit bank or consolidated
debentures or other similar obligations issued by
the 12 federal intermediate credit banks under the
Federal Farm Loan Act, farm loan bonds issued by any
federal loan bank under the Federal Farm Loan Act,
and promissory notes representing domestic farm labor
housing loans authorized by Section 514 of the
Federal Housing Act of 1949, as amended by the Federal
Housing Act of 1961,(F) repurchase agreements involving
government securities, (G) debt instruments, to include,
Federal funds and/or deposits in the Federal Home
Loan Bank, deemed eligible for state banks legal
liquidity by the Commonwealth of Massachusetts or the
Commissioner of Banks, and (H) certain short-term
money market instruments. Fund One's portfolio of
investments was comprised of items (A), (B), (E), and
(F) as of December 31, 1996.
The Registrant has a policy of investing
the Liquidity Fund's assets principally in
(A) cash on hand and demand deposits due from
banks;(B)certificates of deposit due from any trust
company, national banking association, banking
company, or any federally insured savings bank,
co-operative bank or savings & loan association
(C) bankers, acceptances; (D) bonds and other
direct obligations of the United States or
obligations unconditionally guaranteed as to
principal and interest by the United States,
and issues of U.S. Government agencies and
instrumentalities which are established under
the authority of an act of Congress; (E) bonds
and notes of the Commonwealth of Massachusetts
or any political subdivision thereof; which when
purchased, are rated A-1 by Standard & Poor's
Corporation ("Standard & Poor's) or Prime-1 by
Moody's Investors Service, Inc.("Moody's") or,
if not rated, have been determined under
procedures adopted and supervised by the
Registrant's Board of Directors to be of
comparable high quality,(F)repurchase
agreements; (G) commercial paper which, when
purchased, is rated A-1 by Standard & Poor's
Corporation ("Standard & Poor's) or Prime-1 by
Moody's Investors Service, Inc.("Moody's") or,
if not rated, has been determined under
procedures adopted and supervised by the
Registrant's Board of Directors to be of
comparable high quality, including variable
amount master demand notes and short-term
obligations of corporations; (H)Second Tier
securities to the extent permissible by Rule
2a-7 of the Investment Company Act of 1940
(no more than 5% of the Funds assets, in the
aggregate, may be invested in "second tier"
securities, with no more than 1% of the Fund's
assets or one million dollars, whichever is
greater, invested in the second tier securities
of any one issuer) including commercial paper
which when purchased is rated A-2 by Standard
& Poor's or Prime-2 by Moody's or if not rated,
has been determined under procedures adopted,
and supervised by the Fund's Board of Directors
to be of comparable quality. Commercial paper
obligations in the second tier category may
include variable amount master demand notes
and short-term obligations of corporations;
(I) any other debt instrument to include,
Federal funds and/or deposits in the Federal
Home Loan Bank, deemed eligible for state banks
legal liquidity by the Commonwealth of
Massachusetts or the Commissioner of Banks
or the Commissioner of Banks; and (J) certain
short-term money market instruments. All of
the investments for the Liquidity Fund must
have a maturity or remaining maturities of
397 days or less; except for, variable rate
instruments, which provide for adjustment of
interest rates on set dates(currently daily or
weekly) and which upon such adjustment is
expected to have a market values that
approximate their par values, may have a final
maturity in excess of 397 days, but for
purposes of calculating the average maturity
will be deemed to have a maturity equal to (1)
the period remaining until the next
readjustment of the interest rate if it is an
instrument issued or guaranteed by the United
States Government or any agency thereof, or (2)
the longer of the period remaining until the
next readjustment of the interest rate or the
period remaining until the principal amount can
be recovered through demand. The Liquidity Fund
will maintain a dollar-weighted average
maturity of 90 days or less. The Liquidity
Fund may invest more than 25% of its assets in
the banking industry. The Liquidity Fund's
portfolio of investments was comprised of items
(A), (B), (D), (G), (I) and (J) as of December
31, 1996.
The Registrant's board of directors has
established procedures designed to stabilize the per
share net asset value of shares of the Liquidity Fund
at $1,000.
Under repurchase agreements entered into by the
Registrant, the Registrant purchases government
securities from a seller subject to an unconditional
agreement to sell the same securities or other assets
back to the seller at a higher price. If a purchaser
under such a repurchase agreement does not assure its
interest by taking possession of a sufficient amount of
assets, or the market value of such assets does not
remain sufficient, the purchaser is at risk in the
event that the seller under such agreement does not
fulfill its obligations under the agreement. It is the
Registrant's policy to minimize risk under such
agreements by (a) having its custodian take possession
of securities purchased under such agreements and
(b) determining that the market value of the securities
purchased under such an agreement is adequate to secure
its interest at the time of purchase and over the life
of the agreement.
The Funds may enter into reverse repurchase
agreements to meet short term liquidity needs of the
Funds. These agreements may not be in excess of three
business days. Any such borrowing would be limited to
borrowing allowable under Section 18 of the Investment
Company Act of 1940 and applicable regulations
promulgated thereunder.
Because holders of the shares of beneficial
interest issued by the Registrant do not have voting
rights (see Item 4(c) below), the objectives of the
Registrant's Funds may be changed without a vote of
those holders.
The Registrant may establish in the future other
distinct investment funds with investment objectives
different from those which the Registrant has adopted
for the Funds. The Registrant's Charter, however,
restricts the Registrant's authority to invest its
assets to certain specified types of securities and
other property. See Item 13 of Part B, "Investment
Objectives and Policies."
(b) No response is required.
(c) (i) Lack of Management Control of the Registrant
by the Investors. The shares of beneficial interest
issued by the Registrant do not provide holders of
such shares with any voting rights. The Registrant's
Board of Directors is elected by the Registrant's
incorporators, who are the directors of The
Co-operative Central Bank (the "Central Bank"), which
is the statutory reserve bank and excess deposit
insurer for Massachusetts co-operative banks. The
Registrant operates pursuant to an exemption from
those provisions of the 1940 Act which require that
shares of stock issued by a registered investment
management company be voting shares.*
(ii) Limited Transferability of Shares. The
Registrant's shares may not be issued to any persons
other than those certain institutions identified as
eligible investors under Item 6(a) below. The
Registrant's shares may not be transferred by such
*On October 17, 1985 the Securities and Exchange Commission
issued an order pursuant to Section 6(c) of the 1940Act exempting
the Registrant from Sections 13(a), 15(a), 16(a), and (b), 18(I),
22(d) and (e), 24(d), and 32(a) (2) and (3) of the 1940Act (File)
No. 812-6154). This order was amended by the Commission on July
16, 1986. On September 30, 1992 and December 21, 1993, the
Commission issued further orders exempting the Registrant from
Sections 13(a), 15(a), 16(a) and (b), 18(I), 22(d), and 13(a) (2)
and (3) of the 1940 Act (File Nos. 812-7847 and 812-8616,
respectively.
investors to any persons other than other eligible
investors(except that the shares may be pledged to
such other persons, or may be transferred to the
Central Bank). See Item 6, "Capital Stock and Other
Securities." See also the footnote accompanying Item
4(c)(I) above.
(iii) Officers and Employees Not Full-Time. The
executive officers of the Registrant have significant
duties as officers and employees of the Central Bank,
and are not full-time employees of the Registrant.
However, these officers devote to the Registrant's
affairs such time as is reasonably necessary to
conduct its business.
Item 5. Management of the Funds
(a) The Registrant's charter provides that its Board
of Directors shall have full control of the business of the
Registrant, except for certain powers retained by the
Registrant's incorporators. In particular, the Board of
Directors has authority to invest the Registrant's assets,
subject to the limitations of the Registrant's Charter.
(b) The Registrant does not currently employ the
services of an investment advisor. Investment decisions for the
Registrant are made by authorized officers of the Registrant,
pursuant to authority delegated by the Registrant's Board of
Directors. The Registrant reserves the right to appoint an
investment advisor at any reasonable and customary fee as may be
agreed when, in the opinion of the Registrant's Board of
Directors, the use of such services would improve the Funds'
performance.
(c) (i) The Registrant does not currently utilize the
services of any person (other than its directors,
officers or employees) to provide significant
administrative or business affairs management services
to the registrant.
(ii) The primary investment officer of the Funds
is James L. Burns, Jr., President. He has held this
position since inception of the Registrant in 1985.
For more than 15 years prior to the inception of the
Registrant, he managed investment portfolios for the
Co-operative Central Bank and the State Street Bank
and Trust Company, Boston, Massachusetts.
(d) The Registrant does not utilize the services of a
transfer agent or a dividend paying agent.
(e) The Registrant has reimbursed the Central Bank for
its proportionate share of expenses for facilities or services
used in common by both the Registrant and the Central Bank, such
as office rent, furniture and equipment. All fees and expenses
for the Registrant are estimated and accrued daily. Actual
operating expenses for the year ended December 31, 1996 were
.432% of average net assets for Fund One and .150% of average net
assets for the Liquidity Fund. Operating expenses of $34,800 were
paid or accrued by Fund One as reimbursement to the Central Bank
during the year ended December 31, 1996.
The Liquidity Fund paid $33,600 to Fund One for its
proportionate share of office rent, employee compensation,
equipment and data processing, insurance and other general
expenses in the year ended December 31, 1996.
Expenses directly related to the operation of one of
the Funds are charged to that Fund. Common and indirect expenses
are allocated between the Funds in accordance with the annual
budget as determined by the Board of Directors of the
Corporation to be fair and equitable or on such other basis
as the board of Directors of the Corporation may determine
from time to time to be fair and equitable.
(f) The Registrant does not engage in, or contemplate
engaging in, any of the practices referred to in subsection (f)
of item 5 of Form N-lA.
Item 5A. Not applicable, as this Registration Statement is filed
only under the 1940 Act and does not relate to the registration
of any securities of the Registrant under the Securities Act of
1933.
Item 6. Capital Stock and Other Securities
(a) The Registrant has no capital stock; beneficial
ownership of the Registrant is represented by shares of
beneficial interest divided into two classes, the Fund One Class
and the Liquidity Fund Class. Each share within each such class
is equal in every respect to every other share of that class.
The shares of beneficial interest in the Registrant do not
provide holders of such shares with any voting rights. The right
to elect the Registrant's board of directors is vested in the
Registrant's incorporators, who are the directors of the Central
Bank.
Under the Registrant's Charter, its shares may not be
issued to any persons other than Massachusetts co-operative
banks, Massachusetts savings banks, the Co-operative Banks
Employees Retirement Association, the Central Bank, the
Massachusetts Co-operative Bank League, The Savings Bank Life
Insurance Company of Massachusetts, the National Consumer
Co-operative Bank, Massachusetts trust companies, credit
unions incorporated in Massachusetts and federally chartered
credit unions, savings banks and savings and loan associations
with their principal places of business in Massachusetts and
affiliates of other eligible investors in the Registrant.
Notwithstanding these charter provisions, the Registrant is not
currently offering its shares to any credit unions, the
Co-operative Banks Employees Retirement Association, or the
Massachusetts League of Community Banks (formerly called the
Massachusetts Co-operative Bank League), nor is it offering its
shares to any affiliate of an eligible investor other than a
wholly-owned subsidiary of an otherwise eligible investor.
Moreover, shares of the Liquidity Fund are not being offered to
any affiliate of any eligible investor, but rather is offered to
eligible banking institutions only. The Registrant's shares may
not be transferred by eligible investors to any persons other
than such eligible investors (except that the shares may be
pledged to such other persons by such investors, or may be
transferred to the Central Bank). If the Registrant's shares are
acquired by any other person by operation of law or by
foreclosure upon the pledge of such shares (or through transfer
in the case of the Central Bank), and if such condition is known
to the Registrant, no dividend may be paid on such shares after
30 days from the date of such acquisition. Furthermore, the
Registrant must offer to repurchase the shares from such person
at net asset value of the shares, less any dividends paid
thereon, after said thirty days. If such offer is refused, the
redemption price which the holder of such shares may obtain in
any subsequent repurchase of those shares by the Registrant is
limited to the net asset value of the shares as last determined
during said thirty days. See Item 8, "Redemption or Repurchase,"
as to eligible shareholders, redemption rights.
(b) As of the date of filing of this Registration
Statement, no person controls the Registrant within the meaning
of subsection (b) of Item 6 of Form N-lA.
(c) There is no authority in the Registrant's charter
or by-laws for modification of the rights of the holders of the
Registrant's shares of beneficial interest.
(d) The Registrant does not have any authority to issue
any securities other than its shares of beneficial interest.
(e) Shareholder inquiries may be made to the Registrant
in writing addressed to Bank Investment Fund, 75 Park Plaza,
Boston, Massachusetts 02116-3934. Telephone inquiries may be
made by calling (617) 695-0415.
(f) The Registrant's policy is to declare dividends from
net income on each day the Funds are open for business and to
make payments thereof to shareholders on a monthly basis.
Distributions of realized net capital gains, if any, are declared
and paid once a year.
Unless an investor elects in writing to receive
dividends on a cash basis, dividends and distributions are
credited to each investor's investment account as additional
shares in the Registrant of the same class as the shares on which
the dividend was paid, at net asset value on the date of payment.
An investor wishing to change the method by which it receives
dividends and distributions must notify the Registrant in writing
at least one week before the effective date of such change.
(g) The Registrant has and intends to continue to meet
the requirements of Subchapter M of the Internal Revenue Code for
regulated investment companies with respect to Fund One and
intends to meet such requirements with respect to the Liquidity
Fund and, therefore, will not be liable for federal income taxes
to the extent that its earnings are distributed.
Each of the Funds must meet several requirements to
maintain its status as a regulated investment company. Among
these requirements are that at least 90% of its gross income be
derived from dividends, interest, payment with respect to
securities loans or other disposition of securities and certain
other income; that at the close of each quarter of its taxable
year at least 50% of the value of its assets consist of cash and
cash items, government securities, securities of other regulated
investment companies and, subject to certain diversification
requirements, other securities; and that no more than 30% of its
gross income be derived from sales of securities held for less
than three months.
Dividends derived from interest, together with
distributions of any short-term capital gains, are taxable as
ordinary income whether or not reinvested in shares of the
Registrant. Dividends of the Registrant will not qualify for the
85% dividends received provisions of the Internal Revenue Code
for corporations. Investors in the Registrant may be
proportionately liable for taxes on income and gains of the
Registrant. The Registrant will inform its shareholders of the
amount and nature of any income or gains.
Item 7. Purchase of Securities Being offered
(a) Not applicable.
(b) (i) The Registrant continuously offers shares of
each class to all eligible investors and such shares
(except shares of which the redemption price has become
fixed under special conditions set forth in the
Charter, as described under Item 6(a), "Capital Stock
and Other Securities") are sold and redeemed by each
Fund only at prices equal to the net asset value of the
shares of such Fund's class outstanding. The net asset
value per share for each Fund is determined by adding
the value of all securities and other assets held by
the applicable Fund, deducting liabilities of such
Fund and dividing by the number of shares of such
Fund's class outstanding.
With respect to Fund One, investments in
United States debt securities and agency
securities are normally valued on the basis of
valuations provided by market makers. Such prices
are believed to reflect the fair value of such
securities and take into account appropriate factors
such as institutional size, trading in similar groups
of securities, yield quality, coupon rate, maturity,
type of issue, and other market data. Prices for
securities with respect to which market quotations are
not readily available will be determined on the basis
of fair market value as determined in good faith by the
Registrant's Board of Directors. The Liquidity Fund's
investment securities are valued based on their
amortized cost without taking into account unrealized
appreciation or depreciation. The Registrant's Board
of Directors has established procedures to stabilize
the net asset value per share of the Liquidity Fund at
$1,000.00.
(ii) The net asset value per share for each Fund
is determined as of the close of the New York Stock
Exchange on days when the Registrant's custodian bank
is open for business. The price at which an order is
effected is based on the next calculation of net asset
value after the order is placed.
(iii)-(v) No sales charge will be made and no
sales load will be involved in the distribution of any
class of the Registrant's shares.
(c) There are no special purchase plans or methods
contemplated by the Registrant.
(d) The minimum initial investment in the Registrant
is $50,000 (although in certain cases the Registrant may require
a larger minimum investment in accordance with the requirements
of applicable securities laws). Additional investments may be
made in any amount in excess of $50,000.
(e) The Registrant does not pay any "trail fees" as
defined in subsection (e) of Item 7 of Form N-lA.
(f) (i) The Registrant, by action of its Board of
Directors, has adopted a plan under Rule 12b-1 of
the 1940 Act for the payment of distribution expenses
for the Funds (the "Plan"). The Plan provides for
quarterly review by the Registrant's Board of Directors
of the amount of and purposes for which expenditures
were made under the Plan and an additional, more
extensive annual review in determining whether the Plan
will be continued. By its terms, continuation of the
Plan from year to year is contingent on an annual
approval (1) by a majority of the Registrant's
Directors and (2) by a majority of the Directors who
are not "interested persons" as defined in the 1940 Act
and who have no direct or indirect financial interest
in the operation of the Plan or any related agreements
(the Directors described in (1) and (2) being herein
referred to as the "Plan Directors"). The Plan may be
terminated at any time by vote of a majority of the
Plan Directors.
(ii) The principal types of activities for
which payments will be made pursuant to the Plan
are: (1) Fees for membership in trade associations,
including associations in which investors eligible to
invest in one or more of the Funds are members; (2)
Sponsorship of program activities at conferences
attended by eligible investors, or attendance at such
conferences by the Registrant's personnel, and related
travel, meal and other expenses; (3) meals and other
expenses, including travel expenses, related to
business meetings with investors and potential
investors in one or more of the Funds; (4) Personal
items marked with the name or logo of the Registrant
for distribution to investors or eligible investors in
the Registrant; (5) Printing and postage expenses for
written materials to be sent to eligible investors who
are not shareholders in the Registrant; (6)
Subscription to publications for re-distribution to
eligible investors of the Registrant; (7) Formulation
and implementation of marketing and promotional
activities; (8) compensation to officer responsible
for sales and customer service and (9) any other
activities of a substantially similar nature which may
result in the sale of Shares, either directly or
through other persons with which the Registrant may
enter into agreements related to the Plan in
accordance with Rule 12b-1.
(iii) There are no unreimbursed expenses
incurred in any previous plan year and carried over to
future plan years.
The Plan is applicable to both Fund One and the
Liquidity Fund. Any expenses incurred pursuant to the Plan which
directly relate to the sale or distribution of shares of either
Fund, e.g., printing and mailing of offering materials, will be
allocated to and paid by the applicable Fund. Expenses which
do not directly relate to the sale and/or distribution of shares
of either Fund will be allocated between the Funds in accordance
with the annual budget as determined by the Board of Directors
of the Corporation to be fair and equitable or on such other
basis as the board of Directors of the Corporation may
determine from time to time to be fair and equitable.
Item 8. Redemption or Repurchase
(a) The Registrant will redeem shares of either class
from shareholders of record, without any charge, at the per share
net asset value next determined for such class after a request
for redemption is received. Redemption may be requested, if
authorized in advance and in writing, by telephone request to the
Registrant. Shareholders also may make redemption requests by
signed written request addressed to the Registrant. When the
amount to be redeemed is at least $5,000, the Registrant will
wire transfer the amount redeemed to a bank account designated by
the shareholder.
Payment for shares redeemed will be made by the
Registrant within one business day, except as noted in Item 8(d)
below. Redemption of shares or payment may be suspended at times
(a) when the New York Stock Exchange is closed, (b) when trading
on said Exchange is restricted, (c) when an emergency exists as a
result of which disposal by the Registrant of securities owned by
it is not reasonably practicable or it is not reasonably
practicable for the Registrant to fairly determine the value of
the net assets of the Funds, or (d) during any period when the
Securities and Exchange Commission, by order, so permits;
provided that applicable rules and regulations of the Securities
and Exchange Commission shall govern as to whether the conditions
prescribed in (b) or (c) exist.
The Liquidity Fund reserves the freedom of action to
invest more than 25% of its assets in the banking industry
through Certificates of Deposit and Federal Funds sold in the
ordinary course of its business.
(b) The Registrant has not established any procedure
whereby a shareholder can sell its shares to the Registrant
through a broker/dealer.
(c) The Registrant has not established any procedure
which would permit it to redeem shares involuntarily in accounts
below a certain number or value of shares.
(d) The Registrant reserves the right to delay payment
upon request for redemption up to seven business days after any
investment that has been made with uncollected funds.
Item 9. Pending Legal Proceedings
There are no legal proceedings pending to which the
Registrant is a party.
PART B
STATEMENT OF ADDITIONAL INFORMATION
CO-OPERATIVE BANK INVESTMENT FUND
d/b/a Bank Investment Fund
This Statement of Additional Information is not a
prospectus, and should be read in conjunction with Part A of the
Registrant's Registration Statement, dated March 27, 1997 under
the Investment Company Act of 1940 of which this Statement of
Additional Information is a part. A copy of the entire
Registration Statement, including Part A, may be obtained upon
request from the Bank Investment Fund, 75 Park Plaza, Boston,
Massachusetts 02116-3934, (617) 695-0415.
Dated: March 27, 1997
Item 11. Table of Contents
Item No. Title Page No.
12 General Information and History 16
13 Investment objectives and Policies 16
14 Management of the Fund 20
15 Control Persons and Principal Holders 24
of Securities
16 Investment Advisory and Other Services 25
17 Brokerage Allocation 27
18 Capital Stock and Other Securities 28
19 Purchase, Redemption and Pricing of 29
Securities Being Offered
20 Tax Status 30
21 Underwriters 30
22 Calculations of Yield Quotations of 30
Money Market Funds
23 Financial Statements 31
Item 12. General Information and History
The Registrant commenced active operations as an
investment company on October 18, 1985. General information
regarding the Registrant is included under Item 4 of Part A of
the Registration Statement of which this Statement of Additional
Information is a part.
Item 13. Investment Objectives and Policies
(a) The fundamental investment policies and
restrictions of the Registrant followed in connection with the
Registrant's operations are described under Item 4(a) of Part A
of the Registration Statement of which this Statement of
Additional Information is a part.
The Registrant may establish other distinct investment
funds with investment policies which differ from the policies to
be followed with regard to the Registrant's current operations
through the Funds. The Registrant is, however, limited in its
discretion to establish investment policies by certain provisions
of its Charter, which restrict the Registrant's authority to
invest its assets to the following powers:
(1) to make and acquire loans insured by the
Federal Housing Administrator which are secured by
mortgages on real property located within
Massachusetts, or to service such loans;
(2) to invest in debt obligations of the United
States and Massachusetts, certain debt obligations of
other states, certain debt obligations of Canada, debt
obligations of certain other nations (subject to an
aggregate three percent limitation), most federal
agency obligations, debt obligations of Massachusetts
municipalities and certain debt obligations of the
municipalities of other states;
(3) to invest in bonds and other evidences of
indebtedness registered on a national securities
exchange, or for which price quotations are available
through publications of The National Quotation Bureau,
Inc. or a comparable service, or through a national
securities market established in accordance with
Section 11A of the Securities Exchange Act of 1934, or
securities commonly known as 'money market"
instruments, including, but not limited to, commercial
paper, banker's acceptances, certificates of deposit,
repurchase agreements entered into with a bank and
repurchase agreements with entities other than banks,
provided that the term of such agreements may not be in
excess of three business days;
(4) to invest in shares of common stock or
preferred stock, provided that, as regards common
stock, such stock is registered on a national
securities exchange, and, as regards preferred stock,
the common stock of the corporation issuing or having
issued such preferred stock, is so registered;
(5) to invest in any shares of common stock or
preferred stock, other than those registered on a
national securities exchange, for which quotations are
available through publications of The National
Quotation Bureau, Inc. or any comparable service, or
through a national securities market.
The Registrant is not authorized to, and does not,
invest in shares of common or preferred stock as described in
paragraph (4) and (5) above in either Fund One or Liquidity Fund.
The Registrant's authority to invest in the shares of
common or preferred stock described in paragraph (5) above is
limited by its Charter to 10% of the Registrant's total assets.
Furthermore, the Registrant's Charter provides that no
more than 5% of the Registrant's assets may be invested in the
securities of any one issuer except for: (i) direct obligations
of the United States; (ii) obligations unconditionally guaranteed
by the United States; (iii) obligations of, or instruments issued
by and fully guaranteed by, the Federal National mortgage
Association; (iv) debentures, bonds or other obligations issued
by a Federal Home Loan Bank or consolidated Federal Home Loan
Bank debentures or bonds issued by the Federal Home Loan Bank
Board under the Federal Home Loan Bank Act; (v) debentures issued
by the central bank for co-operatives, or consolidated debentures
issued by said central bank and the 12 regional banks for co-
operatives under the Farm Credit Act of 1933 or any successors
thereto; (vi) collateral trust debentures or other similar
obligations issued by any federal intermediate credit bank or
consolidated debentures or other similar obligations issued by
the 12 federal intermediate credit banks under the Federal Farm
Loan Act; (vii) farm loan bonds issued by any federal loan bank
under the Federal Farm Loan Act; and (viii) promissory notes
representing domestic farm labor housing loans authorized by
Section 514 of the Federal Housing Act of 1949, as amended by the
Federal Housing Act of 1961.
The Liquidity Fund may invest more than 25% of its
assets in the banking industry through Certificates of Deposits
and Federal Funds sold in the ordinary course of its business.
(b) (1) The Registrant does not have any authority to
issue any securities, including senior securities, other than the
shares of beneficial interest which will be sold to eligible
investors pursuant to the Registrant's Charter.
(2) The Registrant has no power under its
Charter or otherwise to engage in short sales, purchases on
margin, or the writing of put or call options.
(3) The Registrant may borrow money under its
Charter, provided that the term of such borrowing may not be in
excess of three business days. This authority is designed to
meet short-term liquidity needs of the Registrant which might
otherwise require liquidation of portfolio assets. Any such
borrowing, including reverse repurchase agreements, would be
limited to borrowing allowable under Section 18 of the 1940 Act
and applicable regulations promulgated thereunder.
(4) The Registrant has no power under its
Charter to underwrite securities of other issuers, or to acquire
securities that must be registered under the Securities Act of
1933 before they may be offered or sold to the public.
(5) As described in Item 4 of Part A of the
Registration Statement of which this Statement of Additional
Information is a part, the investment policy for the Registrant's
operation of the Funds is to maintain investments principally in
assets which are eligible for inclusion in the reserve account
which must be maintained by Massachusetts co-operative banks
under Section 22 of Chapter 170 of the Massachusetts General
Laws.
(6) As indicated above under Item 13(a)(1)
"Investment Objectives and Policies," the Registrant's Charter
allows the Registrant to make and acquire certain real estate
mortgage loans. The Registrant does not currently intend to
exercise such power.
(7) The Registrant has no power under its
Charter to engage in the purchase or sale of commodities or
commodity contracts.
(8) Other than the securities which are of the
nature excepted from Item 13(b)(8) of Form N-lA, the Registrant
does not make loans to other persons, except that the Registrant
may make short-term loans of portfolio securities to
broker/dealers collateralized by securities received from such
broker/dealers of like quality and value of which the Registrant
will take possession.
(9) Fundamental investment policies and
restrictions of the Registrant for Fund one and Liquidity Fund,
followed in connection with the Registrant's operations, are
described under Item 4(a) of Part A of the Registration Statement
of which this Statement of Additional Information is a part. The
Registrant does not treat any other policy as a matter of
"fundamental policy" pursuant to Section 8(b)(3) of the 1940 Act.
(c) The Registrant does not have any significant
investment policies other than as described above and in Item 4
of Part A of the Registration Statement of which this Statement
of Additional Information is a part.
(d) The portfolio turnover ratio of Fund One for the
year ended December 31, 1996 was 49.3%. Portfolio purchase and
sale activity was lower in 1996 than in 1995. Portfolio
transactions in 1996 were based upon yield curve opportunities
in addition to reinvestment of maturities and called
securities together with normal response to share investment
and redemption activity. The portfolio turnover ratio of Fund
One for the year ended December 31, 1995 was 84.5%. Portfolio
purchase and sale activity was higher in 1995 than in 1994.
The 1995 activity resulted primarily from the combination
of (1)normal response to share investment and redemption
activity through the year (2) normal portfolio maturities and
reinvestment transactions and (3) managements first quarter
1995 restructuring of the portfolio to take advantage of the
changing market conditions for the remainder of the year.
As described in Item 4(a)(ii) of Part A of the
Registration Statement of which this Statement of Additional
Information is a part, all of the investments for the Liquidity
Fund must have a remaining maturity of 397 days or less and the
Liquidity Fund will maintain a dollar weighted average maturity
of 90 days or less. Due to the short-term nature of such a
portfolio, investments are expected to be held to maturity, in
most instances, except when redemption, market conditions, or
other liquidity needs warrant sales in advance of maturity,
except for, variable rate instruments which provide for
adjustment of interest rates on set dates (currently daily or
weekly) and which upon such adjustment can reasonably be expected
to have a market value that approximates its par value may have a
final maturity in excess of 397 days, but for purposes of
calculating the average maturity will be deemed to have a
maturity equal to (1) the period remaining until the next
readjustment of the interest rate if it is an instrument issued
or guaranteed by the United States Government or any agency
thereof, or (2) the longer of the period remaining until the next
readjustment of the interest rate or the period remaining until
the principal amount can be recovered through demand.
Item 14. Management of the Fund
(a)
(1) (2) (3)
Position(s)
Name Held with Principal Occupation(s)
and Address Registrant during past 5 years
James L. Burns, Jr. President and President and Chief
75 Park Plaza Chief Execu- Executive Officer of the
Boston, MA 02116-3934 tive officer Registrant and President
(since November 1991) and
Executive Vice President
(from February 1973 to
October 1991) of The
Co-operative Central
Bank, Boston,
Massachusetts
William F. Casey, Jr. Executive Executive Vice President
75 Park Plaza Vice President of the Registrant and
Boston, MA 02116-3934 Executive Vice President
(since November 1991),
Financial vice President
(from May 1980 to October
1991) and Treasurer of
The Co-operative Central
Bank, Boston,
Massachusetts
Susan L. Ellis Vice President Vice President of
75 Park Plaza and Treasurer The Co-operative Central
Boston, MA 02116-3934 Bank, Boston,
Massachusetts, and
Vice President of the
Registrant, and (since
March 1990) Treasurer
of the Registrant
Jeremiah J. Foley Vice President Vice President of the
75 Park Plaza and Clerk of Registrant and Vice
Boston, MA 02116-3934 the Corpora- President, and (since
tion October 1990) Clerk of
The Co-operative Central
Bank, Boston,
Massachusetts
(a) (Cont'd)
(1) (2) (3)
Position(s)
Name Held with Principal Occupation(s)
and Address Registrant during past 5 years
Robert E. Haley Vice President Vice President of the
75 Park Plaza Registrant since August
Boston, MA 02116-3934 1990
Annemarie Lee Vice President Vice President (since
75 Park Plaza December 1993) and
Boston, MA 02116-3934 Assistant President of
the Registrant,
(1987-1993), and employed
in various capacities
since 1979 with The
Co-operative Central
Bank, Boston,
Massachusetts
Claire R. Bothwell Director President and Chairman of
P.O. Box 849 the Board of the Ware
Ware, MA 01082 Co-operative Bank, Ware,
Massachusetts
John T. Day Director and Chairman of the Board
430 W. Broadway Chairman of of Mount Washington
S. Boston, MA 02127 the Board Co-operative Bank,
S. Boston, Massachusetts
Robert F. Day Director President of The Needham
1063 Great Plain Ave. Co-operative Bank, Need-
Needham, MA 02192 ham, Massachusetts
Charles P. Hooker Director Chairman of the Board of
70 South Street Pittsfield Co-operative
Pittsfield, MA 01202 Bank,
Pittsfield, Massachusetts
Frederic D. Legate Director President of The Sandwich
100 Old King's Highway Co-operative Bank,
Sandwich, MA 02563 Sandwich, Massachusetts
(a) (Cont'd)
(1) (2) (3)
Position(s)
Name Held with Principal Occupation(s)
and Address Registrant during past 5 years
Walter A. Murphy Director and Chairman of the Board of
P.O. Box 557 Clerk of the Falmouth Co-Operative
Falmouth, MA 02541 Board Bank,
Falmouth, Massachusetts
Charles G. Peterson Director Member of the Board of The
1010 Washington St. Braintree Co-operative
S. Braintree, MA 02184 Bank, S. Braintree,
Massachusetts
(b) Not applicable.
(c) The following table sets forth, for each of the
three highest paid officers and directors of the Registrant whose
total direct or indirect remuneration from the Registrant
exceeded $60,000 and for all directors and officers of the
Registrant as a group, all direct and indirect remuneration paid
or accrued by the Registrant for services in all capacities
during the year ended December 31, 1996.
(1) (2) (3) (4)
Name of Person, Aggregate Pension or Estimated
Position Compensation Retirement Annual
From Registrant Benefits Accrued Benefits
(1) As Part of Upon(2)
Fund Expenses Retirement
Claire R. Bothwell
Director $ 4,000 0 0
John T. Day
Director and Chairman
of the Board 4,000 0 0
Robert F. Day
Director 4,000 0 0
Charles P. Hooker
Director 3,000* 0 0
Frederic D. Legate
Director 4,000* 0 0
Walter A. Murphy
Director and Clerk of
the Board 4,100 0 0
Charles G. Peterson
Director 3,100 0 0
James L. Burns, Jr.
President and Chief
Executive Officer 93,949 3,742 103,855
William F. Casey, Jr.
Executive Vice President 57,500 3,692 100,271
Susan L. Ellis
Vice President 59,000 5,767 120,777
Robert E. Haley
Vice President 101,693 10,100 66,966
Officers and $402,092 $29,694 $591,526
Directors
as a Group
(thirteen
persons
including
the above)
__________________________
(1) Includes Directors fees; does not include health and
hospitalization insurance benefits provided to all salaried
employees of the Registrant pursuant to plans which do not
discriminate in favor of officers and directors; Does not
include remuneration paid by the Co-operative Central Bank
for services provided to such Bank.
(2) Includes all estimated benefits accrued with respect to
the Co-operative Banks Employees' Retirement Association (the
retirement association for the Central Bank, the Registrant,
Massachusetts co-operative banks, and certain other
institutions), whether attributable to the Central Bank or
the Registrant.
* The above figures are deferred compensation totaling $7,000.
_______________________________
Item 15. Control Persons and Principal Holders of Securities
(a) No person is in a control relationship with the
Registrant.
(b) As of February 28, 1997 the following four (4)
investors of Fund One and two (2) investor of Liquidity Fund
owned of record 5% or more of the shares of beneficial interest.
The shares of beneficial interest do not provide the holders of
such shares with any voting rights.
% of ownership,
both beneficially
Holder and of record
Fund One
The Co-operative Central Bank 12.35%
Boston, Massachusetts
Needham Co-operative Bank
Needham, Massachusetts 8.40%
Pittsfield Co-operative Bank
Pittsfield, Massachusetts 6.53%
Mt. Washington Co-operative Bank
S.Boston, Massachusetts 5.25%
Liquidity Fund
MassBank for Savings
Melrose, Massachusetts 11.23%
Cambridge Savings Bank
Cambridge, Massachusetts 9.52%
(c) The directors and officers of the Registrant are
not eligible to hold the equity securities of the Registrant; the
Registrant's Charter limits its eligible shareholders to certain
Massachusetts banks and certain other institutions. The
directors are also directors and/or officers of co-operative
banks which own beneficial interests in shares of the Funds.
Item 16. Investment Advisory and Other Services
(a)-(b) The Registrant does not currently utilize the
services of an investment advisor. Investment decisions for the
Registrant are made by authorized officers of the Registrant,
subject to authority delegated by the Registrant's Board
of Directors. The Registrant reserves the right to appoint an
investment advisor at any reasonable and customary fee as may be
agreed when, in the opinion of the Registrant's Board of
Directors, the use of such services would improve the Funds'
performance.
(c)-(d) See Item 5(e) of Part A of the Registration
Statement of which this Statement of Additional Information is
apart for a discussion of the Registrant's reimbursement
arrangement with the Central Bank in connection with operating
expenses paid by the Central Bank on behalf of the Registrant.
(e) No person other than a director, officer or
employee of the Registrant furnishes advice to the Registrant
with respect to investments.
(f) See Item 7(f) of Part A of the Registration
Statement of which this Statement of Additional Information is a
part for a discussion of the Plan adopted by the Registrant
pursuant to which it will incur expenses related to the
distribution of each class of Shares. The expenditures to be
made pursuant to the Plan may not exceed an amount calculated at
the rate of .12% per annum of the average daily net assets of
each of the Funds with respect to direct expenses and of both of
the Funds with respect to indirect expenses.
(i) The Registrant spent $236,234 ($153,741
Fund One and $82,493 Liquidity Fund) in the
year ended December 31, 1996 for the following
activities indicated under the Plan:
(A) $2,814 and $1,386 for advertising in
trade journals and similar publications for
Fund One and Liquidity Fund which the
Registrant determines are likely to be read
by representatives of eligible investors;
(B) $9,457 and $9,877 for printing and
mailing the offering materials for Fund
One and Liquidity Fund to eligible
investors which are not currently owners
of shares of such Funds;
(C, D and F) No amounts were spent for the
activities described in Item 16(f)(I) (C, D
and F) of the instructions to Form N-lA; and
(E) $82,807 and $40,785 for compensation,
payroll taxes and benefits to officer
responsible for sales and customer service;
(G-1) $15,038 and $7,407 for sponsorship of
annual subscriptions on behalf of
participating investors to IDC Financial
Publishing, Inc.;
(G-2) $16,035 and $7,898 for other
promotional material;
(G-3) $10,080 and $4,965 for sponsorship of
and/or attendance at conferences and
conventions of banking and other groups
including eligible investors as members or
participants; and
(G-4) $17,510 and $10,175 for other related
expenses (telephone, travel, etc.).
(ii) No interested person of the Registrant or
director of the Registrant who is not an
interested person of the Registrant has or will
have any direct or indirect financial
interest in the operation of the Plan, except
that compensation, payroll taxes and other
benefits to an officer responsible for sales
and customer service are deemed by the
Registrant to be expenses related to the
distribution of the Registrant's shares and
counted toward the limits of the Plan.
(iii) The Registrant is required by applicable
state statute to distribute offering materials
and periodic reports to all entities which are
eligible investors of the Funds. The
Registrant believes that the investors in the
Funds will benefit from expenditures made to
ensure that the Funds are operated in
accordance with applicable state law and from
the spread of the Funds, operating expenses
over a larger pool of Fund assets resulting from
increased subscriptions to the Funds.
(g) The portfolio securities of the Registrant are held
by a commercial bank pursuant to a custodian agreement.
(h) The Registrant's custodian is State Street Bank and
Trust Company, 225 Franklin Street, Boston, Massachusetts 02110.
This custodian holds the securities owned by the Registrant and
any money delivered by the Registrant's shareholders or due to
the Registrant.
The Registrant's independent public accountant is
Parent, McLaughlin & Nangle, Certified Public Accountants, Inc.,
176 Federal Street, Boston, Massachusetts 02110. This firm
functions as the Registrant's auditors in the preparation of
annual financial statements required by federal and state law,
and provides general accounting services to the Registrant.
(I) Not applicable.
Item 17. Brokerage Allocation
(a) Transactions in portfolio securities are effected,
by or through broker/dealers chosen by the Registrant.
Securities are received, delivered or exchanged by the
Registrant's custodian bank in connection with such transactions
upon written instructions received from such brokers or
representatives of the Registrant. The Registrant has to date
purchased and sold securities at prices reflecting broker/dealer
markup and for which no separate commission has been paid.
Information regarding the amount of broker/dealer markups are not
provided by broker/ dealers and it is not possible to calculate
the aggregate amount of such markups; however, the Registrant
monitors securities prices available from a number of
broker/dealers to ensure that competitive prices for securities
purchases are obtained.
(b) Not applicable.
(c) The Registrant selects broker/dealers on the basis
of prior experience of the Registrant's management with various
broker/dealers and monitors the reliability and quality of their
services to ensure that services rendered are comparable, and
that securities prices paid and commissions paid, if any, are
competitive, with those of other qualified broker/dealers.
(d) Not applicable.
(e) Not applicable.
Item 18. Capital Stock and Other Securities
(a) (i) Section 3 of the Registrant's Charter provides
that the Registrant will have no capital stock;
beneficial ownership of the Registrant is represented
by shares of beneficial interest without par value
divided into Fund One Class shares and Liquidity Fund
Class shares. Such shares are referred to as the
Registrant's shares.
(ii) (A) The declaration of dividends is in the
discretion of the Registrant's Board of Directors,
subject to certain limitations specified in the
Registrant's Charter.
(B) For the reasons stated in the response to Item
6, "Capital Stock and other Surplus," of Part A of the
Registration Statement of which this Statement of
Additional Information is a part, there are no
securities of the Registrant having voting rights.
(C) All shares of each class of the Registrant's
shares have equal rights upon any liquidation to the
assets of the Fund for which such class of shares was
issued.
(D) Holders of the Registrant's shares do not have
pre-emptive rights.
(E) Holders of the Registrant's shares do not have
any conversion rights.
(F) See Item 8, "Redemption or Repurchase," of Part
A of the Registration Statement of which this Statement
of Additional Information is a part for a discussion of
the redemption provisions applicable to the
Registrant's shares.
(G) There are no sinking fund provisions applicable
to the Registrant's shares.
(H) Holders of the Registrant's shares have no
liability to further calls or to assessments by the
Registrant.
(b) Not applicable.
Item 19. Purchase, Redemption and Pricing of Securities Being
Offered
(a) See Item 7(b) of Part A of the Registration
Statement of which this Statement of Additional Information is a
part as to the manner in which the Registrant's shares are
offered to eligible investors.
(b) The Registrant's shares are offered and sold
pursuant to a private offering to eligible investors. The
offering price of the shares of each Fund's class is the net
asset value per share of that Fund's shares as of the date of
purchase of such shares. The net asset value per share for each
class of the Registrant's shares is determined by the Registrant
as of the close of trading on the New York Stock Exchange
(currently 4:00 p.m. New York time) on days when the Registrant's
custodian bank is open for business. The net asset value
per share for each Fund is computed by taking the value of all
assets of the applicable Fund, subtracting its liabilities, and
dividing by the number of shares of such Fund's class
outstanding.
With respect to Fund One, investments in United States
government and Federal agency debt securities held by the
Registrant are normally valued on the basis of valuations
provided by market makers. Such prices are believed to reflect
the fair value of such securities and take into account
appropriate factors such as institutional size, trading in
similar groups of securities, yield quality, coupon rate,
maturity, type of issue, and other market data.
The Liquidity Fund's investment securities are
valued based on their amortized cost without taking into account
unrealized appreciation or depreciation. This method of
valuation involves valuing an instrument at its cost and
thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. While this
method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or
lower than the price the Liquidity Fund would receive if it sold
the instrument.
The valuation of portfolio instruments based upon their
amortized cost and the concomitant maintenance of the Liquidity
Fund's per share net asset value of $1,000 is permitted
in accordance with Rule 2a-7 of the 1940 Act, subject to the
adherence by the Liquidity Fund to certain conditions. The
Liquidity Fund must (I) maintain a dollar-weighted average
maturity of 90 days or less, (ii) purchase only instruments
having remaining maturities of one year or less, and (iii) invest
only in securities determined by the Registrant's Board
of directors to present minimal credit risks and which are of
high quality as determined by a major rating service, or, in
the case of any instrument which is not rated, which are of
comparable quality as determined by the Registrant's Board
of Directors. The Board of Directors has established procedures
designed to stabilize the Liquidity Fund's net asset value per
share at $1,000. Such procedures will include review of the
Liquidity Fund's investments by the Board of Directors, at
such intervals as they may deem appropriate, to determine
whether the Liquidity Fund's net asset value calculated by
using available market quotations deviates from $1,000 per
share and, if so, whether such deviation may result in material
dilution or is otherwise unfair to existing shareholders. In
the event the Board of Directors determines that such a
deviation exists, it will take such corrective action as it
regards as necessary and appropriate, including (I) the sale
of portfolio instruments prior to maturity to realize capital
gains or losses or to shorten average portfolio maturity, (ii)
withholding dividends, or (iii) establishing a net asset value
per share by using available market quotations.
The information requested in Instructions 2 and 4 of
Item 19 are not applicable to either of the Registrant's Funds
and the information requested in Instruction 6 of Item 19 is not
applicable to Fund One. A specimen price make up sheet, as
requested by Instruction 5, is furnished as part of Exhibit 17.
(c) The Registrant has not received an order of
exemption from Section 18(f) of the 1940 Act from the Commission
nor filed a notice of election pursuant to Rule 18f-1.
Item 20. Tax Status
See discussion under Item 6(g) of Part A of the
Registration Statement of which this Statement of Additional
Information is a part.
Item 21. Underwriters
This item is not applicable to the Registrant because
there are no underwriters currently distributing its securities
nor is such a method of distribution contemplated.
Item 22. Calculations of Yield Quotations
(a) Yield. The yield for the Liquidity Fund for the
seven-day period ended December 31, 1996 was 5.19%. Yield is
calculated based on the 7-day period ending on the date of the
most recent statement of Assets and Liabilities as included
herein, using the formula prescribed by Item 22(a)(I) of Form
N-lA. A schedule of the computation of yield is furnished as
part of Exhibit 16.
(b)(i) Total Return. The total return for Fund One for
the year ended December 31, 1996 was 4.10%. Total return for the
five years ended December 31, 1996 was 5.22%. Total return for
the ten years ended December 31, 1996 was 6.83%.
Fund One's total return for each of the foregoing
periods was computed by finding, through the use of the formula
prescribed by Item 22(b)(i) of Form N-lA, the average annual
compounded rates of return over the period that equates an
assumed $1,000 invested to the value of the investment at the end
of the period. For purposes of computing total return, income
dividends and capital gains distributions paid on shares of Fund
One are assumed to have been reinvested when received. A
schedule of the computation of total return is furnished as
part of Exhibit 16.
(ii) Yield. The yield for Fund One for the thirty-day
period ended December 31, 1996 was 6.25%. Yield is calculated
based on the 30-day period ending on the date of the most recent
statement of Assets and Liabilities as included herein, using
the formula prescribed by Item 22(b)(ii) of Form N-lA. A
schedule of the computation of yield is furnished as part of
Exhibit 16.
Item 23. Financial Statements
Financial Statements of Fund One of the Registrant for
the year ended December 31, 1996 and the report of the
Registrant's independent certified public accountants thereon for
the year ended December 31, 1996 are included herewith.
Financial Statements of the Liquidity Fund of the Registrant for
the year ended December 31, 1996 and the report of the
Registrant's independent certified public accountants thereon for
the year ended December 31, 1996 are also included herewith.<PAGE>
BANK INVESTMENT FUND - FUND ONE
FINANCIAL STATEMENTS
For the year ended December 31, 1996
INDEPENDENT AUDITOR'S REPORT
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
BANK INVESTMENT FUND - FUND ONE
BOSTON, MASSACHUSETTS
We have audited the accompanying statement of assets and
liabilities of Bank Investment Fund - Fund One, including the
schedule of portfolio investments, as of December 31, 1996, and
the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in
the period then ended, and the selected per share data and
ratios for each of the ten years in the period then ended. These
financial statements and per share data and ratios are the
responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements and per
share data and ratios based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and per share data and ratios are free
of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation
of securities owned as of December 31, 1996, by correspondence
with the custodians. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and selected per
share data and ratios referred to above present fairly, in all
material respects, the financial position of Bank Investment
Fund - Fund One as of December 31, 1996, the results of its
operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and
the selected per share data and ratios for each of the ten
years in the period then ended, in conformity with generally
accepted accounting principles.
Parent McLaughlin & Nangle
Certified Public Accountants
Member of the SEC Practice Section, American Institute of
Certified Public Accountants
January 21, 1997
BANK INVESTMENT FUND--FUND ONE
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
INVESTMENTS IN SECURITIES, at value
(Identified cost $132,822,428).............................. $131,825,612
REPURCHASE AGREEMENTS........................................ 18,140,000
INTEREST RECEIVABLE.......................................... 2,249,594
CASH......................................................... 86,511
------------
TOTAL ASSETS............................................... 152,301,717
------------
LIABILITIES:
DIVIDENDS PAYABLE............................................ 535,115
ACCRUED EXPENSES............................................. 175,360
------------
TOTAL LIABILITIES.......................................... 710,475
------------
NET ASSETS: (Equivalent to $974.8002 per share based on
155,510.0645 shares of beneficial interest outstanding)....... $151,591,242
============
REPRESENTED BY:
Paid-in Capital.............................................. $169,857,567
Accumulated net losses on investments........................
(17,269,509)
Unrealized depreciation of investments.......................
(996,816)
------------
TOTAL NET ASSETS........................................... $151,591,242
============
</TABLE>
See notes to financial statements.
13
BANK INVESTMENT FUND--FUND ONE
STATEMENT OF OPERATIONS
Year Ended December 31, 1996
<TABLE>
<CAPTION>
<S> <C>
<C>
INVESTMENT INCOME:
Interest income, net of interest expense of $1,045.... $10,237,558
EXPENSES:
Compensation, payroll taxes and benefits--officers.... $225,148
Compensation, payroll taxes and benefits--other....... 85,401
Distribution expenses................................. 153,741
Occupancy............................................. 63,612
Professional fees..................................... 33,700
Meetings and travel................................... 32,845
Equipment and data processing......................... 22,100
Directors' fees....................................... 17,600
Postage and telephone................................. 15,000
Other expenses........................................ 11,763
Insurance expense..................................... 4,400
--------
TOTAL EXPENSES............................. ..... 665,310
-----------
INVESTMENT INCOME--NET........................... $9,572,248
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on investments................... 119,293
Change in net unrealized appreciation (depreciation) on investment
securities....................................... (3,497,470)
-----------
Net realized and unrealized gain (loss) on investments (3,378,177)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS....................................... $6,194.171
==========
</TABLE>
See notes to financial statements.
14
BANK INVESTMENT FUND--FUND ONE
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1996 1995
---------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Investment income--net..................... $ 9,572,248 $ 9,093,939
Net realized gain (loss) on investments.... 119,293 (3,906,419)
Unrealized appreciation (depreciation)--net. (3,497,470) 10,741,902
---------------------------
Net increase in net assets resulting from
operations 6,194,071 15,929,422
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net........................ (9,572,248) (9,093,939)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST--NET
INCREASE....................................... 8,414,388 10,389,168
---------------------------
TOTAL INCREASE IN NET ASSETS................ 5,036,211 17,224,651
NET ASSETS:
Beginning of year............................. 146,555,031 129,330,380
---------------------------
End of year.................................. $151,591,242 $146,555,031
===========================
</TABLE>
See notes to financial statements.
15
BANK INVESTMENT FUND--FUND ONE
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
Obligations of Federal Agencies--86.9%
Par Coupon Maturity Date Value
------------------------------------------------------------
<S> <C> <C> <C> <C>
Federal Farm Credit Banks $ 2,500,000 6.40% 07/25/00 $ 2,487,500
2,000,000 6.05 02/12/01 1,941,250
5,000,000 6.19 03/19/01 4,968,750
2,000,000 6.20 04/09/01 1,988,750
------------ ------------
$ 11,500,000 Cost $ 11,500,000) $ 11,386,250
------------ ------------
Federal Home Loan Bank $ 2,000,000 7.725% 01/27/97 $ 2,003,750
2,000,000 5.595 02/16/99 1,979,375
3,000,000 7.16 09/01/99 3,028,125
3,000,000 7.88 02/09/00 3,137,813
2,000,000 6.58 12/04/00 1,996,250
2,000,000 6.155 12/08/00 1,985,625
1,000,000 6.00 12/14/00 989,688
2,000,000 6.24 12/20/00 1,960,000
1,000,000 6.00 12/29/00 989,062
2,500,000 6.12 01/24/01 2,464,844
1,985,000 5.745 01/25/01 1,957,706
2,000,000 5.735 02/13/01 1,949,375
2,000,000 6.04 02/14/01 1,958,750
2,000,000 6.00 02/21/01 1,961,250
5,000,000 5.945 03/05/01 4,909,375
1,000,000 6.27 03/12/01 984,375
5,000,000 6.09 03/21/01 4,954,687
5,500,000 7.295 10/17/01 5,482,813
------------ ------------
$ 44,985,000 (Cost $ 44,985,000) $ 44,692,863
------------ ------------
Federal Home Loan Mortgage
Corporation $ 2,000,000 7.42% 09/23/99 $ 2,025,000
2,000,000 7.98 01/19/00 2,096,875
2,000,000 7.70 03/13/00 2,035,625
2,000,000 7.28 05/08/00 2,025,625
See notes to financial statements
16
1,000,000 6.32 11/13/00 986,875
2,000,000 5.99 03/06/01 1,961,875
------------ ------------
$ 11,000,000 (Cost $ 10,999,688) $ 11,131,875
------------ ------------
Federal National Mortgage
Association $ 3,000,000 7.37% 02/06/97 $ 3,005,625
2,000,000 7.29 02/14/97 2,004,375
5,000,000 7.85 09/10/98 5,146,875
1,500,000 5.75 12/10/98 1,486,406
2,500,000 6.34 07/17/00 2,475,781
2,000,000 6.08 12/12/00 1,968,125
1,000,000 6.06 12/22/00 986,875
2,000,000 6.00 12/29/00 1,961,875
2,000,000 5.84 01/19/01 1,958,750
3,000,000 5.82 01/30/01 2,930,625
1,000,000 5.85 02/06/01 977,188
8,000,000 6.05 03/12/01 7,840,000
2,500,000 6.37 03/22/01 2,480,469
3,000,000 6.45 04/12/01 2,983,125
4,500,000 6.40 05/02/01 4,502,812
------------ -----------
$ 43,000,000 (Cost $ 42,983,979) $ 42,708,906
------------ ------------
Government National Mortgage
Association $ 617,271 6.50% 11/15/07 $ 609,748
3,768,339 6.50 07/15/08 3,722,413
1,369,213 6.50 10/15/08 1,352,526
2,106,668 6.50 11/15/08 2,080,993
536,039 6.50 12/15/08 529,506
767,780 5.50 12/15/08 720,753
3,207,785 7.50 03/15/22 3,214,802
3,884,550 7.00 10/15/22 3,806,859
3,779,967 7.00 05/15/23 3,704,368
------------ ------------
$ 20,037,612 (Cost $ 20,266,261) $ 19,741,968
------------ ------------
See notes to financial statements
17
Student Loan Marketing
Association $ 2,000,000 7.723% 01/25/99 $ 2,063,750
------------ ------------
(Cost $ 1,987,500)
Certificates of Deposit--0.0%
NCB Savings Association $ 100,000 5.45% 01/16/97 $ 100,000
------------ ------------
(Cost $ 100,000)
(Cost $132,822,428) $131,825,612
------------
Repurchase Agreement--12.0%
$18,140,000 Repurchase Agreement dated December 31, 1996 with PaineWebber,
Inc. due January 2, 1997 with respect to $17,810,000 U. S.
Treasury Notes 6.50% due May 31, 2001--maturity value
$17,970,988 for an effective yield of 6.00%; also, a Repurchase
Agreement dated December 31, 1996 with State Street Bank and
Trust Company due January 2, 1997 with respect to $180,000
Federal Home Loan Mortgage Corporation 6.70% due January 15,
2015--maturity value of $175,041 for an effective yield of 4.25%.
(Cost $ 18,140,000) $ 18,140,000
------------
Total Investments--98.9% (Cost $150,962,428) $149,965,612
------------
Other assets in excess of liabilities--1.1% 1,625,630
------------
Net assets--100% $151,591,242
============
</TABLE>
See notes to financial statements.
18
BANK INVESTMENT FUND--FUND ONE
NOTES TO FINANCIAL STATEMENTS
NOTE 1. Organization:
The Bank Investment Fund (the "Corporation") was organized effective
April 7, 1985 pursuant to a Special Act of the Commonwealth of Massachusetts
(Acts of 1984, Chapter 482, as amended,) under its chartered name "Co-
operative Bank Investment Fund" and does business under the name "Bank
Investment Fund." The Corporation is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended, as
a diversified, open-end management investment company. The Corporation
invests and manages two mutual investment funds derived from the voluntary
subscriptions made by eligible investors.
Fund One (the "Fund") is a no-load, diversified, open-end investment
fund. Fund shares are currently offered to the following eligible investors:
Massachusetts Co-operative Banks, Massachusetts Savings Banks, Massachusetts
Trust Companies, The Co-operative Central Bank Reserve Fund, The Savings
Bank Life Insurance Company of Massachusetts, the National Cooperative Bank,
and directly or indirectly wholly-owned subsidiaries of such institutions.
Because more than one fund will be operated by the Corporation,
operating expenses related directly to a single fund operation will be
charged directly to that fund. Common or indirect expenses will be allocated
among funds in proportion to the ratio of the net assets of each fund to
total net assets of the Corporation or on such other basis as the Board of
Directors of the Corporation may determine from time to time to be fair and
equitable.
NOTE 2. Significant Accounting Policies:
The Fund's financial statements are prepared in accordance with
generally accepted accounting principles which require the use of management
estimates. The policies described below are followed consistently by the
Fund in the preparation of its financial statements.
Investment security valuation:
U.S. debt securities are normally valued on the basis of valuations
provided by market makers. Such prices are believed to reflect the fair
value of such securities and to take into account appropriate factors such
as institutional size trading in similar groups of securities, yield
quality, coupon rate, maturity, type of issue, and other market data.
Securities for which market quotations are not readily available will be
valued at fair value using methods determined in good faith by or at the
direction of the Board of Directors.
Accounting for investments:
Security transactions are accounted for on the trade date (date the
order to buy or sell is executed). In computing net investment income, the
Fund does not amortize premiums or accrete discounts on fixed income
19
securities in the portfolio, except those original issue discounts for which
amortization is required for federal income tax purposes. Additionally, with
respect to market discount on bonds issued after July 18, 1984, a portion of
any capital gain realized upon disposition may be recharacterized as taxable
ordinary income in accordance with the provisions of the 1984 Tax Reform
Act. Realized gains and losses on security transactions are determined on
the identified cost method.
Repurchase agreements:
It is the policy of the Fund to require the custodian bank to take
possession, to have legally segregated in the Federal Reserve Book Entry
System or to have segregated within the custodian bank's vault, all
securities held as collateral in support of repurchase agreement
investments. Additionally, procedures have been established by the Fund to
monitor, on a daily basis, the market value of each repurchase agreement's
underlying investments to ensure the existence of a proper level of
collateral.
Federal income taxes:
The Corporation's policy is to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required. The Fund realized a
gain of $119,293 during 1996, which will be offset by the available capital
loss carryforward, resulting in a remaining capital loss carryforward of
($15,712,222) at December 31, 1996. Such capital loss carryforward will
reduce the Fund's taxable income arising from future net realized gain on
investments, if any, to the extent permitted by the Internal Revenue Code,
and thus will reduce the amount of the distributions to shareholders which
would otherwise be necessary to relieve the Fund of any liability for
federal income tax. Such capital loss carryforward will expire on December
31, 1997 ($9,386,241), 1998 ($2,419,562), and 2003 ($3,906,419).
Dividends to shareholders:
The Fund distributes all of its net investment income on a daily
basis. Dividends are declared on each day that the Fund is open for
business. Investors receive dividends in additional shares unless they elect
to receive cash. Payment is made in additional shares at the net asset value
on the payable date or in cash, on a monthly basis. Distributions of
otherwise taxable realized net capital gains, if any, are declared and paid
once each year and are reinvested in additional shares at net asset value
or, at each shareholder's option, paid in cash.
20
Net asset value:
The net asset value per share is determined daily by adding the
appraised value of all securities and all other assets, deducting
liabilities and dividing by the number of shares outstanding.
NOTE 3. Security Transactions:
The cost of securities purchased and the proceeds from the sales of
securities, all of which were Obligations of Federal Agencies, (excluding
short-term investments) aggregated $71,478,120 and $74,546,701, respectively
for the year ended December 31, 1996. As of December 31, 1996, unrealized
depreciation of investments was ($996,816); accumulated net realized loss on
investment transactions totaled ($17,269,509).
NOTE 4. Distribution Expenses:
The Fund has adopted a Plan of Distribution (the "Plan"), pursuant to
rule 12b-1 under the Investment Company Act of 1940, to use the assets of
the Fund to finance certain activities relating to the distribution of its
shares to investors. The Plan authorizes the Fund to pay for the cost of
preparing, printing, and distributing offering circulars to prospective
investors, for certain other direct or indirect marketing expenses, direct
payments to sales personnel, and for the cost of implementing and operating
the Plan. Plan expenses may not exceed an amount computed at an annual rate
of .12 of 1% of the Fund's average daily net assets. The Fund paid or
accrued $153,741 (.10% of average net assets) pursuant to this Plan for the
year ended December 31, 1996.
NOTE 5. Pension Plans:
The Fund is a participating employer in the Co-operative Banks
Employees Retirement Association, and has, in effect, a Defined Contribution
Plan covering all eligible officers and employees. Under the plan,
contributions by employees are doubled by the Fund, up to a maximum of 10%
of each employee's salary. Effective January 1, 1989, the Fund also
participates in a Defined Benefit Plan, which covers all eligible employees,
and is funded currently. The Fund's contributions to these multi-employer
plans for the year ended December 31, 1996 was $34,594.
21
NOTE 6. Shares of Beneficial Interest:
Chapter 482 of the Acts of 1984, as amended, of the Commonwealth of
Massachusetts permits the directors to issue an unlimited number of full and
fractional shares of beneficial interest (no par, non-voting, with a stated
value of $1,000 per share). As of December 31, 1996 capital paid-in
aggregated $169,857,567.
Transactions in shares of beneficial interest are summarized as
follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1996 December 31, 1995
-----------------------------------------------------
Shares Amount Shares Amount
-----------------------------------------------------
<S> <C> <C> <C> <C>
Sold........................ 23,700.6936 $23,325,618 19,533.1768 $19,250,000
Issued in reinvestment
of dividends.......... 3,244.8810 3,159,951 3,726.5209 3,656,963
-----------------------------------------------------
26,945.5746 26,485,569 23,259.6977 22,906,963
Redeemed... .............. 18,549.7702 18,071,181 13,039.1631 12,517,795
-----------------------------------------------------
Net increase............. 8,395.8044 $ 8,414,388 10,220.5346 $10,389,168
=====================================================
</TABLE>
NOTE 7. Transactions With Related Parties:
The Incorporators of the Corporation are the Directors of The Co-
operative Central Bank, which is the statutory reserve bank and insurer of
deposits in excess of Federal deposit insurance limitations for
Massachusetts co-operative banks. The Board of Directors of the Corporation
is elected by the Incorporators.
The Fund has reimbursed The Co-operative Central Bank for its
proportionate share of expense items used in common by both the Fund and The
Co-operative Central Bank. All fees and expenses for the Fund are estimated
and accrued daily. Actual operating expenses for the year ended December 31,
1996 was .43% of average net assets. Operating expenses paid to the Central
Bank for the year ended December 31, 1996 was $34,800.
22
BANK INVESTMENT FUND - LIQUIDITY FUND
FINANCIAL STATEMENTS
For the year ended December 31, 1996
INDEPENDENT AUDITOR'S REPORT
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
BANK INVESTMENT FUND - LIQUIDITY FUND
BOSTON, MASSACHUSETTS
We have audited the accompanying statement of assets and
liabilities of Bank Investment Fund - Liquidity Fund, including
the schedule of portfolio investments, as of December 31, 1996,
and the related statement of operations for the year then ended,
the statement of changes in net assets for each of the two years
in the period then ended, and the selected per share data and
ratios for each of the nine periods in the period then ended.
These financial statements and per share data and ratios are the
responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements and per
share data and ratios based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and per share data and ratios are free
of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation
of securities owned as of December 31, 1996, by correspondence
with the custodians. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Bank Investment Fund - Liquidity Fund as of December 31, 1996,
the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the
period then ended,and the selected per share data and ratios for
each of the nine periods in the period then ended, in conformity
with generally accepted accounting principles.
Parent McLaughlin & Nangle
Certified Public Accountants
Member of the SEC Practice Section, American Institute of
Certified Public Accountants
January 21,1997
BANK INVESTMENT FUND-LIQUIDITY FUND
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
INVESTMENTS, at cost which approximates value................ $209,568,930
INTEREST RECEIVABLE......................................... 739,553
CASH........................................................ 345,650
------------
TOTAL ASSETS............................................... 210,654,133
------------
LIABILITIES:
DIVIDENDS PAYABLE............................................. 402,623
OTHER ACCRUED EXPENSES........................................ 43,954
------------
TOTAL LIABILITIES........................................... 446,577
------------
NET ASSETS: (Equivalent to $1,000 per share based on 210,207.5572
shares of beneficial interest outstanding)................ $210,207,556
============
REPRESENTED BY:
Paid-in Capital............................. ............... $210,207,556
============
</TABLE>
See notes to financial statements.
13
BANK INVESTMENT FUND-LIQUIDITY FUND
STATEMENT OF OPERATIONS
Year Ended December 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest income, net of interest expense of $0 $13,137,960
EXPENSES:
Compensation, payroll taxes and benefits--officers..$110,853
Compensation, payroll taxes and benefits--other..... 42,048
Distribution expenses............................... 82,493
Occupancy........................................... 31,300
Bank service fees................................... 19,563
Professional fees................................... 25,437
Meetings and travel................................. 16,173
Equipment and data processing....................... 10,807
Directors' fees..................................... 8,600
Other general expenses.............................. 7,673
Printing and postage................................ 6,522
Insurance expense................................... 2,116
--------
TOTAL EXPENSES.................................... 363,585
-----------
INVESTMENT INCOME--NET............................ 12,774,375
-----------
NET INCREASE IN NET ASSETS RESULTING FROM ................... $12,774,375
OPERATIONS ===========
</TABLE>
See notes to financial statements.
14
BANK INVESTMENT FUND--LIQUIDITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended December 31,
1996 1995
----------------------------
<S> <C> <C>
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS:
Investment income--net.................... $ 12,774,375 $ 11,143,767
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net.................... (12,774,375) (11,143,767)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST--
NET INCREASE (DECREASE).................... (34,942,957) 153,527,526
----------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS. (34,942,957) 153,527,526
NET ASSETS:
Beginning of year......................... 245,150,513 91,622,987
----------------------------
End of year............................... $210,207,556 $245,150,513
============================
</TABLE>
See notes to financial statements.
15
BANK INVESTMENT FUND--LIQUIDITY FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
Obligations of Federal Agencies--13.3%
Amortized
Par Coupon Maturity Date Cost
---------------------------------------------------------
<S> <C> <C> <C> <C>
Federal Farm Credit Bank $ 2,000,000 5.30% 03/21/97 2,000,000
Federal Farm Credit Bank 2,000,000 5.59 04/01/97 2,000,000
Federal Farm Credit Bank 10,000,000 5.40 04/01/97 10,000,000
Student Loan Marketing
Association--Floater 14,000,000 5.27** 08/02/99 14,000,000
------------
- ------------
$ 28,000,000 (Value $ 27,945,000) $28,000,000
------------ ------------
Certificates of Deposit--5.2%
Avon Cooperative Bank $ 250,000 5.25% 05/01/97 $ 250,000
Ben Franklin Savings Bank 300,000 5.40 06/26/97 300,000
Ben Franklin Savings Bank 1,000,000 5.50 01/31/97 1,000,000
Bank of Fall River,
a Cooperative Bank 500,000 5.50 01/21/97 500,000
Fidelity Cooperative Bank 500,000 5.50 01/29/97 500,000
Foxborough Savings Bank 250,000 5.40 01/16/97 250,000
Foxborough Savings Bank 200,000 5.50 04/02/97 200,000
Foxborough Savings Bank 300,000 5.45 06/02/97 300,000
Haymarket Cooperative Bank 500,000 5.40 02/03/97 500,000
Haymarket Cooperative Bank 500,000 5.55 05/02/97 500,000
Hyde Park Cooperative Bank 250,000 5.40 02/04/97 250,000
Lowell Cooperative Bank 200,000 5.40 02/06/97 200,000
Marlborough Cooperative Bank 250,000 5.50 01/03/97 250,000
Marlborough Cooperative Bank 500,000 5.50 01/27/97 500,000
Marlborough Cooperative Bank 250,000 5.85 10/27/97 250,000
Mechanics Cooperative Bank 500,000 5.75 06/27/97 500,000
Mt. Washington Cooperative Bank 600,000 5.35 01/15/97 600,000
Mt. Washington Cooperative Bank 300,000 5.40 02/25/97 300,000
Mt. Washington Cooperative Bank 450,000 5.30 06/19/97 450,000
See notes to financial statements
16
NCB Savings Bank 100,000 5.35 03/06/97 100,000
Pittsfield Cooperative Bank 750,000 5.40 01/21/97 750,000
South Weymouth Savings Bank 500,000 5.60 02/10/97 500,000
Weymouth Savings Bank 1,000,000 5.60 01/24/97 1,000,000
Weymouth Savings Bank 1,000,000 5.50 02/26/97 1,000,000
------------ ------------
$ 10,950,000 (Value $ 10,950,000) $ 10,950,000
------------ ------------
Commercial Paper--63.4%
Allstate Corp. $ 5,000,000 5.34%* 01/02/97 4,998,517
Asset Securitization Cooperative
Corp. 5,000,000 5.33* 02/07/97 4,971,869
Barton Capital Corp. 4,000,000 5.32* 01/03/97 3,998,226
Bay State Gas Corp. 4,000,000 5.31* 01/06/97 3,996,460
Cargill Financial Services Corp. 4,000,000 5.27* 01/08/97 3,995,316
Cargill Financial Services Corp. 4,000,000 5.27* 01/13/97 3,992,388
Case Credit Corp. 6,500,000 5.33* 01/14/97 6,486,527
Coca-Cola Co. 5,000,000 5.23* 01/17/97 4,987,651
Coca-Cola Co. 4,000,000 5.26* 02/06/97 3,978,376
Dean Witter & Co. 4,000,000 5.35* 01/21/97 3,987,517
Delaware Funding Corp. 4,000,000 5.38* 01/21/97 3,987,447
Enterprise Funding Corp. 5,000,000 5.38* 01/24/97 4,982,067
Ford Motor Corp. 3,000,000 5.30* 01/16/97 2,992,933
Ford Motor Corp. 4,000,000 5.31* 01/17/97 3,989,970
Ford Motor Corp. 2,000,000 5.26* 01/22/97 1,993,571
Franklin Resources, Inc. 3,500,000 5.35* 01/15/97 3,492,197
Franklin Resources, Inc. 3,000,000 5.35* 02/04/97 2,984,395
General Electric, Co. 4,000,000 5.28* 01/23/97 3,986,507
Greenwich Asset Funding Corp. 4,062,000 5.33* 01/28/97 4,045,161
See notes to financial statements
17
J.P. Morgan & Co., Inc. 3,000,000 5.35* 01/10/97 2,995,542
Lucent Technologies, Inc. 5,000,000 5.23* 01/09/97 4,993,463
Lucent Technologies, Inc. 5,000,000 5.33* 02/10/97 4,969,649
Merrill Lynch & Co., Inc. 5,000,000 5.35* 01/22/97 4,983,652
Receivables Capital Corp. 5,000,000 5.45* 01/16/97 4,987,888
Receivables Capital Corp. 4,000,000 5.33* 01/17/97 3,989,932
Southland Corp. 2,500,000 5.33* 01/15/97 2,494,448
Sunbelt Dix, Inc. 5,000,000 5.38* 02/18/97 4,963,386
Three Rivers Funding Corp. 3,000,000 5.38* 01/31/97 2,986,102
Toyota Motor Corp. 4,000,000 5.27* 02/05/97 3,978,920
Vermont American Corp. 5,000,000 5.36* 01/30/97 4,977,667
Walt Disney Co. 4,000,000 5.25* 01/07/97 3,995,917
Western Mining Co. 5,000,000 5.45* 02/04/97 4,973,507
------------ ------------
$133,562,000 (Value $133,137,168) $133,137,168
------------ ------------
Short-Term Corporate Bonds and Notes--9.8%
American General Financial Corp. $ 2,000,000 5.80% 04/01/97 2,001,337
Bank of America, N.A. 500,000 7.25 02/03/97 500,942
Dean Witter Discover & Co. 6,000,000 6.66** 09/29/97 6,000,000
Eastman Kodak Co. 1,000,000 8.55 05/01/97 1,009,009
Ford Motor Corp. 1,500,000 7.80 03/18/97 1,508,610
GMAC Corp. 2,200,000 5.00 01/27/97 2,199,305
GMAC Corp. 1,095,000 7.375 02/27/97 1,098,587
GMAC Corp. 1,050,000 7.75 02/20/97 1,053,800
GMAC Corp. 700,000 7.85 03/05/97 703,107
International Lease Finance Corp. 500,000 4.75 01/15/97 499,943
Old Kent Bank 1,000,000 7.23 03/17/97 1,003,042
Sears Roebuck & Co. 2,000,000 5.25 02/24/97 2,000,574
Sears Roebuck & Co. 1,000,000 7.75 02/27/97 1,003,698
------------ ------------
$ 20,545,000 (Value $ 20,576,908) $ 20,581,954
------------ ------------
See notes to financial statements
18
Federal Funds Sold--8.0%
BayBank, N.A. $ 9,120,000 5.00% 01/02/97 9,120,000
Fleet Bank, N.A. 415,000 5.50 01/02/97 415,000
U.S. Trust Co. 7,364,808 5.313 01/02/97 7,364,808
------------ ------------
$ 16,899,808 (Value $ 16,899,808) $ 16,899,808
------------ ------------
Total Investments--99.7% (Value $209,508,884) $209,568,930
------------
Other assets in excess of liabilities--0.3% 638,626
------------
Net assets--100% $210,207,556
============
- ------------------------
<F*> Annualized yield on date of purchase.
<F**> Rate changes daily.
</TABLE>
See notes to financial statements.
19
BANK INVESTMENT FUND--LIQUIDITY FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1. Organization:
The Bank Investment Fund (the "Corporation") was organized effective
April 7, 1985 pursuant to a Special Act of the Commonwealth of Massachusetts
(Acts of 1984, Chapter 482, as amended,) under the chartered name "Co-
operative Bank Investment Fund" and does business under the name "Bank
Investment Fund." The Corporation is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended, as
a diversified, open-end management investment company. The Corporation
invests and manages two mutual funds derived from the voluntary
subscriptions made by eligible banks.
Liquidity Fund (the "Fund") is a no-load, diversified, open-end money
market fund, which commenced operations on October 12, 1988. Fund shares are
currently offered to the following eligible investors: Massachusetts Co-
operative Banks, Massachusetts Savings Banks, Massachusetts Trust Companies,
The Co-operative Central Bank Reserve Fund, The Savings Bank Life Insurance
Company of Massachusetts and the National Cooperative Bank.
Because more than one fund will be operated by the Corporation,
operating expenses related directly to a single fund operation will be
charged directly to that fund. Common or indirect expenses will be allocated
among funds in proportion to the ratio of the net assets of each fund to
total net assets of the Corporation or on such other basis as the Board of
Directors of the Corporation may determine from time to time to be fair and
equitable.
NOTE 2. Significant Accounting Policies:
The Fund's financial statements are prepared in accordance with
generally accepted accounting principles which require the use of management
estimates. The policies described below are followed consistently by the
Fund in the preparation of its financial statements.
Accounting for investments:
Security transactions are accounted for on the trade date (date the
order to buy or sell is executed). The Fund's investment securities are
carried at their amortized cost, which does not take into account unrealized
appreciation or depreciation. Interest income is accrued on all debt
securities on a daily basis and includes accretion of original issue
discount.
20
Repurchase agreements:
It is the policy of the Fund to require the custodian bank to take
possession, to have legally segregated in the Federal Reserve Book Entry
System or to have segregated within the custodian bank's vault, all
securities held as collateral in support of repurchase agreement
investments. Additionally, procedures have been established by the Fund to
monitor, on a daily basis, the market value of each repurchase agreement's
underlying investments to ensure the existence of a proper level of
collateral.
Federal income taxes:
The Corporation's policy is to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
Dividends to shareholders:
The Fund distributes all of its net investment income on a daily
basis. Dividends are declared on each day that the Fund is open for
business. Investors receive dividends in additional shares unless they elect
to receive cash. Payment is made in additional shares at the net asset value
on the payable date or in cash, on a monthly basis. Distributions of
realized net capital gains, if any, are declared and paid once each year and
are reinvested in additional shares at net asset value or, at each
shareholder's option, paid in cash.
Net asset value:
The net asset value per share is determined daily by dividing the
value of all investment securities and all other assets, less liabilities,
by the number of shares outstanding. The Fund has established procedures
reasonably designed to stabilize the net asset value per share at $1,000.
21
NOTE 3. Shares of Beneficial Interest:
Chapter 482 of the Acts of 1984, as amended by Chapter 244, Acts of
1986, of the Commonwealth of Massachusetts permits the directors to issue an
unlimited number of full and fractional shares of beneficial interest (no
par, non-voting, with a stated value of $1,000 per share).
Transactions in shares of beneficial interest are summarized as
follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1996 December 31, 1995
--------------------------- ---------------------------
Shares Amount Shares Amount
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Sold.................. 784,710.5650 $784,710,565 758,881.9784 $758,881,978
Issued in reinvestment of
dividends............ 7,679.4060 7,679,406 6,573.7210 6,573,721
---------------------------------------------------------
792,389.9710 792,389,971 765,455.6994 765,455,699
Redeemed............... 827,332.9277 827,332,928 611,928.1734 611,928,173
-----------------------------------------------------------
Net increase (decrease) (34,942.9567) $(34,942,957) 153,527.5260 $153,527,526
===========================================================
</TABLE>
NOTE 4. Distribution Expenses:
The Fund has adopted a Plan of Distribution (the "Plan"), pursuant to
rule 12b-1 under the Investment Company Act of 1940, to use the assets of
the Fund to finance certain activities relating to the distribution of its
shares to investors. The Plan authorizes the Fund to pay for the cost of
preparing, printing, and distributing offering circulars to prospective
investors, direct payments to sales personnel, for certain other direct or
indirect marketing expenses, and for the cost of implementing and operating
the Plan. Plan expenses may not exceed an amount computed at an annual rate
of .12 of 1% of the Fund's average daily net assets. The Fund paid or
accrued $82,493 (.04% of average net assets) pursuant to the Plan for the
year ended December 31, 1996.
NOTE 5. Pension Plans:
The Fund is a participating employer in the Co-operative Banks
Employees Retirement Association, and has, in effect, a Defined Contribution
Plan covering all eligible officers and employees. Under the Plan,
contributions by employees are doubled by the Fund, up to a maximum of 10%
of each employee's salary. Effective January 1, 1989, the Fund also
participates in a Defined Benefit Plan, which covers all eligible employees,
and is funded currently. The Fund's contributions to these multi-employer
plans for the year ended December 31, 1996 was $17,039.
22
NOTE 6. Transactions With Related Parties:
The Incorporators of the Corporation are the Directors of The Co-
operative Central Bank, which is the statutory reserve bank and insurer of
deposits in excess of Federal deposit insurance limitations for
Massachusetts co-operative banks. The Board of Directors of the Corporation
is elected by the Incorporators.
The Fund reimburses The Co-operative Central Bank and/or the Bank
Investment Fund--Fund One for its proportionate share of expense items used
in common. All fees and expenses for the Fund are estimated and accrued
daily. Annual operating expenses were .15% of the Fund's average net assets
for the year ended December 31, 1996. As reimbursement of allocated
expenses, the Fund paid or accrued $33,600 to the Bank Investment Fund--Fund
One, for the year ended December 31, 1996.
23
PART C
OTHER INFORMATION NOT REQUIRED
IN PROSPECTUS
Item 24. Financial Statements and Exhibits
(a) Financial Statements of Fund One of the Registrant
for the year ended December 31, 1996 and the report of the
Registrant's independent certified public accountants for the
year ended December 31, 1996 are included in Part B above.
Financial Statements of the Liquidity Fund of the Registrant for
the year ended December 31, 1996 and the report of the
Registrant's independent certified public accountants thereon for
the year ended December 31, 1996 are also included in Part B
above.
(b) Exhibits:
1. Copy of the Registrant's charter, being
Chapter 482 of the Acts of 1984 of the
Commonwealth of Massachusetts, as amended by
Chapter 244 of the Acts of 1986 of the
Commonwealth of Massachusetts and Chapters
277 and 285 of the Acts of 1990 and 1991,
respectively, of the Commonwealth of
Massachusetts (filed as Exhibit 1 to
Amendment 11 of the Registrant's Registration
statement on Form N-lA, dated March 30, 1992,
and incorporated herein by reference) and as
further amended by Chapter 147 of the Acts of
1993 of the Commonwealth (filed as Exhibit 1
to Amendment 13 of the Registrant's
Registration Statement on Form N-lA, dated
March 25, 1994, and incorporated herein as
reference).
2. Copy of the By-Laws of the Registrant as
amended and restated as of March 25, 1993
(filed as Exhibit 2 to Amendment 13 of the
Registrant's Registration Statement on Form
N-lA, dated March 25, 1994, and incorporated
herein by reference).
3. None.
4. None.
5. None
6. None
7. Copy of Defined Contribution Plan, as
restated and Defined Benefit Plan,
as restated.
8. Copy of the safekeeping agreements
between the Registrant and the State
Street Bank and Trust Company dated
December 20, 1996.
9. None.
10. Not applicable.
11. Not applicable.
12. Not applicable.
13. None.
14. None.
15. Plan of Distribution Pursuant to Rule
12b-1, as amended.
16. Computation of performance quotations
provided in Item 22.
17. Independent Auditor's Consent
18. None.
19. Specimen price make up sheet required by
Instruction 5 of Item 19(b).
Item 25. Persons Controlled by or Under Common Control with
Registrant
Not applicable.
Item 26. Number of Holders of Securities
Number of Record Holders
Title of Class as of February 28, 1997
Fund One Class 66
Liquidity Fund Class 130
Item 27. Indemnification
Section 1 of Article XII of the Registrant's By-Laws
provides that the Registrant shall indemnify each officer and
director of the corporation against all expenses incurred by
such officer or director in connection with any proceeding in
which he or she is involved as a result of (a) serving or having
served as an officer or director of the corporation; (b) serving
or having served as a director, officer or employee of any
wholly-owned subsidiary, or (c) serving or having served any
other corporation, organization, partnership, joint venture,
trust or other entity at the request or direction of the
corporation.
No indemnification shall be provided to an officer or
director with respect to a matter as to which such person
shall not have acted in good faith and with the reasonable
belief that his or her action was in the best interest of the
corporation. The registrant may purchase and maintain insurance
to protect itself and any officer or director against liability
of any character asserted against and incurred by the Registrant
or any such officer or director, or arising out of any
such status, whether or not the Registrant would have the power
to indemnify such person against such liability by law or under
the provisions of the By-laws, except such person shall not be
insured in the event of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in
the conduct of such person's office.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
provisions described above, 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 said Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than 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.
Item 28. Business and Other Connection of Investment Advisor
Not applicable, as the Registrant does not currently
contemplate the utilization of the services of an investment
advisor.
Item 29. Principal Underwriters
Not applicable, as the Registrant does not use an
underwriter in connection with the distribution of its
securities.
Item 30. Location of Accounts and Records
The accounts, books, and other documents of the
Registrant are physically maintained at the principal offices of
the Registrant at 75 Park Plaza, Boston, Massachusetts
02116-3934.
Item 31. Management Services
There are no management-related service contracts under
which services are provided to the Registrant.
Item 32. Undertakings
Not applicable, as this Registration Statement does not
relate to the Securities Act of 1933.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company
Act of 1940, the Registrant has duly caused this Amended
Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Boston and
Commonwealth of Massachusetts on the 27th day of March, 1997.
CO-OPERATIVE BANK INVESTMENT
FUND d/b/a BANK INVESTMENT FUND
By:
James L. Burns, Jr.
President
1940 ACT FILE NO. 811-4421
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS TO FORM N-lA
AMENDMENT NO. 16
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
CO-OPERATIVE BANK INVESTMENT FUND
d/b/a Bank Investment Fund
75 Park Plaza
Boston, Massachusetts 02116-3934
(617) 695-0415
Exhibit 7
THE PLAN A 1994 RESTATEMENT
CONSISTS OF THE PLAN A 1993 RESTATEMENT, EXECUTED ON MARCH 24,
1993,
THE FIRST AMENDMENT EXECUTED ON AUGUST 22, 1994, AND CERTAIN
OTHER
CHANGES DESIGNED TO FULLY COMPLY WITH TRA '86 AND SUBSEQUENT
LAW
AND REGULATIONS.
THE DEFINED CONTRIBUTION PLAN (PLAN A)
OF THE
COOPERATIVE BANKS EMPLOYEES RETIREMENT PROGRAM
1994 RESTATEMENT
FOREWORD
This is The Defined Contribution Plan (Plan A) (the
"Plan") which forms part of The
Cooperative Banks Employees Retirement Program (the "Retirement
Program"). The Retirement
Program was originally established in 1946 and has been amended
and restated periodically
thereafter. The Retirement Program was amended and restated as
of November 1, 1976 to
comply with the Employee Retirement Income Security Act of 1974
("ERISA") and was again
amended and restated as of November 1, 1984 to comply with the
applicable requirements of the
Tax Equity and Fiscal Responsibility Act of 1982, the Tax
Reform Act of 1984 and the
Retirement Equity Act of 1984. The Plan was amended and
restated, effective as of January 1,
1989, to add a cash or deferred arrangement described in
section 401(k) of the Internal Revenue
Code of 1986, as amended, and to comply with the applicable
requirements of the Tax Reform
Act of 1986, the Omnibus Budget Reconciliation Acts of 1986 and
1987, the Technical and
Miscellaneous Revenue Act of 1988, and other applicable
statutory and regulatory requirements.
The Plan was restated in 1993 to incorporate the provisions of
three amendments since being
restated in 1989, as well as to make additional changes. The
Plan has now been further amended,
generally effective as of January 1, 1989, by this 1994
Restatement to incorporate the provisions
of an amendment to the 1993 Restatement, as well as to make
additional desired changes and to
fully comply with the current requirements of applicable law
and regulations.
The Plan as contained in this document is an extension of
the retirement provisions of the
By-Laws of the Cooperative Banks Employees Retirement
Association (the "Association"). The
Association operates in accordance with Sections 30 through 32
of Chapter 170 of the
Massachusetts General Laws. The Association periodically
amends its By-Laws to provide for
the amendment and continuation of the Retirement Program's
administrative provisions under a
separate document.
The Plan is intended to be a "single plan" within the
meaning of Code section 414(l), and
for reporting and disclosure purposes is classified as a
"multiple employer plan-other".
THE DEFINED CONTRIBUTION PLAN (PLAN A)
OF THE
COOPERATIVE BANKS EMPLOYEES RETIREMENT PROGRAM
1994 RESTATEMENT
Table of Contents
ARTICLE PAGE
ARTICLE 1. INTRODUCTION 1
1.1. Purpose 1
1.2. Application of the Restated Defined
Contribution
Plan (Plan A) 1
1.3. Defined Terms 1
1.4. Applicable Law 1
1.5. Headings 1
ARTICLE 2. DEFINITIONS OTHER THAN SERVICE
DEFINITIONS. 2
2.1. "Account" 2
2.2. "Adoption Agreement" 2
2.3. "Affiliate" 2
2.4. "Association" 3
2.5. "Beneficiary" 3
2.6. "By-Laws" 3
2.7. "Code" 3
2.8. "Compensation" 3
2.9. "Deferred Retirement Date" 5
2.10. "Disability" 5
2.11. "Discretionary Contribution" 5
2.12. "Early Retirement Age" 5
2.13. "Early Retirement Date" 5
2.14. "Elective Contribution" 5
2.15. "Eligible Employee" 5
2.16. "Employee" 6
2.17. "Employee Contribution" 6
2.18. "Employer" 6
2.19. "Entry Date" 6
2.20. "ERISA" 6
2.21. "Highly Compensated Employee" 6
2.22. "Investment Medium" 8
2.23. "Matching Contribution" 8
2.24. "Normal Retirement Date" 8
2.25. "Participant" 8
2.26. "Participating Employer" 8
2.27. "Participating Employer's Participation Date"
8
2.28. "Plan" 8
2.29. "Plan Year" 8
2.30. "Qualified Domestic Relations Order" 8
2.31. "Qualified Nonelective Contribution" 8
2.32. "Retirement Program" 8
2.33. "Rollover Contributions" 9
2.34. "Terminated Eligible Employee" 9
2.35. "Trustee" 9
2.36. "Trust" 9
2.37. "Valuation Date" 9
2.38. "Withdrawal Date" 9
ARTICLE 3. SERVICE DEFINITIONS 10
3.1. "Absence in Military Service" 10
3.2. "Authorized Leave of Absence" 10
3.3. "Hour of Service" 10
3.4. "Employment Commencement Date" 11
3.5. "One-Year Break in Service" 11
3.6. "Period of Service" 12
3.7. "Reemployment Commencement Date" 12
3.8. "Termination of Employment" 12
3.9. "Vesting Service" 12
3.10. "Year of Eligibility Service" 12
3.11. Crediting Periods of Service earned before
Employer becomes a Participating Employer 13
3.12. Crediting Periods of Service earned before
Employer is merged with or acquired by a
Participating Employer 13
ARTICLE 4. PARTICIPATION 14
4.1. Participation Requirements 14
4.2. Date of Participation 14
4.3. Duration of Participation; Reemployment 14
ARTICLE 5. CONTRIBUTIONS TO THE PLAN 15
5.1. Elective Contributions and Employee
Contributions 15
5.2. Form and Manner of Contribution Agreements 15
5.3. Matching Contributions 15
5.4. Discretionary Contributions 15
5.5. Qualified Nonelective Contributions 16
5.6. Rollover Contributions; Direct Transfers 16
5.7. Crediting of Contributions 16
5.8. Time for Making Contributions 16
5.9. Certain Limits Apply 17
5.10. Return of Contributions 17
5.11. Establishment of Trust Fund 17
ARTICLE 6. LIMITS ON CONTRIBUTIONS 18
6.1. Code Section 404 Limits 18
6.2. Code Section 415 Limits 18
6.3. Code Section 402(g) Limits 21
6.4. Code Section 401(k)(3) Limits 23
6.5. Code Section 401(m) Limits 29
6.6. Section 401(a)(26)/410(b) Limits 34
ARTICLE 7. PARTICIPANT ACCOUNTS 36
7.1. Accounts 36
7.2. Adjustment of Accounts 36
7.3. Investment of Accounts 36
ARTICLE 8. VESTING OF ACCOUNTS 38
8.1. Immediate Vesting of Certain Accounts 38
8.2. Deferred Vesting of Other Accounts 38
8.3. Special Vesting Rules 38
8.4. Distribution of Less Than Entire Vested
Percentage 38
8.5. Changes in Vesting Schedule 39
8.6. Forfeitures 39
ARTICLE 9. PAYMENT OF ACCOUNTS 41
9.1. Retirement 41
9.2. Death 41
9.3. Disability 41
9.4. Other Termination of Employment 41
9.5. Valuation for Distribution 41
9.6. Timing of Distribution 41
9.7. Mode of Distribution 42
9.8. Consent to Distributions by Participant 43
9.9. Beneficiary Designation 44
9.10. Facility of Payments 45
9.11. Payment as Discharge of Liability 45
9.12. Direct Rollover Option 46
9.13. Distributions to Certain Participants 46
ARTICLE 10. LOANS TO PARTICIPANTS 47
10.1. Loan Application 47
10.2. Rules and Procedures 47
10.3. Maximum Amount of Loan 47
10.4. Minimum Amount of Loan 47
10.5. Note; Interest; Security; Default 48
10.6. Repayment 49
10.7. Repayment upon Distribution 49
10.8. Note as Trust Asset 50
10.9. Nondiscrimination 50
ARTICLE 11. SPECIAL TOP-HEAVY PROVISIONS. 51
11.1. Provisions to Apply 51
11.2. Minimum Contribution 51
11.3. Special Vesting Schedule 52
11.4. Adjustment to 415 Limitations 52
11.5. Definitions 53
ARTICLE 12. ADMINISTRATION OF THE PLAN 56
12.1. Generally 56
12.2. Expenses of Administration 56
ARTICLE 13. AMENDMENT AND TERMINATION 57
13.1. Amendment or Termination by Association 57
13.2. Voluntary Participation 57
13.3. Withdrawal by Participating Employer 57
13.4. Effect of Withdrawal on a Withdrawing
Participating Employer 59
13.5. Effect of Withdrawal on Participants and
Beneficiaries 59
13.6. Failure to Maintain Qualified Status 60
13.7. Merger, Consolidation or Transfer of Plan
Assets 60
ARTICLE 14. MISCELLANEOUS 62
14.1. Exclusive Benefit Rule 62
14.2. Limitation of Rights 62
14.3. Nonalienability of Benefits 62
14.4. Rights of Eligible Employees 62
14.5. Notice to Employees 62
14.6. Payment Under Domestic Relations Order 62
ARTICLE 15. ADOPTION AGREEMENT 64
15.1. Adoption Agreement 64
<PAGE>
ARTICLE Section I. INTRODUCTION.
1.1. Purpose. The Plan and its related trust are
intended to qualify as a profit-sharing
plan and trust under Code sections 401(a) and 501(a), and the
cash or deferred arrangement
forming part of the Plan is intended to qualify under Code
section 401(k). The purpose of the
Plan is to provide benefits to Participants in a manner
consistent and in compliance with such
Code sections and Title 1 of ERISA.
1.2. Application of the Restated Defined Contribution
Plan (Plan A). Except as otherwise
specifically provided herein, the provisions of this restated
Defined Contribution Plan (Plan A)
shall apply only to those individuals who are Eligible
Employees on or after January 1, 1989.
Except as otherwise provided herein, the rights and benefits,
if any, of a former Employee whose
employment terminated before January 1, 1989 or other effective
date specified in the Plan shall
be determined in accordance with the provisions of the
Retirement Program as in effect from time
to time before that date.
1.3. Defined Terms. All capitalized terms used in the
following provisions of the Plan
have the meanings given them under the Articles entitled
"Definitions Other Than Service
Definitions" and "Service Definitions; Special Service
Crediting".
1.4. Applicable Law. The provisions of the Plan shall be
governed and construed in
accordance with the laws of the Commonwealth of Massachusetts,
except to the extent to which
the Plan is governed by federal law.
1.5. Headings. The headings of the Plan are inserted for
convenience of reference only
and shall have no effect upon the meaning of the provisions
hereof.
ARTICLE Section II. DEFINITIONS OTHER THAN SERVICE
DEFINITIONS.
Where used in the Plan, the words and phrases contained in
Article 2 and Article 3 have
the meanings specified below, unless a different meaning is
plainly required by the context.
Wherever used in this instrument, a singular word shall be
deemed to include the singular and
plural in all cases where the context requires.
2.1. "Account" means, for any Participant, each account
established under the Plan to
which contributions made for the Participant's benefit, and any
allocable income, expense, gain
and loss, are allocated. The term "Account" shall refer, as
the context indicates, to any or all of
the following:
(a) "Matching Contribution Account" means the Account to
which are credited
Matching Contributions allocated to a Participant, and earnings
thereon.
(b) "Discretionary Contribution Account" means the
Account to which are credited
Discretionary Contributions allocated to a Participant, and
earnings thereon.
(c) "Rollover Contribution Account" means the Account to
which are credited a
Participant's Rollover Contributions and direct transfer
amounts, and earnings thereon. A
Participant shall be fully vested at all times in his or her
Rollover Account.
(d) "Elective Contribution Account" means the Account to
which are credited pre-tax
contributions made for the Participant pursuant to his or her
Compensation reduction agreement,
and earnings thereon. A Participant shall be fully vested at
all times in his or her Elective
Contribution Account.
(e) "Employee Contribution Account" means the Account to
which are credited a
Participant's voluntary after-tax contributions, and earnings
thereon. A Participant shall be fully
vested at all times in his or her Employee Contribution
Account.
2.2. "Adoption Agreement" means the agreement described
in the Plan made by and
between a Participating Employer and the Trustee.
2.3. "Affiliate" of a Massachusetts Cooperative Bank or
other organization which is
permitted to participate in the Retirement Program pursuant to
the By-Laws means (i) any
corporation after it becomes a member of a controlled group of
corporations (as defined in
section 414(b) of the Code) with such Bank or other
organization, (ii) any trade or business,
whether or not incorporated, after it comes under common
control (as defined in section 414(c)
of the Code) with such Bank or other organization, (iii) any
trade or business that is a member of
an affiliated service group (as defined in section 414(m) of
the Code) of which such Bank or other
organization is also a member, or (iv) any other entity
required to be aggregated with such Bank
or other organization under section 414(o) of the Code.
2.4. "Association" means the Cooperative Banks Employees
Retirement Association,
organized and operated pursuant to the provisions of Sections
30, 31 and 32 of Chapter 170 of
the General Laws of Massachusetts, as amended from time to
time.
2.5. "Beneficiary" means any person designated by a
Participant to receive any benefits
which become payable under the Plan upon the death of the
Participant.
2.6. "By-Laws" means the By-Laws of the Association, as
amended from time to time in
accordance with the provisions thereof.
2.7. "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
Reference to any section or subsection of the Code includes
reference to any comparable or
succeeding provisions of any legislation which amends,
supplements or replaces such section or
subsection.
2.8. "Compensation" means:
(a) for purposes of determining contributions under
the Plan, the amount of
compensation described in (i), (ii), or (iii) below, as elected
by the Participating Employer in its
Adoption Agreement, where
(i) is the basic salary and wages paid to
a Participant during a Plan
Year by the Participating Employer, increased by any amounts
that would have been received by
the Participant from the Participating Employer as basic salary
and wages but for an election
under sections 125, 401(k), or 403(b) of the Code, but
excluding all additional amounts such as
overtime, commissions, bonus payments, or other distributions;
(ii) is the basic salary and wages paid to
a Participant during a Plan
Year by the Participating Employer, increased by draws against
commissions, mortgage
originator's commissions (up to the amount, if any, elected by
a Participating Employer in its
Adoption Agreement) and any amounts which would have been
received by the Participant from
the Participating Employer as basic salary and wages but for an
election under sections 125,
401(k), or 403(b) of the Code, but excluding all additional
amounts such as overtime,
commissions (including the commissions against which such draws
are taken), bonus payments, or
other distributions, and
(iii) is the total salary and wages paid to
a Participant during the
Plan Year by the Participating Employer, including overtime,
bonus payments, commissions, and
any other distributions (but excluding taxable fringe benefit
payments), increased by any amounts
which would have been received by the Participant from the
Participating Employer as total salary
and wages but for an election under sections 125, 401(k), or
403(b) of the Code.
(b) for purposes of Code section 415 limits and
minimum contributions under
Code section 416, the Participant's salary, wages and other
amounts received from a Participating
Employer or its Affiliate, as defined under Code section
415(c)(3) and the regulations
promulgated thereunder.
(c) for purposes of the discrimination testing
requirements of Code sections
401(k) and 401(m), the Participant's salary, wages and other
amounts as defined in section 414(s)
of the Code, increased, if elected by the Association for a
given Plan Year, by any amounts which
would have been received by the Participant from the
Participating Employer or its Affiliate as
such Compensation but for an election under sections 125,
401(k), or 403(b) of the Code.
(d) for purposes of determining the status of an
individual as a Highly
Compensated Employee, or as a key Employee under Code section
416, the Participant's salary,
wages and other amounts received from a Participating Employer
or its Affiliate, as defined in
Code section 415(c)(3) and the regulations promulgated
thereunder, increased by amounts which
would have been received by the Participant from the
Participating Employer or its Affiliate as
such salary and wages but for an election under sections 125,
401(k), or 403(b) of the Code.
(e) in no event may the amount of Compensation taken
into account under
paragraphs (a), (b) or (c) above exceed
the amount determined from time to time under Code section
401(a)(17).
2.9. "Deferred Retirement Date" means the first day of
any calendar month coinciding
with or next following the date a Participant elects to retire
at any time after his or her Normal
Retirement Date.
2.10. "Disability" means an Eligible Employee's physical
or mental incapacity which has
terminated his or her Eligible Employee status if the
Participating Employer, on the basis of the
certification of a licensed physician acceptable to it and such
other medical substantiation as it
may reasonably require from time to time, has determined that
the Eligible Employee is unable to
perform his or her regular duties with his or her Participating
Employer. In such event, the
Eligible Employees' Disability shall be deemed to commence 90
days following the date on which
he or she terminated his or her Eligible Employee status by
reason of such physical or mental
incapacity, and shall end on the date which is the earlier of
(a) his or her Normal Retirement Date,
or (b) the date on which the Participating Employer determines
(either on the basis of the
certification of a licensed physician acceptable to it or on
the basis of the Eligible Employee's
failure to submit such medical substantiation as the
Participating Employer may reasonably require
from time to time) that the Eligible Employee is no longer
disabled. For purposes of this Section,
medical substantiation of Disability shall not be required more
frequently than semiannually.
2.11. "Discretionary Contribution" means a contribution
(other than a Qualified
Nonelective Contribution) made for the benefit of a Participant
by a Participating Employer in its
discretion pursuant to its Adoption Agreement.
2.12. "Early Retirement Age" means the earliest of the
date on which a Participant has (a)
attained his or her 62nd birthday, (b) attained his or her 55th
birthday and completed at least 5
years of Vesting Service, or (c) attained his or her 50th
birthday and completed at least 15 years
of Vesting Service.
2.13. "Early Retirement Date" means the first day of any
calendar month, prior to a
Participant's Normal Retirement Date and coinciding with or
following the date he or she attains
his or her Early Retirement Age, on which he or she elects to
retire.
2.14. "Elective Contribution" means a contribution made
to the Plan for the benefit of a
Participant pursuant to a Compensation reduction agreement
under the Compensation Agreement.
2.15. "Eligible Employee" means an individual who is a
common-law employee of a
Participating Employer.
2.16. "Employee" means an individual who is a common-law
employee of a Participating
Employer or its Affiliate, and to the extent required by
section 414(n) of the Code, any leased
employee (as defined in section 414(n) of the Code) who
performs services for such Employer.
Notwithstanding the foregoing, if such leased employees
constitute less than 20% of an
Employer's non-highly compensated workforce within the meaning
of section 414(n)(5)(c)(ii) of
the Code, the term Employee shall not include those leased
employees covered by a plan
described in section 414(n)(5) of the Code.
2.17. "Employee Contribution" means a voluntary after-tax
contribution made by a
Participant under the Plan pursuant to a Compensation
Agreement.
2.18. "Employer" means (i) a Massachusetts Cooperative Bank or
other organization which is
permitted to participate in the Retirement Program pursuant to
the By-Laws and (ii) any Affiliate
of each such Bank or other organization, and any successor to
any of the foregoing, either singly
or as a group, as the context may require.
2.19. "Entry Date" means any January 1 or July 1 of any
Plan Year; provided, however,
effective July 1, 1993, "Entry Date" means any January 1, April
1, July 1 or October 1 of any Plan
Year.
2.20. "ERISA" means the Employee Retirement Income
Security Act of 1974, as from
time to time amended, and any successor statute or statutes of
similar import.
2.21. "Highly Compensated Employee" means an Employee of
a Participating Employer
or its Affiliate who is a "highly compensated employee" within
the meaning of Code section
414(q). The term Highly Compensated Employee includes highly
compensated active Employees
and highly compensated former Employees.
(a) A highly compensated active Employee includes any
Employee who performs
service for a Participating Employer or its Affiliate during
the determination year and who, during
the look-back year: (i) received Compensation from the
Participating Employer or its Affiliate in
excess of $75,000 (as adjusted pursuant to Code section 415(d);
(ii) received Compensation from
the Participating Employer or its Affiliate in excess of
$50,000 (as adjusted pursuant to Code
section 415(d) and was a member of the top-paid group for such
year; or (iii) was an officer of the
Participating Employer or its Affiliate and received
Compensation during such year that is greater
than 50 percent of the dollar limitation in effect under Code
section 415(b)(1)(A).
(b) The term Highly Compensated Employee also includes:
(i) Employees who are
both described in paragraph (a) if the term "determination
year" is substituted for the term
"look-back year" and the Employee is one of the 100 Employees
who received the most
Compensation from the Participating Employer or its Affiliate
during the determination year; and
(ii) Employees who are a 5 percent owner at any time during the
look-back year or determination
year. If no officer has satisfied the Compensation requirement
of (a)(iii) 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
and the look-back year shall be the 12-month period immediately
preceding the determination
year.
(c) A highly compensated former Employee includes any
Employee who separated
from service (or was deemed to have separated) prior to the
determination year, performs no
service for the Participating Employer or its Affiliate 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.
(d) If an Employee is, during a determination year or
look-back year, a family member
of either a 5 percent owner who is an active or former Employee
or a Highly Compensated
Employee who is one of the 10 most Highly Compensated Employees
ranked on the basis of
Compensation paid by the Participating Employer or its
Affiliate during such year, then the family
member and the 5 percent owner or top 10 Highly Compensated
Employee shall be aggregated.
In such case, the family member and 5 percent owner or top 10
Highly Compensated Employee
shall be treated as a single Employee receiving Compensation
and Plan contributions equal to the
sum of such Compensation and contributions of the family member
and 5 percent owner or top 10
Highly Compensated Employee. For purposes of this Section,
family member includes the
spouse, lineal ascendant and descendants of the Employee or
former Employee and the spouses of
such lineal ascendant and descendants.
(e) The top paid group shall consist of the top 20
percent of active Employees, ranked on
the basis of Compensation received from the Participating
Employer or its Affiliate during the
year. The number of officers shall be limited to the lesser of
(i) 50 Employees or (ii) the greater
of 3 Employees or 10 percent of Employees. If there is not at
least one officer whose
Compensation is in excess of 50 percent of the Code section
415(b)(i)(A) limit, then the highest
paid officer of the Participating Employer or its Affiliate
shall be treated as a Highly Compensated
Employee. The determination of who is a Highly Compensated
Employee, including the
determinations of the number and identity of Employees in the
top-paid group, the top 100
Employees, the number of Employees treated as officers and
the Compensation that is considered, will be made in accordance
with Code section 414(q).
2.22. "Investment Medium" means any fund, contract,
obligation or other mode of
investment to which a Participant may direct the investment of
assets of his or her Account.
2.23. "Matching Contribution" means a contribution made
by a Participating Employer
for the benefit of a Participant under the Plan on account of
an Elective Contribution or Employee
Contribution.
2.24. "Normal Retirement Date" means the first day of the
calendar month coinciding
with or next following the Participant's 65th birthday.
2.25. "Participant" means an Eligible Employee or
Terminated Eligible Employee who
participates in the Plan pursuant to its provisions.
2.26. "Participating Employer" means an Employer that has
adopted the Plan in
accordance with the By-Laws and has entered into an Adoption
Agreement.
2.27. "Participating Employer's Participation Date" means
the date as of which such
Participating Employer adopts the Plan for the benefit of its
Eligible Employees.
2.28. "Plan" means The Defined Contribution Plan (Plan A)
of the Cooperative Banks
Employees Retirement Program.
2.29. "Plan Year" means the calendar year.
2.30. "Qualified Domestic Relations Order" means any
judgment, decree or order
(including approval of a property settlement agreement) which
constitutes a "qualified domestic
relations order" within the meaning of Code section 414(p). A
judgment, decree or order shall
not be considered not to be a Qualified Domestic Relations
Order merely because it requires a
distribution to an alternate payee (or the segregation of
accounts pending distribution to an
alternate payee) before the Participant is otherwise entitled
to a distribution under the Plan.
2.31. "Qualified Nonelective Contribution" means a
contribution made in the discretion of
the Participating Employer which is designated by the
Participating Employer as a Qualified
Nonelective Contribution pursuant to its Adoption Agreement.
2.32. "Retirement Program" means The Cooperative Banks
Employees Retirement
Program as from time to time in effect.
2.33. "Rollover Contributions" means a contribution made
by a Participant which satisfies
the applicable requirements of the Code and any administrative
requirements imposed by the
Association.
2.34. "Terminated Eligible Employee" means an individual
who has ceased to be an
Eligible Employee (other than on account of death) prior to
becoming eligible to retire on his or
her Normal Retirement Date or Early Retirement Date.
2.35. "Trustee" means any person or persons who are at
any time acting as Trustee under
the Trust.
2.36. "Trust" means the Trust established under a trust
agreement between the
Association and the Trustee for purposes of the Plan.
2.37. "Valuation Date" means the last day of each
calendar quarter or such other dates
selected by the Association.
2.38. "Withdrawal Date" means the date as of which a
Participating Employer withdraws
from the Plan pursuant to the provisions of the Plan.
ARTICLE Section III. SERVICE DEFINITIONS; SPECIAL SERVICE
CREDITING
RULES
3.1. "Absence in Military Service" means an absence of an
Employee in military or
governmental service for the United States of America for the
period during which the Employee
retains rights to re-employment with his or her Employer under
the federal laws of the United
States of America; provided, that the Employee in fact returns
to the active service of his or her
Employer within the period during which he or she is entitled
to such re-employment rights.
3.2. "Authorized Leave of Absence" means any absence of
an Employee granted by his or
her Employer in accordance with rules of uniform application to
all Employees similarly situated.
3.3. "Hour of Service" means, for purposes of determining
the beginning of an
Employee's period of Vesting Service, each hour described in
paragraph (a) below, and for
purposes of determining an Employee's Years of Eligibility
Service, each hour described in
paragraphs (a), (b), (c) and (d) below, where
(a) is each hour for which the Employee is directly
or indirectly paid, or
entitled to payment, for the performance of duties for a
Participating Employer or its Affiliate,
each such hour to be credited to the Employee for the period of
service in which the duties were
performed;
(b) is each hour for which the Employee is directly
or indirectly paid, or
entitled to payment, by a Participating Employer or its
Affiliate (including payments made or due
from a trust fund or insurer to which the Participating
Employer or its Affiliate contributes or pays
premiums) on account of a period of time during which no duties
are performed (irrespective of
whether a Termination of Employment has occurred) due to
vacation, holiday, illness, incapacity,
disability, layoff, jury duty, military duty or leave of
absence, each such hour to be credited to the
Employee for the period of Eligibility Service in which such
period of time occurs, subject to the
following rules:
(i) No more than 501 Hours of Service shall be
credited under this
paragraph (b) to the Employee on account of any single
continuous period during which the
Employee performs no duties;
(ii) Hours of Service shall not be credited
under this paragraph (b) to an
Employee for a payment which solely reimburses the Employee for
medically related expenses
incurred by the Employee, or which is made or due under a plan
maintained solely for the purpose
of complying with applicable workers' compensation,
unemployment compensation, or disability
insurance laws; and
(iii) If the period during which the Employee
performs no duties falls
within two or more computation periods, and if the payment made
on account of such period is
not calculated on the basis of units of time, the Hours of
Service credited with respect to such
period shall be allocated between not more than the first two
such computation periods on any
reasonable basis consistently applied with respect to similarly
situated Employees;
(c) is each hour not counted under paragraph (a) or
(b) for which back pay,
irrespective of mitigation of damages, has been awarded or
agreed to be paid by the Participating
Employer or its Affiliate, each such hour to be credited to the
Employee for the computation
period to which the award or agreement for back pay pertains,
provided that crediting of Hours of
Service under this paragraph (c) with respect to periods
described in paragraph (b) above shall be
subject to the limitations and special rules set forth in
clauses (i), (ii) and (iii) of paragraph (b);
and
(d) is each non-compensated hour while an Employee
that is not credited
under (a), (b) or (c) above during a period of Authorized Leave
of Absence or Absence in
Military Service from the Employer or within such longer period
as may be specified by the
Employer for which the Employee returns for work.
Hours of Service to be credited to an individual under
(a), (b) and (c) above shall be
calculated and credited pursuant to paragraphs (b) and (c) of
Section 2530.200(b)-2 of the
Department of Labor Regulations which are incorporated herein
by reference. Hours of Service
to be credited to an individual during an absence described in
(d) above shall be determined by the
Employer with reference to the individual's most recent normal
work schedule. If the Employer
cannot so determine the number of Hours to be credited, there
shall instead be credited 8 Hours
of Service for each day of absence.
3.4. "Employment Commencement Date" means the date on
which an Employee first
performs an Hour of Service.
3.5. "One-Year Break in Service" means, for any Employee
or former Employee, a
12-month period commencing on his or her Termination of
Employment or any anniversary
thereof during which the Employee or former Employee failed to
perform an Hour of Service for
an Employer. Solely for purposes for determining whether an
Employee has incurred a One-Year
Break in Service, if an Employee is absent from work (i) by
reason of the Employee's pregnancy,
(ii) by reason of the birth of the Employee's child, (iii) by
reason of the placement of a child with
the Employee in connection with the adoption of such child by
the Employee, or (iv) for purposes
of caring for such child for a period beginning immediately
following such birth or placement, the
date of an Employee's Termination of Employment shall be twelve
(12) months after the date
otherwise determined.
3.6. "Period of Service" means, for each Employee, the
period or periods of time
elapsed between his or her Employment Commencement Date or
Reemployment Commencement
Date and his or her Termination of Employment. Each Period of
Service shall be measured in
years and days.
3.7. "Reemployment Commencement Date" means the date on
which a rehired former
Employee of a Participating Employer first performs an Hour of
Service on or following such
reemployment.
3.8. "Termination of Employment" means the date on which
an Employee quits, is
discharged, retires or dies.
3.9. "Vesting Service" means, for any Participant, the
aggregate of all his or her Periods
of Service, but excluding, except as otherwise provided in this
Article, any Period of Service
rendered prior to his or her Participating Employer's
Participation Date.
In addition, if an Employee has a Reemployment Commencement
Date within 12 months after the
date of his or her Termination of Employment, such Employee's
Vesting Service shall include the
period of severance measured from his or her date of
Termination of Employment until his or her
subsequent Reemployment Commencement Date.
Vesting Service shall also include any period not otherwise
included in a Period of Service during
which a Participant is absent due to Disability, Authorized
Leave of Absence, Absence in Military
Service or absent on maternity, paternity leave described in
the definition of One-Year Break in
Service.
Two or more Periods of Service or periods of severance that are
included in a Participant's
Vesting Service and that contain fractions of a year (computed
in months and days) shall be
aggregated on the basis of 365 days constituting a year.
3.10. "Year of Eligibility Service" means a
12-consecutive-month period commencing on
an Employee's Employment Commencement Date, or any Plan Year
thereafter which commences
after such Employment Commencement Date, during which he or she
completes at least 1,000
Hours of Service.
3.11. Crediting Periods of Service earned before Employer
becomes a Participating
Employer. All or any portion of periods of service earned by
an Employee prior to his or her
Participating Employer's Participation Date shall be credited
on a non-discriminatory basis under
the Plan as of such Participation Date for vesting purposes if
the Association approves such
crediting and if his or her Participating Employer agrees, on
or prior to such Participation Date, to
pay the cost, if any, of crediting such periods of service
under the Plan.
3.12. Crediting Periods of Service earned before Employer
is merged with or acquired by
a Participating Employer. All or any portion of periods of
service earned by an Employee prior to
his or her employer's merger with or acquisition by a
Participating Employer shall be credited on a
non-discriminatory basis under the Plan for eligibility or
vesting purposes (or both) if and to the
extent the Association approves such crediting and if such
Participating Employer agrees to pay
the cost, if any, of crediting such periods of service under
the Plan.
ARTICLE Section IV. PARTICIPATION.
4.1. Participation Requirements.
(a) Age and Service. Unless waived under (b) below,
to become a Participant in the Plan each Eligible Employee must
have attained age 21 and completed one Year of Eligibility
Service.
(b) Waiver. Under its Adoption Agreement, a
Participating Employer may elect
to waive or reduce either or both of the age and service
requirements described in (a) above.
4.2. Date of Participation. An Eligible Employee will
become a Participant in the Plan on
the Entry Date coinciding with or next following the date on
which he or she satisfies the participation requirements of
Section 4.1 provided he or she is an Eligible Employee on
such date.
4.3. Duration of Participation; Reemployment. An
individual who has become a Participant will remain a
Participant for as long as an Account is maintained under
the Plan for his or her benefit, or until his or her death,
if earlier. No contributions shall be made by or for (and
no forfeitures may be allocated with respect to) a
Participant who is not an Eligible Employee. A
Participant or former Participant who is reemployed as an
Eligible Employee will again become
eligible to receive or make contributions and must enter
into a contribution agreement immediately upon
reemployment.
ARTICLE Section V. CONTRIBUTIONS TO THE PLAN.
5.1. Elective Contributions and Employee Contributions.
Each Participant may enter
into a contribution agreement specifying Elective Contributions
or Employee Contributions, or
both, in an amount (which must be a whole percentage of his or
her Compensation) equal to at
least one (1) percent but not more than ten (10) percent of his
or her Compenstion. During any
period for which a Matching Contribution is being made for a
Participant, the Participant shall be
required, as a condition of continued employment, to enter into
and to continue a contribution
agreement specifying Elective Contributions or Employee
Contributions in an amount equal to at
least one (1) percent of his or her Compensation. By agreeing
to Elective Contributions, the
Participant agrees to a reduction in Compensation in the amount
designated and the Participating
Employer agrees in consideration of such reduction to
contribute an equivalent amount to the
Trust for the Participant. By agreeing to Employee
Contributions, the Participant agrees to
contribute the designated amount to the Trust out of after-tax
Compensation and the Participating
Employer agrees to facilitate such contributions through
payroll deductions.
5.2. Form and Manner of Contribution Agreements. Each
contribution agreement shall
be on a form prescribed or approved by the Association, and may
be changed by the Participant
from time to time. A contribution agreement or a change in
such Agreement shall be effective
with respect to Compensation payable on and after the first day
of the calendar quarter coinciding
with or next following receipt of such Agreement by the
Association or such other time as the
Association may prescribe. No change may reduce the rate of a
Participant's contributions below
one (1) percent of his or her Compensation during any period
for which a Matching Contribution
is being made for the Participant.
5.3. Matching Contributions. In its Adoption Agreement,
a Participating Employer may
specify an amount of Matching Contributions up to a specified
percentage of Compensation to be
made to the Trust for a Plan Year for the benefit of each
Participant on whose behalf a
contribution agreement with the Participating Employer was in
effect during the Plan Year.
Matching Contributions for a Plan Year shall be expressed as a
percentage (which may be 50%,
100%, 150% or 200%, as specified by the Participating Employer)
of Elective Contributions
and/or Employee Contributions for the Plan Year and shall be
credited to the Matching
Contribution Accounts of Participants on that basis.
5.4. Discretionary Contributions. If so provided in its
Adoption Agreement, a
Participating Employer, in its discretion, may determine
whether a Discretionary Contribution
shall be made to the Trust for a Plan Year, and if so, the
amount to be contributed. The
Discretionary Contribution of a Participating Employer for a
Plan Year shall be allocated among
and credited to the Discretionary Contribution Accounts of all
Participants who are eligible to
receive such Contribution, as determined in accordance with the
Adoption Agreement, in
proportion to their relative amounts of Compensation for that
portion of the Plan Year during
which they were both a Participant and an Eligible Employee.
5.5. Qualified Nonelective Contributions. If so provided
in its Adoption Agreement, to
the extent necessary to satisfy the Code section 401(k)(3)
limits with respect to Elective
Contributions or the Code section 401(m) limits with respect to
Matching Contributions, a
Participating Employer, in its discretion, may determine
whether a Qualified Nonelective
Contribution shall be made to the Trust for a Plan Year and, if
so, the amount to be contributed.
A Qualified Nonelective Contribution for a Plan Year shall be
allocated among and credited to the
QNEC Accounts of Participants in such manner as the
Participating Employer shall determine in
order to accomplish its intended purpose.
5.6. Rollover Contributions; Direct Transfers. An
Eligible Employee may make a
Rollover Contribution to the Plan upon demonstration to the
Association that the contribution is
eligible for transfer to the Plan pursuant to the rollover
provisions of the Code. A Participant may
request the Trustee to accept a direct transfer of funds held
under another plan qualified under
Code section 401(a), subject to such information and
demonstration as the Association may
require.
5.7. Crediting of Contributions. Each type of
contribution for a Plan Year shall be
allocated among and credited to the respective Accounts of
Participants eligible to share in the
contributions as of the Valuation Date coinciding with or next
following the date the contributions
are received by the Trustee (but in no event later than the
last Valuation Date of the Plan Year).
5.8. Time for Making Contributions. Elective
Contributions and Employee Contributions
will be paid in cash to the Trust as soon as such contributions
can reasonably be segregated from
the general assets of the Participating Employer, but in any
event within 90 days after the date on
which the Compensation to which such contributions relate is
paid. Any Matching Contributions,
Discretionary Contributions, or Qualified Nonelective
Contributions for a Plan Year will be
contributed in cash to the Trust at such time as the
Participating Employer determines, but in any
event no later than the time prescribed by law (including
extensions) for filing the Participating
Employer's federal income tax return for its taxable year in or
with which the Plan Year ends. In
addition, Qualified Nonelective Contributions and Matching
Contributions for a Plan Year must
be made no later than the last day of the 12-month period
immediately following the Plan Year.
5.9. Certain Limits Apply. All contributions to the Plan
are subject to the applicable
limits set forth under Code sections 401(k), 402(g), 401(m),
404, and 415, as further described
elsewhere in the Plan. In addition, certain minimum
allocations may be required under Code
sections 401(a)(26), 410(b), and 416, as also further described
elsewhere in the Plan.
5.10. Return of Contributions. If any contribution by a
Participating Employer to the
Trust is
(a) made by reason of a good faith mistake of fact,
or
(b) believed by the Participating Employer in good
faith to be deductible under
Code section 404, but the deduction is disallowed, the Trustee
shall, upon request by the
Participating Employer, return to the Participating Employer
the excess of the amount contributed
over the amount, if any, that would have been contributed had
there not occurred a mistake of
fact or a mistake in determining the deduction. Such excess
shall be reduced by the losses of the
Trust attributable thereto, if and to the extent such losses
exceed the gains and income attributable
thereto. In no event shall the return of a contribution
hereunder cause any Participant's Accounts
to be reduced to less than they would have been had the
mistaken or nondeductible amount not
been contributed. No return of a contribution hereunder shall
be made more than one year after
the mistaken payment of the contribution, or disallowance of
the deduction, as the case may be.
5.11. Establishment of Trust Fund. The Association will
enter into a trust agreement with
a Trustee under which agreement the Trustee shall accept, hold
and invest such contributions as
the Participating Employers shall deliver to it and pay such
benefits as the Participating Employers
shall direct in writing. Contributions with respect to a
Participating Employer will be accounted
for separately. The contributions, together with any income,
gains, or profits, less distributions
and losses, shall constitute the Trust Fund.
ARTICLE Section VI. LIMITS ON CONTRIBUTIONS.
6.1. Code Section 404 Limits. The sum of the
contributions made by each Participating
Employer under the Plan for any Plan Year shall not exceed the
maximum amount deductible
under the applicable provisions of the Code. All contributions
under the Plan made by a
Participating Employer are expressly conditioned on their
deductibility under Code section 404
for the taxable year when paid (or treated as paid under Code
section 404(a)(6).
6.2. Code Section 415 Limits.
(a) Incorporation by reference. Code section 415 is
hereby incorporated by
reference into the Plan.
(b) Annual addition. The Association shall
determine an "annual addition" for
each Participant for each limitation year, which shall consist
of the following amounts allocated to
the Participant's Accounts for the year:
(i) Elective Contributions,
(ii) Qualified Nonelective Contributions,
(iii) Employee Contributions,
(iv) Matching Contributions,
(v) Discretionary Contributions,
(vi) forfeitures
(vii) Amounts allocated to an individual
medical amount (as defined in
Code section 415(l)(2) which is part of a pension or annuity
plan maintained by an Affiliated
Employer; and
(viii) Amounts derived from contributions paid
or accrued which are
attributable to post-retirement medical benefits allocated to
the separate account of a key
employee (as defined in Code section 419(e)) maintained by an
Affiliated Employer.
(c) General limitation on annual additions. The
annual addition to a Participant's
Accounts under the Plan for any limitation year, when added to
the annual additions to his or her
accounts for such Year under all other defined contributions
plans maintained by the Participating
Employer and its Affiliates, shall not exceed the lesser of (i)
$30,000 (or, if greater, one-fourth of
the limitation in effect for the limitation year under Code
section 415(b)(1)(A)), or (ii) 25% of the
Participant's Compensation for such limitation year.
(d) Combined limitations. In the case of a
Participant who also participates in a
defined benefit plan maintained by the Participating Employer
or its Affiliates, the annual addition
for a limitation year will, if necessary, be further limited so
that the sum of the Participant's
defined contribution fraction and his or her defined benefit
plan fraction for such limitation year
does not exceed 1.0.
(i) A Participant's "defined contribution
fraction" shall be a fraction, the
numerator of which is the sum of the annual additions to the
Participant's accounts under all the
defined contribution plans (whether or not terminated)
maintained by the Participating Employer
and its Affiliates for the current and all prior limitation
years (including the annual additions
attributable to the Participant's non-deductible employee
contributions to all defined benefit plans,
whether or not terminated, maintained by the Participating
Employer and its Affiliates, and the
annual additions attributable to all welfare benefit funds, as
defined in section 419(e) of the Code,
and individual medical accounts, as defined in section
415(l)(2) of the Code, maintained by the
Participating Employer and its Affiliates, and the denominator
of which is the sum of the
maximum aggregate amounts for the current and all prior
limitation years of service with the
Participating Employer and its Affiliates (regardless of
whether a defined contribution plan was
maintained by the Participating Employer and its Affiliates.
The maximum aggregate amount in
any limitation year is the lesser of 125 percent of the dollar
limitation determined under Code
sections 415(b) and (d) in effect under Code section
415(c)(1)(A) or 35 percent of the
Participant's Compensation for such year. If the employee was
a Participant as of the end of the
first day of the first limitation year beginning after December
31, 1986, in one or more defined
contribution plans maintained by the Participating Employer and
its Affiliates which were in
existence on May 6, 1986, the numerator of this fraction will
be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise
exceed 1.0 under the terms of this plan.
Under the adjustment, an amount equal to the product of (1) the
excess of the sum of the
fractions over 1.0 times (2) the denominator of this fraction,
will be permanently subtracted from
the numerator of this fraction. The adjustment is calculated
using the fractions as they would be
computed as of the end of the last limitation year beginning
before January 1, 1987, and
disregarding any changes in the terms and conditions of the
plan made after May 5, 1986, but
using the section 415 limitation applicable to the first
limitation year beginning on or after January
1, 1987, shall not be recomputed to treat all employee
contributions as annual additions.
(ii) A Participant's "defined benefit fraction"
shall be a fraction, the
numerator of which is the sum of the Participant's projected
annual benefits under all the defined
benefit plans (whether or not terminated) maintained by an
Affiliated Employer, and the
denominator of which is the lesser of 125 percent of the dollar
limitation determined for the
limitation year under Code sections 415(b) and (d) or 140
percent of the highest average
compensation, including any adjustments under Code section
415(b). Notwithstanding the above,
if the Participant was a Participant as of the first day of the
first limitation year beginning after
December 31, 1986, in one or more defined benefit plans
maintained by an Affiliated Employer
which were in existence on May 6, 1986, the denominator of this
fraction will not be less than 125
percent of the sum of the annual benefits under such plans
which the Participant had accrued as of
the close of the last limitation year beginning before January
1, 1987, disregarding any changes in
the terms and conditions of the plan after May 5, 1986. The
preceding sentence applies only if the
defined benefit plans individually and in the aggregate
satisfied the requirements of Code section
415 for all limitation years beginning before January 1, 1987.
(e) Limitation Year. For purposes of determining
the Code section 415 limits
under the Plan, the "limitation year" shall be the calendar
year.
(f) To the extent necessary to satisfy the
limitations of Code section 415 for any
Participant, the annual addition which would otherwise be made
on behalf of the Participant under
the Plan shall be reduced after the Participant's benefit is
reduced under any and all defined benefit
plans, and after the Participant's annual addition is reduced
under any other defined contribution
plan.
(g) If, as a result of the allocation of
forfeitures, a reasonable error in estimating a
Participant's compensation for a Plan Year or limitation year,
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 under such other facts and
circumstances as may be permitted under regulation or by the
Internal Revenue Service, the
annual addition under the Plan for a Participant would cause
the Code section 415 limitations for
a limitation year to be exceeded, any Elective Contributions
and Employee Contributions made
pursuant to a contribution agreement together with earnings
thereon made by or on behalf of the
Participant for the Limitation Year, to the extent necessary,
will be returned to the Participant.
Any contributions so returned will be disregarded for purposes
of the limits under Code sections
402(g) and 401(k)(3) and 401(m)(2). If the remaining Annual
Addition for the Participant still
exceeds the Code section 415 limits for the limitation year,
Qualified Nonelective Contributions
followed by Discretionary Contributions, followed by Matching
Contributions (including
forfeitures applied to reduce any such Participating Employer
contributions), together with
earnings thereon, will not be allocated to the Participant's
Account to the extent necessary for
limitation year, but will be used to reduce Participating
Employer contributions for the next
limitation year (and succeeding limitation years, as necessary)
for that Participant if the Participant
is covered by the Plan as of the end of the limitation year.
However, if the Participant is not
covered by the Plan as of the end of the limitation year, the
excess amounts will not be distributed
to Participants or former Participants, but will be held
unallocated for that limitation year in a
suspense account. If the suspense account is in existence at
any time during any subsequent
limitation year, all amounts in the suspense account will be
allocated to the Discretionary
Contribution Accounts of all Participants in proportion to
their relative amounts of Compensation
for the subsequent limitation year, before any other
contributions which would be part of an
annual addition are made to the Plan for the subsequent
limitation year. No investment gains or
losses will be allocated to any suspense account described in
this paragraph; instead, any such
gains or losses shall be allocated among the remaining Accounts
in proportion to their respective
balances.
6.3. Code Section 402(g) Limits.
(a) In general. The maximum amount of Elective
Contributions made on behalf of
any Participant for any calendar year, when added to the amount
of elective deferrals under all
other plans, contracts and arrangements of an Affiliated
Employer with respect to the Participant
for the calendar year), shall in no event exceed the maximum
applicable limit in effect for the
calendar year under Regulation section 1.402(g)-1(d). For
purposes of the Plan, an individual's
elective deferrals for a taxable year are the sum of the
following:
(i) Any elective contribution under a qualified
cash or deferred
arrangement (as defined in Code section 401(k)) to the extent
not includable in the individual's
gross income for the taxable year on account of Code section
402(a)(8) (before applying the limits
of Code section 402(g) or this section);
(ii) Any employer contribution to a simplified
employee pension (as
defined in code section 408(k) to the extent not includable in
the individual's gross income for the
taxable year on account of Code section 402(h)(1)(B) (before
applying the limits of Code section
402(g));
(iii) Any employer contribution to a custodial
account or annuity contract
under section 403(b) under a salary reduction agreement (within
the meaning of Code section
3121(a)(5)(D)), and any elective contribution pursuant to an
eligible deferred compensation plan
under Code section 457, to the extent not includable in the
individual's gross income for the
taxable year on account of Code section 403(b) or 457 before
applying the limits of Code section
402(g); and
(iv) Any employee contribution designated as
deductible under a trust
described in Code section 501(c)(19) (before applying the
limits of Code section 402(g)).
A Participant will be considered to have made "excess
deferrals" for a taxable year to the
extent that the Participant's elective deferrals for the
taxable year exceed the applicable limit
described above for the year.
(b) Distribution of excess deferrals. In the event
that an amount is included in a
Participant's gross income for a taxable year as a result of an
excess deferral under Code section
402(g), and the Participant notifies the Association on or
before the March 1 following the taxable
year that all or a specified part of an Elective Contribution
made for his or her benefit represents
an excess deferral, the Association shall make every reasonable
effort to cause such excess
deferral, adjusted for allocable income, to be distributed to
the Participant no later than the April
15 following the calendar year in which such excess deferral
was made. The Participant will be
deemed to have notified the Association before March 1 of any
excess deferral arising under a
plan maintained by an Affiliated Employer. The income
allocable to excess deferrals is equal to
the allocable gain or loss for the taxable year of the
individual, but not the allocable gain or loss
for the period between the end of the taxable year and the date
of distribution (the "gap period").
Income allocable to excess deferrals for the taxable year shall
be determined by multiplying the
gain or loss attributable to the Participant's Elective
Contribution Account for the taxable year by
a fraction, the numerator of which is the Participant's excess
deferrals for the taxable year, and the
denominator of which is the sum of the Participant's Elective
Contribution Account balance as of
the beginning of the taxable year plus the Participant's
Elective Contributions for the taxable year.
No distribution of an excess deferral shall be made during the
taxable year of a Participant in
which the excess deferral was made unless the correcting
distribution is made after the date on
which the Plan received the excess deferral and both the
Participant and the Plan designates the
distribution as a distribution of an excess deferral. The
amount of any excess deferrals that may
be distributed to a Participant for a taxable year shall be
reduced by the amount of Elective
Contributions that were excess contributions and were
previously distributed to the Participant or
recharacterized for the Plan Year beginning with or within such
taxable year.
(c) Treatment of excess deferrals. For other
purposes of the Code, including
Code sections 401(a)(4), 401(k)(3), 404, 409, 411, 412, and
416), excess deferrals must be
treated as employer contributions even if they are distributed
in accordance with paragraph (b)
above. However, excess deferrals of a non-Highly Compensated
Employee are not to be taken
into account for purposes of Code section 401(k)(3) (the actual
deferral percentage test) to the
extent the excess deferrals are prohibited under Code section
401(a)(30). Excess deferrals are
also to be treated as employer contributions for purposes of
Code section 415 unless distributed
under paragraph (b) above.
6.4. Code Section 401(k)(3) Limits.
(a) In General. Elective Contributions made under
the Plan are subject to the
limits of Code section 401(k)(3), as more fully described
below. The Plan provisions relating to
the 401(k)(3) limits are to be interpreted and applied in
accordance with Code sections 401(k)(3)
and 401(a)(4), which are hereby incorporated by reference, and
in such manner as to satisfy such
other requirements relating to Code section 401(k) as may be
prescribed by the Secretary of the
Treasury from time to time.
(b) Actual deferral ratios. For each Plan Year, the
Association will determine the
"actual deferral ratio" for each Participant who is eligible
for Elective Contributions. The actual
deferral ratio shall be the ratio, calculated to the nearest
one-hundredth of one percent, of the
Elective Contributions (plus any Qualified Nonelective
Contributions treated as Elective
Contributions) made on behalf of the Participant for the Plan
Year to the Participant's
Compensation for the applicable period. For purposes of
determining a Participant's actual
deferral ratio,
(i) Elective Contributions will be taken into
account only if each of the
following requirements are satisfied:
(A) the Elective Contribution is allocated
to the Participant's
Elective Contribution Account as of a date within the Plan
Year, is not contingent upon
participation in the Plan or performance of services on any
date subsequent to that date, and is
actually paid to the Trust no later than the end of the
12-month period immediately following the
Plan Year to which the contribution relates; and
(B) the Elective Contribution relates to
Compensation that either
would have been received by the Participant in the Plan Year
but for the Participant's election to
defer under the Plan, or is attributable for services performed
in the Plan Year and, but for the
Participant's election to defer, would have been received by
the Participant within 2 1/2 months
after the close of the Plan Year.
To the extent Elective Contributions which meet the
requirements of (A) and (B)
above constitute excess deferrals, they will be taken into
account for each Highly Compensated
Employee, but will not be taken into account for any non-Highly
Compensated Employee.
(ii) in the case of a Participant who is a
Highly Compensated Employee for
the Plan Year and is eligible to have elective deferrals (and
qualified nonelective or qualified
matching contributions, to the extent treated as elective
deferrals) allocated to his or her accounts
under two or more cash or deferred arrangements described in
Code section 401(k) maintained by
a Participating Employer or its Affiliate, the Participant's
actual deferral ratio shall be determined
as if such elective deferrals (as well as qualified nonelective
or qualified matching contributions)
are made under a single arrangement, and if two or more of the
cash or deferred arrangements
have different Plan Years, all cash or deferred arrangements
ending with or within the same
calendar year shall be treated as a single arrangement;
(iii) for purposes of determining the actual
deferral ratio of a Participant
who is a 5 percent owner or one of the 10 most highly paid
Highly Compensated Employees, the
Elective Contributions (and any Qualified Nonelective
Contributions treated as Elective
Contributions) and Compensation of such Participant shall
include the Elective Contributions (and
Qualified Nonelective Contributions treated as Elective
Contributions) and Compensation for the
Plan Year of the Participant's family members (as defined in
Code section 414(q)(6)), such family
members shall be disregarded as separate employees for purposes
of determining the actual
deferral ratio of both Highly Compensated Employees and
non-Highly Compensated Employees,
and in the event that there are excess contributions with
respect to such family members, the
excess shall be allocated among such family members in
proportion to their Elective
Contributions;
(iv) the applicable period for determining
Compensation for each
Participant for a Plan Year shall be the 12-month period ending
on the last day of such Plan Year;
provided, that to the extent permitted under Regulations, the
Association may choose, on a
uniform basis, to treat as the applicable period only that
portion of the Plan Year during which the
individual was a Participant;
(v) Qualified Nonelective Contributions made on
behalf of Participants
who are eligible to receive Elective Contributions shall be
treated as Elective Contributions to the
extent permitted by Regulation section 1.401(k) 1(b)(5);
(vi) in the event that the Plan satisfies the
requirements of Code sections
401(k), 410(a)(4), or 410(b) only if aggregated with one or
more other plans with the same plan
year, or if one or more other plans with the same Plan Year
satisfy such Code sections only if
aggregated with this Plan, then this section shall be applied
by determining the actual deferral
ratios as if all such plans were a single plan;
(vii) an employee who would be a Participant
but for the failure to make
Elective Contributions shall be treated as a Participant on
whose behalf no Elective Contributions
are made; and
(viii) Elective Contributions which are made on
behalf of non-Highly
Compensated Employees which could be used to satisfy the Code
section 401(k)(3) limits but are
not necessary to be taken into account in order to satisfy such
limits, may instead be taken into
account for purposes of the Code section 401(m) limits to the
extent permitted by Regulation
sections 1.401(m)-1(b)(5).
(c) Actual deferral percentages. The actual
deferral ratios for all Highly
Compensated Employees who are eligible for Elective
Contributions for a Plan Year shall be
averaged to determine the actual deferral percentage for the
highly compensated group for the
Plan Year, and the actual deferral ratios for all Employees who
are not Highly Compensated
Employees but are eligible for Elective Contributions for the
Plan Year shall be averaged to
determine the actual deferral percentage for the nonhighly
compensated group for the Plan Year.
The actual deferral percentages for any Plan Year must satisfy
at least one of the following tests:
(i) the actual deferral percentage for the
highly compensated group does
not exceed 125% of the actual deferral percentage for the
nonhighly compensated group; or
(ii) the excess of the actual deferral
percentage for the highly compensated
group over the actual deferral percentage for the nonhighly
compensated group does not exceed
two percentage points, and the actual deferral percentage for
the highly compensated group does
not exceed twice the actual deferral percentage of the
nonhighly compensated group.
(d) Adjustments by Association. If, prior to the
time all Elective Contributions for
a Plan Year have been contributed to the Trust, the Association
determines that Elective
Contributions are being made at a rate which will cause the
Code section 401(k)(3) limits to be
exceeded for the Plan Year, the Association may, in its sole
discretion, limit the amount of
Elective Contributions to be made with respect to one or more
Highly Compensated Employees
for the balance of the Plan Year by suspending or reducing
Elective Contribution elections to the
extent the Association deems appropriate. Any Elective
Contributions which would otherwise be
made to the Trust shall instead be paid to the affected
Participant in cash.
(e) Excess contributions. If the Code section
401(k)(3) limits have not been met
for a Plan Year after all contributions for the Plan Year have
been made, the Association will
determine the amount of excess contributions with respect to
Participants who are Highly
Compensated Employees. To do so, the Association will reduce
the actual deferral ratio of the
Highly Compensated Employee with the highest actual deferral
ratio to the extent necessary to (i)
enable the Plan to satisfy the 401(k)(3) limits or (ii) cause
such employee's actual deferral ratio to
equal the actual deferral ratio of the Highly Compensated
Employee with the next highest actual
deferral ratio, and will repeat this process until the Plan
satisfies the Code section 401(k)(3) limits.
The amount of excess contributions for each Highly Compensated
Employee for the Plan Year
shall equal the amount of Elective Contributions (plus
Qualified Nonelective Contributions which
are treated as Elective Contributions for purposes of the Code
section 401(k)(3) limits) actually
made to the Trust for the Plan Year, less the product of the
(i) the Highly Compensated
Employee's reduced actual deferral ratio as determined under
the preceding sentence, and (ii) his
or her Compensation. Any excess contributions will be
distributed or recharacterized as provided
below. In no event will excess contributions remain unallocated
or be allocated to a suspense
account for allocation in a future Plan Year.
(f) Distribution of excess contributions. Unless a
Participant elects to have his or
her excess contributions recharacterized, the Participant's
excess contributions, adjusted for
income, will be designated by the Participating Employer as a
distribution of excess contributions
and distributed to the Participant. The income allocable to
excess contributions is equal to the
allocable gain or loss for the Plan Year, but not the allocable
gain or loss for the period between
the end of the Plan Year and the date of distribution (the "gap
period"). Income allocable to
excess contributions for the Plan Year shall be determined by
multiplying the gain or loss
attributable to the Participant's Elective Contribution Account
and QNEC Account balances by a
fraction, the numerator of which is the excess contributions
for the Participant for the Plan Year,
and the denominator of which is the sum of the Participant's
Elective Contribution Account and
QNEC Account balances as of the beginning of the Plan Year plus
the Participant's Elective
Contributions and Qualified Nonelective Contributions for the
Plan Year. Distribution of excess
contributions will be made after the close of the Plan Year to
which the contributions relate, but
within 12 months after the close of such Plan Year. Excess
contributions shall be treated as
annual additions under the Plan, even if distributed under this
paragraph.
(g) Recharacterization. In lieu of receiving a
distribution of excess contributions,
a Highly Compensated Employee may elect, at such time and in
such manner as the Association
may prescribe, to have all or a portion of his or her excess
contributions recharacterized as
Employee Contributions. Excess contributions may be
recharacterized only to the extent that
additional Employee Contributions otherwise could have been
contributed by the Highly
Compensated Employee for the Plan Year under the Plan, and must
be recharacterized no later
than two and one-half months after the close of the Plan Year
to which the recharacterization
relates. If a Highly Compensated Employee elects
recharacterization, the Association will (i)
timely provide such forms to the Highly Compensated Employee
and his or her Participating
Employer, and take such other action, as the Internal Revenue
Service shall require, and (ii)
account for such recharacterized amounts as contributions by
the Highly Compensated Employee
for purposes of Code sections 72 and 6047. Recharacterized
excess contributions shall continue
to be treated as Elective Contributions for all purposes under
the Plan other than determination of
the Code section 401(k)(3) and 401(m) limits (see Section
6.5(b)(vii)).
(h) Special rules. For purposes of recharacterizing
or distributing excess
contributions,
(i) the amount of excess contributions that may
be recharacterized or
distributed with respect to a Highly Compensated Employee for
a Plan Year shall be reduced by
the amount of excess deferrals previously distributed to the
Highly Compensated Employee for his
or her taxable year ending with or within such Plan Year.
(ii) the determination and correction of excess
contributions with respect
to a Highly Compensated Employee whose actual deferral ratio is
determined pursuant to the
family aggregation rules will be accomplished by reducing the
actual deferral ratio as required
above and allocating the excess contributions for the family
group among family members in
proportion to the Elective Contribution of each family member
that is combined to determine the
actual deferral ratio.
(i) Recordkeeping requirement. The Association, on
behalf of the Participating
Employers, shall maintain such records as are necessary to
demonstrate compliance with the Code
section 401(k)(3) limits including the extent to which
Qualified Nonelective Contributions are
taken into account in determining the actual deferral ratios.
(j) Effect on Matching Contributions. A
Participant's Elective Contributions
which are returned or recharacterized as a result of the Code
section 401(k)(3) limits for a Plan
Year shall not be taken into account in determining the amount
of Matching Contributions to be
made for the Participant's benefit for the Year. To the extent
Matching Contributions have
already been made with respect to the Elective Contributions at
the time the Elective
Contributions are determined to be excess contributions, such
Matching Contributions shall be
forfeited to the extent they are not vested, or distributed to
the extent they are vested to the
Participant at the same time as the Elective Contributions are
returned or recharacterized.
(k) Excise tax where failure to correct. If the
excess contributions are not
corrected within 2 1/2 months after the close of the Plan Year to
which they relate, the Participating
Employers will be liable for a 10 percent excise tax on the
amount of excess contributions
attributable to them, to the extent provided by Code section
4979. Qualified Nonelective
Contributions properly taken into account under this Section
for the Plan Year may enable the
Plan to avoid having excess contributions, even if the
contributions are made after the close of the
2 1/2 month period.
6.5. Code Section 401(m) Limits.
(a) In General. Employee and Matching Contributions
made under the Plan are
subject to the limits of Code section 401(m), as more fully
described below. The Plan provisions
relating to the 401(m) limits are to be interpreted and applied
in accordance with Code sections
401(m) and 401(a)(4), which are hereby incorporated by
reference, and in such manner as to
satisfy such other requirements relating to Code section 401(m)
as may be prescribed by the
Secretary of the Treasury from time to time.
(b) Actual contribution ratios. For each Plan Year,
the Association will determine
the "actual contribution ratio" for each Participant who is
eligible for Employee Contributions or
Matching Contributions. The actual contribution ratio shall be
the ratio, calculated to the nearest
one-hundredth of one percent, of the sum of the Employee
Contributions, Matching
Contributions, and Qualified Nonelective Contributions which
are not treated as Elective
Contributions made by and on behalf of the Participant for the
Plan Year, to the Participant's
Compensation for the Plan Year. For purposes of determining a
Participant's actual contribution
ratio,
(i) An Employee Contribution shall be taken
into account for the Plan
Year in which the Contribution is made to the Trust. A payment
by the Participant to an agent of
the Trustee (including a Participating Employer) shall be
treated as a contribution to the Trust at
the time of payment to the agent if the funds are transmitted
to the Trust within the time allotted
by the Plan. A Matching Contribution will be taken into
account only if the Contribution is
allocated to a Participant's Account as of a date within the
Plan Year, is actually paid to the Trust
no later than 12 months after the close of the Plan Year, and
is made on behalf of a Participant on
account of the Participant's Employee or Elective Contributions
for the Plan Year;
(ii) for purposes of determining the actual
contribution ratio of a
Participant who is a 5 percent owner or one of the 10 most
highly paid Highly Compensated
Employees, the Matching Contributions and Compensation of such
Participant shall include the
Employee Contributions, Matching Contributions, Qualified
Nonelective Contributions treated as
Matching Contributions, and Compensation for the Plan Year of
the Participant's family members
(as defined in Code section 414(q)(6)), and such family members
shall be disregarded as separate
employees for purposes of determining the actual contribution
ratio of both Highly Compensated
Employees and non-Highly Compensated Employees;
(iii) in the case of a Participant who is a
Highly Compensated Employee
for the Plan Year and is eligible to have matching
contributions or employee contributions
(including amount treated as matching contributions) allocated
to his or her accounts under two
or more plans maintained by an Affiliated Employer which may be
aggregated for purposes of
Code sections 410(b) and 401(a)(4), the Participant's actual
contribution ratio shall be determined
as if such contributions are made under a single plan, and if
two or more of the plans have
different Plan Years, all plans ending with or within the same
calendar year shall be treated as a
single plan;
(iv) the applicable period for determining
Compensation for each
Participant for a Plan Year shall be the 12-month period ending
on the last day of such Plan Year;
provided, that to the extent permitted under Regulations, the
Association may choose, on a
uniform basis, to treat as the applicable period only that
portion of the Plan Year during which the
individual was a Participant.
(v) Elective Contributions not applied to
satisfy the Code section
401(k)(3) limits and Qualified Nonelective Contributions not
treated as Elective Contributions
may be treated as Matching Contributions to the extent
permitted by Regulation section
1.401(m)-1(b)(5).
(vi) in the event that the Plan satisfies the
requirements of Code sections
401(k), 410(a)(4), or 410(b) only if aggregated with one or
more other plans with the same plan
year, or if one or more other plans with the same Plan Year
satisfy such Code sections only if
aggregated with this Plan, then this section shall be applied
by determining the actual deferral
ratios as if all such plans were a single plan;
(vii) Elective Contributions which are
recharacterized as Employee
Contributions shall be taken into account as Employee
Contributions for the Plan Year that
includes the time at which the excess contributions are
includible in the gross income of the
Participant;
(c) Actual contribution percentages. The actual
contribution ratios for all Highly
Compensated Employees who are eligible for Employee
Contributions or Matching Contributions
for a Plan Year shall be averaged to determine the actual
contribution percentage for the highly
compensated group for the Plan Year, and the actual
contribution ratios for all Employees who
are not Highly Compensated Employees but are eligible for
Employee Contributions or Matching
Contributions for the Plan Year shall be averaged to determine
the actual contribution percentage
for the nonhighly compensated group for the Plan Year. The
actual contribution percentages for
any Plan Year must satisfy at least one of the following tests:
(i) The actual contribution percentage for the
highly compensated group
does not exceed 125% of the actual contribution percentage for
the nonhighly compensated
group; or
(ii) The excess of the actual contribution
percentage for the highly
compensated group over the actual contribution percentage for
the nonhighly compensated group
does not exceed two percentage points, and the actual
contribution percentage for the highly
compensated group does not exceed twice the actual contribution
percentage of the nonhighly
compensated group.
(d) Multiple use test. In the event that (i) the
actual deferral percentage and
actual contribution percentage for the highly compensated group
each exceed 125% of the
respective actual deferral and actual contribution percentages
for the nonhighly compensated
group, and (ii) the sum of the actual deferral percentage and
the actual contribution percentage
for the highly compensated group exceeds the "aggregate limit"
within the meaning of Regulation
section 1.401(m)-2(b)(3), the Association shall reduce the
actual contribution ratios of Highly
Compensated Employees who had both an actual deferral ratio and
an actual contribution ratio for
the Plan Year to the extent required by such section and in the
same manner as described in
paragraph (f) below.
(e) Adjustments by Association. If, prior to the
time all Employee Contributions
or Matching Contributions for a Plan Year have been contributed
to the Trust, the Association
determines that such Contributions are being made at a rate
which will cause the Code section
401(m) limits to be exceeded for the Plan Year, the Association
may, in its sole discretion, limit
the amount of such Contributions to be made with respect to one
or more Highly Compensated
Employees for the balance of the Plan Year by limiting the
amount of such Contributions to the
extent the Association deems appropriate.
(f) Excess aggregate contributions. If the Code
section 401(m) limits have not
been satisfied for a Plan Year after all contributions for the
Plan Year have been made, the excess
of the aggregate amount of the Employee and Matching
Contributions (and any Qualified
Nonelective Contribution or elective deferral taken into
account in computing the actual
contribution percentages) actually made on behalf of Highly
Compensated Employees for the Plan
Year over the maximum amount of such contributions permitted
under Code section
401(m)(2)(A) shall be considered to be "excess aggregate
contributions". The Association shall
determine the amount of excess aggregate contributions made
with respect to each Participant
who is a Highly Compensated Employee. To do so, the
Association will reduce the actual
contribution ratio of the Highly Compensated Employee with the
highest actual contribution ratio
to the extent necessary to (i) enable the Plan to satisfy the
section 401(m) limits or (ii) cause such
employee's actual contribution ratio to equal the actual
contribution ratio of the Highly
Compensated Employee with the next highest actual contribution
ratio, and will repeat this
process until the Plan satisfies the Code section 401(m)
limits. The amount of excess aggregate
contributions for each Highly Compensated Employee for the Plan
Year shall equal the amount of
Employee Contributions and Matching Contributions (plus
Elective Contributions and Qualified
Nonelective Contributions for purposes of the Code section
401(m) limits) actually made to the
Trust for the Plan Year, less the product of the (i) the Highly
Compensated Employee's reduced
actual contribution ratio as determined under the preceding
sentence, and (ii) his or her
Compensation. Any excess aggregate contributions will be
distributed as provided below to the
Highly Compensated Employee to which they are attributable. In
no event will excess aggregate
contributions remain unallocated or be allocated to a suspense
account for allocation in a future
Plan Year.
(g) Distribution of excess aggregate contributions.
A Participant's excess
aggregate contributions, adjusted for income will be designated
by the Participating Employer as a
distribution of excess aggregate contributions, and distributed
to the Participant. The income
allocable to excess aggregate contributions is equal to the
allocable gain or loss for the taxable
year of the individual, but not the allocable gain or loss for
the period between the end of the
taxable year and the date of distribution (the "gap period").
Income allocable to excess aggregate
contributions for the taxable year shall be determined by
multiplying the gain or loss attributable
to the Participant's Matching Contribution Account and Employee
Contribution Account balances
by a fraction, the numerator of which is the excess aggregate
contributions for the Participant for
the Plan Year, and the denominator of which is the sum of the
Participant's Matching Contribution
Account and Employee Contribution Account balances as of the
beginning of the Plan Year plus
the Participant's Employee Contributions and Matching
Contributions for the Plan Year.
Distribution of excess aggregate contributions will be made
after the close of the Plan Year to
which the contributions relate, but within 12 months after the
close of such Plan Year. Excess
aggregate contributions shall be treated as employer
contributions for purposes of Code sections
401(a)(4), 404, and 415 even if distributed from the Plan.
(h) Special Rules. For purposes of distributing
excess aggregate contributions,
(i) the determination and distribution of
excess aggregate contributions
with respect to a Highly Compensated Employee whose actual
contribution ratio is determined
pursuant to the family aggregation rules will be accomplished
by reducing the actual contribution
ratio as required above and allocating the excess aggregate
contributions for the family group
among family members in proportion to the Employee
Contributions and Matching Contributions
of each family member that is combined to determine the actual
contribution ratio.
(ii) Distribution of excess aggregate
contributions (in each case adjusted
for income or loss) shall be accomplished in the following
order:
(1) unmatched Employee Contributions;
(2) Matched Employee Contributions;
(3) Matching Contributions attributable to
Employee
Contributions; and
(4) Matching Contributions attributable to
Elective Contributions.
(i) Recordkeeping requirement. The Association, on
behalf of the Participating
Employers, shall maintain such records as are necessary to
demonstrate compliance with the Code
section 401(m) limits, including the extent to which Elective
Contributions and Qualified
Nonelective Contributions are taken into account in determining
the actual contribution ratios.
(j) Excise tax where failure to correct. If the
excess aggregate contributions are
not corrected within 2 1/2 months after the close of the Plan Year
to which they relate, the
Participating Employers will be liable for a 10 percent excise
tax on the amount of excess
aggregate contributions attributable to them, to the extent
provided by Code section 4979.
Qualified Nonelective Contributions properly taken into account
under this section for the Plan
Year may enable the Plan to avoid having excess aggregate
contributions, even if the
contributions are made after the close of the 2 1/2 month period.
6.6. Section 401(a)(26)/410(b) Limits.
(a) Notwithstanding anything to the contrary, if the
number of Participants who
are eligible to share in any contribution for a Plan Year is
such that the Plan would fail to meet the
requirements of Code sections 410(a)(26), 410(b)(1), or
410(b)(2)(A)(i), because a Participating
Employer's contribution would not be allocated to a sufficient
number of Participants, then the
group of Participants eligible to share in the contribution for
the Plan Year will be increased to
include such minimum number of Participants who are not in the
service of the Company on the
anniversary date, as may be necessary to satisfy the applicable
tests under the above Code
sections. The Participants who will become eligible to share
in the contribution will be those
participants who, when compared to Participants who are
similarly situated, completed the
greatest number of hours of service in the Plan Year before the
termination of their service.
(b) The preceding paragraph will not be construed to
permit the reduction of any
Participant's Account balance, and any amounts which were
allocated to Participants whose
eligibility to share in the contribution did not result from
the application of the preceding
paragraph will not be reallocated to satisfy such requirements.
Instead, the Participating
Employer will make an additional contribution equal to the
amount which the affected Participants
would have received had they been included initially in the
allocation of the Participating
Employer's Contribution, even if it would cause the
contributions of the participating Employer
for the Plan Year to exceed the amount which is deductible by
the participating Employer for such
Plan Year under Code section 404. Any adjustments pursuant to
this paragraph will be
considered to be a retroactive amendment of the Plan which was
adopted by the last day of the
Plan Year.
ARTICLE Section VII. PARTICIPANT ACCOUNTS.
7.1. Accounts. The Association will establish and maintain
(or cause the Trustee to establish and
maintain) for each Participant, such Accounts as are necessary
to carry out the purposes of this
Plan.
7.2. Adjustment of Accounts. As of each Valuation Date, each
Account will be adjusted to
reflect the fair market value of the assets allocated to the
Account. In so doing,
(a) each Account balance will be increased by the
amount of contributions, income
and gain allocable to such Account since the prior Valuation
Date; and
(b) each Account balance will be decreased by the
amount of distributions from
the Account and expenses and losses allocable to the Account
since the prior Valuation Date.
Income, expense, gain and loss which is generated by a
particular investment within the Trust
shall be allocated to an Account participating in such
investment in the ratio to which the portion
of the Account which is invested in the fund bears to the
entire amount of Trust assets invested in
the fund. Any expenses relating to a specific Account or
Accounts, or commissions or sales
charges with respect to an investment in which the Account
participates, may be charged solely to
the particular Account or Accounts.
7.3. Investment of Accounts. Participant's Accounts will be
invested in accordance with the
provisions of the Trust. The Trust shall permit each
Participant to direct the Trustee to invest his
or her Accounts from among such investment options as the
Association may make available from
time to time. It is the intention of the Association to make
such investment options available
under the Trust as will fully satisfy the requirements of
Section 404(c) of ERISA and the
regulations promulgated thereunder. The Association shall
prescribe the form and manner in
which such directions shall be made, as well as the frequency
with which such directions shall be
made or changed, the dates as of which they shall be effective,
and the allocation of Accounts
with respect to which no directions are submitted, in each case
consistent with Section 404(c) of
ERISA and the regulations promulgated thereunder so that
Participants will have a reasonable
opportunity within the meaning of such regulations to give
investment instructions (in writing or
otherwise with an opportunity to obtain written confirmation of
such instructions) to the
Association which is obligated to comply with such instructions
except as otherwise provided
under such regulations. Any other assets of the Trust not
specified above in this Section shall be
invested by the Trustee in the sole discretion of the Trustee
and in accordance with the provisions
of the Trust; provided, that if an investment manager or other
named fiduciary has been appointed
with respect to all or a portion of such assets, the Trustee
shall invest such portion as the
investment manager or other named fiduciary directs.
ARTICLE Section VIII. VESTING OF ACCOUNTS.
8.1. Immediate Vesting of Certain Accounts. A Participant
will at all times be 100% vested in his
or her Elective Contribution Account, QNEC Account, Employee
Contribution Account, and
Rollover Contribution Account.
8.2. Deferred Vesting of Other Accounts. Each Participant will
have a vested interest in a
percentage of his or her Matching Contribution Account and
Discretionary Contribution Account
determined in accordance with the following schedule and based
on his or her Years of Service
for Vesting:
Years of Vesting Applicable
Service Percentage
fewer than 2 0%
2 but fewer than 3 20%
3 but fewer than 4 40%
4 but fewer than 5 60%
5 but fewer than 6 80%
6 or more 100%
8.3. Special Vesting Rules. Notwithstanding any provision of
the Plan to the contrary, a
Participant will be fully vested in 100% of the Accounts
maintained for his or her benefit upon the
happening of any one of the following events:
(a) the Participant's attainment of his or her Early
Retirement Age while an
Employee;
(b) the Participant's death while an Employee;
(c) the termination or partial termination of the
Plan or the complete cessation of
contributions to the Plan, to the extent that the Participant
is affected by such termination, partial
termination, or complete discontinuance.
8.4. Distribution of Less Than Entire Vested Percentage. If
a distribution has been made to a
Participant from an Account at a time when he or she has a
vested percentage in such Account
equal to less than 100%, at any relevant time after the
distribution, the Participant's vested interest
will be equal to (P*(AB+D))-D, where P is the Participant's
vested percentage at the relevant
time, AB is the Account balance at the relevant time, and D is
the amount of the distribution.
8.5. Changes in Vesting Schedule. If the Plan's vesting
schedule is amended, or the Plan is
amended in any way that directly or indirectly adversely
affects the computation of a Participant's
vested percentage (or if the Plan changes to or from a
top-heavy vesting schedule), each
Participant who has completed 3 Years of Service for Vesting
may elect, within the period
described below, to have his or her vested percentage
determined without regard to such
amendment or change. The period referred to in the preceding
sentence will begin on the date the
amendment of the vesting schedule is adopted and will end 60
days thereafter, or, if later, 60 days
after the later of
(a) the date on which such amendment becomes
effective; and
(b) the date on which the Participant is issued
written notice of such amendment
by the Association.
8.6. Forfeitures.
(a) In general. Any portion of a Participant's
Account in which he or she is not
vested upon separation from service for any reason will be
forfeited as of the earlier of
(i) the expiration of 5 consecutive One Year
Breaks in Service, or
(ii) the distribution of the vested portion of
the Account if such
distribution is made as a result of the Participant's
separation from service.
(b) Certain Restorations. Notwithstanding the
preceding paragraph, if a
Participant forfeits any portion of an Account as a result of
the complete distribution of the vested
portion of the Account but thereafter returns to the employ of
a Participating Employer, the
amount forfeited will be recredited to the Participant's
Account if he or she repays to the Plan the
entire amount attributable to Matching Contribution and
Discretionary Contribution Accounts
previously distributed, without interest, prior to the earlier
of (i) the close of the fifth consecutive
One Year Break in Service or (ii) the fifth anniversary of the
date on which the Participant is
reemployed. The Participant's vested percentage in the amount
so recredited will thereafter be
determined under the terms of the Plan as if no forfeiture had
occurred. The money required to
effect the restoration of a Participant's Account shall come
from other Accounts forfeited during
the Plan Year of restoration, and to the extent such funds are
inadequate, from a special
contribution by the Participant's Participating Employer.
(c) Application of forfeitures. Any forfeitures
occurring in a Plan Year with
respect to an Employee of a Participating Employer
(i) first, will be applied to the restoration
of any Accounts of Employees of
the Participating Employer as required for such Year; and
(ii) to the extent amounts remain after the
application of (i) above, will be
applied against the Participating Employer's Matching
Contributions for the Plan Year in which
the forfeitures occurred, and to the extent any forfeitures
remain after such application, they will
be applied against the Employer's Matching Contributions for
the next Plan Year.
ARTICLE Section IX. PAYMENT OF ACCOUNTS.
9.1. Retirement. Each Participant may elect to retire on
his or her Early Retirement Date,
his or her Normal Retirement Date, or his or her Deferred
Retirement Date, and receive his or her
Account in accordance with Section 9.7. If elected by the
Participating Employer in the Adoption
Agreement, a Participant who attains his or her Normal
Retirement Age may elect to receive his
or her Account in accordance with Section 9.7 even though such
Participant does not have a
Termination of Employment.
9.2. Death. The Accounts of any Participant who dies
shall be paid to his or her
Beneficiary in accordance with Section 9.7.
9.3. Disability. If a Participant incurs a Disability prior
to a Termination of Employment, he or
she may elect to receive his or her entire Account, other than
his or her Matching and
Discretionary Contribution Accounts, in a single sum cash
payment.
9.4. Other Termination of Employment. If a Participant
has a Termination of
Employment prior to attaining his or her Early Retirement Age
for any reason other than death, he
or she may receive the vested and non-forfeitable portion of
his or her Account payable in
accordance with Section 9.7.
9.5. Valuation for Distribution. For the purposes of
paying the amounts to be distributed
to a Participant or his or her Beneficiary or Beneficiaries
under the provisions of this Article, the
value of the Trust Fund and the value of the Participant's
Accounts therein shall be determined in
accordance with the provisions of Article 7 as of the Valuation
Date coincident with or
immediately preceding the date of any payment under this
Article. There shall be added to such
amount the additional contributions which have been or are to
be allocated to the Participant's
Accounts since that Valuation Date.
9.6. Timing of Distribution. Unless the Participant
elects otherwise, in no event shall the
payment of any Participant's Account be made any later than the
60th day after the latest of the
following:
(a) the close of the Plan Year in which occurs the
date on which the Participant
would first be eligible for normal retirement under Section
9.1;
(b) the close of the Plan Year in which occurs the
10th anniversary of the year
in which the Participant commenced participation in the Plan;
and
(c) the close of the Plan Year in which the
Participant ceases to be an Employee.
Notwithstanding the foregoing, distribution of a Participant's
Account under the Plan shall occur
no later than the Participant's required beginning date (as
defined in section 401(a)(9) of the
Code) and may continue to the Participant or to his or her
Beneficiary no longer than the
maximum period permitted under section 401(a)(9).
9.7. Mode of Distribution. A Participant's Account
shall be paid to him or her (or to his
or her Beneficiary), subject to the limitations of Section 9.6,
as follows:
(a) Any Participant who qualifies under Section 9.1
to receive his or her Account
because he or she has attained (or elected to retire on) his or
her Early Retirement Date, Normal
Retirement Date or Deferred Retirement Date under Section 9.1,
may elect (on a form provided
by the Association)
(i) to receive his or her entire Account in a
single cash payment; or
(ii) to receive his or her entire Account in up
to five payments of at least
$10,000 each, provided he or she shall not be entitled to more
than one payment in any Plan Year;
or
(iii) to transfer his or her entire Account to
The Defined Benefit Pension
Plan (Plan C) of The Cooperative Banks Employees Retirement
Program (hereinafter referred to
as "Plan C") for the purpose of applying the transferred amount
to the payment of benefits from
Plan C in the form of an annuity that is available thereunder;
or
(iv) to receive his or her Employee
Contributions in a single cash payment
and to transfer the balance of his or her Account to Plan C for
the purpose described in
subparagraph (iii) above; or
(v) to receive his or her entire Account, other
than his or her Matching
and Discretionary Contribution Accounts, and to transfer the
balance of his or her Account to
Plan C for the purpose described in subparagraph (iii) above;
or
(vi) subject to the provisions of Section 9.6,
to defer receipt of his or
her entire Account or to receive his or her entire Account,
other than his or her Matching
Contribution Account, and to defer receipt of his or her
Matching Contribution Account.
(b) Any Participant who has a Termination of
Employment under Section 9.4 may
elect
(i) to receive his or her entire Account in a
single cash payment; or
(ii) subject to the provisions of Section 9.6,
to defer receipt of his or her
entire Account or to receive his or her entire Account other
than his or her Matching Contribution
Account and Discretionary Contribution Account and to defer
receipt of his or her Matching
Contribution Account and Discretionary Contribution Account; or
(iii) when and if the Participant attains his or
her Early Retirement Age, any
of the payment options described in 9.7(a) above.
A Participant who has elected to defer receipt of any
portion of his or her Account under
this Section may subsequently elect to receive his or her
Account in accordance with such
procedures as the Association shall prescribe. The Beneficiary
distribution options under this
Section will be the same as the options that would have been
available to the Participant had he or
she retired or terminated employment immediately before his or
her death.
9.8. Consent to Distributions by Participant. Subject to
the provisions of Section 9.6, no
distribution shall be made to any Participant unless
(a) the Association has (i) provided the Participant
with a written notice, not less
than 30 days (unless the Participant waives in writing the 30
days' notice) nor more than 90 days
prior to his or her annuity starting date (as defined in
section 417(f)(2) of the Code), informing
the Participant of his or her right to defer receipt of such
distribution, and thereafter (ii) obtained
the Participant's prior written consent to such distribution
within 90 days prior to his or her
annuity starting date; or
(b) the value of the vested and nonforfeitable
portion of the Participant's Account,
determined under Section 8.1 as of the Valuation Date
coinciding with or immediately preceding
the date of the distribution, does not exceed $500, in which
event the Association will direct the
Trustee to pay the Participant the value of his or her Account
in cash in a single lump sum.
9.9. Beneficiary Designation.
(a) Except as provided in this Section 9.9, a
Participant may designate the
Beneficiary or Beneficiaries who shall receive, on or after his
or her death, his or her interest in
the Trust Fund. Such designation shall be made by executing
and filing with the Association a
written instrument in such form as may be prescribed by the
Association for that purpose. Except
as provided in this Section 9.9, the Participant may also
revoke or change, at any time and from
time to time, any beneficiary designations previously made.
Such revocations and/or changes
shall be made by executing and filing with the Association a
written instrument in such form as
may be prescribed by the Association for that purpose. If a
Participant names a trust as his or her
Beneficiary, a change in the identity of the trustees or in the
instrument governing such trust shall
not be deemed a change in Beneficiary.
(b) No designation, revocation, or change of
Beneficiaries shall be valid and
effective unless and until filed with the Association.
(c) A Participant who does not establish to the
satisfaction of the Association
that he or she has no spouse may not designate someone other
than his or her spouse to be his or
her Beneficiary unless:
(i)(A) such spouse (or the spouse's legal
guardian, if the spouse is legally
incompetent) executes a written instrument whereby such spouse
consents not to receive such
benefit and consents either:
(1) to the specific Beneficiary or
Beneficiaries designated
by the Participant; or
(2) to the Participant's right to
designate any Beneficiary
without further consent by the spouse;
(B) such instrument acknowledges the
effect of the election to
which the spouse's consent is being given; and
(C) such instrument is witnessed by a Plan
representative or
notary public;
(ii) the Participant:
(A) establishes to the satisfaction of the
Association that his or her
spouse cannot be located; or
(B) furnishes a court order to the
Association establishing that the
Participant is legally separated or has been abandoned (within
the meaning of local law), unless a
qualified domestic relations order pertaining to such
Participant provides that the spouse's consent
must be obtained; or
(iii) the spouse has previously given consent
in accordance with this
subsection (c) and consented to the Participant's right to
designate any Beneficiary without further
consent by the spouse.
The consent of a spouse in accordance with this
subsection (c) shall not be
effective with respect to other spouses of the Participant
prior to the Participant's annuity starting
date (as defined in section 417(f)(2) of the Code), and an
election to which paragraph (ii) of this
subsection (c) applies shall become void if the circumstances
causing the consent of the spouse
not to be required no longer exist prior to the Participant's
annuity starting date (as so defined).
(d) If a Participant has no Beneficiary under
subsection (a) of this Section 9.9,
if the Participant's Beneficiary(ies) predecease the
Participant, or if the Beneficiary(ies) cannot be
located by the Association, the interest of the deceased
Participant shall be paid to the
Participant's estate.
9.10. Facility of Payments. If the Association finds that any
person to whom a benefit is payable
from the Trust Fund is unable to attend to his or her affairs
because of illness or accident, any
payment due (unless a prior claim therefor shall have been made
by a duly appointed guardian,
committee or other legal representative) may be paid to the
person's spouse, child, grandchild,
parent, brother or sister, or to any person deemed by the
Association to have incurred expense for
such person otherwise entitled to payment. Any such payment
shall be a complete discharge of
any liability under the Plan therefor.
9.11. Payment as Discharge of Liability. If a
Participant receives a total distribution
representing his or her entire vested and nonforfeitable
interest under the Plan, such a distribution
shall forever constitute a full and complete discharge of the
Plan's liability for benefits accrued by
such Participant on account of Service by such Participant
prior to the date of such distribution.
9.12. Direct Rollover Option. If the distributee of any
"eligible rollover distribution" from
the Plan (within the meaning of Code section 402(f)(2)(A)
elects to have all or part of such
distribution paid directly to an "eligible retirement plan"
(within the meaning of Code section
401(a)(31)(D)) and specifies the eligible retirement plan to
which such distribution is to be paid,
such distribution shall be made in the form of a direct
trustee-to-trustee transfer to the eligible
retirement plan so specified, to the extent required by Code
section 401(a)(31). The elections and
plan specifications under this Section may be made at such time
and in such manner as determined
by the Association consistent with Code section 401(a)(31),
which is hereby incorporated by
reference.
9.13. Distributions to Certain Participants. Notwithstanding
any other provisions of the Plan to
the contrary, a Participant who was a Participant in the Plan
prior to January 1, 1989 may not
elect any form of distribution under the Plan other than to
transfer his or her entire vested
Account to Plan C for the purpose of applying the transferred
amount to the payment of benefits
from Plan C in the normal form applicable under Plan C for
married or non-married Participants,
as the case may be, unless such election fully conforms to the
applicable election, waiver and
notice requirements of Code sections 401(a)(11) and 417 for
defined contribution plans which are
subject to such requirements.
ARTICLE Section X. LOANS TO PARTICIPANTS.
10.1. Loan Application. Upon the written request of a
Participant on a loan application
form approved or prescribed by the Association, the Association
may direct the Trustee to make a
loan to such Participant from the Participant's Account,
subject to the conditions described in this
Article. Effective October 19, 1989, and only for purposes of
this Article, the Beneficiary of a
Participant shall be treated as a Participant. Notwithstanding
the foregoing, only those
Participants and Beneficiaries who are "parties in interest"
(as defined in section 3(14) of ERISA)
with respect to the Plan may apply for a Plan loan under this
Article.
10.2. Rules and Procedures. The Association shall
determine the time or times each year
when loans shall be available to Participants, and shall
formulate such rules and procedures as it
deems appropriate relating to such loans, which rules and
procedures shall be applied on a
uniform and nondiscriminatory basis. The Association may
assess such charges and processing
fees for loans as it may deem in its sole discretion to be
reasonable, which charges and fees may
be paid by the Participant or out of the Participant's Account,
or applies against the loan amount.
10.3. Maximum Amount of Loan. The amount of any loan
under the Plan shall not
exceed the lesser of:
(a) $50,000, reduced by the amount of principal and
accrued interest owed by the
Participant with respect to any prior loans from qualified
retirement plans of his or her
Participating Employer, and further reduced by the excess of
(1) the highest outstanding loan
balance of the Participant from such plans during the one-year
period ending on the day before the
loan is made, over (2) the Participant's outstanding loan
balance from such plans immediately
prior to the loan; or
(b) one-half of the vested and nonforfeitable
portion of the Participant's Account,
reduced by the amount of principal and accrued interest owed by
the Participant with respect to
any prior loans from the Plan.
For purposes of this loans, the value of a Participant's
Account shall be determined as of the
Valuation Date coinciding with or next following receipt from
the Participant and recording by
the Association of a completed loan application on a form
prescribed by the Association.
10.4. Minimum Amount of Loan. No loan shall be made
hereunder for less than $1,000.
10.5. Note; Interest; Security; Default. Each loan shall
be evidenced by a note on a form
which shall be supplied by the Association and shall bear
interest at a reasonable rate determined
by the Association. Such interest rate shall be commensurate
with the interest rates charged by
persons in the business of lending money for loans which would
be made in similar circumstances,
as determined by the Association after consultation with such
lending institutions as the
Association deems appropriate. Each loan must be secured by
the Participant's Account. In its
sole discretion, the Association may require such additional
security as it deems necessary.
If an event of default occurs before a loan is repaid in
full, then the unpaid principal of the
loan, together with any accrued but unpaid interest, shall
become immediately due and payable.
The Participant (or his or her Beneficiary, in the event of the
Participant's death) shall repay the
loan by paying the unpaid principal of the loan, together with
any accrued but unpaid interest,
within such time as may be specified in the note evidencing
such loan. If the loan is not repaid in
full within the time specified in such note, such unpaid
principal, together with such accrued but
unpaid interest, shall be deducted from the vested portion of
the Participant's Account, in the
manner described below, before making any payments otherwise
due under the Plan to the
Participant or his or her Beneficiary. For purposes of this
paragraph, an event of default occurs if
(i) the Participant dies, (ii) the loan is not fully repaid by
the time the note matures, (iii) the
Participant attempts to revoke any payroll deduction
authorization for repayment of the loan
without the consent of the Association, (iv) the Participant
fails to pay any installment of the loan
when due and the Association elects to treat such failure as a
default; or (v) any other event
occurs which the Association, in its sole discretion, believes
may jeopardize the repayment of the
loan.
The Association shall give written notice to the
Participant of an event of default described
in the immediately preceding paragraph. If an event of default
occurs and the loan is not repaid
within the time specified in the note evidencing such loan, the
amount of the Participant's vested
interest in his or her Account (excluding his or her Elective
Contribution, amounts in his or her
Employee Contribution Account that are attributable to Elective
Contributions which have been
recharacterized as Employee Contributions, Matching and/or
Discretionary Contributions that
have been allocated fewer than 24 months prior to the date of
reduction to his or her Account if
he or she has not been a Participant for a period of at least
60 months and has not had a
separation from service) to the extent such Account is security
for the loan, shall be reduced by
the amount of the unpaid principal of the loan, together with
any accrued but unpaid interest, and
the Participant's indebtedness shall thereupon be discharged to
the extent of the reduction. In
addition, if the value of the Participant's total vested
interest in his or her Account (exclusive of
his or her Elective Contribution Account and Matching and/or
Discretionary Contributions which
have been allocated within fewer than 24 months prior to the
date of reduction if he or she has not
been a Participant for a period of at least 60 months and has
not had a separation from service)
pledged as security for the loan is insufficient to discharge
fully the Participant's indebtedness, his
or her Elective Contribution Account and amounts in his or her
Employee Contribution Account
that are attributable to Elective Contributions which have been
recharacterized as Employee
Contributions shall be used to reduce the Participant's
indebtedness at such time as the Participant
is entitled to a distribution from his or her Elective
Contribution Account, and any remaining
amounts in his or her Matching Contribution Account and/or
Discretionary Contribution Account
shall be used to reduce the Participant's indebtedness at such
time as the Participant has a
separation from service, the Participant completes 60 months of
participation, or such amounts
have been allocated to the Participant for more than 24 months.
Such action shall not operate as
a waiver of the rights of the Association, the Trustee, or the
Plan under applicable law. The
Participating Employer also shall be entitled to take any and
all other actions necessary and
appropriate to foreclose upon any property other than the
Participant's Account pledged as
security for the loan or to otherwise enforce collection of the
outstanding balance of the loan.
10.6. Repayment. Each loan shall be repaid by payroll
deduction (or in the case of a
Terminated Eligible Employee by direct payment) over such
period of time as the Association
determines, and on the basis of substantially level payments
made no less frequently than
quarterly. Such period of time shall not exceed 5 years unless
the loan is used to acquire a
dwelling unit which is to be used within a reasonable time as
a principal residence of the
Participant. A Participant who first notifies the Association
of his or her intent to do so may
prepay any portion of his or her loan at any time, without
penalty. The amount of principal and
interest repaid by a Participant shall be credited to his or
her Account as each repayment is made.
10.7. Repayment upon Distribution. If, as of the time
benefits are to be paid to a
Participant or his or her Beneficiary under the Plan, there
remains any unpaid balance of a loan
hereunder, such unpaid balance shall become immediately due and
payable in full. Such unpaid
balance, together with any accrued but unpaid interest on the
loan, shall be deducted from the
Participant's Account before any such distribution of benefits
is made. No loan shall be made
hereunder after the time distributions to a Participant are to
be paid.
10.8. Note as Trust Asset. A note evidencing a loan to
a Participant under this Article
shall be an asset of the Trust which is allocated to the
Account of the Participant, and shall for
purposes of the Plan be deemed to have a fair market value at
any given time equal to the unpaid
balance of the note plus the amount of any accrued but unpaid
interest.
10.9. Nondiscrimination. Loans shall be made available
to all Participants on a reasonably
equivalent basis, except that the Association may make
reasonable distinctions based upon credit
worthiness, other obligations of the Participant, state law
restrictions affecting payroll deductions
and other factors that may adversely affect the ability to
assure repayment. The Association may
reduce or refuse a requested loan where it determines that
timely repayment of the loan is not
assured.
ARTICLE Section XI. SPECIAL TOP-HEAVY PROVISIONS.
11.1. Provisions to Apply. The provisions of this Article
shall apply for any top-heavy plan year
notwithstanding anything to the contrary in the Plan.
11.2. Minimum Contribution. For any Plan Year which is a
top-heavy plan year, the Participating
Employers shall contribute to the Trust a minimum contribution
on behalf of each Participant who
is not a key employee for such year and who has not separated
from service from the Participating
Employer or its Affiliate by the end of the Plan Year,
regardless of whether or not the Participant
has elected to make Elective Contributions for the Year. The
minimum contribution shall, in
general, equal 3% of each such Participant's Compensation, but
shall be subject to the following
special rules:
(a) If the largest contribution on behalf of a key
employee for such year, taking
into account only Elective Contributions, Qualified Nonelective
Contributions, Matching
Contributions, and Discretionary Contributions (including
forfeitures applied to reduce any such
Participating Employer Contributions), is equal to less than 3%
of the key employee's
Compensation, such lesser percentage shall be the minimum
contribution percentage for
Participants who are not key employees. This special rule
shall not apply, however, if the Plan is
required to be included in an aggregation group and enables a
defined benefit plan to meet the
requirements of Code section 410(a)(4) or 410.
(b) No minimum contribution will be required with
respect to a Participant who is
also covered by another top-heavy defined contribution plan of
an Affiliate which meets the
vesting requirements of Code section 416(b) and under which the
Participant receives the
top-heavy minimum contribution.
(c) If a Participant is also covered by a top-heavy
defined benefit plan of a
Participating Employer or its Affiliate, the Association may
use any one of the four safe harbor
rules set forth in Regulation Sec 1.416-1(M-12) for determining
the minimum contribution, if any,
required under the Plan.
(d) The minimum contribution with respect to any
Participant who is not a key
employee for the particular year will be offset by any
Discretionary Contributions, any Qualified
Nonelective Contributions (including forfeitures applied to
reduce Discretionary Contributions),
and any Matching Contributions but only to the extent such
Matching Contribution is not required
to be taken into account under Section 6.5 to satisfy the Code
section 401(m) limits, but not any
other type of contribution, otherwise made for the
Participant's benefit for such year.
(e) If additional minimum contributions are required
under this Section, the
Association will establish (or cause the Trustee to establish)
a special Account to which such
contributions will be allocated. Distributions from such
Account will be made in accordance with
the rules applicable to Discretionary Contribution Accounts.
(f) A minimum contribution required under this
Section shall be made even
though, under other Plan provisions, the Participant would not
otherwise be entitled to receive an
allocation for the year because of (i) the Participant's
failure to complete 1,000 hours of service
(or any equivalent provided in the Plan), or (ii) the
Participant's failure to make mandatory
contributions or Elective Contributions to the Plan, or (iii)
compensation less than a stated
amount.
11.3. Special Vesting Schedule. Each Employee who is a
Participant at any time during a
top-heavy plan year shall be vested in not less than the
percentage of each of his or her Accounts
as set forth in the following vesting schedule (or the Plan's
general vesting schedule, if faster),
based on the Participant's Years of Service for Vesting:
Years of Service Vested
for Vesting Percentage
fewer than 2 0%
2 but fewer than 3 20%
3 but fewer than 4 40%
4 but fewer than 5 60%
5 but fewer than 6 80%
6 or more 100%
Further, no decrease in a Participant's nonforfeitable
percentage may occur in the event the Plan's
status as top-heavy changes for any Plan Year. If the vesting
schedule under the Plan shifts in or
out of the above schedule for any Plan Year because of the
Plan's top-heavy status, such shift shall
be considered to be an amendment to the vesting schedule for
all purposes of the Plan.
11.4. Adjustment to 415 Limitations. For purposes of the Code
section 415 limits, the definitions
of "defined contribution plan fraction" and "defined benefit
plan fraction" contained therein shall
be modified, for any Plan Year which is a top-heavy Plan Year,
by substituting "1.0" for "1.25" in
Code sections 415(e)(2)(B) and 415(e)(3)(B).
11.5. Definitions. For purposes of these top-heavy
provisions, the following terms have the
following meanings:
(a) "key employee" means a key employee described in
Code section 416(i)(l), and
"non-key employee" means any employee who is not a key employee
(including employees who
are former key employees);
(b) "top-heavy plan year" means a Plan Year if any
of the following conditions
exist:
(i) the top-heavy ratio for the Plan exceeds 60
percent and the Plan is not
part of any required aggregation group or permissive
aggregation group of plans;
(ii) this Plan is a part of a required
aggregation group of plans but not part
of a permissive aggregation group and the top-heavy ratio for
the group of plans exceeds 60
percent; or
(iii) the Plan is part of a required
aggregation group and part of a
permissive aggregation group of plans and the top-heavy ratio
for the permissive aggregation
group exceeds 60 percent.
(c) "top-heavy ratio":
(i) if employer maintains one or more defined
contribution plans (including
any Simplified Employee Pension Plan) and the employers has not
maintained any defined benefit
plan which during the 5-year period ending on the determination
date(s) has or has had accrued
benefits, the top-heavy ratio for the 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 on the determination date(s) (including any part
of any account balance distributed
in the 5-year period ending on the determination date(s)), and
the denominator of which is the
sum of all account balances (including any part of an account
balance distributed in the 5-year
period ending on the determination date(s), both computed in
accordance with Code section 416.
Both the numerator and the 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.
(ii) 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 5-year
period ending on the determination
date(s) has or has had any 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 aggregated defined contribution plan or
plans for all key employees ,
determined in accordance with (i) above, and the present value
of accrued benefits under the
aggregated defined benefit plan or plans for all key employees
as of the determination date(s), and
the denominator of which is the sum of the account balances
under the aggregated defined
contribution plan or plans for all participants, determined in
accordance with (i) above, and the
present value of all accrued benefits under the defined benefit
plan or plans for all participants as
of the determination date(s), all determined in accordance with
Code section 416. The accrued
benefits under a defined benefit plan in both the numerator and
denominator of the top-heavy ratio
are increased for any distribution of an accrued benefit made
in the 5-year period ending on the
determination date.
(iii) For purposes of (i) and (ii) 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 for the first and second plan
years of a defined benefit plan. The
account balances and accrued benefits of a participant (A) who
is not a key employee but who
was a key employee in a prior year, or (B) who has not been
credited with at least one hour of
service with any employer maintaining the plan at any time
during the 5-year period ending on the
determination date will be disregarded. The calculation of the
top-heavy ratio, and the extent to
which distributions, rollovers, and transfers are taken into
account will be made in accordance
with Code section 416. 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.
(iv) The accrued benefit of a participant other
than a key employee shall be
determined under (A) the method, if any, that uniformly applies
for accrual purposes under all
defined benefit plans maintained by the employer, or (B) if
there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule
of Code section 411(b)(1)(C).
(d) The "permissive aggregation group" is the
required aggregation group of plans
plus any other plan or plan of the employer which, when
considered as a group with the required
aggregation group, would continue to satisfy the requirements
of Code sections 401(a)(4) and
410.
(e) The "required aggregation group" is (i) each
qualified plan of the employer in
which at least one key employee participates or participated at
any time during the determination
period (regardless of whether the plan has terminated), and
(ii) any other qualified plan of the
employer which enables a plan described in (i) to meet the
requirements of Code sections
401(a)(4) and 410(b).
(f) For purposes of computing the top-heavy ratio,
the valuation date shall be the
last day of the applicable plan year.
(h) the term "determination date" means, with
respect to the initial plan year of a
plan, the last day of such plan year and, with respect to any
other plan year of a plan, the last day
of the preceding plan year of such plan. The term "applicable
determination date" means, with
respect to the Plan, the determination date for the Plan Year
of reference and, with respect to any
other plan, the determination date for any plan year of such
plan which falls within the same
calendar year as the applicable determination date of the Plan.
ARTICLE Section XII. ADMINISTRATION OF THE PLAN.
12.1. Generally. The general administration of the Plan
shall be accomplished by the
Association in its sole discretion and in accordance with its
By-Laws, as in effect from time to
time. For this purpose, and pursuant to the applicable
provisions of Title I of ERISA, the plan
administrator shall be the Association; the named fiduciary or
fiduciaries with respect to each Plan
shall be either specified in the By-Laws or designated in
accordance with a procedure set forth
therein; and the applicable provisions of the By-Laws shall
govern
(a) the procedures with respect to the establishment
of a funding and
investment policy of the Plan;
(b) the allocation of responsibility for the
operation and administration of the
Plan;
(c) the delegation of responsibility to others;
(d) the appointment of an investment manager, if
any;
(e) the procedures for claiming benefits under the
Plan and appealing the denial
of claims consistent with the requirements of section 503 of
ERISA; and
(f) the procedures for determining the qualified
status of domestic relations
orders and administering distributions under those orders that
constitute "qualified domestic
relations orders" within the meaning of section 414(p) of the
Code and section 206 of ERISA.
12.2. Expenses of Administration. Subject to the
applicable requirements of ERISA and,
to the extent nor preempted thereby, Section 30 of Chapter 170
of the Massachusetts General
Laws, as amended, expenses for the administration of the
Association ("Association expenses"),
expenses for the administration of the Plan ("Plan expenses"),
and expenses of the Trustee
appointed to administer the Trust Fund (including reasonable
legal fees and the compensation of
the Trustee)("Trust expenses") will be paid in such manner as
the Association in its sole discretion
shall determine, which may include payment from the Trust fund.
<PAGE>
ARTICLE Section XIII. AMENDMENT AND TERMINATION.
13.1. Amendment or Termination by Association. The
Association may, at any time or
from time to time, amend the Plan set forth herein, in whole or
in part, or terminate the Plan to the
extent permitted by the By-Laws, either prospectively or
retroactively, and the Association shall
notify each Participating Employer of each such amendment or
termination which shall be in
writing and executed by the Association; provided, however,
that the Plan shall not be amended
or terminated in such a manner as would cause or permit any
part of the Trust Fund to be diverted
to purposes other than for the exclusive benefit of
Participant, Terminated Eligible Employees
entitled to benefits, and retired Participants, or in such a
manner as would cause or permit any
portion of such Trust Fund to revert to, or become the property
of, any Participating Employer,
except as otherwise permitted under the Plan or by applicable
law.
13.2. Voluntary Participation. Each Participating
Employer shall adopt the Plan and
Trust, as to its Eligible Employees, with the bona fide
intention and expectation that its
participation and contributions will be continued indefinitely;
but, subject to the limitations and
conditions set forth herein, and subject to the provisions of
any applicable collective bargaining
agreement covering its Participants, the Participating Employer
shall have no obligation to
maintain its participation hereunder for any given length of
time.
13.3. Withdrawal by Participating Employer.
Notwithstanding Section 13.2 above, a
Participating Employer shall withdraw from participation in the
Plan upon the happening of any of
the following events:
(a) the dissolution of the Participating Employer;
(b) merger, consolidation, or reorganization of the
Participating Employer into
one or more corporations or organizations, unless the surviving
corporation or organization is a
Participating Employer or is an Employer which elects to
continue participation in the Plan by
adoption of the By-Laws in accordance with its terms;
(c) sale of all or substantially all of the assets
of the Participating Employer,
unless the purchaser is a Participating Employer or is an
Employer which elects to continue
participation in the Plan by adoption of the By-Laws in
accordance with its terms;
(d) a withdrawal date agreed to by the Participating
Employer and the
Association's Board of Trustees;
(e) the resolution of the Association's Board of
Trustees to terminate the
participation of a Participating Employer under any Plan for
failure of a Participating Employer to
make proper contributions to or to comply with any other
provision of the Retirement Plan or
By-Laws of the Association; or
(f) any act or occurrence which either
(i) the Association's Board of Trustees
determines to be a "partial
termination" of the Plan as to any or all Eligible Employees of
a Participating Employer, or
(ii) which has been finally and expressly
determined in an
administrative or judicial proceeding to be a partial
termination within the meaning of section
411(d)(3) of the Code.
For purposes of paragraph (b)(i) above, the Association's
Board of Trustees shall
determine that the sale or other disposition of a branch,
division or other unit of a Participating
Employer is a "partial termination" of the Plan of such
Employer as to the Eligible Employees of
such Employer who are employed in such branch, division or
other unit, if all of the following
special conditions are satisfied:
(A) such Participating Employer first
submits a written request for
such a determination to such Board of Trustees; and
(B) such Participating Employer submits to
such Board of Trustees,
in addition to the written request described in subpart (A)
above, a certified vote or votes of the
governing body of such Employer, stating that all additional
costs associated with the full vesting
of such accrued benefits which are required pursuant to Section
13.5 of the Plan as a result of
such partial termination shall be due and payable by such
Participating Employer; and
(C) such Board of Trustees in its sole
discretion determines that
under all the facts and circumstances presented, such "partial
termination" will not discriminate in
favor of any highly compensated employee (as defined in section
414(q) of the Code) or
otherwise cause any Plan to fail to meet the applicable
requirements of the Code or ERISA.
For purposes of paragraph (b)(i) above, if such Board of
Trustees in its sole discretion
determines that under all the facts and circumstances presented
a partial termination must be
declared in order to cause any Plan to continue to meet the
applicable requirements of the Code
or ERISA, then it shall determine that such partial termination
has occurred, whether or not a
Participating Employer makes the written request described in
subpart (A) above or submits the
certified vote described in subpart (B) above. A Participating
Employer's withdrawal under the
Plan shall be effective as of its Withdrawal Date which shall
be the last day of the month during
which any of the events set forth above occurs.
13.4. Effect of Withdrawal on a Withdrawing Participating
Employer. In the event that
the Plan participation of a Participating Employer shall be
terminated as provided in Section 13.3,
the following amount shall be due and payable from the
withdrawing Participating Employer on
the Participating Employer's Withdrawal Date: the lump sum
value of the anticipated costs,
estimated by the Trustee, which will be necessary to administer
the Plan and to pay the expenses
of making all benefit payments (excluding the amounts of such
benefit payments) with respect to
all Plan benefits which are or which are expected to become
payable to Participants, Terminated
Eligible Employees, Beneficiaries, surviving spouses, or other
eligible survivors, as the result of
the participation in the Retirement Program of the withdrawing
Participating Employer.
13.5. Effect of Withdrawal on Participants and
Beneficiaries. In the event that a
Participating Employer shall withdraw from participation in the
Plan as provided in Section 13.3:
(a) Any rights of Participants no longer employed by
such Participating
Employer as of such Participating Employer's Withdrawal Date
(excluding any Participant who
transfers to the employ of a new employer pursuant to the terms
of the events discussed in
Section 13.3 above which triggers such withdrawal), former
Participants and their Beneficiaries,
surviving spouses and other eligible survivors under the Plan
shall be unaffected by such
Participating Employer's withdrawal, to the maximum extent
permitted by law;
(b) With respect to each Participant who is an
active Employee of the
Participating Employer as of such Participating Employer's
Withdrawal Date or who transfers to
the employ of a new employer pursuant to the terms of the event
described in Section 13.3 above
which triggers such Participating Employer's withdrawal:
(i) no further service for any purpose under
the Plan shall be earned by
the Participant as an Employee of such Participating Employer;
and
(ii) notwithstanding the provisions of Section
8.2, each Participant in
the Plan shall have a non-forfeitable right to his or her
Account under the Plan, to the extent that
such benefits have accrued as of the date of Plan termination.
(c) Benefits to be provided under the Plan to a
Participant, Terminated Eligible
Employee, retired Participant, Beneficiary, surviving spouse or
eligible survivor shall be
distributed at the time and in the form set forth in Article 9.
13.6. Failure to Maintain Qualified Status. If the
participation of any Participating
Employer in the Plan shall adversely affect the status of the
Plan as a "qualified" plan under the
applicable provisions of the Code, such Employer shall thereby
be deemed to have withdrawn
from the Plan and the Trustee shall forthwith, upon receipt of
notice to such effect from such
Employer or otherwise, segregate the funds then standing to the
credit of Eligible Employees of
such Participating Employer for their benefit. The funds thus
segregated shall be held by the
Trustee as a separate fund in a savings account, or otherwise
as the Trustee may determine, to be
dealt with and distributed in accordance with the written
directions or instructions of such former
Participating Employer. The Trustee shall be authorized to
take such actions with respect to such
Employer and the funds held for the account of its Employees as
it shall deem necessary or
desirable to maintain the Plan as a "qualified" plan under the
Code.
13.7. Merger, Consolidation or Transfer of Plan Assets.
Any provision contained in this
Article to the contrary notwithstanding, following a
Participating Employer's withdrawal under
the Plan in accordance with this Article, no merger or
consolidation of the Plan with, or transfer
of any assets or liabilities of the Plan to, any plan outside
of the Plan shall be effected unless the
Association acting through its Board of Trustees shall
specifically approve such merger,
consolidation or transfer. In the event of such approval, and
the subsequent merger or
consolidation of the Plan with, or transfer of assets or
liabilities of the Plan to, any other plan
outside of the Retirement Program, a Participant who was an
actively employed Participant of the
transferor plan immediately prior to the effective date of such
merger, consolidation or transfer,
and who is included under such other plan, shall be entitled to
a benefit under such other plan (if it
were terminated immediately after such merger, consolidation or
transfer) which is not less than
the benefit which such actively employed Participant would have
been entitled to receive under
the transferor plan if the transferor plan had been terminated
immediately prior to such merger,
consolidation or transfer.
<PAGE>
ARTICLE Section XIV. MISCELLANEOUS.
14.1. Exclusive Benefit Rule. No part of the corpus or
income of the Trust forming part
of the Plan will be used for or diverted to purposes other than
for the exclusive benefit of each
Participant and Beneficiary, except as otherwise provided under
the provisions of the Plan relating
to Qualified Domestic Relations Orders, the payment of
reasonable expenses of administering the
Plan, the return of contributions upon nondeductibility or
mistake of fact, or the failure of the Plan
to qualify initially.
14.2. Limitation of Rights. Neither the establishment of
the Plan or the Trust, nor any
amendment thereof, nor the creation of any fund or account, nor
the payment of any benefits, will
be construed as giving to any Participant or other person any
legal or equitable right against any
Participating Employer or Association or Trustee, except as
provided herein, and in no event will
the terms of employment or service of any Participant be
modified or in any way be affected
hereby. It is a condition of the Plan, and each Participant
expressly agrees by his or her
participation herein, that each Participant will look solely to
the assets held in the Trust for the
payment of any benefit to which he or she is entitled under the
Plan.
14.3. Nonalienability of Benefits. The benefits provided
hereunder will not be subject to
the voluntary or involuntary alienation, assignment,
garnishment, attachment, execution or levy of
any kind, and any attempt to cause such benefits to be so
subjected will not be recognized, except
to such extent as may be required by law, except that if the
Association receives any Qualified
Domestic Relations Order that requires the payment of benefits
hereunder or the segregation of
any Account, such benefits shall be paid, and such Account
segregated, in accordance with the
applicable requirements of such Order.
14.4. Rights of Eligible Employees. Nothing herein
contained shall be deemed to give
any Eligible Employee the right to be retained in the service
of a Participating Employer or to
interfere with the right of the Participating Employer to
discharge such Eligible Employee, nor
shall it interfere with the Eligible Employee's right to
terminate his or her service at any time.
14.5. Notice to Employees. Notice of the Plan and of any
amendments thereto shall be
given by the Participating Employer to its Employees in such
form as the Association may deem
appropriate, in accordance with applicable law.
14.6. Payment Under Domestic Relations Order.
Notwith-standing any provisions of the
Plan to the contrary, if there is entered any judgment, decree
or order (including approval of a
property settlement agreement) which relates to the provisions
of child support, alimony payments
or marital property rights to a spouse, former spouse, child of
other dependent of a Participant,
which is made pursuant to a state domestic relations law
(including a community property law)
and which creates or recognizes the existence of an alternate
payee the right to, receive all or a
portion of the benefits payable with respect to such
Participant, then such benefits will be paid in
accordance with the applicable requirements of such judgment,
decree or order, provided such
judgment, decree or order either is entered after December 31,
1984 and constitutes a "qualified
domestic relations order" within the meaning of section 414(p)
of the Code and section 206 of
ERISA or is entered prior to January 1, 1985 and the
Association elects, in its sole discretion, to
make payments in accordance with applicable requirements of
such judgment, decree or order.
<PAGE>
ARTICLE Section XV. ADOPTION AGREEMENT.
15.1. Adoption Agreement. The Adoption Agreement shall
be that separate document
through which the Participating Employer adopts the Plan and
elects among the various options
offered under the Plan, and which, when executed by the
Participating Employer and the Trustee,
becomes an integral part of the Plan. Any Participating
Employer may change any election on the
Adoption Agreement currently in effect by filing with the
Trustee a duly executed Adoption
Agreement containing the change in election, provided that no
change in election shall
retroactively reduce the benefit or vesting percentage to which
any Participant, former Participant
or Beneficiary is entitled under the Plan.
IN WITNESS WHEREOF, the Cooperative Banks Employees
Retirement Association
has caused this instrument to be executed in its name and on
its behalf by its officer thereunto duly
authorized at Boston, Massachusetts, on this ______ day of
____________, 1994.
COOPERATIVE BANKS EMPLOYEES
RETIREMENT ASSOCIATION
By:
Title:
FIRST AMENDMENT
of the Defined Contribution Plan (Plan A)
of the Cooperative Banks Employees Retirement Program
(1994 Restatement)
Pursuant to the provisions of Section 13.1 of the
aforesaid Plan, Cooperative Banks
Employees Retirement Association hereby amends said Plan by
inserting a new Section 14.7 to
read as follows:
"14.7 Plan Mergers. This section sets forth special
provisions applicable to
mergers of other plans with the Plan which occur from time to
time.
(a) Merger of Depositors Trust Company 401(k)
Plan. Effective as of July
1, 1994, the Depositors Trust Company 401(k) Plan was merged
with the Plan. In connection
with the merger, all of the provisions of the Plan were
substituted for the provisions of the
Depositors Trust Company 401(k) Plan except as follows:
(i) The following vesting schedule is
substituted for the vesting schedule
found in Section 8.2 of the Plan for those individuals who were
plan participants in the Depositors
Trust Company 401(k) Plan on July 1, 1994.
Years of Vesting Service Applicable Percentage
fewer than 3 0
3 but fewer than 4 50
4 but fewer than 5 75
5 or more 100
(ii) For purposes of measuring service for
vesting and eligibility prior to
January 1, 1994, the Depositors Trust Company 401(k) Plan hour
of service provisions will apply
to all persons who were participants in that plan on July 1,
1994 (which provisions are
incorporated herein by reference). For purposes of measuring
service for vesting and eligibility on
and after January 1, 1994, the Plan's elapsed time service
provisions will apply to such
participants."
IN WITNESS WHEREOF, the Cooperative Banks Employees
Retirement Association
has caused this instrument to be executed in its name and on
its behalf by its officer thereunto duly
authorized at Boston, Massachusetts, on this day of
December, 1994.
COOPERATIVE BANKS EMPLOYEES
RETIREMENT ASSOCIATION
By: _____________________________
Title: _____________________________
SECOND AMENDMENT
of the Defined Contribution Plan
(Plan A) of the Cooperative Banks Employees
Retirement Program (1994 Restatement)
Pursuant to the provisions of Section 13.1 of the
aforesaid Plan, Cooperative Banks
Employees Retirement Association hereby amends said Plan by
inserting a new paragraph (b) at
the end of Section 14.7 to read as follows:
"(b) Merger of Metropolitan Bank Profit-Sharing
Plan. Effective as of December
31, 1994, the Metropolitan Bank Profit-Sharing Plan and Trust
was merged with the Plan and
Trust. In connection with the merger, all of the provisions of
the Plan were substituted for the
provisions of the Metropolitan Plan except as follows:
(i) For purposes of measuring service for vesting
prior to January 1, 1995, the
Metropolitan Bank Profit-Sharing Plan definition of Year of
Service (Section 1.63) and other
related provisions will apply to all persons who were
participants in that Plan on December 31,
1994 (which provisions are incorporated herein by reference).
For purposes of measuring service
for vesting on and after January 1, 1994, the Plan's elapsed
time service provisions will apply to
such participants.
(ii) Metropolitan Bank Profit-Sharing Plan Section
1.59, defining the term "Total
Permanent Disability", and Section 6.3, providing for full
vesting and for distribution upon Total
and Permanent Disability, will continue to apply to all persons
who were participants in that Plan
on December 31, 1994 (which provisions are incorporated herein
by reference).
(iii) Metropolitan Bank Profit-Sharing Plan Section
6.5(a)(2) providing for
installment payments will continue to apply to all persons who
were participants in that Plan on
December 31, 1994 (which provisions are incorporated herein by
reference)."
IN WITNESS WHEREOF, the Cooperative Banks Employees
Retirement Association
has caused this instrument to be executed in its name and on
its behalf by its officer thereunto duly
authorized at Boston, Massachusetts, on this day of
, 1995.
COOPERATIVE BANKS EMPLOYEES
RETIREMENT ASSOCIATION
By:
Title:
THIRD AMENDMENT
of the Defined Contribution Plan (Plan A)
of the Cooperative Banks Employees Retirement Program
(1994 Restatement)
Pursuant to the provisions of Section 13.1 of the
aforesaid Plan, Cooperative Banks
Employees Retirement Association hereby further amends said
Plan as follows:
(1) Paragraph (e) of Section 2.8 is amended to read as
follows:
"(e) For each Plan Year commencing before January 1,
1994, a Participant's
Compensation will be limited for all purposes under the Plan to
$200,000 (or such larger amount
as the Secretary of the Treasury or his delegate may determine
for such Plan Year under section
401(a)(17) of the Code). For each Plan Year commencing after
December 31, 1993, a
Participant's Compensation will be limited for all purposes
under the Plan to $150,000 (or such
larger amount as the Secretary of the Treasury or his delegate
may determine for such Plan Year
under section 401(a)(17) of the Code). In determining
compensation for purposes of this
limitation, the family aggregation rules of section 414(q)(6)
of the Code shall apply, except that in
applying such rules, the term 'family' shall include only the
spouse of the Participant or any lineal
descendants who have not attained age 19 before the close of
the calendar year."
(2) A new Section 3.13 is added to read as follows:
"3.13 Application of Service Definitions. All
provisions of the Plan relating to the
crediting of service shall be construed and applied consistent
with the requirements of Code
section 413(c)."
(3) Section 9.12 is amended to read as follows:
"9.12 Direct Rollovers. Notwithstanding any
provision of the Plan to the contrary
that may otherwise limit a distributee's election under this
Section, for distributions made on or
after January 1, 1993, a distributee may elect, at the time and
in the manner prescribed by the
Association to have any portion of an eligible rollover
distribution paid directly to an eligible
retirement plan specified by the distributee in a direct
rollover. For purposes of this Section, the
following definitions shall apply:
(i) An 'eligible rollover distribution' is any
distribution of all or any portion
of the distributee's benefit, except that an eligible rollover
distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently
than annually) made for the life (or expectancy) of the
distributee or the joint lives of the
distributee and the distributee's Beneficiary, or for a
specified period of ten years or more, or any
distribution to the extent such distribution is required under
Code section 401(a)(9).
(ii) With respect to a distributee other than
the Participant's surviving
spouse, an 'eligible retirement plan' is an individual
retirement account described in Code section
408(a), an individual retirement annuity described in Code
section 403(b), an annuity plan
described in Code section 403(a), or a qualified trust
described in Code section 401(a). With
respect to a distributee who is a Participant's surviving
spouse, an eligible retirement plan is an
individual retirement account or an individual retirement
annuity.
(iii) A 'distributee' includes an Employee or
former Employee. In addition,
the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's
spouse or former spouse, who is an alternate payee under a
qualified domestic relations order, are
distributees with regard to the interest of the spouse or
former spouse.
(iv) A 'direct rollover' is a payment by the
Plan to the eligible retirement
plan specified by the distributee."
(4) Section 12.2 is hereby amended in its entirety to
read as follows:
"12.2 Expenses of Administration. Subject to the
applicable requirements of
ERISA and, to the extent not preempted thereby, Section 30 of
Chapter 170 of the Massachusetts
General Laws, as amended, expenses for the administration of
the Association ("Association
expenses"), expenses for the administration of the Plan ("Plan
expenses"), and expenses of the
Trustee appointed to administer the Trust Fund (including
reasonable legal fees and the
compensation of the Trustee) ("Trust expenses") will be paid in
such manner as the Association in
its sole discretion shall determine, which may include payment
from the Trust fund. Plan expenses
may include, but shall not be limited to, amounts due from a
withdrawing Participating Employer
under Section 13.4 and recordkeeping expenses charged by the
Association for recordkeeping
services provided to the Plan. The Association in its sole
discretion shall determine what
constitutes Association expenses, Plan expenses and Trust
expenses."
(5) Paragraph (a) of Section 14.7 is hereby amended by
inserting at the end thereof the
following additional subparagraph:
"(iii) Any other provision of the Depositors Trust
Company 401(k) Plan which
constitutes a protected benefit, right or feature under the
applicable provisions of the Code."
(6) Paragraph (b) of Section 14.7 is hereby amended by
inserting at the end thereof the
following additional subparagraph:
"(iv) Any other provision of the Metropolitan Bank
Profit-Sharing Plan which
constitutes a protected benefit, right or feature under the
applicable provisions of the Code."
IN WITNESS WHEREOF, the Cooperative Banks Employees
Retirement Association
has caused this instrument to be executed in its name and on
its behalf by its officer thereunto duly
authorized at Boston, Massachusetts, on this ____ day of
__________, 1995.
COOPERATIVE BANKS EMPLOYEES
RETIREMENT ASSOCIATION
By: _____________________________
Title:
____________________________
FOURTH AMENDMENT
of the Defined Contribution Plan (Plan A)
of the Cooperative Banks Employees Retirement Program
(1994 Restatement)
Pursuant to the provisions of Section 13.1 of the
aforesaid Plan, Cooperative Banks
Employees Retirement Association hereby further amends said
Plan, effective as of January 1,
1996, as follows:
1. Section 5.1 is hereby amended in its entirety to read
as follows:
"5.1 Elective Contributions and Employee Contributions.
Each Participant may enter
into a contribution agreement specifying Elective Contributions
or Employee Contributions, or
both. Such Elective Contributions or Employee Contributions
shall be expressed as a percentage
(which may be any percentage allowed by the Association under
its administrative procedures) of
the Participant's Compensation. Unless the Participating
Employer elects otherwise in its
Adoption Agreement, during any period for which a Matching
Contribution is being made for a
Participant, the Participant shall be required, as a condition
of continued employment, to enter
into and to continue a contribution agreement specifying
Elective Contributions or Employee
Contributions in an amount equal to at least one (1) percent of
his or her Compensation. By
agreeing to Elective Contributions, the Participant agrees to
a reduction in Compensation in the
amount designated and the Participating Employer agrees in
consideration of such reduction to
contribute an equivalent amount to the Trust for the
Participant. By agreeing to Employee
Contributions, the Participant agrees to contribute the
designated amount to the Trust out of
after-tax Compensation and the Participating Employer agrees to
facilitate such contributions
through payroll deductions."
2. Section 5.2 is hereby amended in its entirety to read
as follows:
"5.2 Form and Manner of Contribution Agreements. Each
contribution agreement shall
be on a form prescribed or approved by the Association, and may
be changed by the Participant
from time to time. A contribution agreement or a change in
such Agreement shall be effective
with respect to Compensation payable on and after the first day
of the calendar quarter coinciding
with or next following receipt of such Agreement by the
Association or such other time as the
Association may prescribe."
3. Section 5.3 is hereby amended in its entirety to read
as follows:
"5.3 Matching Contributions.
(a) Formula Matching Contributions. In its
Adoption Agreement, a
Participating Employer may specify an amount of Matching
Contributions up to a specified
percentage of Compensation to be made to the Trust for a Plan
Year for the benefit of each
Participant on whose behalf a contribution agreement with the
Participating Employer was in
effect during the Plan Year. Formula Matching Contributions
for a Plan Year shall be expressed
as a percentage (which may be any percentage allowed by the
Association under its administrative
procedures), as specified by the Participating Employer of
Elective Contributions and/or
Employee Contributions for the Plan Year and shall be credited
to the Matching Contribution
Accounts of Participants on that basis.
(b) Discretionary Matching Contributions. If
so provided in its
Adoption Agreement, a Participating Employer, in addition to
formula Matching Contributions,
may determine whether a discretionary Matching Contribution
shall be made to the Trust for a
Plan Year, and if so, the amount to be contributed with respect
to Elective Contributions and/or
Employee Contributions for the Plan Year. The Participating
Employer must notify the
Association in writing of the amount of such discretionary
Matching Contribution and the
matching formula."
IN WITNESS WHEREOF, the Cooperative Banks Employees
Retirement Association
has caused this instrument to be executed in its name and on
its behalf by its officer thereunto duly
authorized at Boston, Massachusetts, on this day of
, 1996.
COOPERATIVE BANKS EMPLOYEES
RETIREMENT ASSOCIATION
By: _____________________________
Title: _____________________________
FIFTH AMENDMENT
of the Defined Contribution Plan (Plan A)
of the Cooperative Banks Employees Retirement Program
(1994 Restatement)
Pursuant to the provisions of Section 13.1 of the
aforesaid Plan, the Cooperative Banks
Employees Retirement Association hereby further amends said
Plan as follows:
1. Effective as of July 1, 1994, a new Section 12.3 is
hereby inserted to read as follows:
"12.3 Authority to Correct Operational Defects. The
Association will have the full
discretionary power and authority to correct any "operational
defect" in any manner or by any
method it deems appropriate in its sole discretion in order to
cause the Plan (i) to operate in
accordance with its terms, or (ii) to maintain its tax
qualified status under the Code. For purposes
of this Section, an "operational defect" is any operational or
administrative action (or inaction) in
connection with the Plan which, in the judgment of the
Association, fails to conform with the
terms of the Plan or causes or could cause the Plan to lose its
tax qualified status under the
Code."
2. Effective as of January 1, 1997, Section 14.6 is
hereby amended in its entirety to read
as follows:
"14.6 Payment Under Domestic Relations Order.
Notwithstanding any provisions of the
Plan to the contrary, if there is entered any judgment, decree
or order (including approval of a
property settlement agreement) which relates to the provision
of child support, alimony payments
or marital property rights to a spouse, former spouse, child of
other dependent of a Participant,
which is made pursuant to a state domestic relations law
(including a community property law)
and which creates or recognizes the existence of an alternate
payee's right to receive all or a
portion of the vested benefits payable with respect to such
Participant, then such benefits will be
paid in accordance with the applicable requirements of such
judgment, decree or order, provided
such judgment, decree or order is determined by the Association
to constitute a qualified domestic
relations order (a "QDRO") within the meaning of section 414(p)
of the Code and section 206 of
ERISA. For purposes of the Plan, in addition to requiring or
permitting payments to be made to
the alternate payee in such form and at such time as payments
may be made to the Participant, the
QDRO may require or permit a payment to be made, or to
commence, to the alternate payee prior
to the time payments may be made to the Participant."
IN WITNESS WHEREOF, the Cooperative Banks Employees
Retirement Association
has caused this instrument to be executed in its name and on
its behalf by its officer thereunto duly
authorized at Norwood, Massachusetts, on this day of
, 1997.
COOPERATIVE BANKS EMPLOYEES
RETIREMENT ASSOCIATION
By: _____________________________
Title: _____________________________
Exibit 7
THE PLAN C 1994 RESTATEMENT
CONSISTS OF THE PLAN C 1993, RESTATEMENT, EXECUTED ON SEPTEMBER
29,
1993 THE FIRST AMENDMENT EXECUTED ON AUGUST 22, 1994, AND CERTAIN
OTHER CHANGES DESIGNED TO FULLY COMPLY WITH TRA '86 AND
SUBSEQUENT
LAW AND REGULATIONS.
THE DEFINED BENEFIT PENSION PLAN (PLAN C)
OF THE
COOPERATIVE BANKS EMPLOYEES RETIREMENT PROGRAM
1994 RESTATEMENT
FOREWORD
This is The Defined Benefit Pension Plan (Plan C)(the
"Plan") which forms part of The
Cooperative Banks Employees Retirement Program (the "Retirement
Program"). The Retirement
Program was originally established in 1946 and has been amended
and restated periodically
thereafter. The Retirement Program was amended and restated as
of November 1, 1976 to
comply with the Employee Retirement Income Security Act of 1974
("ERISA") and was again
amended and restated as of November 1, 1984 to comply with the
applicable requirements of the
Tax Equity and Fiscal Responsibility Act of 1982, the Tax Reform
Act of 1984 and the
Retirement Equity Act of 1984. The Plan was amended and restated
to comply with the
applicable requirements of the Tax Reform Act of 1986, the
Omnibus Budget Reconciliation Acts
of 1986 and 1987, the Technical and Miscellaneous Revenue Act of
1988, and other applicable
statutory and regulatory requirements. The Plan was restated in
1993 to incorporate the
provisions of several amendments since being restated in 1989, as
well as to make additional
changes. The Plan has now been further amended, generally
effective as of January 1, 1989 by
this 1994 Restatement to incorporate the provisions of an
amendment to the 1993 Restatement, as
well as to make additional desired changes and to fully comply
with the current requirements of
applicable law.
The Plan as contained in this document is an extension of
the retirement provisions of the
By-Laws of the Cooperative Banks Employees Retirement Association
(the "Association"). The
Association operates in accordance with Sections 30 through 32 of
Chapter 170 of the
Massachusetts General Laws. The Association periodically amends
its By-Laws to provide for
the amendment and continuation of the Retirement Program's
administrative provisions under a
separate document.
The Plan is intended to be a "single plan" within the
meaning of Code section 414(l), and
for reporting and disclosure purposes is classified as a
"multiple employer plan - other."
THE DEFINED BENEFIT PENSION PLAN (PLAN C)
OF THE
COOPERATIVE BANKS EMPLOYEES RETIREMENT
PROGRAM
1994 RESTATEMENT
Table of Contents
ARTICLE PAGE
ARTICLE 1. INTRODUCTION 1
1.1. Purpose 1
1.2. Application of the restated Defined Benefit
Pension Plan (Plan C) 1
1.3. Defined Terms 1
1.4. Applicable Law 1
1.5. Headings 1
ARTICLE 2. DEFINITIONS OTHER THAN SERVICE DEFINITIONS 2
2.1. "Accrued Pension" 2
2.2. "Actuary" 2
2.3. "Actuarial Equivalent" 2
2.4. "Adoption Agreement 3
2.5. "Affiliate" 3
2.6. "Association" 3
2.7. "Base Benefit Percentage" 3
2.8. "Beneficiary" 3
2.9. "By-Laws" 4
2.10. "Code" 4
2.11. "Compensation" 4
2.12. "Covered Compensation" 5
2.13. "Deferred Retirement Date" 5
2.14. "Disability" 5
2.15. "Early Retirement Age" 5
2.16. "Early Retirement Date" 6
2.17. "Eligible Employee" 6
2.18. "Employee" 6
2.19. "Employer" 6
2.20. "Employer Contribution Account Balance" 6
2.21. "Entry Date" 6
2.22. "ERISA" 6
2.23. "Final Average Compensation" 6
2.24. "Highly Compensated Employee" 7
2.25. "Key Employee" 7
2.26. "Maximum Excess Allowance" 7
2.27. "Normal Retirement Date" 7
2.28. "Participant" 7
2.29. "Participating Employer" 8
2.30. "Participating Employer's Participation Date"
8
2.31. "Pensioner" 8
2.32. "Plan" 8
2.33. "Plan Year" 8
2.34. "Prior Plan" 8
2.35. "Provisional Payee" 8
2.36. "Qualified Domestic Relations Order" 8
2.37. "Retirement Program" 8
2.38. "Social Security Retirement Age" 8
2.39. "Terminated Eligible Employee" 8
2.40. "Trust" 9
2.41. "Trustee" 9
2.42. "Withdrawal Date" 9
ARTICLE 3. SERVICE DEFINITIONS; SPECIAL SERVICE RULES 10
3.1. "Absence in Military Service" 10
3.2. "Authorized Leave of Absence" 10
3.3. "Credited Service" 10
3.4. "Employment Commencement Date" 11
3.5. "Hour of Service" 11
3.6. "One-Year Break in Service" 12
3.7. "Period of Service" 13
3.8. "Reemployment Commencement Date" 13
3.9. "Termination of Employment" 13
3.10. "Vesting Service" 13
3.11. "Year of Eligibility Service" 14
3.12. Crediting Periods of Service earned before
Employer becomes a Participating Employer 14
3.13. Crediting Periods of Service earned before
Employer is merged with or acquired by a
Participating Employer 14
ARTICLE 4. PARTICIPATION 15
4.1. Participation Requirements. 15
4.2. Required Information. 15
4.3. Reemployed Eligible Employees. 15
4.4. Duration of Participation. 15
ARTICLE 5. REQUIREMENTS FOR RETIREMENT BENEFITS 16
5.1. Normal Retirement. 16
5.2. Early Retirement. 16
5.3. Deferred Retirement. 16
ARTICLE 6. AMOUNT OF PENSION 17
6.1. Amount of Pension at Normal Retirement Date.
17
6.2. Amount of Accrued Pension at Early Retirement
Date 18
6.3. Computation of Accrued Pension Prior to Normal
Retirement Date. 18
6.4. Amount of Accrued Pension at Deferred Retirement
Date. 19
ARTICLE 7. VESTING 20
7.1. Vesting Schedule 20
7.2. Special Vesting Rules 20
7.3. Payment of Vested Pension 20
7.4. Changes in Vesting Schedule 21
ARTICLE 8. RESTRICTIONS ON PENSIONS 22
8.1. Code Section 415 Limitations 22
8.2. Restrictions on Distributions to Certain Highly
Compensated Employees 22
8.3. Nonalienability of Benefits 22
8.4. Required Distributions 22
8.5. Rights of Eligible Employees 23
ARTICLE 9. FORM OF PENSION 24
9.1. Standard Form of Pension for Participants who are
not Married 24
9.2. Standard Form of Pension for Married
Participants 24
9.3. Waiver of Standard Forms of Pension 24
9.4. Optional Forms of Pension 26
9.5. Distributions required by a Qualified Domestic
Relations Order 27
9.6. Direct Rollover Option 27
9.7. Small Payments 28
9.8. Facility of Payments 28
9.9. Payment as discharge of liability 28
ARTICLE 10. DEATH BENEFITS 29
10.1. Death Benefits Limited 29
10.2. Death of Participant prior to Annuity Starting
Date 29
10.3. Designation of Beneficiary 29
10.4. Death of Participants after Annuity Starting
Date 30
ARTICLE 11. CONTRIBUTIONS AND TRUST FUND 31
11.1. Participating Employer Contributions. 31
11.2. No Contributions by Participants 31
11.3. Establishment of Trust Fund. 31
11.4. No Liability Imposed on the Participating
Employer. 31
11.5. Exclusive Benefit Rule. 31
11.6. Return of Contribution 31
11.7. Direct transfers from Plan A 32
11.8. Forfeitures 32
ARTICLE 12. ADMINISTRATION OF THE PLAN 33
12.1. Generally. 33
12.2. Expenses of Administration. 33
ARTICLE 13. AMENDMENT AND TERMINATION 34
13.1. Amendment or Termination by Association. 34
13.2. Voluntary Participation. 34
13.3. Withdrawal by Participating Employer. 34
13.4. Effect of Withdrawal on a Withdrawing
Participating Employer. 36
13.5. Effect of Withdrawal on Participants and
Beneficiaries. 36
13.6. Effect of Plan Termination. 37
13.7. Failure to Maintain Qualified Status. 38
13.8. Merger, Consolidation or Transfer of Plan
Assets. 38
13.9. Merger of Abington National Bank Pension Plan
into the Plan 39
13.10. Merger of Workingmens Plan 39
ARTICLE 14. SPECIAL TOP HEAVY PROVISIONS 40
14.1. Provisions to apply 40
14.2. Minimum Benefits. 40
14.3. Special Vesting Schedule. 40
14.4. Adjustment to 415 Limitations. 41
14.5. Definitions. 41
ARTICLE 15. ADOPTION AGREEMENT 44
15.1. Adoption Agreement 44
ARTICLE 16. RETIREE MEDICAL ACCOUNT 45
16.1. In General 45
16.2. Benefits from the 401(h) Account 45
16.3. Contributions to the 401(h) Account 45
16.4. Eligible retired Participants 46
<PAGE>
ARTICLE Section I. INTRODUCTION
1.1. Purpose. The Plan and its related trust are intended
to qualify as a defined benefit
pension plan and trust under Code sections 401(a) and 501(a).
The purpose of the Plan is to
provide benefits generally upon retirement to Participants in a
manner consistent and in
compliance with such Code sections and Title I of ERISA.
1.2. Application of the restated Defined Benefit Pension
Plan (Plan C). Except as
otherwise specifically provided herein, the provisions of this
restated Defined Benefit Pension Plan
(Plan C) shall apply only to those individuals who are Eligible
Employees on or after January 1,
1989. Except as otherwise specifically provided herein, the
rights and benefits, if any, of a former
Employee whose employment terminated before January 1, 1989 or
other effective dates specified
in the Plan shall be determined in accordance with the provisions
of the Retirement Program as in
effect from time to time before that date.
1.3. Defined Terms. All capitalized terms used in the
following provisions of the Plan
have the meanings given them under the Articles entitled
"Definitions Other Than Service
Definitions" and "Service Definitions; Special Service Crediting
Rules."
1.4. Applicable Law. The provisions of the Plan shall be
governed and construed in
accordance with the laws of the Commonwealth of Massachusetts,
except to the extent to which
the Plan is governed by federal law.
1.5. Headings. The headings of the Plan are inserted for
convenience of reference only
and shall have no effect upon the meaning of the provisions
hereof.
ARTICLE Section II. DEFINITIONS OTHER THAN SERVICE
DEFINITIONS
Where used in the Plan, the words and phrases contained in
Article 2 and Article 3 have
the meanings specified below, unless a different meaning is
plainly required by the context.
Wherever used in this instrument, a singular word shall be deemed
to include the singular and
plural, in all cases where the context requires.
2.1. "Accrued Pension" means, as of any determination date,
the annual pension, in the
standard form referred to in Section 9.1, payable at Normal
Retirement Date or Deferred
Retirement Date which the Participant has earned as of such
determination date in accordance
with the provisions of Article 6.
2.2. "Actuary" means the firm which (a) shall be designated
by the Association from time
to time to make all actuarial computations in connection with the
Plan, and (b) shall act through
any of its partners or employees who shall be enrolled by the
Joint Board for the Enrollment of
Actuaries pursuant to Section 3042 of ERISA to practice before
the Department of Labor and the
Internal Revenue Service.
2.3. "Actuarial Equivalent", or terms of similar import,
means an amount having equal
value as a benefit or benefits otherwise payable in a different
form or at a different time under the
Plan, on the basis of the 1984 Unisex Pension Mortality Table and
an interest rate that would be
used (as of the first day of the Plan Year in which such amount
begins to be paid) by the Pension
Benefit Guaranty Corporation (the "PBGC") to value annuities
(immediate or deferred, whichever
is appropriate) upon termination of a trusteed, single-employer
plan. In determining the amount
of a lump sum payment under the Plan, the applicable interest
rate will be the rate (immediate or
deferred, whichever is appropriate) or combination of rates that
would be used (as of the first day
of the Plan Year in which lump sum payment is made) by the PBGC
to value the Accrued Pension
of the particular Participant or Beneficiary in the event the
Plan were terminated. If the amount of
that payment (determined using the applicable interest rate
described in the prior sentence) is
greater than $25,000, the applicable interest rate shall be 105
percent of the rate described in the
prior sentence; provided, however, effective January 1, 1994, the
percentage of the rate described
in the prior sentence shall be determined in accordance with the
following table:
PBGC Percentage Rate
(immediate rate in effect
on the first day of the
Plan Year) Applicable Percentage
Under 6 120
At least 6 but less than 7 115
At least 7 but less than 8 110
At least 8 but less than 9 105
9 or more 100
further provided, however, that the use of such interest rate
shall not result in any lump sum
payment being decreased to less than $25,000 or less than the
lump sum payment determined as
of December 31, 1993 under the applicable provisions of the Plan
in effect on December 31,
1993.
2.4. "Adoption Agreement" means the agreement described in
the Plan made by and
between a Participating Employer and the Trustee.
2.5. "Affiliate" of a Massachusetts Cooperative Bank or
other organization which is
permitted to participate in the Retirement Program pursuant to
the By-Laws means (i) any
corporation after it becomes a member of a controlled group of
corporations (as defined in
section 414(b) of the Code) with such Bank or other organization,
(ii) any trade or business,
whether or not incorporated, after it comes under common control
(as defined in section 414(c)
of the Code) with such Bank or other organization, (iii) any
trade or business that is a member of
an affiliated service group (as defined in section 414(m) of the
Code) of which such Bank or other
organization is also a member, or (iv) any other entity required
to be aggregated with such Bank
or other organization under section 414(o) of the Code.
2.6. "Association" means the Cooperative Banks Employees
Retirement Association,
organized and operated pursuant to the provisions of Sections 30,
31 and 32 of Chapter 170 of
the General Laws of Massachusetts, as amended from time to time.
2.7. "Base Benefit Percentage" for a particular Plan Year
means the percentage applied to
Final Average Compensation in Sections 6.1(a)(i) and 6.1(b)(i).
A Participating Employer may
elect a Base Benefit Percentage of one-half percent (1/2%),
three-fourths percent (3/4%), one
percent (1%), one and one-fourth percent (1 1/4%) or one and
one-half percent (1 1/2%).
2.8. "Beneficiary" means any person designated by a
Participant (or a Participant's
Beneficiary) to receive any benefits which become payable under
the Plan upon the death of the
Participant (or the Beneficiary).
2.9. "By-Laws" means the By-Laws of the Association, as
amended from time to time in
accordance with the provisions thereof.
2.10. "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
Reference to any section or subsection of the Code includes
reference to any comparable or
succeeding provisions of any legislation which amends,
supplements or replaces such section or
subsection.
2.11. "Compensation" means effective as of January 1, 1994:
(a) for purposes of determining benefits under the
Plan, the amount of
compensation described in (i) or (ii) below, as elected by the
Participating Employer in its
Adoption Agreement, where
(i) is the total salary and wages paid to a
Participant during the Plan Year
by the Participating Employer, including overtime, bonus
payments, commissions, and any other
distributions (but excluding taxable fringe benefit payments),
increased by the amounts which
would have been received by the Participant from the
Participating Employer as such total salary
and wages but for an election under sections 125, 401(k), or
403(b) of the Code;
(ii) is the amount described in (i) above, but
excluding solely in the case of
an individual who is a Highly Compensated Employee, commissions
(in excess of the amount
elected by the Participating Employer in its Adoption Agreement).
(b) for purposes of Code section 415 limits and
minimum benefits under Code
section 416, the Participant's salary, wages and other amounts
received from a Participating
Employer or its Affiliate, as defined under Code section
415(c)(3) and the regulations
promulgated thereunder.
(c) for purposes of determining the status of an
individual as a Highly
Compensated Employee, or as a key Employee under Code section
416, the Participant's salary,
wages and other amounts received from a Participating Employer or
its Affiliate, as defined in
Code section 415(c)(3) and the regulations promulgated
thereunder, increased by amounts which
would have been received by the Participant from the
Participating Employer or its Affiliate as
such salary and wages but for an election under sections 125,
401(k), or 403(b) of the Code.
(d) in no event may the amount of Compensation taken
into account under
paragraphs (a) or (b) above exceed the amount determined from
time to time under Code section
401(a)(17).
2.12. "Covered Compensation" of a Participant, for each
Plan Year, means the average
(without indexing) of the taxable wage bases in effect for each
calendar year during the 35-year
period ending with the calendar year in which the Participant
attains the Social Security
Retirement Age, assuming no increase in such wage base for years
after the year of determination
and before the Participant actually attains the Social Security
Retirement Age. A Participant's
Covered Compensation for a Plan Year ending after the 35-year
period described in this Section is
the Participant's Covered Compensation for the year during which
the Participant attained the
Social Security Retirement Age. A Participant's Covered
Compensation for a Plan Year ending
before the 35-year period described in this Section is the
taxable wage base in effect as of the
beginning of the Plan Year. A Participant's Covered Compensation
shall be automatically
adjusted for each Plan Year.
2.13. "Deferred Retirement Date" means the first day of any
calendar month coinciding
with or next following the date on which a Participant elects to
retire or to commence receiving a
pension at any time after his or her Normal Retirement Date.
2.14. "Disability" means an Eligible Employee's physical or
mental incapacity which has
terminated his or her Eligible Employee status if the
Participating Employer, on the basis of the
certification of a licensed physician acceptable to it and such
other medical substantiation as it
may reasonably require from time to time, has determined that the
Eligible Employee is unable to
perform his or her regular duties with his or her Participating
Employer. In such event, the
Eligible Employees' Disability shall be deemed to commence 90
days following the date on which
he or she terminated his or her Eligible Employee status by
reason of such physical or mental
incapacity, and shall end on the date which is the earlier of (a)
his or her Normal Retirement Date,
or (b) the date on which the Participating Employer determines
(either on the basis of the
certification of a licenced physician acceptable to it or on the
basis of the Eligible Employee's
failure to submit such medical substantiation as the
Participating Employer may reasonably require
from time to time) that the Eligible Employee is no longer
disabled. For purposes of this Section,
medical substantiation of Disability shall not be required more
frequently than semiannually.
2.15. "Early Retirement Age" means the earliest of the date
on which a Participant has (a)
attained his or her 62nd birthday, (b) attained his or her 55th
birthday and completed at least 5
years of Vesting Service, or (c) attained his or her 50th
birthday and completed at least 15 years
of Vesting Service.
2.16. "Early Retirement Date" means the first day of any
calendar month, prior to a
Participant's Normal Retirement Date and coinciding with or
following the date he or she attains
his or her Early Retirement Age, on which he or she elects to
retire.
2.17. "Eligible Employee" means an individual who is a
common-law employee of a
Participating Employer.
2.18. "Employee" means any individual who is a common-law
employee of a Participating
Employer or its Affiliate, and to the extent required by section
414(n) of the Code, any leased
employee (as defined in section 414(n) of the Code) who performs
services for such Employer.
Notwithstanding the foregoing, if such leased employees
constitute less than 20% of an
Employer's non-highly compensated workforce within the meaning of
section 414(n)(5)(c)(ii) of
the Code, the term Employee shall not include those leased
employees covered by a plan
described in section 414(n)(5) of the Code.
2.19. "Employer" means (i) a Massachusetts Cooperative Bank
or other organization
which is permitted to participate in the Retirement Program
pursuant to the By-Laws, and (ii) any
Affiliate of each such Bank or other organization, and any
successor to any of the foregoing,
either singly or as a group, as the context may require.
2.20. "Employer Contribution Account Balance" means that
portion of a Participant's
account balance under The Defined Contribution Plan (Plan A) of
The Cooperative Banks
Employees Retirement Program as of December 31, 1988 that is
attributable to contributions
made by a Participating Employer and earnings on such
contributions.
2.21. "Entry Date" means any January 1, or July 1 of any
Plan Year; provided, however,
effective July 1, 1993, "Entry Date" means January 1, April 1,
July 1, or October 1 of any Plan
Year.
2.22. "ERISA" means the Employee Retirement Income Security
Act of 1974, as
amended, and any successor statute or statutes of similar import.
2.23. "Final Average Compensation" means effective as of
January 1, 1995, the highest
average of three consecutive Plan Year's Compensation, out of the
Participant's entire Period of
Service with the Participating Employer to his or her Normal
Retirement Date, Deferred
Retirement Date, Early Retirement Date or the date he or she
became a Terminated Eligible
Employee (whichever is applicable), or other applicable
determination date. If the period of the
Participant's Service is less than three complete Plan Years,
"Final Average Compensation" will be
his or her total aggregate Compensation divided by his to her
total Period of Service. Prior to
January 1, 1995, "Final Average Compensation" was determined with
reference to the highest
average of twelve (12) consecutive calendar quarters'
Compensation.
2.24. "Highly Compensated Employee" means an Employee of an
Employer who is a
"highly compensated employee" within the meaning of Code section
414(q).
2.25. "Key Employee" means a key employee within the
meaning of Code section 416.
2.26. "Maximum Excess Allowance" means, (a) in the case of
a Participating Employer
which elects to provide Participants with an unreduced Accrued
Pension as described in Section
6.2(c), the percentage set out in Column II in the table below,
and (b) in all other cases, the
percentage set out in Column III in the table below.
I II III
Age at Retirement Maximum Excess Allowance Maximum Excess
Allowance
65 or older 22.75% 22.75%
64 21.00% 22.50%
63 19.25% 22.21%
62 17.50% 21.87%
61 22.43% 22.43%
60 23.62% 23.62%
59 23.49% 23.49%
58 23.33% 23.33%
57 23.16% 23.16%
56 22.38% 22.38%
55 21.77% 21.77%
54 21.30% 21.30%
53 20.92% 20.92%
52 20.74% 20.74%
51 20.71% 20.71%
50 20.90% 20.90%
2.27. "Normal Retirement Date" means the first day of the
calendar month coinciding
with or next following the Participant's 65th birthday.
2.28. "Participant" means an Eligible Employee or
Terminated Eligible Employee who
participates in the Plan pursuant to its provisions.
2.29. "Participating Employer" means an Employer that has
adopted the Plan in
accordance with the By-Laws and has entered into an Adoption
Agreement.
2.30. "Participating Employer's Participation Date" means
the date as of which such
Participating Employer adopts the Plan for the benefit of its
Eligible Employees.
2.31. "Pensioner" means any person who is receiving
periodic payments of his or her
Accrued Pension.
2.32. "Plan" means The Defined Benefit Pension Plan (Plan
C) of The Cooperative Banks
Employees Retirement Program.
2.33. "Plan Year" means the calendar year.
2.34. "Prior Plan" means the provisions of the Past Service
Plan (formerly "Plan B") and
the Supplemental Plan of The Cooperative Banks Employees
Retirement Program, as in effect
prior to January 1, 1989.
2.35. "Provisional Payee" means a person designated by a
Participant in accordance with
Article 9 to receive a joint and survivor benefit in the event of
the Participant's death after his or
her retirement date.
2.36. "Qualified Domestic Relations Order" means any
judgment, decree or order
(including approval of a property settlement agreement) which
constitutes a "qualified domestic
relations order" within the meaning of Code section 414(p). A
judgment, decree or order shall
not be considered not to be a Qualified Domestic Relations Order
merely because it requires a
distribution to an alternate payee (or the segregation of
accounts pending distribution to an
alternate payee) before the Participant is otherwise entitled to
a distribution under the Plan.
2.37. "Retirement Program" means The Cooperative Banks
Employees Retirement
Program as from time to time in effect.
2.38. "Social Security Retirement Age" shall mean the age
used as the retirement age for
the Participant under Section 216 of the Social Security Act,
except that such section shall be
applied without regard to the age increase factor, and as if the
early retirement age under Section
216 of the Act were 62.
2.39. "Terminated Eligible Employee" means an individual
who has ceased to be an
Eligible Employee (other than on account of death) prior to
becoming eligible to retire on his or
her Normal Retirement Date or Early Retirement Date.
2.40. "Trust" means the Trust established under a trust
agreement between the
Association and the Trustee for purposes of the Plan.
2.41. "Trustee" means any person or persons who are at any
time acting as Trustee under
the Trust.
2.42. "Withdrawal Date" means the date as of which a
Participating Employer withdraws
from the Plan pursuant to the provisions of the Plan.
ARTICLE Section III. SERVICE DEFINITIONS; SPECIAL SERVICE
RULES
3.1. "Absence in Military Service" means an absence of an
Employee in military or
governmental service for the United States of America for the
period during which the Employee
retains rights to reemployment with his or her Employer under the
federal laws of the United
States of America; provided, that the Employee in fact returns to
the active service of his or her
Employer within the period during which he or she is entitled to
such reemployment rights.
3.2. "Authorized Leave of Absence" means any absence of an
Employee granted by his or
her Employer in accordance with rules of uniform application to
all Employees similarly situated.
3.3. "Credited Service" shall mean for any Participant, the
aggregate of all his or her
Periods of Service, but excluding:
(a) except as otherwise provided in this Article, any
period prior to the adoption
of the Plan by the Participant's Participating Employer;
(b) any period during which he or she was absent due
to Disability or an
Authorized Leave of Absence;
(c) any period prior to 5 consecutive One-Year Breaks
in Service which is not
included in his or her Vesting Service by reason of Section
3.10(b) hereof; and
(d) any period prior to a Termination of Employment if
he or she received a
distribution or commenced to receive payment of his or her
Accrued Pension pursuant to Article
8, unless the Participant subsequently repaid such amount
pursuant to this Section.
On his or her Reemployment Commencement Date, a former
Participant who received a
benefit hereunder shall have the right to repay the entire amount
distributed. However, such
repayment shall be made before the fifth anniversary of the date
the Participant is reemployed.
The amount of the repayment shall bear interest, compounded
annually from the date of
distribution, on the full amount of the distribution at the rate
of 5% or such other rate as
determined by the Secretary of the Treasury. Upon the timely
repayment of a distribution
permitted under this Section, a Participant's prior Years of
Credited Service, attributable to
service prior to the distribution, shall be reinstated. In the
event that a Participant who received a
distribution is reemployed and does not repay amounts
distributed, the Participant's Accrued
Pension under the Plan shall be adjusted to reflect the fact that
the Participant's prior Years of
Credited Service, attributable to his or her service prior to the
distribution, were not restored. For
purposes of Section 6.1, a Participating Employer may elect, in
its Adoption Agreement, either to
limit the number of years of Credited Service used in its pension
formula's years-of-Credited
Service multiplier to 25, or to provide that the number of such
years shall be unlimited, with no
maximum limit placed upon the number of such years used in such
multiplier.
3.4. "Employment Commencement Date" means the date on which
an Employee first
performs an Hour of Service.
3.5. "Hour of Service" means, for purposes of determining
the beginning of an
Employee's periods of Credited Service and Vesting Service, each
hour described in paragraph (a)
below, and for purposes of determining an Employee's Years of
Eligibility Service, each hour
described in paragraphs (a), (b), (c) and (d) below, where
(a) is each hour for which the Employee is directly or
indirectly paid, or entitled to
payment, for the performance of duties for a Participating
Employer or its Affiliate, each such
hour to be credited to the Employee for the period of service in
which the duties were performed;
(b) is each hour for which the Employee is directly or
indirectly paid, or entitled to
payment, by a Participating Employer or its Affiliate (including
payments made or due from a
trust fund or insurer to which the Participating Employer or its
Affiliate contributes or pays
premiums) on account of a period of time during which no duties
are performed (irrespective of
whether a Termination of Employment has occurred) due to
vacation, holiday, illness, incapacity,
disability, layoff, jury duty, military duty or leave of absence,
each such hour to be credited to the
Employee for the period of Eligibility Service in which such
period of time occurs, subject to the
following rules:
(i) No more than 501 Hours of Service shall be
credited under this
paragraph (b) to the Employee on account of any single continuous
period during which the
Employee performs no duties;
(ii) Hours of Service shall not be credited under
this paragraph (b) to an
Employee for a payment which solely reimburses the Employee for
medically related expenses
incurred by the Employee, or which is made or due under a plan
maintained solely for the purpose
of complying with applicable worker's compensation, unemployment
compensation, or disability
insurance laws; and
(iii) If the period during which the Employee
performs no duties falls within two
or more computation periods, and if the payment made on account
of such period is not
calculated on the basis of units of time, the Hours of Service
credited with respect to such period
shall be allocated between not more than the first two such
computation periods on any
reasonable basis consistently applied with respect to similarly
situated Employees;
(c) is each hour not counted under paragraph (a) or
(b) for which back pay,
irrespective of mitigation of damages, has been awarded or agreed
to be paid by the Participating
Employer or its Affiliate, each such hour to be credited to the
Employee for the computation
period to which the award or agreement for back pay pertains,
provided that crediting of Hours of
Service under this paragraph (c) with respect to periods
described in paragraph (b) above shall be
subject to the limitations and special rules set forth in clauses
(i), (ii) and (iii) of paragraph (b);
and
(d) is each non-compensated hour while an Employee
that is not credited under
(a), (b) or (c) above during a period of Authorized Leave of
Absence or Absence in Military
Service from his or her Employer or within such longer period as
may be specified by the
Employer for which the Employee returns for work.
Hours of Service to be credited to an individual under (a),
(b) and (c) above shall be
calculated and credited pursuant to paragraphs (b) and (c) of
Section 2530.200(b)-2 of the
Department of Labor Regulations which are incorporated herein by
reference. Hours of Service
to be credited to an individual during an absence described in
(d) above shall be determined by the
Employer with reference to the individual's most recent normal
work schedule. If the Employer
cannot so determine the number of Hours to be credited, there
shall instead be credited eight
Hours of Service for each day of absence.
3.6. "One-Year Break in Service" means, for any Employee or
former Employee, a
12-month period commencing on his or her Termination of
Employment or any anniversary
thereof during which the Employee or former Employee failed to
perform an Hour of Service for
an Employer. Solely for purposes for determining whether an
Employee has incurred a One-Year
Break in Service, if an Employee is absent from work beginning
after December 31, 1984 (i) by
reason of the Employee's pregnancy, (ii) by reason of the birth
of the Employee's child, (iii) by
reason of the placement of a child with the Employee in
connection with the adoption of such
child by the Employee, or (iv) for purposes of caring for such
child for a period beginning
immediately following such birth or placement, the date of an
Employee's Termination of
Employment shall be twelve (12) months after the date otherwise
determined.
3.7. "Period of Service" means for each Employee, the
period of time elapsed between his
or her Employment Commencement Date or Reemployment Date and his
or her Termination of
Employment. Each Period of Service shall be measured in years
and days.
3.8. "Reemployment Commencement Date" means the date on
which a rehired former
Employee of a Participating Employer first performs an Hour of
Service on or following such
reemployment.
3.9. "Termination of Employment" means the date on which an
Employee quits, is
discharged, retires or dies.
3.10. "Vesting Service" means, for any Participant, the
aggregate of all his or her Periods
of Service, but excluding, in all cases:
(a) except as provided in this Article, any Period of
Service rendered prior to his
or her Participating Employer's Participation Date;
(b) any Period of Service rendered prior to a
Termination of Employment, if:
(i) upon Termination of Employment, the
Participant did not have a
nonforfeitable right to a benefit under the provisions of the
Plan; and
(ii) such Participant had at least 5 consecutive
One-Year Breaks in Service
following such Termination of Employment and preceding his or her
next Reemployment
Commencement Date.
In addition, if an Employee has a Reemployment Commencement
Date within 12 months
after the date of his or her Termination of Employment, such
Employee's Vesting Service shall
include the period of severance measured from his or her date of
Termination of Employment
until his or her subsequent Reemployment Commencement Date.
Vesting Service shall also include any period not otherwise
included in a Period of Service
during which a Participant is absent due to Disability,
Authorized Leave of Absence, Absence in
Military Service or absent on maternity, paternity leave
described in the definition of One-Year
Break in Service.
Two or more Periods of Service or periods of severance that
are included in a Participant's
Vesting Service and that contain fractions of a year (computed in
months and days) shall be
aggregated on the basis of 365 days constituting a year.
3.11. "Year of Eligibility Service" means a
12-consecutive-month period commencing on
an Employee's Employment Commencement Date, or any Plan Year
thereafter which commences
after such Employment Commencement Date, during which he or she
completes at least 1,000
Hours of Service.
3.12. Crediting Periods of Service earned before Employer
becomes a Participating
Employer. All or any portion of periods of service earned by an
Employee prior to his or her
Participating Employer's Participation Date shall be credited on
a nondiscriminatory basis under
the Plan as of such Participation Date for vesting or benefit
purposes if the Association approves
such crediting and if his or her Participating Employer agrees,
on or prior to such Participation
Date, to pay the cost, if any, of crediting such periods of
service under the Plan.
3.13. Crediting Periods of Service earned before Employer
is merged with or acquired by
a Participating Employer. All or any portion of periods of
service earned by an Employee prior to
his or her employer's merger with or acquisition by a
Participating Employer shall be credited on a
nondiscriminatory basis under the Plan for eligibility, vesting
or benefit purposes (or any
combination thereof) if and to the extent the Association
approves such crediting and if such
Participating Employer agrees to pay the cost, if any, of
crediting such periods of service under
the Plan.
ARTICLE Section IV. PARTICIPATION
4.1. Participation Requirements.
(a) Age and Service. Unless waived or reduced under
(b) below, to become a
Participant in the Plan each Eligible Employee must have attained
age 21 and completed one Year
of Eligibility Service.
(b) Waiver. Under its Adoption Agreement, a
Participating Employer may elect
to waive or reduce either or both of the age and service
requirements described in (a) above.
4.2. Required Information. Upon becoming a Participant, an
Eligible Employee must give
the Association correct information as to his or her date of
birth and such other information as
may reasonably be required in order to compute his or her
benefits under the Plan. A
misstatement by a Participant with respect to age or any other
information reasonably required by
the Association shall be corrected when it becomes known that any
such misstatement of fact has
occurred, and the proper adjustment in benefits shall thereupon
be made; provided, however, that
(a) no such adjustment shall be made with respect to a
misstatement resulting from incorrect
information furnished by the Participant affected, if the
adjustment would have the effect of
increasing the Participant's Accrued Pension or the Participating
Employer's contribution, and (b)
no such adjustment shall result in the retroactive payment of
benefits to the Participant.
4.3. Reemployed Eligible Employees. Any vested Participant
who is rehired after a
Termination of Employment shall again become a Participant on his
or her Reemployment
Commencement Date. Any non-vested Participant who is rehired
after a Termination of
Employment shall again become a Participant on his or her
Reemployment Commencement Date
if he or she has not incurred 5 consecutive One-Year Breaks in
Service after his or her
Termination of Employment. Any non-vested Participant who has
incurred 5 consecutive
One-Year Breaks in Service shall become a Participant again only
after he or she completes a
Year of Eligibility Service after his or her Reemployment
Commencement Date.
4.4. Duration of Participation. Participation in the Plan
shall terminate on the date on
which the Participant ceases to have a vested right to receive
benefits under the Plan.
ARTICLE Section V. REQUIREMENTS FOR RETIREMENT BENEFITS
5.1. Normal Retirement. Each Participant who attains age
65 while an Eligible Employee
shall have a fully vested and nonforfeitable interest in his or
her Accrued Pension and may retire
on his or her Normal Retirement Date and receive a pension, or if
elected by the Participating
Employer in the Adoption Agreement, may elect to receive a
pension without terminating,
commencing on his or her Normal Retirement Date, in the amount
specified in Section 6.1.
5.2. Early Retirement. Each Participant who has attained
his or her Early Retirement Age
while an Eligible Employee shall have a fully vested and
non-forfeitable interest in his or her
Accrued Pension and may elect to retire on his or her Early
Retirement Date and receive a
pension, commencing on his or her Early Retirement Date or on the
first day of any calendar
month thereafter, in the amount specified in Section 6.2. The
Participant's election of an early
benefit commencement date will not be effective unless made
within the 90-day period prior to his
or her "annuity starting date" (as defined in section 417(f)(2)
of the Code), the Association will
furnish to the Participant a written notification in nontechnical
terms describing the effects of an
early commencement of benefits and the rights of the Participant
with respect thereto. However,
the foregoing election period and notification requirements will
not apply if the total value of the
Participant's benefit, determined in the same manner (and using
the same assumptions) as under
Section 9.7, is $3,500 or less.
5.3. Deferred Retirement. Each Participant described in
Section 5.1 who does not
terminate on his or her Normal Retirement Date, but remains in
the active service of his or her
Participating Employer after his or her Normal Retirement Date
shall continue to have a fully
vested and non-forfeitable interest in his or her Accrued Pension
and may retire on his or her
Deferred Retirement Date and receive a pension, commencing on his
or her Deferred Retirement
Date, or if elected by the Participating Employer in the Adoption
Agreement, may elect to receive
a pension without terminating, commencing on the first day of any
month after his or her Normal
Retirement Date, in the amount specified in Section 6.4.
ARTICLE Section VI. AMOUNT OF PENSION
6.1. Amount of Pension at Normal Retirement Date. In the
case of a Participant
described in Section 5.1 who retires or is eligible to receive a
pension on his or her Normal
Retirement Date, his or her annual pension shall be the greater
of (a) or (b), if applicable, where
(a) is
(i) Base Benefit Percentage times the
Participant's Final Average
Compensation times Years of Credited Service earned after
December 31, 1988; plus
(ii) One-half percent (1/2%) times the
Participant's Final Average
Compensation above the Participant's Covered Compensation times
Years of Credited Service
earned after December 31, 1988; where Years of Credited Service
in excess of the greater of (A)
35 less the years of service used in determining the benefit in
(iii) below and (B) zero are not
taken into account; plus
(iii) the Participant's accrued pension
determined under the Supplemental
Plan of The Cooperative Banks Employees Retirement Program as of
December 31, 1988; plus
(iv) the Participant's accrued pension under the
Past Service Plan of The
Cooperative Banks Employees Retirement Program (formerly "Plan
B") as of December 31,
1988. See Schedule A for a listing of Participants and their
accrued pensions as of December 31,
1988, and
(b) is
(i) Base Benefit Percentage times the
Participant's Final Average
Compensation times Years of Credited Service; plus
(ii) One-half percent (1/2%) times the
Participant's Final Average
Compensation above the Participant's Covered Compensation times
Years of Credited Service;
minus
(iii) the Participant's Employer Contribution
Account Balance as of December
31, 1988 converted to an Actuarial Equivalent life annuity (using
a 7% interest rate with no
pre-age 65 mortality but with post-age 65 mortality from the 1984
Unisex Pension Mortality
Table) payable at age 65.
Notwithstanding the above, in no event shall the amount of a
Participant's Accrued
Pension determined under Section 6.1(b)(ii) above exceed the
amount of Accrued Pension equal
to a Participant's Final Average Compensation above his or her
Covered Compensation times the
Maximum Excess Allowance.
Subsection (b) will apply only in the case of a Participant
who was an Eligible Employee
of a Participating Employer that elected to participate in the
Supplemental Plan of The
Cooperative Banks Employees Retirement Program prior to January
1, 1989.
6.2. Amount of Accrued Pension at Early Retirement Date.
In the case of a Participant
described in Section 5.2 who elects to retire on his or her Early
Retirement Date, his or her
Accrued Pension at his or her Early Retirement Date shall be:
(a) a deferred pension, commencing on his or her
Normal Retirement Date, which
pension shall be the amount of Accrued Pension accrued up to his
or her Early Retirement Date,
computed in accordance with the provisions of Section 6.3; or
(b) a pension, commencing on his or her Early
Retirement Date or the first day of
any calendar month thereafter, but prior to his or her Normal
Retirement Date, as elected by the
Participant, which pension shall be the amount of his or her
Accrued Pension accrued up to his or
her Early Retirement Date, computed in accordance with the
provisions of Section 6.3, reduced
by
(i) five-ninths of one percent (5/9%) for each
month not in excess of 60 by
which the annuity starting date precedes the Participant's Normal
Retirement Date, and
(ii) five-eighteenths of one percent (5/18%) for
each month in excess of 60
but not in excess of 180 by which the annuity starting date
precedes the Participant's Normal
Retirement Date.
(c) Notwithstanding Section 6.2 (b)(i) above, a
Participating Employer may elect
in the Adoption Agreement to provide its Participants with an
unreduced Accrued Pension, so
long as the benefit commencement date occurs on or after the date
the Participant attains age 62.
6.3. Computation of Accrued Pension Prior to Normal
Retirement Date. To determine
the Participant's Accrued Pension under Section 6.1 at the time
of his or her Termination of
Employment prior to his or her Normal Retirement Date, the amount
determined under Section
6.1 shall be determined based on Years of Credited Service, Final
Average Compensation and
Covered Compensation as of the Participant's Termination of
Employment.
6.4. Amount of Accrued Pension at Deferred Retirement Date.
In the case of a
Participant described in Section 5.3 who continues to be employed
by his or her Participating
Employer after his or her Normal Retirement Date, the amount of
his or her Accrued Pension at
his or her Deferred Retirement Date shall be determined under
Section 6.1, but based on his or
her Final Average Compensation, and years of Credited Service as
of his or her Deferred
Retirement Date.
ARTICLE Section VII. VESTING
7.1. Vesting Schedule. If a Participant becomes a
Terminated Eligible Employee, he or
she shall have a vested and nonforfeitable right to a percentage
of his or her Accrued Pension,
determined as of the date he or she becomes a Terminated Eligible
Employee, based on the
number of his or her years of Vesting Service as set forth in the
following vesting schedule:
Years of Percentage
Vesting Service Vested
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
7.2. Special Vesting Rules. Notwithstanding any provision
of the Plan to the contrary, a
Participant will be fully vested in 100% of the Accounts
maintained for his or her benefit upon the
happening of any one of the following events:
(a) the Participant's attainment of his or her Early
Retirement Age while an
Employee;
(b) the Participant's death while an Employee;
(c) the termination or partial termination of the Plan
or the complete cessation of
contributions to the Plan while the Participant is an Employee,
to the extent that the Participant is
affected by such termination, partial termination, or complete
discontinuance.
7.3. Payment of Vested Pension. A Participant will be
entitled to receive his or her vested
Accrued Pension commencing on his or her Normal Retirement Date.
In lieu of payment of his or
her vested Accrued Pension commencing on his or her Normal
Retirement Date, a Participant
may elect to receive, commencing on what would have been his or
her Early Retirement Date, his
or her Accrued Pension reduced in the same manner described in
Section 6.2(b) to reflect such
early commencement. A Participant's election to receive a vested
Accrued Pension prior to his or
her Normal Retirement Date will not be effective unless made
within the 90-day period prior to
his or her "annuity starting date" (as defined in section
417(f)(2) of the Code). At least 30 days,
but not more than 90 days prior to his or her "annuity starting
date" (as defined in section
417(f)(2) of the Code), the Association will furnish to the
Participant a written notification in
nontechnical terms describing the effects of an early
commencement of benefits and the rights of
the Participant with respect thereto. However, the foregoing
election period and notification
requirements will not apply if the total value of the
Participant's benefit, determined in the same
manner (and using the same assumptions) as under Section 9.7, is
$3,500 or less.
7.4. Changes in Vesting Schedule. If the Plan's vesting
schedule is amended, or the Plan
is amended in any way that directly or indirectly adversely
affects the computation of a
Participant's vested percentage (or if the Plan changes to or
from a top-heavy vesting schedule),
each Participant who has completed 3 Years of Service for Vesting
may elect, within the period
described below, to have his or her vested percentage determined
without regard to such
amendment or change. The period referred to in the preceding
sentence will begin on the date the
amendment of the vesting schedule is adopted and will end 60 days
thereafter, or, if later, 60 days
after the later of
(a) the date on which such amendment becomes
effective; and
(b) the date on which the Participant is issued
written notice of such amendment
by the Association.
ARTICLE Section VIII. RESTRICTIONS ON PENSIONS
8.1. Code Section 415 Limitations. The annual benefit to
which a Participant is
entitled under the Plan shall not, in any limitation year, be in
an amount which would exceed the
applicable limitations under section 415 of the Code, which is
hereby incorporated by reference.
If the benefit payable under the Plan would (but for this
Section) exceed the limitations of section
415 of the Code by reason of a benefit payable under another plan
aggregated with this Plan under
section 415(f), the benefit under this Plan shall be reduced only
after all reductions have been
made under such other plan. If the benefit payable under this
Plan would (but for this Section)
exceed the limitations described in section 415(e) of the Code,
the benefit under this Plan shall be
reduced prior to any such reduction in annual additions under the
defined contribution plan or
plans taken into account for purposes of the Code section 415(e)
determination. For purposes of
this Section, the limitation year shall be the Plan Year.
8.2. Restrictions on Distributions to Certain Highly
Compensated Employees.
Notwithstanding any other provision of the Plan to the contrary,
the annual payments to a Highly
Compensated Employee or former Highly Compensated Employee who is
among the 25 such
individuals entitled to benefits under the Plan with the greatest
compensation shall be restricted to
an amount equal to the payments that would be made on behalf of
the Employee under a single
life annuity that is the Actuarial Equivalent of the sum of the
Employee's Accrued Pension and the
Employee's other benefits under the Plan, all as determined
pursuant to, and to the extent required
by, Treasury Regulation Sec.1.401(a)(4)-5(b)(3). In the event of
Plan termination, the benefit of any
Highly Compensated Employee (and Former Highly Compensated
Employee) is limited to a
benefit that is nondiscriminatory under section 401(a)(4) of the
Code.
8.3. Nonalienability of Benefits. The benefits provided
hereunder will not be subject to
voluntary or involuntary alienation, assignment, garnishment,
attachment, execution or levy of any
kind, and any attempt to cause such benefits to be so subjected
will not be recognized, except to
such extent as may be required by law, except that if the
Association receives any Qualified
Domestic Relations Order that requires the payment of benefits
hereunder, such benefits will be
paid in accordance with the applicable requirements of the Order
as provided under Section 9.5.
8.4. Required Distributions. Unless the Participant elects
otherwise, in no event shall the
payment of benefits to any Participant commence later than the
60th day after the latest of the
following:
(a) the close of the Plan Year in which occurs the date
on which the Participant
attains the age sixty-five (65);
(b) the close of the Plan Year in which occurs the 10th
anniversary of the year in
which the Participant commenced participation in the Plan; or
(c) the close of the Plan Year in which the Participant
ceases to be an Employee.
Notwithstanding the foregoing, distribution of a Participant's
benefit shall occur no later than the
Participant's required beginning date (as defined in section
401(a)(9) of the Code) and may
continue to the Participant or to his or her Beneficiary no
longer than the maximum period
permitted under section 401(a)(9).
8.5. Rights of Eligible Employees. Nothing herein
contained shall be deemed to give any
Eligible Employee the right to be retained in the service of a
Participating Employer or to interfere
with the right of the Participating Employer to discharge such
Eligible Employee, nor shall it
interfere with the Eligible Employee's right to terminate his or
her service at any time.
<PAGE>
ARTICLE Section IX. FORM OF PENSION
9.1. Standard Form of Pension for Participants who are not
Married. Except as otherwise
provided in Section 9.7, the standard form of pension payable
under the Plan to a Participant who
is not married on his or her "annuity starting date" (as defined
in section 417(f)(2) of the Code) is
a pension payable monthly to the Participant during his or her
lifetime, the first payment to be due
on the date of the commencement of his or her benefits under the
Plan, and the last payment to be
due for the calendar month in which his or her death occurs.
9.2. Standard Form of Pension for Married Participants.
Except as otherwise provided in
Section 9.7, the standard form of pension payable under the Plan
to a Participant who is married
on his or her "annuity starting date" (as defined in section
417(f)(2) of the Code) and who has not
made an election under Section 9.3 below, will be a qualified
joint and survivor form (which form
will be of Actuarial Equivalent value to the standard form
described in Section 9.1) under which a
reduced pension will be payable to the Participant during his or
her lifetime and following his or
her death the same amount of such reduced pension will be payable
to the person to whom the
Participant was married on his or her "annuity starting date" (as
defined above), such amount to
be payable during the remaining lifetime of such person. Such
qualified joint and survivor annuity
form of pension will be at least as valuable (within the meaning
of regulation Sec.1.401(a)-20A-16)
as any other optional form of benefit payable under the Plan at
the same time. If the person to
whom a survivor annuity is payable under this Section dies after
the Participant's "annuity starting
date" (as defined above) and while the Participant is alive, the
Participant will continue to receive
during his or her remaining lifetime the same amount of reduced
pension payable to him or her
under this Section during the joint lifetime of the Participant
and such person and the last payment
to be due for the calendar month in which the Participant's death
occurs.
9.3. Waiver of Standard Forms of Pension. A Participant
may elect to waive the standard
form of annuity described in Sections 9.1 or 9.2, but only if
such election satisfies the
requirements of this Section.
(a) Election Period. The election period during which
a Participant may elect
to waive the applicable standard annuity form described in
Sections 9.1 or 9.2 begins on the date
which is 90 days before his or her "annuity starting date" (as
defined in section 417(f)(2) of the
Code) and continues until such date.
(b) Required Information. At least 30 days but not
more than 90 days prior to the
Participant's "annuity starting date" (as defined in section
417(f)(2) of the Code), the Association
will furnish to each Participant (including a Participant no
longer in the employ of the
Participating Employer) a written notification in nontechnical
terms containing (i) the terms and
conditions of the applicable standard form of benefit described
in Sections 9.1 and 9.2, including
the circumstances in which it will be provided, (ii) the
Participant's right to make, and the effect
of, an election to waive the applicable standard form of benefit,
(iii) the rights of the Participant's
spouse, if any, under paragraph (c), (iv) the right to make, and
the effect of, a revocation of an
election under this Section, (v) a general description of the
eligibility conditions and other material
features of the optional forms of payment under the Plan
(including the right to defer a
distribution until the Participant's Normal Retirement Date) and
sufficient additional information
to explain the relative values of the optional forms of payment,
and (vi) a general explanation of
the relevant financial effects on the amount of a Participant's
benefit of an election under this
Section.
(c) Election Procedure. A Participant may waive the
applicable standard form of
annuity described in Section 9.1 or 9.2 and elect an optional
form at any time during the election
period described in (a) above. Any such waiver and election
shall specify the optional form of
benefit elected and shall state the specific non-spouse
beneficiary, if any, who will receive a
benefit upon the Participant's death, and shall be made in such
form and manner as the
Administrator shall prescribe. In no event, however, shall a
waiver and election by a Participant
who is married on his or her "annuity starting date" (as defined
above) take effect unless:
(i) the Participant's spouse consents to, and
acknowledges the effect of,
the waiver and election, such consent and acknowledgement to
state specifically the optional form
of benefit elected and the non-spouse beneficiary, if any,
elected by the Participant (including any
class of beneficiaries and any contingent beneficiaries), and to
be made in writing and witnessed
by either a notary public or a duly authorized representative of
the Association, or
(ii) it is established to the satisfaction of the
Association that spousal
consent cannot be obtained because there is no spouse, because
the spouse has died (evidenced by
a certificate of death), because the spouse cannot be located
(based on information supplied by a
government agency or independent investigator), or because of
such other circumstances as the
Secretary of the Treasury or his or her delegate may prescribe,
or
(iii) the Association receives from the
Participant a court order certifying
either that the Participant is legally separated from his or her
spouse or has been abandoned by the
spouse, and a Qualified Domestic Relations Order with respect to
the Participant does not
otherwise require spousal consent, or
(iv) the Participant, simultaneously with
electing to waive the joint and
survivor annuity benefit described in Section 9.2, elects an
optional form of benefit that has the
effect of a "qualified joint and survivor annuity" with respect
to the Participant within the meaning
of section 401(a)(11) and 417 of the Code and names his or her
spouse as the survivor annuitant.
In the event a spouse is legally incompetent to give consent, the
spouse's legal guardian, even if
the guardian is the Participant, may given consent under (i)
above on behalf of the spouse. Any
consent by or on behalf of a spouse (or establishment that
spousal consent cannot be obtained)
shall be effective only with respect to such spouse and such
specific beneficiary and optional form
selected, but shall be irrevocable once made.
(d) Revocation. A Participant may revoke any waiver
and election made under
this Section without need of spousal consent by filing a written
revocation with the Association at
any time during the election period described in paragraph (a)
above. No such revocation shall
prevent the Participant from making a subsequent waiver and
election under this Section during
such election period.
9.4. Optional Forms of Pension. Any Participant who has
waived the applicable standard
form of pension may elect to receive his or her pension in one of
the optional forms described
below, each of which shall be of Actuarial Equivalent value to a
single life annuity commencing at
the same time, except that the joint and survivor annuity
described below with a Participant's
surviving spouse as the joint annuitant shall be at least as
valuable (within the meaning of
regulation Sec1.401(a)-20A-16) as any other optional form of
benefit payable under the Plan at the
same time.
(a) the form described in Section 9.1, if not
otherwise applicable to the
Participant;
(b) an optional joint and survivor form under which a
reduced pension will be
payable monthly to the Participant during his or her lifetime and
following his or her death 50
percent, 75 percent, or 100 percent of such reduced pension, as
elected by the Participant, will be
payable monthly to the Participant's Provisional Payee (who may,
but need not, be the
Participant's surviving spouse) during the remaining lifetime of
such Provisional Payee. If the
Provisional Payee to whom a survivor benefit is payable under
this paragraph dies after the date of
commencement of benefits to the Participant and while the
Participant is alive, the Participant will
continue to receive during his or her remaining lifetime the same
amount of reduced pension as
was payable to him or her during the joint lifetime of the
Participant and his or her Provisional
Payee, with the last payment to be due for the calendar month in
which the Participant's death
occurs;
(c) a five, ten or fifteen year (whichever the
Participant elects) certain and
continuous form under which an adjusted pension will be payable
monthly to the Participant
during his or her lifetime; provided, however, that if his or her
death occurs during the 60, 120 or
180-month period (whichever is applicable) following the date his
or her benefits commence, such
adjusted pension will be payable monthly to the Participant's
Beneficiary for the remainder of the
60, 120 or 180-month period (whichever is applicable), or to the
Beneficiary's Beneficiary if he or
she (or they) should also die within the 60, 120 or 180-month
period (whichever is applicable);
and
(d) a lump sum payment.
No optional form of benefit may be elected under the Plan
unless distributions under the
form are expected to satisfy the minimum distribution rules of
section 401(a)(9) of the Code with
respect to the Participant (including without limitation the
minimum distribution incidental benefit
rules included therein).
9.5. Distributions required by a Qualified Domestic
Relations Order. To the extent
required by a Qualified Domestic Relations Order, the Association
shall make distributions of
vested benefits to alternate payees named in such order in a
manner consistent with the
distribution options otherwise available under the Plan to
unmarried Participants, regardless of
whether the Participant is otherwise entitled to a distribution
at such time under the Plan.
9.6. Direct Rollover Option. If the distributee of any
"eligible rollover distribution" from
the Plan (within the meaning of Code section 402(f)(2)(A)) elects
to have all or part of such
distribution paid directly to an "eligible retirement plan"
(within the meaning of Code section
401(a)(31)(D)) and specifies the eligible retirement plan to
which such distribution is to be paid,
such distribution shall be made in the form of a direct
trustee-to-trustee transfer to the eligible
retirement plan so specified, to the extent required by Code
section 401(a)(31). The elections and
plan specifications under this Section may be made at such time
and in such manner as determined
by the Association consistent with Code section 401(a)(31), which
is hereby incorporated by
reference.
9.7. Small Payments. If the Actuarial Equivalent lump sum
value of a Participant's
Accrued Pension under the Plan at the time the Participant
becomes a Terminated Eligible
Employee is less than $3,500, the Association shall direct the
Trustee to make a payment of such
amount in cash in a single lump sum.
9.8. Facility of Payments. If the Association finds that
any person to whom a benefit is
payable from the Trust Fund is unable to attend to his or her
affairs because of illness or accident,
any payment due (unless a prior claim therefor shall have been
made by a duly appointed
guardian, committee or other legal representative) may be paid to
the Pensioner's spouse, child,
grandchild, parent, brother or sister, or to any person deemed by
the Association to have incurred
expense for such person otherwise entitled to payment. Any such
payment shall be a complete
discharge of any liability under the Plan therefor.
9.9. Payment as discharge of liability. If a Participant
receives a total distribution
representing his or her entire interest or the present value of
his or her total Accrued Pension
under the Plan, such a distribution shall forever constitute a
full and complete discharge of the
Plan's liability for benefits accrued by such Participant on
account of service by such Participant
prior to the date of such distribution.
ARTICLE Section X. DEATH BENEFITS
10.1. Death Benefits Limited. Except as otherwise provided
in this Article, no death
benefits will be payable hereunder to anyone following the death
of the Participant.
10.2. Death of Participant prior to Annuity Starting Date.
In the case of a Participant
who dies prior to his or her annuity starting date, his or her
Beneficiary is entitled to a death
benefit equal to the Actuarial Equivalent of the deceased
Participant's Accrued Pension calculated
as of the date of the Participant's death.
The form of preretirement death benefit payable under this
Section will be either a single
life annuity or a lump sum, as elected by the Beneficiary
(provided, however, if the Beneficiary is
not the Participant's spouse and is not age 50, such Beneficiary
may only elect a lump sum), and
will be paid at such time as the Beneficiary elects consistent
with the applicable requirements of
Code section 401(a)(9). The Association will prescribe such
rules and procedures as it deems
appropriate regarding available elections as to the form and time
of payment of such preretirement
death benefit.
10.3. Designation of Beneficiary. Each Participant shall
designate a Beneficiary or
Beneficiaries to receive any death benefits which may be payable
under the Plan, but he or she
may change his or her Beneficiary from time to time either before
or after his or her retirement by
filing written notice thereof with the Association on such form
as it shall prescribe; provided,
however, that no designation of a Beneficiary who is not the
Participant's spouse on his or her
death shall be effective unless such designation is made in
accordance with the applicable
requirements (including the spousal consent rules) of Code
sections 401(a)(11) and 417 and the
regulations promulgated thereunder.
Any consent by a spouse under (a) above, or a determination
by the Association with
respect to such spouse under (b) above, shall be effective only
with respect to such spouse. Any
such consent shall be irrevocable but shall be effective only
with respect to the specific Beneficiary
designation. If the Participant's designated Beneficiary
predeceases him or her, or if the
Participant dies without having designated a Beneficiary, then
the Participant's Beneficiary shall be
deemed to be his or her surviving spouse or, if none, any one or
more of the following as
determined by the Association in its sole discretion: the
Participant's child or children (including a
stepchild or stepchildren and a child or children by adoption),
mother, father, sister, brother, or
executors or administrators. Any such payment shall fully
discharge the liability of the Plan with
respect to such payment.
10.4. Death of Participants after Annuity Starting Date.
In the case of any Participant
who dies after his or her annuity starting date, no death benefit
will be payable hereunder except
as otherwise provided under a joint and survivor annuity form or
optional form of benefit in effect
pursuant to Sections 9.2 or 9.4.
ARTICLE Section XI. CONTRIBUTIONS AND TRUST FUND
11.1. Participating Employer Contributions. Each
Participating Employer shall make
such contributions to the Trustee as shall be required under
accepted actuarial principles to
provide pensions under the Plan, with respect to its
Participants, and to maintain the Plan in an
actuarially sound condition. All contributions under the Plan
shall be made on the condition that
they are deductible under Code section 404 of the Code by the
Participating Employer for the
taxable year for which made.
11.2. No Contributions by Participants. Except as provided
in Section 11.7, contributions
to the Plan by Participants shall be neither required nor
permitted.
11.3. Establishment of Trust Fund. The Association will
enter into a trust agreement with
a Trustee under which agreement the Trustee shall accept, hold
and invest such contributions as
the Participating Employers shall deliver to it and pay such
benefits as the Participating Employers
shall direct in writing. Contributions with respect to a
Participating Employer will be accounted
for separately. The contributions, together with any income,
gains, or profits, less distributions
and losses, shall constitute the Trust Fund.
11.4. No Liability Imposed on the Participating Employer.
Except as otherwise expressly
provided by law, any person having a right or claim under the
Plan shall look solely to the assets
of the Trust Fund; and in no event shall the Participating
Employer or its officers or governing
body be liable, jointly or severally, or to any person whomever
on account of any claim arising by
reason of provisions of the Plan or of any instrument or
instruments implementing the provisions
thereof.
11.5. Exclusive Benefit Rule. No part of the corpus or
income of the Trust forming part
of the Plan will be used for or diverted to purposes other than
for the exclusive benefit of each
Participant and Beneficiary, except as otherwise provided under
the provisions of the Plan relating
to Qualified Domestic Relations Orders, the payment of reasonable
expenses of administering the
Plan, the return of contributions upon nondeductibility or
mistake of fact, or the failure of the Plan
to qualify initially.
11.6. Return of Contribution. If a contribution by a
Participating Employer to the Trust
is (i) made by reason of a good faith mistake or fact, or (ii)
believed by said Participating
Employer in good faith to be deductible under Section 404 of the
Code, but the deduction is
disallowed, the Trustee will, upon request by the Participating
Employer, return to the
Participating Employer the excess of the amount contributed over
the amount that would have
been contributed had there not occurred a mistake of fact or a
mistake in determining the
deduction. Such excess will be reduced by the losses of the
Trust attributable thereto, if and to
the extent such losses exceed the gains and income attributable
thereto. No return of a
contribution will be made more than one year after the mistaken
payment of the contribution, or
disallowance of the deduction, as the case may be.
11.7. Direct transfers from Plan A. A Participant who is
entitled to a distribution from
The Defined Contribution Pension Plan (Plan A) of The Cooperative
Banks Employees
Retirement Program may, in such manner as determined by the
Association, elect a direct transfer
of the distribution to the Plan. Any such direct transfer shall
be permitted only at the Participant's
Early Retirement Age, Normal Retirement Age or Deferred
Retirement Age and only for the
purpose of applying the transferred amount to the payment of
benefits from the Plan in the form
of an annuity that is available under the Plan in accordance with
Article 9.
11.8. Forfeitures. Forfeitures under the Plan will be
applied to reduce the contributions
of the Participating Employers and will not be applied to
increase the benefits of any person
hereunder prior to termination of the Plan. A Participant will
forfeit any portion of his or her
Accrued Pension to which he or she does not have a vested right
upon the actual or deemed
distribution of his or her vested Accrued Pension. In addition,
the portion of any Participant's
Accrued Pension with respect to which he or she has previously
received a distribution and which
is attributable to prior service will be disregarded upon
determination of the Accrued Pension to
be paid after the Participant again severs from employment or
ceases to be an Eligible Employee.
Any individual, however, who forfeits all of a portion of his or
her Accrued Pension under this
Section and later accrues additional benefits under the Plan as
an Eligible Employee may repay to
the Plan the amount earlier distributed, with interest at the
rate determined under Code section
411(c)(2)(C) in effect on the date of repayment; provided,
however, that such repayment must be
made prior to the earlier of (i) 5 years after the first day the
employee is subsequently reemployed,
or (ii) the Participant's annuity starting date after
reemployment. In the case of any repayment
under this Section, a Participant's Accrued Pension will be
recomputed by taking into account
service performed by the Participant with respect to which he or
she already received a
distribution.
ARTICLE Section XII. ADMINISTRATION OF THE PLAN
12.1. Generally. The general administration of the Plan
shall be accomplished by the
Association in accordance with its By-Laws, as in effect from
time to time. For this purpose, and
pursuant to the applicable provisions of Title I of ERISA, the
plan administrator shall be the
Association; the named fiduciary or fiduciaries with respect to
the Plan shall be either specified in
the By-Laws or designated in accordance with a procedure set
forth therein; and the applicable
provisions of the By-Laws shall govern
(a) the procedures with respect to the establishment
of a funding and investment
policy for the Plan;
(b) the allocation of responsibility for the operation
and administration of the Plan;
(c) the delegation of responsibility to others;
(d) the appointment of an investment manager, if any;
(e) the procedures for claiming benefits under the Plan
and appealing the denial of
claims; and
(f) the procedures for determining the qualified
status of domestic relations orders
and administering distributions under those orders that
constitute Qualified Domestic Relations
Orders.
12.2. Expenses of Administration. Subject to the
applicable requirements of ERISA and,
to the extent not preempted thereby, Section 30 of Chapter 170 of
the Massachusetts General
Laws, as amended, expenses for the administration of the
Association ("Association expenses"),
expenses for the administration of the Plan ("Plan expenses") and
expenses of the Trustees
appointed to administer the Trust Fund (including reasonable
legal fees and the compensation of
the Trustees) ("Trust expenses") will be paid in such manner as
the Association shall determine,
which may include payment from the Trust Fund.
ARTICLE Section XIII. AMENDMENT AND TERMINATION
13.1. Amendment or Termination by Association. The
Association may, at any time or
from time to time, amend the Plan set forth herein, in whole or
in part, or terminate the Plan to the
extent permitted by the By-Laws, either prospectively or
retroactively, and the Association shall
notify each Participating Employer of each such amendment or
termination which shall be in
writing and executed by the Association; provided, however, that,
except as otherwise permitted
under the Plan or by applicable law, the Plan shall not be
amended or terminated in such a manner
as would cause or permit any part of the Trust Fund to be
diverted to purposes other than for the
exclusive benefit of Participants, Terminated Eligible Employees
entitled to benefits, and
Pensioners, or in such a manner as would cause or permit any
portion of such Trust Fund to
revert to, or become the property of, any Participating Employer,
prior to the satisfaction of all
the Participating Employers' liabilities under the Plan. Upon
satisfaction of all of the Participating
Employers' liabilities under the Plan, assets of the Trust Fund
may revert to the respective
Participating Employers.
13.2. Voluntary Participation. Each Participating Employer
shall adopt the Plan and
Trust, as to its Eligible Employees, with the bona fide intention
and expectation that its
participation and contributions will be continued indefinitely;
but, subject to the limitations and
conditions set forth herein, and subject to the provisions of any
applicable collective bargaining
agreement covering its Participants, the Participating Employer
shall have no obligation to
maintain its participation hereunder for any give length of time.
13.3. Withdrawal by Participating Employer.
Notwithstanding Section 13.2 above, a
Participating Employer shall withdraw from participation in the
Plan upon the happening of any of
the following events:
(a) the dissolution of the Participating Employer;
(b) the merger, consolidation, or reorganization of
the Participating Employer into
one or more corporations or organizations, unless the surviving
corporation or organization is a
Participating Employer or is an Employer which elects to continue
participation in the Plan by
adoption of the By-Laws in accordance with its terms;
(c) sale of all or substantially all of the assets of
the Participating Employer, unless
the purchaser is a Participating Employer or is an Employer which
elects to continue participation
in the Plan by adoption of the By-Laws in accordance with its
terms;
(d) a withdrawal date agreed to by the Participating
Employer and the
Association's Board of Trustees;
(e) the resolution of the Association's Board of
Trustees to terminate the
participation of a Participating Employer under the Plan for
failure of a Participating Employer to
make proper contributions to or to comply with any other
provision of the Retirement Program or
the By-Laws of the Association;
(f) final decree, from which no timely or further
appeal is taken, terminating the
Plan as to a Participating Employer, by the United States
District Court for the District of
Massachusetts pursuant to the application of the Pension Benefit
Guaranty Corporation; or
(g) any act or occurrence which either
(i) the Trustees determine to be a "partial
termination" of the Plan as to
any or all Eligible Employees of a Participating Employer, or
(ii) which has been finally and expressly
determined in an administrative or
judicial proceeding to be a partial termination within the
meaning of section 411(d)(3) of the
Code.
For purposes of paragraph (b)(i) above, the
Trustees shall determine that
the sale or other disposition of a branch, division or other unit
of a Participating Employer is a
"partial termination" of the Plan of such Bank as to the Eligible
Employees of such Bank who are
employed in such branch, division or other unit, if all of the
following special conditions are
satisfied:
(A) such Participating Employer first
submits a written request for
such a determination to the Trustees; and
(B) such Participating Employer submits to
the Trustees, in
addition to the written request described in subpart (A) above, a
certified vote or votes of the
governing body of such Bank, stating that all additional costs
associated with the full vesting of
such accrued benefits which are required pursuant to Section 13.6
of the Plan as a result of such
partial termination shall be due and payable by such
Participating Employer, as provided in
Section 13.4 of the Plan; and
(C) the Trustees in their sole discretion
determine that under all the
facts and circumstances presented, such "partial termination"
will not discriminate in favor of any
highly compensated employee (as defined in section 414(q) of the
Code) or otherwise cause the
Plan to fail to meet the applicable requirements of the Code or
ERISA.
For purposes of paragraph (b)(i) above, if the
Trustees determine in their
sole discretion that under all the facts and circumstances
presented, a partial termination must be
declared in order to cause the Plan to continue to meet the
applicable requirements of the Code or
ERISA, then they shall determine that such partial termination
has occurred, whether or not a
Participating Employer makes the written request described in
subpart (A) above or submits the
certified vote described in subpart (B) above. A Participating
Employer's withdrawal under the
Plan shall be effective as of its Withdrawal Date which shall be
the last day of the month during
which any of the events set forth above occurs.
13.4. Effect of Withdrawal on a Withdrawing Participating
Employer. In the event that
the Plan participation of a Participating Employer shall be
terminated as provided in Section 13.3,
the following amounts shall be due and payable from the
withdrawing Participating Employer on
the Participating Employer's Withdrawal Date:
(a) all unfunded accrued benefits of the Participating
Employer, based on the
accrued benefits and Plan assets attributable to the
participation in the Plan of the Participating
Employer; and
(b) the lump sum value of the anticipated costs,
estimated by the Trustee, which
will be necessary to administer the Plan and to pay the expenses
of making all benefit payments
(excluding the amounts of such benefit payments) with respect to
all Plan benefits which are or
which are expected to become payable to Participants, Terminated
Eligible Employees,
Beneficiaries, surviving spouses, or other eligible survivors, as
the result of the participation in the
Retirement Program of the withdrawing Participating Employer.
13.5. Effect of Withdrawal on Participants and
Beneficiaries. In the event that a
Participating Employer shall withdraw from participation in the
Plan as provided in Section 14.3:
(a) any rights of Participants no longer employed by
such Participating Employer
as of such Participating Employer's Withdrawal Date (excluding
any Participant who transfers to
the employ of a new employer pursuant to the terms of the event
described in Section 13.3 above
which triggers such withdrawal), former Participants and their
Beneficiaries, surviving spouses
and other eligible survivors under the Plan shall be unaffected
by such Participating Employer's
withdrawal to the maximum extent permitted by law;
(b) with respect to each Participant who is and active
Employee of the
Participating Employer as of such Participating Employer's
Withdrawal Date or who transfers to
the employ of a new employer pursuant to the terms of the event
described in Section 13.3 above
which triggers such Participating Employer's withdrawal:
(i) no further service for purposes of vesting or
benefit accrual shall be
earned by the Participant as an Employee of such Participating
Employer; and
(ii) notwithstanding the provisions of Section
7.1, each such Participant in
the Plan shall have a nonforfeitable right to his or her Accrued
Pension under the Plan, to the
extent that such benefits have accrued as of the Withdrawal Date;
and
(c) Benefits to be provided under the Plan to a
Participant, Terminated Eligible
Employee, Pensioner, Beneficiary, surviving spouse or eligible
survivor shall be distributed at the
time and in the form set forth in Articles 5 through 10. For
this purpose, an individual shall be
considered a Terminated Eligible Employee as of his or her
Participating Employer's Withdrawal
Date.
13.6. Effect of Plan Termination. In the event that the
Plan terminates as provided in
Section 13.1, no further Credited Service or Accrued Pension
shall be earned by affected Eligible
Employees, Participants, Terminated Eligible Employees or
Pensioners with respect to
employment after the date of termination of the Plan. The
benefits of Participants as of the date
of termination or partial termination shall be paid in accordance
with the following:
The rights of affected Participants, Terminated Eligible
Employees and Pensioners whose
pensions have not yet commenced, to the extent funded as of the
date of termination or partial
termination, shall become nonforfeitable and the available assets
of the Plan shall be allocated
among the Participants, Terminated Eligible Employees and
Pensioners in the order of precedence
set forth in section 4044(a) of ERISA. Any residual assets of
the Plan remaining after distribution
in accordance with the foregoing provisions of this paragraph
shall be distributed to the respective
Participating Employers, provided that
(a) all liabilities of the Plan to Participants,
Terminated Eligible Employees and
Pensioners have been satisfied, and
(b) the distribution does not contravene any
provisions of law.
13.7. Failure to Maintain Qualified Status. If the
participation of any Participating
Employer in the Plan shall adversely affect the status of the
Plan as a "qualified" plan under the
applicable provisions of the Code, such Participating Employer
shall thereby be deemed to have
withdrawn from the Plan and the Trustee shall forthwith, upon
receipt of notice to such effect
from such Employer or otherwise, segregate the funds then
standing to the credit of Eligible
Employees of such Participating Employer for their benefit. The
funds thus segregated shall be
held by the Trustee as a separate fund in a savings account, or
otherwise as the Trustee may
determine, to be dealt with and distributed in accordance with
the written directions or
instructions of such former Participating Employer. The Trustee
shall be authorized to take such
actions with respect to such Employer and the funds held for the
account of its Employees as it
shall deem necessary or desirable to maintain the Plan as a
"qualified" plan under the Code.
13.8. Merger, Consolidation or Transfer of Plan Assets.
Any provision contained in this
Article to the contrary notwithstanding, following a
Participating Employer's withdrawal under
the Plan in accordance with this Article, no merger or
consolidation of the Plan with, or transfer
of any assets or liabilities of the Plan to, any plan outside of
the Plan shall be effected unless the
Association acting through its Board of Trustees shall
specifically approve such merger,
consolidation or transfer. In the event of such approval, and
the subsequent merger or
consolidation of the Plan with, or transfer of assets or
liabilities of the Plan to, any other plan
outside of the Retirement Program, a Participant who was an
actively employed Participant of the
transferor plan immediately prior to the effective date of such
merger, consolidation or transfer,
and who is included under such other plan, shall be entitled to a
benefit under such other plan (if it
were terminated immediately after such merger, consolidation or
transfer) which is not less than
the benefit which such actively employed Participant would have
been entitled to receive under
the transferor plan if the transferor plan had been terminated
immediately prior to such merger,
consolidation or transfer.
13.9. Merger of Abington National Bank Pension Plan into
the Plan. Effective July 1,
1989, the Abington National Bank Pension Trust ("Abington Plan")
is merged into the Plan,
conditional upon the receipt by the Association of a favorable
determination from the Internal
Revenue Service that the merger of the Abington Plan into the
Plan will not adversely affect the
qualification of the Retirement Program. Upon receipt of such
determination, the assets held in
the trust under the Abington Plan shall be transferred to the
Trust Fund. Participants who were
former participants in the Abington Plan shall continue to vest
in the amount of the benefits so
transferred to the Plan in accordance with the vesting schedule
set out in Section 7.1 with respect
to any service with any Participating Employer after June 30,
1989. In accordance with Sections
3.12 and 3.13, all periods of service prior to June 30, 1989
during which such Employee was an
employee of a Participating Employer or a non-Participating
Employer which merged into a
Participating Employer shall be counted for purposes of
eligibility to participate in the Plan and
Vesting Service.
13.10. Merger of Workingmens Plan. Effective June 1, 1992,
the Workingmens
Cooperative Bank Pension Plan and Trust, as in effect on May 31,
1992, (the "Workingmens
Plan") is merged into the Plan, conditional upon approval of such
merger by the Federal Deposit
Insurance Corporation. Upon receipt of such approval, the assets
held in the trust under the
Workingmens Plan shall be transferred to the Trust Fund.
Individuals who were participants in
the Workingmens Plan and had an accrued benefit thereunder on May
31, 1992 (the
"Workingmens Accrued Benefit") shall become Participants in the
Plan ("Workingmens
Participants"); provided, however, that no Workingmens
Participant shall accrue additional
service or benefit for any purpose under the Plan after May 31,
1992.
The amount of a Workingmens Participant's benefit under the
Plan shall be his or her
Workingmens Accrued Benefit; provided, however, that such benefit
shall not include any death
benefit, other than the qualified pre-retirement spousal death
benefit. Each Workingmens
Participant shall be fully vested in his or her Workingmens
Accrued Benefit. Each Workingmens
Participant shall continue to have the same forms of
distributions with respect to his or her
Workingmens Accrued Benefit as were provided for under the terms
of the Workingmens Plan.
In all other respects, a Workingmens Participant's rights with
respect to his or her Workingmens
Accrued Benefit will be determined under the terms of the Plan as
from time to time in effect on
or after June 1, 1992.
ARTICLE Section XIV. SPECIAL TOP HEAVY PROVISIONS
14.1. Provisions to apply. The provisions of this Article
shall apply for any top-heavy
plan year notwithstanding anything to the contrary in the Plan.
14.2. Minimum Benefits. The benefit payable at any time to
each Participant who is not a
key employee, determined as of the end of such Plan Year (and as
of the end of any subsequent
Plan Year) and when expressed as an annual benefit payable as a
single life annuity commencing
at the Participant's Normal Retirement Date, shall not be less
than the lesser of
(a) the product of (1) two percent of the
Participant's high five year compensation
and (2) the number of his or her years of service for minimum
benefit purposes (excluding any
such year that was not a top heavy plan year), and
(b) twenty percent of his or her high five year
compensation;
provided, however, if the Participant is also covered by a top
heavy defined contribution plan of a
Participating Employer or its Affiliate, the Association may use
any one of the four safe harbor
rules set forth in Regulation Sec1.416-1(M-12) for determining the
minimum benefits, if any,
required under the Plan.
If payment of the Participant's benefit under the Plan is
suspended in circumstances in
which, but for section 411(a)(3)(B) of the Code and section
203(a)(3)(B) of ERISA, such
suspension would constitute a forfeiture of benefits, the minimum
benefit described above, to the
extent affected by such suspension, shall be actuarially
increased (using the assumptions used in
determining an Actuarial Equivalent benefit) to reflect such
period of suspension.
14.3. Special Vesting Schedule. Each individual who is a
Participant at any time during a
top-heavy Plan Year shall be vested in not less than the
percentage of his or her Accrued Pension
as set forth in the following schedule (or the Plan's general
vesting schedule if faster), based on his
or her completed years of Vesting Service:
Years of Vesting Nonforfeitable
Service Percentage
Less than 2 0
2 but less than 3 20
3 but less than 4 40
4 but less than 5 60
5 but less than 6 80
6 or more 100
Further, no decrease in a Participant's nonforfeitable percentage
may occur in the event the Plan's
status as top heavy changes for any Plan Year. If the vesting
schedule under the Plan shifts in or
out of the above schedule for any Plan Year because of the Plan's
top heavy status, such shift shall
be considered to be an amendment to the vesting schedule for all
purposes of the Plan.
14.4. Adjustment to 415 Limitations. For purposes of the
Code section 415 limits, the
definitions of "defined contribution plan fraction" and "defined
benefit plan fraction" contained
therein shall be modified, for any Plan Year which is a top-heavy
Plan Year, by substituting "1.0"
for "1.25" in Code sections 415(e)(2)(B) and 415(e)(3)(B).
14.5. Definitions. For purposes of this Article:
(a) "High Five Year Compensation" means the average of
the Participant's annual
Compensation for those five consecutive years of service for
minimum benefit purposes (or, if the
Participant has less than sixty such months, then for his or her
actual number of consecutive years
of service for minimum benefit purposes) for which his or her
aggregate Compensation is greatest.
Any Plan Year which is not a year of service for minimum benefit
purposes shall be ignored in
determining whether the Participant's years of service for
minimum benefit purposes are
consecutive.
(b) "Key employee" means a key employee described in
Code section 416(i)(1),
and "non-key employee" means any employee who is not a key
employee (including employees
who are former key employees).
(c) "Top heavy plan year" means a Plan Year if the sum
of the present values of
the total Accrued Pension of all key employees under the Plan and
under each other defined
benefit plan (as of the applicable determination date of each
such plan) which is aggregated with
this Plan, plus the sum of the account balances of all key
employees under each defined
contribution plan (as of the applicable determination date of
each such plan) which is aggregated
with this Plan, exceeds sixty percent of the sum of such amounts
for all Employees or former
Employees (other than former key employees but including
beneficiaries of deceased former
Employees) under such plans.
The following rules shall apply for purposes of making the
necessary determinations under
the paragraph (c):
(i) All determinations hereunder will be computed
in accordance with
section 416 of the Code and the regulations promulgated
thereunder, which are specifically
incorporated herein by reference.
(ii) The term "determination date" means, with
respect to the initial plan
year of a plan, the last day of such plan year and, with respect
to any other plan year of a plan, the
last day of the preceding plan year of such plan. The term
"applicable determination date" means,
with respect to the Plan, the determination date for the Plan
Year of reference and, with respect to
any other plan, the determination date for any plan year of such
plan which falls within the same
calendar year as the applicable determination date of the Plan.
Accrued benefits or account
balances under a plan will be determined as of the most recent
valuation date of the plan;
provided, however, that in the case of a defined benefit plan
such valuation date must be the same
date as is employed for minimum funding purposes, and in the case
of a defined contribution plan
the value so determined will be adjusted for contributions made
after the valuation date to the
extent required by applicable Treasury regulations.
(iii) There shall be aggregated with this Plan
(A) any other plan of an
Employer under which at least one key employee participates and
which is able to satisfy the
requirements of sections 401(a)(4) and 410 of the Code by reason,
at least in part, of the
existence of this Plan, and (B) if at least one key employee is a
Participant hereunder, any other
plan of an Employer (B-1) in which a key employee participates or
(B-2) which enables another
such plan (including, but not limited to, the Plan) to satisfy
the requirements of sections 401(a)(4)
and 410 of the Code. Any plan of an Employer not required to be
aggregated with the Plan may
nevertheless, at the discretion of the Administrator, be
aggregated with the Plan if the benefits and
coverage of all aggregated plans would continue to satisfy the
requirements of sections 401(a)(4)
and 410 of the Code.
(iv) The determination of the present value of
accrued benefits under a
defined benefit plan shall be made on the basis of the mortality
assumptions and interest rate used
in determining an Actuarial Equivalent benefit.
(d) "Year of service for minimum benefit purposes"
means, with respect to any
Participant, the aggregate of all of his or her Periods of
Service except:
(1) any such Period of Service which began before
January 1, 1984, and
(2) any such Period of Service after the last day
of the most recent Plan
Year which was a top heavy plan year.
ARTICLE Section XV. ADOPTION AGREEMENT
15.1. Adoption Agreement. The Adoption Agreement shall be
that separate document
through which the Participating Employer adopts the Plan and
elects among the various options
offered under the Plan, and which, when executed by the
Participating Employer and the Trustee,
becomes an integral part of the Plan. Any Participating Employer
may change any election on the
Adoption Agreement currently in effect by filing with the Trustee
a duly executed Adoption
Agreement containing the change in election, provided that no
change in election shall
retroactively reduce the benefit or vested percentage to which
any Participant, former Participant
or Beneficiary is entitled under the Plan.
ARTICLE Section XVI. RETIREE MEDICAL ACCOUNT
16.1. In General. The Association will establish (or cause to
be established), as of January 1,
1993, an account from which medical benefits may be paid with
respect to eligible retired
Participants pursuant to Section 401(h) of the Code. The
account, hereinafter referred to as the
'401(h) Account', will be a separate account for recordkeeping
purposes. The 401(h) Account
need not be segregated from the other assets of the Plan for
investment purposes; however, the
Association may segregate all or part of the 401(h) Account in
its discretion, and to the extent the
401(h) Account is segregated, it may be held in a separate trust
established under this Plan and
qualifying under Code section 501(a). It shall be impossible, at
any time prior to the satisfaction
of all liabilities under the Plan to provide the medical benefits
described in Section 16.2 below, for
any part of the corpus or income of the 401(h) Account to be used
for, or diverted to any purpose
other than the providing of such benefits. However, upon the
satisfaction of all liabilities under
the Plan to provide such benefits, any amount remaining in the
401(h) Account will be returned to
the Participating Employers, in such proportions as is determined
by the Association.
16.2. Benefits from the 401(h) Account. Benefits for medical
expenses (including without
limitation premiums for sickness, accident or hospitalization
insurance or similar coverage) will be
paid in such amounts, at such time or times, in such manner, and
to such payees as is provided
under the Participating Employers' retiree medical programs as in
effect from time to time. All
assets of the 401(h) Account will be available to pay benefits
with respect to any eligible retired
Participant, and no separate fund or subaccount need be
segregated for any such Participant.
16.3. Contributions to the 401(h) Account. Each Participating
Employer may make direct
contributions to the 401(h) Account in such amounts and at such
time or times as it determines in
its discretion. Such contributions must be reasonable and
ascertainable, and are subject to the
general conditions relating to Plan contributions under Article
12. However, in no event shall the
aggregate amount of such contributions, when added to any actual
contributions for life insurance
protection under the Plan, exceed 25 percent of the total actual
contributions to the Plan under
this Section and Section 11.1 (other than contributions to fund
past service credits) after the date
on which the 401(h) Account is established. Any forfeitures with
respect to medical benefits
under the 401(h) Account must be applied as soon as possible to
reduce Participating Employer
contributions to fund such benefits.
16.4. Eligible retired Participants. For purposes of this
Article, an "eligible retired Participant" is
a Participant
(a) with respect to whom a Termination Date has
occurred; and
(b) who is eligible for retiree medical benefits
under the Participating
Employers' retiree medical programs as in effect from time to
time.
IN WITNESS WHEREOF, The Cooperative Banks Employees
Retirement Association
has caused this instrument to be executed in its name and on its
behalf by its officer thereunto duly
authorized at Boston, Massachusetts, on this ______ day of
_____________, 1994.
COOPERATIVE BANKS EMPLOYEES
RETIREMENT ASSOCIATION
By:
Title:
SCHEDULE A
Plan B Participants as of 12/31/88
Name Soc. Sec. Num. Bank Name Bank Num.
Date of Birth Annual Benefit
Howard Grimes ###-##-#### Athol-Clinton 20 02/08/24 $
270.00
Margaret Harris ###-##-#### Athol-Clinton 20 10/09/25
115.00
Therese Sullivan ###-##-#### Avon Coop 35 12/08/25
252.36
Monique Ducharme ###-##-#### City Coop 115 01/20/27
1,077.00
James Perkins ###-##-#### Equitable Coop 165 10/26/30
366.00
Bertha Mulley
(Wansley) ###-##-#### George Peabody 220 05/02/34 10.00
Rose Marks ###-##-#### Hyde Park Coop 280 05/15/11
142.00
Marie Yagoda ###-##-#### Coolidge Corner 130 11/14/40
40.00
Kenneth Clark ###-##-#### Greenfield 235
10/21/31 13.00
Thomas Lee ###-##-#### Greenfield 235 07/03/27 57.00
FIRST AMENDMENT
of the Defined Benefit Pension Plan (Plan C)
of the Cooperative Banks Employees Retirement Program
(1994 Restatement)
Pursuant to the provisions of Section 13.1 of the aforesaid
Plan, Cooperative Banks
Employees Retirement Association hereby amends said Plan as
follows:
(1) Section 2.1 is amended by inserting at the end thereof
the following additional
paragraph:
"Unless otherwise provided under the Plan, each section
401(a)(17) employee's
Accrued Pension under the Plan will be the greater of the Accrued
Pension determined for the
employee under (a) or (b) below:
(a) the employee's Accrued Pension determined
with respect to the benefit
formula applicable for the Plan Year beginning on or after
January 1, 1994, as applied to the
employee's total years of service taken into account under the
Plan for the purposes of benefit
accruals, or
(b) the sum of:
(1) the employee's Accrued Pension as of the
last day of the last
Plan Year beginning prior to January 1, 1994, frozen in
accordance with section 1.401(a)(4)-13 of
the regulations, and
(2) the employee's Accrued Pension
determined under the benefit
formula applicable for the plan year beginning on or after
January 1, 1994, as applied to the
employee's years of service credited to the employee for Plan
Years beginning on or after January
1, 1994, for purposes of benefit accruals.
A section 401(a)(17) employee means an
Employee whose current
Accrued Pension as of a date on or after the first day of the
first Plan Year beginning on or after
January 1, 1994, is based on Compensation for a year beginning
prior to the first day of the first
Plan Year beginning on or after January 1, 1994, that exceeded
$150,000."
(2) Paragraph (d) of Section 2.11 is amended to read as
follows:
"(d) For each Plan Year commencing before January 1,
1994, a Participant's
Compensation will be limited for all purposes under the Plan to
$200,000 (or such larger amount
as the Secretary of the Treasury or his delegate may determine
for such Plan Year under section
401(a)(17) of the Code). For each Plan Year commencing after
December 31, 1993, a
Participant's Compensation will be limited for all purposes under
the Plan to $150,000 (or such
larger amount as the Secretary of the Treasury or his delegate
may determine for such Plan Year
under section 401(a)(17) of the Code). In determining
compensation for purposes of this
limitation, the family aggregation rules of section 414(q)(6) of
the Code shall apply, except that in
applying such rules, the term 'family' shall include only the
spouse of the Participant or any lineal
descendants who have not attained age 19 before the close of the
calendar year."
(3) The final paragraph of Section 3.3 relating to Credited
Service is hereby amended
in its entirety to read as follows:
"On his or her Reemployment Commencement Date, a former
Participant who
received a benefit hereunder shall have the right to repay the
entire amount distributed. However,
such repayment shall be made before the earlier of (i) the
fifth anniversary of the date the
Participant is reemployed or (ii) the Participant's annuity
starting date after reemployment. The
amount of the repayment shall bear interest at the rate
determined under Code section
411(c)(2)(C). Upon the timely repayment of a distribution
permitted under this Section, a
Participant's prior Years of Credited Service, attributable to
service prior to the distribution, shall
be reinstated. In the event that a Participant who received a
distribution is reemployed and does
not repay amounts distributed, the Participant's Accrued Pension
under the Plan shall be adjusted
to reflect the fact that the Participant's prior Years of
Credited Service, attributable to his or her
service prior to the distribution, were not restored. For
purposes of Section 6.1, a Participating
Employer may elect, in its Adoption Agreement, either to limit
the number of years of Credited
Service used in its pension formula's years-of-Credited Service
multiplier to 25, or to provide that
the number of such years shall be unlimited, with no maximum
limit placed upon the number of
such years used in such multiplier."
(4) A new Section 3.14 is hereby added to read as follows:
"3.14 Application of Service Definitions. All
provisions of the Plan relating to the
crediting of service shall be construed and applied consistent
with the requirements of section
413(c) of the Code."
(5) Section 9.6 is amended to read as follows:
"9.12 Direct Rollovers. Notwithstanding any provision
of the Plan to the contrary
that may otherwise limit a distributee's election under this
Section, for distributions made on or
after January 1, 1993, a distributee may elect, at the time and
in the manner prescribed by the
Association, to have any portion of an eligible rollover
distribution paid directly to an eligible
retirement plan specified by the distributee in a direct
rollover. For purposes of this Section, the
following definitions shall apply:
(i) An 'eligible rollover distribution' is any
distribution of all or any portion
of the distributee's benefit, except that an eligible rollover
distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives of the
distributee and the distributee's Beneficiary, or for a specified
period of ten years or more, or any
distribution to the extent such distribution is required under
Code Section 401(a)(9).
(ii) With respect to a distributee other than the
Participant's surviving
spouse, an 'eligible retirement plan' is an individual retirement
account described in Code Section
408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan
described in Code Section 403(a), or a qualified trust described
in Code Section 401(a). With
respect to a distributee who is a Participant's surviving spouse,
an eligible retirement plan is an
individual retirement account or an individual retirement
annuity.
(iii) A 'distributee' includes an Employee or
former Employee. In addition,
the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's
spouse or former spouse, who is an alternate payee under a
qualified domestic relations order, are
distributees with regard to the interest of the spouse or former
spouse.
(iv) A 'direct rollover' is a payment by the Plan
to the eligible retirement
plan specified by the distributee."
(6) Section 12.2 is hereby amended in its entirety to read
as follows:
"12.2 Expenses of Administration. Subject to the
applicable requirements of
ERISA and, to the extent not preempted thereby, Section 30 of
Chapter 170 of the Massachusetts
General Laws, as amended, expenses for the administration of the
Association ("Association
expenses"), expenses for the administration of the Plan ("Plan
expenses"), and expenses of the
Trustee appointed to administer the Trust Fund (including
reasonable legal fees and the
compensation of the Trustee) ("Trust expenses") will be paid in
such manner as the Association in
its sole discretion shall determine, which may include payment
from the Trust fund. Plan expenses
may include, but shall not be limited to, amounts due from a
withdrawing Participating Employer
under Section 13.4 and recordkeeping expenses charged by the
Association for recordkeeping
services provided to the Plan. The Association in its sole
discretion shall determine what
constitutes Association expenses, Plan expenses and Trust
expenses."
IN WITNESS WHEREOF, the Cooperative Banks Employees
Retirement Association
has caused this instrument to be executed in its name and on its
behalf by its officer thereunto duly
authorized at Boston, Massachusetts, on this ____ day of
__________, 1995.
COOPERATIVE BANKS EMPLOYEES
RETIREMENT ASSOCIATION
By: _____________________________
Title: ____________________________
Exhibit 8
CUSTODIAN AGREEMENT
AGREEMENT made as of this twentieth day of December,
1996,
between The Bank Investment Fund - Fund One, a corporation
having
its principal place of business at Boston, MA (hereinafter
called the "Company") and STATE STREET BANK AND TRUST COMPANY,
a
Massachusetts banking corporation, having its principal place
of
business at Boston, Massachusetts (hereinafter called "State
Street").
WITNESSETH THAT:
In consideration of the mutual agreements herein contained
the Company and State Street hereby agree as follows:
1. APPOINTMENT
1.1 The Company hereby appoints State Street its
Custodian for the safekeeping of securities and agrees that
State Street shall hold all securities received from the
Company at State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts 02110 except as otherwise
provided in Section 3.1.
2. DELIVERY OF SECURITIES
2.1 All securities delivered to State Street (other
than bearer securities) shall be properly endorsed and in
proper form for transfer.
3. DUTIES
3.1 State Street shall:
(a) Receive delivery of certificates for
safekeeping at its premises, or upon receipt of proper
instructions from the Company and a representation that no
rule or regulation applicable to the Company prohibits the
safekeeping of the Company's securities in a foreign
depository or in a book-entry system, at a domestic or
foreign subcustodian or in a domestic or foreign book-entry
system for the central handling of securities
("Subcustodian").
(b) Maintain records of all receipts, deliveries
and locations of securities, together with a current
inventory thereof.
(c) Upon receipt of proper instructions, and
insofar as cash is available for the purpose, pay for and
receive all securities purchased for the account of the
Company and collect all dividends, interest or other
distributions. In receiving or disbursing funds in
connection with foreign securities transactions, it may be
necessary for State Street to convert cash into U.S. dollars
or into non-U.S. currency. State Street shall incur no
liability for loss or expense as a result of such conversion,
including but not limited to losses arising from fluctuations
in exchange rates.
(d) Upon receipt of proper instructions, exchange
securities held by it for the account of the Company for
other securities or cash or both, and to expend cash, in
connection with any merger, consolidation, reorganization,
recapitalization, split-up of shares, changes of par value or
conversion or in connection with the exercise of subscription
or purchase rights, or otherwise.
(e) Upon receipt of proper instructions make
delivery of securities which have been sold for the account of
the Company, or which have been called, redeemed, retired, or
otherwise become payable, upon payment therefor. All such
payments are to be made in cash, by certified check or
treasurer's or cashier's check, by wire transfer or in the
case of delivery through a securities depository, by credit
by the securities depository, all in accordance with street
custom or the rules and regulations of the securities
depository. In acting upon instructions to deliver securities
against payment, State Street is authorized, in accordance
with street delivery practices in the place where the
transaction is settled, to deliver such securities against a
receipt, before receiving payment. All collection and receipt
of funds or securities and all payment and delivery of funds
or securities under this Agreement shall be made by State
Street, at Company's risk, including without limitation the
risk associated with (i) such street delivery practices of
delivering securities against a receipt, before receiving
payment, or (ii) the restriction by foreign governmental
authorities on the movement of funds or securities. Failure
of the counter party to remit counter value shall be at the
sole risk of the Company.
(f) Promptly collect all income and other payments
with respect to the securities and credit such income and
other payments to the Company.
(g) Promptly execute all proxies in favor of
management unless otherwise directed and mail said proxies to
the address specified.
(h) Promptly transmit to the Company written
information (including, without limitation, pendency of call
and maturities of securities and expirations of rights in
connection therewith) received by State Street from
Subcustodians or from issuers of the securities being held for
the Company. With respect to tender or exchange offers, State
Street shall transmit promptly to the Company written
information received by State Street from Subcustodians or
from issuers of the securities whose tender or exchange is
sought or from the party (or his agents) making the tender or
exchange offer. State Street shall not be liable for any
untimely exercise of any tender, exchange or other right or
power in connection with securities or other property of the
Company at any time held by it unless (i) State Street or
Subcustodians are in actual possession of such securities or
property and (ii) State Street received proper instructions
with regard to the exercise of any such right or power, and
both (i) and (ii) occur at least three business days prior to
the date on which such right or power is to be exercised.
4. BANK ACCOUNT
4.1 State Street shall:
(a) Retain cash of the Company in the banking
department of State Street or an agent bank in a separate
account or accounts in the name of State Street for the
account of the Company, subject only to draft or order by
State Street acting pursuant to the terms of this Agreement.
(b) Collect, receive and deposit in the bank
account maintained pursuant to Section 4.1(a) all income and
other payments with respect to the securities held
hereunder.
(c) Render reports as agreed upon from time to time
between both parties.
4.2 State Street reserves the right to reverse
erroneous entries to the Company's account and to charge the
account for the amount of securities for which payment has
not been made and for any other amount due from the Company,
by way of indemnity, reimbursement of expenses, compensation
or otherwise, notwithstanding the provisions of Section 15.4.
5. INSTRUCTIONS
5.1 State Street shall receive a list of one or more
persons which the Board of Directors of the Company shall from
time to time authorize to give instructions. Different
persons may be authorized to give instructions for different
purposes. State Street is authorized to rely on any
instructions believed by it in good faith to have been given
or sent by an authorized person.
5.2 A certified copy of a resolution or action of the
Board of Directors of the Company may be received and
accepted by State Street as conclusive evidence of the
authority of any such person or persons, including
investment managers, to act and may be considered as in full
force and effect until receipt of written notice to the
contrary.
5.3 Instructions may be general or specific in terms,
and unless specified to the contrary, State Street is
authorized to act upon such instructions whether given
orally, by telephone, telex, facsimile or other means of
electronic transmission; provided that the Company shall not
send and State Street shall not accept instructions delivered
via electronic mail through the Internet. State Street may
electronically record any instructions given by telephone,
and any other telephone discussions with respect to the
securities, the account and performance of this Agreement.
5.4 State Street may consult counsel satisfactory to
it, including house counsel, and the opinion of such counsel
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion
of such counsel.
6. INDEMNITY
6.1 State Street shall not be responsible for the title,
validity or genuineness of any security received by it or
delivered by it pursuant to this Agreement and shall be kept
indemnified by the Company and be without liability for any
action taken or thing done by it in carrying out the terms and
provisions of this Agreement, including reasonable attorney's
fees, provided that State Street has acted in good faith and
has not been guilty of negligence. In no event shall State
Street be liable for indirect, special or consequential
damages even if advised of the possibility of such damages.
6.2 State Street shall have no more or less
responsibility or liability to the Company on account of any
action or omission of any Subcustodian employed by State
Street than any such subcustodian has to State Street, except
(i) to the extent attributable to a failure by State Street
in exercising due care in the selection or retention of the
Subcustodian, or (ii) to the extent that such act or omission
of the Subcustodian was caused by State Street's own
negligence or bad faith.
6.3 Except as otherwise agreed to in writing, any
securities or other property of the Company at any time in
the possession of State Street may at all times be held and
treated as collateral for the payment of securities for
which payment has not been made, or for the purchase and
sale of foreign exchange or of contracts for foreign
exchange, notwithstanding the provisions of Section 15.4.
7. COMPENSATION
7.1 The Company shall pay to State Street the
compensation set forth in Exhibit A hereto until a different
compensation shall be agreed upon in writing between the
parties and any other includable expenses incurred in
connection
herewith.
8. TEST KEY
8.1 If State Street has issued to the Company a test
key security system in order that State Street may verify
that certain transmission of information has been originated
by the Company, the Company hereby agrees:
(a) To indemnify State Street against and to hold
State street harmless from all liability, claims, loss and
demands whatsoever, including reasonable attorney's fees,
howsoever arising or incurred because of or in connection
with State Street's relying on receipt of a test key to
authenticate previous transmission received by State Street
apparently from the Company.
(b) Upon request, to cause the Company's internal
auditors to verify to State Street from time to time that use
of and access to the test key system is restricted to
authorized employees.
9. DATA ACCESS
9.1 If State Street has issued to the Company a data
access security system in order that the Company may have
access to certain data and functions, the Company hereby
agrees:
(a) To access data and functions only in
accordance with the Data Access Operating Procedures annexed
hereto as Exhibit B and to regard and preserve as
confidential all information obtained with respect to the
issuance to the Company of a data access security system.
(b) To access data and functions solely for its
own internal use and benefit.
(c) To discontinue use of the data access security
system at any time for security reasons upon notice from
State Street.
(d) Upon request, to cause the Company's internal
auditors to verify to State Street that data access is
restricted to authorized employees.
(e) To indemnify State Street against and to hold
State Street harmless from all liability, claims, loss and
demands whatsoever, including reasonable attorney's fees,
howsoever arising or incurred because of or in connection
with the access of data and functions by the Company and the
use by the Company or any of its employees, whether
authorized or unauthorized, of the data access security
system.
10. SECURITY
10.1 Except as provided in Sections 4.2 and 6.3, State
Street may not pledge, assign, hypothecate or otherwise
encumber securities or cash of the Company without the prior
written consent of the Company.
11. TAXES
11.1 The Company agrees that it shall assume any and all
obligations imposed now or hereafter by any applicable tax
law with respect to any sale, transfer, delivery or receipt
of securities under this Agreement, and it further agrees to
indemnify and hold State Street harmless from and against any
taxes, additions for late payment, interest, penalties and
other expenses, that may be assessed against State Street on
any such sales, transfer, deliveries or receipt or other
activities under this Agreement.
11.2 The Company undertakes to instruct State Street in
writing with respect to State Street's responsibility for
withholding and other taxes, assessments or other governmental
charges, certifications and governmental reporting in
connection with its acting as Custodian under this Agreement.
The Company agrees to indemnify and hold State Street harmless
from any liability on account of taxes, assessments or other
governmental charges, including without limitation the
withholding or deduction or the failure to withhold or deduct
same, and any liability for failure to obtain proper
certifications or to properly report to governmental
authorities, to which State Street may be or become subject in
connection with or which arises out of this Agreement,
including costs and expenses (including reasonable legal
fees), interest and penalties.
12. COMPLIANCE WITH LEGAL PROCESS AND JUDICIAL ORDERS
12.1 If any securities subject to this Agreement are at
any time attached or levied upon, or in case the transfer or
delivery of any such securities shall be stayed or enjoined,
or in the case of any other legal process or judicial order
affecting such securities, State Street is authorized to
comply with any such order in any matter as State Street or
its legal counsel reasonably deems appropriate. If State
Street complies with any process, order, writ, judgment or
decree relating to the securities subject to this Agreement,
then State Street shall not be liable to the Company or to
any other person or entity even if such order or process is
subsequently modified, vacated or otherwise determined to
have been without legal force or effect.
13. FORCE MAJEURE
13.1 State Street shall not be responsible for delays or
failures in performance resulting from acts beyond its
control. Such acts shall include but not be limited to acts
of God, strikes, lockouts, riots, acts of war or terrorism,
epidemics, nationalization, expropriation, currency
restrictions, governmental regulations superimposed after
the fact, fire, communication line failures, power failures,
earthquakes or other disasters.
14. REPRESENTATIONS
14.1 The Company represents and warrants that (i) it is
duly incorporated or organized and is validly existing in
good standing in its jurisdiction of incorporation or
organization, (ii) the execution, delivery and performance
of this Agreement and all documents and instruments to be
delivered hereunder or thereunder have been duly authorized,
(iii) the person executing this Agreement on its behalf has
been duly authorized to act on its behalf, (iv) this
Agreement constitutes its legal, valid, binding and
enforceable agreement and (v) its entry into this Agreement
will not violate any agreement, law, rule or regulation by
which it is bound or by which any of its assets are affected.
15. MISCELLANEOUS
15.1 These provisions may not be altered or changed in
any manner except by written agreement between the Company
and State Street.
15.2 This Agreement may not be assigned without the
prior written consent of the other party.
15.3 This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of
Massachusetts.
15.4 Either party may terminate this Agreement by notice
in writing delivered or mailed to the other party hereto not
less than thirty (30) days prior to the date on which such
termination shall take place and thereupon this Agreement
shall terminate in accordance with such notice and all
property then held shall be delivered to the Company or upon
its order to its successor. The provisions of Section 4.2
and Articles 6, 8, 9, 11 and 17 shall survive the termination
of this Agreement.
15.5 Any and all notices, requests, demands or other
communications required or permitted to be given hereunder
shall be deemed to have been duly given when personally
delivered or mailed by first class certified or registered
mail, return receipt requested, addressed to the parties at
the addresses set forth below:
(a) If to State Street, to:
State Street Bank and Trust Company
Insurance Services Division
P.O. Box 351
Boston, Massachusetts 02101
Attention: Mark J. Bowler
(b) If to the Company, to:
The Bank Investment Fund - Fund One
75 Park Plaza
Boston, MA 02116
Attention: Ms. Susan Ellis
15.6 All computer programs, software specifications,
formats, manuals and like materials written and used in
connection with this Agreement are made available "as is"
without warranty.
15.7 Any waiver of any rights hereunder, of any failure
to perform hereunder, or of any breach hereof shall not
constitute or be deemed a waiver of any other right or
failure to perform hereunder or breach hereof, whether of a
similar or dissimilar nature.
15.8 This Agreement contains the entire agreement
between the parties with respect to the subject matter
hereof, and no waiver, alteration or modification of any of
the provisions hereof or rights to act hereunder shall be
binding unless in writing.
16. INVESTMENT MANAGER
16.1 The Company at any time may appoint one or more
investment managers to manage the investment of all or any
portion of the securities. In such event, the Company shall
notify State Street in writing of the appointment of such
investment manager and of the portion of the securities over
which the investment manager may exercise its authority. The
Company similarly shall notify State Street of the
termination of the appointment of any investment manager.
16.2 State Street, in performing its duties under this
Agreement, shall be entitled to rely on proper instructions
from an investment manager to the same extent as State Street
would be entitled to accept such proper instructions from the
Company if no investment manager had been appointed.
17. PRICING
17.1 If State Street employs one or more nationally
recognized pricing services to determine the market value of
widely traded securities which may be owned by the Company or
uses other services, publications and procedures to establish
the value of the securities, including but not limited to the
assignment of face value to some money market instruments and
to the use of matrix pricing for other obligations, the
Company acknowledges and agrees that these values may not
equal actual market value and indemnifies and holds State
Street harmless from any loss arising from the value
ascribed to the securities.
18. REPRODUCTION OF DOCUMENTS
18.1 This Agreement and all documents relating thereto,
including, without limitation, confirmations and other
information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm,
optical disk, micro-card, miniature photographic or other
similar process. The parties agree that any such reproduction
shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction
was made by a party in the regular course of business, and
that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed in its name on its behalf by a
duly authorized officer as of the day and year first above
written.
State Street Bank and Trust Company
By:
Mark J. Bowler
Title: Senior Vice President
The Bank Investment Fund - Fund One,
By:
Title:
EXHIBIT B
PROTECTION OF EQUIPMENT AND INFORMATION
The databases, computer programs screen formats, screen
designs, report formats, interactive design techniques, and
other information furnished to Company by State Street as part
of the services constitute copyrighted trade secret or
proprietary information of substantial value to State Street.
Such databases, programs and other information are
collectively referred to below as "Proprietary Information".
Company agrees that it shall treat all Proprietary Information
as proprietary to State Street and that it shall not divulge
any Proprietary Information to any person or organization
except as is expressly permitted hereunder. Without limiting
the foregoing Company agrees for itself and its employees and
agents:
(1) to use such programs and databases (i) solely on
State Street's computers or designated Company devices, (ii)
solely from devices at Company locations designations by the
Company and (iii) solely in accordance with State Street's
applicable user documentation;
(2) to refrain from copying or duplicating in any way
(other than in the normal course of performing processing on
State Street's computers) any part of any Proprietary
Information;
(3) to refrain from obtaining unauthorized access to
any programs, data or other information to which Company is
not entitled, and if such access is accidentally obtained, to
respect and safeguard the same as Proprietary Information;
(4) to refrain from causing or allowing information
transmitted from State Street's computer to the Company's
terminal to be transmitted to another computer, terminal or
other device for other than the Company's own use, except
upon prior written approval of State Street;
(5) that the Company shall have access to only those
authorized transactions agreed upon from time to time by
State Street and the Company; and
(6) to honor all reasonable written requests made by
State Street to protect at State Street's expense the rights
of State Street in Proprietary Information at common law,
under the Federal copyright statute and under other Federal
and state statutes.
Exhibit 8
CUSTODIAN AGREEMENT
AGREEMENT made as of this twentieth day of December,
1996, between Bank Investment Fund - Liquidity Fund, a
corporation having its principal place of business at Boston,
MA (hereinafter called the "Company") and STATE STREET BANK
AND TRUST COMPANY, a Massachusetts banking corporation, having
its principal place of business at Boston, Massachusetts
(hereinafter called "State Street").
WITNESSETH THAT:
In consideration of the mutual agreements herein contained
the Company and State Street hereby agree as follows:
1. APPOINTMENT
1.1 The Company hereby appoints State Street its
Custodian for the safekeeping of securities and agrees that
State Street shall hold all securities received from the
Company at State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts 02110 except as otherwise
provided in Section 3.1.
2. DELIVERY OF SECURITIES
2.1 All securities delivered to State Street (other
than bearer securities) shall be properly endorsed and in
proper form for transfer.
3. DUTIES
3.1 State Street shall:
(a) Receive delivery of certificates for
safekeeping at its premises, or upon receipt of proper
instructions from the Company and a representation that no
rule or regulation applicable to the Company prohibits the
safekeeping of the Company's securities in a foreign
depository or in a book-entry system, at a domestic or
foreign subcustodian or in a domestic or foreign book-entry
system for the central handling of securities
("Subcustodian").
(b) Maintain records of all receipts, deliveries
and locations of securities, together with a current
inventory thereof.
(c) Upon receipt of proper instructions, and
insofar as cash is available for the purpose, pay for and
receive all securities purchased for the account of the
Company and collect all dividends, interest or other
distributions. In receiving or disbursing funds in
connection with foreign securities transactions, it may be
necessary for State Street to convert cash into U.S. dollars
or into non-U.S. currency. State Street shall incur no
liability for loss or expense as a result of such conversion,
including but not limited to losses arising from fluctuations
in exchange rates.
(d) Upon receipt of proper instructions, exchange
securities held by it for the account of the Company for
other securities or cash or both, and to expend cash, in
connection with any merger, consolidation, reorganization,
recapitalization, split-up of shares, changes of par value or
conversion or in connection with the exercise of subscription
or purchase rights, or otherwise.
(e) Upon receipt of proper instructions make
delivery of securities which have been sold for the account of
the Company, or which have been called, redeemed, retired, or
otherwise become payable, upon payment therefor. All such
payments are to be made in cash, by certified check or
treasurer's or cashier's check, by wire transfer or in the
case of delivery through a securities depository, by credit
by the securities depository, all in accordance with street
custom or the rules and regulations of the securities
depository. In acting upon instructions to deliver securities
against payment, State Street is authorized, in accordance
with street delivery practices in the place where the
transaction is settled, to deliver such securities against a
receipt, before receiving payment. All collection and receipt
of funds or securities and all payment and delivery of funds
or securities under this Agreement shall be made by State
Street, at Company's risk, including without limitation the
risk associated with (i) such street delivery practices of
delivering securities against a receipt, before receiving
payment, or (ii) the restriction by foreign governmental
authorities on the movement of funds or securities. Failure
of the counter party to remit counter value shall be at the
sole risk of the Company.
(f) Promptly collect all income and other payments
with respect to the securities and credit such income and
other payments to the Company.
(g) Promptly execute all proxies in favor of
management unless otherwise directed and mail said proxies to
the address specified.
(h) Promptly transmit to the Company written
information (including, without limitation, pendency of call
and maturities of securities and expirations of rights in
connection therewith) received by State Street from
Subcustodians or from issuers of the securities being held for
the Company. With respect to tender or exchange offers, State
Street shall transmit promptly to the Company written
information received by State Street from Subcustodians or
from issuers of the securities whose tender or exchange is
sought or from the party (or his agents) making the tender or
exchange offer. State Street shall not be liable for any
untimely exercise of any tender, exchange or other right or
power in connection with securities or other property of the
Company at any time held by it unless (i) State Street or
Subcustodians are in actual possession of such securities or
property and (ii) State Street received proper instructions
with regard to the exercise of any such right or power, and
both (i) and (ii) occur at least three business days prior to
the date on which such right or power is to be exercised.
4. BANK ACCOUNT
4.1 State Street shall:
(a) Retain cash of the Company in the banking
department of State Street or an agent bank in a separate
account or accounts in the name of State Street for the
account of the Company, subject only to draft or order by
State Street acting pursuant to the terms of this Agreement.
(b) Collect, receive and deposit in the bank
account maintained pursuant to Section 4.1(a) all income and
other payments with respect to the securities held
hereunder.
(c) Render reports as agreed upon from time to time
between both parties.
4.2 State Street reserves the right to reverse
erroneous entries to the Company's account and to charge the
account for the amount of securities for which payment has
not been made and for any other amount due from the Company,
by way of indemnity, reimbursement of expenses, compensation
or otherwise, notwithstanding the provisions of Section 15.4.
5. INSTRUCTIONS
5.1 State Street shall receive a list of one or more
persons which the Board of Directors of the Company shall from
time to time authorize to give instructions. Different
persons may be authorized to give instructions for different
purposes. State Street is authorized to rely on any
instructions believed by it in good faith to have been given
or sent by an authorized person.
5.2 A certified copy of a resolution or action of the
Board of Directors of the Company may be received and
accepted by State Street as conclusive evidence of the
authority of any such person or persons, including
investment managers, to act and may be considered as in full
force and effect until receipt of written notice to the
contrary.
5.3 Instructions may be general or specific in terms,
and unless specified to the contrary, State Street is
authorized to act upon such instructions whether given
orally, by telephone, telex, facsimile or other means of
electronic transmission; provided that the Company shall not
send and State Street shall not accept instructions delivered
via electronic mail through the Internet. State Street may
electronically record any instructions given by telephone,
and any other telephone discussions with respect to the
securities, the account and performance of this Agreement.
5.4 State Street may consult counsel satisfactory to
it, including house counsel, and the opinion of such counsel
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion
of such counsel.
6. INDEMNITY
6.1 State Street shall not be responsible for the title,
validity or genuineness of any security received by it or
delivered by it pursuant to this Agreement and shall be kept
indemnified by the Company and be without liability for any
action taken or thing done by it in carrying out the terms and
provisions of this Agreement, including reasonable attorney's
fees, provided that State Street has acted in good faith and
has not been guilty of negligence. In no event shall State
Street be liable for indirect, special or consequential
damages even if advised of the possibility of such damages.
6.2 State Street shall have no more or less
responsibility or liability to the Company on account of any
action or omission of any Subcustodian employed by State
Street than any such subcustodian has to State Street, except
(i) to the extent attributable to a failure by State Street
in exercising due care in the selection or retention of the
Subcustodian, or (ii) to the extent that such act or omission
of the Subcustodian was caused by State Street's own
negligence or bad faith.
6.3 Except as otherwise agreed to in writing, any
securities or other property of the Company at any time in
the possession of State Street may at all times be held and
treated as collateral for the payment of securities for
which payment has not been made, or for the purchase and
sale of foreign exchange or of contracts for foreign
exchange, notwithstanding the provisions of Section 15.4.
7. COMPENSATION
7.1 The Company shall pay to State Street the
compensation set forth in Exhibit A hereto until a different
compensation shall be agreed upon in writing between the
parties and any other includable expenses incurred in
connection herewith.
8. TEST KEY
8.1 If State Street has issued to the Company a test
key security system in order that State Street may verify
that certain transmission of information has been originated
by the Company, the Company hereby agrees:
(a) To indemnify State Street against and to hold
State street harmless from all liability, claims, loss and
demands whatsoever, including reasonable attorney's fees,
howsoever arising or incurred because of or in connection
with State Street's relying on receipt of a test key to
authenticate previous transmission received by State Street
apparently from the Company.
(b) Upon request, to cause the Company's internal
auditors to verify to State Street from time to time that use
of and access to the test key system is restricted to
authorized employees.
9. DATA ACCESS
9.1 If State Street has issued to the Company a data
access security system in order that the Company may have
access to certain data and functions, the Company hereby
agrees:
(a) To access data and functions only in
accordance with the Data Access Operating Procedures annexed
hereto as Exhibit B and to regard and preserve as
confidential all information obtained with respect to the
issuance to the Company of a data access security system.
(b) To access data and functions solely for its
own internal use and benefit.
(c) To discontinue use of the data access security
system at any time for security reasons upon notice from
State Street.
(d) Upon request, to cause the Company's internal
auditors to verify to State Street that data access is
restricted to authorized employees.
(e) To indemnify State Street against and to hold
State Street harmless from all liability, claims, loss and
demands whatsoever, including reasonable attorney's fees,
howsoever arising or incurred because of or in connection
with the access of data and functions by the Company and the
use by the Company or any of its employees, whether
authorized or unauthorized, of the data access security
system.
10. SECURITY
10.1 Except as provided in Sections 4.2 and 6.3, State
Street may not pledge, assign, hypothecate or otherwise
encumber securities or cash of the Company without the prior
written consent of the Company.
11. TAXES
11.1 The Company agrees that it shall assume any and all
obligations imposed now or hereafter by any applicable tax
law with respect to any sale, transfer, delivery or receipt
of securities under this Agreement, and it further agrees to
indemnify and hold State Street harmless from and against any
taxes, additions for late payment, interest, penalties and
other expenses, that may be assessed against State Street on
any such sales, transfer, deliveries or receipt or other
activities under this Agreement.
11.2 The Company undertakes to instruct State Street in
writing with respect to State Street's responsibility for
withholding and other taxes, assessments or other governmental
charges, certifications and governmental reporting in
connection with its acting as Custodian under this Agreement.
The Company agrees to indemnify and hold State Street harmless
from any liability on account of taxes, assessments or other
governmental charges, including without limitation the
withholding or deduction or the failure to withhold or deduct
same, and any liability for failure to obtain proper
certifications or to properly report to governmental
authorities, to which State Street may be or become subject in
connection with or which arises out of this Agreement,
including costs and expenses (including reasonable legal
fees), interest and penalties.
12. COMPLIANCE WITH LEGAL PROCESS AND JUDICIAL ORDERS
12.1 If any securities subject to this Agreement are at
any time attached or levied upon, or in case the transfer or
delivery of any such securities shall be stayed or enjoined,
or in the case of any other legal process or judicial order
affecting such securities, State Street is authorized to
comply with any such order in any matter as State Street or
its legal counsel reasonably deems appropriate. If State
Street complies with any process, order, writ, judgment or
decree relating to the securities subject to this Agreement,
then State Street shall not be liable to the Company or to
any other person or entity even if such order or process is
subsequently modified, vacated or otherwise determined to
have been without legal force or effect.
13. FORCE MAJEURE
13.1 State Street shall not be responsible for delays or
failures in performance resulting from acts beyond its
control. Such acts shall include but not be limited to acts
of God, strikes, lockouts, riots, acts of war or terrorism,
epidemics, nationalization, expropriation, currency
restrictions, governmental regulations superimposed after
the fact, fire, communication line failures, power failures,
earthquakes or other disasters.
14. REPRESENTATIONS
14.1 The Company represents and warrants that (i) it is
duly incorporated or organized and is validly existing in
good standing in its jurisdiction of incorporation or
organization, (ii) the execution, delivery and performance
of this Agreement and all documents and instruments to be
delivered hereunder or thereunder have been duly authorized,
(iii) the person executing this Agreement on its behalf has
been duly authorized to act on its behalf, (iv) this
Agreement constitutes its legal, valid, binding and
enforceable agreement and (v) its entry into this Agreement
will not violate any agreement, law, rule or regulation by
which it is bound or by which any of its assets are affected.
15. MISCELLANEOUS
15.1 These provisions may not be altered or changed in
any manner except by written agreement between the Company
and State Street.
15.2 This Agreement may not be assigned without the
prior written consent of the other party.
15.3 This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of
Massachusetts.
15.4 Either party may terminate this Agreement by notice
in writing delivered or mailed to the other party hereto not
less than thirty (30) days prior to the date on which such
termination shall take place and thereupon this Agreement
shall terminate in accordance with such notice and all
property then held shall be delivered to the Company or upon
its order to its successor. The provisions of Section 4.2
and Articles 6, 8, 9, 11 and 17 shall survive the termination
of this Agreement.
15.5 Any and all notices, requests, demands or other
communications required or permitted to be given hereunder
shall be deemed to have been duly given when personally
delivered or mailed by first class certified or registered
mail, return receipt requested, addressed to the parties at
the addresses set forth below:
(a) If to State Street, to:
State Street Bank and Trust Company
Insurance Services Division
P.O. Box 351
Boston, Massachusetts 02101
Attention: Mark J. Bowler
(b) If to the Company, to:
Bank Investment Fund - Liquidity Fund
75 Park Plaza
Boston, MA 02116
Attention: Ms. Susan Ellis
15.6 All computer programs, software specifications,
formats, manuals and like materials written and used in
connection with this Agreement are made available "as is"
without warranty.
15.7 Any waiver of any rights hereunder, of any failure
to perform hereunder, or of any breach hereof shall not
constitute or be deemed a waiver of any other right or
failure to perform hereunder or breach hereof, whether of a
similar or dissimilar nature.
15.8 This Agreement contains the entire agreement
between the parties with respect to the subject matter
hereof, and no waiver, alteration or modification of any of
the provisions hereof or rights to act hereunder shall be
binding unless in writing.
16. INVESTMENT MANAGER
16.1 The Company at any time may appoint one or more
investment managers to manage the investment of all or any
portion of the securities. In such event, the Company shall
notify State Street in writing of the appointment of such
investment manager and of the portion of the securities over
which the investment manager may exercise its authority. The
Company similarly shall notify State Street of the
termination of the appointment of any investment manager.
16.2 State Street, in performing its duties under this
Agreement, shall be entitled to rely on proper instructions
from an investment manager to the same extent as State Street
would be entitled to accept such proper instructions from the
Company if no investment manager had been appointed.
17. PRICING
17.1 If State Street employs one or more nationally
recognized pricing services to determine the market value of
widely traded securities which may be owned by the Company or
uses other services, publications and procedures to establish
the value of the securities, including but not limited to the
assignment of face value to some money market instruments and
to the use of matrix pricing for other obligations, the
Company acknowledges and agrees that these values may not
equal actual market value and indemnifies and holds State
Street harmless from any loss arising from the value
ascribed to the securities.
18. REPRODUCTION OF DOCUMENTS
18.1 This Agreement and all documents relating thereto,
including, without limitation, confirmations and other
information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm,
optical disk, micro-card, miniature photographic or other
similar process. The parties agree that any such reproduction
shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction
was made by a party in the regular course of business, and
that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed in its name on its behalf by a
duly authorized officer as of the day and year first above
written.
State Street Bank and Trust Company
By:
Mark J. Bowler
Title: Senior Vice President
Bank Investment Fund - Liquidity Fund
By:
Title:
EXHIBIT B
PROTECTION OF EQUIPMENT AND INFORMATION
The databases, computer programs screen formats, screen
designs, report formats, interactive design techniques, and
other information furnished to Company by State Street as part
of the services constitute copyrighted trade secret or
proprietary information of substantial value to State Street.
Such databases, programs and other information are
collectively referred to below as "Proprietary Information".
Company agrees that it shall treat all Proprietary Information
as proprietary to State Street and that it shall not divulge
any Proprietary Information to any person or organization
except as is expressly permitted hereunder. Without limiting
the foregoing Company agrees for itself and its employees and
agents:
(1) to use such programs and databases (i) solely on
State Street's computers or designated Company devices, (ii)
solely from devices at Company locations designations by the
Company and (iii) solely in accordance with State Street's
applicable user documentation;
(2) to refrain from copying or duplicating in any way
(other than in the normal course of performing processing on
State Street's computers) any part of any Proprietary
Information;
(3) to refrain from obtaining unauthorized access to
any programs, data or other information to which Company is
not entitled, and if such access is accidentally obtained, to
respect and safeguard the same as Proprietary Information;
(4) to refrain from causing or allowing information
transmitted from State Street's computer to the Company's
terminal to be transmitted to another computer, terminal or
other device for other than the Company's own use, except
upon prior written approval of State Street;
(5) that the Company shall have access to only those
authorized transactions agreed upon from time to time by
State Street and the Company; and
(6) to honor all reasonable written requests made by
State Street to protect at State Street's expense the rights
of State Street in Proprietary Information at common law,
under the Federal copyright statute and under other Federal
and state statutes.
Exhibit 15
AMENDED BANK INVESTMENT FUND
PLAN OF DISTRIBUTION
PURSUANT TO RULE 12B-1
WHEREAS, Co-operative Bank Investment Fund, d/b/a Bank
Investment Fund, a corporation organized under the laws of the
Commonwealth of Massachusetts (the "Corporation"), engages in
business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as
amended (the "Act");
WHEREAS, the Corporation is authorized to issue an
unlimited number of shares of beneficial interest without par
value (the "Shares");
WHEREAS, the Corporation intends to finance activities
which may be considered to be primarily intended to result in
the sale of its Shares, and desires to adopt a plan of
distribution pursuant to Rule 12b-1 under the Act
("Rule12b-1") in order to ensure the Corporation's
compliance with Section 12(b) of the Act and Rule 12b-1;
WHEREAS, the Corporation intends to operate distinct
investment funds as provided in Section 4(h) of Chapter 482 of
the Massachusetts Acts of 1984, as amended, including the funds
currently operated by the Corporation under the names
"Fund One" and "Liquidity Fund";
WHEREAS, none of the Directors of the Corporation is an
interested person of the Corporation (as defined in the Act),
nor has any direct or indirect financial interest in the
operation of this Amended Plan or any agreement relating
hereto;
WHEREAS, the Directors approving this Amended Plan have
concluded, in the exercise of reasonable business judgment and
in light of their fiduciary duties under state law and under
Section 36(a) and (b) of the Act, that there is a reasonable
likelihood that adoption of this Amended Plan will benefit the
Corporation and its shareholders; and have approved this
Amended Plan by votes cast in person at a meeting called for
the purpose of voting hereon;
WHEREAS, the Corporation has been advised by the Office
of Chief Counsel, Division of Investment Management of the
Securities and Exchange Commission, that given the unique
circumstances of the Corporation, it would not recommend any
enforcement action to said Commission if the Corporation were
to adopt a distribution plan pursuant to Rule 12b-1 without
obtaining the approval of the Corporation's voting securities,
as required by paragraph (b)(1) of Rule 12b-1;
NOW, THEREFORE, the Corporation hereby adopts this
Amended Plan in accordance with Rule 12b-1 under the Act, on
the following terms and conditions:
1. Distribution Activities. Subject to the supervision of
the Directors of the Corporation, the Corporation may, directly
or indirectly, make expenditures for the following purposes:
a. Fees for membership in trade associations, including
associations in which investors eligible to invest in
the Corporation's investment funds are members;
b. Sponsorship of program activities at conferences
attended by eligible investors, or attendance at such
conferences by Corporation personnel, and related
travel, meals and other expenses;
c. Meals and other expenses, including travel expenses,
related to business meetings with investors and
potential investors in the Corporation;
d. Personal items marked with the name or logo of the
Corporation for distribution to investors or eligible
investors in the Corporation;
e. Printing and postage expenses for written materials
to be sent to eligible investors who are not
Shareholders in the Corporation;
f. Subscription to publications for re-distribution to
eligible investors of the Corporation;
g. Formulation and implementation of marketing and
promotional activities, including, but not limited to,
newspaper and other mass media advertising;
h. Compensation to personnel engaged in sales
activities;
i. Any other activities of a substantially similar
nature which may result in the sale of Shares, either
directly or through other persons with which the
Corporation may enter into agreements related to this
Amended Plan in accordance with Rule 12b-1.
The President of the Corporation, or any officer
of the
Corporation designated by the Board of Directors, is authorized
to direct the disposition of amounts payable by the Corporation
pursuant to this Amended Plan. Such payments for distribution
activities may be made directly by the Corporation or to other
persons with which the Corporation may enter into agreements
related to this Amended Plan in accordance with Rule 12b-1.
2. Maximum Expenditures. In no event may expenditures
under this Amended Plan in any year exceed an amount equal to
.12% of the average daily net assets of the Corporation for
such year.
- 2 -
3. Allocation of Corporation Expenses among Distinct
Investment Funds. If the Corporation shall divide the Shares
into two or more classes of Shares to represent Shares in two
or more distinct investment funds as provided in Section 4(h)
of Chapter 482 of the Massachusetts Acts of 1984, as amended
(including the investment funds designated or to be designated
by the Corporation as Fund One and Liquidity Fund), the assets
of the Corporation in respect of a particular investment fund
shall be charged with the liabilities, expenses, costs, and
charges incurred by the Corporation pursuant to the provisions
of this Amended Plan in respect of such investment fund. Any
general liabilities, expenses, costs, or charges of the
Corporation incurred under this Amended Plan which are not
readily identifiable to any particular investment fund shall be
allocated and charged by the Corporation to and among such
investment funds in such manner and on such basis as the Board
of Directors in its sole discretion deems fair and equitable.
4. Term and Termination.
a. This Amended Plan shall become effective on the
date hereof. Unless terminated as herein provided, this
Amended Plan shall continue in effect as long as such
continuance is approved at least annually by a vote of the
Board of Directors of the Corporation cast in person at a
meeting called for the purpose of voting on such approval. If
at any time any of the Directors shall be an interested person
of the Amended Plan or have any direct or indirect financial
interest in the operation of the Amended Plan or in any related
agreements, then such continuance shall also be approved by the
directors who are not interested persons and have no such
interest, voting in the manner provided in the preceding
sentence.
b. This Amended Plan may be terminated at any time by
vote of a majority of the Directors of the Corporation who are
not interested persons of the Corporation and have no direct or
indirect financial interest in the operation of the Amended
Plan or in any agreements related to the Amended Plan.
5. Amendments. This Amended Plan may not be amended to
increase materially the amount of expenditures authorized in
Section 2 hereof or to make any other material amendment to
this Amended Plan unless such amendment is approved in the
manner described in Section 4(a).
6. Quarterly Reports. The President, or any other officer
authorized to direct the disposition of amounts paid or payable
by the Corporation pursuant to this Amended Plan or any related
agreement which may be entered into by the Corporation in
accordance with Rule 12b-1, shall provide to the Directors of
the Corporation, and the Directors shall review at least
quarterly, a written report of the amounts expended pursuant to
this Amended
Plan and any related agreement and the purpose for which such
expenditures were made.
- 3 -
7. Recordkeeping. The Corporation shall preserve copies
of this Amended Plan and any related agreements and all reports
made pursuant to Section 6 hereof for a period of not less than
six years from the date of this Amended Plan, the agreements or
such reports, as the case may be, the first two years in an
easily accessible place.
8. Selection of Non-Interested Directors. While this
Amended Plan is in effect, the selection and nomination of
those Directors who are not interested persons of the
Corporation are committed to the discretion of such
disinterested Directors.
9. Severability. The provisions of the Plan, whenever
applicable, are severable for each class of Shares, including
the funds currently operated by the Corporation under the names
"Fund One" and "Liquidity Fund".
IN WITNESS WHEREOF, the Corporation has caused this
Amended Plan to be executed as of the date set forth below.
Dated: _____________________ CO-OPERATIVE BANK INVESTMENT
FUND
D/B/A BANK INVESTMENT FUND
Attest:
By:______________________________
President
____________________________
Clerk
- 4 -
Exhibit 16
BANK INVESTMENT FUND
Yield worksheet
FUND ONE DATE 12/31/96
Yield = 2[( a - b 6
____ + 1) -1]
[( cd )
a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.
d = the maximum offering price per share on the last day of
the period.
a = 793,660.31 b = 22,850.00
c = 153,695.5138 d = 974.8002
a - b = 770,810.31
cd = 149,822,417.59
Yield in accordance with the above formula is 6.25%.
Exhibit 16
BANK INVESTMENT FUND
Total Return Worksheet
FUND ONE DATE 1 year
Ended 12/31/96
n 1
Total Return: P(l + T) = ERV or [(ERV) /n}
------- -1
[(P ) }
p = a hypothetical initial payment of $1000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1000
payment made at the beginning of the 1, 5, or 10
year periods to the end of the 1, 5, or 10 year
periods (or fractional portion thereof).
P = 1000.00 T = 4.10%
n = 1 ERV = 1,040.9647
Total return in accordance with the above formula is 4.10%.
Exhibit 16
BANK INVESTMENT FUND
Total Return Worksheet
FUND ONE DATE 5 years
Ended 12/31/96
n 1
Total Return: P(l + T) = ERV or [( ERV) /n}
-------- -1
(P ) }
p = a hypothetical initial payment of $1000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1000
payment made at the beginning of the 1, 5, or 10
year periods to the end of the 1, 5, or 10 year
periods (or fractional portion thereof).
P = 1000.00 T = 5.22%
n = 5 years ERV = 1289.7238
Total return in accordance with the above formula is 5.22%.
Exhibit 16
BANK INVESTMENT FUND
Total Return Worksheet
FUND ONE DATE 10 years
Ended 12/31/96
n 1
Total Return: P(l + T) ERV or [( ERV ) /n}
----- -1
[( P ) }
p = a hypothetical initial payment of $1000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1000
payment made at the beginning of the 1, 5, or 10
year periods to the end of the 1, 5, or 10 year
periods (or fractional portion thereof).
P = 1000.00 T = 6.83%
n = 10 years ERV = 1936.5907
Total return in accordance with the above formula is 6.83%.
Exhibit 16
BANK INVESTMENT FUND
Yield worksheet
LIQUIDITY FUND DATE 12/31/96
Yield = c * 365
----
7
c = a
----
b
a net investment income (per share) or net change
b beginning value = 1000.00
c base period return = net investment income
---------------------
beginning value
a = .9962 b= 1000.00
c = .0009962
Yield in accordance with the above formula is 5.19%.
Exhibit 17
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in Form N-1A
of our report dated January 21, 1997, and appearing on Page
12 of the Offering Circular on the financial statements of
Bank Investment Fund - Fund One, appearing on Pages 13
through 22 of the Offering Circular for the year ended
December 31, 1996.
Parent, McLaughlin & Nangle
Certified Public Accountants
Boston, Massachusetts
January 21, 1997
Exhibit 17
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in Form N-1A
of our report dated January 21, 1997, and appearing on Page
12 of the Offering Circular on the financial statements of
Bank Investment Fund - Liquidity Fund, appearing on Pages 13
through 23 of the Offering Circular for the year ended
December 31, 1996.
Parent, McLaughlin & Nangle
Certified Public Accountants
Boston, Massachusetts
January 21, 1997
Exhibit 19
BANK INVESTMENT FUND
FUND ONE
PRICE MAKE UP SHEET
Date: 12/31/96
Net Asset Value - January 1
$ 146,555,031
Cash Invested:
YTD-Yesterday $23,325,618
INV-Today -0- 23,325,618
Dividends Reinvested:
YTD-Yesterday 2,892,797
DR-Today 267,154 3,159,951
Cash Redeemed:
YTD-Yesterday (18,071,181)
RED-Today -0- (18,071,181)
Realized Gains (Losses):
YTD-Yesterday 119,293
G/L-Today -0- 119,293
Unrealized Depreciation:
YTD-Yesterday (3,497,470)
Appreciation/
(Depreciation) Today -0- (3,497,470)
TOTAL NET ASSETS - TODAY $151,591,242
Exhibit 19
PRE-NET ASSET VALUE COMPUTATION:
Total Net Assets - Yesterday
(Adjusted - see below) $151,324,088
Today's Appreciation/
Depreciation in Inv. Sec.* 0
Number of Shares Outstanding-
Yesterday (Adjusted - see below) 155,235.9983
Pre-NAV per share $974.8002
POST-NET ASSET VALUE COMPUTATION:
Total Net Assets - Today $155,591,242
Shares Outstanding:
Today 155,510.0582
Current
Redemptions - 0 -
Current
Investments (Dividend Reinvestment) 274.0599
Number of
shares out-
standing today 155,510.0582
NET ASSET VALUE PER SHARE 974.8002
*INVESTMENT SECURITIES PORTFOLIO
Yesterday Today
Market $149,965,612 $149,965,612
Cost 150,962,428 150,962,428
Appreciation/
Depreciation $ -0- $ -0-
TODAY'S CHANGE $ -0-
Exhibit 19
BANK INVESTMENT FUND
Liquidity Fund
PRICE MAKE UP SHEET
Date: 12/31/96
Net Asset Value - January 1
$245,150,513
Cash Invested:
YTD-Yesterday $784,710,565
INV-Today -0- 784,710,565
Dividends Reinvested:
YTD-Yesterday $ 7,071,763
DR-Today 607,643 7,679,406
Cash Redeemed:
YTD-Yesterday $827,332,928
RED-Today -0- 827,332,928
Realized Gains (Losses):
YTD-Yesterday -0-
G/L-Today -0- -0-
Unrealized Appreciation:
YTD-Yesterday -0-
Appreciation/
(Depreciation) Today -0- -0-
TOTAL NET ASSETS - TODAY $210,207,556
Exhibit 19 PRE-NET ASSET VALUE
COMPUTATION:
Total Net Assets - Yesterday $210,207,556
Today's Appreciation/
Depreciation in Inv. Sec. 0
Number of Shares Outstanding-
Yesterday 210,207.5572
Pre-NAV per share $1000.00
POST-NET ASSET VALUE COMPUTATION:
Total Net Assets - Today $210,207,556
Shares Outstanding:
Today 209,599.9140
Current
Redemptions - 0 -
Current
Investments (Dividend Reinvestment) 607.6432
Number of
shares out-standing today 210,207.5572
NET ASSET VALUE PER SHARE $1000.00
INVESTMENT SECURITIES PORTFOLIO*
Yesterday Today
Market $
Cost
Appreciation/
Depreciation $
TODAY'S CHANGE $
This Section is Not Applicable - Amortized Cost Method used.
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