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. 18
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 31, 1999
(214 Pages, including Exhibits)
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. Investment Objectives, Principal Investment Strategies
and Related Risks
(a) The investment objective of Fund One is to maximize
current income consistent with liquidity of assets and safety
of principal. Fund One was formed to provide participating banks
with a high liquid, diversified, high-quality investment vehicle
designed to assist liquidity management.
The investment objective of Liquidity Fund is to
maximize current income consistent with liquidity of assets
and safety of principal. The Liquidity Fund was formed to
provide participating banks with a highly liquid, diversified,
high-quality investment vehicle designed to assist liquidity
management, while seeking preservation of capital.
(b) Fund One invests principally in short and intermediate
term marketable debt securities issued by the United States
Government or by agencies of the United States, repurchase
agreements, reverse repurchase agreements and money market
instruments. Asset investments for Fund One include principally
those securities eligible to be included in legal liquidity
for Massachusetts co-operative banks under Massachusetts General
Laws, Chapter 170, Section 22.
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 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) 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,(E) repurchase agreements involving
government securities, (F) 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 (G) certain
short-term money market instruments. The Registrant is authorized
by statute to invest its assets in a variety of debt and equity
securities. No more than 5% of the Registrant's assets, at the
time of purchase, may be invested in the securities of any one
issuer except for direct obligations of the United States or
obligations guaranteed by the United States, and other
obligations issued under certain federal programs or by certain
federal agencies or instrumentalities. Fund One is further
restricted through the investment policy maintained by the
Registrant's Officers and Directors. The investment policy for
Fund One restricts the Registrant from a) making any investment
in equity securities , b) making any intermediate or long-term
investment in corporate (non-governmental) debt securities and c)
investing more than 25% of the of the Fund's total assets in the
securities of a particular industry other than U.S. Government or
Federal agency securities. Fund One's portfolio of investments
was comprised of items (A), (B), (D), and (E) as of December 31,
1998.
The Liquidity Fund invests principally in short term
marketable debt securities issued by the United States
Government or by agencies of the United States, bank money
instruments, repurchase agreements, short-term corporate debt
instruments, commercial paper, and reverse repurchase agreements.
Asset investments for Liquidity Fund include principally those
securities eligible to be included in legal liquidity for
Massachusetts co-operative banks under Massachusetts General
Laws, Chapter 170, Section 22.
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)repurchase agreements; (F) 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; (G)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;(H) 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 (I) 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
rates(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 through certificates of deposit and
federal funds. The Liquidity Fund's portfolio of investments
was comprised of items (A), (B), (D), (F), (H) and (I) as of
December 31, 1998.
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.
(c) The main risk factor in Fund One's performance is
interest rates. The yield and share price of Fund One change
daily based on changes in interest rates and market conditions,
and in response to other economic, political or financial events.
The Fund One's total return includes both income and price gains
or losses. While income is the most important component of
returns over time, Fund One's emphasis on income does not mean
Fund One invests only in the highest-yielding bonds and notes
available, or that it can avoid losses of principal. In general,
bond and note prices rise when interest rates fall and fall when
interest rates rise. Longer-term bonds and notes are usually
more sensitive to interest rate changes. In other words, the
longer the maturity of a bond or note, the greater the impact a
change in interest rates is likely to have on the price.
An additional risk factor in Fund One's performance
is pre-payment risk. Many types of debt securities, including
mortgage securities and callable bonds and notes may be subject
to a prepayment risk. Prepayment risk occurs when the issuer of
a security can prepay principal prior to the security's maturity.
Securities subject to prepayment risk generally offer less
potential for gains during a declining interest rate environment,
and similar or greater potential for loss in a rising interest
rate environment.
These risk factors may adversely effect Fund One's
net asset value, yield, total return and loss of money in an
investment in the Fund may result.
The main risk factor in Liquidity Fund's performance is
interest rates, the fluctuation of which will cause the income of
the Liquidity Fund to correspondingly change. The average
portfolio duration may cause a delayed effect before the market
interest rate change is fully reflected in the Liquidity Fund's
income performance.
An additional risk factor in the Liquidity Fund's
performance, to a limited extent, is credit risk. Credit risk is
the chance that the issuer of the security will be unable to pay
interest and principal in a timely manner. While the credit
quality of the Liquidity Fund's investment portfolio is extremely
high based on the principal investment strategies discussed
above, the Liquidity Fund is subject to some degree of credit
risk.
The Liquidity Fund seeks to maintain, but does not
guaranty a stable net asset value of $1000 per share. In
addition, the shares being offered are not savings accounts or
deposits and are not insured or guaranteed by the Federal Deposit
Insurance Corporation, U.S. Government or its agencies.
Item 5
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 6 Management, Organization and Capital Structure
(a)(1) 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. 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.
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 LiquidityFund")
(Fund One and the Liquidity Fund are hereinafter referred
to collectively as the "Funds").
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.
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.
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.
(2) 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 Funds, he managed investment portfolios for the
Co-operative Central Bank and the State Street Bank and Trust
Company, Boston, Massachusetts.
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.
The Registrant does not utilize the services of
a transfer agent or a dividend paying agent.
(3) There are no legal proceedings pending to which the
Registrant is a party.
(b) 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 Co-operative
Central Bank ("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.
Item 7 Shareholder Information
(a) Fund One's net asset value per share is determined
as of the close of the New York Stock Exchange on days when the
Custodian Bank (State Street Bank) is open for business. The net
asset value per share by Fund One is determined by adding the
appraised values of all securities and all other assets,
deducting liabilities and dividing by the number of shares
outstanding. The price of which an order is effected is based on
the next calculation of net asset values after the order is
placed. 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.
The Liquidity Fund's net asset value per share is
determined by dividing the value of all investment securities and
all other assets, less liabilities, by the number of shares
outstanding. The Liquidity Fund's investment securities are valued
based on their amortized cost, which does not take into
account unrealized appreciation or depreciation. The
Corporation's Board of Directors has established procedures
reasonably designed to stabilize the net asset value per share at
$1,000.00.
The Registrant generally observes the following holidays
during the calendar year: New Year's Day, Martin Luther King
Day, President's Day, Memorial Day, Independence Day, Labor Day,
Columbus Day, Veteran's Day, Thanksgiving Day, and Christmas Day.
(b) 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 on Capital
Structure under Item 6(b), 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.
Shares of the Fund are offered for sale on days on which
both the New York Stock Exchange and the custodian bank are open
for business. There is no sales charge. The minimum initial
investment is $59,000.00 (although in certain cases the
Registrant may require a minimum investment in accordance with
requirements of applicable securities laws). Additional
investments may be made in any amount in excess of the minimum.
Call your correspondent bank and speak to your account
officer. Tell the officer that you want to transfer funds to
State Street Bank and Trust Company. Instruct the officer to
wire transfer the money before 12:00 noon, Boston time, to:
State Street Bank and Trust Company
Boston, Massachusetts
Routing number 0110-0002-8
For account of the Bank Investment
Fund, Fund One
Account number: 9006-930-3 (in the case
of Fund One purchase)
or
For account of The Bank Investment Fund
Liquidity Fund
Account number: 9006-884-2 (in the case
of Liquidity Fund Purchase
If your correspondent bank account is with the State
Street Bank and Trust Company, contact your account officer and
instruct the officer to transfer funds from your account to the
account of the Bank Investment Fund, Fund One, Account number
9006-930-3, or to the account of the Bank Investment Fund,
Liquidity Fund, Account number 9006-884-2.
AFTER INSTRUCTING YOUR BANK TO TRANSFER FUNDS, PLEASE
CALL THE REGISTRANT AND TELL US THE AMOUNT YOU TRANSFERRED AND
THE NAME OF THE BANK SENDING THE TRANSFER. YOUR BANK MAY CHARGE
A FEE FOR SUCH SERVICES. REMEMBER, IT IS IMPORTANT TO DO THIS
BEFORE 12:00 NOON.
The securities market, in which the Fund buys and sells
securities, usually requires immediate settlement in Federal
funds for all securities transactions; therefore, payment for the
purchase of each Fund's shares not received in the form of
Federal funds will be recorded as share subscriptions, and not
invested in Fund shares until such payments are converted into
Federal funds. Payments received by bank wire can be converted
immediately into Federal funds; any other form of respective
payment will result in a delay. Orders received prior to 12:00
noon, Boston time, will be invested in shares of the Fund at the
next determined net asset value.
(c) 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 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. 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 Registrant has not established any procedure whereby
a shareholder can sell its shares to the Registrant through a
broker/dealer.
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'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.
(e) 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.
Shares of either Fund One or the Liquidity Fund may be
exchanged for shares of the other Fund on the basis of the
respective net asset values of the shares involved. Such
exchange will be treated as a sale of the surrendered shares and
any gain or the transaction may be subject to federal and state
income taxes.
Item 8 Distribution Arrangements
(a) No sales charge will be made and no sales load
will be involved in the distribution of any class of the
Registrant's shares.
(b) 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.
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 Funds;
(5) printing and postage expenses for written materials to be
sent to eligible investors who are not shareholders in the
Funds; (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.
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 determine 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.
(c) Not applicable as the Registrant does not maintain
any Multiple Class Fund or Master-Feeder Fund.
Item 9 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.
PART B
STATEMENT OF ADDITION AL INFORMATION
FUND ONE (SERIES I)
AND
LIQUIDITY FUND (SERIES 2)
CO-OPERATIVE BANK INVESTMENT FUND (REGISTRANT)
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 Statement dated March 31, 1999 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, without charge,
upon request from the Bank Investment Fund, 75 Park Plaza,
Boston, Massachusetts 02116-3934, (617) 695-0415 ( collect)
Dated: March 31, 1999
Item 10(b). Table of Contents
Item No. Title Page No.
11 Fund History 15
12 Description of The Fund and Its Investments 15
and Risks
13 Management of the Fund 19
14 Control Persons and Principal Holders 23
of Securities
15 Investment Advisory and Other Services 25
16 Brokerage Allocation and Other Practices 28
17 Capital Stock and Other Securities 29
18 Purchase, Redemption and Pricing of 30
Shares
19 Taxation of The Fund 32
20 Underwriters 32
21 Calculations of Performance Data 32
22 Financial Statements 33
Item 11. Fund History
The Registrant commenced active operations as an
investment company on October 18, 1985. General information
regarding the Registrant is included under Item 6(a) of Part
A of the Registration Statement of which this Statement of
Additional Information is a part.
Item 12 Description of the Fund and its Investments and Risks
(a) 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 non-diversified 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").
(b) Fund One invests principally in short and
intermediate term marketable debt securities issued by the United
States Government or by agencies of the United States, repurchase
agreements, reverse repurchase agreements and money market
instruments.
Asset investments for Fund One include principally
those securities eligible to be included in legal liquidity for
Massachusetts co-operative banks under Massachusetts General
Laws, Chapter 170, Section 22. The categories of those securities
include, but may not be limited to a) cash on hand and due from
banks, b) certificates of deposit due from any trust company,
national banking association or banking company, c) bonds and
other direct obligations of the United States or such obligations
as are unconditionally guaranteed as to principal and interest by
the United States, d) federal agency obligations which have
unexpired terms of five years or less, e) repurchase agreements,
f) any other debt instrument deemed eligible for legal liquidity
by the Commonwealth or its agent, and g) certain common money
market instruments of temporary duration.
The Liquidity Fund invests principally in short-term
marketable debt securities issued by the United States Government
or by agencies of the United States, bank money instruments,
repurchase agreements, short-term corporate debt instruments,
commercial paper, and reverse repurchase agreements.
Asset investments for Liquidity Fund include
principally those securities eligible to be included in legal
liquidity for Massachusetts co-operative banks under
Massachusetts General Laws, Chapter 170, Section 22.The
categories of those securities include, but may not be limited
to a) cash on hand and due from banks, b) certificates of deposit
due from any trust company, national banking association or
banking company, or any federally insured savings banks, co-
operative bank or savings & loan association, c) Federal Funds
sold, d) bonds and other direct obligations of the United States
which are unconditionally guaranteed as to principal and
interest by the United States, and issues of U.S. Government
agencies and instrumentalities: e) repurchase agreements; f)
commercial paper which, when purchased, is rated A-1 by Standard
& Poor's Corporation ("Standard & Poor's") and/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
Fund's Board of Directors to be of comparable high quality.
Commercial paper obligations may include variable amount of
master demand notes; short-term obligations of corporations; g)
Second Tier securities to the extent permissible by Rule 2a-7 of
the Investment Company Act of 1940 (see investment restrictions)
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, supervised and approved by
the Fund's Board of Directors to be of comparable quality, h) any
other debt instrument deemed eligible for legal liquidity by the
Commonwealth or its agent, and i) certain common money market
instruments of temporary duration. All the above eligible
investment must have original maturities or remaining maturities
of 397 days or less. In addition, the Fund will maintain a dollar
weighted average maturity of 90 days or less.
The main risk factor in Fund One's performance is
interest rates. The yield and share price of Fund One change
daily based on changes in interest rates and market conditions,
and in response to other economic, political or financial events.
The Fund's total return includes both income and price gains or
losses. While income is the most important component of returns
over time, Fund One's emphasis on income does not mean the Fund
invests only in the highest-yielding bonds and notes available,
or that it can avoid losses of principal. In general, bond and
note prices rise when interest rates fall and fall when interest
rates rise. Longer-term bonds and notes are usually more
sensitive to interest rate changes. In other words, the longer
the maturity of a bond or note, the greater the impact a change
in interest rates is likely to have on the price.
An additional risk factor in the Fund One's performance
is prepayment risk. Many types of debt securities, including
mortgage securities and callable bonds and notes may be subject
to a prepayment risk. Prepayment risk occurs when the issuer of
a security can prepay principal prior to the security's maturity.
Securities subject to prepayment risk generally offer less
potential for gains during a declining interest rate environment,
and similar or greater potential for loss in a rising interest
rate environment.
These risk factors may adversely effect Fund One's net
asset value, yield, total return and loss of money in an
investment in the Fund may result.
The main risk factor in the Liquidity Fund's performance
is interest rates, the fluctuation of which will cause the income
of the Liquidity Fund to correspondingly change. The average
portfolio duration may cause a delayed effect before the market
interest rate change is fully reflected in the Liquidity Fund's
income performance.
An additional risk factor in the Liquidity Fund's
performance, to a limited extent, is credit risk. Credit risk is
the chance that the issuer of the security will be unable to pay
interest and principal in a timely manner. While the credit
quality of the Liquidity Fund's investment portfolio is extremely
high based on the principal investment strategies discussed
above, the Liquidity Fund is subject to some degree of credit
risk.
All software used by the Registrant for general ledger,
investment securities, mutual fund operation and related purposes
is provided and maintained by Bankware, Inc.. The Registrant believes
that all such software is year 2000 compliant. Software review,
evaluation, update, implemenation and testing validation were
completed prior to December 31, 1998. The Registrant expects to
process participating bank's investments, redemptions and monthly
interest payments without disruption in the year 2000. The
Registrant's costs related to this year 2000 systems issue have
not material. Fund One and Liquidity Fund recorded expenses of
$6,108 and $3,744, respectively in 1998 in this regard. Little,
if any, further expenses are expected. Like other mutual funds
and other financial and business organizations around the world,
the Registrant could be adversly affected if the computer systems
used by its third party transaction processors, such as custodians,
banks, broker dealers or others that the Registrant does business
with, do not properly process the date from and after January 1,
2000. The Registrant continues to seek assurances that comparable
steps are being taken by these third party processors. However,
there can be no assurance that these steps will be sufficient to
prevent any adverse impact on the Fund. The Liquidity Fund plans
to be more liquid at year end 1999 in the event that increased
redemption activity is received prior to the century date.
(c)(1) The restrictions and investment policies of the
Registrant for Fund One and Liquidity Fund are described as
follows:
(i) 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.
(ii) 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 8 of the 1940 Act and
applicable regulations promulgated thereunder.
(iii) 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.
(iv) 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: (1) direct obligations
of the United States; (2) obligations unconditionally guaranteed
by the United States; (3) obligations of, or instruments issued
by and fully guaranteed by, the Federal National Mortgage
Association; (4) 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; (5) 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; (6) 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; (7) farm loan bonds issued by and federal loan bank
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.
Fund One's investment policy restricts it from investing
more than 25% of its assets in the securities of any particular
industry other than U.S. Government or Federal agency securities.
The Liquidity Fund may 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.
The Registrant is not authorized to, and does not,
invest in shares of common or preferred stock in either Fund One
or Liquidity Fund.
(v) 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.
The Registrant has no power under its Charter to engage
in the purchase or sale of commodities or commodity contracts.
(vi) Other than the securities which are of the nature
excepted from Item 13 (b) (8) of Form N-1A, 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.
(vii) 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
Items 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.
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.
The Board of Directors of the Corporation has investment
discretion with regard to Fund One assets.
(d) Not applicable
(e) The portfolio turnover ration for Fund One was
50.00% in 1998 as compared to 25.93% in 1997. The increased
portfolio turnover is primarily attributed to the reinvestment of
maturing and called securities in light of the declining interest
rate environment in 1998. While securities were called in the
third and fourth quarters of 1997, investment securities were
called throughout 1998. In 1997, the established portfolio
positions allowed management to limit its investment activity,
primarily to new share investments and the reinvestment of
maturing or called securities, in light of the declining interest
rate environment it the third and fourth quarters of 1997.
13 Management of The Fund
(a) The business of the Corporation is conducted by a
Board of Directors elected by the Corporation's Incorporators and
the Directors have investment discretion relative to Corporation
assets. 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.
(b)
(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
Robert E. Haley Vice President Vice President of the
75 Park Plaza Registrant since August
Boston, MA 02116-3934 1990
(b) cont)
(1) (2) (3)
Position(s)
Name Held with Principal Occupation(s)
and Address Registrant during past 5 years
Annemarie Lee Vice President Vice President (since
75 Park Plaza December 1993) and
Boston, MA 02116-3934 Assistant Vice 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 Chairman of the Board
P.O. Box 849 the Ware Co-operative
Ware, MA 01082 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
*deceased 01/28/1999
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
Ronald E. Lestan Director President of The Walpole
305 Bullard Street Co-operative Bank,
Walpole, MA 02081 Walpole, Massachusetts
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
(b) cont)
(1) (2) (3)
Position(s)
Name Held with Principal Occupation(s)
and Address Registrant during past 5 years
John H. Pearson, Jr. Director President of Butler Bank,
62 Fairmount St. a Co-operative Bank
Lowell, MA 01852 Lowell, Massachusetts
(c) Not applicable.
(d) 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, 1998.
(1) (2)and(5) (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 $ 3,000 0 0
John T. Day*
Director and Chairman
of the Board 4,000 0 0
*deceased 01/28/1999
Robert F. Day
Director 4,000 0 0
Charles P. Hooker
Director 4,000* 0 0
Ronald E. Lestan
Director 4,000 0 0
Walter A. Murphy
Director and Clerk of
the Board 4,100 0 0
John H.Pearson, Jr.
Director 4,000 0 0
James L. Burns, Jr.
President and Chief
Executive Officer 75,725 3,068 107,648
William F. Casey, Jr.
Executive Vice President 45,000 3,655 98,233
Susan L. Ellis
Vice President 57,000 5,683 180,235
Robert E. Haley
Vice President 110,696 11,000 77,277
Officers and $381,521 $29,695 $623,674
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 figure are deferred compensation totaling $4,000.
(c) Not Applicable
_______________________________
Item 14. Control Persons and Principal Holders of Securities
(a) No person is in a control relationship with the
Registrant.
(b) As of February 28, 1999 the following five (5)
investors of Fund One and two (2) investors 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 14.50%
Boston, Massachusetts
Needham Co-operative Bank
Needham, Massachusetts 11.08%
Mt. Washington Co-operative Bank
S. Boston, Massachusetts 6.16%
Pittsfield Co-operative Bank
Pittsfield, Massachusetts 5.74%
United Co-operative Bank
W. Springfield, Massachusetts 5.41%
Liquidity Fund
Woronoco Savings Bank
Westfield, Massachusetts 21.63%
Massbank for Savings
Melrose, Massachusetts 7.11%
(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 15. Investment Advisory and Other Services
(a)-(f) The Registrant as underwriter does not currently
utilize the services of any 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. No person other than a director,
officer or employee of the Registrant furnishes advice to the
Registrant with respect to investments.
(g ) See Item 8(b) 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.
(1) The Registrant spent $173,468 ($101,919
Fund One and $71,549 Liquidity Fund) in the
year ended December 31, 1998 for the following
activities indicated under the Plan:
(i) $5,200 and $3,119 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;
(ii) $4,919 and $4,919 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;
(iii, iv & vi) No amounts were spent for the
activities described in Item 15(g)(iii) and
(iv) of the instructions to Form N-lA; and
(v) $41,800 and $25,700 for compensation,
payroll taxes and benefits to officer
responsible for sales and customer service;
(vii-a) $6,700 and $4,100 for sponsorship of
annual subscriptions on behalf of
participating investors to IDC Financial
Publishing, Inc.;
(vii-b) $29,600 and $18,896 for other
promotional material;
(vii-c) $5,700 and $3,402 for sponsorship of
and/or attendance at conferences and
conventions of banking and other groups
including eligible investors as members or
participants; and
(vii-d) $8,000 and $12,113 for other related
expenses (telephone, travel, etc.).
(2) and (3) Not Applicable
(4) Because more than one fund will be operated by the
Corporation, operating expenses and expenses incurred pursuant
to the Plan related directly to a single fund operation will be
charged directly to that fund. Common or indirect expenses will
be allocated among 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.
(5) 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.
(6) 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.
(h) (1), (2) and (4) Not Applicable
(h) (3) The portfolio securities of the Registrant are
held by a commercial bank pursuant to a custodian agreement.
The Registrant's custodian is State Street Bank and
Trust Company, 225 Franklin Street, Boston, Massachusetts 02110.
This custodian holds cash and investments, other than Federal
funds sold, and investments held under custody include
certificates of deposit. The Fund maintains Federal funds sold
balances with qualified national banks located in Massachusetts
and Massachusetts state chartered banks, including State Street
Bank and Trust Company. While the banks utilized have been
determined by the officers and directors of the Fund to qualify
as custodian banks themselves, the Fund acts as self custodian
for Federal funds sold.
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.
The Registrant has also made arrangements with Parent
McLaughlin and Nangle for the audit scope to include the
confirmation of its federal funds sold position at least three
times during the fiscal year, at least two of which shall be
chosen by such accountants without prior notice to the Fund, in
accordance with paragraph (f) of Rule 17f-2.
(i) Not applicable.
Item 16 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 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 17 Capital Stock and Other Securities
(a) (1) 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.
(2)(i) Fund shares may not be transferred by banks
holding such shares to any persons other than an eligible bank
(except that the shares may be pledged to such other persons or
they may be transferred to The Co-operative Central Bank,
hereinafter the "Central Bank"). If the Fund shares are acquired
by any other persons by operation of law or by foreclosure upon
the pledge of such shares (or through transfer, in the case of
the Central Bank), the Corporation must offer to repurchase the
shares from such person at net asset value of the shares. If
such offer is refused, no dividend may be paid by the Corporation
or Fund on such shares, and the redemption price which the holder
of such shares may obtain in any subsequent repurchase of those
shares by the Corporation or Fund is limited to the net asset
value of the shares on the date of the Corporation's offer.
(ii) In the event of any transfer, it is extremely important
to notify the Corporation immediately of any purchase, sale or
transfer of Fund shares not made through the Corporation or its
transfer agent. Immediate notification should be furnished to
the Corporation by telephone, with written notification as a
follow-up thereto. Prompt notification is essential to avoid any
delay in redemption offer and loss of earnings. Please remember
that a statutory restriction exists on the Corporation and it
would be unable to pay a dividend to an ineligible holder after
expiry of the 30-day repurchase period which is statutorily
available following such transfer. The Registrant is not aware
any material obligation or potential liabilities associated with
owning The Fund shares beyond the investment risks that were
discussed in Item 4(c) of Part A of the Registration Statement of
which the statement of Additional Information is a part.
(iii) 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.
(iv) 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.
(v) All shares if 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.
(vi) Holders of the Registrant's shares do not have
pre-emptive rights
(vii) Holders of the Registrant's shares do not have
any conversion rights.
(viii) (F) See Item 7 (c), "Redemption of
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.
(ix) There are no sinking fund provisions applicable
to the Registrant's shares.
(x) Holders of the Registrant's shares have no
liability to further calls or to assessments by the Registrant.
(b) Not applicable
Item 18 Purchase, Redemption and Pricing of Shares
(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) Not applicable
(c) 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 assets 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 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 values, 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 3 of
Item 18 are not applicable to either of the Registrant's Funds.
A specimen price make up sheet, as requested by Instruction 4, is
furnished as part of Exhibit 18.
(d) 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 19 Taxation of the Fund
See discussion under Item 7(c) of Part A of the
Registration Statement of which this Statement of Additional
Information is a part.
Item 20 Underwriters
Not Applicable
Item 21 Calculations of Performance Data
(a) (1) Yield. The yield for the Liquidity Fund for
the seven-day period ended December 31, 1998 was 5.09% 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 21 (a) (2) of Form
N-1A. A schedule of the computation of yield is furnished as
part of Exhibit 16
(b) (1) Total Return. The total return for Fund One
for the year ended December 31, 1998 was 6.32% total return for
the five years ended December 31, 1998 was 5.50% Total return
for the ten years ended December 31, 1998 was 7.19%.
Fund One's total return for each of the foregoing
periods was computed by finding, through the use of the formula
prescribed by Item 21 (b) (1) of Form N-1A, 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
(b) (2) Yield. The yield for Fund One for the thirty-
day period ended December 31, 1998 was 5.69% 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 21 (b) (2) of Form N-1A. A schedule
of the computation of yield is furnished as part of Exhibit 16
Item 22 Financial Statements
Financial Statements of Fund One of the Registrant for
the year ended December 31, 1998 and the report of the
Registrant's independent certified public accountants thereon for
the year ended December 31, 1998 are included herewith.
Financial Statements of the Liquidity Fund of the Registrant for
the year ended December 31, 1998 and the report of the
Registrant's independent certified public accountants thereon for
the year ended December 31, 1998 are also included herewith.
BANK INVESTMENT FUND - FUND ONE
FINANCIAL STATEMENTS
For the year ended December 31, 1998
[BIF FUND ONE PAGES 19-28 ONLY]
BANK INVESTMENT FUND-FUND ONE
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1998
<TABLE>
<S>
<C>
ASSETS:
INVESTMENTS IN SECURITIES, at value
(Identified cost $121,737,234)
$122,659,962
REPURCHASE AGREEMENTS
6,330,000
INTEREST RECEIVABLE
1,971,031
CASH
50,649
- ------------
TOTAL ASSETS
131,011,642
- ------------
LIABILITIES:
ACCOUNTS PAYABLE-BROKER
2,000,000
DIVIDENDS PAYABLE
410,103
ACCRUED EXPENSES
126,210
- ------------
TOTAL LIABILITIES
2,536,313
NET ASSETS: (Equivalent to $987.5026 per share based on 130,101.2565 shares
of
beneficial interest outstanding)
$128,475,329
============
REPRESENTED BY:
Paid-in Capital
$144,814,662
Accumulated net losses on investments
(17,262,056)
Unrealized appreciation of investments-net
922,723
- ------------
TOTAL NET ASSETS
$128,475,329
============
</TABLE>
See notes to financial statements.
BANK INVESTMENT FUND-FUND ONE
STATEMENT OF OPERATIONS
Year Ended December 31, 1998
<TABLE>
<S> <C>
<C>
INVESTMENT INCOME:
Interest income, net of interest expense of $11,583
$8,294,216
EXPENSES:
Compensation, payroll taxes and benefits-officers $233,305
Compensation, payroll taxes and benefits-other 84,983
Distribution expenses 101,919
Occupancy 59,539
Meetings and travel 36,400
Professional fees 32,635
Equipment and data processing 28,600
Directors' fees 16,800
Postage and telephone 14,100
Stationary and supplies 7,300
Shareholder reports 4,919
Insurance expense 4,800
Custodian and other bank service fees 3,300
Other expenses 15,150
--------
TOTAL EXPENSES
643,750
- ----------
INVESTMENT INCOME-NET
7,650,466
- ----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments
2,375
Change in net unrealized appreciation on investment securities
588,959
- ----------
Net realized and unrealized gain on investments
591,334
- ----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS
$8,241,800
==========
</TABLE>
See notes to financial statements.
BANK INVESTMENT FUND-FUND ONE
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended
December 31,
--------------
- ---------------
1998
1997
----
- ----
<S> <C>
<C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Investment income-net $ 7,650,466
$ 8,839,050
Net realized gain on investments 2,375
5,078
Unrealized appreciation-net 588,959
1,330,580
--------------
- ---------------
Net increase in net assets resulting from operations 8,241,800
10,174,708
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net (7,650,466)
(8,839,050)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST-NET
DECREASE (15,724,503)
(9,318,402)
--------------
- ---------------
TOTAL DECREASE IN NET ASSETS (15,133,169)
(7,982,744)
NET ASSETS:
Beginning of year 143,608,498
151,591,242
--------------
- ---------------
End of year $128,475,329
$143,608,498
=============================
</TABLE>
See notes to financial statements.
BANK INVESTMENT FUND-FUND ONE
PORTFOLIO OF INVESTMENTS
December 31, 1998
<TABLE>
<CAPTION>
Obligations of Federal Agencies-95.4%
Par Coupon Maturity Date
Value
--- ------ -------------
- -----
<S> <C> <C> <C>
<C>
Federal Farm Credit Bank $ 2,500,000 6.19% 03/19/01
$ 2,560,937
2,000,000 6.20 04/09/01
2,050,000
2,500,000 6.78 01/15/02
2,502,344
-----------
- ------------
$ 7,000,000 (Cost $
7,000,000) $ 7,113,281
-----------
- ------------
Federal Home Loan Bank $ 3,000,000 7.88% 02/09/00
$ 3,093,750
1,000,000 6.00 12/14/00
1,019,375
1,985,000 5.745 01/25/01
1,982,519
2,000,000 5.735 02/13/01
1,996,250
2,000,000 6.04 02/14/01
1,998,125
5,000,000 6.09 03/21/01
5,118,750
5,000,000 6.48 01/08/02
5,045,312
3,000,000 6.60 09/03/02
3,028,125
2,000,000 6.015 02/05/03
2,000,000
2,000,000 5.73 11/24/03
1,981,875
2,000,000 6.08 12/01/03
2,004,375
-----------
- ------------
$28,985,000 (Cost $
28,985,000) $ 29,268,456
-----------
- ------------
Federal Home Loan Mortgage
Corporation $ 2,000,000 7.98% 01/19/00
$ 2,061,250
4,000,000 6.125 03/03/03
4,003,750
2,000,000 6.15 03/06/03
2,016,250
2,000,000 5.48 10/08/03
1,985,625
1,500,000 5.85 11/19/03
1,487,344
-----------
- ------------
$11,500,000 (Cost $
11,488,639) $ 11,554,219
-----------
- ------------
Federal National Mortgage
Association $ 2,000,000 5.91% 01/12/01
$ 1,996,250
2,000,000 5.84 01/19/01
2,000,000
2,500,000 6.37 03/22/01
2,503,906
3,000,000 6.45 04/12/01
3,007,500
$ 4,500,000 6.40% 05/02/01
$ 4,651,875
1,500,000 5.35 12/17/01
1,498,594
2,500,000 6.375 01/16/02
2,600,000
5,000,000 6.45 12/16/02
5,059,375
2,000,000 6.15 12/26/02
2,013,125
2,000,000 5.96 02/07/03
2,004,375
2,500,000 6.16 02/19/03
2,501,562
4,000,000 5.96 03/05/03
4,060,000
2,000,000 6.08 06/23/03
2,004,375
2,000,000 6.01 08/18/03
2,005,625
4,000,000 5.91 08/25/03
4,037,500
3,000,000 6.07 09/02/03
2,993,438
2,000,000 5.75 09/23/03
1,983,750
2,000,000 5.52 10/06/03
1,983,750
2,000,000 5.27 10/14/03
1,982,500
2,000,000 5.62 10/14/03
1,981,875
2,000,000 5.80 11/17/03
1,989,375
1,500,000 5.64 11/19/03
1,486,406
2,000,000 5.66 01/05/04
2,000,000
-----------
- ------------
$58,000,000 (Cost $
57,994,020) $ 58,345,156
-----------
- ------------
Government National Mortgage
Association $ 441,999 6.50% 11/15/07
$ 450,287
2,480,040 6.50 07/15/08
2,526,540
2,405,358 6.50 11/15/08
2,450,459
358,157 6.50 12/15/08
364,873
645,027 5.50 12/15/08
637,771
1,927,868 7.50 03/15/22
1,987,511
2,893,077 7.00 10/15/22
2,961,787
2,828,690 7.00 05/15/23
2,895,872
-----------
- ------------
$13,980,216 (Cost $
14,175,825) $ 14,275,100
-----------
- ------------
Student Loan Marketing
Association $ 2,000,000 7.723% 01/25/99
$ 2,003,750
-----------
- ------------
(Cost $
1,993,755)
Certificates of Deposit-0.1%
NCB Savings Bank, FSB $ 100,000 5.75% 01/19/99
$ 100,000
(Cost $
100,000)
- ------------
(Cost
$121,737,239) $122,659,962
- ------------
Repurchase Agreement-4.9%
<C> <S>
$6,330,000 Repurchase Agreement dated December 31, 1998
with
PaineWebber, Inc. due January 4, 1999 with
respect to
various Federal Agencies ranging from:
Par Value $1,000-$3,100,000
Rate Range 2.00%-12.50%
Maturity Range 07/14/99-09/01/26
Maturity value of $6,333,341 for an effective
yield of
4.75%.
<S> <C>
<C>
(Cost $
6,330,000) $ 6,330,000
- ------------
Total Investments-100.4% (Cost
$128,067,239) $128,989,962
- ------------
Liabilities in excess of other assets-(0.4)%
(514,633)
- ------------
Net assets-100%
$128,475,329
============
</TABLE>
See notes to financial statements.
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, Federally Chartered Savings Banks and
Savings and Loan Associations with their principal place of business in
Massachusetts, 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 prior
to January 1, 1997, the Fund did not amortize premiums or accrete discounts
on fixed income securities in the portfolio, except those original issue
discounts for which amortization is required for federal income tax
purposes. Since January 1, 1997, the Fund amortizes premiums or accretes
discounts on related fixed income securities, which change had an
immaterial effect on investment income. Premiums, if any, and discounts are
amortized or accreted on a straight line basis, which approximates the
income method. 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 $2,375 during 1998, which was offset by the available capital loss
carryforward, resulting in a remaining capital loss carryforward of
($3,906,419) at December 31, 1998. 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, 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.
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 $64,588,735 and $78,099,219,
respectively for the year ended December 31, 1998. As of December 31, 1998,
unrealized appreciation of investments was $922,723; accumulated net
realized loss on investment transactions totaled ($17,262,056).
NOTE 4. Borrowed Funds:
The average balance of borrowed funds was $202,055 for the year ended
December 31, 1998. The average interest rate on these borrowings was 5.49%.
Total expense of $11,583 was netted against investment income for the year
ended December 31, 1998.
NOTE 5. 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 $101,919 (.08% of average net assets) pursuant to this Plan for the
year ended December 31, 1998.
NOTE 6. 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, 1998 was $32,970.
NOTE 7. 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, 1998 capital paid-in
aggregated $144,814,662.
Transactions in shares of beneficial interest are summarized as
follows:
<TABLE>
<CAPTION>
Year Ended
Year Ended
December 31, 1998
December 31, 1997
----------------------------- ---
- ------------------------
Shares Amount
Shares Amount
------ ------ -
- ----- ------
<S> <C> <C> <C>
<C>
Sold 1,696.8609 $ 1,674,618
2,216.1487 $ 2,170,000
Issued in reinvestment of dividends 2,750.3006 2,716,925
2,790.7661 2,724,117
-------------------------------------
- ------------------------
4,447.1615 4,391,543
5,006.9148 4,894,117
Redeemed 20,326.3359 20,116,046
14,536.5484 14,212,519
-------------------------------------
- ------------------------
Net decrease (15,879.1744) $(15,724,503)
(9,529.6336) $(9,318,402)
=============================================================
</TABLE>
NOTE 8. 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, 1998 was .48% of average net assets. Operating expenses paid
to the Central Bank for the year ended December 31, 1998 was $40,800.
BANK INVESTMENT FUND - LIQUIDITY FUND
FINANCIAL STATEMENTS
For the year ended December 31, 1998
[BIF-LIQUIDITY PAGES 17-27 ONLY]
BANK INVESTMENT FUND-LIQUIDITY FUND
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1998
<TABLE>
<S>
<C>
ASSETS:
INVESTMENTS, at cost which approximates value
$286,109,400
INTEREST RECEIVABLE
1,003,438
CASH
236,835
- ------------
TOTAL ASSETS
287,349,673
- ------------
LIABILITIES:
DIVIDENDS PAYABLE
639,503
OTHER ACCRUED EXPENSES
81,536
- ------------
TOTAL LIABILITIES
721,039
- ------------
NET ASSETS: (Equivalent to $1,000 per share based on 286,628.6340 shares of
beneficial interest outstanding)
$286,628,634
============
REPRESENTED BY:
Paid-in Capital
$286,628,634
============
</TABLE>
See notes to financial statements.
BANK INVESTMENT FUND-LIQUIDITY FUND
STATEMENT OF OPERATIONS
Year Ended December 31, 1998
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
$16,804,967
EXPENSES:
Compensation, payroll taxes and benefits-officers $143,008
Compensation, payroll taxes and benefits-other 52,092
Distribution expenses 71,549
Occupancy 36,400
Professional fees 51,393
Other expenses 23,077
Custodian and other bank service fees 29,708
Equipment and data processing 17,464
Meetings and travel 21,973
Directors' fees 10,300
Printing and postage 6,622
Stationary and supplies 4,470
Insurance expense 3,025
Shareholder reports 4,919
--------
TOTAL EXPENSES
476,000
--------
- ---
INVESTMENT INCOME-NET
16,328,967
--------
- ---
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS
$16,328,967
===========
</TABLE>
See notes to financial statements.
BANK INVESTMENT FUND-LIQUIDITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
- -
1998 1997
---- ----
<S> <C> <C>
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS:
Investment income-net $ 16,328,967 $
12,091,702
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net (16,328,967)
(12,091,702)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST-
NET INCREASE 51,424,170
24,996,908
---------------------------
- -
TOTAL INCREASE IN NET ASSETS 51,424,170
24,996,908
NET ASSETS:
Beginning of year 235,204,464
210,207,556
---------------------------
- -
End of year $286,628,634
$235,204,464
============================
</TABLE>
See notes to financial statements.
BANK INVESTMENT FUND-LIQUIDITY FUND
PORTFOLIO OF INVESTMENTS
December 31, 1998
<TABLE>
<CAPTION>
Obligations of Federal Agencies-10.1%
Par Coupon Maturity Date
Cost
--- ------ -------------
- ----
<S> <C> <C> <C>
<C>
Federal Home Loan Mortgage
Corporation $ 5,000,000 5.04%* 01/06/99
$ 4,995,800
Federal National Mortgage
Association 5,000,000 5.06* 01/04/99
4,997,200
Federal National Mortgage
Association 5,000,000 6.45 07/01/99
5,033,794
Student Loan Marketing
Association-Floater 14,000,000 4.858** 08/02/99
14,000,000
------------
- ------------
$ 29,000,000 (Value $
29,006,944) $ 29,026,794
------------
- ------------
Certificates of Deposit-3.2%
Avon Cooperative Bank $ 250,000 5.00% 05/03/99
$ 250,000
Ben Franklin Savings Bank 1,000,000 5.50 01/29/99
1,000,000
Ben Franklin Savings Bank 300,000 5.10 06/28/99
300,000
Bank of Fall River,
a Cooperative Bank 500,000 5.50 01/20/99
500,000
Fidelity Cooperative Bank 500,000 5.50 01/27/99
500,000
First Trade Union 90,000 5.50 11/10/99
90,000
Foxborough Savings Bank 250,000 5.50 01/14/99
250,000
Foxborough Savings Bank 200,000 5.25 03/31/99
200,000
Foxborough Savings Bank 300,000 5.00 06/01/99
300,000
Hyde Park Cooperative Bank 250,000 5.50 02/02/99
250,000
Lowell Cooperative Bank 200,000 5.50 02/04/99
200,000
Marlborough Cooperative Bank 500,000 5.60 01/27/99
500,000
Marlborough Cooperative Bank 250,000 5.65 07/01/99
250,000
Marlborough Cooperative Bank 250,000 5.60 09/30/99
250,000
Mechanics Cooperative Bank 500,000 5.00 06/28/99
500,000
Mt. Washington Cooperative
Bank 600,000 5.55 01/11/99
600,000
Mt. Washington Cooperative
Bank 300,000 5.55% 02/25/99
300,000
Mt. Washington Cooperative Bank 450,000 5.00 06/17/99
450,000
NCB Savings Bank, FSB 100,000 5.00 04/05/99
100,000
South Shore Cooperative Bank 1,000,000 5.55 02/25/99
1,000,000
South Shore Savings Bank 500,000 5.50 02/09/99
500,000
South Shore Savings Bank 1,000,000 5.50 02/24/99
1,000,000
------------
- ------------
$ 9,290,000 (Value $
9,290,000) $ 9,290,000
------------
- ------------
Commercial Paper-62.0%
Anheuser Busch Corp. $ 5,000,000 5.05%* 01/07/99
$ 4,995,090
Anheuser Busch Corp. 5,000,000 5.05* 01/20/99
4,985,972
Anheuser Busch Corp. 7,000,000 5.00* 01/26/99
6,974,722
Bank One Funding Corp. 4,717,000 5.43* 01/13/99
4,707,751
Bank One Funding Corp. 7,000,000 5.45* 01/21/99
6,977,746
Carolina Power & Light Co. 5,000,000 5.15* 02/11/99
4,969,958
Carolina Power & Light Co. 5,000,000 5.10* 02/26/99
4,959,625
Coca Cola & Co. 3,000,000 5.00* 01/14/99
2,994,167
Coca Cola & Co. 5,000,000 5.09* 02/01/99
4,977,378
Coca Cola & Co. 3,000,000 5.05* 02/12/99
2,981,904
Consolidated Natural Gas Co. 5,475,000 5.05* 01/22/99
5,458,104
Consolidated Natural Gas Co. 3,000,000 5.12* 01/28/99
2,988,053
Consolidated Natural Gas Co. 3,000,000 5.05* 02/02/99
2,985,920
Duke Energy Corp. 5,000,000 5.17* 01/13/99
4,990,665
Duke Energy Corp. 5,000,000 5.15* 02/04/99
4,974,965
Duke Energy Corp. 3,000,000 5.20* 02/08/99
2,983,100
Fleet Funding Corp. 5,000,000 5.30* 01/11/99
4,991,903
Fleet Funding Corp. 5,000,000 5.45* 01/14/99
4,989,403
Ford Motor Credit Co. 4,000,000 5.02%* 01/22/99
3,987,729
General Electric Capital Corp. 5,000,000 5.01* 01/25/99
4,982,604
Gillette Inc. 5,000,000 5.12* 01/07/99
4,995,022
Gillette Inc. 5,000,000 5.12* 01/08/99
4,994,311
Gillette Inc. 7,000,000 5.12* 01/12/99
6,988,053
GTE Funding Inc. 5,000,000 5.16* 02/16/99
4,966,317
Lucent Technologies Inc. 5,000,000 5.15* 01/29/99
4,979,257
Lucent Technologies Inc. 8,000,000 5.10* 02/03/99
7,961,467
Merrill Lynch & Co. Inc. 5,000,000 5.23* 01/19/99
4,986,199
Merrill Lynch & Co. Inc. 5,000,000 5.30* 01/27/99
4,980,125
Merrill Lynch & Co. Inc. 5,000,000 5.20* 02/23/99
4,961,000
National Rural Utilities Inc. 5,000,000 5.00* 01/11/99
4,992,361
National Rural Utilities Inc. 5,000,000 5.12* 02/19/99
4,964,444
National Rural Utilities Inc. 3,000,000 5.04* 03/23/99
2,965,560
Receivables Captial Corp. 2,159,000 5.22* 01/14/99
2,154,584
USAA Capital Corp. 5,000,000 5.16* 01/12/99
4,991,400
USAA Capital Corp. 3,000,000 5.15* 01/20/99
2,991,417
USAA Capital Corp. 4,000,000 5.11* 01/28/99
3,984,102
USAA Capital Corp. 3,000,000 5.00* 03/31/99
2,962,500
Winn-Dixie, Inc. 5,000,000 5.03* 01/05/99
4,996,507
------------
- ------------
$178,351,000 (Value $
177,703,887) $177,671,385
------------
- ------------
Short-Term Corporate Bonds and Notes-10.7%
Asssociates Corp. of N.A. $ 5,500,000 6.75% 10/15/99
$ 5,581,958
Avco Financial Corp. 2,000,000 7.25 07/15/99
2,015,366
Ford Motor Corp. 530,000 5.625 01/15/99
530,027
GMAC Corp. 5,594,000 7.75 01/15/99
5,599,099
GMAC Corp. 1,000,000 8.50 01/15/99
1,001,101
GMAC Corp. 750,000 6.04 03/19/99
751,164
GMAC Corp. 1,500,000 7.50 07/22/99
1,519,939
Household Finance Corp. 2,500,000 7.28% 07/22/99
2,530,170
Household Finance Corp. 1,600,000 8.86 12/15/99
1,657,661
IBM Corp. 1,500,000 5.40 01/27/99
1,499,969
Morgan Stanley Dean Witter
Corp. 4,000,000 6.125 01/05/99
4,000,153
Morgan Stanley Dean Witter
Corp. 1,000,000 7.44 06/08/99
1,007,182
Pepsico 500,000 6.25 09/01/99
503,204
Transamerica Financial Corp. 2,500,000 6.80 03/15/99
2,505,716
------------
- ------------
$ 30,474,000 (Value $
30,727,466) $ 30,702,709
------------
- ------------
Federal Funds Sold-13.8%
<CAPTION>
Par Coupon Maturity Date
Cost
--- ------ -------------
- ----
<S> <C> <C> <C>
<C>
BankBoston $ 13,811,096 4.875% 01/04/99
$ 13,811,096
Fleet Bank, N.A. 11,765,000 4.75 01/04/99
11,765,000
U. S. Trust Co. 13,842,416 4.938 01/04/99
13,842,416
------------
- ------------
$ 39,418,512 (Value $
39,418,512) $ 39,418,512
------------
- ------------
Total Investments-99.8% (Value
$286,146,809) $286,109,400
- ------------
Other assets in excess of liabilities-0.2%
519,234
- ------------
Net assets-100%
$286,628,634
============
<FN>
- --------------------
* Annualized yield on date of purchase.
** Rate changes weekly.
</FN>
</TABLE>
See notes to financial statements.
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, Federally Chartered Savings Banks and Savings and Loan
Associations with their principal place of business in Massachusetts, 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. Premiums, if any, and discounts are amortized or accreted on a
straight line basis, which approximates the income 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.
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.
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, 1998
December 31, 1997
----------------------------- ---
- ------------------------
Shares Amount
Shares Amount
------ ------ -
- ----- ------
<S> <C> <C> <C>
<C>
Sold 1,468,133.7242 $1,468,133,724
763,373.3134 $763,373,313
Issued in reinvestement
of dividends 9,254.9275 9,254,927
7,740.8565 7,740,856
-------------------------------------
- ------------------------
1,477,388.6517 1,477,388,651
771,114.1699 771,114,169
Redeemed 1,425,964.4817 1,425,964,481
746,117.2619 746,117,261
-------------------------------------
- ------------------------
Net increase 51,424.1700 $ 51,424,170
24,996.9080 $ 24,996,908
=============================================================
</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 $71,549 (.02% of average net assets) pursuant to the Plan for the
year ended December 31, 1998.
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, 1998 was $20,207.
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 net assets for the
year ended December 31, 1998. As reimbursement of allocated expenses, the
Fund paid or accrued $24,200 to the Bank Investment Fund-Fund One, for the
year ended December 31, 1998.
PART C
OTHER INFORMATION NOT REQUIRED
IN PROSPECTUS
Item 23 Exhibits
(a) 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-1A, 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-1A, dated March 25, 1994, and incorporated herein as
reference).
(b) Copy of the By-Laws of the Registrant as amended
and restated as of March 20, 1997 ( filed as Exhibit 2 of the
Registration Statement on Form N-1A, dated March 31, 1998 and
incorporated herein by reference).
(c) None
(d) None
(e) None
(f) Copy of the Defined Contribution Plan (Plan A) of the
Cooperative Banks Employees Retirement Program (1998 Reinstatement)
dated December 30, 1998. A Copy of Defined Pension Plan (Plan C) of
the Coperative Banks Employees Retirement Program (1998 Reinstatement)
dated December 30, 1998, shown as Exhibit 7.
(g) Copy of the safekeeping agreements between the
Registrant and the State Street Bank and Trust Company dated
December 20, 1996. (filed as Exhibit 8 to Amendment 16 of the
Registrant's Registration Statement on Form N-1A, dated March 27,
1997, and incorporated herein by reference).
(h) None.
(i) Not applicable.
(j) Not applicable.
(k) Not applicable.
(l) None.
(m) Plan of Distribution Pursuant to Rule 12b-1, as
amended (filed as Exhibit 15 to Amendment 16 of the Registrant's
Registration statement in Form N-1A, dated March 27, 1996, and
incorporated herein by reference).
(n) Financial Data Schedule
Computation of performance quotations provided in
Item 21. Independent Auditor's Consent (Exhibits 16 and 17)
(o) None.
Specimen price make up sheet required by Instruction 5 of Item
18(c)(4).
Item 24 Persons Controlled by or Under Common Control with registrant
Not applicable
Item 25 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 of 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 a 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
had 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 26 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 27 Principal Underwriters
Not applicable, as the Registrant does not use an
underwriter in connection with the distribution of its
securities.
Item 28 Location of Accounts and Records
The accounts, books and other documents of the
Registrant are physically maintained a the principal offices of
the Registrant at 75 Park Plaza, Boston, Massachusetts 02116-3934
Item 29 Management Services
There are not management-related service contracts under
which services are provided to the Registrant.
Item 30 Undertakings
Not applicable, as this Registration Statement does not
relate to the Securities Act of 1933
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 31st day of March, 1999.
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. 18
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 1998 RESTATEMENT
CONSISTS OF THE PLAN A 1994
RESTATEMENT EXECUTED ON
OCTOBER 26, 1994, THE FIRST
AMENDMENT EXECUTED ON DECEMBER
30, 1994, THE SECOND AMENDMENT
EXECUTED ON MARCH 29, 1995,
THE THIRD AMENDMENT EXECUTED
ON SEPTEMBER 27, 1995, THE
FOURTH AMENDMENT EXECUTED ON
FEBRUARY 28, 1996, THE FIFTH
AMENDMENT EXECUTED ON FEBRUARY
26, 1997, THE SIXTH AMENDMENT
EXECUTED ON DECEMBER 17, 1997,
AND CERTAIN OTHER CHANGES
GENERALLY DESIGNED TO COMPLY
WITH RECENT LAW AND
REGULATIONS.
THE DEFINED CONTRIBUTION PLAN (PLAN A)
OF THE
COOPERATIVE BANKS EMPLOYEES RETIREMENT PROGRAM
(1998 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 was further amended, generally
effective as of January 1, 1989, by the 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 has now been further amended by this 1998
Restatement to incorporate the provisions of six amendments to
the 1994 Restatement, as well as to make additional desired
changes and to comply with the current requirements of applicable
law and regulations. This 1998 Restatement is generally
effective as of January 1, 1998; provided, however, any provision
of the Plan which is required by law to be effective as of an
earlier date will be effective as of such date.
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
1998 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" 6
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" 6
2.23. "Matching Contribution" 6
2.24. "Normal Retirement Date" 6
2.25. "Participant" 7
2.26. "Participating Employer" 7
2.27. "Participating Employer's Participation Date" 7
2.28. "Plan" 7
2.29. "Plan Year" 7
2.30. "Qualified Domestic Relations Order" 7
2.31. "Qualified Nonelective Contribution" 7
2.32. "Retirement Program" 7
2.33. "Rollover Contributions" 7
2.34. "Terminated Eligible Employee" 7
2.35. "Trustee" 7
2.36. "Trust" 7
2.37. "Valuation Date" 8
2.38. "Withdrawal Date" 8
ARTICLE 3. SERVICE DEFINITIONS 9
3.1. "Absence in Military Service" 9
3.2. "Authorized Leave of Absence" 9
3.3. "Hour of Service" 9
3.4. "Employment Commencement Date" 10
3.5. "One-Year Break in Service" 10
3.6. "Period of Service" 11
3.7. "Reemployment Commencement Date" 11
3.8. "Termination of Employment" 11
3.9. "Vesting Service" 11
3.10. "Year of Eligibility Service" 11
3.11. Crediting Periods of Service earned before Employer
becomes a Participating Employer 11
3.12. Crediting Periods of Service earned before Employer
is merged with or acquired by a Participating Employer 12
3.13. Application of Service Definitions 12
ARTICLE 4. PARTICIPATION 13
4.1. Participation Requirements 13
4.2. Date of Participation 13
4.3. Duration of Participation; Reemployment 13
4.4. Reclassification of employment status 13
ARTICLE 5. CONTRIBUTIONS TO THE PLAN 14
5.1. Elective Contributions and Employee Contributions 14
5.2. Form and Manner of Contribution Agreements 14
5.3. Matching Contributions 14
5.4. Discretionary Contributions 15
5.5. Qualified Nonelective Contributions 15
5.6. Rollover Contributions; Direct Transfers 15
5.7. Crediting of Contributions 15
5.8. Time for Making Contributions 15
5.9. Certain Limits Apply 16
5.10. Return of Contributions 16
5.11. Establishment of Trust Fund 16
ARTICLE 6. LIMITS ON CONTRIBUTIONS 17
6.1. Code Section 404 Limits 17
6.2. Code Section 415 Limits 17
6.3. Code Section 402(g) Limits 20
6.4. Code Section 401(k)(3) Limits 22
6.5. Code Section 401(m) Limits 26
6.6. Section 410(b) Limits 30
ARTICLE 7. PARTICIPANT ACCOUNTS 32
7.1. Accounts 32
7.2. Adjustment of Accounts 32
7.3. Investment of Accounts 32
ARTICLE 8. VESTING OF ACCOUNTS 34
8.1. Immediate Vesting of Certain Accounts 34
8.2. Deferred Vesting of Other Accounts 34
8.3. Special Vesting Rules 34
8.4. Distribution of Less Than Entire Vested Percentage 34
8.5. Changes in Vesting Schedule 35
8.6. Forfeitures 35
ARTICLE 9. PAYMENT OF ACCOUNTS 37
9.1. Retirement 37
9.2. Death 37
9.3. Disability 37
9.4. Other Termination of Employment 37
9.5. Valuation for Distribution 37
9.6. Timing of Distribution 37
9.7. Mode of Distribution 38
9.8. Consent to Distributions by Participant 39
9.9. Beneficiary Designation 40
9.10. Facility of Payments 41
9.11. Payment as Discharge of Liability 41
9.12. Direct Rollover Option 41
9.13. Distributions to Certain Participants 42
ARTICLE 10. LOANS TO PARTICIPANTS 43
10.1. Loan Application 43
10.2. Rules and Procedures 43
10.3. Maximum Amount of Loan 43
10.4. Minimum Amount of Loan 43
10.5. Note; Interest; Security; Default 43
10.6. Repayment 45
10.7. Repayment upon Distribution 45
10.8. Note as Trust Asset 45
10.9. Nondiscrimination 45
ARTICLE 11. SPECIAL TOP-HEAVY PROVISIONS. 46
11.1. Provisions to Apply 46
11.2. Minimum Contribution 46
11.3. Special Vesting Schedule 47
11.4. Adjustment to 415 Limitations 47
11.5. Definitions 47
ARTICLE 12. ADMINISTRATION OF THE PLAN 51
12.1. Powers and Duties of the Association 51
12.2. Appointment of Trustee and Investment Managers 52
12.3. Conclusiveness of Various Documents 52
12.4. Indemnification 52
12.5. Claims Procedure 53
12.6. Expenses of Administration 53
12.7. Authority to Correct Operational Defects 54
12.8. Effect of Interpretation or Determination 54
ARTICLE 13. AMENDMENT AND TERMINATION 55
13.1. Amendment or Termination by Association 55
13.2. Voluntary Participation 55
13.3. Withdrawal by Participating Employer 55
13.4. Effect of Withdrawal on a Withdrawing Participating
Employer 57
13.5. Effect of Withdrawal on Participants and
Beneficiaries 57
13.6. Failure to Maintain Qualified Status 57
13.7. Merger, Consolidation or Transfer of Plan Assets 58
ARTICLE 14. MISCELLANEOUS 59
14.1. Exclusive Benefit Rule 59
14.2. Limitation of Rights 59
14.3. Nonalienability of Benefits 59
14.4. Rights of Eligible Employees 59
14.5. Payment Under Domestic Relations Order 59
14.6. Plan Mergers 60
14.7. Veterans' Reemployment and Benefit Rights 62
ARTICLE 15. ADOPTION AGREEMENT 63
15.1. Adoption Agreement 63
ARTICLE 1. INTRODUCTION tc \l1 "ARTICLE 1. INTRODUCTION .
1.1. Purpose tc \l2 "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 Plan is also intended to
constitute a plan described in section 404(c) of ERISA. 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 and the provisions of the Plan and Trust shall
be construed and applied accordingly.
1.2. Application of the Restated Defined Contribution Plan
(Plan A) tc \l2 "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, 1998. Except
as otherwise provided herein, the rights and benefits, if any, of
a former Employee whose employment terminated before January 1,
1998 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.
Generally, the provisions of the Plan in effect at the time an
Employee terminates employment are controlling with respect to
that Employee.
1.3. Defined Terms tc \l2 "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 tc \l2 "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 tc \l2 "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 2. DEFINITIONS OTHER THAN SERVICE DEFINITIONS.
tc \l1 "ARTICLE 2. 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" tc \l2 "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" tc \l2 "2.2. "Adoption
Agreement" means the agreement described in the Plan made by and
between a Participating Employer and the Trustee.
2.3. "Affiliate" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "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, and
also includes reference to any regulation issued pursuant to or
with respect to such section or subsection.
2.8. "Compensation" tc \l2 "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. To the extent permitted under Code sections 415
and 416, Compensation under this paragraph will also include
amounts which would have been received by the Participant
from a Participating Employer or its Affiliate as salary and
wages but for an election under sections 125, 401(k) or
403(b) of the Code.
(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). The Association may prescribe procedures for
applying such limit consistent with the applicable requirements
of Code section 401(a)(17).
A Participating Employer may elect in its Adoption Agreement
a different amount of compensation under (i), (ii) or (iii) above
for purposes of determining different types of contributions
under the Plan.
2.9. "Deferred Retirement Date" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "2.15. "Eligible
Employee" means an individual who is a common-law employee of a
Participating Employer. In no event shall a "leased employee"
(as defined in Code section 414(n)) become an Eligible Employee
until he or she becomes actually employed by a Participating
Employer.
2.16. "Employee" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "2.19. "Entry Date" means any
January 1, April 1, July 1 or October 1 of any Plan Year.
2.20. "ERISA" tc \l2 "2.20. "ERISA" means the Employee
Retirement Income Security Act of 1974, as from time to time
amended. Reference to any section or subsection of ERISA refers
to any comparable or succeeding provisions of any legislation
which amends, supplements or replaces such section or subsection,
and also includes reference to any regulation issued pursuant to
or with respect to such section or subsection.
2.21. "Highly Compensated Employee" tc \l2 "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 provisions of
which are incorporated herein by reference.
2.22. "Investment Medium" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "2.25. "Participant" means an
Eligible Employee or Terminated Eligible Employee who
participates in the Plan pursuant to its provisions.
2.26. "Participating Employer" tc \l2 "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" tc \l2
"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" tc \l2 "2.28. "Plan" means The Defined
Contribution Plan (Plan A) of the Cooperative Banks Employees
Retirement Program.
2.29. "Plan Year" tc \l2 "2.29. "Plan Year" means the
calendar year.
2.30. "Qualified Domestic Relations Order" tc \l2 "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" tc \l2 "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" tc \l2 "2.32. "Retirement
Program" means The Cooperative Banks Employees Retirement
Program as from time to time in effect.
2.33. "Rollover Contributions" tc \l2 "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" tc \l2 "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" tc \l2 "2.35. "Trustee" means any person
or persons who are at any time acting as Trustee under the Trust.
2.36. "Trust" tc \l2 "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" tc \l2 "2.37. "Valuation Date"
means the last day of each calendar quarter or such other dates
selected by the Association.
2.38. "Withdrawal Date" tc \l2 "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 3. SERVICE DEFINITIONS tc \l1 "ARTICLE 3. SERVICE
DEFINITIONS ; SPECIAL SERVICE CREDITING RULES
3.1. "Absence in Military Service" tc \l2 "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 Participating Employer or its Affiliate 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
Participating Employer or its Affiliate within the period during
which he or she is entitled to such re-employment rights.
3.2. "Authorized Leave of Absence" tc \l2 "3.2.
"Authorized Leave of Absence" means any absence of an Employee
granted by his or her Participating Employer or its Affiliate in
accordance with rules of uniform application to all Employees
similarly situated.
3.3. "Hour of Service" tc \l2 "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 Participating Employer or its Affiliate, or
within such longer period as may be specified by the
Participating Employer or its Affiliate 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" tc \l2 "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" tc \l2 "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. The preceding sentence
shall be construed and applied in a manner consistent with the
Family Medical Leave Act of 1993.
3.6. "Period of Service" tc \l2 "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" tc \l2 "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" tc \l2 "3.8. "Termination
of Employment" means the date on which an Employee quits, is
discharged, retires or dies.
3.9. "Vesting Service" tc \l2 "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" tc \l2 "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 tc \l2 "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 tc \l2
"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.
3.13. Application of Service Definitions tc \l2 "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).
ARTICLE 4. PARTICIPATION tc \l1 "ARTICLE 4. PARTICIPATION .
4.1. Participation Requirements tc \l2 "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 tc \l2 "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 tc \l2 "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
may enter into a contribution agreement, immediately upon
reemployment.
4.4. Reclassification of employment status tc \l2 "4.4. .
Notwithstanding anything herein to the contrary, an individual who is not
characterized or
treated as a common law employee of the Participating Employer shall not be
eligible to
participate in the Plan. However, in the event that such an individual is
reclassified or deemed to
be reclassified as a common law employee of the Participating Employer, the
individual shall be
eligible to participate in the Plan as of the Entry Date coinciding with or
next following the actual
date of such reclassification (to the extent such individual otherwise
qualifies as an Eligible
Employee hereunder). If the effective date of any such reclassification is
prior to the actual date
of such reclassification, in no event shall the reclassified individual be
eligible to participate in the
Plan retroactively to the effective date of such reclassification.
ARTICLE 5. CONTRIBUTIONS TO THE PLAN tc \l1 "ARTICLE 5.
CONTRIBUTIONS TO THE PLAN .
5.1. Elective Contributions and Employee Contributions tc
\l2 "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.
5.2. Form and Manner of Contribution Agreements tc \l2
"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.
5.3. Matching Contributions tc \l2 "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.
5.4. Discretionary Contributions tc \l2 "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 tc \l2 "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 tc \l2 "5.6.
Rollover Contributions; Direct Transfers . An Eligible Employee
may make a Rollover Contribution to the Plan upon demonstration
satisfactory 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 tc \l2 "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 tc \l2 "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 the
time required under the Code and ERISA. 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 (or in the case of
Qualified Nonelective Contributions, such earlier date as may be
required by the Code).
5.9. Certain Limits Apply tc \l2 "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 410(b) and 416, as also further described elsewhere
in the Plan.
5.10. Return of Contributions tc \l2 "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 tc \l2 "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 6. LIMITS ON CONTRIBUTIONS tc \l1 "ARTICLE 6. LIMITS ON
CONTRIBUTIONS .
6.1. Code Section 404 Limits tc \l2 "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 tc \l2 "6.2. Code Section 415
Limits .
(a) Incorporation by reference. Code section 415 is
hereby incorporated by reference into the Plan and the
provisions of this Section shall be construed and applied in
accordance with Section 415.
(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 (increased from time to time in accordance with
Code section 415(d)), or (ii) 25% of the Participant's
Compensation for such limitation year.
(d) Combined limitations. The provisions of this
subsection will cease to apply on and after January 1, 2000.
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 tc \l2 "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 tc \l2 "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. A Participating Employer may elect in
its Adoption Agreement contribution provisions which will
cause the Plan for such Participating Employer to become a
safe harbor plan within the meaning of Code section
401(k)(12). In such event, the Plan for such Participating
Employer will be administered in all respects as such a safe
harbor plan in accordance with the applicable requirements
of Code section 401(k)(12).
(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? 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) 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;
(iv) 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);
(v) 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;
(vi) 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
(vii) 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 for the Plan Year does not exceed
125% of the prior year actual deferral percentage for
the prior year nonhighly compensated group; or
(ii) the excess of the actual deferral percentage
for the highly compensated group for the Plan Year over
the prior year actual deferral percentage for the prior
year nonhighly compensated group does not exceed two
percentage points, and the actual deferral percentage
for the highly compensated group for the Plan Year does
not exceed twice the prior year actual deferral
percentage of the prior year nonhighly compensated
group.
For purposes of satisfying the above tests for a Plan Year, the "prior year
actual
deferral percentage for the prior year nonhighly compensated group" refers to
the
actual percentage determined for the immediately preceding Plan Year for the
nonhighly compensated group existing during such preceding Plan Year.
Notwithstanding the foregoing, in satisfying the above tests, the Association
may
elect, in accordance with Code section 401(k)(3) and applicable Regulations,
to
use the actual deferral percentage for the nonhighly compensated group
determined for the current Plan Year.
(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 in the manner prescribed by Code
section 401(k)(8).
(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, 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.
(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? 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? month
period.
(l) Special rule for early participation. Effective
January 1, 1999, the Association may elect to follow the
rules set forth in Code section 401(k)(3)(F) for purposes of
determining the applicable Code section 401(k)(3) limits.
6.5. Code Section 401(m) Limits tc \l2 "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)(11) 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. A Participating Employer may elect in its Adoption
Agreement contribution provisions which will cause the Plan
for such Participating Employer to become a safe harbor plan
within the meaning of Code section 401(m). In such event,
the Plan for such Participating Employer will be
administered in all respects as such a safe harbor plan in
accordance with the applicable requirements of Code section
401(m)(11).
(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) 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;
(iii) 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.
(iv) 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).
(v) 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;
(vi) 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 for the Plan Year does not
exceed 125% of the prior year actual contribution
percentage for the prior year nonhighly compensated
group; or
(ii) The excess of the actual contribution
percentage for the highly compensated group for the
Plan Year over the prior year actual contribution
percentage for the prior year nonhighly compensated
group does not exceed two percentage points, and the
actual contribution percentage for the highly
compensated group for the Plan Year does not exceed
twice the prior year actual contribution percentage of
the prior year nonhighly compensated group.
For purposes of satisfying the above tests for a Plan Year,
the "prior year actual contribution percentage for the prior
year nonhighly compensated group" refers to the actual
contribution percentage determined for the immediately
preceding Plan Year for the nonhighly compensated group
existing during such preceding Plan Year. Notwithstanding
the foregoing, in satisfying the above tests, the
Association may elect, in accordance with Code section
401(m)(2) and applicable regulations, to use the actual
contribution percentage for the nonhighly compensated group
calculated for the current Plan Year.
(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 in the manner prescribed by Code section
401(m)(6)(C).
(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, 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?
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? month period.
(k) Special rule for early participation. Effective
January 1, 1999, the Association may elect to follow the
rules set forth in Code section 401(m)(5)(C) for purposes of
determining the application Code section 401(m) limits.
6.6. Section 410(b) Limits tc \l2 "6.6. Section 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(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 7. PARTICIPANT ACCOUNTS tc \l1 "ARTICLE 7. PARTICIPANT
ACCOUNTS .
7.1. Accounts tc \l2 "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 tc \l2 "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 tc \l2 "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 Plan is
intended to be an "ERISA Section 404(c) plan" as described in
Section 404(c) of ERISA and shall be administered and interpreted
in a manner consistent with that intent. 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
the "identified plan fiduciary" for purposes of ERISA Section
404(c) 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 8. VESTING OF ACCOUNTS tc \l1 "ARTICLE 8. VESTING OF
ACCOUNTS .
8.1. Immediate Vesting of Certain Accounts tc \l2 "8.1.
Immediate Vesting of Certain Accounts . A Participant will at
all times be 100% vested in his or her Elective Contribution
Account, Qualified Non Elective Contribution Account, Employee
Contribution Account, and Rollover Contribution Account.
8.2. Deferred Vesting of Other Accounts tc \l2 "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 tc \l2 "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 tc
\l2 "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 tc \l2 "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 tc \l2 "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 9. PAYMENT OF ACCOUNTS tc \l1 "ARTICLE 9. PAYMENT OF
ACCOUNTS .
9.1. Retirement tc \l2 "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 tc \l2 "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 tc \l2 "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 tc \l2 "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.
tc \l2 "
9.5. Valuation for Distribution tc \l2 "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 tc \l2 "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). The applicable provisions of
Code section 401(a)(9) are incorporated herein by reference.
9.7. Mode of Distribution tc \l2 "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 tc \l2 "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 consistent
with the applicable requirements of the Code) 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 tc \l2 "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 tc \l2 "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 tc \l2 "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 tc \l2 "9.12. Direct Rollover
Option . Notwithstanding any provision of the Plan to the
contrary that may otherwise limit a distributee's election under
this Section, 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.
9.13. Distributions to Certain Participants tc \l2 "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 10. LOANS TO PARTICIPANTS tc \l1 "ARTICLE 10. LOANS TO
PARTICIPANTS .
10.1. Loan Application tc \l2 "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 tc \l2 "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 tc \l2 "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 tc \l2 "10.4. Minimum Amount
of Loan . No loan shall be made hereunder for less than $1,000.
10.5. Note; Interest; Security; Default tc \l2 "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 treats
such failure as a default in a manner and at a time consistent
with the applicable requirements of the Code; 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
(which time shall be consistent with the applicable requirements
of the Code), 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 tc \l2 "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 tc \l2 "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 tc \l2 "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 tc \l2 "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 11. SPECIAL TOP-HEAVY PROVISIONS. tc \l1 "ARTICLE 11.
SPECIAL TOP-HEAVY PROVISIONS.
11.1. Provisions to Apply tc \l2 "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 tc \l2 "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 ?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 tc \l2 "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 tc \l2 "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 tc \l2 "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 12. ADMINISTRATION OF THE PLAN tc \l1 "ARTICLE 12.
ADMINISTRATION OF THE PLAN .
12.1. Powers and Duties of the Association tc \l2 "12.1.
Powers and Duties of the Association . The Association shall
administer the Plan and shall have all discretionary authority
and power necessary or appropriate to supervise the
administration of the Plan and to control its operation in
accordance with the terms and provisions hereof, and to carry out
its duties thereunder, including without limiting the generality
of the foregoing, the following powers:
(a) To interpret the provisions of the Plan and to
determine any question or decide any dispute which may arise
under the Plan or in connection with the administration or
operation thereof;
(b) To determine the eligibility of any employee of a
Participating Bank to become a Participant of a Plan, the
eligibility of any Participant to receive a benefit under a
Plan, and the amount of any such benefit;
(c) To authorize and direct the payment of all
benefits and other sums under the Plan and the disbursement
of funds for expenses of administration thereof;
(d) To require any Participating Bank or any
Participant to furnish such information as the Association
may request for the purpose of the proper administration of
the Plan, and to prescribe forms to be used to furnish such
information, to make various elections under the Plan, and
for any other purpose of the Plan, which prescribed forms
shall in all cases be executed and filed with the
Association (unless the Association shall otherwise
determine);
(e) To make and enforce such rules and regulations for
carrying out the provisions of the Plan as the Association
may deem proper or desirable to enable it to administer and
carry out its duties hereunder;
(f) To employ legal counsel, accountants, actuaries,
consultants, and agents, and to obtain such clerical and
other services as it may deem necessary or appropriate in
carrying out the provisions of the Plan;
(g) To delegate to any trustee or trustees of the
Association, or to any employee or employees thereof, the
authority to perform any ministerial or routine act in
connection with the administration of the Plan, and to
authorize one or more trustees or employees to execute
instruments and documents in the name or on behalf of the
Association;
(h) To charge interest, at such rate as the
Association may from time to time determine to be
reasonable, to any Participating Bank with respect to any
contribution required to be made by it to the Plan;
(i) To establish from time to time a funding policy of
the Plan consistent with the objectives of the Plan and
ERISA; and
(j) To take such other actions and make such
determinations as the Association deems necessary or
appropriate to administer the Plan and to supply any
omission or reconcile any ambiguity or inconsistency in the
Plan, in such manner and to such extent as it deems
expedient to carry the same into effect.
In exercising its powers and duties hereunder, and in
any exercise of discretion or any action by the Association,
the Association shall act in accordance with uniform rules
applied without discrimination between Participants and
shall treat all Participants in similar circumstances in a
uniform manner.
12.2. Appointment of Trustee and Investment Managers tc \l2
"12.2. Appointment of Trustee and Investment Managers . The
Association shall expressly have authority to appoint and remove
the Trustee and any successor Trustee under the Trust. Any such
Trustee shall be a national banking association or trust company
and shall be a member bank of the Federal Reserve Bank system.
The Association shall also have the authority at any time
and from time to time to appoint and remove one or more
Investment Managers for part of all of the Trust Fund. Whenever
an Investment Manager shall have been appointed as aforesaid, it
shall have and may exercise all of the powers and duties of a
trustee under a trust agreement with respect to the investment
and reinvestment of the part of the Trust Fund with respect to
which the Investment Manager has been appointed. Any such
Investment Manager shall meet the requirements for an investment
manager under ERISA and shall acknowledge in writing that it is a
fiduciary with respect to the Plan.
In accordance with the terms of the Trust, the Association
shall establish and may from time to time change the investment
policy with respect to the Trust Fund, which investment policy
shall be consistent with the objective of the Plan and with the
requirements of ERISA. In its discretion, the Association may
delegate to any Trustee or Investment Manager appointed in
accordance with this Section the authority to establish and
change the investment policy with respect to the Trust.
12.3. Conclusiveness of Various Documents tc \l2 "12.3.
Conclusiveness of Various Documents . Neither the Association
nor any of its trustees or officers shall be responsible for any
reports furnished by an actuary or accountant retained or
employed by the Association, but shall be entitled to rely
thereon, as well as on all tables, valuations, and certificates
furnished by such actuary or accountant, and on all opinions and
recommendations of legal counsel.
12.4. Indemnification tc \l2 "12.4. Indemnification . Any
trustee, officer, or employee of the Association who is
considered to occupy or to have occupied a fiduciary capacity
with respect to the Plan shall be indemnified by the Association
for any liability, loss, damage or injury (including amounts paid
in settlement with approval of the Association), and reasonable
costs and expenses related thereto, arising by reason of any act
or omission affecting the Plan or affecting Participants, former
or retired Participants, or their beneficiaries, to the fullest
extent permitted under ERISA or other applicable law; provided,
however, that the act or omission shall have occurred in the
course of the person's service as a trustee, officer, or employee
of the Association and that the act or omission shall have been
in good faith as determined by a disinterested majority of the
board of trustees of the Association (whose determination made in
good faith and not arbitrarily or capriciously shall be
conclusive). No trustee, officer, or employee of the Association
shall be liable with respect to a breach of fiduciary duty, if
such breach occurred before he became a fiduciary or after he
ceased to be a fiduciary. The Association, by a vote of its
trustees, shall expressly have the power to purchase insurance to
cover potential liabilities of any trustee, officer, or employee
who serves in a fiduciary capacity with respect to the Plan, and
the obligation of the Association to indemnify any such trustee,
officer, or employee shall be offset to the extent of any
otherwise applicable insurance coverage under any such policy
maintained by the Association. The Association shall also have
the power, exercisable by vote of its trustees, to agree to
indemnify any bank or other agent or administrative agent of the
Association under the Plan, to the extent authorized by the board
of trustees of the Association.
12.5. Claims Procedure tc \l2 "12.5. Claims Procedure .
If any person entitled to benefits under the Plan is denied such
benefits, the Association shall notify such person of its
decision in writing, give the reason for such decision and advise
the person of his right to request a review of his claim. Such
request may be made in writing to the Association within sixty
(60) days after receipt of the Association's notice. Within
sixty (60) days after filing such request, the claimant may, in
the full discretion of the Association, be granted a hearing
before the Association. The decision resulting from any such
hearing shall be made in writing and shall specify the reasons
for such decisions and the provisions of the Plan or other
related documents upon which the decision is based. Such
decision shall be delivered to the claimant within one hundred
and twenty (120) days after his request for a review of his claim
is first received by the Association. The Association may
establish such rules and regulations as it may determine
necessary or appropriate to carry out its duties under this
Section and make such records, transcripts, and reports as it may
deem appropriate under the circumstances then prevailing.
12.6. Expenses of Administration tc \l2 "12.6. 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.
12.7. Authority to Correct Operational Defects tc \l2
"12.7. 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.
12.8. Effect of Interpretation or Determination tc \l2
"12.8. Effect of Interpretation or Determination . Any
interpretation of the Plan or other determination with respect to
the Plan by the Association shall be final and binding and
conclusive on all persons in the absence of clear and convincing
evidence that the Association acted arbitrarily and capriciously.
ARTICLE 13. AMENDMENT AND TERMINATION tc \l1 "ARTICLE 13.
AMENDMENT AND TERMINATION .
13.1. Amendment or Termination by Association tc \l2 "13.1.
Amendment or Termination by Association . The Association may,
at any time or from time to time and in such manner as it deems
appropriate, amend the Plan, in whole or in part, or terminate
the Plan, either prospectively or retroactively; 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 tc \l2 "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 tc \l2 "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 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 (f)(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 (f)(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 tc \l2 " . 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 tc \l2 "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 tc \l2 "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 tc
\l2 "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.
ARTICLE 14. MISCELLANEOUS tc \l1 "ARTICLE 14. MISCELLANEOUS .
14.1. Exclusive Benefit Rule tc \l2 "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 or permitted under Code
section 401(a)(13) and 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 tc \l2 "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 tc \l2 "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 permitted
or required under Code section 401(a)(13), as determined by the
Association in its sole discretion.
14.4. Rights of Eligible Employees tc \l2 "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. Payment Under Domestic Relations Order tc \l2 "14.5.
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.
14.6. Plan Mergers tc \l2 "14.6. 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.
(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.
(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).
(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.
(c) Merger of Mercantile Bank and Trust Company 401(k)
Plan. Effective as of January 1, 1998, the Mercantile Bank
and Trust Company 401(k) Plan and its related trust (the
'Mercantile plan and trust') are merged with and into the
Plan and Trust. In connection with the merger, all of the
provisions of the Plan and Trust are substituted for and
completely replace the provisions of the Mercantile plan and
trust except as follows:
(i) Solely for purposes of determining vesting in
amounts attributable to contributions under the
Mercantile plan and trust prior to January 1, 1998, all
of the applicable provisions of the Mercantile plan and
trust in effect on December 31, 1997 relating to the
determination of vesting will continue to apply (which
provisions are incorporated herein by reference for
such purpose only).
(ii) Solely for purposes of determining in-
service withdrawal rights in amounts attributable to
contributions made prior to January 1, 1998, all of the
applicable provisions of the Mercantile plan and trust
in effect on December 31, 1997 relating to in-service
withdrawals will continue to apply (which provisions
are incorporated herein by reference for such purpose
only).
(d) Merger of Other Tax Qualified Defined Contribution
Plans into the Plan. From time to time, the Association may permit, in such
manner as it deems appropriate, a tax qualified defined contribution plan of
another
employer (the "other plan") to be merged with and into the Plan. In
connection with such
merger, all of the provisions of the Plan are substituted for the provisions
of the other
plan, except those provisions of the other plan which constitute a protected
benefit right
or feature within the meaning of Code section 411(d)(6), which provisions of
the other
plan shall continue to be in effect under the Plan to the extent required by
Code section
411(d)(6) and are incorporated herein by reference. Furthermore, the rights
to benefits of
an individual who was a participant in the other plan prior to the effective
date of the
merger will be determined in accordance with the provisions of the other plan
as in effect
from time to time prior to the effective date of the merger.
14.7. Veterans' Reemployment and Benefit Rights.
Notwithstanding any provision of the Plan to the contrary,
contributions, benefits and service credit with respect to
qualified military service will be provided in accordance
with Code section 414(u).
ARTICLE 15. ADOPTION AGREEMENT tc \l1 "ARTICLE 15. ADOPTION
AGREEMENT .
15.1. Adoption Agreement tc \l2 " . 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 Norwood, Massachusetts, on this 30th day of
December, 1998.
COOPERATIVE BANKS EMPLOYEES
RETIREMENT ASSOCIATION
By:
Title:
PLANA
PLANA
-75-
Exhibit 7
THE PLAN C 1998 RESTATEMENT
CONSISTS OF THE PLAN C 1994,
RESTATEMENT, EXECUTED ON
OCTOBER 26, 1994, THE FIRST
AMENDMENT EXECUTED ON
SEPTEMBER 27, 1995, THE SECOND
AMENDMENT EXECUTED ON
SEPTEMBER 23, 1998 AND CERTAIN
OTHER CHANGES GENERALLY
DESIGNED TO COMPLY WITH
RECENT LAW AND REGULATIONS.
THE DEFINED BENEFIT PENSION PLAN (PLAN C)
OF THE
COOPERATIVE BANKS EMPLOYEES RETIREMENT PROGRAM
(1998 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 was further amended, generally effective as of January 1,
1989 by the 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 has now been further amended by this 1998 Restatement to incorporate
the
provisions of two amendments to the 1994 Restatement, as well as to make
additional desired
changes and to comply with the current requirements of applicable law and
regulations. This
1998 Restatement is generally effective as of January 1, 1998, provided,
however, any provision
of the Plan which is required by law to be effective as of an earlier or
later date will be effective as
of such date.
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
1998 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" 3
2.4. "Adoption Agreement 4
2.5. "Affiliate" 4
2.6. "Association" 4
2.7. "Base Benefit Percentage" 5
2.8. "Beneficiary" 5
2.9. "By-Laws" 5
2.10. "Code" 5
2.11. "Compensation" 5
2.12. "Covered Compensation" 6
2.13. "Deferred Retirement Date" 6
2.14. "Disability" 6
2.15. "Early Retirement Age" 7
2.16. "Early Retirement Date" 7
2.17. "Eligible Employee" 7
2.18. "Employee" 7
2.19. "Employer" 7
2.20. "Employer Contribution Account Balance" 7
2.21. "Entry Date" 7
2.22. "ERISA" 7
2.23. "Final Average Compensation" 8
2.24. "Highly Compensated Employee" 8
2.25. "Key Employee" 8
2.26. "Maximum Excess Allowance" 8
2.27. "Normal Retirement Date" 9
2.28. "Participant" 9
2.29. "Participating Employer" 9
2.30. "Participating Employer's Participation Date" 9
2.31. "Pensioner" 9
2.32. "Plan" 9
2.33. "Plan Year" 9
2.34. "Prior Plan" 10
2.35. "Provisional Payee" 10
2.36. "Qualified Domestic Relations Order" 10
2.37. "Retirement Program" 10
2.38. "Social Security Retirement Age" 10
2.39. "Terminated Eligible Employee" 10
2.40. "Trust" 10
2.41. "Trustee" 10
2.42. "Withdrawal Date" 10
ARTICLE 3. SERVICE DEFINITIONS; SPECIAL SERVICE RULES 11
3.1. "Absence in Military Service" 11
3.2. "Authorized Leave of Absence" 11
3.3. "Credited Service" 11
3.4. "Employment Commencement Date" 12
3.5. "Hour of Service" 12
3.6. "One-Year Break in Service" 13
3.7. "Period of Service" 13
3.8. "Reemployment Commencement Date" 14
3.9. "Termination of Employment" 14
3.10. "Vesting Service" 14
3.11. "Year of Eligibility Service" 14
3.12. Crediting Periods of Service earned before Employer becomes a
Participating
Employer 15
3.13. Crediting Periods of Service earned before Employer is merged with or
acquired by
a Participating Employer 15
3.14. Application of Service Definitions 15
ARTICLE 4. PARTICIPATION 16
4.1. Participation Requirements. 16
4.2. Date of Participation. 16
4.3. Required Information. 16
4.4. Reemployed Eligible Employees. 16
4.5. Duration of Participation. 16
4.6. Reclassification of employment status. 16
ARTICLE 5. REQUIREMENTS FOR RETIREMENT BENEFITS 18
5.1. Normal Retirement. 18
5.2. Early Retirement. 18
5.3. Deferred Retirement. 18
5.4. Deferred Commencement of Benefits. 18
ARTICLE 6. AMOUNT OF PENSION 19
6.1. Amount of Pension at Normal Retirement Date. 19
6.2. Amount of Accrued Pension at Early Retirement Date 20
6.3. Computation of Accrued Pension Prior to Normal Retirement Date. 20
6.4. Amount of Accrued Pension at Deferred Retirement Date. 21
6.5. Non-duplication of Benefits. 21
6.6. Veterans' Reemployment and Benefit Rights. 21
ARTICLE 7. VESTING 22
7.1. Vesting Schedule 22
7.2. Special Vesting Rules 22
7.3. Payment of Vested Pension 22
7.4. Changes in Vesting Schedule 23
ARTICLE 8. RESTRICTIONS ON PENSIONS 24
8.1. Code Section 415 Limitations 24
8.2. Restrictions on Distributions to Certain Highly Compensated Employees
24
8.3. Nonalienability of Benefits 24
8.4. Required Distributions 24
8.5. Rights of Eligible Employees 25
ARTICLE 9. FORM OF PENSION 26
9.1. Standard Form of Pension for Participants who are not Married 26
9.2. Standard Form of Pension for Married Participants 26
9.3. Waiver of Standard Forms of Pension 26
9.4. Optional Forms of Pension 28
9.5. Distributions required by a Qualified Domestic Relations Order 29
9.6. Direct Rollover Option 29
9.7. Small Payments 30
9.8. Facility of Payments 30
9.9. Payment as discharge of liability 30
ARTICLE 10. DEATH BENEFITS 31
10.1. Death Benefits Limited 31
10.2. Death of Participant prior to Annuity Starting Date 31
10.3. Designation of Beneficiary 31
10.4. Death of Participants after Annuity Starting Date 31
ARTICLE 11. CONTRIBUTIONS AND TRUST FUND 32
11.1. Participating Employer Contributions. 32
11.2. No Contributions by Participants 32
11.3. Establishment of Trust Fund. 32
11.4. No Liability Imposed on the Participating Employer. 32
11.5. Exclusive Benefit Rule. 32
11.6. Return of Contribution 32
11.7. Direct transfers from Plan A 33
11.8. Forfeitures 33
ARTICLE 12. ADMINISTRATION OF THE PLAN 34
12.1. Powers and Duties of the Association. 34
12.2. Appointment of Trustee and Investment Managers 35
12.3. Conclusiveness of Various Documents 35
12.4. Indemnification 35
12.5. Claims Procedure 36
12.6. Expenses of Administration. 36
12.7. Authority to Correct Operational Defects 37
12.8. Effect of Interpretation or Determination 37
ARTICLE 13. AMENDMENT AND TERMINATION 38
13.1. Amendment or Termination by Association. 38
13.2. Voluntary Participation. 38
13.3. Withdrawal by Participating Employer. 38
13.4. Effect of Withdrawal on a Withdrawing Participating Employer. 40
13.5. Effect of Withdrawal on Participants and Beneficiaries. 40
13.6. Effect of Plan Termination. 41
13.7. Failure to Maintain Qualified Status. 41
13.8. Merger, Consolidation or Transfer of Plan Assets. 42
13.9. Merger of Abington National Bank Pension Plan into the Plan 42
13.10. Merger of Workingmens Plan 42
ARTICLE 14. SPECIAL TOP HEAVY PROVISIONS 44
14.1. Provisions to apply 44
14.2. Minimum Benefits. 44
14.3. Special Vesting Schedule. 44
14.4. Adjustment to 415 Limitations. 45
14.5. Definitions. 45
ARTICLE 15. ADOPTION AGREEMENT 48
15.1. Adoption Agreement 48
ARTICLE 16. RETIREE MEDICAL ACCOUNT 49
16.1. In General 49
16.2. Benefits from the 401(h) Account 49
16.3. Contributions to the 401(h) Account 49
16.4. Eligible retired Participants 49
ARTICLE 1. INTRODUCTION tc \l1 "ARTICLE 1. INTRODUCTION
1.1. Purpose tc \l2 "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) tc
\l1 "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, 1998.
Except as otherwise specifically provided herein, the rights and benefits, if
any, of a former
Employee whose employment terminated before January 1, 1998 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. Generally, the provisions of the
Plan in effect at the
time an Employee terminates employment are controlling with respect to that
Employee.
1.3. Defined Terms tc \l2 "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 tc \l2 "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 tc \l2 "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 2. DEFINITIONS OTHER THAN SERVICE DEFINITIONS tc \l1 "ARTICLE
2. 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" tc \l2 "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. 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 the dollar limitation under Code section
401(a)(17).
2.2. "Actuary" tc \l2 "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" tc \l2 "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. Notwithstanding the foregoing, in determining the amount of a lump sum
payment made
under the Plan on and after January 1, 2000 (i) the mortality table to be
used will be the mortality
table based on the prevailing IRS Commissioner's standard table (described in
Code section
807(d)(5)(A)) used to determine reserves for group annuity contracts issued
on the date on which
distribution is made (without regard to any other subparagraph of Code
section 807(d)(5)), that is
prescribed by such Commissioner in revenue rulings, notices, other guidance
published in the
Internal Revenue Bulletin, and (ii) the interest rate to be used will be the
average of annual
interest rates on 30-year Treasury securities as specified by the IRS
Commissioner (in revenue
rulings, notices or other guidance published in the Internal Revenue
Bulletin) for August,
September and October preceding the Plan Year in which distribution is made.
2.4. "Adoption Agreement tc \l2 "2.4. "Adoption Agreement " means the
agreement
described in the Plan made by and between a Participating Employer and the
Trustee.
2.5. "Affiliate" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "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, and also includes
reference to any regulations
issued pursuant to or with respect to such section or subsection.
2.11. "Compensation" tc \l2 "2.11. "Compensation" means:
(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. To the extent permitted under Code
sections 415
and 416, Compensation under this paragraph will also include amounts which
would have
been received by the Participant from a Participating Employer or its
Affiliate as salary and
wages but for an election under sections 125, 401(k) or 403(b) of the Code.
(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). The Association may prescribe procedures for applying
such limit
consistent with the applicable requirements of Code section 401(a)(17).
2.12. "Covered Compensation" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "2.17. "Eligible Employee" means an
individual who is
a common-law employee of a Participating Employer. In no event shall a
"leased employee" (as
defined in Code section 414(m)) become an Eligible Employee until he or she
becomes actually
employed by a Participating Employer.
2.18. "Employee" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "2.21. "Entry Date" means January 1, April 1,
July 1, or
October 1 of any Plan Year.
2.22. "ERISA" tc \l2 "2.22. "ERISA" means the Employee Retirement Income
Security
Act of 1974, as from time to time amended. Reference to any section or
subsection of ERISA
refers to any comparable or succeeding provisions of any legislation which
amends, supplements
or replaces such section or subsection, and also includes reference to any
regulation issued
pursuant to or with respect to such section or subsection.
2.23. "Final Average Compensation" tc \l2 "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" tc \l2 "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), the provisions of which are incorporated herein by
reference.
2.25. "Key Employee" tc \l2 "2.25. "Key Employee" means a key employee
within the
meaning of Code section 416.
2.26. "Maximum Excess Allowance" tc \l2 "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" tc \l2 "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" tc \l2 "2.28. "Participant" means an Eligible Employee
or
Terminated Eligible Employee who participates in the Plan pursuant to its
provisions.
2.29. "Participating Employer" tc \l2 "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" tc \l2 "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" tc \l2 "2.31. "Pensioner" means any person who is
receiving periodic
payments of his or her Accrued Pension.
2.32. "Plan" tc \l2 "2.32. "Plan" means The Defined Benefit Pension Plan
(Plan C) of
The Cooperative Banks Employees Retirement Program.
2.33. "Plan Year" tc \l2 "2.33. "Plan Year" means the calendar year.
2.34. "Prior Plan" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "2.37. "Retirement Program" means The
Cooperative Banks Employees Retirement Program as from time to time in
effect.
2.38. "Social Security Retirement Age" tc \l2 "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" tc \l2 "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" tc \l2 "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" tc \l2 "2.41. "Trustee" means any person or persons who
are at any time
acting as Trustee under the Trust.
2.42. "Withdrawal Date" tc \l2 "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 3. SERVICE DEFINITIONS; SPECIAL SERVICE RULES tc \l1 "ARTICLE
3. SERVICE DEFINITIONS; SPECIAL SERVICE RULES
3.1. "Absence in Military Service" tc \l2 "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 Participating
Employer or its Affiliate 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
Participating Employer or its
Affiliate within the period during which he or she is entitled to such
reemployment rights.
3.2. "Authorized Leave of Absence" tc \l2 "3.2. "Authorized Leave of
Absence" means
any absence of an Employee granted by his or her Participating Employer or
its Affiliate in
accordance with rules of uniform application to all Employees similarly
situated.
3.3. "Credited Service" tc \l2 "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;
(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;
and
(e) any Period of Service during which he or she was not employed by a
Participating
Employer; provided, however, a Participating Employer may elect to include
such Period of
Service in accordance with rules and procedures prescribed by the
Association.
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.
3.4. "Employment Commencement Date" tc \l2 "3.4. "Employment Commencement
Date" means the date on which an Employee first performs an Hour of Service.
3.5. "Hour of Service" tc \l2 "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 Participating Employer or its Affiliate or
within such
longer period as may be specified by the Participating Employer or its
Affiliate 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" tc \l2 "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. The preceding sentence will be construed and applied in a manner
consistent with the
Family Medical Leave Act of 1993.
3.7. "Period of Service" tc \l2 "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" tc \l2 "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" tc \l2 "3.9. "Termination of Employment"
means the
date on which an Employee quits, is discharged, retires or dies.
3.10. "Vesting Service" tc \l2 "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" tc \l2 "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 tc \l2 "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 tc \l2 "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.
3.14. Application of Service Definitions tc \l2 "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.
ARTICLE 4. PARTICIPATION tc \l1 "ARTICLE 4. PARTICIPATION
4.1. Participation Requirements. tc \l2 "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. Date of Participation. tc \l2 "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. Required Information. tc \l2 "4.3. 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.
4.4. Reemployed Eligible Employees. tc \l2 "4.4. 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.
4.5. Duration of Participation. tc \l2 "4.5. 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.
4.6. Reclassification of employment status. tc \l2 "4.6. Reclassification
of employment
status. Notwithstanding anything herein to the contrary, an individual who
is not characterized
or treated as a common law employee of the Participating Employer shall not
be eligible to
participate in the Plan. However, in the event that such an individual is
reclassified or deemed to
be reclassified as a common law employee of the Participating Employer, the
individual shall be
eligible to participate in the Plan as of the Entry Date coinciding with or
next following the actual
date of such reclassification (to the extent such individual otherwise
qualifies as an Eligible
Employee hereunder). If the effective date of any such reclassification is
prior to the actual date
of such reclassification, in no event shall the reclassified individual be
eligible to participate in the
Plan retroactively to the effective date of such reclassification.
ARTICLE 5. REQUIREMENTS FOR RETIREMENT BENEFITS tc \l1 "ARTICLE 5.
REQUIREMENTS FOR RETIREMENT BENEFITS
5.1. Normal Retirement. tc \l2 "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. tc \l2 "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, but prior to his or her
Normal Retirement Date, 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). At least 30 days (or
such shorter period as
may be permitted under the Code) but not more than 90 days prior to his or
her "annuity starting
date" (as defined in section 417(b)(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 $5,000
or less.
5.3. Deferred Retirement. tc \l2 "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.
5.4. Deferred Commencement of Benefits. tc \l2 "5.4. Deferred Commencement
of
Benefits. Notwithstanding any provisions of the Plan to the contrary, a
Participant who is
entitled to a normal, early or deferred retirement benefit under Articles 5
and 6, or a vested
termination benefit under Article 7, may elect, in accordance with rules
prescribed by the
Association, to defer commencement of such benefit to the first day of any
calendar month after
his or her Normal Retirement Date (or after his or her actual retirement
date, if later), but not
later than April 1 of the calendar year following the calendar year he or she
attains age 70. Such
Participant's benefit will be equal to the Actuarial Equivalent of his or her
Accrued Pension,
determined as of his or her benefit commencement date.
ARTICLE 6. AMOUNT OF PENSION tc \l1 "ARTICLE 6. AMOUNT OF PENSION
6.1. Amount of Pension at Normal Retirement Date. tc \l2 "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 tc \l2 "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. tc \l2
"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. tc \l2 "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 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;
provided, however, his
or her Accrued Pension on his or her Deferred Retirement Date shall be no
less than his or her
Accrued Pension determined as of his or her Normal Retirement Date, increased
to its Actuarial
Equivalent on his or her Deferred Retirement Date. The provisions of this
Section 6.4 shall be
interpreted and applied in accordance with the applicable provisions of the
Code and ERISA
relating to benefits payable to a Participant who continues to be employed
after his or her Normal
Retirement Date.
6.5. Non-duplication of Benefits. tc \l2 "6.5. Non-duplication of Benefits.
Notwithstanding any provision of the Plan to the contrary, in the case of a
Participant whose
Credited Service includes a Period of Service with an employer which
maintains a tax qualified
defined benefit pension plan (other than the Plan) in which such Participant
participates, such
Participant's Accrued Pension shall be reduced by any benefit accrued by such
Participant during
such Period of Service under such other pension plan.
6.6. Veterans' Reemployment and Benefit Rights. tc \l2 "6.6.
Notwithstanding any
provision of the Plan to the contrary, contributions, benefits and service
credit with
respect to qualified military service will be provided in accordance with
Code section
414(u).
ARTICLE 7. VESTING
tc \l1 "ARTICLE 7. VESTING 7.1. Vesting Schedule tc \l2 "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 tc \l2 "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 tc \l2 "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 or on the first day of any calendar
month thereafter, but
prior to his or her Normal 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 (or such shorter
period as may be
permitted under the Code), 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 $5,000
or less.
7.4. Changes in Vesting Schedule tc \l2 "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 8. RESTRICTIONS ON PENSIONS tc \l1 "ARTICLE 8. RESTRICTIONS ON
PENSIONS
8.1. Code Section 415 Limitations tc \l2 "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 (the provisions of this sentence will cease to
apply on and after
January 1, 2000.) For purposes of this Section, the limitation year shall be
the Plan Year.
8.2. Restrictions on Distributions to Certain Highly Compensated Employees
tc \l2 "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 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 tc \l2 "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
permitted or required
under Code section 401(a)(13) as determined by the Association in its sole
discretion.
8.4. Required Distributions tc \l2 "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), the provisions of which are incorporated
herein by reference.
8.5. Rights of Eligible Employees tc \l2 "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.
ARTICLE 9. FORM OF PENSION tc \l1 "ARTICLE 9. FORM OF PENSION
9.1. Standard Form of Pension for Participants who are not Married tc \l2
"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 tc \l2 "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
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 tc \l2 "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 (or such shorter period of time
as may
be permitted under the Code) 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 acknowledgment 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 tc \l2 "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 1.401(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 tc \l2
"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 tc \l2 "9.6. Direct Rollover Option .
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.
9.7. Small Payments tc \l2 "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 $5,000, 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 tc \l2 "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 tc \l2 "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 10. DEATH BENEFITS tc \l1 "ARTICLE 10. DEATH BENEFITS
10.1. Death Benefits Limited tc \l2 "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 tc \l2 "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 tc \l2 "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 tc \l2 "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 11. CONTRIBUTIONS AND TRUST FUND tc \l1 "ARTICLE 11.
CONTRIBUTIONS AND TRUST FUND
11.1. Participating Employer Contributions. tc \l2 "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 tc \l2 "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. tc \l2 "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. tc \l2 "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. tc \l2 "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 or permitted under Code section 401(a)(13) and 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 tc \l2 "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 tc \l2 "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 tc \l2 "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 12. ADMINISTRATION OF THE PLAN tc \l1 "ARTICLE 12.
ADMINISTRATION OF THE PLAN
12.1. Powers and Duties of the Association. tc \l2 "12.1. Powers and Duties
of the
Association. The Association shall administer the Plan and shall have all
discretionary authority
and power necessary or appropriate to supervise the administration of the
Plan and to control its
operation in accordance with the terms and provisions hereof, and to carry
out its duties
thereunder, including without limiting the generality of the foregoing, the
following powers:
(a) To interpret the provisions of the Plan and to determine any question or
decide
any dispute which may arise under the Plan or in connection with the
administration or
operation thereof;
(b) To determine the eligibility of any employee of a Participating Bank to
become
a Participant of a Plan, the eligibility of any Participant to receive a
benefit under a Plan,
and the amount of any such benefit;
(c) To authorize and direct the payment of all benefits and other sums under
the
Plan and the disbursement of funds for expenses of administration thereof;
(d) To require any Participating Bank or any Participant to furnish such
information as the Association may request for the purpose of the proper
administration of
the Plan, and to prescribe forms to be used to furnish such information, to
make various
elections under the Plan, and for any other purpose of the Plan, which
prescribed forms
shall in all cases be executed and filed with the Association (unless the
Association shall
otherwise determine);
(e) To make and enforce such rules and regulations for carrying out the
provisions
of the Plan as the Association may deem proper or desirable to enable it to
administer and
carry out its duties hereunder;
(f) To employ legal counsel, accountants, actuaries, consultants, and
agents, and
to obtain such clerical and other services as it may deem necessary or
appropriate in
carrying out the provisions of the Plan;
(g) To delegate to any trustee or trustees of the Association, or to any
employee
or employees thereof, the authority to perform any ministerial or routine act
in connection
with the administration of the Plan, and to authorize one or more trustees or
employees to
execute instruments and documents in the name or on behalf of the
Association;
(h) To charge interest, at such rate as the Association may from time to
time
determine to be reasonable, to any Participating Bank with respect to any
contribution
required to be made by it to the Plan;
(i) To establish from time to time a funding policy of the Plan consistent
with the
objectives of the Plan and ERISA; and
(j) To take such other actions and make such determinations as the
Association
deems necessary or appropriate to administer the Plan and to supply any
omission or
reconcile any ambiguity or inconsistency in the Plan, in such manner and to
such extent as
it deems expedient to carry the same into effect.
In exercising its powers and duties hereunder, and in any exercise of
discretion or
any action by the Association, the Association shall act in accordance with
uniform rules
applied without discrimination between Participants and shall treat all
Participants in
similar circumstances in a uniform manner.
12.2. Appointment of Trustee and Investment Managers tc \l2 "12.2.
Appointment of
Trustee and Investment Managers . The Association shall expressly have
authority to appoint
and remove the Trustee and any successor Trustee under the Trust. Any such
Trustee shall be a
national banking association or trust company and shall be a member bank of
the Federal Reserve
Bank system.
The Association shall also have the authority at any time and from time to
time to appoint
and remove one or more Investment Managers for part of all of the Trust Fund.
Whenever an
Investment Manager shall have been appointed as aforesaid, it shall have and
may exercise all of
the powers and duties of a trustee under a trust agreement with respect to
the investment and
reinvestment of the part of the Trust Fund with respect to which the
Investment Manager has
been appointed. Any such Investment Manager shall meet the requirements for
an investment
manager under ERISA and shall acknowledge in writing that it is a fiduciary
with respect to the
Plan.
In accordance with the terms of the Trust, the Association shall establish
and may from
time to time change the investment policy with respect to the Trust Fund,
which investment policy
shall be consistent with the objective of the Plan and with the requirements
of ERISA. In its
discretion, the Association may delegate to any Trustee or Investment Manager
appointed in
accordance with this Section the authority to establish and change the
investment policy with
respect to the Trust.
12.3. Conclusiveness of Various Documents tc \l2 "12.3. Conclusiveness of
Various
Documents . Neither the Association nor any of its trustees or officers
shall be responsible for
any reports furnished by an actuary or accountant retained or employed by the
Association, but
shall be entitled to rely thereon, as well as on all tables, valuations, and
certificates furnished by
such actuary or accountant, and on all opinions and recommendations of legal
counsel.
12.4. Indemnification tc \l2 "12.4. Indemnification . Any trustee,
officer, or employee of
the Association who is considered to occupy or to have occupied a fiduciary
capacity with respect
to the Plan shall be indemnified by the Association for any liability, loss,
damage or injury
(including amounts paid in settlement with approval of the Association), and
reasonable costs and
expenses related thereto, arising by reason of any act or omission affecting
the Plan or affecting
Participants, former or retired Participants, or their beneficiaries, to the
fullest extent permitted
under ERISA or other applicable law; provided, however, that the act or
omission shall have
occurred in the course of the person's service as a trustee, officer, or
employee of the Association
and that the act or omission shall have been in good faith as determined by a
disinterested majority
of the board of trustees of the Association (whose determination made in good
faith and not
arbitrarily or capriciously shall be conclusive). No trustee, officer, or
employee of the Association
shall be liable with respect to a breach of fiduciary duty, if such breach
occurred before he became
a fiduciary or after he ceased to be a fiduciary. The Association, by a vote
of its trustees, shall
expressly have the power to purchase insurance to cover potential liabilities
of any trustee, officer,
or employee who serves in a fiduciary capacity with respect to the Plan, and
the obligation of the
Association to indemnify any such trustee, officer, or employee shall be
offset to the extent of any
otherwise applicable insurance coverage under any such policy maintained by
the Association.
The Association shall also have the power, exercisable by vote of its
trustees, to agree to
indemnify any bank or other agent or administrative agent of the Association
under the Plan, to
the extent authorized by the board of trustees of the Association.
12.5. Claims Procedure tc \l2 "12.5. Claims Procedure . If any person
entitled to
benefits under the Plan is denied such benefits, the Association shall notify
such person of its
decision in writing, give the reason for such decision and advise the person
of his right to request
a review of his claim. Such request may be made in writing to the
Association within sixty (60)
days after receipt of the Association's notice. Within sixty (60) days after
filing such request, the
claimant may, in the full discretion of the Association, be granted a hearing
before the
Association. The decision resulting from any such hearing shall be made in
writing and shall
specify the reasons for such decisions and the provisions of the Plan or
other related documents
upon which the decision is based. Such decision shall be delivered to the
claimant within one
hundred and twenty (120) days after his request for a review of his claim is
first received by the
Association. The Association may establish such rules and regulations as it
may determine
necessary or appropriate to carry out its duties under this Section and make
such records,
transcripts, and reports as it may deem appropriate under the circumstances
then prevailing.
12.6. Expenses of Administration. tc \l2 "12.6. 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.
12.7. Authority to Correct Operational Defects tc \l2 "12.7. 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.
12.8. Effect of Interpretation or Determination tc \l2 "12.8. Effect of
Interpretation or
Determination . Any interpretation of the Plan or other determination with
respect to the Plan by
the Association shall be final and binding and conclusive on all persons in
the absence of clear and
convincing evidence that the Association acted arbitrarily and capriciously.
ARTICLE 13. AMENDMENT AND TERMINATION tc \l1 "ARTICLE 13.
AMENDMENT AND TERMINATION
13.1. Amendment or Termination by Association. tc \l2 "13.1. Amendment or
Termination by Association. The Association may, at any time or from time
to time, and in such
manner as it deems appropriate, amend the Plan, in whole or in part, or
terminate the Plan;
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. tc \l2 "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. tc \l2 "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. tc \l2
"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. tc \l2 "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. tc \l2 "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. tc \l2 "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. tc \l2 "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 tc \l2
"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 tc \l2 "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 14. SPECIAL TOP HEAVY PROVISIONS tc \l1 "ARTICLE 14. SPECIAL
TOP HEAVY PROVISIONS
14.1. Provisions to apply tc \l2 "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. tc \l2 "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 1.416-1(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. tc \l2 "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. tc \l2 "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. tc \l2 "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 15. ADOPTION AGREEMENT tc \l1 "ARTICLE 15. ADOPTION
AGREEMENT
15.1. Adoption Agreement tc \l2 "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 16. RETIREE MEDICAL ACCOUNT tc \l1 "ARTICLE 16. RETIREE
MEDICAL ACCOUNT
16.1. In General tc \l2 " 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 tc \l2 " 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 tc \l2 " 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 tc \l2 " 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 Norwood, Massachusetts, on this 30th day of December, 1998.
COOPERATIVE BANKS EMPLOYEES
RETIREMENT ASSOCIATION
By:
Title:
PLANC
PLANC
PLANC
-ix-
PLANC
PLANC
-52-
PLANC
-53-
Exhibit 16
BANK INVESTMENT FUND
Yield worksheet
FUND ONE DATE 12/31/98
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 = 601,463.67 b = 600.00
c = 129,822.1810 d = 987.5026
a - b = 600,865.67
cd = 128,199,741.28
Yield in accordance with the above formula is 5.69%.
Exhibit 16
BANK INVESTMENT FUND
Total Return Worksheet
FUND ONE DATE 1 year
Ended 12/31/98
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 = 6.32%
n = 1 ERV = 1,063.1672
Total return in accordance with the above formula is 6.32%.
Exhibit 16
BANK INVESTMENT FUND
Total Return Worksheet
FUND ONE DATE 5 years
Ended 12/31/98
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 = 5.50%
n = 5 years ERV = 1306.7711
Total return in accordance with the above formula is 5.50%.
Exhibit 16
BANK INVESTMENT FUND
Total Return Worksheet
FUND ONE DATE 10 years
Ended 12/31/98
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 = 7.19%
n = 10 years ERV = 2003.1762
Total return in accordance with the above formula is 7.19%.
Exhibit 16
BANK INVESTMENT FUND
Yield worksheet
LIQUIDITY FUND DATE 12/31/98
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 = .9758 b= 1000.00
c = .0009758
Yield in accordance with the above formula is 5.09%.
Exhibit 17
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in Form N-1A of our
report dated January 28, 1999, and appearing on Page 18 of the Offering
Circular on the financial statements of Bank Investment Fund -
Fund One, appearing on Pages 19 through 28 of the Offering Circular
for the year ended December 31, 1998.
Parent McLaughlin & Nangle
Certified Public Accountants
Boston, Massachusetts
January 28, 1999
Exhibit 17
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in Form N-1A of our
report dated January 28, 1999, and appearing on Page 16 of the Offering
Circular on the financial statements of Bank Investment Fund -
Liquidity Fund, appearing on Pages 17 through 27 of the Offering
Circular for the year ended December 31, 1998.
Parent McLaughlin & Nangle
Certified Public Accountants
Boston, Massachusetts
January 28, 1999
Exhibit 18
BANK INVESTMENT FUND
FUND ONE
PRICE MAKE UP SHEET
Date: 12/31/98
Net Asset Value - January 1
$ 143,608,498
Cash Invested:
YTD-Yesterday $1,674,618
INV-Today -0- 1,674,618
Dividends Reinvested:
YTD-Yesterday 2,467,917
DR-Today 249,008 2,716,925
Cash Redeemed:
YTD-Yesterday (20,116,046)
RED-Today -0- (20,116,046)
Realized Gains (Losses):
YTD-Yesterday 2,375
G/L-Today -0- 2,375
Unrealized Depreciation:
YTD-Yesterday (588,959)
Appreciation/
(Depreciation) Today -0- (588,959)
TOTAL NET ASSETS - TODAY $128,475,329
Exhibit 18
PRE-NET ASSET VALUE COMPUTATION:
Total Net Assets - Yesterday
(Adjusted - see below) $128,226,322
Today's Appreciation/
Depreciation in Inv. Sec.* 0
Number of Shares Outstanding-
Yesterday (Adjusted - see below) 129,849.0975
Pre-NAV per share $987.5026
POST-NET ASSET VALUE COMPUTATION:
Total Net Assets - Today $128,475,329
Shares Outstanding:
Today 130,101.2565
Current
Redemptions - 0 -
Current
Investments (Dividend Reinvestment) 252.1590
Number of
shares out-
standing today 130,101.2565
NET ASSET VALUE PER SHARE 987.5026
*INVESTMENT SECURITIES PORTFOLIO
Yesterday Today
Market $128,989,962 $128,989,962
Cost 128,067,239 128,067,239
Appreciation/
Depreciation $ -0- $ -0-
TODAY'S CHANGE $ -0-
Exhibit 18
BANK INVESTMENT FUND
Liquidity Fund
PRICE MAKE UP SHEET
Date: 12/31/98
Net Asset Value - January 1
$235,204,464
Cash Invested:
YTD-Yesterday $1,468,133,724
INV-Today -0- 1,468,133,724
Dividends Reinvested:
YTD-Yesterday $ 8,493,134
DR-Today 761,793 9,254,927
Cash Redeemed:
YTD-Yesterday ($1,425,964,481)
RED-Today -0- ($1,425,964,481)
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 $286,628,634
Exhibit 18
PRE-NET ASSET VALUE COMPUTATION:
Total Net Assets - Yesterday $286,628,634
Today's Appreciation/
Depreciation in Inv. Sec. 0
Number of Shares Outstanding-
Yesterday 286,628.6340
Pre-NAV per share $1000.00
POST-NET ASSET VALUE COMPUTATION:
Total Net Assets - Today $286,628,634
Shares Outstanding:
Today 285,832.1230
Current
Redemptions - 0 -
Current
Investments (Dividend Reinvestment) 796.5112
Number of
shares out-standing today 286,628.6342
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.
60
PLANA
PLANA
-68-
PLANC
PLANC
PLANC
-ix-
PLANC
PLANC
-60-
10
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000773154
<NAME> CO OPERATIVE BANK INVESTMENT FUND
<SERIES>
<NUMBER> 1
<NAME> FUND ONE
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 121,737,234
<INVESTMENTS-AT-VALUE> 122,659,962
<RECEIVABLES> 1,971,031
<ASSETS-OTHER> 50,649
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 131,011,642
<PAYABLE-FOR-SECURITIES> 2,000,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 536,313
<TOTAL-LIABILITIES> 2,536,313
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 144,814,662
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (17,262,056)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 922,723
<NET-ASSETS> 128,475,329
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8,294,216
<OTHER-INCOME> 0
<EXPENSES-NET> 643,750
<NET-INVESTMENT-INCOME> 7,650,466
<REALIZED-GAINS-CURRENT> 2,375
<APPREC-INCREASE-CURRENT> 588,959
<NET-CHANGE-FROM-OPS> 8,241,800
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 7,650,466
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,697
<NUMBER-OF-SHARES-REDEEMED> 20,326
<SHARES-REINVESTED> 2,750
<NET-CHANGE-IN-ASSETS> (15,133,169)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 643,750
<AVERAGE-NET-ASSETS> 133,219,515
<PER-SHARE-NAV-BEGIN> 983.750
<PER-SHARE-NII> 56.880
<PER-SHARE-GAIN-APPREC> 3.750
<PER-SHARE-DIVIDEND> (56.880)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 987.500
<EXPENSE-RATIO> .480
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000773154
<NAME> CO OPERATIVE BANK INVESTMENT FUND
<SERIES>
<NUMBER> 2
<NAME> LIQUIDITY FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 286,109,400
<INVESTMENTS-AT-VALUE> 286,146,809
<RECEIVABLES> 1,003,438
<ASSETS-OTHER> 236,835
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 287,349,673
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 721,039
<TOTAL-LIABILITIES> 721,039
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 286,628,634
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 286,628,634
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 16,804,967
<OTHER-INCOME> 0
<EXPENSES-NET> 476,000
<NET-INVESTMENT-INCOME> 16,328,967
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 16,328,967
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (16,328,967)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,468,134
<NUMBER-OF-SHARES-REDEEMED> 1,425,964
<SHARES-REINVESTED> 9,255
<NET-CHANGE-IN-ASSETS> 51,424,170
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 476,000
<AVERAGE-NET-ASSETS> 308,087,863
<PER-SHARE-NAV-BEGIN> 1000.000
<PER-SHARE-NII> 53.070
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (53.070)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1000.000
<EXPENSE-RATIO> .150
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
