<PAGE> 1
As filed with the Securities and Exchange Commission on February 4, 1999
Registration No.333-____________
- ----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-----------------------
YARDVILLE NATIONAL BANCORP
(Exact Name of Registrant as Specified in its Charter)
New Jersey
(State of Other Jurisdiction of Incorporation or Organization)
22-2670267
(IRS Employer Identification Number)
--------------------------
3111 Quakerbridge Road, Mercerville, New Jersey 08619
(Address of Principal Executive Office and Zip Code)
--------------------------
YARDVILLE NATIONAL BANK EMPLOYEE STOCK OWNERSHIP PLAN
(Full title of Plan)
--------------------------
Patrick M. Ryan
President and Chief Executive Officer
YARDVILLE NATIONAL BANCORP
3111 Quakerbridge Road
Mercerville, New Jersey 08619
(609) 585-5100
(Name, Address and Telephone Number, including Area Code, of Agent for
Service)
Copy to:
Brian S. Vargo, Esquire
PEPPER HAMILTON LLP
3000 Two Logan Square
Eighteenth and Arch Streets
Philadelphia, PA 19103-2799
--------------------------
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Title of Securities Amount to Proposed Maximum Proposed Maximum Amount of
to be Registered be Registered(1) Offering Price Per Share Aggregate Offering Price Registration Fee
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 155,340 shares $12.87498 $2,000,000 $400.00
(no par value)
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents the number of shares of Common Stock that will be purchased
pursuant to the Yardville National Bank Employee Stock Ownership Plan (the
"Plan"). Pursuant to Rule 416 under the Securities Act of 1933, this
Registration Statement also covers such number of additional shares of
Common Stock which may become available for issuance pursuant to the Plan
in the event of certain changes in outstanding shares, including
reorganizations, recapitalizations, stock splits, stock dividends and
stock combinations.
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. Plan Information
Omitted pursuant to Form S-8.
ITEM 2. Registrant Information and Employee Plan Annual Information
Omitted pursuant to Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference.
The following documents and information heretofore filed by
Yardville National Bancorp (the "Company" or "Registrant") with the U.S.
Securities and Exchange Commission (the "Commission") are, as of their
respective dates, incorporated into this Registration Statement by reference:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(b) the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1998;
(c) the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1998;
(d) the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1998; and
(e) the description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission on May
17, 1995.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934 after the date
hereof and prior to the filing of a post-effective amendment hereto that
indicates that all shares of Common Stock registered hereby have been sold or
that deregisters all such shares then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be part
hereof from the date of filing of such documents. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in
any other subsequently filed documents which also is or is deemed to be
incorporated by reference herein.
ITEM 4. Description of Securities.
Not Applicable.
ITEM 5. Interests of Named Experts and Counsel.
Not Applicable.
ITEM 6. Indemnification of Directors and Officers.
Section 14A:3-5 of the New Jersey Business Corporation Act, as
amended (the "Act"), provides for indemnification of, and insurance for,
directors, officers, employees and agents of a corporation and specifically
empowers the Company to indemnify, subject to the standards therein prescribed,
any director, officer, employee or agent in connection with any action, suit or
proceeding brought or threatened by reason of the fact that he or she is or was
a director, officer, employee or agent of the Company. Article VI of the
Company's Restated Certificate of Incorporation requires the Company to
indemnify each of the Company's directors, officers, employees and agents and
former directors, officers, employees and agents, and any other persons serving
at the request of the Company as an officer, director, employee or agent of
another corporation, association, partnership, joint venture, trust or other
enterprise, to the fullest extent permitted by the Act. The Company has the
power to maintain and, as of the date of filing of this Registration Statement,
does maintain insurance on behalf of the persons enumerated above against any
liability asserted against or incurred by such persons in any such capacity.
<PAGE> 4
ITEM 7. Exemption from Registration Claimed.
Not Applicable.
ITEM 8. Exhibits.
In lieu of an opinion of counsel concerning compliance with the
requirements of the Employee Retirement Income Security Act of 1974, as
amended, or a determination letter of the Internal Revenue Service that the
Plan is qualified under Section 401 of the Internal Revenue Code of 1986, as
amended, the undersigned registrant hereby undertakes to submit the Plan and
all amendments thereto to the Internal Revenue Service in a timely manner and
will make all changes required by the Internal Revenue Service to qualify the
Plan.
The following exhibits are included in this Registration Statement:
Exhibit Number
and Description
4.1 Restated Certificate of Incorporation, as amended (incorporated by
reference from the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998).
4.2 By-Laws of the Registrant (incorporated by reference from the
Registrant's Registration Statement on Form SB-2, Registration No.
33-78050).
4.3 Specimen of Share of Common Stock of the Registrant (incorporated
by reference from the Registrant's Registration Statement on Form
SB-2, Registration No. 33-78050).
4.4 Yardville National Bank Employee Stock Ownership Plan.
5.1 Opinion of Pepper Hamilton LLP.
23.1 Consent of Pepper Hamilton LLP (included in Exhibit 5.1).
23.2 Consent of KPMG LLP, Certified Public Accountants.
24.1 Power of Attorney.
ITEM 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement (Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.); and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this Registration
Statement;
provided however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or
<PAGE> 5
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be an
initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for the
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such information is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of the expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction to the question
whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in Trenton, New Jersey, on February 4, 1999.
YARDVILLE NATIONAL BANCORP
(Registrant)
By: /s/ Patrick M. Ryan
--------------------
Patrick M. Ryan
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons, in the
capacities indicated, on February 4, 1999.
<TABLE>
<CAPTION>
Signature Capacity
- --------- --------
<S> <C>
/s/ Patrick M. Ryan Director, President and Chief Executive
- ------------------- Officer
Patrick M. Ryan
/s/ Stephen F. Carman Secretary, Treasurer, Principal Financial
- --------------------- Officer and Principal Accounting
Stephen F. Carman
/s/ Jay G. Destribats* Chairman of the Board and Director
- ----------------------
Jay G. Destribats
/s/ C. West Ayres* Director
- ------------------
C. West Ayres
/s/ Elbert G. Basolis, Jr.* Director
- ---------------------------
Elbert G. Basolis, Jr.
/s/ Lorraine Buklad* Director
- --------------------
Lorraine Buklad
Director
- --------------------------
Anthony M. Giampetro, M.D.
/s/ Sidney L. Hofing* Director
- ---------------------
Sidney L. Hofing
/s/ James J. Kelly* Director
- -------------------
James J. Kelly
/s/ Gilbert W. Lugossy* Director
- -----------------------
Gilbert W. Lugossy
Director
- --------------------------
Weldon J. McDaniel, Jr.
/s/ Louis R. Matlack* Director
- ---------------------
Louis R. Matlack
/s/ F. Kevin Tylus* Director
- -------------------
F. Kevin Tylus
* By: /s/ Patrick M. Ryan
-------------------
Patrick M. Ryan
Attorney-in-Fact
</TABLE>
<PAGE> 7
INDEX TO EXHIBITS
Exhibit Number
and Description
4.1 Restated Certificate of Incorporation (incorporated by reference
from the Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1998, as amended by Form 10-Q/A filed on
June 9, 1998).
4.2 By-Laws of the Registrant (incorporated by reference from the
Registrant's Registration Statement on Form SB-2, Registration No.
33-78050).
4.3 Specimen of Share of Common Stock of the Registrant (incorporated
by reference from the Registrant's Registration Statement on Form
SB-2, Registration No. 33-78050).
4.4 Yardville National Bank Employee Stock Ownership Plan.
5.1 Opinion of Pepper Hamilton LLP.
23.1 Consent of Pepper Hamilton LLP (included in Exhibit 5.1).
23.2 Consent of KPMG LLP, Certified Public Accountants.
24.1 Power of Attorney.
<PAGE> 1
EXHIBIT 4.4
YARDVILLE NATIONAL BANK
EMPLOYEE STOCK OWNERSHIP PLAN
EFFECTIVE JANUARY 1, 1999
<PAGE> 2
YARDVILLE NATIONAL BANK
EMPLOYEE STOCK OWNERSHIP PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
<S> <C>
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
-----------
"Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
-------
"ESOP Stock Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
------------------
"ESOP Cash Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
-----------------
"Account Balance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
---------------
"Acquisition Loan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
----------------
"Administrator" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
-------------
"Affiliated Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
------------------
"Alternate Payee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
---------------
"Benefits Committee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
------------------
"Board of Directors" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
------------------
"Break in Service" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
----------------
"Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
----
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
"Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
-------
"Compensation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
------------
"Covered Employee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
----------------
"Credited Service" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
----------------
"Direct Rollover" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
---------------
"Distributee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-----------
"Effective Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
--------------
"Election Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
---------------
"Eligible Employee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-----------------
"Eligible Retirement Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
------------------------
"Eligible Rollover Distribution" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
------------------------------
"Employee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
--------
"Entry Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
----------
"ERISA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-----
"ESOP Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
----------
"Financed Shares" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
---------------
"Hour of Service" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
---------------
"Limitation Year" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
---------------
"Loan Suspense Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
---------------------
"Normal Retirement Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
----------------------
"Participant" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-----------
"Participating Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
---------------------
"Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
----
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
"Plan Year" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
---------
"Qualified Domestic Relations Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
----------------------------------
"Qualified Participant" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
---------------------
"Required Beginning Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-----------------------
"Spouse" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
------
"Total Disability" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
----------------
"Trust" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
-----
"Trust Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
---------------
"Trust Investment Committee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
--------------------------
"Trustee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
-------
"Valuation Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
--------------
ARTICLE II
PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.1 Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
-------------
2.2 Participation Not Guarantee of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
-----------------------------------------
2.3 Beneficiary Designation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
-----------------------
2.4 Participation After Reemployment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
--------------------------------
2.5 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
----
2.6 Credit for Military Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
---------------------------
ARTICLE III
PLAN CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
------------------
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<S> <C>
3.1 Participating Company Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
-----------------------------------
3.2 Participant Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
-------------------------
3.3 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
-----
3.4 Timing of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
-----------------------
ARTICLE IV
ALLOCATION OF PARTICIPATING COMPANY
------------------------------------
CONTRIBUTIONS AND FORFEITURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-----------------------------
4.1 Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
----------
4.2 Maximum Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
------------------
ARTICLE V
PARTICIPANTS' ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
----------------------
5.1 Separate Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
-------------------
5.2 Investment of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
-------------------
5.3 Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
---------
5.4 Adjustment of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
----------------------
5.5 Accounting for Allocations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
--------------------------
5.6 Restricted Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
-----------------
5.7 Participant Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
----------------------
5.8 Registration of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
--------------------------
5.9 Voting Of Employer Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
------------------------
5.10 Tender or Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
------------------------
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<S> <C>
5.11 Acquisition Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
-----------------
5.12 Restrictions on Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
---------------------------
5.13 Dividends on ESOP Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
-----------------------
ARTICLE VI
VESTING AND DISTRIBUTION OF ACCOUNT BALANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
--------------------------------------------
6.1 Retirement or Total Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
------------------------------
6.2 Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
-----
6.3 Termination of Employment other than as a Result of Death, Retirement or Total Disability. . . . 27
-----------------------------------------------------------------------------------------
6.4 Forfeitures and Restoration of Forfeited Amounts upon Reemployment . . . . . . . . . . . . . . . 28
------------------------------------------------------------------
6.5 Mode of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
--------------------
6.6 Pre-Retirement Diversification Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
-------------------------------------
6.7 Timing of Benefit Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
-------------------------------
6.8 Valuation for Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
--------------------------
6.9 Direct Rollover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
---------------
ARTICLE VII
DEATH BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
--------------
7.1 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
-----------
7.2 Form of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
---------------
</TABLE>
-v-
<PAGE> 7
<TABLE>
<S> <C>
ARTICLE VIII
MANAGEMENT OF FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
-------------------
8.1 Designation of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
----------------------
8.2 Exclusive Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
-----------------
8.3 No Interest in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
--------------------
8.4 Trust Investment Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
--------------------------
ARTICLE IX
ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
--------------
9.1 Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
-------------
9.2 Benefits Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
------------------
9.3 Ministerial Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
---------------------
9.4 Duties and Powers of Benefits Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
---------------------------------------
9.5 Functioning of Benefits Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
---------------------------------
9.6 Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
--------
9.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
---------------
9.8 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
--------
ARTICLE X
AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
-------------------------
10.1 Power of Amendment and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
----------------------------------
10.2 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
------
</TABLE>
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<PAGE> 8
<TABLE>
<S> <C>
ARTICLE XI
TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
--------------------
11.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
-------
11.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
-----------
11.3 Minimum Contribution for Non-Key Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
------------------------------------------
11.4 Change in Vesting Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
--------------------------
11.5 Social Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
---------------
11.6 Adjustment to Maximum Allocation Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
-------------------------------------------
ARTICLE XII
RIGHTS OF ALTERNATE PAYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
--------------------------
12.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
-------
12.2 Death Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
--------------
ARTICLE XIII
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
------------------
13.1 Source of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
------------------
13.2 Alienation of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
----------------------
13.3 Facility of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
-------------------
13.4 Interest and Dividends on Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
---------------------------------------
13.5 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
--------------
</TABLE>
-vii-
<PAGE> 9
<TABLE>
<S> <C>
SCHEDULE A
PARTICIPATING COMPANIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
-----------------------
SCHEDULE B
TRUST INVESTMENT COMMITTEE CHARTER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
----------------------------------
</TABLE>
-viii-
<PAGE> 10
WHEREAS, Yardville National Bank (the "Company") desires to adopt a
written employee stock ownership plan to permit eligible employees of the
Company and certain participating subsidiaries to share in the growth of the
Company through stock ownership; and
WHEREAS, the plan is intended (1) to comply with the applicable
requirements of the Employee Retirement Income Security Act of 1974, as
amended, (2) to comply with the applicable requirements of sections 401(a), 409
and 4975(e)(7) of the Internal Revenue Code of 1986, as amended, and (3) to be
an employee stock ownership plan within the meaning of section 4975(e)(7) of
the Code; and
WHEREAS, the plan is designed to invest primarily in "employer
securities", as defined in section 409(l) of the Internal Revenue Code; and
WHEREAS, the plan is also intended to accommodate purchases from
shareholders of the Company that qualify for tax treatment under section 1042
of the Code, whether or not such purchases are in fact made;
NOW, THEREFORE, effective January 1, 1999, the Yardville National
Bank Employee Stock Ownership Plan, is established as hereinafter set forth:
<PAGE> 11
ARTICLE I
DEFINITIONS
Except where otherwise clearly indicated by context, the masculine
pronoun shall include the feminine and the singular shall include the plural,
and vice versa. Any term used in the Plan without an initial capital letter
that is used in a provision of the Code with which this Plan must comply to
meet the requirements of section 401(a) of the Code shall be interpreted as
having the meaning used in such provision of the Code, if necessary for the
Plan to comply with such provision.
"Account" means the entries maintained in the records of the Trustees
which represent the Participant's interest in the Trust. The term "Account"
shall refer, as the context requires, to any or all of the following:
"ESOP Stock Account" -- the Account to which is credited ESOP
Stock allocated to a Participant under the Plan attributable to Company
contributions, as adjusted for distributions, earnings, losses and expenses
attributable thereto, to the extent held in the form of ESOP Stock.
"ESOP Cash Account" -- the Account to which are credited
Company contributions allocated to a Participant under the Plan, as adjusted
for distributions, earnings, losses and expenses attributable thereto, to the
extent held in any form other than ESOP Stock.
"Account Balance" means, for each Participant, the aggregate credit
standing to his Account.
"Acquisition Loan" means a loan or other extension of credit used by
the Trustee to finance the acquisition of ESOP Stock, as set forth in Section
5.11.
"Administrator" means the Company.
-2-
<PAGE> 12
"Affiliated Company" means (a) any subsidiaries of the Company (or
companies under common control with the Company) which are members of the same
controlled group of corporations as the Company, as determined under section
414(b) of the Code; (b) any member of an affiliated service group, as
determined under section 414(m) of the Code, of which the Company is a member;
and (c) any trades or businesses under common control with the Company, as
determined under section 414(c) of the Code. "50% Affiliated Company" means an
Affiliated Company described in (a) or (c) above, but applied as if the phrase
"more than 50%" were substituted for the phrase "at least 80%" each time it
appears in section 1563(a) of the Code.
"Alternate Payee" means any Spouse, former Spouse, child or other
dependent of a Participant who is recognized by a domestic relations order
(within the meaning of section 414(p)(1)(B) of the Code) as having a right to
receive all, or a portion of, the benefits payable under the Plan with respect
to such Participant.
"Benefits Committee" means the person or persons appointed by the
Board of Directors to supervise the administration of the Plan pursuant to
Article IX.
"Board of Directors" means the board of directors of the Company.
"Break in Service" means any Plan Year during which an Employee
receives credit for not more than 500 Hours of Service. Notwithstanding the
foregoing, if an Employee is absent from work by reason of pregnancy,
childbirth, or adoption, or for purposes of the care of such Employee's child
immediately after birth or adoption, such Employee shall be credited, solely
for purposes of this Section, with the Hours of Service which otherwise would
have been credited to such individual for such absence or, if such hours cannot
be determined, at the rate of eight hours per normal workday, except that the
total number of hours counted as Hours of Service for this purpose will not
exceed 501. The hours described in this Section shall be treated as Hours of
-3-
<PAGE> 13
Service for this purpose will not exceed 501. The hours described in this
Section shall be treated as Hours of Service:
(a) only in the Plan Year in which the absence from work
begins, if an Employee would be prevented from incurring a Break in Service in
such Plan Year solely because the period of absence is treated as Hours of
Service under this Section; or
(b) in any other case, in the immediately following Plan
Year.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Yardville National Bank, and its successors.
"Compensation"
(a) In General. Except as otherwise provided in this
definition, the term 'Compensation' means an Employee's base pay for each
calendar year ending with or within a Plan Year and which is includable in the
Employee's gross income for federal income tax purposes. The term
'Compensation' shall include amounts deferred or contributed under a salary
reduction agreement with a Participating Company and excludible from gross
income for federal income tax purposes pursuant to section 125 or 402(g) of the
Code. Except as otherwise provided above with respect to amounts excludible
from gross income under section 402(g) of the Code, the term 'Compensation'
shall not include contributions to this Plan or any other contributions by or
on behalf of the Employee to any other plan of deferred compensation.
(b) Statutory Limit on Compensation. Except as otherwise
provided in the Plan, only the first $160,000 of a Participant's Compensation
(or such greater amount as may be allowable under section 401(a)(17), as
determined by the Secretary of the Treasury) will be considered for any purpose
of the Plan.
-4-
<PAGE> 14
"Covered Employee" means any Employee who is employed by a
Participating Company other than:
(a) an Employee who is covered by a collective
bargaining agreement, unless such agreement specifically provides for
participation hereunder; or
(b) an individual who is an Employee solely by reason of
being a leased employee within the meaning of section 414(n) of the Code.
"Credited Service" means that portion of an Employee's employment
with the Company and all Affiliated Companies which is used to calculate the
Employee's vesting status hereunder. An Employee shall earn one year of
Credited Service for each Plan Year beginning on or after the Effective Date
during which he is credited with 1000 Hours of Service.
"Direct Rollover" means a payment by the Plan to an Eligible
Retirement Plan specified by the Distributee.
"Distributee" means a Participant or a Participant's surviving spouse
or Alternate Payee.
"Effective Date" means January 1, 1999.
"Election Period" means, with respect to any Participant, the 90-day
period immediately following the end of (1) the Plan Year in which such
Participant becomes a Qualified Participant and (2) each of the five succeeding
Plan Years.
"Eligible Employee" means an Employee who has become an Eligible
Employee as set forth in Article II, whether or not he is a Participant, and
who has remained a Covered Employee at all times thereafter.
-5-
<PAGE> 15
"Eligible Retirement Plan" means:
(a) an individual retirement account described in section
408(a) of the Code;
(b) an individual retirement annuity described in section
408(b) of the Code;
(c) a qualified trust described in section 401(a) of the
Code; and
(d) an annuity plan described in section 403(a) of the Code.
Paragraphs (c) and (d) shall not apply if the distributee of an Eligible
Rollover Distribution is the Participant's surviving spouse.
"Eligible Rollover Distribution" means any distribution under the
Plan to a Distributee, to the extent that such distribution is not required
under section 401(a)(9) of the Code.
"Employee" means any individual employed by the Company or any
Affiliated Company, including officers, shareholders or directors who are
employees. An individual who is not otherwise employed by the Company or an
Affiliated Company shall be deemed to be an Employee by the Company if he is a
leased employee with respect to the Company or an Affiliated Company within the
meaning of section 414(n) of the Code.
"Entry Date" means January 1st or July 1st.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESOP Stock" means the common stock of Yardville National Bancorp,
par value $.01 per share, or such other security that meets the requirements of
Section 409(l) of the Code.
-6-
<PAGE> 16
"Financed Shares" means shares of ESOP Stock acquired by the Trustee
with the proceeds of an Acquisition Loan.
"Hour of Service" means an hour for which:
(a) an Employee is directly or indirectly paid or
entitled to payment by the Company or an Affiliated Company for the performance
of employment duties;
(b) an Employee is entitled, either by award or
agreement, to back pay from the Company or an Affiliated Company, irrespective
of mitigation of damages;
(c) an Employee is directly or indirectly paid or
entitled to payment by the Company or an Affiliated Company on account of a
period of time during which no duties are performed due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty, military duty,
or leave of absence.
There shall be excluded from the foregoing those periods during which
payments are made or due under a plan maintained solely for the purpose of
complying with applicable workers' compensation, unemployment compensation, or
disability insurance laws. No more than 501 Hours of Service shall be credited
under Subsection (c) on account of any single continuous period during which no
duties are performed, except to the extent otherwise provided in this Plan. An
Hour of Service shall not be credited where an Employee is being reimbursed
solely for medical or medically related expenses.
Hours of Service shall be credited in accordance with the rules set
forth in U.S. Department of Labor Reg. Section 2530.200b-2(b) and (c).
"Limitation Year" means the Plan Year.
"Loan Suspense Account" means an account established to hold Financed
Shares pending repayment of the Acquisition Loan used to purchase such Financed
Shares.
-7-
<PAGE> 17
"Normal Retirement Date" means a Participant's 65th birthday.
"Participant" means an individual for whom an Account is maintained
under the Plan.
"Participating Company" means the Company and each of the Affiliated
Companies listed on Schedule A that, with the consent of the Board of
Directors, adopts the Plan for the benefit of its Eligible Employees.
"Plan" means the Yardville National Bank Employee Stock Ownership
Plan as set forth in this plan document and the Trust Agreements, and, as it
may be amended from time to time.
"Plan Year" means the 12-consecutive-month period extending from
January 1st and ending December 31st.
"Qualified Domestic Relations Order" means a domestic relations order
(within the meaning of section 414(p)(1)(B) of the Code) which creates or
recognizes the existence of an Alternate Payee's rights to, or assigns to an
Alternate Payee the right to receive all or a portion of the benefits payable
with respect to a Participant under the Plan, and is determined by the Benefits
Committee to satisfy the requirements of section 414(p) of the Code.
"Qualified Participant" means a Participant who has attained age 55
and who has completed ten years of participation in the Plan.
"Required Beginning Date" means the earlier of the dates determined
under (a) or (b) where:
(a) is the later of (1) the 60th day after the close of
the Plan Year in which the Participant reaches Normal Retirement Date, or (2)
the 60th day after the close of the
-8-
<PAGE> 18
Plan Year in which the Participant terminates employment with the Company and
all Affiliated Companies; and
(b) is April 1st of the calendar year following the later
of (1) the calendar year in which the Participant reaches age 70 1/2, or (2) the
calendar year in which the Participant terminates employment with the Company
and all Affiliated Companies; provided, however, that clause (2) shall not
apply with respect to a Participant who is a 5-percent owner (as defined in
section 416(i)(1)(B)(i) of the Code) of the Company or any Affiliated Company.
"Spouse" means the person to whom a Participant is married as of the
date of reference.
"Total Disability" means a physical or mental condition of such
severity and probable prolonged duration as to entitle the Participant to
disability retirement benefits under the Federal Social Security Act.
"Trust" means the fund established for this Plan, administered under
the Trust Agreement and out of which benefits payable under this Plan will be
paid.
"Trust Agreement" means any agreement and declaration of trust
executed under this Plan.
"Trust Investment Committee" means the person or persons appointed by
the Board of Directors to exercise the responsibilities assigned to such
Committee under the Plan and Trust Agreement. The operation of the Trust
Investment Committee shall be governed by the Charter attached as Schedule B
and incorporated herein by reference.
"Trustee" means the corporate trustee(s) and/or any group of one or
more individuals collectively appointed by the Board of Directors, to act as
trustee, pursuant to the terms of the Plan and Trust Agreement.
-9-
<PAGE> 19
"Valuation Date" means the last day of each Plan Year and each
interim date on which the Trust Investment Committee determines that a
valuation of the Trust shall be made.
-10-
<PAGE> 20
ARTICLE II
PARTICIPATION
2.1 Participation.
2.1.1 Each Covered Employee as of the Effective Date who
has reached the first anniversary of his employment with a Participating
Company as of the Effective Date shall become an Eligible Employee as of the
Effective Date. Each other Covered Employee shall become an Eligible Employee
on the Entry Date next following nearest the first anniversary of his
commencement of employment with the Company, provided he is a Covered Employee
as of such Entry Date.
2.1.2 If an individual is not a Covered Employee as of the
Entry Date or next following the first anniversary of his commencement of
employment with the Company, he shall become an Eligible Employee as of the
next following Entry Date on which he is a Covered Employee.
2.1.3 Except as otherwise provided in this Section 2.1.3,
an Eligible Employee shall share in contributions and forfeitures under Section
4.1 for a Plan Year only if he receives Compensation, is credited with 1,000 or
more Hours of Service for such Plan Year and is a Covered Employee on the last
day of such Plan Year. An Eligible Employee who is not a Covered Employee on
the last day of a Plan Year solely on account of layoff, leave of absence
approved in writing in advance by the Participating Company, military leave to
the extent that his right to rehire is protected by law, or transfer approved
by the Company to any Affiliated Company that is not a Participating Company
shall share in contributions and forfeitures under Section 4.1 for such Plan
Year only if he receives Compensation and is credited with 1,000 or
-11-
<PAGE> 21
more Hours of Service for such Plan Year. Notwithstanding the foregoing, an
Eligible Employee who is not a Covered Employee on the last day of a Plan Year
solely on account of death, Total Disability or termination of employment on or
after Normal Retirement Date during such Plan Year shall share in contributions
and forfeitures under Section 4.1 without regard to whether he is credited with
1,000 or more Hours of Service for such Plan Year.
2.2 Participation Not Guarantee of Employment.
Participation in the Plan does not constitute a guarantee or contract of
employment and will not give any Employee the right to be retained in the
employ of the Company or an Affiliated Company.
2.3 Beneficiary Designation. Upon becoming a Participant
in the Plan, an Employee may designate, in the manner specified by the Benefits
Committee and in accordance with Section 7.1, a beneficiary or beneficiaries to
whom his Account Balance shall be paid in the event of his death. A
Participant may change his beneficiary designation at any time by written
notice to the Benefits Committee in a form approved by the Benefits Committee.
2.4 Participation After Reemployment.
2.4.1 An individual who is a Participant, who
terminates employment with the Company and all Affiliated Companies and is
subsequently reemployed by a Participating Company as a Covered Employee shall
again become an Eligible Employee as of his reemployment date, provided that
such individual is so reemployed before incurring his fifth consecutive Break
in Service.
2.4.2 An individual who is a Participant, who
terminates employment with the Company and all Affiliated Companies employment
at a time when he has a nonforfeitable interest in his Account Balance and who
is subsequently reemployed by a Participating Company as a Covered Employee
shall again become an Eligible Employee as of
-12-
<PAGE> 22
his reemployment date, whether or not such individual is so reemployed before
incurring his fifth consecutive Break in Service.
2.4.3 An individual who is a Participant, who
terminates employment with the Company and all Affiliated Companies at a time
when he has no nonforfeitable interest in his Account Balance under the Plan
and who subsequently becomes an Employee after incurring five consecutive
Breaks in Service shall be treated as a new Employee for purposes of
determining his eligibility to participate and of calculating Credited Service
under the Plan.
2.5 Data. Each Employee shall furnish to the Benefits
Committee such data as the Benefits Committee may consider necessary for the
determination of the Employee's rights and benefits under the Plan and shall
otherwise cooperate fully with the Benefits Committee in the administration of
the Plan.
2.6 Credit for Military Service. 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 section 414 (u) of the Code.
-13-
<PAGE> 23
ARTICLE III
PLAN CONTRIBUTIONS
3.1 Participating Company Contributions. Subject to the
conditions and limitations of the Plan, for each Plan Year the Company (or such
other Participating Companies as the Board of Directors shall designate) shall
contribute to the Trust cash equal to, or ESOP Stock having an aggregate fair
market value equal to, such amount, if any, as the Board of Directors shall
determine by resolution; provided, however, that the contribution for any Plan
Year shall not exceed the lesser of the maximum amount deductible by the
Company for Federal income tax purposes, or the maximum amount which may be
credited that year in accordance with the contribution limitation provisions of
Section 4.2. To the extent provided in an Acquisition Loan between the Company
and the Trust pursuant to which the Company lends to the Trust amounts
attributable to the proceeds of a loan between the Company and an unrelated
third-party lender and intended for the acquisition of ESOP Stock by the Trust,
the Company's payment of principal and interest pursuant to such loan shall be
treated as the contribution of cash to the Trust pursuant to this Section 3.1,
and the repayment of such Acquisition Loan as described in Section 5.11.2.
3.2 Participant Contributions. No Participant shall be
required or permitted to make any contributions to the Plan.
-14-
<PAGE> 24
3.3 Trust.
3.3.1 The contributions deposited in the Trust in
accordance with this Article shall constitute a fund held for the benefit of
Participants and their eligible beneficiaries under and in accordance with this
Plan. No part of the principal or income of the Trust shall be used for, or
diverted to, any purpose other than the exclusive benefit of such Participants
and their eligible beneficiaries (including necessary administrative costs);
provided that in the case of a contribution made (1) as a mistake of fact, (2)
for which a tax deduction is disallowed, in whole or in part, by the Internal
Revenue Service, or (3) which is conditioned upon the initial qualification of
the Plan under section 401(a) of the Code, if the Plan is the subject of an
adverse determination with respect to its initial qualification, the
Participating Company that made such contribution shall be entitled to its
refund.
3.3.2 Any refund of contributions described in
Section 3.3.1 must be made within one year (1) after payment of a contribution
made as a mistake of fact, (2) after disallowance of the tax deduction, to the
extent of such disallowance, or (3) of the date on which the initial
qualification of the Plan is denied by the Internal Revenue Service, but only
if the application for determination is made by the time prescribed by law for
filing the Company's federal income tax return for the taxable year in which
the Plan is adopted or such later date as may be permitted by applicable
Treasury Regulation or other applicable administrative pronouncements, as the
case may be.
3.4 Timing of Contributions. Participating Company
contributions for any Plan Year under this Article shall be made no later than
the last date on which amounts so paid may be deducted for federal income tax
purposes for the taxable year of the employer in which
-15-
<PAGE> 25
the Plan Year ends. All contributions hereunder are expressly conditioned upon
their deductibility for federal income tax purposes.
-16-
<PAGE> 26
ARTICLE IV
ALLOCATION OF PARTICIPATING COMPANY
CONTRIBUTIONS AND FORFEITURES
4.1 Allocation. Each Participating Company contribution,
plus any forfeitures arising during the Plan Year and any amount held in
suspense in accordance with Section 4.2.2, shall be allocated as of the last
day of the Plan Year for which the contribution is made to the Account of each
Eligible Employee who is entitled to share in such contribution under Section
2.1.3 in the proportion that his Compensation for that portion of the Plan Year
during which he was an Eligible Employee bears to such Compensation of all such
Eligible Employees for the Plan Year.
4.2 Maximum Allocation.
4.2.1 Notwithstanding anything in this Article to
the contrary, in no event shall amounts allocated to a Participant's Account
under this Plan and any other defined contribution plan maintained by the
Company or a 50% Affiliated Company exceed the limitations set forth in section
415 of the Code, which are hereby incorporated by reference into the Plan.
4.2.2 If the amounts otherwise allocable to the
Account of a Participant under this Plan and any other defined contribution
plan maintained by the Company or a 50% Affiliated Company would exceed the
limitation set forth in section 415(c) of the Code as a result of the
reallocation of forfeitures, a reasonable error in estimating the Participant's
compensation or such other circumstances as permitted by law, the excess amount
shall be held in a suspense account by the Trustee until the following Plan
Year (or any succeeding Plan Years), at which time such amount shall be
allocated in the manner described in Section 4.1
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before any contributions by the Company may be made for such Plan Year.
Amounts held in the suspense account shall share in investment gains and losses
of the Trust.
4.2.3 If, in any Limitation Year beginning prior to
January 1, 2000, a Participant is a participant in one or more defined benefit
plans sponsored by the Company or a 50% Affiliated Company, the annual
additions to the Account of the Participant under the Plan shall be reduced
only to the extent necessary to meet the combined plan limits of section 415(e)
of the Code and only if the annual benefit under the defined benefit plan(s) is
not reduced to the extent necessary to meet such limits.
4.2.4 Notwithstanding anything in this Plan to the
contrary, the maximum allocation provisions of this Section shall be construed
in accordance with the requirements of section 415 of the Code and the
regulations promulgated thereunder.
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ARTICLE V
PARTICIPANTS' ACCOUNTS
5.1 Separate Accounting. Separate Accounts shall be
maintained for each Participant. These Accounts shall represent the
Participant's individual interest in the Trust.
5.2 Investment of Trust. Except as otherwise provided in
Sections 6.6 and 5.4.4, the assets of the Trust shall be primarily invested in
ESOP Stock. The Trustee shall invest contributions that are not applied to the
payment of principal and interest on any Acquisition Loan in ESOP Stock, except
that subject to the direction of the Trust Investment Committee, the Trustee
shall be authorized to invest a portion of such contributions received in other
securities as a reserve for the payment of administrative expenses and cash
distributions. The Trustee shall be specifically authorized to invest in
interest-bearing deposit accounts or certificates of deposit of any affiliate
of the Trustee. The Trustee shall also be authorized to invest contributions
not applied to the payment of principal and interest on any Acquisition Loan
and income received on Plan assets in other securities pending investment in
ESOP Stock or pending distribution to Participants. In accordance with the
directions of the Trust Investment Committee, shares of ESOP Stock may be
purchased from any Company shareholder or from the Company or an Affiliated
Company. All purchases of ESOP Stock by the Trustee shall be made only as
directed by the Trust Investment Committee. The Trust Investment Committee may
direct the Trustee to sell shares of ESOP Stock to any person (including the
Company or an Affiliated Company). Except as otherwise provided in Section
6.6, the Trust Investment Committee may direct the Trustee to hold up to 100%
of assets allocated to Participants' Accounts in ESOP Stock.
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5.3 Valuation. The value of the Trust shall be computed
by the Trustee as of the close of business of each Valuation Date on the basis
of the fair market value of the assets of the Trust. All valuations of ESOP
Stock shall be made in accordance with section 401(a)(28)(C) of the Code,
section 3(18) of ERISA, and applicable regulations issued under such sections.
5.4 Adjustment of Accounts. As of each Valuation Date,
the following adjustments shall be made to each Participant's Account, in the
order described below.
5.4.1 The Account of each Participant shall be
charged with all distributions and payments made to him, or on his behalf,
since the last preceding Valuation Date that have not been charged previously,
including payments by the Trustee in accordance with Section 5.13 of cash
dividends paid with respect to shares of ESOP Stock allocated to the
Participant's ESOP Stock Accounts.
5.4.2 Any appreciation, depreciation, gains or
losses experienced by the Trust hall be allocated among and correspondingly
credited to or charged against each Participant's ESOP Stock Accounts and ESOP
Cash Accounts, respectively, in proportion to the balance in each of such
Accounts as of such Valuation Date, after the application of Section 5.4.1.
5.4.3 Any cash dividends paid by the Company with
respect to Shares of ESOP Stock allocated to a Participant's ESOP Stock Account
which are not applied to the repayment of any Acquisition Loan shall be
credited to the ESOP Cash Account of such Participant.
5.4.4 If dividends paid on shares of ESOP Stock
that have not been allocated to Participants' ESOP Stock Accounts are applied
to the repayment of any Acquisition Loan, then shares will be released from the
Loan Suspense Account as described in Section
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5.11.3 and allocated to each Eligible Employee's ESOP Stock Account as a
Company contribution in accordance with Section 4.1.
5.4.5 If dividends paid on shares of ESOP Stock
that have been allocated to Participants' ESOP Stock Accounts (regardless of
whether such shares were acquired with the proceeds of an Acquisition Loan) are
applied to the repayment of any Acquisition Loan, the shares thereby released
from the Loan Suspense Account shall be allocated directly to the ESOP Stock
Account of each Participant for whose benefit the dividends would otherwise
have been allocated. If the fair market value of the shares so allocated to
each Participant's Account is less than the amount of the dividend that would
otherwise have been allocated to such Account, then contributions and/or
forfeitures will be allocated to such Participant's Account until the total
allocation made pursuant to this Section 5.4.5 is equal to the amount of the
dividend that would otherwise have been allocated to such Account. Any
allocation of ESOP Stock made under this Section 5.4.5 shall be made for the
Plan Year in which the dividend would otherwise have been allocated.
5.4.6 Contributions and forfeitures shall be
allocated to each Eligible Employee's Account in accordance with Section 4.1;
provided, however, that to the extent that such contributions or forfeitures
are applied to the repayment of any Acquisition Loan, then shares will be
released from the Loan Suspense Account as described in Section 5.11.3 and
allocated to each Eligible Employee's ESOP Stock Account as a Company
contribution in accordance with Section 4.1.
5.4.7 Each Participant's ESOP Stock Account shall
be credited with the shares of ESOP Stock, if any, that have been purchased
with amounts from his corresponding ESOP Cash Account since the last preceding
Valuation Date, and such ESOP Cash Account shall
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be charged with the amount of cash, or the value of such other Plan assets, if
any, used to purchase such shares of ESOP Stock.
5.5 Accounting for Allocations. The Benefits Committee
shall establish or provide for the establishment of accounting procedures for
the purpose of making the allocations, valuations and adjustments to
Participants' Accounts. From time to time, such procedures may be modified for
the purpose of achieving equitable and nondiscriminatory allocations among the
Accounts of Participants in accordance with the general concepts of the Plan
and the provisions of this Article.
5.6 Restricted Assets. Financed Shares which are pledged
as collateral for an Acquisition Loan as provided in Section 5.11 shall not be
considered part of the Trust for purposes of determining the Trust's income and
appreciation or depreciation for a valuation period. Such Financed Shares
shall be considered part of the Trust for such purposes only after they are
released from the Loan Suspense Account and allocated to Accounts under Section
5.11.
5.7 Participant Statements. Each Participant will be
entitled to an annual statement showing the additions to and subtractions from
his or her account since the last Valuation Date and the fair market value of
his Account as of the current Valuation Date.
5.8 Registration of Securities. If the Trustee invests
any part of the Trust, pursuant to the directions of the Trust Investment
Committee, in ESOP Stock and the Trust Investment Committee thereafter directs
the Trustee to dispose of such investment, or any part thereof, under
circumstances which, in the opinion of counsel for the Trustee, require
registration of the securities under the Securities Act of 1933 or the
registration or qualification of the securities under the Blue Sky laws or
other laws of any state of states, the Company will take any and all such
action as may be necessary or appropriate to effect such registration or
qualification.
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5.9 Voting Of Employer Stock. The Trustee will vote
shares of ESOP Stock in accordance with this Section 5.9.
5.9.1 If the Company has a registration-type class
of securities (as described in section 409(e)(4) of the Code), each Participant
(or beneficiary of a deceased Participant) to whose account shares of ESOP
Stock have been allocated will, as a named fiduciary (within the meaning of
section 403(a)(2) of ERISA), have the right to direct the Trustee as to the
voting of such ESOP Stock.
5.9.2 If the Company does not have a
registration-type class of securities (as described in section 409(e)(4) of the
Code), the following voting procedure will apply:
5.9.2.1 Each Participant (or beneficiary of
a deceased Participant) to whose account shares of ESOP Stock have been
allocated will, as a named fiduciary (within the meaning of section 403(a)(2)
of ERISA), have the right to direct the Trustee as to the voting of such ESOP
Stock with respect to any of the following corporate matters involving the
Company or any Affiliated Company: (i) mergers or consolidations; (ii)
recapitalizations; (iii) reclassifications; (iv) liquidations; (v)
dissolutions; (vi) sales of substantially all assets of a trade or business; or
(vii) such similar transactions as may be prescribed in Treasury Regulations.
5.9.2.2 The Trust Investment Committee will,
as a named fiduciary (within the meaning of section 403(a)(2) of ERISA), direct
the Trustee as to the voting of all shares of ESOP Stock with respect to
corporate matters not described in Section 5.9.2.1.
5.9.3 Shares of ESOP Stock that have not been
allocated and shares of ESOP Stock that have been allocated but for which no
direction is received pursuant to Sections 5.9.1 or 5.9.2.1 will be voted by
the Trustee in identical proportion to the votes of shares of ESOP Stock for
which direction has been received pursuant to Sections 5.9.1 or 5.9.2.1
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5.9.4 The Company shall furnish such proxy
materials to the Trustee as are necessary to effectuate the voting procedures
described in this Section.
5.10 Tender or Exchange Offer. ESOP Stock that becomes
the subject of a tender or exchange offer will be tendered or exchanged by the
Trustee in accordance with this Section 5.10.
5.10.1 Each Participant (or beneficiary of a
deceased Participant) to whose account shares of ESOP Stock have been allocated
will, as a named fiduciary (within the meaning of section 403(a)(2) of ERISA),
have the right to direct the Trustee as to the tender or exchange of such ESOP
Stock.
5.10.2 Shares of ESOP Stock that have not been
allocated and shares of ESOP Stock that have been allocated but for which no
direction has been received pursuant to Sections 5.10.1 will be tendered or
exchanged by the Trustee in identical proportion to the shares of ESOP Stock
for which direction has been received pursuant to Sections 5.10.1.
5.11 Acquisition Loans. The Trust Investment Committee
may, from time to time, direct the Trustee to incur one or more Acquisition
Loans to finance the acquisition of ESOP Stock for the Trust or to repay a
prior Acquisition Loan, subject to the following provisions.
5.11.1 An Acquisition Loan shall be for a specific
term, shall bear a reasonable rate of interest, and shall not be payable on
demand. An Acquisition Loan may be secured by pledge of Financed Shares
acquired with the proceeds of such Acquisition Loan, or with the proceeds of a
prior Acquisition Loan which is being refinanced and repaid with the proceeds
of such current Acquisition Loan. No other assets of the Plan or Trust may be
pledged as collateral for an Acquisition Loan, and no lender shall have
recourse against any other Plan or
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Trust assets. If the lender is a party in interest under ERISA, the
Acquisition Loan must provide for a transfer of Trust assets upon default only
upon and to the extent of the failure of the Trust to meet the payment schedule
of the Acquisition Loan.
5.11.2 Payments of principal and/or interest on any
Acquisition Loan shall be made by the Trustee only from Company contributions
paid in cash to enable the Trustee to repay such loan or from earnings
attributable to such contributions. In addition, the Trust Investment
Committee may direct the Trustee to apply any cash dividends received by the
Trustee on shares of ESOP Stock (whether or not allocated to Participants'
Accounts) to pay principal and interest on an Acquisition Loan; provided,
however, that dividends paid on such shares may be used to repay only an
Acquisition Loan the proceeds of which were used to acquire such shares for the
Trust. In the event that the Trustee is unable to make payments of principal
and/or interest on an Acquisition Loan when due, the Trust Investment Committee
may direct the Trustee to sell any Financed Shares that have not been allocated
to Participants' Accounts or to obtain an Acquisition Loan in an amount
sufficient to make such payments.
5.11.3 Any pledge of Financed Shares must provide
for the release of shares so pledged as payments are made on the Acquisition
Loan by the Trustee. Financed Shares shall initially be credited to the Loan
Suspense Account and shall be transferred for allocation to Participants' ESOP
Stock Accounts as payments are made on the Acquisition Loan by the Trustee.
The number of shares so released shall bear the same relationship to the number
of Financed Shares held immediately before release for any Plan Year as the
amount of principal and interest paid for such year bears to the total amount
of principal and interest to be paid for such year and all following years.
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5.12 Restrictions on Allocations.
5.12.1 Notwithstanding any other provision in this
Plan, if shares of ESOP Stock are sold to the Plan by a Company shareholder in
a transaction for which such shareholder elects nonrecognition treatment
pursuant to section 1042 of the Code, no assets attributable to such Stock may
be allocated, during the nonallocation period, to the Account of any of the
following:
5.12.1.1 the selling shareholder;
5.12.1.2 any person who is related to
that shareholder (within the meaning of section 267(b) of the Code), but
excluding lineal descendants of such shareholder as long as no more than five
percent of the aggregate amount of all ESOP Stock sold by such shareholder in a
transaction to which Code section 1042 applies is allocated to such lineal
descendants; or
5.12.1.3 any other person who owns
(after application of section 318(a) of the Code), more than 25 percent in
value of outstanding securities of the Company at any time during the 1-year
period ending on the date of sale of such ESOP Stock.
Further, no allocation of contributions may be made to the
Accounts of persons described in Sections 5.12.1.1 through 5.12.1.3 unless
additional allocations are made to other Participants, in accordance with the
provisions of sections 401(a) and 410 of the Code. The nonallocation period is
the period beginning on the date of sale and ending ten years thereafter, or if
later, on the date of the allocation attributable to the final payment on the
Acquisition Loan incurred with respect to the sale.
5.13 Dividends on ESOP Stock. Any cash dividends paid
with respect to shares of ESOP Stock allocated to Participants' ESOP Stock
Accounts which are not applied to
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the repayment of any Acquisition Loan may, as determined by the Company, be (1)
paid by the Company directly in cash to the Participants for whose benefit such
ESOP Stock is held under the Plan, (2) paid to the Trustee and distributed by
the Trustee to the Participant no later than 90 days after the end of the Plan
Year in which paid to the Trustee or (3) paid to the Trustee and invested in
accordance with Section 5.2.
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ARTICLE VI
VESTING AND DISTRIBUTION OF ACCOUNT BALANCES
6.1 Retirement or Total Disability. Any Participant
whose employment with the Company and all Affiliated Companies terminates (1)
on or after his Normal Retirement Date or (2) at any time because of Total
Disability shall be deemed to have retired under the Plan and shall be entitled
to receive his entire Account Balance as provided in Sections 6.5 and 6.7.
6.2 Death. If a Participant's employment with the
Company and all Affiliated Companies terminates as a result of his death, his
beneficiary shall be entitled to receive his entire Account Balance as provided
in Sections 6.5 and 6.7. If distributions have begun before the date of the
Participant's death, distributions shall continue to be made to the
Participant's beneficiary on the same basis as in effect before the
Participant's death.
6.3 Termination of Employment other than as a Result of
Death, Retirement or Total Disability. Any Participant whose employment with
the Company and all Affiliated Companies terminates for any reason other than
under Sections 6.1 and 6.2 shall be entitled to receive his nonforfeitable
interest in his Account Balance as provided in Section 6.5. Except as
otherwise provided in Section 11.4, a Participant shall have a 100 percent
nonforfeitable interest in his Account Balance after he has been credited with
five years of Credited Service, prior to which his account shall not be vested.
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6.4 Forfeitures and Restoration of Forfeited Amounts upon
Reemployment.
6.4.1 If a Participant who has terminated
employment does not thereafter complete an Hour of Service before the end of
the Plan Year in which occurs the earlier of:
6.4.1.1 the date on which he receives a
distribution of the nonforfeitable portion of his Account; or
6.4.1.2 the date on which he incurs his
fifth consecutive Break in Service, his Account shall be closed, and any
forfeitable portion of his Account shall be forfeited. For purposes of this
Section 6.4.1, a Participant who has a termination of employment at a time when
his nonforfeitable interest in the Plan is zero shall be deemed to have
received a distribution of his entire Account on the date of such termination
of employment.
6.4.2 If a Participant who has received (or who was
deemed to have received) a distribution described in Section 6.4.1.1, whereby
any part of his Account has been forfeited, becomes an Employee again prior to
incurring five consecutive Breaks in Service, the amount so forfeited shall be
restored to his new Account. Unallocated contributions or forfeitures will be
used to fund the restoration of Accounts pursuant to this Section 6.4.2;
provided, however, that if such unallocated contributions and forfeitures are
insufficient for this purpose, additional Participating Company contributions
will be made to fund such restorations. If forfeitures for a Plan Year exceed
the amount necessary for the restoration of accounts pursuant to this Section
6.4.2, such excess shall be allocated as an additional Participating Company
contribution in accordance with Section 4.1.
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6.5 Mode of Distribution.
6.5.1 Except as otherwise provided in this Article
VI, the nonforfeitable portion of a Participant's Account, valued in accordance
with Section 6.8, shall be paid to him or applied for his benefit in
substantially equal periodic installments over a period of five years, plus one
additional year (but not more than five additional years) for each $100,000 (or
such higher amount as may be applicable under Section 409(o) of the Code), or
portion thereof by which such Account Balance exceeds $500,000 (or such higher
amount as may be applicable under Section 409(o) of the Code). The
undistributed portion of the Employee's Account shall continue to be invested
as provided in the Plan.
6.5.2 Notwithstanding Section 6.5.1, if a
Participant's nonforfeitable interest in his Account Balance has never exceeded
$5,000, his Account shall be distributed in a single sum payment.
6.5.3 The distribution of a Participant's
nonforfeitable interest in his ESOP Cash Account shall be made in cash. The
distribution of a Participant's nonforfeitable interest in his ESOP Stock
Account shall be made in whole shares of ESOP Stock and in cash equal to the
value of any fractional share. Notwithstanding the foregoing, if shares of ESOP
Stock are not traded on an established market, a Participant (or beneficiary,
if applicable) shall have the right to receive a cash distribution in lieu of
shares of ESOP Stock.
6.5.4 If the distribution is made in shares of ESOP
Stock and such shares are not traded on an established market, the former
Participant (or his beneficiary, if applicable) will have the right to sell
such shares to the Company at a price equal to their fair market value as of
the last Valuation Date preceding the exercise of such right, as determined by
an independent appraiser in accordance with section 401(a)(28) of the Code.
Such right, known as a "put
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option," may be exercised at any time during the two option periods described
below. The first put option period shall be a period of 60 days commencing on
the date the ESOP Stock is distributed to the Participant or beneficiary. If
the put option is not exercised within that period, it will temporarily lapse.
Upon the close of the Plan Year in which such temporary lapse of the put option
occurs, the Trustee shall establish the value of the ESOP Stock, as determined
by an independent appraiser, and shall notify each Participant (or beneficiary)
who did not exercise the put option during the first option period of the
revised value of the ESOP Stock. The second period during which the put option
may be exercised shall commence on the date such notice of revaluation is given
and shall permanently terminate 60 days thereafter.
6.5.5 Financed Shares distributed to a Participant
(or his beneficiary) shall be subject to a right of first refusal as provided
in this Section 6.5.5, if such Financed Shares are not publicly traded at the
time the right of first refusal may be exercised. Financed Shares distributed
to a Participant (or his beneficiary) shall not be transferable to any person
other than the Plan or the Company unless (i) the Participant or beneficiary
receives a good faith written offer for the purchase of such Financed Shares
from a person other than the Plan or the Company; (ii) the Participant or
beneficiary provides written notice to the Trust Investment Committee of the
receipt of such offer in a form reasonably acceptable to the Trust Investment
Committee; (iii) such written notice includes a copy of such offer and a
description of the terms and conditions of such offer; and (iv) the Plan fails
to purchase such Financed Shares before the close of the 14th day following the
Trust Investment Committee's receipt of such written notice. In exercising its
right of first refusal under this Section 6.5.5, the Plan may not purchase
Financed Shares for an amount less than the greater of (A) the purchase price
and other terms offered by the offeror for such Financed Shares or (B) the
value of such Financed Shares as
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determined pursuant to Treasury Regulation Section 54.4975-11(d)(5). The Trust
Investment Committee shall immediately notify the Board of Directors of its
receipt of a written notice from a Participant or beneficiary of any offer to
purchase Financed Shares that are subject to the right of first refusal
hereunder, and of its intentions regarding the exercise of such right of first
refusal. If the Trust Investment Committee notifies the Board of Directors on
behalf of the Plan that the Plan shall decline to exercise such right, the
Company shall have the right to exercise such right to the same extent as the
Plan, provided that such right must be exercised before the close of the 14th
day following the Trust Investment Committee's receipt of the Participant's or
beneficiary's notice of such offer. Such notice shall be deemed received on
the date actually received by the Trust Investment Committee.
6.6 Pre-Retirement Diversification Rights. The Benefits
Committee shall establish a procedure pursuant to which, during an Election
Period, each Qualified Participant may direct the Trustee as to the investment
of the value (determined as of the immediately preceding Valuation Date) of at
least 25% of the number of shares of ESOP Stock credited to his Account. The
amount with respect to which a Qualified Participant may direct the investment
during any Election Period subsequent to the Qualified Participant's initial
Election Period shall be determined by multiplying the number of shares of ESOP
Stock credited to his Account by 25% (or, with respect to a Participant's final
election, 50%), reduced by the aggregate number of shares subject to any prior
elections by such Qualified Participant pursuant to this Section. The
procedure established by the Benefits Committee may provide that the Qualified
Participant may direct the investment of the amount determined pursuant to this
Section by instructing the Trustee to:
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6.6.1 distribute such amount to him within ninety
(90) days after the Election Period;
6.6.2 if the Benefits Committee selects three or
more investment options other than ESOP Stock for purposes of this Section, to
invest such amount, within ninety (90) days after the Election Period, in one
or more of such investment options; or
6.6.3 if the Company maintains another qualified
defined contribution plan that permits participant direction of investments, to
transfer such amount, within ninety (90) days after the Election Period, to
such other plan.
The procedure established by the Benefits Committee, and the effectuation of a
Qualified Participant's elections made pursuant to such procedure, shall comply
with section 401(a)(28) of the Code.
6.7 Timing of Benefit Distributions.
6.7.1 Special Distribution Rules. The following
special distribution rules shall supersede the general distribution rules of
Sections 6.7.2 through 6.7.3:
6.7.1.1 Required Beginning Date.
Notwithstanding any other provision of the Plan, benefits to a Participant (or
to a Participant's beneficiary following the Participant's death before
benefits have begun to be paid), shall begin to be paid not later than the
Required Beginning Date.
6.7.1.2 Small Dollar Cash-Outs. If the
value of the nonforfeitable Account Balance of a Participant who separates from
service to the Company and all Affiliated Companies has never exceeded $5,000,
his Account Balance shall be distributed in a single sum as soon as
administratively practicable following the Participant's separation from
service.
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6.7.1.3 Financed Shares. Except for
distributions subject to Sections 6.7.1.1 and 6.7.1.2 and notwithstanding any
other Plan provision, to the extent a Participant's Account Balance holds
Financed Shares, distributions shall not begin before the Acquisition Loan with
respect to such Financed Shares has been repaid in full.
6.7.1.4 Required Consent to Distribution.
Except for distributions (i) subject to Section 6.7.1.2, (ii) payable following
a Participant's death or (iii) payable following a Participant's Normal
Retirement Date, no distribution will be made without the Participant's
consent. Moreover, for such consent to be valid, it must be given not more than
90 days before the date as of which distributions begin. If a Participant does
not consent to a distribution of his nonforfeitable interest in his Account
Balance at the time that it first becomes distributable, such nonforfeitable
interest shall continue to be held in the Plan until the earlier of: (i) the
close of the Plan Year in which the Participant reaches Normal Retirement Date
or dies, or (ii) as soon as practicable following such time as the Participant
submits a written request for such distribution to the Benefits Committee.
6.7.2 Normal Retirement, Total Disability or Death.
6.7.2.1 Normal Retirement or Total
Disability. Except as otherwise provided in Section 6.7.1, distributions with
respect to a Participant who separates from service to the Company and all
Affiliated Companies on or after his Normal Retirement Date or on account of a
Total Disability shall begin as soon as administratively practicable following
such separation from service, but not later than the close of the Plan Year
following the Plan Year during which such separation from service occurs.
6.7.2.2 Death. If a Participant separates
from service to the Company and all Affiliated Companies because of death, but
the commencement of the
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distribution is delayed beyond the close of the Plan Year following the Plan
Year during which such separation from service occurs because of the
application of Section 6.7.1.3 (regarding the effect of the existence of an
Acquisition Loan on the timing of distributions), then, notwithstanding any
other provision of this Article VI to the contrary:
(i) if (and to the extent that) the Participant's
beneficiary is a person or entity that is not the Participant's surviving
spouse, distribution with respect to such Participant shall be made in a single
sum as soon as practicable following the repayment of the Acquisition Loan in
full, or, if earlier, by the last day of the calendar year which contains the
fifth anniversary of the Participant's date of death; and
(ii) if (and to the extent that) the Participant's
beneficiary is the Participant's spouse, distribution with respect to such
Participant shall be paid in the form described in Section 6.5.1, and shall
begin to be paid as soon as practicable following the repayment of the
Acquisition Loan, or, if earlier, the date the Participant would have attained
age 70 1/2.
6.7.3 Other Separation From Service. Except as
otherwise provided in Section 6.7.1, distributions with respect to a
Participant who separates from service to the Company and all Affiliated
Companies before his Normal Retirement Date, or as a result of his Total
Disability or death, shall begin as soon as administratively practicable
following the fifth anniversary of such separation from service, but not later
than the close of the sixth Plan Year beginning after such separation from
service, provided that distributions shall not begin under this Section 6.7.3
if the Participant is reemployed by the Company or an Affiliated Company before
the close of the sixth Plan Year beginning after the Participant's separation
from service.
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6.8 Valuation for Distribution. For the purposes of
paying the amounts to be distributed to a Participant or his beneficiaries
under the provisions of this Article, the value of a Participant's Account
shall be determined in accordance with Article V as of the Valuation Date
immediately preceding the date of payment and shall be adjusted for any
contributions or forfeitures which have been allocated to the Participant's
Account since that Valuation Date.
6.9 Direct Rollover. Notwithstanding any provision of
the Plan, a Distributee may elect, at the time and in the manner prescribed by
the Benefits Committee, to have any portion of an Eligible Rollover
Distribution paid directly to the Eligible Retirement Plan specified by that
Distributee as a Direct Rollover.
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ARTICLE VII
DEATH BENEFITS
7.1 Beneficiary. Following the death of a married
Participant, his entire Account Balance shall be paid to his surviving spouse
unless the Participant has designated a different beneficiary in the manner
prescribed by the Benefits Committee pursuant to Section 2.3, and (i) the
Participant's Spouse has consented to that designation in writing, in an
instrument that acknowledges the effect of the designation and that is
witnessed by a representative of the Benefits Committee or by a notary public,
or (ii) the Benefits Committee concludes that such consent cannot be obtained
because the Participant has no Spouse or because the Spouse cannot be located
or because such consent is not required under such circumstances as are
prescribed by governmental regulations. If the Participant is not married on
the date of his death, his beneficiary shall be the person or persons
designated by him pursuant to Section 2.3. Any portion of the Participant's
Account Balances which is undisposed of due to the failure to designate a
beneficiary or to the failure of the designated beneficiary or Spouse to
survive the Participant shall be paid to the Participant's estate.
7.2 Form of Payment. Death benefits shall be payable in
the form described in Section 6.5.
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ARTICLE VIII
MANAGEMENT OF FUNDS
8.1 Designation of Trustee. The Trust Investment
Committee shall name and designate a Trustee and shall enter into a Trust
Agreement with such Trustee on behalf of the Participating Companies. The Trust
Investment Committee shall have the power to amend the Trust Agreement, remove
any Trustee, and designate a successor Trustee, as provided in the Trust
Agreement. All of the assets of the Plan shall be held by the Trustee for use
in accordance with this Plan in providing for the benefits hereunder.
8.2 Exclusive Benefit. Prior to the satisfaction of all
liabilities under the Plan in the event of termination of the Plan, no part of
the corpus or income of the Trust shall be used for or diverted to purposes
other than for the exclusive benefit of Participants and their beneficiaries
except as expressly provided in this Plan and in the Trust Agreement.
8.3 No Interest in Trust. No person shall have any
interest in or right to any part of the assets or income of the Trust, except
to the extent expressly provided in this Plan and in the Trust Agreement.
8.4 Trust Investment Committee. The Trust Investment
Committee shall be the named fiduciary with respect to management and control
of Plan assets held by the Trustee and shall have exclusive and sole
responsibility for investment thereof in accordance with the Trust Agreement
and the provisions of the Plan. The Trustee shall have the exclusive and sole
responsibility for the custody of Plan assets held by it in accordance with the
Trust Agreement and the provisions of the Plan, for following the directions of
the Trust Investment Committee
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and of Participants as required by the Plan and Trust Agreement, and for
selecting short-term investment funds for the investment of cash balances held
by the Trust.
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ARTICLE IX
ADMINISTRATION
9.1 Administrator. The Company shall control and manage
the operation of the Plan and shall be the Plan Administrator.
9.2 Benefits Committee. The Company shall delegate its
discretionary authority and control with respect to Plan administration to the
Benefits Committee, which Benefits Committee shall consist of not less than
three persons who will serve at the pleasure of the Board of Directors. The
Benefits Committee members may be, but need not be, employees of the Company or
members of the Trust Investment Committee. They shall be entitled to
reimbursement of expenses but to no compensation for their service on the
Benefits Committee. Any reimbursement of expenses of the Benefits Committee
shall be paid directly by the Company.
9.3 Ministerial Functions. The Benefits Committee shall
delegate its ministerial duties or functions to such person or persons as the
Benefits Committee shall select. Such person or persons shall be responsible
for the general administration of the Plan under the policy guidance of the
Benefits Committee. Such person or persons may be employees of the Company and
shall be compensated for services and expenses by the Company according to its
normal employment policies, without special or additional compensation for
service hereunder.
9.4 Duties and Powers of Benefits Committee. In addition
to the duties and powers described elsewhere hereunder, the Benefits Committee
shall have the following specific duties and powers:
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9.4.1 to enact uniform and non-discriminatory
rules, regulations, and procedures necessary or desirable to carry out the
provisions of the Plan;
9.4.2 to interpret the provisions of the Plan and
to resolve questions or disputes relating to or arising under the Plan;
9.4.3 to establish reasonable procedures to
determine the qualified status of domestic relations orders which relate to the
Plan, as provided in section 414(p) of the Code; and
9.4.4 to retain such consultants, accountants, and
attorneys as may be deemed necessary or desirable to render statements,
reports, and advice with respect to the Plan, and to assist the Benefits
Committee in complying with all applicable rules and regulations affecting the
Plan. Any consultants, accountants, or attorneys may be the same as those
retained by the Company.
9.5 Functioning of Benefits Committee. The Benefits
Committee shall keep accurate records and minutes of meetings, interpretations,
and decisions. The Benefits Committee shall act by majority vote of its
members, and such action shall be evidenced by written documents.
9.6 Disputes.
9.6.1 In the event that the Benefits Committee
denies, in whole or in part, a claim for benefits by a Participant or his
beneficiary, the Benefits Committee shall furnish notice of the denial to the
claimant, setting forth (1) the specific reasons for the denial, (2) specific
reference to the pertinent Plan provisions on which the denial is based, (3) a
description of any additional information necessary for the claimant to perfect
the claim and an explanation of why such information is necessary, and (4)
appropriate information as to the steps to be taken
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if the claimant wishes to submit his claim for review. Such notice shall be
forwarded to the claimant within 90 days of the Benefits Committee's receipt of
the claim; provided, however, that in special circumstances the Benefits
Committee may extend the response period for up to an additional 90 days,
provided that the Benefits Committee notifies the claimant in writing of the
extension and specifies the reason or reasons for the extension.
9.6.2 Within 60 days of receipt of a notice of
claim denial, a claimant or his duly authorized representative may petition the
Benefits Committee in writing for a full and fair review of the denial. The
claimant or his duly authorized representative shall have the opportunity to
review pertinent documents and to submit issues and comments in writing to the
Benefits Committee. The Benefits Committee shall review the denial and shall
communicate its decision and the reasons therefor to the claimant in writing
within 60 days of receipt of the petition; provided, however, that the Benefits
Committee may extend the 60-day response period in special circumstances for up
to an additional 60 days. Written notice of the extension shall be sent to the
claimant prior to the commencement of the extension.
9.7 Indemnification. Each member of the Benefits
Committee, the Trust Investment Committee and any other person who is an
Employee or director of the Company or an Affiliated Company, or any person
serving as Trustee, shall be indemnified by the Company against expenses (other
than amounts paid in settlement to which the Company does not consent)
reasonably incurred by him in connection with any action to which he may be a
party by reason of his performance of administrative functions and duties under
the Plan, except in relation to matters as to which he shall be adjudged in
such action to be personally guilty of willful misconduct in the performance of
his duties. The foregoing right to indemnification shall be in addition to
such other rights as the Benefits Committee member or other person may enjoy as
a
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matter of law or by reason of insurance coverage of any kind. Rights granted
hereunder shall be in addition to and not in lieu of any rights to
indemnification to which the Benefits Committee member or other person may be
entitled pursuant to the by-laws of the Company.
9.8 Expenses. The expenses incident to the operation of
the Plan and the Trust shall be paid or reimbursed from the Trust, unless they
are paid directly by the Company and the Company does not seek reimbursement
for such payment.
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ARTICLE X
AMENDMENT AND TERMINATION
10.1 Power of Amendment and Termination. It is the
intention of the Company that this Plan will be permanent. However, the
Company reserves the right to amend the Plan or terminate the Plan at any time
by action of the Board of Directors or its delegate. Except as expressly
provided elsewhere in the Plan, prior to the satisfaction of all liabilities
with respect to the benefits provided under this Plan, no such amendment or
termination shall cause any part of the monies contributed hereunder to revert
to the Company or to be diverted to any purpose other than for the exclusive
benefit of Participants and their beneficiaries. Except as otherwise permitted
by law, no amendment shall have the effect of retroactively depriving
Participants of benefits already accrued under the Plan. In the event of a
termination, a partial termination, or a complete discontinuance of
contributions, or in the event that the Company is dissolved, liquidated, or
adjudicated a bankrupt, the interests of the affected Participants, their
estates, and their beneficiaries shall be fully vested. Any amendment shall
become effective as of the date designated by the Board of Directors.
10.2 Merger. The Plan shall not be merged with or
consolidated with, nor shall its assets be transferred to, any other qualified
retirement plan unless each Participant would receive a benefit after such
merger, consolidation, or transfer (assuming the surviving or transferee plan
then terminated) which is of equal or greater actuarial value than the benefit
he would have received if the Plan had been terminated on the day before such
merger, consolidation, or transfer. The Plan shall not accept a transfer of
any amounts which would cause the Plan to be a direct or indirect transferee of
a plan to which the joint and survivor
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annuity and pre-retirement survivor annuity requirements of sections 401(a)(11)
and 417 of the Code apply.
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ARTICLE XI
TOP-HEAVY PROVISIONS
11.1 General. The following provisions shall apply
automatically to the Plan and shall supersede any contrary provisions for each
Plan Year in which the Plan is a Top-Heavy Plan. It is intended that this
Article shall be construed in accordance with the provisions of section 416 of
the Code.
11.2 Definitions. The following definitions shall
supplement those set forth in Article I of the Plan:
11.2.1 "Aggregation Group" shall mean:
11.2.1.1 each plan (including a frozen plan
or a plan which has been terminated during the 60-month period ending on the
Determination Date) of the Company or an Affiliated Company in which a Key
Employee is a participant,
11.2.1.2 each other plan (including a frozen
plan or a plan which has been terminated during the 60-month period ending on
the Determination Date) of the Company or an Affiliated Company which enables
any plan in which a Key Employee participates to meet the requirements of
sections 401(a)(4) and 410 of the Code, and
11.2.1.3 each other plan (including a frozen
plan or a plan which has been terminated during the 60-month period ending on
the Determination Date) of the Company or an Affiliated Company which is
included by the Benefits Committee if the Aggregation Group, including such a
plan, would continue to meet the requirements of sections 401(a)(4) and 410 of
the Code.
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11.2.2 "Determination Date" shall mean the last day
of the preceding Plan Year.
11.2.3 "Key Employee" shall mean any Employee or
former Employee who at any time during the 60-month period ending on the
Determination Date is described below. Key Employee shall also include the
beneficiaries of such persons. Notwithstanding the foregoing, the number of
persons described in Section 11.2.3.2 for the entire 60-month period shall be
limited to 10.
11.2.3.1 An officer of the Company or an
Affiliated Company having annual compensation, as defined in section 414(q) of
the Code, from the Company and all Affiliated Companies for a Plan Year during
such period greater than fifty percent (50%) of the amount in effect under
section 415(b)(1)(A) of the Code for such Plan Year.
11.2.3.2 One of the 10 Employees with annual
compensation, as defined in section 414(q) of the Code, from the Company and
all Affiliated Companies greater than the amount described in section
415(c)(1)(A) of the Code who own (or are considered as owning, within the
meaning of section 318 of the Code) the largest interests in the Company or any
Affiliated Company, provided that such interest exceeds one-half percent (0.5%)
of the total share ownership of the Company or Affiliated Company.
11.2.3.3 A five-percent (5%) owner of the
Company or any Affiliated Company.
11.2.3.4 A one-percent (1%) owner of the
Company or any Affiliated Company who has annual compensation, as defined in
section 414(q) of the Code, from the Company and all Affiliated Companies
which, in the aggregate, is in excess of $150,000.
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The above determinations will be made in accordance with section 416(i) of the
Code. No more than 50 employees (or, if less, the greater of three employees
or ten percent (10%) of the greatest number of employees, including leased
employees within the meaning of section 414(n) of the Code, employed by the
Company and all Affiliated Companies during the 60-month period ending on the
Determination Date) shall be treated as officers, for which purpose employees
described in section 414(q)(8) of the Code shall not be taken into account.
11.2.4 "Key Employee Ratio" shall mean the ratio for
any Plan Year, calculated as of the Determination Date of such Plan Year,
determined by comparing the amount described in Section 11.2.4.1 with the
amount described in Section 11.2.4.2 after deducting from each such amount any
portion thereof described in Section 11.2.4.3.
11.2.4.1 The sum of (i) the present value of
all accrued benefits of Key Employees under all qualified defined benefit plans
included in the Aggregation Group, (ii) the balances in all of the accounts of
Key Employees under all qualified defined contribution plans included in the
Aggregation Group, and (iii) the amounts distributed from all plans in such
Aggregation Group to or on behalf of any Key Employee during the period of five
Plan Years ending on the Determination Date, except benefits paid on account of
death in excess of the accrued benefit or account balances immediately prior to
death.
11.2.4.2 The sum of (i) the present value of
all accrued benefits of all participants under all qualified defined benefit
plans included in the Aggregation Group, (ii) the balances in all of the
accounts of all participants under all qualified defined contribution plans
included in the Aggregation Group and (iii) the amounts distributed from all
plans in such Aggregation Group to or on behalf of any participant during the
period of five Plan Years ending on the Determination Date.
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11.2.4.3 The sum of (i) all rollover
contributions (or fund to fund transfers) to the Plan by an Employee from a
plan sponsored by an employer which is not the Company or an Affiliated
Company, (ii) any amount that is included in Sections 11.2.4.1 and 11.2.4.2 for
a person who is a Non-Key Employee as to the Plan Year of reference but who was
a Key Employee as to any earlier Plan Year, and (iii) any amount that is
included in Sections 11.2.4.1 and 11.2.4.2 for a person who had not performed
any services for the Company during the five-year period ending on the
Determination Date.
11.2.4.4 The present value of accrued
benefits under all qualified defined benefit plans included in the Aggregation
Group shall be determined on the basis of the 1984 Unisex Mortality Table and
an interest rate of seven percent (7%).
11.2.5 "Non-Key Employee" shall mean any person who
is an Employee or a former Employee of the Company or an Affiliated Company in
any Plan Year but who is not a Key Employee as to that Plan Year. Non-Key
Employee shall also include the beneficiaries of such persons.
11.2.6 "Super Top-Heavy Plan" shall mean each plan
in an Aggregation Group if, as of the applicable Determination Date, the Key
Employee Ratio in the plan exceeds ninety percent (90%), determined in
accordance with section 416 of the Code.
11.2.7 "Top-Heavy Plan" shall mean each plan in an
Aggregation Group if, as of the applicable Determination Date, the Key Employee
Ratio exceeds sixty percent (60%), determined in accordance with section 416 of
the Code.
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11.3 Minimum Contribution for Non-Key Employees.
11.3.1 In each Plan Year in which the Plan is a
Top-Heavy Plan, each Participant who is a Non-Key Employee (except a
Participant who is a Non-Key Employee as to the Plan Year of reference but who
was a Key Employee as to any earlier Plan Year) and who is actively employed by
a Participating Company on the last day of such Plan Year will receive a total
minimum allocation of Participating Company contributions (including
forfeitures) under all plans described in Section 11.2.1.1 and 11.2.1.2 of not
less than three percent (3%) of the Participant's annual compensation, as
defined in Treas. Reg. Section 1.415-2(d). Salary reduction contributions to
such plans made on behalf of a Participant shall not be deemed to be
Participating Company contributions for the purpose of this Section 11.3.1.
11.3.2 The percentage set forth in Section 11.3.1
shall be reduced to the percentage at which contributions, including
forfeitures, are made (or are required to be made) for a Plan Year for the Key
Employee for whom such percentage is the highest for that Plan Year. This
percentage shall be determined for each Key Employee by dividing the
contribution for such Key Employee (including salary reduction contributions to
such plans made on behalf of such Key Employee) by his compensation, as defined
in Treas. Reg. Section 1.415-2(d), for the Plan Year. All defined contribution
plans required to be included in an Aggregation Group shall be treated as one
plan for the purpose of this Section; however, this Section shall not apply to
any plan which is required to be included in an Aggregation Group if such plan
enables a defined benefit plan in the group to meet the requirements of section
401(a)(4) or section 410 of the Code.
11.3.3 If a Non-Key Employee described in Section
11.3.1 participates in both a defined benefit plan and a defined contribution
plan described in Section 11.2.1.1 and
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11.2.1.2, the Company is not required to provide such Employee with both the
minimum benefit under the defined benefit plan and the minimum contribution.
In such event, the Non-Key Employee shall receive the minimum benefit provided
under the defined benefit Top-Heavy Plan.
11.4 Change in Vesting Schedule. Each Participant who has
an Hour of Service in any Plan Year beginning on or after the first day of the
first Plan Year for which the Plan is a Top-Heavy Plan, shall have a 100
percent nonforfeitable interest in his Account after completing three years of
Credited Service.
11.5 Social Security. The Plan, for each Plan Year in
which it is a Top-Heavy Plan, must meet the requirements of this Article
without regard to any Social Security or similar contributions or benefits.
11.6 Adjustment to Maximum Allocation Limitation. The
following rules shall apply only with respect to Plan Years beginning before
January 1, 2000:
11.6.1 For each Plan Year in which the Plan is (1) a
Super Top-Heavy Plan or (2) a Top-Heavy Plan and the Board of Directors does
not make the election described in Section 11.6.2 and for which a similar
election has not been made as to another plan in the Aggregation Group, the
1.25 factor in the defined benefit and defined contribution fractions described
in sections 415(e)(2) and (e)(3) of the Code shall be reduced to 1.0. The
adjustment described in this Section 11.6.1 shall not apply to any Participant
during any period in which the Participant earns no additional accrued benefit
under any defined benefit plan and has no employer contributions, forfeitures,
or voluntary contributions allocated to his accounts under any defined
contribution plan.
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11.6.2 If, in any Plan Year in which the Plan is a
Top-Heavy Plan but not a Super Top-Heavy Plan, the Aggregation Group described
in Section 11.2.1.1 and 11.2.1.2 also includes a defined benefit plan, the
Board of Directors may elect to use a factor of 1.25 in computing the
denominator of the defined benefit and defined contribution fractions described
in sections 415(e)(2) and (e)(3) of the Code. In the event of such an election,
the minimum Company contribution described in Section 11.3.1 for each Non-Key
Employee who is not covered under a defined benefit plan shall be increased to
four percent (4%), and the minimum Company contribution described in Section
11.3.3 for each Non-Key Employee who is covered under a defined benefit plan
shall be increased to seven and one-half percent (7-1/2%).
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ARTICLE XII
RIGHTS OF ALTERNATE PAYEES
12.1 General. Except as otherwise provided in this
Article, an Alternate Payee shall have no rights to a Participant's benefit and
shall have no rights under this Plan other than those rights specifically
granted to the Alternate Payee pursuant to a Qualified Domestic Relations
Order. Notwithstanding the foregoing, an Alternate Payee shall have the right
to appeal the denial of a claim for any benefits awarded to the Alternate Payee
pursuant to a Qualified Domestic Relations Order, as provided in Section 9.6.
Any interest of an Alternate Payee in the Account of a Participant, other than
an interest payable solely upon the Participant's death pursuant to a Qualified
Domestic Relations Order that provides that the Alternate Payee shall be
treated as the Participant's surviving spouse, shall be separately accounted
for by the Trustee in the name and for the benefit of the Alternate Payee.
12.2 Death Benefits. Unless a Qualified Domestic
Relations Order provides otherwise, an Alternate Payee shall have the right to
designate a beneficiary, in the same manner as provided in Section 7.1 with
respect to a Participant (except that no spousal consent shall be required),
who shall receive benefits payable to the Alternate Payee which have not been
distributed at the time of the Alternate Payee's death. If the Alternate Payee
does not designate a beneficiary, or if the beneficiary predeceases the
Alternate Payee, benefits payable to the Alternate Payee which have not been
distributed at the time of the Alternate Payee's death shall be paid to the
Alternate Payee's estate.
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ARTICLE XIII
GENERAL PROVISIONS
13.1 Source of Benefits. The provisions of the Plan shall
not create any obligation or liability of the Company to pay any benefit under
the Plan beyond the funds of the Plan available for such payment.
13.2 Alienation of Benefits. Except with respect to
qualified domestic relations orders pursuant to Code section 414(p), or an
amount necessary to satisfy a Federal tax levy made pursuant to Code section
6331, payments from and benefits under the Plan are neither alienable nor
assignable, and are not subject to attachment by creditors of or through legal
processes against any Participant or his beneficiary.
13.3 Facility of Payment. If the Administrator deems any
person incapable of receiving benefits to which he is entitled by reason of
minority, illness, infirmity, or other incapacity, it may direct that payment
be made directly for the benefit of such person or to any person selected by
the Plan Administrator to disburse it, whose receipt shall be a complete
acquittance therefor. Such payments shall, to the extent thereof, discharge
all liability of the Administrator, the Company and the party making the
payment.
13.4 Interest and Dividends on Distributions. The amount
of the distribution shall be determined as of the date provided in Article VI,
without adjustment for earnings, gains, or losses between such date and the
date of actual payment.
13.5 Applicable Law. Except as provided by federal law,
the Plan shall be governed by and construed in accordance with the laws of the
State of New Jersey.
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SCHEDULE A TO THE
YARDVILLE NATIONAL BANK EMPLOYEE STOCK OWNERSHIP PLAN
PARTICIPATING COMPANIES
The following companies have been designated by the Board of
Directors of Yardville National Bank as Participating Companies in the
Yardville National Bank Employee Stock Ownership Plan (the "Plan"), and have
adopted the Plan for the benefit of their eligible employees, effective as of
the Effective Date of the Plan:
1. Yardville National Bank
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SCHEDULE B TO THE
YARDVILLE NATIONAL BANK EMPLOYEE STOCK OWNERSHIP PLAN
TRUST INVESTMENT COMMITTEE CHARTER
1. Background. Eligible employees of Yardville National
Bank (the "Company") and certain of its affiliates participate in the Yardville
National Bank Employee Stock Ownership Plan (the "Plan"). The Plan is subject
to the special provisions of the Internal Revenue Code, as amended (the "Code")
that apply to plans that are designed primarily to invest in employer
securities, and to the fiduciary provisions of Part 4 of Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The
Company's Board of Directors (the "Board") has created the Trust Investment
Committee ("TIC") to perform certain investment functions, as enumerated below,
with respect to the Plan.
2. Membership. The Board shall appoint the membership
of TIC. Unless otherwise determined pursuant to a Board resolution, TIC shall
consist of not less than three voting members, including a Chairman, who shall
also be appointed by the Board. Members may, but need not be employees of the
Company or an affiliate. Members who are employees of the Company or an
affiliate shall not be separately compensated for their service to TIC. Other
members shall be compensated by the Company as separately agreed to between the
Company and such member. Members shall be reimbursed for reasonable
out-of-pocket expenses in accordance with the Company's regular reimbursement
policies. Members shall serve on TIC at the pleasure of the Board, and may be
removed by the Board at any time, with or without cause. The Chairman, at his
discretion, may invite one or more employees of the Company or an affiliate who
are not voting members to attend meetings of TIC as non-voting members of TIC.
3. Meetings.
3.1 Membership Meetings. TIC shall hold regular
meetings of its membership, at least annually, to review the business of the
committee and prepare regular reports for the Board. Special meetings shall be
held as the Chairman may deem appropriate.
3.2 Reports to the Board. The Chairman of TIC
shall prepare and deliver an annual written report to the Board, or such
committee of the Board as the Board may designate. Such report shall summarize
the business of TIC for the preceding year, evaluate the performance of the
trustee of the trust established under the Plan and the Plan's independent
valuation advisor for employer securities held by the Plan, and the anticipated
short-, medium- and long-term cash needs of the Plan for debt amortization and
repurchase of employer securities from eligible employees who separate from
service with a nonforfeitable interest in their Plan Accounts. The Chairman of
TIC shall make such additional reports and request additional Board or Board
committee consideration at such time or times as the Chairman shall deem
necessary or appropriate.
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3.3 Valuation Advisors. TIC or its members shall
conduct such meetings with current or prospective independent valuation
advisors, and other consultants and advisors as it may deem appropriate.
4. Jurisdiction. TIC shall have the following
responsibilities under the Plan and related trust:
4.1 The appointment, retention and termination of
an independent valuation advisor to provide valuation reports with respect to
employer securities held by the trust;
4.2 The appointment, retention and termination of
the trustee;
4.3 To vote employer securities held by the
trust, except to the extent otherwise provided in the Plan and trust;
4.4 To decide whether to tender or exchange
employer securities held by the trust;
4.5 To direct the trustee of the trust to
purchase employer securities from the Company and shareholders, to determine
the price at which such purchase shall be closed based on the advice of an
independent valuation advisor, and, in connection with each such purchase, to
approve the terms and conditions under which the trust will finance
acquisitions of employer securities; and
4.6 To take all other actions and make all other
decisions assigned to it under the Plan and trust.
6. Amendment. The Board shall have the authority to
amend this Charter.
Adopted this 27th day of January, 1999.
[Corporate Seal] YARDVILLE NATIONAL BANK
ATTEST: /s/ Stephen F. Carman By: /s/ Patrick M. Ryan
--------------------- -------------------
Patrick M. Ryan
President and Chief Executive Officer
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EXHIBIT 5.1
February 4, 1999
Yardville National Bancorp
3111 Quakerbridge Road
Trenton, NJ 08619
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to and for Yardville National Bancorp, a New
Jersey corporation (the "Company"), in connection with the preparation of the
Company's Registration Statement on Form S-8 ("Registration Statement") under
the Securities Act of 1933, as amended, with respect to 155,340 shares of
common stock (the "Shares"), no par value per share, of the Company (the
"Common Stock"). The Shares will be issued by the Company to the Yardville
National Bank Employee Stock Ownership Plan (the "Plan") for the accounts of
participants in the Plan.
In our capacity as counsel, we have been requested to render the opinion
set forth in this letter and in connection therewith, we have reviewed the
following documents and materials: (i) the Restated Certificate of
Incorporation of the Company, certified as true and correct by the Secretary of
the Company, (ii) the Bylaws of the Company, certified as true and correct by
the Secretary of the Company, (iii) the Registration Statement, (iv) the Plan,
certified as true and correct by the Secretary of the Company, (v) certain
minutes of meetings and resolutions of the Board of Directors of the Company,
certified as true and correct by the Secretary of the Company, (vi) a
certificate of the Secretary of the Company dated the date hereof (the
"Officer's Certificate"), and (vii) such other documents, instruments and
records as we deemed necessary or appropriate for purposes of rendering the
opinion set forth herein.
In rendering this opinion, we have assumed and relied upon, without
independent investigation, (i) the statements contained in the Registration
Statement, (ii) the representations and warranties of the Company contained in
the documents referenced above, and (iii) the representations contained in the
Officer's Certificate for the truth, accuracy and completeness of the matters
contained therein.
In addition, we have assumed and relied upon, without independent
investigation, (i) the authenticity, completeness, truth and due authorization
and execution of all documents submitted to us as originals, (ii) the
genuineness of all signatures on all documents submitted to us as originals,
and (iii) the conformity to the originals of all documents submitted to us as
certified or photostatic copies.
No opinion is expressed herein in any respect as to (i) federal and state
securities laws and regulations, (ii) pension and employee benefit laws and
regulations, including without limitation the Employee Retirement Income
Security Act of 1974, as amended, and (iii) federal and state tax laws and
regulations.
The opinion expressed herein is limited and qualified in all respects by
the effects of general principles of equity, whether applied by a court of law
or equity, and by the effects of bankruptcy, insolvency, reorganization,
moratorium, arrangement, fraudulent conveyance or fraudulent transfer,
receivership, and other laws now or hereafter in force affecting the rights and
remedies of creditors generally (not just creditors of specific types of
debtors) and other laws now or hereafter in force affecting generally only
creditors of specific types of debtors.
The law covered by the opinion expressed herein is limited to (i) the
Federal statutes, judicial decisions and rules and regulations of the
governmental agencies of the United States and (ii) the New Jersey Business
Corporation Act, as amended.
This opinion letter is given only with respect to laws and regulations
presently in effect. We assume no obligation to advise you of any changes in
law or regulation which may hereafter occur, whether the same are retroactively
or prospectively applied, or to update or supplement this letter in any fashion
to reflect any facts or circumstances which hereafter come to our attention.
Based upon, and subject to, the foregoing, we are of the opinion, as of
the date hereof, that the Shares will be, when and if issued in accordance with
the terms of the Plan and upon receipt by the Company of the required
consideration, validly issued, fully paid and nonassessable.
<PAGE> 2
Yardville National Bancorp
February 4, 1999
Page 2
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and we further consent to any reference to our firm in
the Registration Statement as legal counsel who have passed upon the legality
of the securities offered thereby. This opinion is solely for your benefit and
may not be otherwise published by you (other than upon court order in a court
or other legal tribunal) and may not be otherwise relied upon in any manner or
for any purpose by, or circulated to, any third party without the prior written
approval of a partner of this firm in each instance.
Very truly yours,
PEPPER HAMILTON LLP
By: /s/ Brian S. Vargo
-------------------------
Brian S. Vargo, A Partner
<PAGE> 1
EXHIBIT 23.2
Independent Auditors' Consent
The Board of Directors
Yardville National Bancorp:
We consent to incorporation by reference in the registration statement on Form
S-8 of Yardville National Bancorp of our report dated January 30, 1998 relating
to the consolidated statements of condition of Yardville National Bancorp and
subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1997, which report is
incorporated by reference in the December 31, 1997 annual report on Form 10-K
of Yardville National Bancorp.
KPMG LLP
Princeton, New Jersey
February 4, 1999
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Jay G. Destribats, Patrick M. Ryan and Stephen F. Carman, and each of them,
with full power to act without the other, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for her or him and in her or his name, place and stead in any
and all capacities (until revoked in writing) to sign this Registration
Statement on Form S-8 of Yardville National Bancorp and any and all amendments
hereto (including post-effective amendments), and to file the same, with all
exhibits thereto and other documents in connection therewith, with the U.S.
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary fully to all intents and purposes
as she or he might or could do in person thereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their or his
substitutes, may lawfully do or cause to be done, by virtue hereof.
In witness whereof, the undersigned Directors of Yardville National
Bancorp have executed this Power of Attorney as of January 27, 1999.
<TABLE>
<S> <C>
/S/ Jay G. Destribats /s/ Elbert G. Basolis
- --------------------- ---------------------
Jay G. Destribats Elbert G. Basolis
/s/ Patrick M. Ryan /s/ C. West Ayres
- ------------------- -----------------
Patrick M. Ryan C. West Ayres
/s/ Gilbert W. Lugossy
- --------------------- ----------------------
Anthony M. Giampetro Gilbert W. Lugossy
/s/ F. Kevin Tylus
- ------------------ --------------------
F. Kevin Tylus Weldon J. McDaniel
/s/ Lorraine Buklad /s/ Sidney L. Hofing
- ------------------- --------------------
Lorraine Buklad Sidney L. Hofing
/s/ James J. Kelly /s/ Louis R. Matlack
- ------------------ --------------------
James J. Kelly Louis R. Matlack
</TABLE>
