As filed with the Securities and Exchange Commission on July 29, 1997
Registration No. 33-_________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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COLUMBIA BANCORP
(Exact name of registrant as specified in its charter)
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Maryland 52-1545782
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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10480 Little Patuxent Parkway
Columbia, Maryland 21044
(410) 465-4800
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive office)
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Columbia Bancorp 401(k) Plan and Trust
(Full title of the plan)
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John M. Bond, Jr. James J. Winn, Jr., Esquire
Columbia Bancorp Piper & Marbury L.L.P.
10480 Little Patuxent Parkway 36 South Charles Street
Columbia, Maryland 21044 Baltimore, Maryland 21201
(410) 465-4800 (410) 539-2530
(Name, address, including zip code, and telephone number, including area code,
of agents for service)
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<TABLE>
CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered Per Share(a) Offering Price(a) Registration Fee(a)
- -------------------- ------------ ---------------- ----------------- -------------------
Common Stock,
par value $.01 per share 75,000 shares $ 23.625 $ 1,771,875 $ 536.93
and participation interest
in the Columbia Bancorp
401(k) Plan and Trust
- -------------------------- ------------- ---------------- ----------------- -------------------
</TABLE>
(a) Pursuant to Rules 457(c) and (h)(1), the proposed maximum offering price
per share, proposed maximum aggregate offering price and amount of
registration fee are based upon the average of the high and low prices of
the Common Stock of the registrant on the NASDAQ National Market System on
July 29, 1997. Pursuant to Rule 457(h)(2), no separate registration fee is
provided for the participation interest in the Columbia Bancorp 401(k)
Plan and Trust.
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<PAGE>
COLUMBIA BANCORP
40l(k) PLAN AND TRUST
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents which have been filed by the registrant
with the Securities and Exchange Commission (the "Commission") are incorporated
herein by reference:
(a) Annual Report of the registrant on Form 10-K for the
year ended December 31, 1996; and Annual Report of the
Columbia Bancorp 401(k) Plan and Trust (the "Plan") on
Form 11-K for the year ended December 31, 1996;
(b) Quarterly Reports of the registrant on Form 10-Q for
the quarter ended March 31, 1997; and Form 15 for the
Plan;
(c) Description of Common Stock of the registrant contained
in its Registration Statement on Form 8-A dated June 9,
1994.
All documents subsequently filed by the registrant with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"), subsequent to this Registration
Statement and prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference into this
Registration Statement and to be a part of the Registration Statement from the
date of filing of such document.
ITEM 4. DESCRIPTION OF SECURITIES.
Not required.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain legal matters in connection with the issuance of the
Common Stock offered by this Registration Statement are being passed upon for
the Company by Piper & Marbury L.L.P. of Baltimore, Maryland.
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<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Maryland General Corporation Law ("MGCL"),
Article Eighth, Paragraph (5) of the Company's Charter provides for
indemnification of directors and officers of the Company, as follows:
The Corporation shall indemnify (a) its directors to the full
extent provided by the general laws of the State of Maryland now
or hereafter in force, including the advance of expenses under
the procedures provided by such laws; (b) its officers to the
same extent it shall indemnify its directors; and (c) its
officers who are not directors to such further extent as shall
be authorized by the Board of Directors and be consistent with
law. The foregoing shall not limit the authority of the
Corporation to indemnify other employees and agents consistent
with law.
The Company's By-Laws contain indemnification procedures that
implement those of the Charter. The MGCL permits a corporation to indemnify its
directors and officers, among others, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection with
any proceeding to which they may be made a party by reason of their service in
those or other capacities, unless it is established that (a) the act or omission
of the director or officer was material to the matter giving rise to such
proceeding and (i) was committed in bad faith or (ii) was the result of active
and deliberate dishonesty, (b) the director or officer actually received an
improper personal benefit in money, property or services, or (c) in the case of
any criminal proceeding, the director or officer had reasonable cause to believe
that the action or omission was unlawful.
As permitted by the MGCL, Article Eighth, Paragraph (6) of the
Company's Charter provides for limitation of liability of liability of directors
and officers of the Company, as follows:
To the fullest extent permitted by Maryland statutory or
decisional law, as amended or interpreted, no director or
officer of this Corporation shall be personally liable to the
Corporation or its stockholders for money damages. No amendment
of the Charter of the Corporation or repeal of any of its
provisions shall limit or eliminate the benefits provided to
directors and officers under this provision with respect to any
act or omission which occurred prior to such amendment or
repeal.
The MGCL permits the charter of a Maryland corporation to
include a provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages, except to the extent that
(i) the person actually received an improper benefit or profit in money,
property or services or (ii) a judgment or other final adjudication is entered
in a proceeding based on a finding that the person's action, or failure to act,
was the result of active and deliberate dishonesty and was material to the cause
of action adjudicated in the proceeding.
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<PAGE>
As permitted under Section 2-418(k) of the MGCL, the Company has
purchased and maintains insurance on behalf of its directors and officers
against any liability asserted against such directors and officers in their
capacities as such, whether or not the registrant would have the power to
indemnify such persons under the provisions of Maryland law governing
indemnification.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit
Number Description
------ -----------
4 Columbia Bancorp 40l(k) Plan and Trust.
5.1 Internal Revenue Service determination
letter (dated May 23, 1995) for the Plan.
5.2 Opinion of Piper & Marbury L.L.P. (contains
Consent of Counsel).
5.3 The Plan was amended after the 1995 Internal
Revenue Service determination letter
(Exhibit 5.2). In lieu of the exhibits
required under Item 601(5)(iii) of
Regulation S-K, the registrant hereby
undertakes to submit the Plan provisions
which are so amended for an Internal Revenue
Service determination letter in the time
required by Code section 401(b) and to make
all changes required by the Internal Revenue
Service in order to qualify the Plan under
Code section 401.
23.1 Consent of Independent Accountants.
23.2 Consent of Consultants.
23.3 Consent of Counsel (contained in Exhibit
5.2).
24 Power of Attorney.
ITEM 9. UNDERTAKINGS.
A. Employee Plans on Form S-8.
The undersigned registrant hereby undertakes:
II-3
<PAGE>
(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 Securities Act of 1933 (the "Securities
Act");
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the 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 the Registration
Statement;
(iii) To include any material information
with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change
to such information in the Registration Statement.
Provided, however, that paragraphs A.(1)(i) and
A.(1)(ii) do not apply if the Registration Statement is on Form
S-3 or Form S-8, and the information required to be included in
a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13
or section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
B. Filings Incorporating Subsequent Documents by Reference.
The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be
deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
II-4
<PAGE>
C. Indemnification.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the County of Howard, and State of Maryland on this 29th day of
July, 1997.
COLUMBIA BANCORP
By: /s/John M. Bond, Jr.
John M. Bond, Jr.
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Principal Executive Officer:
/s/John M. Bond, Jr. President and Chief Date: July 29, 1997
- --------------------
John M. Bond, Jr. Executive Officer
Principal Accounting and
Financial Officer:
/s/John A. Scaldara, Jr. Chief Financial Officer Date: July 29, 1997
- ----------------------
John A. Scaldara, Jr.
A Majority of the Board of Directors:
Anand S. Bhasin, John M. Bond, Jr., Garnett Y. Clark, Jr., James Clark, Jr.,
Hugh F.Z. Cole, Jr., Robert J. Gaw, William L. Hermann, Herschel L. Langenthal,
Harry L. Lundy, Jr., Richard E. McCready, James R. Moxley, Jr., Patricia T.
Rouse, Mary S. Scrivener, Maurice M. Simpkins, Robert N. Smelkinson, and
Theodore G. Venetoulis
/s/John M. Bond, Jr. For himself and Date: July 29, 1997
- ----------------------
John M. Bond, Jr. as Attorney-in-Fact
II-6
<PAGE>
Pursuant to the requirements of the Securities Act, the
trustees (or other persons who administer the Plan) have duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the County of Howard, State of Maryland on July 29, 1997.
COLUMBIA BANCORP
401(k) PLAN AND TRUST
By: /s/John M. Bond, Jr.
John M. Bond, Jr.
Trustee
By: /s/John A. Scaldara, Jr.
John A. Scaldara, Jr.
Trustee
II-7
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
4 Columbia Bancorp 40l(k) Plan and Trust.
5.1 Internal Revenue Service determination letter (dated May 23, 1995) for
the Plan.
5.2 Opinion of Piper & Marbury L.L.P. (contains Consent of Counsel).
23.1 Consent of Independent Accountants.
23.2 Consent of Consultants.
23.3 Consent of Counsel (contained in Exhibit 5.2).
24 Power of Attorney.
Exhibit 4
COLUMBIA BANCORP 401(k) PLAN AND TRUST
AMENDMENT AND RESTATEMENT
EFFECTIVE JANUARY 1, 1989
<PAGE>
COLUMBIA BANCORP 401(k) PLAN AND TRUST
AMENDMENT AND RESTATEMENT
EFFECTIVE JANUARY 1, 1989
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
1.1 Administrator 1
1.2 Break in Service 1
1.3 Code 1
1.4 Company Stock 1
1.5 Compensation 1
1.6 Effective Date 2
1.7 Employee 2
1.8 Employer 2
1.9 Employer Matching Contribution Account 2
1.10 Employer Voluntary Contribution Account 3
1.11 ERISA 3
1.12 Fair Market Value 3
1.13 Highly Compensated Employee 3
1.14 Hour of Service 7
1.15 Non-Highly Compensated Employee 7
1.16 Normal Retirement Date 8
1.17 Participant 8
1.18 Plan 8
1.19 Plan Account 8
1.20 Plan Sponsor 8
1.21 Plan Year 8
1.22 Qualified Matching Contribution Account 8
1.23 Qualified Nonelective Contribution Account 8
1.24 Rollover Contribution Account 8
1.25 Salary Reduction Contribution Account 9
1.26 Trust 9
1.27 Trust Fund 9
1.28 Trustee 9
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<PAGE>
1.29 Valuation Date 9
1.30 Year of Service 9
ARTICLE II
ELIGIBILITY FOR PARTICIPATION
2.1 Initial Eligibility 10
2.2 Subsequent Eligibility 10
2.3 Rehired Participants 10
ARTICLE III
RETIREMENT DATE
3.1 Normal Retirement 11
3.2 Late Retirement 11
ARTICLE IV
CONTRIBUTIONS
4.1 Salary Reduction Contributions by Participants 11
4.2 Employer Matching Contributions 13
4.3 Employer Voluntary Contributions 15
4.4 Deductibility of Contributions 17
4.5 Limits on Annual Additions 17
4.6 Disposition of Excess Annual Additions 20
4.7 Contributions to Rollover Contribution Account 21
4.8 Definition of "Rollover Contribution" 21
4.9 Valuation of Participants' Plan Accounts 22
4.10 Distribution of Excess Deferrals 22
4.11 Distribution of Excess Contributions 23
4.12 Distribution of Excess Aggregate Contributions 25
4.13 Participants' Investment Elections 26
ARTICLE V
DISTRIBUTIONS
5.1 Retirement 28
5.2 Death of Participant 28
5.3 Permanent Disability 29
5.4 Termination Prior to Retirement 29
5.5 Rehired Participant 31
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<PAGE>
5.6 Commencement of Benefits 31
5.7 Notice Requirements 32
5.8 Cash-Out Distributions 32
5.9 Distribution Upon Disposition of a Subsidiary 32
5.10 Benefit Payments 33
5.11 Direct Rollover Election 40
5.12 Distribution of Amounts Invested in
Company Stock 41
ARTICLE VI
ADMINISTRATION
6.1 Administration 42
ARTICLE VII
THE ADMINISTRATOR
7.1 Designation 43
7.2 Procedure 43
7.3 Powers and Responsibilities 43
7.4 Certifications and Investigations 44
7.5 Claims Procedure 45
7.6 Advice 46
7.7 Delegation 47
7.8 Liability; Indemnification 47
7.9 Insurance 48
7.10 Bonding 48
7.11 Compensation 48
ARTICLE VIII
TRUST AND TRUSTEE
8.1 Trust Fund 49
8.2 Trustee Control 49
8.3 Investment Funds 49
8.4 Trustee Appointment and Resignation;
Removal and Succession of Trustees 51
8.5 Prudent Person Rule 51
8.6 Liability; Expenses; Compensation 52
8.7 Management of Assets 52
8.8 Reliance by Trustee 57
8.9 Changes in Administrator 58
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<PAGE>
8.10 Legal Counsel 58
8.11 Accounting of Funds and Transactions 58
8.12 Reliance on Trustee 59
8.13 Legal Action 59
ARTICLE IX
AMENDMENT
9.1 Amendment 59
ARTICLE X
TERMINATION
10.1 Right to Terminate 60
10.2 Effect of Termination 60
10.3 Merger, Consolidation or Transfer of Assets
of the Employer 61
10.4 Merger, Consolidation or Transfer of Assets
of the Plan 61
ARTICLE XI
PROVISIONS TO PREVENT DISCRIMINATION
11.1 No Code Section 401(a) Discrimination 62
11.2 Uniform Treatment 62
ARTICLE XII
IN-SERVICE WITHDRAWALS FROM PLAN ACCOUNT
12.1 Hardship Withdrawals 62
12.2 Withdrawals After Age Fifty-Nine and
One-Half (59-1/2) 64
12.3 Withdrawals from Rollover Contribution Accounts 64
ARTICLE XIII
TOP HEAVY PROVISIONS
13.1 Top Heavy Requirements 64
13.2 Top Heavy Plan Definitions 66
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<PAGE>
ARTICLE XIV
LOANS TO PARTICIPANTS
14.1 Loan Administration 68
14.2 Frequency, Number 69
14.3 Amount, Availability 69
14.4 Non-Discrimination 69
14.5 Loan Approval 70
14.6 Interest Rate 70
14.7 Collateral 70
14.8 Repayment 71
14.9 Participant Consent to Loan Set-Offs 72
14.10 Distributions Prohibited 72
14.11 No Alienation 72
14.12 Disclosure 73
ARTICLE XV
MISCELLANEOUS
15.1 No Right to Employment 73
15.2 Headings 73
15.3 Counterparts 73
15.4 Governing Law 73
15.5 Rules and Regulations 73
15.6 No Assignment of Benefits 74
15.7 Exclusive Benefit 74
15.8 Withdrawal or Termination by an Employer 75
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<PAGE>
COLUMBIA BANCORP 401(k) PLAN AND TRUST
Amendment and Restatement
Effective January 1, 1989
This amended and restated Plan, Columbia Bancorp 401(k) Plan and Trust (the
"Plan"), is adopted, effective as of January 1, 1989, by Columbia Bancorp (the
"Plan Sponsor"). This amended and restated Plan is designed to afford eligible
employees an opportunity to increase their security at retirement through their
own savings and through Employer contributions during their periods of active
employment while this Plan remains in effect.
Accordingly, the Employer wishes to adopt this amended and restated Plan,
effective as of January 1, 1989, subject, however, to such amendments as may be
required by the Internal Revenue Service in order that the Plan may qualify as a
tax-qualified plan and conditioned on such qualification.
ARTICLE I
DEFINITIONS
The following terms, when used in this Plan, shall have the meanings set
forth below, unless different meanings are clearly required by the context: 1.1
ADMINISTRATOR means the Plan Administrator provided for in Article VII of this
Plan.
1.2 A BREAK IN SERVICE shall occur at the end of any Plan Year during which
an Employee is not credited with at least five hundred (500) Hours of Service.
1.3 CODE means the Internal Revenue Code of 1986 and the regulations
promulgated thereunder, as amended from time to time.
1.4 COMPANY STOCK means common or preferred stock of Columbia Bancorp.
1.5 COMPENSATION means the total compensation paid by the Employer to an
Employee during each Plan Year (or portion thereof) during which such person is
1
<PAGE>
a Participant, plus "elective contributions" which are not includible in gross
income under Code sections 125, 401(k), 402(a)(8), 402(h) or 403(b). Effective
January 1, 1989 through December 31, 1993, the Compensation of any Participant
taken into account under the Plan for any year may not exceed two hundred
thousand dollars ($200,000). This two hundred thousand dollar ($200,000)
limitation shall be adjusted automatically at the same time and in the same
manner as any cost-of-living adjustment made by the Secretary of the Treasury
under Code section 415(d). Effective January 1, 1994, the Compensation of any
Participant taken into account under the Plan for any year may not exceed one
hundred fifty thousand dollars ($150,000). This one hundred fifty thousand
dollar ($150,000) limitation shall be adjusted as provided in Code section
401(a)(17)(B). In determining the Compensation of a Participant for purposes of
applying the applicable dollar limitation, the rules in Code section 414(q)(6)
(applicable to five percent (5%) owners and the ten (10) most highly paid Highly
Compensated Employees) shall apply, except in applying such rules, the term
"family" shall include only the spouse of the Participant and any lineal
descendents of the Participant who have not attained age nineteen (19) before
the close of the Plan Year.
1.6 EFFECTIVE DATE means January 1, 1989.
1.7 EMPLOYEE means any person employed on a salaried basis by the Employer,
except such a person who is a leased employee as defined by Code section 414(n).
1.8 EMPLOYER means Columbia Bancorp and such of its affiliates and
subsidiaries as are designated by Columbia Bancorp to be participating employers
under this Plan.
1.9 EMPLOYER MATCHING CONTRIBUTION ACCOUNT means that portion of a
Participant's Plan Account which is attributable to contributions made under
Section 4.2.
2
<PAGE>
1.10 EMPLOYER VOLUNTARY CONTRIBUTION ACCOUNT means that portion of a
Participant's Plan Account which is attributable to contributions made under
Section 4.3.
1.11 ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.12 FAIR MARKET VALUE means the last reported sales price, regular way, on
the applicable date, or, in the event that no sales takes place on such day, the
average of the reported closing bid and asked prices, regular way, in either
case as reported on the principal national securities exchange on which Company
Stock is listed or admitted to trading or, if not listed or admitted to trading
on any national securities exchange, on the NASDAQ National Market System or, if
such security is not quoted on such National Market System, the average of the
closing bid and asked prices on such day in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for Company Stock on such day
shall not have been reported through NASDAQ, the average of the bid and asked
prices for such day as furnished by any New York Stock Exchange member firm
regularly making a market in Company Stock selected for such purpose by the
Employer or by the Administrator in each case, on the applicable date plus fees
or commission paid to purchase the Company Stock.
1.13 HIGHLY COMPENSATED EMPLOYEE. The term Highly Compensated Employee
includes active Highly Compensated Employees and former Highly Compensated
Employees, as described in Code section 414(q), which currently provides as
follows:
An active Highly Compensated Employee includes any Employee who
performs service for the Employer during the determination year and who, during
the "look-back year" (i) received compensation (as defined below) from the
Employer in excess of seventy-five thousand dollars ($75,000) (as adjusted
pursuant to Code section 415(d)); (ii) received compensation (as defined below)
from the Employer in excess of fifty thousand dollars ($50,000) (as adjusted
3
<PAGE>
pursuant to section 415(d) of the Code) and was a member of the top-paid group
(top twenty percent (20%) of non-excludable employees ranked by compensation (as
defined below)) for such year; or (iii) was an officer of the Employer and
received compensation (as defined below) during such year that is greater than
fifty percent (50%) of the dollar limitation in effect under Code section
415(b)(1)(A). The term Highly Compensated Employee also includes: (i) Employees
who are both described in the preceding sentence if the term "determination
year" is substituted for the term "look-back year" and the Employee is one (1)
of the one hundred (100) Employees who received the most compensation (as
defined below) from the Employer during the determination year; and (ii)
Employees who are five percent (5%) owners at any time during the look-back year
or determination year.
For purposes of (iii) above, no more than fifty (50) employees (or, if
less, the greater of three (3) employees or ten percent (10%) of employees)
shall be treated as officers. If no officer has satisfied the compensation
requirement of (iii) above during either a determination year or look-back year,
the highest paid officer for such year shall be treated as a Highly Compensated
Employee.
For this purpose, the determination year shall be the Plan Year.
Except as otherwise elected, as provided below, the look-back year shall be the
twelve (12) month period immediately preceding the determination year.
A former Highly Compensated Employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was an active Highly Compensated Employee for either the
separation year or any determination year ending on or after the Employee's
fifty-fifth (55th) birthday.
If an Employee is, during a determination year or look-back year, a
family member of either a five percent (5%) owner who is an active or former
Employee or a Highly Compensated Employee who is one (1) of the ten (10) most
highly compensated Employees ranked on the basis of compensation (as defined
4
<PAGE>
below) paid by the Employer during such year, then the family member and the
five percent (5%) owner or top ten (10) highly compensated employee shall be
aggregated. In such case, the family member and five percent (5%) owner or top
ten (10) highly compensated employee shall be treated as a single Employee
receiving compensation (as defined below) and Plan contributions or benefits
equal to the sum of such compensation (as defined below) and contributions or
benefits of the family member and five percent (5%) owner or top ten (10) highly
compensated employee. For this purpose, family member includes the spouse,
lineal ascendants and descendants of the Employee or former Employee and the
spouses of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the top-paid
group, the top one hundred (100) Employees, the number of Employees treated as
officers and the compensation that is considered, will be made in accordance
with Code section 414(q) and the regulations thereunder.
In determining whether an individual is a Highly Compensated Employee,
the term "compensation" means compensation as defined in Section 4.5, or any
other definition selected by the Plan Administrator which is permitted under
Code section 415(c)(3), which is received by the individual during the
determination year or during the look-back year, including, however, elective or
salary reduction contributions to a cafeteria plan under Code section 125, a
cash or deferred arrangement under Code section 401(k), a simplified employee
pension under Code section 402(h), or a tax-sheltered annuity under Code section
403(b).
Notwithstanding the preceding, in determining whether an individual is
a Highly Compensated Employee, the Employer may make the following elections:
(a) In a determination of the top paid twenty percent (20%) group of
Employees for purposes of determining whether an individual is a Highly
Compensated Employee, the Employer may elect, on a consistent and uniform basis,
to modify the permissible exclusions for months of service, hours per week,
5
<PAGE>
months per year, and age by substituting a shorter period of service or lower
age than that specified in Code section 414(q) and regulations thereunder. In
addition, the Employer may elect not to exclude those Employees who may be
excluded because (i) they are covered by a bona fide collective bargaining
agreement, (ii) ninety percent (90%) or more of all Employees are covered by
bona fide collective bargaining agreements, and (iii) the plan being tested does
not cover Employees covered by the collective bargaining agreements. If any of
these elections are made by the Employer, the Employer must apply the test
uniformly for purposes of determining its top paid twenty percent (20%) group
with respect to all its qualified plans and employee benefit plans and for
purposes of the line of business rules set forth in Code section 414(r).
(b) The Employer may elect to use the calendar year to determine
whether an Employee is a Highly Compensated Employee in the look-back year (as
defined in Treasury Regulations under Code section 414(q)) calculation. The
calendar year used will be the calendar year ending with or within the
determination year (as defined in the regulations under Code section 414(q)).
The determination year shall be the months (if any) in the current Plan Year
which follow the end of the calendar look-back year. If the Employer elects to
make the calendar year calculation election with respect to any plan, entity or
arrangement, such election must apply with respect to all plans, entities and
arrangements of the Employer.
(c) If, at all times during the applicable year, the Employer
maintained significant business activity (and employed Employees) in at least
two (2) significantly separate geographic areas, and the Employer satisfies such
other conditions as the Secretary of the Treasury may prescribe in regulations,
the Employer may elect to determine whether an Employee is a Highly Compensated
Employee by applying the category of Highly Compensated Employees in Code
section 414(q)(1)(B) (which includes any Employee who receives compensation from
the Employer in excess of seventy-five thousand dollars ($75,000) (as indexed)
for the year) by substituting fifty thousand dollars ($50,000) for seventy-five
thousand dollars ($75,000), and by disregarding the category of Highly
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Compensated Employees in Code section 414(q)(1)(C) (which includes any Employee
who receives compensation from the Employer in excess of fifty thousand dollars
($50,000) (as indexed) and was a member of the top-paid twenty percent (20%)
group of all non-excludable Employees for the year).
1.14 HOUR OF SERVICE means each hour for which an Employee is directly or
indirectly compensated by the Employer for the performance of duties for the
Employer, or for reasons other than the performance of such duties, and each
hour for which back pay is either awarded or granted to such Employee by the
Employer, regardless of mitigation of damages. In computing and crediting Hours
of Service for periods during which the Employee does not perform duties for the
Employer, no more than five hundred one (501) Hours of Service shall be credited
for any single continuous period of nonperformance of duties for the Employer,
and the rules set forth in sections 2530.200b-2(b) and (c) of Department of
Labor Regulations shall apply, and those rules are incorporated herein by
reference. Solely for purposes of determining whether a Break in Service has
occurred, an Employee who is absent for maternity or paternity reasons or on
other authorized leave will receive credit for the Hours of Service which would
otherwise have been credited to the Employee had the Employee not been absent,
or if those Hours of Service cannot be determined, eight (8) Hours of Service
for each day of absence. An absence for maternity or paternity reasons means an
absence (1) because of the individual's pregnancy, (2) because of the birth of
the individual's child, (3) because of the individual's adoption of a child or
(4) for purposes of caring for the individual's child beginning immediately
following the child's birth or placement with the individual.
Notwithstanding anything herein to the contrary, Employees who are
employed by an entity which is acquired by or merges with the Employer will
receive credit under these rules for Hours of Service with such prior employer.
1.15 NON-HIGHLY COMPENSATED EMPLOYEE means an Employee who is not a Highly
Compensated Employee.
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1.16 NORMAL RETIREMENT DATE means the first day of the month coinciding
with or next following a Participant's sixty-fifth (65th) birthday.
1.17 PARTICIPANT means any Employee who participates in the Plan as
provided in Article II or who makes a contribution to a Rollover Contribution
Account under Section 4.7. A Participant shall continue to be a Participant as
long as he or she has a Plan Account.
1.18 PLAN means the Columbia Bancorp 401(k) Plan and Trust as set forth in
this document and as ---- amended from time to time.
1.19 PLAN ACCOUNT means the amount held under this Plan for the account of
a Participant, and shall equal the sum as to each Participant of the
Participant's Salary Reduction Contribution Account, Employer Voluntary
Contribution Account, Employer Matching Contribution Account, Qualified
Nonelective Contribution Account, Qualified Matching Contribution Account and
Rollover Contribution Account.
1.20 PLAN SPONSOR means Columbia Bancorp and any successor which maintains
this Plan.
1.21 PLAN YEAR means the twelve (12) month period beginning each January 1
and ending each December 31 during which this Plan is in effect.
1.22 QUALIFIED MATCHING CONTRIBUTION ACCOUNT means that portion of a
Participant's Plan Account which is attributable to "qualified matching
contributions" (as defined in Code sections 401(k) and (m)).
1.23 QUALIFIED NONELECTIVE CONTRIBUTION ACCOUNT means that portion of a
Participant's Plan Account which is attributable to "qualified nonelective
contributions" (as defined in Code sections 401(k) and (m)).
1.24 ROLLOVER CONTRIBUTION ACCOUNT means that portion of a Participant's
Plan Account which is attributable to contributions made under Section 4.7.
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1.25 SALARY REDUCTION CONTRIBUTION ACCOUNT means that portion of a
Participant's Plan Account which is attributable to contributions made under
Section 4.1(a).
1.26 TRUST means the trust established under this Plan or under a separate
trust agreement which forms a part of this Plan.
1.27 TRUST FUND means the assets of the Trust.
1.28 TRUSTEE means the trustee of the Trust serving as such from time to
time.
1.29 VALUATION DATE means the last day of a Plan Year, and any other date
or dates chosen by the Administrator as of which the Trust is valued pursuant to
Article VIII.
1.30 YEAR OF SERVICE, for eligibility purposes, means the twelve (12) month
period beginning on an Employee's date of hire by the Employer if the Employee
completes at least one thousand (1,000) Hours of Service during that period. If
an Employee does not complete at least one thousand (1,000) Hours of Service
during the twelve (12) month period beginning on his or her date of hire by the
Employer, he or she will receive credit, for eligibility purposes, for a Year of
Service at the close of any Plan Year commencing after his or her date of hire
by the Employer (either before or after the Effective Date) during which he or
she completes at least one thousand (1,000) Hours of Service.
For purposes of vesting, Year of Service means a calendar year, either
before or after the Effective Date, during which an Employee is credited with
one thousand (1,000) Hours of Service.
If an Employee incurs a Break in Service, the Employee's Years of
Service before the Break in Service will be taken into account if the Employee
subsequently becomes an Employee and completes one (1) Year of Service.
In the case of any Participant who incurs five (5) consecutive Breaks
in Service, Years of Service completed after such five (5) year period shall not
be taken into account for purposes of determining the Participant's vested
interest in benefits derived from Employer contributions which accrued before
such five (5) year period.
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If a Participant has a Break in Service before the Participant
acquires a vested interest in the Participant's Plan Account, service before the
Break in Service shall not be taken into account if the number of consecutive
Breaks in Service equals or exceeds the greater of five (5) or the aggregate
number of such Years of Service prior to such Break in Service.
If the Employer is a member of a controlled group of employers within
the meaning of Code sections 414(b), (c), (m) or (o), Years of Service shall be
determined as if all participants of the controlled group were a single
employer.
Notwithstanding anything herein to the contrary, Employees who are
employed by an entity which is acquired by or merges with the Employer will
receive credit under these rules for Years of Service with such prior employer.
ARTICLE II
ELIGIBILITY FOR PARTICIPATION
2.1 INITIAL ELIGIBILITY. Each person who is an Employee on the Effective
Date and is credited with at least one (1) Year of Service for eligibility
purposes will become a Participant in the Plan on the Effective Date.
2.2 SUBSEQUENT ELIGIBILITY. Each Employee who is credited with at least one
(1) Year of Service for eligibility purposes after the Effective Date will
become a Participant on the January 1 or July 1 next following the date on which
the Employee is credited with at least one (1) Year of Service for eligibility
purposes.
2.3 REHIRED PARTICIPANTS. A Participant whose employment terminates and who
is rehired will be eligible to participate in this Plan on the first day of the
first calendar month following the date he or she is reemployed by the Employer;
provided, however, that if the Employee's Years of Service are disregarded
pursuant to Section 1.30, the Employee shall participate in this Plan only as
provided in Section 2.2.
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ARTICLE III
RETIREMENT DATE
3.1 NORMAL RETIREMENT. A Participant may retire hereunder on or after his
or her Normal Retirement Date.
3.2 LATE RETIREMENT. A Participant who continues employment beyond his or
her Normal Retirement Date will continue to participate in this Plan until his
or her actual retirement.
ARTICLE IV
CONTRIBUTIONS
4.1 SALARY REDUCTION CONTRIBUTIONS BY PARTICIPANTS.
(a) Each Participant may make a salary reduction election to reduce
his or her Compensation per payroll period in an amount equal to any whole
percentage of his or her Compensation, subject, however, to the Employer's right
to amend or revoke the Participant's election as provided in subsection (c)
below. In addition, a Participant's salary reduction contributions to the Plan,
and to all other plans, contracts or arrangements subject to Code section
402(g), during any calendar year may not exceed seven thousand dollars ($7,000).
This seven thousand dollar ($7,000) limit shall be adjusted automatically by the
cost-of-living adjustment factor prescribed by the Secretary of the Treasury at
the same time and in the same manner as the cost-of-living adjustment applied
under Code section 415(d).
(b) contribution will be made by or on behalf of the Employer to the
Salary Reduction Contribution Account of each Participant employed by that
Employer in an amount equal to the amount of the Participant's reduction in
Compensation. All Salary Reduction Contribution Accounts shall be one hundred
percent (100%) vested at all times.
(c) Salary reduction elections shall be made in writing on such forms,
and shall be subject to such uniform administrative rules, as the Administrator
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shall establish. A Participant may amend or revoke his or her salary reduction
election at such times and with such frequency as the Administrator's uniform
rules shall permit.
(d) The Employer shall have the right to amend or revoke a
Participant's salary reduction election (i) if such election causes the
Participant's contributions to exceed the limits on annual additions imposed by
this Section or Section 4.5 or (ii) to insure that this Plan meets the deferral
percentage tests of Code section 401(k)(3).
(e) The Plan at all times shall be administered so as to comply with
the provisions of Code section 401(k)(3) and of Treasury Regulation section
1.401(k)-1(b). For purposes of testing compliance with Code section 401(k)(3),
the definition of "compensation" will be the definition designated by the
Administrator from year to year, and may be limited to Compensation during that
portion of the Plan Year that the Employee was a Participant, as permitted under
applicable law.
(f) The Employer also may uniformly amend or revoke all Participants'
salary reduction elections if the full amount of salary reduction contributions
to the Plan cannot be made for any Plan Year because the full amount of salary
reduction contributions for a Plan Year will exceed the amount deductible by the
Employer under Code section 404 (including carryovers) for the applicable fiscal
year of the Employer.
(g) Any amendment or revocation of a Participant's salary reduction
election by the Employer must be made in writing to the Participant stating the
amount of the salary reduction contribution which the Employer will accept. If
the Employer amends or revokes a Participant's salary reduction election for a
Plan Year, any excess of salary reduction contributions already made with
respect to the Participant for such Plan Year over the amount of such
contributions allowed with respect to the Participant for such Plan Year shall
be returned to the Participant as provided below.
(h) If, at the end of any Plan Year, it appears to the Employer that
the above deferral percentage test of Code section 401(k)(3) will not be met,
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the Employer, in lieu of amending or revoking salary reduction elections as
permitted above, may elect to make an additional contribution for the benefit of
Participants who are Non-Highly Compensated Employees. The additional
contribution shall be allocated in the same manner as Employer Matching
Contributions or in any other manner determined by the Employer. If the
additional contribution is not allocated as an Employer Matching Contribution,
it shall be added to the Qualified Nonelective Contribution Accounts of
Participants on whose behalf it is made and shall be immediately one hundred
percent (100%) vested and, except as otherwise provided herein, shall be subject
to the distribution provisions and limitations which are applicable to salary
reduction contributions to the Plan. If the additional contribution is allocated
as an Employer Matching Contribution, it shall be added to the Qualified
Matching Contribution Accounts of Participants on whose behalf it is made and
shall be immediately one hundred percent (100%) vested and, except as otherwise
provided herein, shall be subject to the distribution provisions and limitations
which are applicable to salary reduction contributions to the Plan. The amount
of the additional contribution shall be such that the deferral percentage test
of Code section 401(k)(3) will be met. The additional contribution shall be
deposited to Participants' Accounts not later than the earlier of (i) the date
which is prescribed by law for filing the Employer's income tax return
(including any extension thereof) for the taxable year to which the contribution
relates, or (ii) the last day of the twelve (12) month period immediately
following the Plan Year to which the contribution relates. A Participant may not
elect to receive any portion of the additional contribution as current
Compensation.
4.2 EMPLOYER MATCHING CONTRIBUTIONS.
(a) In General. The Employer may, in its discretion, make a matching
contribution for each Participant employed by that Employer. The Employer
Matching Contribution for each Participant shall be made biweekly for each
biweekly period in which a contribution to the Participant's Salary Reduction
Contribution account is made, provided that the Participant is employed by the
Employer on the last day of the biweekly period.
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The Employer Matching Contribution, if any, for each Participant
shall equal a percentage of each Participant's Salary Reduction Contribution.
The percentage shall be determined by the Employer prior to the start of the
Plan Year.
(b) Employer Matching Contributions Prior to January 1, 1995. Employer
Matching Contributions made prior to January 1, 1995, may be made in Company
Stock or in cash. Employer Matching Contributions which are made in cash shall
be initially allocated to Participants' Accounts in cash, but subject to the
terms of ERISA, shall be reinvested by the Trustee in Company Stock. Cash
Employer Matching Contributions and any earnings thereon and dividends on
Company Stock shall be temporarily invested in a money market fund selected by
the Employer (which may be a money market fund of the Employer), pending the
Trustee's reinvestment of such amounts in Company Stock.
(c) Employer Matching Contributions made after December 31, 1994.
Effective January 1, 1995, Employer Matching Contributions shall be made in cash
and shall be invested by the Trustee in accordance a Participant's investment
elections under Section 4.13. Company Stock or cash which has been allocated to
the Participant's Account as of December 31, 1994 pursuant to Section 4.2(b) may
be reinvested by the Trustee in accordance with a Participant's investment
elections under Section 4.13.
(d) The Plan at all times shall be administered so as to comply with
the provisions of Code section 401(m) and of Treasury Regulation sections
1.401(m)-1 and 1.401(m)-2. For purposes of testing compliance with Code section
401(m)(2), the definition of "compensation" will be the definition designated by
the Administrator from year to year, and may be limited to Compensation during
that portion of the Plan Year that the Employee was a Participant, as permitted
under applicable law. When required by Treasury Regulation section
1.401(m)-2(c), multiple use of the alternative limitation shall be corrected by
reducing the actual contribution percentage of all Highly Compensated Employees
under the Plan.
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(e) If, at the end of any Plan Year, it appears to the Employer that
the above contribution percentage test of Code section 401(m)(2) will not be
met, the Employer, in lieu of limiting or prohibiting Employee contribution
elections as permitted above or distributing Excess Aggregate Contributions as
permitted in section 4.12, may elect to make an additional contribution for
participants who are Non-Highly Compensated Employees. The additional
contribution may be made in cash or Company Stock and shall be allocated in the
same manner as Employer Matching Contributions or in any other manner determined
by the Employer. If the additional contribution is not allocated as an Employer
Matching Contribution, it shall be added to the Qualified Nonelective
Contribution Accounts of Participants on whose behalf it is made and shall be
immediately one hundred percent (100%) vested and, except as otherwise provided
herein, shall be subject to the distribution provisions and limitations which
are applicable to salary reduction contributions to the Plan. If the additional
contribution is allocated as an Employer Matching Contribution, it shall be
added to the Employer Matching Contribution Accounts of Participants on whose
behalf it is made and shall for all purposes herein be treated as if it were an
Employer Matching Contribution. The amount of the additional contribution shall
be such that the contribution percentage test of Code section 401(m) will be
met. The additional contribution shall be deposited to Participants' Accounts
not later than the earlier of (i) the date which is prescribed by law for filing
the Employer's income tax return (including any extension thereof) for the
taxable year to which the contribution relates, or (ii) the last day of the
twelve (12) month period immediately following the Plan Year to which the
contribution relates. A Participant may not elect to receive any portion of the
additional contribution as current Compensation.
4.3 EMPLOYER VOLUNTARY CONTRIBUTIONS.
(a) In General. The Employer may, in its discretion, make Voluntary
Contributions to the Plan. Voluntary Contributions, if made, may be in addition
to or in lieu of Matching Contributions. Voluntary Contributions shall equal a
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percentage of the Compensation of each Participant entitled to share therein.
The amount of each year's Voluntary Contribution, if any, will be established at
the discretion of the Board of Directors of the applicable Employer, and the
contribution for each Participant shall be made annually or more frequently as
the Employer may determine. The Employer will make Employer Voluntary
Contributions for a Plan Year only to the Accounts of those Participants who
have been credited with at least one thousand (1,000) Hours of Service during
the Plan Year and are employed on the last day of the Plan Year.
(b) Employer Voluntary Contributions Made Prior to January 1, 1995.
Employer Voluntary Contributions made prior to January 1, 1995, if any, shall be
made in cash or Company Stock. Employer Voluntary Contributions which are made
in cash will be initially allocated to Participants' Accounts in cash but,
subject to terms of ERISA, shall be reinvested by the Trustee in Company Stock.
Cash Employer Voluntary Contributions and any earnings thereon and dividends on
Company Stock shall be temporarily invested in a money market fund designated by
the Employer (which may be a money market fund of the Employer) pending the
Trustee's reinvestment of such amounts in Company Stock.
(c) Employer Voluntary Contributions made after December 31, 1994.
Effective January 1, 1995, Employer Voluntary Contributions, if any, shall be
made in cash and shall be invested by the Trustee in accordance with a
Participant's investment elections under Section 4.13. Company Stock or cash
which has been allocated to the Participant's Account as of December 31, 1994
pursuant to Section 4.3(b) may be reinvested by the Trustee in accordance with a
Participant's investment elections under Section 4.13.
(d) Employer contributions for a Plan Year shall not exceed an amount
which, when combined with all other contributions under the Plan for the Plan
Year, equals the maximum contribution which would be deductible by the Employer
under Code section 404 (including carryovers) for the applicable fiscal year of
the Employer.
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4.4 DEDUCTIBILITY OF CONTRIBUTIONS. Employer contributions (including
Participant salary reduction contributions) shall be made only by an Employer
entitled to deduct such contributions under Code section 404 and only to the
extent such contributions are deductible.
4.5 LIMITS ON ANNUAL ADDITIONS.
(a) Basic Limitations. Notwithstanding any other provision of this
Plan, a Participant's total annual additions under this Plan for any Plan Year
shall not exceed the lesser of (a) thirty thousand dollars ($30,000) or, if
greater, one-fourth (1/4) of the defined benefit dollar limitation set forth in
Code section 415(b)(1) as in effect for the Plan Year, as adjusted in Treasury
Regulation section 1.415-2(b)(4)(iii), or (b) twenty-five percent (25%) of the
Participant's Compensation for such Plan Year. "Annual additions" for this
purpose means the sum of (i) contributions under Sections 4.1, 4.2 and 4.3 of
this Plan allocable to the Participant's Plan Account, and (ii) any forfeitures
allocable to the Participant's Plan Account.
For purposes of this Section, "Compensation" refers to the
Participant's earned income, wages, salaries, and fees for professional services
actually rendered in the course of employment with the Employer (including, but
not limited to, commissions paid to salespersons, compensation for services on
the basis of a percentage of profits, commissions on insurance premiums, tips
and bonuses) and excluding the following:
(i) Employer contributions to a plan of deferred compensation
which are not includable in the Participant's gross income for the taxable year
in which contributed, or Employer contributions under a simplified employee
pension plan to the extent such contributions are deductible by the Participant,
or any distributions from a plan of deferred compensation;
(ii) Amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by the Participant either
becomes freely transferable or is no longer subject to a substantial risk of
forfeiture;
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(iii) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(iv) Other amounts which received special tax benefits, or
contributions made by a Participant (whether or not under a salary reduction
agreement) towards the purchase of an annuity described in Code section 403(b)
(whether or not the amounts are actually excludable from the gross income of the
Participant).
For purposes of applying the limitations of this Section,
Compensation for a limitation year is the Compensation actually paid or
includible in gross income during such year.
Notwithstanding the preceding sentence, Compensation for a
Participant who is permanently and totally disabled (as defined in Code section
37(e)(3)) is the compensation such Participant would have received for the
limitation year if the Participant had been paid at the rate of compensation
paid immediately before becoming permanently and totally disabled. Such imputed
Compensation for the disabled Participant may be taken into account only if the
Participant is not a Highly Compensated Employee and contributions made on
behalf of such Participant are nonforfeitable when made.
(b) Combined Limitations. If a Participant participates in any other
defined contribution plan sponsored by the Employer which is qualified under
Code section 401(a), his or her annual additions under such plan shall be
aggregated with his or her annual additions under this Plan, and his or her
annual additions under this Plan shall be reduced, if necessary, so that the
aggregate of such annual additions does not exceed the limitations set forth in
(a), above.
If a Participant participates or has participated in any defined
benefit pension plan sponsored by the Employer which is qualified under Code
section 401(a), his or her benefit under the defined benefit pension plan shall
be reduced, if necessary, so that the sum of (1) and (2) below does not exceed
1.0 for any Plan Year:
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(1) (i) the projected annual normal retirement benefit (assuming
continued employment until such Participant's normal retirement date and
constancy of all relevant factors) of the Participant under the defined benefit
pension plans, determined as of the close of the Plan Year, divided by
(ii) the lesser of (A) 1.25 times the dollar limitation in
effect under Code section 415(b)(1)(A) as of the close of such Plan Year or (B)
1.4 times the Participant's average Compensation for his or her "high three
years" (where "high three years" refers to the period of three (3) consecutive
calendar years yielding the highest such average and during which the
Participant was a participant in the defined benefit pension plan), plus
(2) (i) the sum of the annual additions credited to the
Participant under this Plan (and all other defined contribution plans required
to be aggregated with this Plan) for the current Plan Year and all prior Plan
Years, determined as of the close of the Plan Year, less any amounts permitted
to be subtracted from such sum under section 235(g)(3) of the Tax Equity and
Fiscal Responsibility Act of 1982, divided by
(ii) the lesser of (A) 1.25 times the dollar limitation in
effect under Code section 415(c)(1)(A) (determined without regard to Code
section 415(c)(6)) for the current Plan Year and for all prior years of the
Participant's employment with the Employer (regardless of whether a defined
contribution plan was in effect for those years), or (B) thirty-five percent
(35%) of the Participant's Compensation for the current Plan Year and for prior
years of the Participant's employment with the Employer (regardless of whether a
defined contribution plan was in effect for those years).
If the fraction produced under (2) above would exceed 1.0, even
after the reduction in the Participant's benefits under the defined benefit
plan(s), which shall be done first, then the contributions for the Participant
under this Plan shall be reduced to the extent necessary in accordance with
Section 4.6.
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(c) Aggregation of Employers. The foregoing maximum contributions
which may be made under this Plan shall be further limited by reason of the
existence of other qualified retirement plans maintained by any other members of
a controlled group of corporations, of one of a group of trades or businesses
under common control (as described in Code sections 414(b) or (c), as modified
by Code section 415(h)), or of an affiliated service group (as described in Code
sections 414(n) or (o)) to the extent such limitation is required by Code
section 415. The Administrator shall advise affected Participants of any
additional limitation required by the preceding sentence.
4.6 DISPOSITION OF EXCESS ANNUAL ADDITIONS. If the limitations described in
Section 4.5 are exceeded with respect to any Participant in any Plan Year, then
the contributions allocable to the Participant under this Plan for such Plan
Year shall be reduced to the minimum extent required by such limitations by
first reducing contributions to the Participant's Salary Reduction Contribution
Account and then, if necessary, reducing contributions to the Participant's
Employer Contribution Accounts. The Administrator, in its sole discretion, shall
determine if any reduction in the annual additions to a Participant's Accounts
is required by reason of the limitations set forth in this Article or Code
section 415. No Participant shall be entitled to any annual additions (or
earnings thereon) made or allocated to the Participant in excess of such
limitations. If it is determined at any time that the Administrator has erred in
accepting and crediting salary reduction by a Participant or in allocating
Employer contributions to any Participant's Plan Account for any Plan Year in
violation of such limitations, then (i) the amount of any required reduction in
the Participant's contributions (including earnings thereon) shall be returned
to the Participant and (ii) the amount of any required reduction in the
Employer's contributions (including earnings thereon) allocable or allocated to
the Participant under this Plan shall be returned to the Employer if such
reduction in the Employer's contributions is attributable to a mistake of fact
by the Employer or the Administrator at the time the contribution was made. If
the reduction in the Employer's contributions is not attributable to such a
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mistake of fact, the amount of the reduction (including earnings thereon) shall
be held in suspense and applied against the Employer's contributions under
Section 4.3 which are next due and owing to the Plan.
4.7 CONTRIBUTIONS TO ROLLOVER CONTRIBUTION ACCOUNT. Any Employee (whether
or not currently eligible to participate in the Plan) may transfer to the Trust
any Rollover Contributions as defined in Section 4.8. An Employee's Rollover
Contribution shall be credited to and held in the Participant's Rollover
Contribution Account. A Participant's Rollover Contribution Account shall be one
hundred percent (100%) vested in the Participant at all times. A Rollover
Contribution shall not be taken into account in determining the annual additions
to an Employee's Plan Account under Section 4.5.
4.8 DEFINITION OF "ROLLOVER CONTRIBUTION". The term "Rollover Contribution"
means an amount contributed to the Plan on or before the sixtieth (60th) day
after the day the contributing Employee received it, if the amount received by
the Employee is a distribution which is eligible for rollover to the Plan under
Code section 402(a).
The term "Rollover Contribution" also means assets representing a
Participant's nonforfeitable interest in another retirement plan qualified under
Code section 401(a) or 403(a), or in a conduit individual retirement account or
annuity, which assets have been transferred directly from the trustee (or other
fiduciary) of such other plan, account or annuity to the Trustees of this Plan;
provided, however, that such direct transfer shall not be accepted by the
Trustee unless (A) the transfer constitutes an "elective transfer" under section
1.411(d)-4 Q&A-3(b) of regulations promulgated by the Secretary of the Treasury,
(B) the plan from which the transfer is made provides no protected benefits
under Code section 411(d)(6) which are not already provided under the Plan or
(C) the transfer is a direct transfer of an eligible rollover distribution,
within the meaning of Code section 401(a)(31).
The Administrator may reject any Rollover Contribution which is not
qualified to be a Rollover Contribution to the Plan under the foregoing or under
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the Code. The Administrator may make all investigations necessary to determine
whether any amount submitted as a Rollover Contribution may be received.
4.9 VALUATION OF PARTICIPANTS' PLAN ACCOUNTS. Each time that the Trust is
valued hereunder, all income, gains and losses (including unrealized gains and
losses) from each investment fund established under Section 8.3, after deducting
a proportionate share of expenses of the Trust, shall be separately allocated by
the Administrator proportionately to the Account of each Participant in the fund
as of the previous Valuation Date, based on the previous valuation, but (i)
taking into account in a uniform and non-discriminatory manner contributions by
and on behalf of Participants made since the last Valuation Date and (ii)
subtracting from each Participant's Account any withdrawals made by the
Participant since the last Valuation Date.
4.10 DISTRIBUTION OF EXCESS DEFERRALS.
(a) In General. Notwithstanding any other provision of the Plan,
Excess Deferrals, plus income and minus any loss allocable thereto, shall be
distributed no later than April 15 to any Participant to whose account Excess
Deferrals were assigned for the preceding taxable year and who claims such
Excess Deferrals for such taxable year. A Participant is deemed to have claimed
the Excess Deferrals for a taxable year to the extent that the Participant's
Excess Deferrals are calculated by taking into account only Elective Deferrals
to this Plan.
(b) Definitions.
(i) "Elective Deferrals" means any Employer contributions made to
the Plan at the election of the Participant, in lieu of cash compensation, and
shall include contributions made pursuant to a salary reduction agreement or
other deferral mechanism. With respect to any taxable year, a Participant's
Elective Deferrals equal the sum of all Employer contributions made on behalf of
such Participant pursuant to the Participant's election to defer under the Plan
or under any other plan or arrangement described in Code sections 401(k), 408(k)
or 403(b).
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(ii) "Excess Deferrals" means the amount of Elective Deferrals
for the Participant's taxable year that is includible in the Participant's gross
income under Code section 402(g) to the extent such Participant's Elective
Deferrals exceed the seven thousand dollar ($7,000) (as indexed) limit under
Code section 402(g). Excess Deferrals shall be treated as annual additions under
the Plan for purposes of the limitations under Code section 415.
(c) Claims. The Participant's claim shall be in writing, shall be
submitted to the Administrator no later than March 1; shall specify the
Participant's Excess Deferrals for the preceding taxable year; and shall be
accompanied by the Participant's written statement that if such amounts are not
distributed, such Excess Deferrals, when added to amounts deferred under other
plans or arrangements described in Code sections 401(k), 408(k) or 403(b),
exceed the dollar limitation under Code section 402(g) for the year in which the
deferral occurred.
(d) Determination of Income. The Excess Deferrals distributed to a
Participant with respect to a taxable year shall be adjusted for income or loss
during the taxable year and, if elected by the Plan Administrator, during the
period from the end of the taxable year to the date of distribution. The income
or loss allocable to Excess Deferrals for the taxable year (and, if elected,
from the end of the Plan Year to the date of distribution) shall be determined
by the Plan Administrator using any reasonable method permitted under Code
section 402(g).
4.11 DISTRIBUTION OF EXCESS CONTRIBUTIONS.
(a) In General. Notwithstanding any other provision of the Plan,
Excess Contributions, plus any income and minus any loss allocable thereto,
shall be distributed to the appropriate Highly Compensated Employees after the
last day of the Plan Year in which the Excess Contributions arose and, if
possible, within two and one-half (2-1/2) months after the last day of such Plan
Year. (If Excess Contributions are distributed more than two and one-half
(2-1/2) months after the last day of the Plan Year in which such Excess
Contributions arose, a ten percent (10%) excise tax will be imposed on the
Employer with respect to such amounts.) Excess Contributions, plus any income
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and minus any loss allocable thereto, shall be distributed no later than the
last day of the twelfth (12th) month after the last day of the Plan Year in
which the Excess Contributions arose. Excess Contributions shall be treated as
annual additions under the Plan for purposes of the limitations under Code
section 415. Excess Contributions for a Participant whose Actual Deferral
Percentage was determined under family aggregation rules shall be distributed
among Family Members in proportion to the contributions of each Family Member
that is aggregated.
(b) Excess Contributions. "Excess Contributions" means, with respect
to any Plan Year, the excess of (i) the aggregate amount of Employer
contributions actually taken into account in computing the Actual Deferral
Percentage of Highly Compensated Employees for such Plan Year, over (ii) the
maximum amount of such contributions permitted by the Average Deferral
Percentage test. The maximum amount of contributions permitted for each Highly
Compensated Employee shall be determined by a leveling method under which the
actual deferral percentage of the Highly Compensated Employee with the highest
actual deferral percentage is reduced to the extent required to (i) enable the
Plan to satisfy the Average Deferral Percentage Test under Section 4.1 or (ii)
cause such Highly Compensated Employee's actual deferral percentage to equal the
actual deferral percentage of the Highly Compensated Employee with the next
highest actual deferral percentage. This process is continued until the Plan
satisfies the Average Deferral Percentage Test under Section 4.1 and the maximum
amount of contributions permitted for each Highly Compensated Employee is
determined.
(c) Determination of Income. Excess Contributions shall be adjusted
for income or loss during the Plan Year and, if elected by the Plan
Administrator, during the period from the end of the Plan Year to the date of
distribution. The income or loss allocable to Excess Contributions for the Plan
Year (and, if elected, from the end of the Plan Year to the date of
distribution) shall be determined by the Plan Administrator using any reasonable
method permitted under Code section 401(k).
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4.12 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
(a) In General. Notwithstanding any other provision of the Plan,
Excess Aggregate Contributions, plus income and minus any loss allocable
thereto, shall be forfeited, if forfeitable, or if not forfeitable, distributed
to the appropriate Highly Compensated Employees after the last day of the Plan
Year in which the Excess Aggregate Contributions arose and, if possible, within
two and one-half (2-1/2) months after the last day of such Plan Year. (If Excess
Aggregate Contributions are distributed more than two and one-half (2-1/2)
months after the last day of the Plan Year in which such Excess Aggregate
Contributions arose, a ten percent (10%) excise tax will be imposed on the
Employer with respect to such amounts.) Excess Aggregate Contributions, plus
income and minus any loss allocable thereto, shall be forfeited, if forfeitable,
or if not forfeitable, distributed no later than the last day of the twelfth
(12th) month after the last day of the Plan Year in which the Excess Aggregate
Contributions arose. Excess Aggregate Contributions shall be treated as annual
additions under the Plan for purposes of the limitations under Code section 415.
Excess Aggregate Contributions for a Participant whose Contribution Percentage
was determined under family aggregation rules shall be distributed among family
members in proportion to the Contribution Percentage Amounts of each family
member that is aggregated.
(b) Excess Aggregate Contributions. "Excess Aggregate Contri-butions"
means, with respect to any Plan Year, the excess of (i) the aggregate
Contribution Percentage Amounts taken into account in computing the numerators
of the Contribution Percentages of Highly Compensated Employees for such Plan
Year, over (ii) the maximum Contribution Percentage Amounts permitted by the
Average Contribution Percentage test. The maximum amount of contributions
permitted for each Highly Compensated Employee shall be determined by a leveling
method under which the contribution percentage of the Highly Compensated
Employee with the highest contribution percentage is reduced to the extent
required to (i) enable the Plan to satisfy the Average Contribution Percentage
Test under Section 4.2 (ii) cause such Highly Compensated Employee's
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contribution percentage to equal the contribution percentage of the Highly
Compensated Employee with the next highest contribution percentage. This process
is continued until the Plan satisfies the Average Contribution Percentage Test
under Section 4.2 and the maximum amount of contributions permitted for each
Highly Compensated Employee is determined. A determination of Excess Aggregate
Contributions shall be made after first determining Excess Deferrals and then
determining Excess Contributions.
(c) Determination of Income. Excess Aggregate Contributions shall be
adjusted for any income or loss during the Plan year and, if elected by the Plan
Administrator, during the period from the end of the Plan Year to the date of
distribution. The income or loss allocable to Excess Aggregate Contributions for
the Plan Year (and, if elected, from the end of the Plan Year to the date of
distribution) shall be determined by the Plan Administrator using any reasonable
method permitted under Code section 401(m).
4.13 PARTICIPANT INVESTMENT ELECTIONS Each Participant and each former
Participant with a vested Plan Account may elect in writing to have his or her
Plan Account invested in one or more investment funds described in Article VIII.
Prior to January 1, 1995, a Participant's or former Participant's investment
elections do not apply to amounts held in his or her Employer Voluntary
Contribution Account or Employer Matching Contribution Account. If any
Participant or former Participant fails to make an investment election, the
portion of the Participant's or former Participant's Plan Account subject to
direction shall be invested in an investment fund, or a combination of
investment funds, selected by the Administrator, which offer(s) reasonable
opportunities for capital appreciation, preservation of capital, and/or
liquidity.
If the Administrator elects, this Plan may be operated in compliance
with ERISA section 404(c) and all or part of the regulations thereunder, in
which case the following shall apply:
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(a) Plan Fiduciaries' Responsibilities. The Trustee shall be
responsible for implementing Participants' investment instructions and shall
comply with such instructions to the extent such instructions are consistent
with ERISA and the regulations thereunder. The Administrator is responsible for
ensuring compliance with ERISA section 404(c) and the regulations thereunder in
all other respects, including providing to Participants all information required
under such provisions.
(b) Investment Funds. The Administrator shall direct the Trustee to
establish investment funds pursuant to Article VIII which constitute a broad
range of investment alternatives and which are sufficient to provide
Participants with a reasonable opportunity to affect materially the potential
return on amounts in their Plan Accounts and the degree of risk to which such
amounts are subject. The Administrator shall direct the Trustee to establish at
least 3 investment funds in addition to the Company Stock Fund, each of which is
diversified, has materially different risk and return characteristics and which
will enable Participants to minimize overall risk through diversification and
achieve a portfolio with appropriate aggregate risk and return characteristics.
(c) Investment Information. The Administrator shall provide
Participants with sufficient information to make informed decisions with regard
to investments in the funds available under the Plan in accordance with ERISA
section 404(c) and the regulations thereunder.
(d) Investment Elections. Participant investment elections may be
changed quarterly on any January 1, April 1, July 1 or October 1, or more
frequently if the Administrator determines, in its discretion, that it is
appropriate in light of market conditions, subject, however, to any rules
established by the Administrator and any rules or restrictions of any insurance
company or other entity serving as the manager or funding vehicle of any of the
investment funds.
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ARTICLE V
DISTRIBUTIONS
5.1 RETIREMENT.
(a) On a Participant's retirement, whether at the Participant's Normal
or Late Retirement Date, the Participant shall be entitled to receive the full
amount of the Plan Account in accordance with Section 5.10.
(b) Distribution to a Participant shall be made as soon as is
practicable after the first Valuation Date coincident with or next following the
Participant's retirement, and after arrangements for payment have been made by
the Administrator and the Trustee; provided, however, that distribution shall be
made not later than sixty (60) days after the end of the Plan Year in which the
later of the Participant's Normal Retirement Date or Late Retirement Date occurs
and provided further that no distribution shall be made, or shall commence, to a
Participant without the Participant's written consent given in a manner required
by applicable law until the Participant's Normal Retirement Date unless, subject
to the provisions of Section 5.8, the Participant's Account balance at the date
of distribution or commencement is three thousand five hundred dollars ($3,500)
or less.
(c) Notwithstanding any other provision of this Plan, a Participant
shall become fully vested in his or her Plan Account upon attainment of age
sixty-five (65).
5.2 DEATH OF PARTICIPANT. Except as provided below, if a Participant dies,
the full amount of the Participant's Plan Account, determined as of the
Valuation Date coinciding with or next following the Participant's date of
death, shall be vested in the Participant and shall be paid in the manner set
forth in Section 5.10.
Payment of the Participant's Plan Account on death shall be made, or
shall commence, as soon as is practicable after the first Valuation Date
coincident with or next following the Participant's death and after arrangements
for payment have been made by the Administrator and the Trustee.
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5.3 PERMANENT DISABILITY
(a) If a Participant's employment with the Employer terminates because
of permanent disability, the full amount of the Participant's Plan Account,
determined as of the Valuation Date coinciding with or next following the
Administrator's approval of the Participant's permanent disability, shall be
vested in the Participant and, subject to the provisions of Section 5.8, shall
be paid to the Participant in accordance with Section 5.10 as though he had
retired.
Payment shall be made, or shall commence, as soon as is
practicable after the Valuation Date coincident with or next following the
Administrator's approval of the Participant's permanent disability and after
arrangements for payment have been made by the Administrator and the Trustee.
(b) A Participant shall be considered permanently disabled if he or she
establishes to the satisfaction of the Administrator that he or she is mentally
or physically disabled due to accident or illness and has been unable to perform
every duty of his or her regular occupation with the Employer for a period of at
least one hundred eighty (180) days, and that such disability is permanent.
Evidence of disability shall include the certificate of a competent licensed
physician selected by the Participant and approved by the Administrator which
confirms that the Participant is disabled as defined herein.
5.4 TERMINATION PRIOR TO RETIREMENT.
(a) Amount of Distribution: Forfeitures. If a Participant's employment
terminates for any reason other than retirement on or after his or her Normal
Retirement Date, disability or death, his or her Plan Account shall be vested in
the Participant as follows:
(1) Contributions to the Participant's Employer Matching
Contribut ion Account and Employer Voluntary Contribution Account shall become
vested according to the following schedule:
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Years of Service
For Vesting Purposes Vested Percentage
Less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 or more 100%
(2) The Participant's Salary Reduction Contribution Account,
Qualified Nonelective Contribution Account, Qualified Matching Contribution
Account and Rollover Account shall be one hundred percent (100%) vested at all
times.
The vested portion of the terminated Participant's Plan
Account shall be payable as provided in this Section. The unvested portion of
such Plan Account shall first be made available to reinstate previously
forfeited account balances of Former Participants, if any. For Plan Years
beginning before January 1, 1994, the remaining forfeitures, if any, shall be
allocated ratably to the Accounts of remaining Participants on the basis of
their Compensation. For Plan Years beginning on or after January 1, 1994, the
remaining forfeitures, if any, shall be allocated as a matching contribution to
the Accounts of eligible Participants pro rata on the basis of each
Participant's Salary Reduction Contributions to the Plan during the Plan Year.
Notwithstanding the foregoing, a Participant will not receive an allocation of
forfeitures for a Plan Year unless the Participant has met the requirements for
receipt of an allocation of any Employer Voluntary Contribution for the Plan
Year. The unvested portion of the terminated Participant's Plan Account shall be
forfeited on the earlier of (1) the date of a cash-out distribution to the
Participant as described in Treasury Regulation section 1.411(a)-7(d), or (2)
the date on which the Participant incurs a fifth consecutive one-year Break in
Service. Forfeitures shall be restored pursuant to Section 5.5.
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(b) Form and Timing of Distribution. Subject to the provisions of
Section 5.8, if the value of a terminated Participant's Plan Account on such
Valuation Date is more than three thousand five hundred dollars ($3,500),
distributions to the Participant shall be made on the occurrence of an event
which will result in a distribution had the terminated Participant remained in
the employ of the Employer (death, permanent disability or normal retirement).
However, at the election of the Participant, the entire vested portion of the
Terminated Participant's Plan Account may be distributed upon the Participant's
termination. Any distribution under this paragraph will be made in a manner
which is consistent with and satisfies the provisions of Section 5.10.
Distributions shall also be subject to reasonable rules established by the
Administrator.
5.5 REHIRED PARTICIPANT. If the Plan Account of a terminated Participant is
paid to the Participant before the Participant incurs five (5) consecutive
Breaks in Service and if the Participant is rehired before he or she incurs five
(5) consecutive Breaks in Service and repays the amount distributed before the
date which is five (5) years after the date the Participant is rehired, any
unvested portion of the Participant's Plan Account existing when payment was
made shall be restored to the Participant's Plan Account.
5.6 COMMENCEMENT OF BENEFITS. A Participant's distribution must begin by
the first day of April following the calendar year in which the Participant
attains age seventy and one-half (70-1/2). Notwithstanding the preceding, if the
Participant attained age seventy and one-half (70-1/2) before January 1, 1988,
and such Participant was not a five percent (5%) owner (as defined in Code
section 416(i)) at any time during the calendar year in which such Participant
attained age sixty-six and one-half (66-1/2), or during any subsequent calendar
year, the required distribution commencement date is the first day of April
following the later of the calendar year in which the Participant terminates
employment or the calendar year in which the Participant attains age seventy and
one-half (70-1/2). Notwithstanding the preceding, if the Participant attained
age seventy and one-half (70-1/2) in 1988, and such Participant was not a five
percent (5%) owner of the Employer (as defined in Code section 416(i)) at any
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time during the calendar year in which such Participant attained age sixty-six
and one-half (66-1/2), or during any subsequent calendar year, and such
Participant had not retired by January 1, 1989, the required distribution
commencement date is April 1, 1990.
5.7 NOTICE REQUIREMENTS. No less than thirty (30) days and no more than
ninety (90) days before the date of any distribution to a Participant prior to
the Participant's Normal Retirement Date, the Participant must receive (i) a
general description of the material features, and an explanation of the relative
values, of optional forms of benefit available under the Plan, and (ii) notice
of the Participant's right to defer the distribution until the Participant's
Normal Retirement Date. The preceding notice requirement is not applicable for
any distribution after the Participant's Normal Retirement Date or if the
Participant's Plan Account can be cashed out as provided under Section 5.8.
5.8 CASH-OUT DISTRIBUTIONS. Notwithstanding any other provision of the Plan
to the contrary, if, upon the Participant's retirement, disability, termination
of employment or death, the present value of the vested Plan Account of a
Participant does not exceed three thousand five hundred dollars ($3,500), such
Participant's vested Plan Account will be distributed in a lump sum as soon as
practicable after the Participant's retirement, disability, termination of
employment or death. Cash-out distributions of amounts invested in Company Stock
will be made in kind, unless the Participant makes a timely election, in
accordance with rules established by the Administrator, to receive cash. For
purposes of this determination, if at the time of any distribution the present
value of the vested Plan Account of the Participant exceeds three thousand five
hundred dollars ($3,500), then the present value of the vested Plan Account of
the Participant at any subsequent time shall be deemed to exceed three thousand
five hundred dollars ($3,500).
5.9 DISTRIBUTION UPON DISPOSITION OF A SUBSIDIARY. If the Employer disposes
of substantially all of the assets (within the meaning of Code section 409(d)(2)
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and applicable Treasury Regulations) used by the Employer in a trade or business
of the Employer or if the Employer disposes of the Employer's interest in a
subsidiary (within the meaning of Code section 409(d)(3)), any employee who
continues employment with the corporation acquiring such assets or with such
subsidiary will receive a lump sum distribution (as defined in Code section
401(k)(10)(B)) of his or her entire vested Plan account. Such distribution shall
occur as soon as practicable after the event which entitled the Participant to
the distribution. Notwithstanding the preceding, the provisions of this Section
5.9 shall apply only if the Employer continues to maintain the Plan after the
disposition of assets or of the subsidiary.
5.10 BENEFIT PAYMENTS.
(a) Effect of Section. This Section shall take precedence over any
conflicting provision in this Plan.
(b) Annuities. Unless otherwise elected as provided below, a
Participant who is married on the Annuity Starting Date and who does not die
before the Annuity Starting Date shall receive the value of all of his benefits
in the form of a Joint and 50% Survivor Annuity as set forth below. However, the
Participant may elect to receive a smaller annuity benefit with continuation of
payments to the spouse at a rate of seventy-five percent (75%) or one hundred
percent (100%) of the rate payable to a Participant during his lifetime, which
alternative joint and survivor annuity shall be equal in value to the automatic
Joint and 50% Survivor Annuity. An unmarried Participant shall receive the value
of his benefit in the form of a life annuity. Such unmarried Participant,
however, may elect, in writing, to waive the life annuity. This election must
comply with the provisions of this Section as if it were an election to waive
the Joint and 50% Survivor Annuity by a married Participant, but without the
spousal consent requirement, and the unmarried Participant shall have available
to him or her the same benefit options and shall be subject to the same rules
regarding account balances of three thousand five hundred dollars ($3,500) or
less.
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(c) Joint and 50% Survivor Spouse Annuity.
(i) The retirement allowance of a vested Participant will be paid
in the form of a Joint and 50% Survivor Spouse Annuity unless the Participant
makes a qualified election (as defined below) of a different form of benefit
within the ninety (90) day period ending on the Annuity Starting Date.
(ii) Notwithstanding the foregoing, if the present value of the
Joint and 50% Survivor Spouse Annuity to which a Participant becomes entitled is
three thousand five hundred dollars ($3,500) or less, the Employer shall, at any
time before the Annuity Starting Date (or, at any time thereafter if the
Employer obtains the written consent, given within ninety (90) days prior to the
proposed lump sum payment, of the Participant and the Participant's spouse, or
the survivor of them), direct the Trustee to pay to the Participant or to the
Participant's spouse, as applicable, in lieu of the Joint and 50% Survivor
Spouse Annuity, a lump sum equal to the present value of such benefit as of the
date of payment. Any such lump sum payment will fully discharge the Plan's
obligations to the Participant and the Participant's spouse with respect to the
Joint and 50% Survivor Spouse Annuity. If the present value of a Participant's
Joint and 50% Survivor Spouse Annuity is greater than three thousand five
hundred dollars ($3,500), the Employer shall at any time, if the Participant and
the Participant's spouse, or the survivor of them, consent(s), in writing,
within ninety (90) days prior to the proposed lump sum payment, direct the
Trustee to pay to the Participant or to the Participant's spouse, as applicable,
in lieu of the Joint and 50% Survivor Spouse Annuity, in one or more of the
following methods:
(A) One lump-sum payment in cash, in kind or in a combination
thereof;
(B) Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments. In order to provide such installment
payments, the Administrator may (1) segregate the aggregate amount thereof in a
separate, federally insured savings account, certificate of deposit in a bank or
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savings and loan association, money market certificate or other liquid
short-term security or (2) purchase a nontransferable annuity contract for a
term certain (with no life contingencies) providing for such payment. The period
over which such payment is to be made shall not extend beyond the Participant's
life expectancy (or the life expectancy of the Participant and his designated
Beneficiary).
(C) Purchase of or providing an annuity. However, such annuity
may not be in any form that will provide for payments over a period extending
beyond either the life of the Participant (or the lives of the Participant and
his designated Beneficiary) or the life expectancy of the Participant (or the
life expectancy of the Participant and his designated Beneficiary).
For purposes of the foregoing, present value shall be determined
pursuant to Code section 417(e) and the regulations thereunder.
(d) Qualified Preretirement Survivor Annuity.
(i) If a vested, married Participant dies before payment of his
or her benefits begins, the following rules shall apply. If the Participant had
not made a qualified election (as defined below) waiving the Qualified
Preretirement Survivor Annuity, the Participant's vested account will be paid in
the form of a life annuity to the Participant's surviving spouse. If the
Participant had made such a qualified election, the Participant's account shall
be payable to his or her designated beneficiary.
(ii) For purposes of subsection (c)(i), a surviving spouse will
begin to receive payments as soon as practicable after the Participant's death
unless the surviving spouse elects to have payments begin at a later date.
(iii) Notwithstanding the foregoing, if fifty percent (50%) of a
Participant's account amounts to three thousand five hundred dollars ($3,500) or
less, the Employer shall, at any time before the Annuity Starting Date (or at
any time thereafter, if the Employer obtains the surviving spouse's written
consent, given within ninety (90) days prior to the proposed lump sum payment),
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direct the Trustee to pay to the spouse the Participant's account as a lump sum,
in lieu of the Qualified Preretirement Survivor Annuity. Any such lump sum
payment will fully discharge the Plan's obligations to the spouse with respect
to the benefit described above. If the Participant's account exceeds three
thousand five hundred dollars ($3,500), the Employer shall, at any time, if the
Employer obtains the surviving spouse's written consent, given within ninety
(90) days prior the proposed payment, direct the Trustee to pay to the spouse as
a lump sum, in lieu of the Qualified Preretirement Survivor Annuity the
Participant's account. Any such lump sum payment will fully discharge the Plan's
obligations to the spouse with respect to the benefit described above.
(iv) In the event the death benefit is not paid in the form of a
Pre-Retirement Survivor Annuity, it shall be paid to the Participant's
Beneficiary by either of the following methods, as elected by the Participant
(or if no election has been made prior to the Participant's death, by his
Beneficiary):
(A) One lump-sum payment in cash, in kind or in a
combination thereof;
(B) Payment in monthly, quarterly, semi-annual, or annual
cash installments over a period to be determined by the Participant or his
Beneficiary. After periodic installments commence, the Beneficiary shall have
the right to direct the Trustee to reduce the period over which such periodic
installments shall be made, and the Trustee shall adjust the cash amount of such
periodic installments accordingly.
In the event the death benefit payable pursuant to Section
5.2 is payable in installments, then, upon the death of the Participant, the
Administrator may direct the Trustee to segregate the death benefit into a
separate account, and the Trustee shall invest such segregated account
separately, and the funds accumulated in such account shall be used for the
payment of the installments.
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(e) Definitions.
(i) Earliest retirement age: the earliest date on which the
Participant could elect to receive a distribution under the Plan.
(ii) Qualified election: A Participant's written waiver of the
Joint and 50% Survivor Spouse Annuity and election to receive benefits in the
Plan's normal form or in one of the optional forms permitted under the Plan, or
the written waiver of a Qualified Preretirement Survivor Annuity and the
election of a non-spouse beneficiary or the election of an optional death
benefit form available hereunder. A Participant's spouse must consent in writing
to the waiver (including consent to the beneficiary or beneficiaries who will
receive benefits payable on the death of the Participant), and the spouse's
consent must be notarized or witnessed by a Plan representative. The spouse's
consent must acknowledge the effect of the waiver, election and consent and may
be limited to consent to the specific form of benefit elected and to the payment
of the benefit to the specific Beneficiary designated in the election. Once a
spouse has consented to a form of benefit and/or designation of Beneficiary, the
form of benefit and/or designation of Beneficiary may not be changed without
subsequent spousal consent unless the spouse's consent (i) expressly permits the
Participant to make subsequent elections with respect to forms of benefits
and/or subsequent designations of Beneficiaries without further consent of the
spouse and (ii) acknowledges and expressly relinquishes the right to limit the
consent to an election of a specific benefit and a designation of a specific
Beneficiary. If a Participant establishes to the satisfaction of the
Administrator that the Participant is not married, that the Participant's
spouse's written consent cannot be obtained because the spouse cannot be
located, that the Participant is legally separated or the Participant has been
abandoned (within the meaning of local law) and the Participant has a court
order to such effect, or that such other circumstances exist as are specified
under applicable Internal Revenue Service regulations, a waiver by the
Participant alone will be a qualified election (unless a qualified domestic
relations order as described in section 414(p) of the Code provides otherwise).
Any consent necessary under this provision will be valid only with respect to
the spouse who signs the consent. If the spouse is legally incompetent to give
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consent, the spouse's legal guardian, even if the guardian is the Participant,
may give consent. A Participant may revoke a previous waiver without the consent
of his or her spouse at any time before benefits begin. A spouse may not revoke
his or her written consent. A qualified election must be made during the
qualified election period as defined below.
(iii) Spouse (surviving spouse): The spouse or surviving spouse
of a Participant, provided that the Participant and the Participant's spouse are
married to each other on the earlier of the Annuity Starting Date or the date of
the Participant's death, and further provided that a former spouse will be
treated as a spouse or surviving spouse to the extent provided under a qualified
domestic relations order as described in Code section 414(p).
(iv) Joint and 50% Survivor Spouse Annuity: A reduced retire-ment
allowance commencing at normal retirement age, or, with the consent of the
Participant, commencing at the earliest retirement age, of actuarially
equivalent value payable during the retired Participant's life, with the
provision that, after the Participant's death, a monthly benefit equal to
one-half (1/2) of the monthly benefit payable during the Participant's life
shall be continued during the life of and paid to the Participant's surviving
spouse, with payments ceasing with the retired Participant's death if the
Participant's spouse does not survive the Participant. A Joint and 50% Survivor
Spouse Annuity for a single Participant is a monthly benefit payable to the
Participant during his or her life with payments ceasing upon the Participant's
death.
(v) Qualified Election Period: For a Joint and 50% Survivor
Spouse Annuity, the period which begins on the date the Participant receives the
notice required below and ends on the Annuity Starting Date (such election
period shall be no more than ninety (90) days and no less than thirty (30)
days). For a Qualified Preretirement Survivor Annuity, the period which begins
on the first day of the Plan Year in which the Participant attains age
thirty-five (35) and ends on the date of the Participant's death. If a
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Participant separates from service prior to the first day of the Plan Year in
which the Participant attains age thirty-five (35), the qualified election
period with respect to the Participant's interest in the Plan as of the date of
separation shall begin on the date of separation. Notwithstanding the preceding,
a Participant may waive the Qualified Preretirement Survivor Annuity before the
earlier of attainment of age thirty-five (35) or separation from service,
provided that the notice requirement is met before such waiver and provided the
waiver becomes invalid upon the first day of the Plan Year in which the
Participant attains age thirty-five (35). Thereafter, if the Participant wishes
to waive the Qualified Preretirement Survivor Annuity, a new qualified election
must be made.
(vi) Annuity Starting Date: The first day of the first period for
which an amount is paid as an annuity or in the case of a benefit not paid in
the form of an annuity, the first day on which all events have occurred which
entitle the Participant to such benefit.
(f) Notice Requirements.
(i) In the case of a Joint and 50% Survivor Spouse Annuity,
within ninety (90) days but not less than thirty (30) days prior to the Annuity
Starting Date, the Administrator shall provide to each Participant who will
receive a Joint and 50% Survivor Spouse Annuity a written explanation of: (i)
the terms and conditions of a Joint and 50% Survivor Spouse Annuity; (ii) the
Participant's right to waive the Joint and 50% Survivor Spouse Annuity form of
benefit and the effect of such a waiver; (iii) the rights of a Participant's
spouse under this Section; and (iv) the Participant's right to revoke a previous
waiver of the Joint and 50% Survivor Spouse Annuity and the effect of revoking
such a waiver. Effective as of the first day of the first Plan Year beginning
after December 31, 1988, a Participant also must be furnished a general
description of the eligibility conditions and sufficient additional information
to explain the relative values of the optional forms of benefit available under
the Plan (e.g., the extent to which optional forms are subsidized relative to
the normal form of benefit or the interest rates used to calculate the optional
forms).
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(ii) In the case of a Qualified Preretirement Survivor Annuity,
the Administrator shall provide to each Participant, within the period beginning
on the first day of the Plan Year in which the Participant attains age
thirty-two (32) and ending with the close of the Plan Year in which the
Participant attains age thirty-four (34), a written explanation of the Qualified
Preretirement Survivor Annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the requirements above
applicable to notices regarding Joint and 50% Survivor Spouse Annuities. If an
individual becomes a Participant after the individual attains age thirty-four
(34), the Administrator shall provide the notice no later than the end of the
one (1) year period beginning with the first day of the first Plan Year for
which the individual is a Participant. If a Participant separates from service
before attaining age thirty-five (35), the Committee shall provide the notice
within one (1) year after the date of separation from service.
(iii) In the case of any distribution (other than an automatic
cash-out of three thousand five hundred dollars ($3,500) or less) which is to
commence prior to the later of the Participant's attainment of Normal Retirement
Age or age sixty-two (62), the Administration shall notify the Participant of
the Participant's right to defer the commencement of the distribution until the
later of the Participant's attainment of Normal Retirement Age or age sixty-two
(62).
5.11 DIRECT ROLLOVER ELECTION.
(a) In General. This section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to the contrary, a
Distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover. No Direct Rollover election may be made if the Distributee's Eligible
Rollover Distributions during a year are reasonably expected to total less than
two hundred dollars ($200.00).
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(b) Definitions. For purposes of this Section following terms have the
following meanings:
(1) "Eligible Rollover Distribution" means any distribution of
all or any portion of the balance to the credit of the Distributee, excluding
distributions that are one of a series of substantially equal periodic payments
(and not less frequently than annually) made for the life (or joint life
expectancy) of the Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee's designated beneficiary or for a
specified period of ten years or more; any distributions to the extent such
distribution is required under Code section 401(a)(9); and the portion of any
distribution that is not includible in gross income (determined without regard
to the exclusion for net unrealized depreciation with respect to employer
securities).
(2) "Eligible Retirement Plan" means an individual retirement
account described in Code section 408(a), and individual retirement annuity
described in Code section 408(b) and annuity plan described in Code section
403(a) for a qualified trust described in Code section 401(a) that accepts the
Distributee's Eligible Rollover Distribution, provided, however, that in the
case of an Eligible Rollover Distribution to the surviving spouse, an Eligible
Retirement Plan is an individual retirement account or individual retirement
annuity.
(3) "Distributee" means a Participant, the Participant's
surviving spouse or the Participant's spouse or former spouse who is an
alternate payee under a qualified domestic relations order, as defined in Code
section 414(p).
(4) "Direct Rollover" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
5.12 DISTRIBUTION OF AMOUNTS INVESTED IN COMPANY STOCK. If a Participant
who has shares of Company Stock allocated to his or her Plan Account and is
entitled to a distribution hereunder does not elect to receive an in-kind
distribution of Company Stock, the Trustee shall liquidate such portion of the
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Participant's Account by cashing out such shares at their Fair Market Value with
funds that are available under the Plan for the purchase of Company Stock or, if
sufficient funds are not available, direct the independent agent appointed under
Section 8.3(b) to sell the shares of Company Stock allocated to the
Participant's Account on the open market.
ARTICLE VI
ADMINISTRATION
6.1 ADMINISTRATION. The Administration of this Plan shall be the
responsibility of the following named fiduciaries, who are designated as such
for purposes of the ERISA:
(a) The Trustee with respect to the management, control and investment
of the Trust (except to the extent the Trustee is subject to the direction of
the Administrator or an investment manager appointed by the Plan Sponsor as
provided in Section 8.7) and the payment of benefits to Participants and their
beneficiaries;
(b) The Administrator or other person or persons designated by the
Administrator for purposes of determining appeals with respect to denied claims
for benefits; and
(c) The Administrator with respect to controlling and managing the
administration and operation of the Plan as hereinafter set forth. The
Administrator may, through a written instrument, designate other persons to
carry out some or all of its fiduciary responsibility.
The authority of each named fiduciary in its designated area of
responsibility as aforesaid shall be exclusive, and no named fiduciary shall
have either authority or responsibility to exercise any discretion or control
other than as specifically delegated to the named fiduciary hereunder. Any
person or group of persons or entity may serve in more than one fiduciary
capacity with respect to the Plan.
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ARTICLE VII
THE ADMINISTRATOR
7.1 DESIGNATION. The Administrator shall be designated by the Plan
Sponsor and may be the Plan Sponsor or a committee of one or more individuals.
The Administrator shall serve until resignation or removal by the Plan Sponsor.
The Administrator may, but need not, be a Participant in the Plan.
7.2 PROCEDURE.
(a) The Administrator may elect from among its membership, by a
majority vote for each, a secretary and such other officers as the Administrator
may deem expedient. The Administrator shall meet as often as its Chairperson
deems necessary to carry out its functions. Any other two (2) members of the
Administrator may call a meeting at any time by giving due notice thereof to the
Chairperson and the other Administrator members.
(b) Action by the Administrator on any matter of substance or on
any matter that requires the exercise of discretion by the Administrator shall
be taken at a meeting of the Administrator by a majority vote or by unanimous
written consent without a meeting. Action on purely administrative matters may
be taken by any member designated by a majority of the entire Administrator to
act upon such administrative matter. However, no member of the Administrator who
is a Participant shall vote or act on any question concerning only his or her
rights or his or her beneficiaries' rights under the Plan.
7.3 POWERS AND RESPONSIBILITIES. The Administrator shall have the following
powers and responsibilities:
(a) Under advice of counsel, who may be counsel to the Employer
or counsel of its own selection, construing the Plan, and remedying any
ambiguities, inconsistencies or omissions.
(b) Determining all questions relative to the eligibility of
employees to be Participants and the benefits of Participants or beneficiaries.
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(c) Establishing reasonable rules for the administration of the
Plan.
(d) Maintaining appropriate records relating to Participants and
their beneficiaries.
(e) Designating to the Trustee the investment vehicles to be
established under Section 8.3 and the portion of each Participant's Plan Account
to be invested in each such vehicle.
(f) Preparing and filing such reports and returns with respect to
the Plan as are required by law.
(g) Allocating income, gains and losses among Plan Accounts as
provided in Article IV above.
(h) Performing other duties necessary for the administration of
this Plan which appear to the Administrator to be necessary or appropriate in
order properly to administer and operate the Plan.
The Administrator shall discharge its duties for the exclusive
purpose of providing benefits hereunder and defraying the reasonable expenses of
operating the Plan and with the skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims.
In carrying out its duties herein, the Administrator shall have
discretionary authority to exercise all powers and to make all determinations,
consistent with the terms of the Plan, in all matters entrusted to it, and its
determinations shall be given deference and shall be final and binding on all
interested parties.
7.4 CERTIFICATIONS AND INVESTIGATIONS.
(a) Whenever in the administration of the Plan a certification by
the Employer is required to be given to the Administrator, or if the
Administrator shall deem it necessary that a matter be proved by certification
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of the Employer prior to taking or omitting any action hereunder, such
certification shall be duly made, and the matter shall be deemed proved, by an
instrument delivered to the Administrator, signed in the name of the Employer by
its duly authorized representative. The Administrator shall be empowered to act,
and shall be protected in acting, upon such instrument. Further, the
Administrator shall be empowered to act, and shall be protected in acting, upon
any notice, resolution, order, offer, telegram, letter or other document
believed by the Administrator to be genuine and to have been signed by the
proper party or parties.
(b) The Administrator shall not be required to make any
investigation to determine the identity or mailing address of any person
entitled to benefits under this Plan and shall be entitled to withhold the
payment of benefits until the identity and mailing addresses of persons entitled
to benefits are certified to it by the Employer or by such person.
7.5 CLAIMS PROCEDURE. Any person claiming a benefit under the Plan (a
"Claimant") shall present the claim, in writing, to the Administrator, and the
Administrator shall respond in writing. If the claim is denied, the written
notice of denial shall state, in a manner calculated to be understood by the
Claimant:
(a) The specific reason or reasons for denial, with specific
references to the Plan provisions on which the denial is based;
(b) A description of any additional material or information
necessary for the Claimant to perfect his or her claim and an explanation of why
such material or information is necessary; and
(c) An explanation of the Plan's claims review procedure.
The written notice denying or granting the Claimant's claim shall
be provided to the Claimant within ninety (90) days after the Administrator's
receipt of the claim, unless special circumstances require an extension of time
for processing the claim. If such an extension is required, written notice of
the extension shall be furnished by the Administrator to the Claimant within the
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initial ninety (90) day period and in no event shall such an extension exceed a
period of ninety (90) days from the end of the initial ninety (90) day period.
Any extension notice shall indicate the special circumstances requiring the
extension and the date on which the Administrator expects to render a decision
on the claim. Any claim not granted or denied within the period noted above
shall be deemed to have been denied.
Any Claimant whose claim is denied, or deemed to be denied under
the preceding sentence, (or such Claimant's authorized representative) may,
within sixty (60) days after the Claimant's receipt of notice of the denial, or
after the date of the deemed denial, request a review of the denial by notice
given, in writing, to the Administrator. Upon such a request for review, the
claim shall be reviewed by the Administrator (or its designated representative)
which may, but shall not be required to, grant the Claimant a hearing. In
connection with the review, the Claimant may have representation, may examine
pertinent documents, and may submit issues and comments in writing.
The decision on review normally shall be made within sixty (60)
days of the Administrator's receipt of the request for review. If an extension
of time is required due to special circumstances, the Claimant shall be
notified, in writing, by the Administrator, and the time limit for the decision
on review shall be extended to one hundred twenty (120) days. The decision on
review shall be in writing and shall state, in a manner calculated to be
understood by the Claimant, the specific reasons for the decision and shall
include references to the relevant Plan provisions on which the decision is
based. The written decision on review shall be given to the Claimant within the
sixty (60) day (or, if applicable, the one hundred twenty (120) day) time limit
discussed above. If the decision on review is not communicated to the Claimant
within the sixty (60) day (or, if applicable, the one hundred twenty (120) day)
period discussed above, the claim shall be deemed to have been denied upon
review. All decisions on review shall be final and binding with respect to all
concerned parties.
7.6 ADVICE. The Administrator may secure specialized advice or assistance
as it deems necessary or desirable in connection with the administration and
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operation of the Plan and shall be entitled to rely conclusively upon, and shall
be fully protected in any action or omission taken by it in good faith reliance
upon, any advice or opinion so obtained.
7.7 DELEGATION. The Administrator shall have the power and authority to
delegate from time to time by written instrument all or any part of its duties,
powers or responsibilities under the Plan, both ministerial and discretionary,
as it deems appropriate, to any person, and in the same manner to revoke any
such delegation of duties, powers or responsibilities. Any action of such person
in the exercise of duties, powers or responsibilities delegated to such person
shall have the same force and effect for all purposes hereunder as if such
action had been taken by the Administrator. Further, the Administrator may
authorize one or more persons to execute any certificate or document on behalf
of the Administrator, in which event any person notified by the Administrator of
such authorization shall be entitled to accept and conclusively rely upon any
such certificate or document executed by such person as representing action by
the Administrator until such third person shall have been notified of the
revocation of such authority. Except to the extent required by ERISA, the
Administrator shall not be liable for any act or omission of any person to whom
the Administrator's duties, powers or responsibilities have been delegated, nor
shall any person to whom any duties, powers or responsibilities have been
delegated have any liabilities with respect to any duties, powers or
responsibilities not delegated to such person, except to the extent required by
ERISA.
7.8 LIABILITY; INDEMNIFICATION. Except to the extent required by ERISA, no
member of the Administrator shall incur any liability: (i) by virtue of any
contract, agreement, bond or other instrument made or executed by the member or
on the member's behalf as a member of the Administrator, (ii) for any act or
failure to act, or any mistake or judgment made by the member, with respect to
the business of the Plan, unless resulting from the member's gross negligence or
willful misconduct, or (iii) for the neglect, omission or wrongdoing of any
other member of the Administrator or of any person employed or retained by the
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Administrator. The Employer shall indemnify and hold harmless each member of the
Administrator from the effects and consequences of the member's acts, omissions
and conduct with respect to the Plan, except to the extent that such effects and
consequences shall result from the member's own willful misconduct or gross
negligence. The foregoing right to indemnification shall be in addition to such
other rights as Administrator may enjoy as a 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 Administrator may
be entitled pursuant to the by-laws of the Employer, and, if a Administrator is
an Employee, service as a Administrator shall be deemed in partial fulfillment
of the member's employment function. In all computations, the Administrator
shall be entitled to rely fully upon data furnished by the Employer and upon
information furnished it by or on behalf of an Employee or Employees.
7.9 INSURANCE. The Plan may purchase, as an expense of the Plan, liability
insurance for the Plan and/or for its fiduciaries to cover liability or losses
occurring by reason of an act or omission by a fiduciary. In addition, any
fiduciary may purchase, from and for the fiduciary's own account, insurance to
protect the fiduciary in the event of a breach of fiduciary duty, and the
Employer may also purchase insurance to cover the potential liability of one or
more persons who serve in a fiduciary capacity with regard to the Plan.
7.10 BONDING. The Administrator shall arrange for such bonding as is
required by law. Bonding in excess of the amount required by law shall not be
considered required, but shall be permitted, by this Plan. The costs for such
bonding shall be paid by the Employer or, if the Employer elects, from the
Trust.
7.11 COMPENSATION. The Administrator shall serve without compensation, but
all expenses of the Administrator incurred in the performance of duties
hereunder shall be proper charges to the Trust and shall be paid therefrom
unless the Employer, in its discretion, chooses to pay such expenses.
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ARTICLE VIII
TRUST AND TRUSTEE
8.1 TRUST FUND. The Trust Fund shall consist of all contributions made by
the Employer under Article IV or transferred to the Trust Fund as provided
herein, and the investments and reinvestments thereof and the income thereon
which shall be accumulated and added to principal.
8.2 TRUSTEE CONTROL. The Trustee shall hold and invest the funds and assets
received by the Trustee under this Plan subject to the terms of this Plan and
for the purposes herein set forth. The Trustee shall be responsible only for
such funds and assets as shall actually be received by the Trustee as Trustee
hereunder. So long as a Trustee is acting, title to any of the assets of the
Trust Fund may be held or registered in the name of a nominee of the Trustee for
ease of dealing with the same, provided that the books of the Trust reflect
actual ownership. The Trustee shall be liable for the acts of its nominees. The
assets so held or registered shall at all times remain in the possession or
under the control of the Trustee.
8.3 INVESTMENT FUNDS.
(a) In General. The Trustee shall establish such investment funds as
the Administrator shall direct, and shall divide the trust among investment
funds in accordance with the investment directions of Participants made as
provided in this Plan; provided, however, that prior to January 1, 1995,
Employer contributions will be invested as set forth in Article IV and will not
be subject to Participants' investment directions. Investment funds shall be
established either by direct investment or through the medium of a bank, and
trust fund, an insurance contract or regulated investment company mutual fund,
as the Administrator shall direct. Each investment fund (a) shall be held and
administered as part of the Trust, but (b) shall be separately invested and
accounted for.
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The assets of the Trust invested in each of the funds shall be
separately valued at fair market value as of the appropriate Valuation Date.
The Administrator shall direct the Trustee to establish no less than
three (3) internally diversified investment funds having materially different
risk and return characteristics.
(b) Company Stock Fund. Effective January 1, 1995, the Trustee shall
establish a Company Stock Fund as an investment alternative under the Plan, and
all shares of Company Stock or cash allocated to Participants' Accounts pursuant
to Sections 4.2(b) and 4.3(b) shall be transferred to the Company Stock Fund on
that date. Participants may direct transactions in Company Stock through the
Company Stock Fund in accordance with Section 4.13. Such transactions shall be
conducted on the open market to the extent that they may not be effected through
intrafund transfers.
Dividends payable on Company Stock allocated to the Company Stock Fund
shall be used to purchase additional Shares of Company Stock, which shall be
allocated among the Accounts of Participants in the Company Stock Fund.
Contributions to the Company Stock Fund and dividends on Company Stock shall
temporarily be invested in a money market fund designated by the Employer (which
may be a money market fund of the Employer) pending the Trustee's investment of
such amounts in Company Stock.
The Employer shall appoint an independent agent (within the meaning of
Rule 10(b)-18(a)(6) of the Securities Exchange Act of 1934) to conduct market
transactions in shares of Company Stock. As soon as practical after receiving
contributions for a payroll period pursuant to Article IV, the Trustee shall (i)
determine, based on available Participant investment and distribution
instructions, the net amount of cash that is available under the Company Stock
Fund for the purchase of shares of Company Stock or the net number of shares of
Company Stock that must be sold in order to implement Participants' investment
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and distribution instructions, and (ii) direct the independent agent to execute
promptly and with the best execution available such market transactions as are
necessary to implement Participants investment and distribution instructions.
The proceeds of market transactions in Company Stock shall be
allocated to Participants' Accounts as of the date of the market transaction
based on the purchase or sale price. The proceeds of transfers of shares
effected by netting Participants' purchase and sale orders shall be allocated to
Participants' accounts as of the transfer date based upon the Company Stock's
Fair Market Value on such date.
8.4 TRUSTEE APPOINTMENT AND RESIGNATION; REMOVAL AND SUCCESSION OF
TRUSTEES.
(a) Appointment of Trustee. The Trustee shall be appointed by the Plan
Sponsor.
(b) Resignation or Removal of Trustee. The Trustee may resign at any
time by filing the Trustee's resignation, in writing, with the Plan Sponsor. The
Plan Sponsor shall have the power to remove the Trustee at any time, with or
without cause, and to appoint a successor Trustee. Upon resignation or removal,
the Trustee shall render an accounting of its administration since the last
annual accounting and shall transfer and deliver the assets in hand under this
Plan to any remaining or successor Trustee. Any successor Trustee shall have all
the same titles, rights, powers, authorities, discretions and immunities as the
original Trustee hereunder.
8.5 PRUDENT PERSON RULE. The Trustee shall discharge its duties under this
Plan solely in the interest of Participants and their beneficiaries and: (i) for
the exclusive purpose of providing benefits to such Participants and
beneficiaries and paying reasonable expenses of administering the Plan; (ii)
with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of like character and
with like aims; (iii) by diversifying the investments of the Plan so as to
minimize the risk of large losses, unless under the circumstances it is clearly
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prudent not to do so; and (iv) in accordance with the provisions of this Plan
insofar as they are consistent with the provisions of ERISA.
8.6 LIABILITY; EXPENSES; COMPENSATION. The Trustee shall not be liable for
any losses which may be incurred upon the investments of the Trust Fund except
to the extent that any losses to the Trust Fund shall have been caused by its
bad faith, negligence or willful misconduct or by a breach of its fiduciary
duties under ERISA.
The Employer agrees to pay all expenses properly and actually incurred
by the Trustee in the administration or termination of the Trust Fund, including
compensation for the Trustee's services as Trustee and legal expenses, provided
that, if the Trustee already receives full time pay from the Employer, the
Trustee may not receive such compensation. Should the Employer for any reason
fail to pay such expenses, the same shall be paid out of the Trust Fund. The
Trustee shall receive for the services rendered as Trustee hereunder such
reasonable compensation as the Plan Sponsor and the Trustee may from time to
time agree upon, unless the Trustee receives full time pay from the Employer.
8.7 MANAGEMENT OF ASSETS.
(a) Powers of the Trustee or Investment Manager. The Trustee who is
managing and administering the Trust Fund or, if applicable, the Investment
Manager (as defined in section 3(38) of ERISA) which has been appointed by the
Employer to manage the Plan's assets, shall be and hereby is empowered and
authorized, in its sole discretion and subject to current rules and regulations
at the time the investment is made and subject to the provisions of the Plan
with respect to Company Stock, Participant direction (and voting) of
investments, if applicable, and to subsections (b) and (c) of this Section:
(1) To invest and reinvest contributions and any accretions
thereto, whether capital gains or income or both, and the proceeds of any sale,
pledge, lease or other disposition of any assets of the Trust Fund in bonds,
notes, mortgages, commercial paper, coins, stamps, foreign bonds, antiques,
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broodmares, gold, art, silver, diamonds, second trusts, option securities, in
any other type of personal property and in real property; provided, however,
that no individually-directed account may be invested in collectibles as
described in Code section 408(m). Notwithstanding any other provision of this
Plan, any person having investment authority with regard to the Trust Fund is
hereby authorized to direct the investment of any part or all of the assets of
the trust in any common, collective, or group trust ("Common Trust"), including
but not limited to any Common Trust which has been qualified under Code section
401(a) and is exempt from taxation under Code section 501(a) now or hereafter
maintained by a bank or trust company which is a fiduciary with respect to the
Plan or trust, as any such Common Trust may have heretofore been or may
hereafter be amended, to be held subject to all the provisions thereof and to be
commingled with the assets of other trusts participating therein; provided,
however, that any investment and retention of an interest therein shall be such
as will not adversely affect in any manner the qualified or exempt status of the
Plan and trust under Code section 401(a) and Code section 501(a). To the extent
of the equitable share of the trust in a Common Trust which is qualified under
Code section 401(a), the Common Trust shall be a part of the Plan and of the
trust, and all of the terms and conditions of the instrument creating the Common
Trust shall be deemed to be incorporated by reference herein. The power herein
conferred is intended to and shall override any provision of this Plan to the
contrary (including, but not limited to, any investment limitations contained in
or imposed by this Plan).
(2) Except as provided in Section 8.7(c), to vote any and all
stock held hereunder and to continue any investment in stocks, bonds, real
estate notes or other securities, or real or personal property, which may at any
time form a part of the Trust Fund; provided, however, that the Trustee shall
vote stock of the Employer only upon the instructions of the Administrator or
the Participants, except as otherwise required under ERISA.
(3) To invest, reinvest and change investments; to sell,
mortgage, pledge, lease, assign, transfer and convey any and all of the Trust
Fund property for cash or on credit, at public or private sale; to exchange any
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Trust Fund property for other property; to grant options to purchase or acquire
any Trust Fund property; to determine the prices and terms of sales, exchanges
or options; and to execute, acknowledge and deliver any and all deeds or other
trust instruments of conveyance which may be required to carry the foregoing
powers into effect, without obligation on the part of the purchaser, lessee,
lender, assignee or transferee, or anyone to whom the property may in any way be
conveyed to see to the application of the purchase money loans or property
exchanged, transferred, assigned or conveyed.
(4) To allow cash in the Trustee's hands to remain uninvested and
on deposit in the commercial or savings department of any bank or trust company
supervised by the United States or a State or agency of either, even if it is a
fiduciary or party-in-interest, at any time and from time to time in a
reasonable amount; and, as to such amount on deposit, the Trustee shall have no
liability for interest thereon, except for such interest as may be paid on such
deposit.
(5) To exercise with respect to all investments all of the
rights, powers and privileges of an owner including, without limiting the
foregoing, the power to give proxies and to pay calls, assessments and other
sums deemed necessary for the protection of the Trust Fund; to participate in
voting trusts, pooling agreements, foreclosures, reorganizations,
consolidations, mergers and liquidations, and in connection therewith to deposit
securities with and transfer title to any protective or other committee under
such terms as the Trustee may deem advisable; to exercise or sell stock
subscriptions or conversion rights and to accept and retain as an investment
hereunder any securities received through the exercise of any of the foregoing
powers. If the Trustee shall pay more than the par value of any security
purchased, the Trustee shall not be obligated to establish a sinking fund out of
the income of such investments for repaying to the principal the same amount
paid above par.
(6) To take any action with respect to conserving or realizing
upon the value of any Trust Fund property and with respect to foreclosures,
reorganizations, or other changes affecting the Trust Fund property; to collect,
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pay, contest, compromise, or abandon demands of or against the Trust Fund
estate, wherever situated; and to execute contracts, notes, conveyances and
other instruments, including instruments containing covenants and warranties
binding upon and creating a charge against the Trust Fund estate, and containing
provisions excluding personal liability.
(7) To employ agents, including investment counsel, for advice
and to manage the investment of the Trust Fund property, to employ attorneys,
auditors, depositories and proxies, with or without discretionary powers and all
such parties shall have the right to rely upon and execute the written
instructions of the Trustee, and shall not be obligated to inquire into the
propriety of the acts of directions of the Trustee, other than is required under
ERISA.
(8) To compromise any claims existing in favor of or made against
the Trust Fund.
(9) To engage in any litigation, either for the collection of
monies or for other properties due the Trust Fund, provided in defense of any
claim against the Trust Fund; provided, however, that the Trustee shall not be
required to engage in or participate in any litigation unless the Trustee shall
have been indemnified to its satisfaction against all expenses and liabilities
to which the Trustee may become subject.
(10) To invest and reinvest up to one hundred percent (100%) of
the Trust Fund in qualifying Employer securities, as defined in section
407(d)(1) of ERISA. Such investment must be for the exclusive benefit of
employees and must meet the requirements of Code section 401(a) and all aspects
thereof as to the common law prudence standard (except as to the diversification
requirement).
(b) Investment Manager. Notwithstanding the foregoing, the Plan
Sponsor reserves the right to appoint an investment adviser registered as such
under the Investment Advisers Act of 1940, a bank (as defined in that Act) or an
insurance company qualified to perform investment management services under the
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laws of more than one state to manage the investments of all or any part of the
Trust Fund. Upon such appointment, and acknowledgment by the appointee that it
is a fiduciary as defined in ERISA, the appointee shall have all rights to
manage the investments of that portion of the Trust Fund over which authority
has been granted. The Trustee shall be relieved of all further responsibility in
respect thereof and shall abide by the instructions of such appointee.
(c) Participant Voting of Company Stock. Notwithstanding any other
provision of this Plan to the contrary, the provisions of this subsection (c)
shall govern the voting and tendering of Company Stock during periods of time in
which (i) the trust holds more than 10% of the Employer's stock or (ii) the
Administrator elects to operate the Company Stock Fund in accordance with ERISA
Section 404(c). The Trustee shall vote, itself or by proxy, all shares of stock
held in trust under the Plan as follows:
(i) The Trustee shall forward to each Participant all quarterly,
annual and other reports generally distributed to stockholders. In addition, the
Trustee shall adopt reasonable measures to notify Participants of the date and
purpose of each meeting of stockholders where holders of shares of stock shall
be entitled to vote, to furnish each Participant a copy of the proxy statement
with respect to such meeting and to request instructions from each Participant
regarding the voting at such meeting of the whole shares held by the Trustee
attributable to the vested and nonvested interest of such Participant in the
stock. The Administrator, with respect to Company Stock, may direct that each
Participant's voting instructions be tabulated by an independent fiduciary on a
confidential basis, which independent fiduciary will direct the Trustee as to
the number of shares held by Participants instructing a vote for the particular
matter to be acted upon and the Trustee shall vote in accordance with such
instructions. In addition, the Administrator may designate an independent
fiduciary to carry out, on a confidential basis, all other activities relating
to the purchase, sale and exercise of voting and similar rights with respect to
the Employer stock.
(ii) The Trustee shall vote any unvoted shares held in trust
under the Plan pro rata, in the same manner in which shares were voted by
Participants.
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(d) Tender or Exchange Offers. As soon as practicable after the
commencement of a tender offer or exchange offer ("Offer") for shares of stock,
the Trustee shall use its reasonable best efforts to cause each Participant to
be advised in writing of the terms of the Offer, together with forms by which
the Participant may instruct the Trustee, or revoke such instruction, whether or
not to tender whole shares held by the Trustee attributable to the vested or
unvested interest of such Participant in the Trust to the extent permitted under
the terms of any such Offer. The Trustee shall follow the directions of each
Participant, but the Trustee shall not tender shares for which no instructions
are received unless the Trustee determines that it must do so to meet its
fiduciary obligations under ERISA. In advising Participants of the terms of the
Offer, the Trust may include statements from the management of the Employer
setting forth its position with respect to the Offer. The giving of instructions
to the Trustee whether or not to tender shares and the tender thereof shall not
be deemed a withdrawal or suspension from the Plan or a forfeiture of any
portion of the Participant's interest in the Plan. The number of shares for
which each Participant may provide instructions shall be the total number of
whole shares held by the Trustee attributable to the vested and unvested
interest of such Participant in the stock held in trust under the Plan as of the
close of business on the day preceding the date on which the Offer commences or
such earlier date which shall be designated by the Trustee which the Trustee, in
its sole discretion, deems appropriate for reasons of administrative
convenience. Any securities received by the Trustee as a result of a tender of
shares hereunder shall be held, and any cash so received shall be invested by
the Trustee, for the account of each Participant with respect to whom shares
were tendered, as the Trustee may deem appropriate, consistent with the purposes
of the Plan.
8.8 RELIANCE BY TRUSTEE. The Trustee may rely on any decision of the
Administrator purporting to be made pursuant to the terms of this Plan and on
any list or notice furnished by the Employer or the Administrator as to any
facts, the occurrence of any events or the existence of any situation, and shall
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not be bound to inquire as to the basis of any such decision, list or notice,
and shall incur no obligation or liability for any action taken or suffered to
be taken by them in reliance thereon.
8.9 CHANGES IN ADMINISTRATOR. The Trustee shall not be bound to inquire as
to changes in the Administrator and shall be entitled to rely on such
information as it may receive from time to time from the Employer with respect
to such membership.
8.10 LEGAL COUNSEL. The Trustee may consult with legal counsel (who may or
may not be counsel for the Employer) concerning any question which may arise
with reference to its duties under this Plan, and the Trustee may rely in good
faith upon the opinion of such counsel.
8.11 ACCOUNTING OF FUNDS AND TRANSACTIONS.
(a) The Trustee shall keep true and accurate records of all
transactions of the Trust Fund which records shall be available for inspection
on order by authorized representatives of the Employer or by Participants at
reasonable times.
Although a separate Account for each Participant under the Plan
shall be maintained as herein provided, it shall not be necessary for the
Trustee to make or maintain an actual physical division of the assets of the
Trust Fund until the time shall arrive for the payment to a Participant or a
beneficiary or beneficiaries of a Participant, and, at such time or times, the
Trustee need only make an actual division of so much of any Account as may be
necessary to satisfy the particular payments to be made.
(b) On the last day of the Plan Year, or more often as directed by the
Employer, the Trustee shall prepare and deliver to the Employer an accounting of
the funds and transactions since the last previous such accounting of the Trust
Fund. In the absence of the filing in writing with the Trustee by the Employer
of exceptions or objections to such accounting within one hundred twenty (120)
days after the delivery of such accounting to the Employer, the Employer shall
be deemed to have approved such accounting, and in such a case or upon the
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written approval by the Employer of such an accounting, the Trustee shall be
released, relieved and discharged with respect to all matters and things
disclosed in such accounting as though such accounting had been settled by
decree of a court of competent jurisdiction.
8.12 RELIANCE ON TRUSTEE. No person contracting or in any way dealing with
the Trustee shall be under any obligation to ascertain or inquire: (i) into any
powers of the Trustee, (ii) whether such powers have been properly exercised, or
(iii) about the sources or applications of any funds received from or paid to
the Trustee. Any person contracting or in any way dealing with the Trustee may
rely on the exercise of any power or authority as the conclusive evidence that
the Trustee possesses such power or authority.
8.13 LEGAL ACTION. In the case of any suit or proceeding regarding this
Plan to which the Trustee is a party, the Trustee shall be reasonably reimbursed
for any and all costs, including attorney's fees, and for all necessary expenses
which it has incurred or become liable on account thereof or on account of any
other phase of its administration of the Trust Fund, and it shall be entitled to
reimburse itself for said expenses out of the Trust Fund. In order to protect
the Trust Fund against depletion as the result of ill-advised litigation, it is
agreed that in the event any Participant, beneficiary or Employee brings any
legal action against the Trustee, the result of which shall be adverse to the
party bringing such suit, the court costs and attorney's fees to the Trustee in
defending such suit shall be charged to such extent as is allowed by a court of
competent jurisdiction, and as is possible, directly to the account of said
Participant, beneficiary or Employee, and only the excess, if any, of such costs
and fees over and above the Participant's separate share of the fund shall be
included in the expense in determining the earnings or loss to the Trust Fund.
ARTICLE IX
AMENDMENT
9.1 AMENDMENT. Except as herein limited, the Employer shall have the right
to amend this Plan at any time to any extent that it may deem advisable. In
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addition, the Administrator at all times shall have the authority to make any
amendment to the Plan required by law. Any amendment of the Plan shall be set
forth in an instrument in writing. All Participants, all Employers, the
Administrator and the Trustee shall be bound by any amendment to this Plan
except that:
(a) No amendment shall increase the duties or liabilities of the
Administrator or the Trustee without the consent of such party;
(b) No amendment shall have the effect of vesting in the Employer any
interest in or control over any of the assets held by the Trustee pursuant to
this Plan; and
(c) No amendment shall have any retroactive effect so as to deprive
any Participant or beneficiary of any benefit already accrued, except that no
amendment made in order that the Plan shall qualify or continue to qualify under
Code sections 401(a), 401(k) or 401(m), or in order that the Plan shall qualify
or continue to qualify under any other statute relating to employees' trusts, or
any official regulations or rulings issued pursuant thereto, shall be considered
prejudicial to the rights of any Participant or beneficiary, and any such
amendment specifically shall be permitted.
ARTICLE X
TERMINATION
10.1 RIGHT TO TERMINATE. It is expected that this Plan and the payment of
contributions hereunder will continue indefinitely, but the continuance of this
Plan is not assumed as a contractual obligation of any Employer. The Employer
shall have the right at any time, and without the consent of any party, to
terminate this Plan in its entirety.
10.2 EFFECT OF TERMINATION. Upon a termination of this Plan, upon a partial
termination of the Plan as determined under applicable rules and regulations of
the Internal Revenue Service or upon a complete discontinuance of contributions
to the Plan, the Plan Account of each Participant with respect to whom the Plan
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is being terminated (including any Participant who has not received a complete
distribution of his or her vested Plan Account and has not incurred, as of the
date of the termination, at least five (5) Breaks in Service) or with respect to
whom contributions are being discontinued shall become fully vested. Upon such
termination or partial termination, the Administrator shall instruct the Trustee
to transfer to each Participant or retired Participant (or his or her
beneficiaries) with respect to whom the Plan is being terminated, by suitable
instrument of transfer and delivery thereof, all assets held by the Trustee for
such Participant or retired Participant (or his or her beneficiaries). If,
however, the Employer or any entity within a controlled group (determined under
the Code) with the Employer maintains another defined contribution plan other
than an employee stock ownership plan (as defined by Code section 4975(e)(7)),
the Plan Accounts of all Participants will be determined and transferred to such
other defined contribution plan, unless the Participant consents to an immediate
distribution from the Plan.
10.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS OF THE EMPLOYER. In the
event of merger or consolidation of the Employer, or transfer of all or
substantially all of its assets to any corporation or other business, provisions
may be made by any successor organization for the continuance of this Plan, and
said successor shall in such event be substituted in place of the Employer by an
appropriate instrument confirming such substitution and adopting this Plan.
Notice of such substitution delivered to the Trustee shall be authority to the
Trustee to recognize such successor in place of the Employer. The continuation
of this Plan shall be by a separate plan and trust, to which the Trustee shall
transfer the Plan Accounts of Employees of that Employer as provided in Section
14.8.
10.4 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS OF THE PLAN. In the event
of the merger, consolidation or transfer of the assets of the Plan with any
other pension or profit sharing plan, such action shall be on terms providing
that each Participant in this Plan would (if the transferee plan then
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terminated) receive a benefit immediately after the merger, consolidation or
transfer which is not less than the benefit the Participant would have been
entitled to receive immediately before such action (if the Plan had then
terminated).
ARTICLE XI
PROVISIONS TO PREVENT DISCRIMINATION
11.1 NO CODE SECTION 401(a) DISCRIMINATION. No contributions made to the
Trust Fund by the Employer, nor benefits received from the Trust Fund by the
Participants or their beneficiaries, shall be discriminatory within the meaning
of Code section 401. 11.2 UNIFORM TREATMENT. This Plan shall be administered and
construed in a uniform and non-discriminatory manner, treating similarly
situated Participants alike.
ARTICLE XII
IN-SERVICE WITHDRAWALS FROM PLAN ACCOUNTS
12.1 HARDSHIP WITHDRAWALS. No amounts may be withdrawn from a Participant's
Plan Account prior to the Participant's retirement, death, disability,
termination of service with the Employer, or attainment of age fifty-nine and
one-half (59-1/2), except in the case of financial hardship. A Participant may
withdraw all or part of his or her Plan Account attributable to salary reduction
contributions (exclusive of earnings attributable thereto), in amounts of at
least five hundred dollars ($500.00), if the Participant is suffering an
immediate and heavy financial hardship. A hardship withdrawal may not exceed the
amount which is necessary to alleviate the Participant's financial hardship. The
determination of the existence of an immediate and heavy financial hardship and
of the amount necessary to alleviate the financial hardship shall be made in
accordance with the standards set forth below.
A distribution will be deemed to be made on account of an immediate and
heavy financial hardship of the Participant if the distribution is on account of
(1) medical expenses described in Code section 213(d) previously incurred by the
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Participant, the Participant's spouse, or any dependents of the Participant (as
defined in Code section 152) or necessary for these persons to obtain medical
care described in Code section 213(d); (2) costs directly related to the
purchase of a principal residence for the Participant (excluding mortgage
payments); (3) the payment of tuition and related educational fees for the next
twelve (12) months of post-secondary education for the Participant, or for the
Participant's spouse, children, or dependents (as defined in Code section 152);
(4) payments necessary to prevent the eviction of the Participant from his or
her principal residence or foreclosure on the mortgage of the Participant's
principal residence; (5) any other event which is deemed an immediate and heavy
financial hardship by the Secretary of Treasury; or (6) any federal, state or
local income taxes or penalties reasonably anticipated to result from the
hardship distribution.
A distribution will be deemed to be necessary to alleviate the
Participant's immediate and heavy financial hardship if the following
requirements are satisfied: (1) the distribution is not in excess of the amount
of the immediate and heavy financial hardship of the Participant; and (2) the
Participant has obtained all distributions, other than hardship distributions,
and all non-taxable (at the time of the loan) loans currently available under
the Plan, and all other plans maintained by the Employer.
A Participant who receives a hardship distribution may not make salary
reduction contributions to the Plan (or to any other qualified or non-qualified
plans of deferred compensation (including stock option, stock purchase and
similar plans, and any cash or deferred arrangement that is part of a cafeteria
plan under Code section 125) maintained by the Employer, other than the
mandatory employee contribution to a defined benefit plan and other than health
or welfare plans) for the twelve (12) month period beginning on the date of
receipt of the hardship distribution, and the aggregate of salary reduction
contributions made by the Participant for the calendar year of the hardship
distribution and the calendar year immediately following the year of
distribution cannot exceed the dollar limitation in Code section 402(g).
Notwithstanding any other provision of the Plan, if a Participant is suspended
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from making salary reduction contributions for a period of twelve (12) months
because of a hardship withdrawal, such Participant may resume making salary
reduction contributions immediately following such twelve (12) month period.
12.2 WITHDRAWALS AFTER AGE FIFTY-NINE AND ONE-HALF (59-1/2). A Participant
who has attained age fifty-nine and one-half (59-1/2) may, while the Participant
is employed, withdraw all of the Participant's vested interest in the
Participant's Plan Account, or any part the Participant's Plan Account, in
amounts of at least five hundred dollars ($500), subject, however, to such
uniform rules as to required notice, frequency of withdrawals, and the like as
the Administrator may establish.
12.3 WITHDRAWALS FROM ROLLOVER CONTRIBUTION ACCOUNTS A Participant may, at
any time, withdraw all the Participant's Rollover Contribution Account, or any
portion of such Account in amounts of at least five hundred dollars ($500),
subject, however, to such uniform rules as to required notice, frequency of
withdrawals, and the like as the Administrator may establish.
ARTICLE XIII
TOP HEAVY PROVISIONS
13.1 TOP HEAVY REQUIREMENTS. Notwithstanding anything contained herein to
the contrary, if the Plan is a Top Heavy Plan for any Plan Year, then the Plan
shall meet the following requirements for such Plan Year:
(a) Minimum Vesting Requirements. A Participant will have a fully
vested interest in his or her Plan Account upon completion of three (3) Years of
Service for vesting purposes. If the Plan is found to be a Top Heavy Plan and
subsequently ceases to be a Top Heavy Plan, then the vested interest of a
Participant with fewer than three (3) Years of Service for vesting purposes on
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the date on which the Plan ceases to be a Top Heavy Plan in amounts allocated to
his or her Plan Account after the Plan ceases to be a Top Heavy Plan shall be
determined without regard to the preceding sentence.
(b) Minimum Contribution Requirement. This Plan will provide a minimum
contribution allocation for such Plan Year for each Participant who is a Non-Key
Employee in an amount equal to at least three percent (3%) of such Participant's
Compensation (as defined in Section 4.5(a)) for such Plan Year. The three
percent (3%) minimum contribution allocation requirement shall be increased to
four percent (4%) for any year in which the Employer also maintains a defined
benefit pension plan if such increase is necessary to avoid the application of
Code section 416(h)(1), relating to special adjustments to Code section 415
limits for Top Heavy Plans, and if the adjusted limitations of Code Section
416(h)(1) would otherwise be exceeded if such minimum contribution allocation
were not so increased.
The minimum contribution allocation requirements set forth
hereinaboveshall be reduced in the following circumstances:
(1) The percentage minimum contribution allocation required hereunder
shall in no event exceed the percentage contribution allocation made for the Key
Employee for whom such percentage is the highest for the Plan Year, after taking
into account contribution allocations and benefits under other qualified plans
in this Plan's aggregation group as provided in Code section 416(c)(2)(B)(ii);
and
(2) No minimum contribution will be required (or the minimum
contribution will be reduced, as the case may be) for a Participant under this
Plan for any Plan Year if the Participant's Employer maintains another qualified
plan under which a minimum benefit or contribution is being funded or made for
such year for the Participant in accordance with Code section 416(c).
(c) Additional Super Top Heavy Requirement. If the Plan is a Super
Top Heavy Plan for any Plan Year, the limitations on annual additions contained
in Article IV shall be adjusted pursuant to Code section 416(h).
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13.2 TOP HEAVY PLAN DEFINITIONS. For purposes of this Article, the
following terms shall have the meanings provided below:
(a) A plan is a "Top Heavy Plan" if, as of the Determination Date, the
aggregate of the accounts of Key Employees under a defined contribution plan
exceeds sixty percent (60%) of the aggregate of the accounts of all employees
under such plan or, in the case of a defined benefit plan, the present value of
the cumulative accrued benefits under the plan for Key Employees exceeds sixty
percent (60%) of the present value of the cumulative accrued benefits under the
plan for all employees, all as adjusted by and determined in accordance with the
provisions of Code section 416(g). The determination of whether a plan is Top
Heavy shall be made after aggregating each Plan of the sponsoring Employer in
which at least one Key Employee participates and each other plan of the
sponsoring Employer which enables any plan in which at least one Key Employee
participates to meet the requirements of Code sections 401(a)(4) or 410, and
after aggregating any plan not required to be aggregated by the foregoing if
such aggregated group of plans, taking such plan into account, continues to meet
the requirements of Code sections 401(a)(4) and 410. A plan is a "Super Top
Heavy Plan" if, as of the Determination Date, the plan would meet the test
specified above for being a Top Heavy Plan if ninety percent (90%) were
substituted for sixty percent (60%) in each place it appears in this subsection
(a).
(b) The "Determination Date" for purposes of determining whether a plan is
Top Heavy for a particular plan year is the last day of the preceding plan year
(or, in the case of the first plan year of a plan, the last day of the first
plan year).
(c) A "Key Employee" is any employee or former employee (including a
beneficiary of such employee or former employee) who at any time during the plan
year or any of the four (4) preceding plan years is:
(1) An officer of the plan sponsor or any corporation required to be
aggregated with the plan sponsor under Code sections 414(b), (c), (m) or
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(o) who has annual compensation (as defined below) from the plan sponsor or any
corporation required to be aggregated with the plan sponsor under Code sections
414(b), (c), (m) or (o) of more than fifty percent (50%) of the amount in
effect under Code section 415(b)(1)(A) for the plan year (but in no event
shall the number of officers taken into account as Key Employees exceed the
lesser of (i) fifty (50) or, (ii) the greater of three (3) or ten percent
(10%) of all employees).
(2) One (1)of the ten (10) Employees owning (or considered as owning
within the meaning of Code section 318) both more than a one-half percent (1/2%)
ownership interest and the largest percentage ownership interests in the
Employer, and (ii) as annual compensation (as defined below) of more than the
amount in effect under Code section 415(c)(1)(A). For purposes of this Section,
if two (2) Employees have the same interests in the Employer, the Employee
having greater annual compensation (as defined below) from the Employer shall be
treated as having a larger interest;
(3) A person owning (or considered as owning within the meaning of
Code section 318) more than five percent (5%) of the outstanding stock of the
plan sponsor or stock possessing more than five percent(5%)of the total combined
voting power of all stock of the plan sponsor; or
(4) A person who has an annual compensation (as defined below) from
the plan sponsor (or any corporation required to be aggregated with the plan
sponsor under Code sections 414(b),(c), (m) or (o)) of more than one hundred
fifty thousand dollars ($150,000) and who would be described in subparagraph
(3)hereof if one percent (1%) were substituted for five percent (5%).
For purposes of applying Code section 318 to the provisions of this
subsection (c), subparagraph (C) of Code section 318(a)(2) shall be applied
by substituting five percent(5%) for fifty percent (50%). In addition, the rules
of subsections (b), (c) and (m) of Code section 414 shall not apply for purposes
of determining ownership of the plan sponsor under this subsection (c).
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For purposes of determining whether an Employee is a Key Employee,
annual compensation means compensation as defined in Code section 415(c)(3),
but including amounts contributed by the Employer pursuant to a salary
reduction agreement which are excludable from the Employee's gross income
under Code sections 125, 402(a)(8), 402(h) or 403(b).
(d) A "Non-Key Employee" is any participant in a plan (including a
beneficiary of such participant) who is not a Key Employee.
ARTICLE XIV
LOANS TO PARTICIPANTS
14.1 LOAN ADMINISTRATION. The Administrator is authorized to establish
and administer a loan program as provided herein.
Parties in interest (as defined in ERISA section 3(14), who are
Participants, or who are beneficiaries who have become entitled to receive a
benefit under the Plan, may make written application to the Administrator for a
loan. The Administrator shall review the loan application and approve or deny
the application in writing, in accordance with the uniform and nondiscriminatory
loan policy set forth in this Article. Any such loan shall be made from the
assets of, and shall be charged against, the borrower's Plan Account. Any such
loan shall be charged against the sub-accounts of the borrower's Plan Account in
the following order:
(i) Salary Reduction Account;
(ii) Employer Contribution Account;
(iii) Employer Voluntary Contribution Account;
(iv) Qualified Matching Contribution Accounts; and
(v) Qualified Nonelective Contribution Account.
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14.2 FREQUENCY, NUMBER. Until a loan from the Plan to a borrower,
including any interest due, is completely repaid, such borrower shall not be
permitted to borrow additional amounts from the Plan.
14.3 AMOUNT, AVAILABILITY. The minimum amount which a borrower may borrow
at any one time from the Plan, exclusive of interest, is one thousand dollars
($1,000). The maximum amount which a borrower may borrow from the Plan, when
added to the outstanding balance of all other loans from the Plan and from any
other qualified plans maintained by the Employer and any entity required to be
aggregated with the Employer pursuant to Code section 72(p), exclusive of
interest, shall not exceed the lesser of: (i) fifty thousand dollars ($50,000),
reduced by the excess (if any) of the highest outstanding balance of loans from
the Plan to the borrower during the one (1) year period ending on the day before
the date on which such loan was made, over the outstanding balance of loans from
the Plan to the borrower on the date on which such loan was made; or (ii) fifty
percent (50%) of the borrower's vested Plan Account, determined as of the
origination date of the loan in the same manner as provided in Section 14.6. A
borrower's vested interest in the Plan shall be determined in accordance with
Code section 72(p)(2)(A). In addition, the Administrator shall approve a loan
made pursuant to this Article only if the Administrator determines, in the
Administrator's sole and absolute discretion, that the amount of such loan is
reasonable based on factors that are legally considered by commercial entities
in the business of making similar loans. In no event shall a loan be made which
would be taxed under Code section 72(p) as a distribution from the Plan.
14.4 NON-DISCRIMINATION. Loans shall be available on a reasonably
equivalent basis, without regard to an individual's race, color, religion, age,
sex or national origin. In approving such loans, the Administrator shall not
discriminate in favor of Highly Compensated Employees as to the general
availability of loans, as to the terms of repayment, or as to the amount of such
loans in proportion to the vested portion of the borrower's Plan Account.
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Notwithstanding anything in this Plan to the contrary, all loans shall comply
with the requirements of section 408(b)(1) of ERISA.
14.5 LOAN APPROVAL. The Administrator shall approve or deny the loan
application based on the same factors which commercial lenders in the business
of making similar types of loans legally recognize for purposes of loan
availability. The Administrator may examine such factors as creditworthiness,
financial need, adequacy of security and risk of loss to the Plan in the event
of default. Based on these factors, Participants and beneficiaries other than
active employees may be offered loans on different terms and conditions due to
valid economic differences.
14.6 INTEREST RATE. Each loan shall bear a reasonable rate of interest, to
be established by the Administrator. A reasonable rate of interest means an
interest rate which is at least the rate of interest currently being charged by
commercial lenders in the area for the use of money which they lend under
similar circumstances (including creditworthiness of the borrower and the
security given for the loan). The Administrator shall not discriminate among
borrowers in the matter of interest, but loans may bear different interest rates
if, in the Administrator's opinion, the difference is justified by different
terms for repayment, the security of the collateral, or changes in economic
conditions. No loans will be granted during any period in which the reasonable
commercial interest rate for money loaned under similar circumstances exceeds
the maximum legal rate that may be charged to individuals for loans of this
nature under applicable usury laws.
The Administrator may from time to time set appropriate processing and
loan administration fees.
14.7 COLLATERAL. Each loan, to the extent of the amount of the
indebtedness, including interest, shall be secured by the assignment of the
borrower's vested Plan Account, determined as of the origination date of the
loan, supported by the borrower's collateral promissory note for the payment of
the indebtedness, including interest, payable to the order of the Trustee.
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Subject to applicable provisions of law, each loan shall be further supported by
the Participant's execution of an agreement, in a form specified by the
Administrator, to repay the loan by payroll deduction over a term and in a
manner specified by the Administrator. In addition to the assignment of any part
of the borrower's Plan Account, the Administrator may require such additional
collateral as he or she may deem necessary to adequately secure such loan. The
Administrator shall choose collateral that the Plan can sell or foreclose on in
the event of default, that will not leave the Plan with a loss of principal or
interest, and that would be sufficient in the same context in a commercial
setting. The assignment of any part of the borrower's Plan Account provided for
above shall be void for any period of time during which the loan fails to comply
with Code section 4975(d)(1) and section 408(b)(1) of ERISA.
14.8 REPAYMENT. Except as provided in regulations or other formal guidance
issued by the Secretary of the Treasury or by the Department of Labor, and
subject to any limitations which may apply in the case of a borrower who is not
an active Employee, loans shall be repaid by payroll deductions. Any loan to a
borrower shall be repaid in such manner and over such period as will constitute
level amortization of such loan over the term of the loan (with payments not
less frequently than quarterly), and the term of the loan shall not exceed such
period (not to exceed five years, or such longer period as may be allowed
without causing the loan to be taxed under Code section 72(p) as a distribution
from the Plan) as the Administrator shall determine. All payments by a borrower
on any such loan, including interest, shall be credited to such borrower's Plan
Account.
The events of default shall be listed specifically in the borrower's Loan
Agreement. The Loan Agreement provisions are deemed part of the Plan with
respect to that borrower for purposes of complying with Department of Labor
Regulation section 2550.408b-1(d)(2). Generally, a borrower is in default if one
or more of the following events occurs: (a) any false or misleading
representation, warranty, or statement is made by the borrower in connection
with the borrower's Loan Agreement; (b) failure by the borrower to pay any loan
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obligation when due; (c) failure by the borrower to observe or perform any
warranty, covenant, condition, or agreement under the Loan Agreement; (d) the
borrower's death or retirement; (e) the borrower's request for a distribution of
the borrower's Plan Account or (f) the borrower's termination of employment. If
a borrower defaults in the repayment of the loan, the borrower's Plan Account
used as collateral shall be charged with the full unpaid balance of the loan,
including any accrued but unpaid interest, as of the earliest date on which the
borrower may elect to receive a distribution of a portion or all of his or her
Plan Account. If the borrower's Plan Account used as collateral is insufficient
to repay the remaining balance of the loan, including interest, such borrower
shall be liable for and continue to make payments on any balance still due. Any
costs incurred by the Trustee or Administrator in collecting amounts due,
including attorney's fees, shall be added to the principal balance of the loan
and treated accordingly.
14.9 PARTICIPANT CONSENT TO LOAN SET-OFFS. No loan shall be made to a
Participant unless the Participant consents, in writing, to the loan and to the
fact that, if the loan defaults, the Participant's account may be reduced as
provided in Section 14.7, before the Participant attains the age of sixty-five
(65). The consent of the Participant must be made within the ninety (90) day
period before the making of the loan. For purposes of this Section, any
renegotiation, extension, renewal or other revision of a loan shall be treated
as a new loan made on the day of the renegotiation, extension, renewal or other
revision.
14.10 DISTRIBUTIONS PROHIBITED. No distribution (other than a hardship
distribution of that portion of the Participant's vested Plan Account which is
not used as collateral for any loan hereunder) under the Plan shall be made to
any Participant or former Participant or to a beneficiary of any such
Participant unless all unpaid loans, including accrued interest, have been
repaid or otherwise discharged.
14.11 NO ALIENATION. A loan made to a borrower shall not be treated as an
assignment or alienation of any portion of the borrower's Plan Account due to
the fact that the loan will be secured by the borrower's Plan Account and all
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loans made to Participants and beneficiaries shall be exempt from the tax
imposed on prohibited transactions under Code section 4975(d)(1).
14.12 DISCLOSURE. Every borrower must receive from the Administrator a
statement which describes the procedure for loan application, the events
constituting default and the steps which will be taken by the Plan in the event
of default, and a clear statement of the charges involved in each loan
transaction. The statement of charges shall include the dollar amount of the
loan and the annual interest rate.
ARTICLE XV
MISCELLANEOUS
15.1 NO RIGHT TO EMPLOYMENT. Participation in this Plan shall not give any
person the right to be retained in the employ of the Employer, or any right or
interest in this Plan other than as herein provided.
15.2 HEADINGS. The headings and sub-headings in this instrument are
inserted for convenience of reference only and are not to be considered in
construing the provisions hereof.
15.3 COUNTERPARTS. This instrument may be executed in any number of
counterparts, each of which shall be deemed an original, and said counterparts
shall constitute but one and the same instrument, which may be sufficiently
evidenced by any one counterpart.
15.4 GOVERNING LAW. This Plan shall be construed, administered and governed
in all respects under and by the laws of the State of Maryland, except to the
extent Maryland law shall have been pre-empted by ERISA.
15.5 RULES AND REGULATIONS. By becoming a Participant, every Participant
shall thereby be deemed to have agreed to abide by the rules and regulations of
the Administrator made in accordance with this Plan, and to sign all papers
necessary for the compliance therewith.
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15.6 NO ASSIGNMENT OF BENEFITS. Except as expressly provided herein, no
benefits under the Plan may be assigned or alienated, and the Trustee shall pay
all amounts payable hereunder, and shall distribute all assets distributable
hereunder, to any person, into the hands of such person and not unto any other
person or corporation whatsoever, whether claiming by his or her authority or
otherwise; nor may said payments be anticipated. Except as expressly provided
herein, the interest of any Participant hereunder may not be assigned or
encumbered, nor shall it be subject to attachment or other judicial process.
However, deposit to the credit of the account of any person in a bank or trust
company designated by such person in writing shall be deemed to be the
equivalent of payment into the hands of such person. Notwithstanding the
foregoing, amounts held for the benefit of a Participant may be paid in
accordance with a "qualified domestic relations order" as defined in Code
section 414(p) (or a domestic relations order entered before January 1, 1985
which, in the judgment of the Administrator, is entitled to be treated as a
qualified domestic relations order), so long as the payment complies with Code
section 414(p).
15.7 EXCLUSIVE BENEFIT. The Trust Fund shall be held by the Trustee for the
exclusive purpose of providing benefits to Participants and their beneficiaries
and defraying reasonable expenses of administering the Plan. No part of the
Trust shall ever inure to the benefit of the Employer, except that:
(a) Any contribution made to the Trust Fund by the Employer which
is attributable to a mistake of fact may be returned to the Employer within
one year after such contribution was made.
(b) All contributions shall be conditioned on the initial
qualification of the Plan under Code section 401, and if the Plan does not
qualify, then such contributions may be returned to the Employer (or in the
case of salary reduction contributions to the appropriate Participants)
within one year after the date of denial of qualification of the Plan.
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(c) All contributions shall be conditioned on their deductibility
under Code section 404, and any nondeductible contribution will be returned to
the Employer (or, in the case of salary reduction contributions, to the affected
Participants) within one year after the date of disallowance of such deduction.
(d) If a return of contributions pursuant to the foregoing is due to
a good faith mistake of fact or a good faith mistake in determining the
deductibility of the contribution:
(i) The amount which may be returned to the Employer is the
excess ofthe amount contributed over the amount that would have been contributed
had there not occurred a mistake of fact or a mistake in determining the
deduction;
(ii) Compensation attributable to such excess contribution
may not be withdrawn, but losses attributable thereto must reduce the amount
to be returned; and
(iii) In no event may a return of contributions be due which
would cause the Account of any Participant to be reduced to an amount less
than the amount which would have been credited to the Participant's Account if
the mistaken amount not been contributed.
(e) If the return of contributions is due to the non-deductibility for
federal tax purposes under Code section 404 or any statute of similar impact,
such amount shall be deemed forfeited within one year after the date of
disallowance of the deduction and shall be applied to reduce future Employer
Contributions due hereunder.
15.8 WITHDRAWAL OR TERMINATION BY AN EMPLOYER.
(a) Any Employer, by action of its board of directors or other governing
authority and notice to the Plan Sponsor, the Administrator and the Trustee, may
withdraw from the Plan and Trust at any time, or may terminate the Plan and
Trust with respect to its Employees at any time, without affecting other
Employers not withdrawing or terminating. A withdrawing Employer may arrange for
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the continuation of this Plan and Trust in separate forms for its own Employees,
with such amendments, if any, as it may deem proper, and may arrange for
continuation of the Plan and Trust by merger with an existing plan and trust,
and transfer of Trust Fund assets. The Plan Sponsor may, in its absolute
discretion, terminate an Employer's participation in this Plan at any time,
without the consent of any Employer, Participant or beneficiary.
(b) An Employer which withdraws from or terminates its participation in
this Plan shall direct the Trustee to liquidate the share of the Trust Fund
allocable to its Employees or their beneficiaries, as determined by the
Administrator. If the Employer is not terminating the Plan, such share shall be
transferred to a successor trust upon receipt of evidence satisfactory to the
Administrator that the successor trust qualifies under Code section 401(a). If
the Employer is terminating the Plan, such share shall be distributed as
provided in Section 5.9.
IN WITNESS WHEREOF, as evidence of its adoption of this Plan, the
Employer has caused this Plan to be executed, and the Trustee has joined herein
to evidence its acceptance of the provisions of the Plan applicable to the
Trustee, generally effective as of the January 1, 1989.
ATTEST/WITNESS: COLUMBIA BANCORP
_______________________________ By:_________________________________
Print Name:_____________________ Title:______________________________
Print Name:_________________________
Date:_____________________________
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ADOPTING EMPLOYERS:
THE COLUMBIA BANK
/s/ Linda H. Cartaxo By:/s/ John A. Scaldara, Jr._____________
Print Name:Linda H. Cartaxo Title:Vice President____________________
Print Name:John A. Scaldara, Jr.
Date:12-12-94________________________
MCALPINE ENTERPRISES, INC.
/s/ Linda H. Cartaxo By:/s/ John A. Scaldara, Jr._____________
- -
Print Name:Linda H. Cartaxo Title:Vice President____________________
Print Name:John A. Scaldara, Jr.
Date:12-12-94________________________
TRUSTEES:
/s/ Linda H. Cartaxo By:/s/ John A. Scaldara, Jr.____________
Print Name:Linda H. Cartaxo Print Name:John A. Scaldara, Jr.
Date:12-12-94_______________________
Print Name: Print Name:
Date:
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<PAGE>
AMENDMENT NO. 1 TO THE
COLUMBIA BANCORP 401(k) PLAN AND TRUST
Columbia Bancorp (the "Employer"), pursuant to action taken by its Board of
Directors, adopts the following Amendment to the Columbia Bancorp 401(k) Plan
and Trust (the "Plan").
The Employer wishes to amend the Plan to clarify the Plan's forfeiture
allocation provisions and to provide that, effective January 1, 1994,
forfeitures will be allocated as matching contributions.
Accordingly, the second paragraph of Section 5.4(a)(2) of the Plan hereby
is amended to read as follows:
The vested portion of the terminated Participant's Plan
Account shall be payable as provided in this Section. The unvested
portion of such Plan Account shall first be made available to reinstate
previously forfeited account balances of Former Participants, if any.
For Plan Years beginning before January 1, 1994, the remaining
forfeitures, if any, shall be allocated ratably to the Accounts of
remaining Participants on the basis of their Compensation. For Plan
years beginning on or after January 1, 1994, the remaining forfeitures,
if any, shall be allocated as a matching contribution to the Accounts
of eligible Participants pro rata on the basis of each Participant's
Salary Reduction Contributions to the Plan during the Plan Year.
Notwithstanding the foregoing, a Participant will not receive an
allocation of forfeitures for a Plan Year unless the Participant has
met the requirements for receipt of an allocation of an Employer
Voluntary Contribution for the Plan Year. The unvested portion of the
terminated Participant's Plan Account shall be forfeited on the earlier
of (1) the date of a cash-out distribution to the Participant as
described in Treasury Regulation section 1.411(a)-7(d), or (2) the date
on which the Participant incurs a fifth consecutive one-year Break in
Service. Forfeitures shall be restored pursuant to Section 5.5.
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IN WITNESS WHEREOF, the Employer has duly caused this Amendment No. 1 to be
executed, effective as set forth above.
WITNESS/ATTEST: COLUMBIA BANCORP
______________________________ By:_________________________(Seal)
Print Name:_____________________ Title:___________________________
Print Name:_____________________
Date:__________________________ Date:___________________________
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AMENDMENT NO. 2
COLUMBIA BANCORP 401(k) PLAN AND TRUST
Columbia Bancorp (the "Employer"), adopts the following amendment to the
Columbia Bancorp 401(k) Plan and Trust (the "Plan").
W I T N E S S E T H:
WHEREAS, the Omnibus Budget Reconciliation Act of 1993 amended Internal
Revenue Code ("Code") section 401(a)(17) effective January 1, 1994, to limit
compensation which may be taken into account under the Plan in any year to
$150,000, adjusted for cost-of-living increases; and
WHEREAS, the Employer wishes to amend the Plan to (i) comply with amended
Code section 401(a)(17) and (ii) clarify that the trustee may appoint an
independent agent for purposes of complying with applicable security laws.
NOW, THEREFORE, the Plan is amended as follows effective January 1, 1994:
1. Section 1.5 is amended to read as follows:
1.5 COMPENSATION means the total compensation paid by the
Employer to an Employee during each Plan Year (or portion
thereof) during which such person is a Participant, plus
"elective contributions" which are not includible in gross
income under Code sections 125, 401(k), 402(a)(8), 402(h) or
403(b). Effective January 1, 1989 through December 31, 1993, the
Compensation of any Participant taken into account under the
Plan for any year may not exceed two hundred thousand dollars
($200,000). This two hundred thousand dollar ($200,000)
limitation shall be adjusted automatically at the same time and
in the same manner as any cost-of-living adjustment made by the
Secretary of the Treasury under Code section 415(d). Effective
January 1, 1994, the Compensation of any Participant taken into
account under the Plan for any Plan Year may not exceed one
hundred and fifty thousand dollars ($150,000). This one hundred
fifty thousand dollar ($150,000) limitation shall be adjusted as
provided under Code section 401(a)(17)(B).
In determining the Compensation of a Participant for purposes of
applying the applicable dollar limitation, the rules in Code
section 414(q)(6) (applicable to five percent (5%) owners and
the ten (10) most highly paid Highly Compensated Employees)
shall apply, except in applying such rules, the term "family"
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shall include only the spouse of the Participant and any lineal
descendents of the Participant who have not attained age
nineteen (19) before the close of the Plan Year.
2. Section 8.7(a)(7) is amended to read as follows:
To employ agents, including investment counsel, for advice and
to manage the investment of the Trust Fund property, and
independent agents (within the meaning of Securities Exchange
Act Rule 10b-18(a)(6)), to invest in Company Stock, and to
employ attorneys, auditors, depositories and proxies, with or
without discretionary powers, and all such parties shall have
the right to rely upon and execute the written instructions of
the Trustee, and shall not be obligated to inquire into the
propriety of the acts or directions of the Trustee, other than
as is required under ERISA.
IN WITNESS WHEREOF, the Employer has duly caused this Amendment No. 2 to be
executed, effective as set forth above.
WITNESS/ATTEST: COLUMBIA BANCORP
By:________________________________(SEAL)
Print Title:________________________________
Name:________________________________
Print:________________________________
Name:_________________________________
Date:________________________________ Date:_________________________________
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AMENDMENT NO. 3
TO THE
COLUMBIA BANCORP 401(k) PLAN AND TRUST
AMENDMENT AND RESTATEMENT
EFFECTIVE JANUARY 1, 1989
THIS AMENDMENT NO. 3 to the Columbia Bancorp 401(k) Plan and Trust (the
"Plan") is adopted this 1 st ---- day of June , 1995 by Columbia Bancorp (the
"Employer"). --------
W I T N E S S E T H
WHEREAS, the Internal Revenue Service issued a favorable determination
letter dated May 23, 1995 for the Plan, subject to the Employer adopting a
technical correction to the Plan's the definition of "Employee"; and
WHEREAS, the Employer wishes to amend the definition of "Employee" to make
such technical correction;
NOW THEREFORE, Section 1.7 of the Plan is amended to read as follows,
effective January 1, 1989:
1.7 EMPLOYEE means any person employed by the Employer,
except such a person who is a leased employee as
defined by Code section 414(n).
IN WITNESS WHEREOF, the Employer has caused this Amendment No. 3 to be
executed by its duly authorized officer.
ATTEST: COLUMBIA BANCORP
/s/ Linda H. Cartaxo By: /s/ John A. Scaldara, Jr.
Print Name: Linda H. Cartaxo Title: Chief Financial Officer
Print Name: John A. Scaldara, Jr.
Date: June 1, 1995
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AMENDMENT NO. 4
TO THE COLUMBIA BANCORP 401(k) PLAN AND TRUST
AMENDMENT AND RESTATEMENT
EFFECTIVE JANUARY 1, 1989
THIS AMENDMENT NO. 4 to the Columbia Bancorp 401(k) Plan and Trust,
Amendment and Restatement Effective January 1, 1989 (the "Plan"), is adopted
this _____ day of ___________________, 1997 by Columbia Bancorp (the
"Employer").
W I T N E S S E T H
WHEREAS, the Uniformed Services Employment and Reemployment Rights Act of
1994 (the "USERRA"), in relevant parts, amended and restated federal law
protecting the rights and benefits of veterans under employee pension benefit
plans; and
WHEREAS, the Small Business Job Protection Act of 1996 (the "SBJPA"), in
relevant parts, amended the tax-qualification requirements for pension plans to
provide modified rules regarding the minimum required distribution after age
70-1/2, the definition of compensation for purposes of the limits on
contributions and benefits, the contributions on behalf of disabled employees
and the aggregation of family members for purposes of the nondiscrimination
requirements; and
WHEREAS, new Rule 16b-3 ("New Rule 16b-3"), effective November 1, 1996,
under the Securities Exchange Act of 1934, as amended (the "1934 Act"), exempts
from the short-swing profits disgorgement provisions of Section 16(b) of the
1934 Act transactions which are directed by participants under employee benefit
plans and which constitute exempt Discretionary Transactions as defined in New
Rule 16b-3; and
WHEREAS, the Employer wishes to amend the Plan to comply with the USERRA
and the SBJPA and to ensure that the investment elections by participants who
are subject to Section 16(b) of the 1934 Act will qualify as exempt
Discretionary Transactions under New Rule 16b-3; and
WHEREAS, the Board of Directors of the Employer has, by duly adopted
resolutions, approved such amendment;
NOW, THEREFORE, the Plan is amended as follows:
1. Section 2.4, as set forth below, is added to the Plan, effective
October 13, 1996:
"2.4 REHIRED PARTICIPANTS WITH MILITARY SERVICE. Notwithstanding
any provision of this Plan to the contrary, contributions, benefits
and service credit with respect to qualified military service will be
provided in accordance with Code section 414(u)."
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2. Section 14.8 of the Plan is amended, effective October 13, 1996,
to add the following sentence to the end of the first paragraph of that Section:
"Loan repayments will be suspended under this Plan as permitted under
Code section 414(u)(4)."
3. Section 4.5(a) of the Plan is amended, effective January 1, 1998, to
state in its entirety as follows (the added terms are underlined twice and the
deleted terms have a line striking through):
"(a) Basic Limitations. Notwithstanding any other provision of
this Plan, a Participant's total annual additions under this Plan for
any Plan Year shall not exceed the lesser of (a) thirty thousand
dollars ($30,000) or, if greater, one-fourth (1/4) of the defined
benefit dollar limitation set forth in Code section 415(b)(1) as in
effect for the Plan Year, as adjusted in Treasury Regulation section
1.415-2(b)(4)(iii), or (b) twenty-five percent (25%) of the
Participant's Compensation for such Plan Year. "Annual additions" for
this purpose means the sum of (i) contributions under Sections 4.1, 4.2
and 4.3 of this Plan allocable to the Participant's Plan Account, and
(ii) any forfeitures allocable to the Participant's Plan Account.
For purposes of this Section, "Compensation" refers to
the Participant's earned income, wages, salaries, and fees for
professional services actually rendered in the course of employment
with the Employer (including, but not limited to, commissions paid to
salespersons, compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses and elective
or salary reduction contributions to a cafeteria plan under Code
section 125, a cash or deferred arrangement under Code section 401(k),
or a simplified employee pension under Code section 402(h)) and
excluding the following:
(i) Employer contributions to a plan of deferred
compensation which are not includable in the Participant's gross income
for the taxable year in which contributed, or Employer contributions
under a simplified employee pension plan to the extent such
contributions are deductible by the Participant, or any distributions
from a plan of deferred compensation;
(ii) Amounts realized from the exercise of a
nonqualified stock option, or when restricted stock (or property) held
by the Participant either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(iii) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(iv) Other amounts which received special tax benefits
(except elective or salary reduction contributions to a cafeteria plan
under Code section 125, a cash or deferred arrangement under Code
section 401(k), or a simplified employee pension under Code section
402(h)).
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For purposes of applying the limitations of this
Section, Compensation for a limitation year is the Compensation
actually paid or includible in gross income during such year, plus
elective or salary reduction contributions to a cafeteria plan under
Code section 125, a cash or deferred arrangement under Code section
401(k), or a simplified employee pension under Code section 402(h).
Notwithstanding the preceding sentence, Compensation
for a Participant who is permanently and totally disabled (as defined
in Code section 22(e)(3)) is the compensation such Participant would
have received for the limitation year if the Participant had been paid
at the rate of compensation paid immediately before becoming
permanently and totally disabled. Such imputed Compensation for the
disabled Participant may be taken into account only if the
contributions made on behalf of such Participant are nonforfeitable
when made."
4. The second paragraph of Section 1.5 of the Plan is amended,
effective January 1, 1997, to state in its entirety as follows (the added
language is underlined twice):
"In determining the Compensation of a Participant for purposes of
applying the applicable dollar limitation for a year prior to
January 1, 1997, the rules in Code section 414(q)(6) (applicable to
five percent (5%) owners and the ten (10) most highly paid Highly
Compensated Employees) shall apply, except in applying such rules, the
term "family" shall include only the spouse of the Participant and any
lineal descendants of the Participant who have not attained age
nineteen (19) before the close of the Plan Year."
5. Section 5.6 of the Plan is amended to state in its entirety as
follows (the added terms are underlined twice and the deleted terms have a line
striking through):
"5.6 COMMENCEMENT OF BENEFITS. If a Participant either (i)
attains age seventy and one-half (70-1/2) before January 1, 1996, or
(ii) attains age seventy and one-half (70-1/2) after December 31, 1995,
and is a five percent (5%) owner (as defined in Code section 416(i)) at
any time during the calendar year in which the Participant attains age
seventy and one-half (70-1/2), distribution to that Participant must
begin by the first day of April following the calendar year in which
the Participant attains age seventy and one-half (70-1/2). If a
Participant attains age seventy and one-half (70-1/2) in a calendar
year after December 31, 1995, and is not a five percent (5%) owner (as
defined in Code section 416(i)) at any time during that the calendar
year in which the Participant attains age seventy and one-half
(70-1/2), distribution to that Participant must begin no later than the
first day of April following the later of the calendar year in which
the Participant attains age seventy and one-half (70-1/2) or the
calendar year in which the Participant retires. Notwithstanding the
preceding, if the Participant attained age seventy and one-half
(70-1/2) before January 1, 1988, and such Participant was not a five
percent (5%) owner (as defined in Code section 416(i)) at any time
during the calendar year in which such Participant attained age
sixty-six and one-half (66-1/2), or during any subsequent calendar
year, the required distribution commencement date is the first day of
April following the later of the calendar year in which the Participant
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terminates employment or the calendar year in which the Participant
attains age seventy and one-half (70-1/2). Notwithstanding the
preceding, if the Participant attained age seventy and one-half
(70-1/2) in 1988, and such Participant was not a five percent (5%)
owner of the Employer (as defined in Code section 416(i)) at any time
during the calendar year in which such Participant attained age
sixty-six and one-half (66-1/2), or during any subsequent calendar
year, and such Participant had not retired by January 1, 1989, the
required distribution commencement date is April 1, 1990.
6. Section 4.13 of the Plan is amended, effective November 1, 1996, to
state in its entirety as follows (the added terms are underlined twice):
"4.13 PARTICIPANTS' INVESTMENT ELECTIONS. Each Participant and
each former Participant with a vested Plan Account may elect in writing
to have his or her Plan Account invested in one or more investment
funds described in Article VIII. Prior to January 1, 1995, a
Participant's or former Participant's investment elections do not apply
to amounts held in his or her Employer Voluntary Contribution Account
or Employer Matching Contribution Account. If any Participant or former
Participant fails to make an investment election, the portion of the
Participant's or former Participant's Plan Account subject to direction
shall be invested in an investment fund, or a combination of investment
funds, selected by the Administrator, which offer(s) reasonable
opportunities for capital appreciation, preservation of capital, and/or
liquidity.
If the Administrator elects, this Plan may be operated in
compliance with ERISA section 404(c) and all or part of the regulations
thereunder, in which case the following shall apply:
(a) Plan Fiduciaries' Responsibilities. The Trustee shall be
responsible for implementing Participants' investment instructions and
shall comply with such instructions to the extent such instructions are
consistent with ERISA and the regulations thereunder. The Administrator
is responsible for ensuring compliance with ERISA section 404(c) and
the regulations thereunder in all other respects, including providing
to Participants all information required under such provisions.
(b) Investment Funds. The Administrator shall direct the
Trustee to establish investment funds pursuant to Article VIII which
constitute a broad range of investment alternatives and which are
sufficient to provide Participants with a reasonable opportunity to
affect materially the potential return on amounts in their Plan
Accounts and the degree of risk to which such amounts are subject. The
Administrator shall direct the Trustee to establish at least three
investment funds in addition to the Company Stock Fund, each of which
is diversified, has materially different risk and return
characteristics and which will enable Participants to minimize overall
risk through diversification and achieve a portfolio with appropriate
aggregate risk and return characteristics.
(c) Investment Information. The Administrator shall provide
Participants with sufficient information to make informed decisions
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with regard to investments in the funds available under the Plan in
accordance with ERISA section 404(c) and the regulations thereunder.
(d) Investment Elections. Participant investment elections as
to new contributions and/or amounts previously credited to a
Participant's Plan Account may be changed quarterly on any January 1,
April 1, July 1 or October 1, or more frequently if the Administrator
determines, in its discretion, that it is appropriate in light of
market conditions, subject, however, to any rules established by the
Administrator and any rules or restrictions of any insurance company or
other entity serving as the manager or funding vehicle of any of the
investment funds.
Notwithstanding anything herein to the contrary, a Participant
or former Participant who is subject to Section 16 of the Securities
Exchange Act of 1934, as amended, may change the amount of his or her
existing Plan Account invested in the Company Stock Fund only on
January 1 of each year, provided that the election to make such change
is made within the calendar month preceding such change. Such election
shall be subject to any other rules and policies as may be adopted from
time to time by the Administrator.
IN WITNESS WHEREOF, the Employer has caused this Amendment No. 4 to be
executed by its duly authorized officer.
ATTEST: COLUMBIA BANCORP
___________________________ By: _________________________
Print Name:__________________ Title:________________________
Print Name:___________________
Date:________________________
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Exhibit 5.1
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
31 HOPKINS PLAZA
BALTIMORE, MD 21201-0000
Employer Identification Number:
Date: May 23, 1995 52-1545782
File Folder Number:
COLUMBIA BANCORP 521039611
c/o JEFFREY A SHARPE, ESQUIRE Person to Contact:
PIPER & MARBURY ELSIE GARCIA
36 SOUTH CHARLES STREET Contact Telephone Number:
BALTIMORE, MD 21201 (201)645-6056
Plan Name:
COLUMBIA BANCORP 401(k) PLAN
AND TRUST
Plan Number: 002
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualified of the plan under its present form will depend on its
effect in operation. (See section 1.401-1(b)(3) of the Income Tax Regulations.)
We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or
local statutes.
This determination is subject to your adoption of the proposed amendments
submitted in your letter dated May 8, 1995. The proposed amendments should be
adopted on or before the date prescribed by the regulations under Code section
401(b).
This plan has been mandatorily disaggregated, permissively aggregated, or
restructured to satisfy the nondiscrimination requirements.
This letter is issued under Rev. Proc. 93-39 and considers the amendments
required by the Tax Reform Act of 1986 except as otherwise specified in this
letter.
1
<PAGE>
COLUMBIA BANCORP
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401(a)(4)-4(b) of the regulations with respect to
those benefits, rights, and features that are currently available to all
employees in the plan's coverage group. For this purpose, the plan's coverage
group consists of those employees treated as currently benefiting for purposes
of demonstrating that the plan satisfies the minimum coverage requirements of
section 410(b) of the Code.
This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
We have sent a copy of this letter to your representative as indicated in
the power of attorney.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ Paul M. Harrington
District Director
Enclosures:
Publication 794
Reporting & Disclosure Guide
for Employee Benefit Plans
2
Exhibit 5.2
PIPER & MARBURY
L.L.P.
CHARLES CENTER SOUTH
36 SOUTH CHARLES STREET
BALTIMORE, MARYLAND 21201-3018
410-539-2530
FAX: 410-539-0489
July 29, 1997
Columbia Bancorp
110 Thomas Johnson Drive
Frederick, Maryland 21705
Registration Statement on Form S-8
Dear Sirs:
We have acted as counsel for Columbia Bancorp, a Maryland corporation
(the "Company"), in connection with a Registration Statement on Form S-8 which
was filed by the Company under the Securities Act of 1933, as amended, (the
"Registration Statement"), and which registers: (a) 75,000 shares of the Common
Stock of the Company (the "Shares") to be issued pursuant to the Columbia
Bancorp 401(k) Plan and Trust (the "Plan"); and (b) participation interest in
the Plan.
In this capacity, we have examined the Registration Statement (and all
amendments thereto), the Charter and By-Laws of the Company, the Plan, the
proceedings of the Board of Directors of the Company relating to the issuance of
the Shares to be issued pursuant to the Plan, a Certificate of the Secretary of
the Company dated July 29, 1997, and such other statutes, certificates,
instruments and documents relating to the Company and matters of law as we have
deemed necessary to the issuance of this opinion. In such examination, we have
assumed, without independent investigation, the genuineness of all signatures,
the legal capacity of all individuals who have executed any of the aforesaid
documents, the authenticity of all documents submitted to us as originals, the
conformity with originals of all documents submitted to us as copies (and the
authenticity of the originals of such copies), and that all public records
reviewed are accurate and complete. As to factual matters, we have relied on the
Certificate of the Secretary and have not independently verified the matters
stated therein. We assume that the Company will have, at the time of each
purchase of the Shares for an account under the Plan, at least that number of
authorized but unissued shares of Common Stock of the Company equal to the
number of Shares then being purchased.
<PAGE>
Piper & Marbury
L.L.P.
Columbia Bancorp
July 29, 1997
Page 2
Based upon the foregoing, we are of the opinion and advise you that the
Shares to be issued by the Company pursuant to the Plan have been duly and
validly authorized and, when issued and delivered as contemplated in the
Registration Statement and in accordance with the Plan, will be validly issued,
fully paid, and non-assessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm and to our opinion in
the Registration Statement.
Very truly yours,
/s/ Piper & Marbury L.L.P.
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Columbia Bancorp:
We consent to the use of our report through the incorporation by
reference in the Registration Statement of Columbia Bancorp on Form S-8, 1997
registration of the Common Stock of Columbia Bancorp held by, and the
participation interests in, the Columbia Bancorp 401(k) Plan and Trust.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Baltimore, Maryland
July 29, 1997
1
Exhibit 23.2
CONSENT OF CONSULTANTS
The Board of Directors
Columbia Bancorp:
We consent to the use of our annual financial statements through the
incorporation by reference in the Registration Statement of Columbia Bancorp on
Form S-8, 1997 registration of the Common Stock of Columbia Bancorp held by, and
the participation interests in, the Columbia Bancorp 401(k) Plan and Trust.
PENSION BENEFITS SERVICES, INC.
/s/ Mary M. Gernhardt
By: Mary M. Gernhardt
Title: Vice President - Administration
Baltimore, Maryland
July 29, 1997
1
Exhibit 24
COLUMBIA BANCORP
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors and
officers of Columbia Bancorp, a Maryland corporation, constitute and appoint
John M. Bond, Jr. and John A. Scaldara, Jr., or either of them, the true and
lawful agents and attorneys-in-fact of the undersigned with full power and
authority in said agents and attorneys-in-fact, and in any one or both of them,
to sign for the undersigned in their respective names as directors and officers
of Columbia Bancorp, a Registration Statement on Form S-8 (or other appropriate
form) to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and any amendment or supplement to such
registration statement relating to a proposed issue of participation interests
in the Columbia Bancorp 401(k) Plan and Trust. We hereby confirm all acts taken
by such agents and attorneys-in-fact, or any one or more of them, as herein
authorized.
Dated: July 28, 1997
Name Title
/s/ John M. Bond, Jr. President, Chief Executive Officer and
John M. Bond, Jr. Director(Principal Executive Officer)
/s/ John A. Scaldara, Jr. Chief Financial Officer and Secretary
John A. Scaldara, Jr. (Principal Financial and Accounting Officer)
/s/ James R. Moxley, Jr. Chairman of the Board and Director
James R. Moxley, Jr.
/s/ Herschel L. Langenthal Vice Chairman of the Board and Director
Herschel L. Langenthal
/s/ Anand S. Ahasin Director
Anand S. Bhasin
/s/ Garnett Y. Clark, Jr. Director
Garnett Y. Clark, Jr.
/s/ James Clark, Jr. Director
James Clark, Jr.
/s/ Hugh F.Z. Cole, Jr. Director
Hugh F.Z. Cole, Jr.
1
<PAGE>
____________________ Director
G. William Floyd
/s/ Robert J. Gaw Director
Robert J. Gaw
____________________ Director
Mary T. Gould
/s/ William L. Hermann Director
William L. Hermann
/s/ Harry L. Lundy, Jr. Director
Harry L. Lundy, Jr.
/s/ Richard E. McCready Director
Richard E. McCready
/s/ Patricia T. Rouse Director
Patricia T. Rouse
/s/ Mary S. Scrivener Director
Mary S. Scrivener
/s/ Maurice M. Simpkins Director
Maurice M. Simpkins
/s/ Robert N. Smelkinson Director
Robert N. Smelkinson
/s/ Theodore G. Venetoulis Director
Theodore G. Venetoulis
2
