<PAGE>
As filed with the Securities and Exchange Commission on September 20, 1996
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
CENTURA BANKS, INC.
(Exact name of Registrant as specified in its charter)
North Carolina 56-1688522
(State of Incorporation) (IRS Employer Identification No.)
134 North Church Street, Rocky Mount, North Carolina 27804
(Address of principal executive offices)
CENTURA BANKS, INC. 401(K) PLAN
(Full title of the Plan)
Joseph A. Smith, Jr.
General Counsel and Corporate Secretary
Centura Banks, Inc.
134 North Church Street
Rocky Mount, North Carolina 27804
(919) 977-4400
(Name, address, and telephone number of agent for service)
Copies to:
M. Guy Brooks, III, Esq.
Poyner & Spruill, L.L.P.
Post Office Box 10096
Raleigh, North Carolina 27605
(919) 783-2878
--------------------------------------------
In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this Registration Statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the Plan.
(Facing Page Continued on the following page)
<PAGE>
(CONTINUATION OF FACING PAGE)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Amount Maximum Maximum
Securities to be Offering Aggregate Amount of
to be Registered Price Per Offering Registration
Registered (1)(2) Share (3) Price (3) Fee (3)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 500,000 $39.56 $19,780,000 $6,820.69
(no par value) Shares
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents additional shares of Common Stock not previously registered
as part of the Registrant's Post-Effective Amendment No. 1 to Form S-4
Registration Statement on Form S-8 Registration Statement (No. 33-
33773).
(2) Plus such additional number of shares as may be required under the Plan
in the event of a stock dividend, split-up of shares, recapitalization,
or other similar change in the Common Stock.
(3) Estimated pursuant to Rule 457(h)(1) solely for purposes of calculating
the registration fee, upon the basis of the average of the high and low
prices for the Common Stock as reported on the New York Stock Exchange
Composite Tape on September 16, 1996.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
This Registration Statement relates to the registration of Five Hundred
Thousand (500,000) additional shares of the no par value common stock ("Common
Stock") of Centura Banks, Inc. (the "Registrant") for issuance or delivery under
the Centura Banks, Inc. 401(k) Plan (the "Plan"). Five Hundred Thousand
(500,000) shares of the Registrant's Common Stock were originally registered for
issuance or delivery under the Plan as part of the Registrant's Post-Effective
Amendment No. 1 to Form S-4 Registration Statement on Form S-8 (No. 33-33773).
This Registration Statement also relates to an indeterminant amount of interests
to be offered or sold pursuant to the Plan and to an indeterminant number of
additional shares that may be necessary to adjust the number of shares reserved
for issuance pursuant to the Plan as a result of a reclassification,
reorganization, recapitalization, stock split, stock dividend, or similar
occurrence that makes an adjustment of shares just and appropriate. Documents
containing the information specified in Part I of Form S-8 will be sent or given
to participants under the Plan as specified by Rule 428(b)(1).
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL
INFORMATION.
See response to Item 1 above.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") are incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-K for the year
ended December 31, 1995.
(b) The Registrant's Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31, 1996 and June 30, 1996.
<PAGE>
(c) The Registrant's Current Reports on Form 8-K dated January 8,
February 28, March 12, March 20, April 3, April 16, April 18,
May 17, May 24, June 14, July 2, July 12, July 29, August 16,
August 22, and September 4, 1996.
(d) The description of the Registrant's Common Stock contained in
the Registrant's registration statement on Form 8-A filed
October 19, 1990 under the Exchange Act, including any other
amendment or report filed for the purpose of updating such
description.
(e) The Plan's Annual Report on Form 11-K for the year ended
December 31, 1995.
Any information included or incorporated by reference in the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 in
response to Items 402(a)(8), (i), (k), or (l) of Regulation S-K of the
Commission is not incorporated herein and is not part of this Registration
Statement.
All documents subsequently filed by the Registrant and the Plan
pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
registered hereby have been sold or which deregisters all securities then
remaining unsold, shall be deemed incorporated by reference herein and to be a
part hereof from the date of the filing of such documents.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
The Registrant's Common Stock is registered under Section 12 of the
Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the shares of Common Stock offered hereby will be
passed upon for the Registrant by Poyner & Spruill, L.L.P., Counsel to the
Registrant. Charles T. Lane, a partner with Poyner & Spruill, L.L.P., is a
director of the Registrant. As of
2
<PAGE>
March 31, 1996, Mr. Lane owned beneficially 26,082 shares of the Registrant's
Common Stock, and other members of the firm of Poyner & Spruill, L.L.P.
beneficially owned, in the aggregate, approximately 65,132 shares of the
Registrant's Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 55-8-50 through 55-8-58 of the General Statutes of North
Carolina provide for indemnification of directors, officers, employees, and
agents of a North Carolina corporation. Subject to certain exceptions, a
corporation may indemnify an individual made a party to a proceeding because he
is or was a director against liability incurred in the proceeding if (i) he
conducted himself in good faith; and (ii) he reasonably believed (a) in the case
of conduct in his official capacity with the corporation, that his conduct was
in its best interests and (b) in all other cases, that his conduct was at least
not opposed to its best interests; and (iii) in the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful.
Moreover, unless limited by its articles of incorporation, a corporation must
indemnify a director who was wholly successful, on the merits or otherwise, in
the defense of any proceeding to which he was a party because he is or was a
director of the corporation against reasonable expenses incurred by him in
connection with the proceeding. Expenses incurred by a director in defending a
proceeding may be paid by the corporation in advance of the final disposition of
such proceeding as authorized by the board of directors in the specific case or
as authorized or required under any provision in the articles of incorporation
or bylaws or by any applicable resolution or contract upon receipt of an
undertaking by or on behalf of a director to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation against such expenses. A director may also apply for court-ordered
indemnification under certain circumstances.
Unless a corporation's articles of incorporation provide otherwise, (i)
an officer of a corporation is entitled to mandatory indemnification and is
entitled to apply for court-ordered indemnification to the same extent as a
director; (ii) the corporation may indemnify or advance expenses to an officer,
employee, or agent of a corporation to the same extent as to a director; and
(iii) a corporation may also indemnify or advance expenses to an officer,
employee, or agent who is not a director to the extent, consistent with public
policy, that may be provided by its articles of incorporation, bylaws, general
or specific action of its board of directors, or contract.
In addition and separate and apart from the indemnification rights
discussed above, the above-cited statutes further provide that a corporation
may, in its articles of incorporation or bylaws, or by contract or resolution,
indemnify or agree to indemnify any
3
<PAGE>
one of its directors, officers, employees, or agents against liability and
expenses in any proceeding (including without limitation a proceeding brought by
or on behalf of the corporation itself) arising out of their status as such or
their activities in any of the foregoing capacities; provided, however, that a
corporation may not indemnify or agree to indemnify a person against liability
or expenses he may incur on account of his activities which were at the time
taken known or believed by him to be clearly in conflict with the best interests
of the corporation. A corporation may likewise and to the same extent indemnify
or agree to indemnify any person who, at the request of the corporation, is or
was serving as a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint venture, trust, or
other enterprise or as a trustee or administrator under an employee benefit
plan. Any such provision for indemnification may also include provisions for
recovery from the corporation of reasonable costs, expenses, and attorneys' fees
in connection with the enforcement of rights to indemnification and may further
include provisions establishing reasonable procedures for determining and
enforcing the rights granted therein.
As permitted by the North Carolina statutory provisions explained
above, Article IX, Section 4 of the Bylaws of the Registrant provides as
follows:
Any person who at any time serves or has served as a director
or officer of the Corporation, or at the request of the Corporation is
or was serving as an officer, director, agent, partner, trustee, or
employee for any other foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan, or other enterprise, shall
be indemnified by the Corporation to the fullest extent from time to
time permitted by law in the event he is made, or is threatened to be
made, a party to any threatened, pending or completed civil, criminal,
administrative, investigative or arbitrative action, suit, or
proceeding and any appeal therein (and any inquiry or investigation
that could lead to such action, suit or proceeding), whether or not
brought by or on behalf of the Corporation, seeking to hold him liable
by reason of the fact that he is or was acting in such capacity. In
addition, the Board may provide such indemnification for other
employees and agents of the Corporation as it deems appropriate.
The rights of those receiving indemnification hereunder shall,
to the fullest extent from time to time permitted by law, cover (i)
reasonable expenses, including without limitation all attorneys' fees
actually and necessarily incurred by him in connection with any such
action, suit, or proceeding; (ii) all reasonable payments made by him
in satisfaction of any judgment, money decree, fine (including an
4
<PAGE>
excise tax assessed with respect to an employee benefit plan), penalty,
or settlement for which he may have become liable in such action, suit,
or proceeding; and (iii) all reasonable expenses incurred in enforcing
the indemnification rights provided herein.
Expenses incurred by a director in defending a proceeding may
be paid by the Corporation in advance of the final disposition of such
proceeding as authorized by the Board of Directors in the specific case
or as authorized or required under any provision in the Bylaws or by an
applicable resolution or contract upon receipt of an undertaking by or
on behalf of the director to repay such amounts unless it shall
ultimately be determined that he is entitled to be indemnified by the
Corporation against such expenses.
The board of directors of the Corporation shall take all such
action as may be necessary and appropriate to authorize the Corporation
to pay the indemnification required by this bylaw, including without
limitation, to the extent needed, making a good faith evaluation of the
manner in which the claimant for indemnity acted and of the reasonable
amount of indemnity due him.
Any person who at any time serves or has served in any of the
aforesaid capacities for or on behalf of the Corporation shall be
deemed to be doing or to have done so in reliance upon, and as
consideration for, the right of indemnification provided herein. Any
repeal or modification of these indemnification provisions shall not
affect any rights or obligations existing at the time of such repeal or
modification. The rights provided for herein shall inure to the benefit
of the legal representatives of any such person and shall not be
exclusive of any other rights to which such person may be entitled
apart from the provisions of this bylaw.
The rights granted herein shall not be limited by the
provisions contained in N.C. Gen. Stat. ss.55-8-51 (or its
successor).
As permitted by applicable statutes, the Registrant has purchased a
standard directors' and officers' liability policy which will, subject to
certain limitations, indemnify the Registrant and its officers and directors for
damages they become legally obligated to pay as a result of any negligent act,
error, or omission committed by directors or officers while acting in their
capacities as such.
The indemnification provisions in the Bylaws may be
sufficiently broad to permit indemnification of the Registrant's
5
<PAGE>
officers and directors for liabilities arising under the Securities Act of 1933,
as amended (the "1933 Act").
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Description Reference
<S> <C> <C>
4.1 Excerpts from the Registrant's Incorporated
Articles of Incorporation and by Reference
Bylaws relating to rights of
holders of the Registrant's
capital stock (incorporated by
reference to Exhibit 4 of the
Registrant's Form S-4
Registration Statement No.
33-33773 originally filed with
the Commission on March 8,
1990).
4.2 Centura Banks, Inc. 401(k) Plan. Filed herewith
4.3 First Amendment to the Filed herewith
Centura Banks, Inc. 401(k) Plan.
5 Opinion of Poyner & Spruill, Filed herewith
L.L.P.
24.1 Consent of Poyner & Spruill, Filed herewith
L.L.P. (included in Exhibit 5).
24.2 Consent of KPMG Peat Marwick LLP. Filed herewith
25 Power of Attorney from Filed herewith
Directors and Officers of
Registrant.
</TABLE>
In reference to Exhibit 5, the Registrant undertakes that it will submit (and
has submitted) the Plan and any amendment thereto to the Internal Revenue
Service ("IRS") in a timely manner and has made or will make all changes
required by the IRS in order to qualify the Plan.
6
<PAGE>
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the 1933 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 (1)(i) and (1)(ii) above 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 1933
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 the 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 that remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 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.
7
<PAGE>
Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions discussed in Item 6 hereof, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by 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 hereby, the Registrant will, unless in the opinion of its counsel the
matter has been sealed 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 1933 Act and will be governed by the
final adjudication of such issue.
8
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Rocky Mount, State of North Carolina, on the
17th day of September, 1996.
CENTURA BANKS, INC.
Registrant
/s/ Robert R. Mauldin
By:_________________________________
Robert R. Mauldin
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY. Each person whose signature appears below appoints
Joseph A. Smith, Jr., General Counsel and Corporate Secretary of the Registrant,
with full power of substitution, as attorney-in-fact to execute in their
respective names on their behalf individually, and in each capacity stated
below, the Registration Statement and one or more amendments (including
post-effective amendments) to the Registration Statement as the attorney-in-fact
and to file any such Registration Statement and any amendment to the
Registration Statement with the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
<S> <C> <C>
/s/ Robert R. Mauldin
_________________________ Chairman of the Board, September 17, 1996
Robert R. Mauldin Director, and Chief
Executive Officer
* Director, President, and _________, 1996
- ------------------------
Cecil W. Sewell, Jr. Chief Operating Officer
* Director, Group Executive _________, 1996
- -------------------------
Frank L. Pattillo Officer, and Chief
Financial Officer
9
<PAGE>
* Director and Group Execu- _________, 1996
- -------------------------
William H. Wilkerson tive Officer
* Principal Accounting Officer _________, 1996
- -------------------------
Ann K. Lawson
* Director _________, 1996
- -------------------------
William H. Kincheloe
* Director _________, 1996
- -------------------------
O. Tracy Parks III
* Director _________, 1996
- -------------------------
Richard H. Barnhardt
* Director _________, 1996
- -------------------------
Charles T. Lane
* Director _________, 1996
- -------------------------
J. Richard Futrell, Jr.
* Director _________, 1996
- -------------------------
Thomas A. Betts, Jr.
* Director _________, 1996
- -------------------------
C. Wood Beasley
* Director _________, 1996
- -------------------------
Alexander P. Thorpe III
* Director _________, 1996
- -------------------------
John H. High
* Director _________, 1996
- -------------------------
Robert L. Hubbard
* Director _________, 1996
- -------------------------
H. Tate Bowers
10
<PAGE>
* Director _________, 1996
- -------------------------
Ernest L. Evans
* Director _________, 1996
- -------------------------
William D. Hoover
* Director _________, 1996
- -------------------------
Jack A. Moody
* Director _________, 1996
- -------------------------
Clifton H. Moore
* Director _________, 1996
- -------------------------
Joseph H. Nelson
Director _________, 1996
George T. Stronach III
* Director _________, 1996
- -------------------------
Joseph L. Wallace, Jr.
* Director _________, 1996
- -------------------------
Charles P. Wilkins
* Director _________, 1996
- ------------------------
Charles M. Reeves, III
* Director _________, 1996
- ------------------------
William H. Redding, Jr.
/s/ Joseph A. Smith, Jr.
*By:__________________________ September 17, 1996
Joseph A. Smith, Jr.
Attorney-in-Fact
</TABLE>
11
<PAGE>
THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the
Plan has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Rocky Mount, State of
North Carolina, on the 17th day of September, 1996.
CENTURA BANKS, INC. 401(k) PLAN
By: CENTURA BANK, Trustee
/s/ Robert R. Mauldin
By:____________________________
Robert R. Mauldin
Chairman of the Board and
Chief Executive Officer
12
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Page
<S> <C> <C>
4.1 Excerpts from the Registrant's Incorporated
Articles of Incorporation and by Reference
Bylaws relating to rights of
holders of the Registrant's
capital stock (incorporated by
reference to Exhibit 4 of the
Registrant's Form S-4
Registration Statement No.
33-33773 originally filed with
the Commission on March 8,
1990).
4.2 Centura Banks, Inc. 401(k) Plan.
4.3 First Amendment to the
Centura Banks, Inc. 401(k) Plan.
5 Opinion of Poyner & Spruill,
L.L.P.
24.1 Consent of Poyner & Spruill, Included in
L.L.P. (included in Exhibit 5). Exhibit 5
24.2 Consent of KPMG Peat Marwick LLP.
25 Power of Attorney from Certain
Directors and Officers of
Registrant.
</TABLE>
13
<PAGE>
EXHIBIT 4.2
<PAGE>
CENTURA BANKS, INC. 401(k) PLAN
As Amended and Restated
Effective January 1, 1994
<PAGE>
CENTURA BANKS, INC. 401(k) PLAN
Table of Contents
<TABLE>
<CAPTION>
Page
ARTICLE 1
<S> <C>
EFFECTIVE DATE, PURPOSE, LEGAL EFFECT AND FORM OF PLAN.......................................................... 2
1.1 Effective Date................................................................................ 2
1.2 Purpose of Plan............................................................................... 2
1.3 Legal Effect.................................................................................. 2
1.4 Form of Plan.................................................................................. 3
1.5 Gender and Number............................................................................. 3
ARTICLE 2
DEFINITIONS..................................................................................................... 4
2.1 Act........................................................................................... 4
2.2 Adjustment Date............................................................................... 4
2.3 Beneficiary................................................................................... 4
2.4 Board......................................................................................... 4
2.5 Break in Service.............................................................................. 4
2.6 Brevard Prior Plan............................................................................ 4
2.7 Cash Subaccount............................................................................... 4
2.8 Code.......................................................................................... 4
2.9 Committee..................................................................................... 4
2.10 Compensation.................................................................................. 4
2.11 Cost Subaccount............................................................................... 5
2.12 Date of Employment............................................................................ 5
2.13 Date of Reemployment.......................................................................... 5
2.14 Disability.................................................................................... 5
2.15 Employee...................................................................................... 6
2.16 Employee Deferral Account..................................................................... 6
2.17 Employee Rollover Contribution Account........................................................ 6
2.18 Employee Voluntary Contribution Account....................................................... 6
2.19 Employer...................................................................................... 6
2.20 Employer Prior Discretionary Contribution Account............................................. 6
2.21 Employer Matching Contribution Account........................................................ 6
2.22 Employer Stock................................................................................ 7
2.23 Employer Stock Ownership Account.............................................................. 7
2.24 Entry Date.................................................................................... 7
2.25. First Carolina Prior Plan..................................................................... 7
2.26 First Charlotte Prior Plan.................................................................... 7
2.27 Forfeitures................................................................................... 7
2.28 Fund.......................................................................................... 7
2.29 Highly Compensated Employee................................................................... 7
2.30 Hour of Service............................................................................... 8
2.31 Inactive Participant.......................................................................... 9
2.32 Leave of Absence.............................................................................. 9
2.33 Limitation Year............................................................................... 9
i
<PAGE>
2.34 Non-highly Compensated Employee............................................................... 9
2.35 Normal Retirement Age......................................................................... 9
2.36 Normal Retirement Date........................................................................ 10
2.37 Number of Shares Subaccount................................................................... 10
2.38 Participant................................................................................... 10
2.39 PAYSOP Account................................................................................ 10
2.40 Peoples Prior Plan............................................................................ 10
2.41 Plan.......................................................................................... 10
2.42 Planters Prior Plan........................................................................... 10
2.43 Plan Administrator............................................................................ 10
2.44 Plan Year..................................................................................... 10
2.45 Qualified Employee............................................................................ 10
2.46 Qualified Matching Contribution Account....................................................... 10
2.47 Qualified Nonelective Contribution Account.................................................... 10
2.48 Qualifying Year of Service.................................................................... 10
2.49 Related Employer.............................................................................. 10
2.50 Trust or Trust Fund........................................................................... 11
2.51 Trustee....................................................................................... 11
2.52 Year of Service............................................................................... 11
ARTICLE 3
ELIGIBILITY AND PARTICIPATION................................................................................... 14
3.1 Eligibility................................................................................... 14
3.2 Participation................................................................................. 14
3.3 Transfer to or from Eligible Class of Employees............................................... 14
3.4 Service with a Related Employer............................................................... 14
3.5 Service as a Leased Employee.................................................................. 14
ARTICLE 4
CONTRIBUTIONS................................................................................................... 16
4.1 Employee Deferrals............................................................................ 16
4.2 Employer Matching Contributions............................................................... 17
4.3 Special Requirements for Employer Contributions to Finance Exempt Loan........................ 17
4.4 Qualified Nonelective Contributions........................................................... 17
4.5 Employer Contributions to Finance Exempt Loan................................................. 18
4.6 Portability................................................................................... 18
4.7 Return of Employee Deferrals.................................................................. 18
4.8 Adjustment of Deferrals....................................................................... 19
4.9 Adjustment of Employer Matching Contributions................................................. 21
4.10. Nondiscrimination as to Benefits.............................................................. 24
ARTICLE 5
BENEFITS........................................................................................................ 25
5.1 Normal Retirement and Delayed Retirement Date................................................. 25
5.2 Disability Retirement......................................................................... 25
5.3 Early Retirement.............................................................................. 25
5.4 Optional Methods of Settlement................................................................ 25
5.5 Commencement of Benefits...................................................................... 27
ii
<PAGE>
5.6 Consent Requirement........................................................................... 28
5.7. Distributions to Alternate Payees............................................................. 28
5.8 Special Distribution Requirements for Former First Charlotte Prior Plan Participants.......... 28
ARTICLE 6
DEATH BENEFITS.................................................................................................. 31
6.1 Amount and Payment of Death Benefits.......................................................... 31
6.2 Designation of Beneficiary.................................................................... 31
6.3 Payment of Death Benefits..................................................................... 31
6.4 Qualified Domestic Relations Order............................................................ 32
6.5 Special Beneficiary Designation Requirements for Former First Charlotte Prior Plan
Participants.................................................................................. 32
ARTICLE 7
VESTING......................................................................................................... 34
ARTICLE 8
DISTRIBUTIONS................................................................................................... 35
8.1 Withdrawal of Employee Deferrals.............................................................. 35
8.2 Withdrawal of Employee Contributions.......................................................... 35
8.3 Termination of Employment before Retirement................................................... 35
8.4 Vesting When a Participant Terminates Employment, Receives a Distribution and is
Rehired Prior to Five Consecutive One-Year Breaks in Service.................................. 35
8.5 PAYSOP Account................................................................................ 36
8.6 Deemed Distribution........................................................................... 36
8.7 Hardship Distributions........................................................................ 36
ARTICLE 9
ACCOUNTS........................................................................................................ 39
9.1 Committee Responsibility...................................................................... 39
9.2 Investment Elections.......................................................................... 39
9.3 Account Adjustments........................................................................... 40
9.4 Limitation on Annual Additions................................................................ 44
9.5 Limitation on Benefits and Contributions...................................................... 46
ARTICLE 10
TOP-HEAVY PLAN PROVISIONS....................................................................................... 47
10.1 Determination Date............................................................................ 47
10.2 Top-Heavy Plan................................................................................ 47
10.3 Key Employee.................................................................................. 47
10.4 Non-Key Employee.............................................................................. 48
10.5 Top-Heavy Group............................................................................... 48
10.6 Minimum Contributions and Benefits for Top-Heavy Plans........................................ 49
10.7 Top-Heavy Average Compensation................................................................ 49
10.8 Top-Heavy Years of Service.................................................................... 50
10.9 Top-Heavy Group Minimum-Contribution.......................................................... 50
iii
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10.10 Adjustments in Section 415 Limits for Top-Heavy Plans......................................... 50
ARTICLE 11
ADMINISTRATION BY COMMITTEE..................................................................................... 51
11.1 Committee..................................................................................... 51
11.2 Committee Officers and Subcommittees.......................................................... 51
11.3 Committee Meetings............................................................................ 51
11.4 Committee Action.............................................................................. 51
11.5 Committee Records............................................................................. 51
11.6 Committee Rules............................................................................... 51
11.7 Conflict of Interest.......................................................................... 51
11.8 Committee Authority........................................................................... 51
11.9 Advisors...................................................................................... 51
11.10 Compensation.................................................................................. 52
11.11 Expenses...................................................................................... 52
ARTICLE 12
ALLOCATION OF RESPONSIBILITIES AMONG NAMED FIDUCIARIES,
MANAGEMENT OF FUNDS AND AMENDMENT OR TERMINATION OF PLAN........................................................ 53
12.1 Allocation of Responsibilities................................................................ 53
12.2 Liability for Actions......................................................................... 54
12.3 Discharge of Duties........................................................................... 54
12.4 Trust Agreement............................................................................... 54
12.5 Committee Instructions........................................................................ 54
12.6 Amendment and Termination..................................................................... 54
12.7 Fiduciary Discretion.......................................................................... 54
12.8 Exempt Loans.................................................................................. 55
ARTICLE 13
MISCELLANEOUS................................................................................................... 57
13.1 Alienation of Benefits........................................................................ 57
13.2 Payment in Event of Incapacity................................................................ 57
13.3 Rights of Parties............................................................................. 57
13.4 Communication to Employees.................................................................... 57
13.5 Resumption of Employment...................................................................... 57
ARTICLE 14
TERMINATION OF PLAN AND TRUST, MERGER OR CONSOLIDATION OF PLAN.................................................. 58
14.1 Termination of Plan and Trust................................................................. 58
14.2 Merger or Consolidation....................................................................... 58
ARTICLE 15
CLAIMS PROCEDURE................................................................................................ 59
15.1 Filing of a Claim for Benefits................................................................ 59
15.2 Notification to Claimant of Decision.......................................................... 59
15.3 Claims Review Procedure....................................................................... 59
iv
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15.4 Decision on Review............................................................................ 59
15.5 Action by Authorized Representative of Claimant............................................... 60
ARTICLE 16
GOVERNING LAWS.................................................................................................. 61
16.1 Applicable Law................................................................................ 61
16.2 Headings...................................................................................... 61
16.3. Limitations of the Securities Exchange Act of 1934............................................ 61
ARTICLE 17
SPECIAL PROVISIONS.............................................................................................. 62
17.1 General....................................................................................... 62
17.2 Options on Distributed Shares of Employer Stock............................................... 62
17.3 Diversification of Investments................................................................ 63
17.4 Independent Appraisals........................................................................ 63
17.5 Voting of Shares.............................................................................. 63
17.6 Distributions................................................................................. 64
17.7 Tender Offers................................................................................. 65
</TABLE>
v
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CENTURA BANKS, INC. 401(K) PLAN
WHEREAS, The Planters Corporation, a corporation organized under the
laws of the State of North Carolina, amended and restated a salary deferral
thrift plan (the "Salary Deferral Thrift Plan of The Planters Corporation and
Subsidiaries") for the benefit of its qualified employees, said plan being
effective, as amended and restated, on January 1, 1990; and
WHEREAS, Peoples Bancorporation, a corporation organized under the laws
of the State of North Carolina, amended and restated a thrift plan (the "Peoples
Bancorporation and Adopting Related Employers 401(k) Profit Sharing Plan") for
its employees, said plan being effective, as amended and restated, on January 1,
1984; and
WHEREAS, The Planters Corporation and Peoples Bancorporation merged on
November 2, 1990 to become Centura Banks, Inc.; and
WHEREAS, Centura Banks, Inc. has merged the Peoples Bancorporation and
Adopting Related Employers 401(k) Profit Sharing Plan into the Salary Deferral
Thrift Plan of The Planters Corporation and Subsidiaries and has amended and
restated that plan effective December 31, 1990; and
WHEREAS, effective January 1, 1991, the Plan as amended and restated
was renamed the Centura Banks, Inc. 401(k) Plan, and has been operative since
such date for the benefit of eligible employees of Centura Banks, Inc. and its
subsidiaries; and
WHEREAS, Centura Banks, Inc. amended the Plan on December 19, 1991,
December 30, 1992, and twice on December 29, 1993, and desires to restate the
Plan to incorporate such amendments into a single plan document; and
WHEREAS, Centura Banks, Inc. desires to further amend the Plan to
accommodate the transfer to the Plan of assets and liabilities from the First
Charlotte Financial Corporation Retirement Savings Plan, which plan provides for
distributions in various annuity forms; and
WHEREAS, Centura Banks, Inc. desires to further amend the Plan (i) to
provide for a safe harbor definition of Compensation, effective January 1, 1995,
(ii) to limit Compensation taken into account for a Highly Compensated Employee
benefitting under an Exempt Loan, (iii) to eliminate provisions for
discretionary contributions, except those made to finance an Exempt Loan, (iv)
to clarify the accounting for certain contributions and accounts, (v) to conform
the provisions of Section 4.2 to those of Section 9.3 with respect to the
treatment of forfeitures, (vi) to provide that earnings or losses on Excess
Aggregate Contributions shall not be credited for the gap period between the end
of the Plan Year and distribution or forfeiture, provided the distribution or
forfeiture occurs prior to the first Adjustment Date after the close of such
Plan Year; (vii) to permit a Participant to waive the 30 day notice of the right
to elect a direct rollover; (viii) to change the timing of forfeitures,
effective October 1, 1994, and the sources for restoring forfeited balances,
effective January 1, 1994; (ix) to change the order of accounts from which
hardship distributions shall be taken; (x) to clarify the provisions of the Plan
relating to investment elections; (xi) to clarify the reallocation provisions
applicable to excess annual additions; (xi) to clarify the intent of the Plan
with respect to those portions constituting an employee stock ownership plan;
and (xii) to make certain other technical corrections as reflected herein;
NOW, THEREFORE, Centura Banks, Inc., a corporation organized under the
laws of the State of North Carolina, herein referred to as the Employer, does
hereby amend and restate and, as amended and restated, continue a salary
deferral thrift plan for the benefit of its Qualified Employees on the terms and
conditions described hereinafter.
<PAGE>
ARTICLE 1
EFFECTIVE DATE, PURPOSE, LEGAL EFFECT AND FORM OF PLAN
Section 1.1 Effective Date. Except as otherwise provided herein, the
effective date of the Plan, as amended and restated by Centura Banks, Inc., is
January 1, 1994.
Section 1.2 Purpose of Plan. The purpose of this Plan is to promote, in
the manner set forth hereinafter, the future economic welfare of the Employees,
to develop in those Employees an increased interest in the Employer's successful
operation and to encourage Employee savings. The intention of the Employer is
that the contributions made by it and Employee deferrals, together with the
income thereon, shall be accumulated and made available to such Employees upon
their retirement, all as set forth hereinafter. It is intended that this Plan
qualify as a stock bonus plan under Sections 401(a) and 401(k) of the Internal
Revenue Code, and an employee stock ownership plan as defined in Code Section
4975(e)(7). The portion of this Plan designated as an employee stock ownership
plan shall be primarily invested in Employer Stock.
It is further intended that, for purposes of nondiscrimination and
coverage testing under Sections 401(a)(4), 401(k), 401(m) and 410(b) of the
Code, and the regulations thereunder, the features of this Plan described in
Sections 401(k), 401(m) and 4975(e) of the Code shall be tested as if such
features constitute separate plans, in the manner provided in such sections, and
effective for Plan Years beginning on and after January 1, 1991.
Section 1.3 Legal Effect. As of December 31, 1990, the terms and
conditions of this Plan shall amend and supersede prospectively the terms and
conditions of the Planters Prior Plan, as amended and restated effective January
1, 1990, and the Peoples Prior Plan, as amended and restated effective January
1, 1984, and all subsequent amendments to such Prior Plans; provided, however,
that the provisions of such Prior Plans shall continue to govern the rights of
all Employees who retired or otherwise ceased to work for the Employer or their
respective employer prior to December 31, 1990, except as is otherwise expressly
stated herein.
As of January 1, 1993, the terms and conditions of this Plan shall
amend and supersede prospectively the terms and conditions of the First Carolina
Prior Plan, as established as of January 1, 1992, and all subsequent amendments
to such First Carolina Prior Plan; provided, however, that the provisions of
such First Carolina Prior Plan shall continue to govern the rights of all
Employees who retired or otherwise ceased to work for the Employer or their
respective employer prior to December 29, 1993, except as is otherwise expressly
stated herein.
As of September 30, 1993, the terms and conditions of this Plan shall
amend and supersede prospectively the terms and conditions of the Brevard Prior
Plan, as amended and restated effective January 1, 1989, and all subsequent
amendments to such Brevard Prior Plan; provided, however, that the provisions of
such Brevard Prior Plan shall continue to govern the rights of all Employees who
retired or otherwise ceased to work for the Employer or their respective
employer prior to December 29, 1993, except as is otherwise expressly stated
herein.
Notwithstanding the foregoing, to the extent necessary for certain
provisions of the Plan to apply to the Peoples Prior Plan, the Planters Prior
Plan, the First Carolina Prior Plan and/or the Brevard Prior Plan prior to
December 31, 1990, January 1, 1993 or September 30, 1993, as the case may be, in
order for such plans to maintain their qualified status in light of Tax Reform
Act of 1986 changes in the Internal Revenue Code, such provisions shall be
deemed retroactive amendments of such plans.
If the provisions of this Plan and the Trust Agreement which is part of
this Plan are found to be contradictory, then the provisions of this Plan
document shall apply.
Section 1.4 Form of Plan. The Plan shall be a single employer plan. The
total assets of the Plan shall be available to provide benefits for any Plan
Participant.
2
<PAGE>
Section 1.5 Gender and Number. The masculine gender shall be deemed to
include the feminine, and the singular shall include the plural unless otherwise
clearly required by the context.
3
<PAGE>
ARTICLE 2
DEFINITIONS
The following words and phrases, when used herein, shall have the
meanings set forth below unless otherwise clearly required by the context:
Section 2.1 Act. The Employee Retirement Income Security Act of 1974.
Section 2.2 Adjustment Date. The last day of March, June, September and
December in each Plan Year and such additional Adjustment Dates as the Committee
shall designate, from time to time.
Section 2.3 Beneficiary. The person or persons designated by a
Participant or Inactive Participant to receive the balance of his account, if
any, after his death.
Section 2.4 Board. The Board of Directors of Centura Banks, Inc.
Section 2.5 Break in Service. The termination and failure of an
Employee to complete more than 500 Hours of Service during a Plan Year. Such
break shall be effective as of the last day of the Plan Year in which such event
occurs.
Section 2.6 Brevard Prior Plan. The Brevard Federal Savings and Loan
Association Profit Sharing Plan.
Section 2.7 Cash Subaccount. The balance posted to the record of each
Participant, Inactive Participant, or Beneficiary consisting of any Employer
contributions consisting of cash, cash dividends which have been paid with
respect to Employer Stock allocated to his accounts and earnings on short term
investments which shall have been deposited in his Cash Subaccount pending
investment in Employer Stock.
Section 2.8 Code. The Internal Revenue Code of 1986, as amended, or as
it may be amended from time to time.
Section 2.9 Committee. The Compensation Committee as described in
Article 11. Provided, however, the Compensation Committee shall be authorized to
delegate some or all of its duties and functions as described in Article 11 to
the Benefits Administration Committee.
Section 2.10 Compensation. Except as provided in Section 10.7 of this
Plan, Compensation shall be the total earnings paid to a Participant by the
Employer during a Plan Year reported or reportable on U. S. Treasury Department
Wage and Tax Statement, Form W-2 (or similar form which may be required for such
purposes), including amounts deferred under this Plan and salary reduced under a
Code Section 125 arrangement maintained by the Employer, plus incentive pay,
overtime, and bonuses. Compensation shall exclude non-cash items, directors'
fees, reimbursed moving expenses and other similar nonrecurring payments, and
amounts allocated or benefits paid under this Plan or any other benefit plan of
the Employer, such as cash awards used to pay taxes on restricted stock
distributions.
Effective for Plan Years beginning on and after January 1, 1995, and
except as provided in Section 10.7 of this Plan, Compensation shall be the total
earnings paid to a Participant by the Employer during a Plan Year reported or
reportable on U.S. Treasury Department Wage and Tax Statement, Form W-2 (or
similar form which may be required for such purposes), including amounts
deferred under this Plan and salary reduced under a Code Section 125 arrangement
maintained by the Employer, plus incentive pay, overtime, and bonuses;
Compensation shall exclude reimbursements or other expense allowances, fringe
benefits (cash and non-cash), moving expenses, deferred compensation and welfare
benefits; and, in the case of any Highly Compensated Employee, Compensation
4
<PAGE>
shall also exclude any taxable benefit paid in cash or in kind under any
employee benefit plan or arrangement maintained by the Employer, such as cash
awards used to pay taxes on restricted stock distributions.
Notwithstanding the above, for Plan Years beginning on or after January
1, 1989, the annual Compensation of each Employee taken into account under this
Plan for any Plan Year shall not exceed $200,000, as adjusted pursuant to Code
Section 401(a)(17). In determining the Compensation of a Participant for
purposes of this limitation, the family aggregation rules of Code Section
414(q)(6) 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 19 before the close of the Plan Year. If,
as a result of the application of this paragraph the $200,000 limitation (as
adjusted) applies to a family aggregation unit, the limitation shall be prorated
among the affected individuals in proportion to each such affected individual's
Compensation as determined under this Section prior to the application of this
limitation.
References to $200,000 within this Section shall be replaced by
references to $150,000, effective January 1, 1994. Such amount shall be indexed
as described above, except that such limit shall be rounded to the lowest
increment of $10,000.
Effective for Plan Years beginning on and after January 1, 1994, the
Compensation of Highly Compensated Employees who are the intended beneficiaries
of an Exempt Loan under the Plan shall be further limited for purposes of making
allocations in respect of contributions to repay such Exempt Loan so that the
aggregate of such Compensation does not exceed one-third of the aggregate
Compensation of the entire group of intended beneficiaries of such Exempt Loan.
The Committee shall make a separate determination with respect to each
outstanding Exempt Loan, and in the event an adjustment is necessary to satisfy
this limitation the Committee shall reduce the Compensation of Highly
Compensated Employees, beginning with the highest paid and proceeding in reverse
order of Compensation until the limitation is satisfied.
Section 2.11 Cost Subaccount. The balance posted to the record of each
Participant, Inactive Participant, or Beneficiary consisting of the average cost
of shares of Employer Stock purchased during any Plan quarter and allocated to
his accounts.
Section 2.12 Date of Employment. The first date on which an Employee
completes an Hour of Service.
Section 2.13 Date of Reemployment. The date on which an Employee
completes an Hour of Service following a termination or Break in Service.
Section 2.14 Disability shall be determined as follows. Any Participant
who is not yet eligible for early or normal retirement, and who ceases to be an
Employee due to disability shall be considered disabled if:
(a) a Participant qualifies for any disability benefits sponsored
by the Employer under any existing insured disability income
plan, or if no such benefits are provided, then
(b) a Participant becomes unable to engage in any substantial
gainful occupation by reason of any physical or mental
impairment which, on the basis of competent medical opinion to
the satisfaction of the Committee, meets the following
requirements:
(1) The Participant has become totally disabled by bodily
injury, disease or mental disorder and is unable to
perform any and every duty of any gainful occupation
for which he is reasonably fitted by training,
education, or experience, and
(2) Such disability has continued for a period of six
consecutive months and will be permanent and
continuous for the remainder of the Participant's
lifetime.
5
<PAGE>
(c) For purposes of this Plan, however, no Participant shall be
deemed totally and permanently disabled if his disability
results from chronic alcoholism, addiction to narcotics,
injury incurred while engaging in any illegal or felonious
enterprise, intentionally self-inflicted injury, or injury
incurred while serving in the armed forces of any country.
(d) The Employer may require proof of continued disability from
time to time, but not more frequently than once in any six (6)
month period.
Section 2.15 Employee. Any person who is employed by the Employer.
Section 2.16 Employee Deferral Account. The balance posted to the
record of each Participant, Inactive Participant or Beneficiary consisting of
elective deferrals of the Participant's Compensation and adjustments as of each
Adjustment Date, less any payments therefrom. Each Employee Deferral Account
shall include, where appropriate, subaccounts which reflect Employee-directed
investments if permitted in Section 9.2.
Section 2.17 Employee Rollover Contribution Account. The balance posted
to the record of each Participant, Inactive Participant or Beneficiary
consisting of the Participant's rollovers or transfers, pursuant to Section 4.6,
and adjustments as of each Adjustment Date. Each Employee Rollover Contribution
Account shall include, where appropriate, subaccounts which reflect
Employee-directed investments if permitted in Section 9.2.
Section 2.18 Employee Voluntary Contribution Account. The balance
posted to the record of each Participant, Inactive Participant, or Beneficiary
consisting of the balance of the Employee Participant's voluntary contribution
account under the Peoples Prior Plan as of December 31, 1990, immediately prior
to its merger and amendment and restatement and adjustments as of each
subsequent Adjustment Date, less any payments therefrom. Each Employee Voluntary
Contribution Account shall include, where appropriate, subaccounts which reflect
Employee-directed investments if permitted in Section 9.2.
Section 2.19 Employer. Centura Banks, Inc. and any Related Employer
which has adopted the Plan and Trust with the consent of Centura Banks, Inc. To
the extent not indicated otherwise, the term Employer shall be deemed to apply
to each Employer independently. For purposes of the Plan, Centura Banks, Inc.
shall be deemed the representative of each adopting Related Employer and any
action taken by Centura Banks, Inc. shall be binding on all Employers. An
adopting Related Employer shall cease its participation in the Plan if it no
longer constitutes a Related Employer or if such Related Employer loses its
status as a legal entity by means of dissolution, merger, consolidation,
bankruptcy or otherwise.
Section 2.20 Employer Prior Discretionary Contribution Account. The
balance posted to the record of each Participant, Inactive Participant, or
Beneficiary consisting of the balance of his Employer Basic and Elective
Contribution Accounts under the Peoples Prior Plan as of December 31, 1990,
immediately prior to its merger and amendment and restatement and adjustments as
of each subsequent Adjustment Date, less any distributions therefrom and amounts
forfeited. Each Employer Prior Discretionary Contribution Account shall include,
where appropriate, subaccounts which reflect Employee-directed investments.
Section 2.21 Employer Matching Contribution Account. The balance posted
to the record of each Participant, Inactive Participant, or Beneficiary
consisting of his allocated share of Employer matching contributions and
adjustments as of each Adjustment Date, less any distributions therefrom and
amounts forfeited. The Employer Matching Contribution Account of each
Participant shall include, as appropriate, a special subaccount for any Employer
Stock allocated to the account in connection with an Exempt Loan pursuant to
Section 12.8. Each Employer Matching Contribution Account shall be subdivided
into a Cash Subaccount, a Cost Subaccount, and a Number of Shares Subaccount.
6
<PAGE>
Section 2.22 Employer Stock. Shares of common stock of Centura Banks,
Inc. which are readily tradable on an established securities market and any
securities substituted for such stock by way of recapitalization,
reorganization, merger or consolidation.
Section 2.23 Employer Stock Ownership Account. The balance posted to
the record of each Participant, Inactive Participant or Beneficiary consisting
of the balance of his Employer Stock Ownership Account under the Peoples Prior
Plan or Planters Prior Plan, or both, as of December 31, 1990, plus any
dividends which may accrue thereon after that date, and his allocated share of
Employer discretionary contributions applied to finance an Exempt Loan and
adjustments as of each subsequent Adjustment Date, less any distributions
therefrom and amounts forfeited. Each Employer Stock Ownership Account shall be
subdivided to a Cash Subaccount, a Cost Subaccount and a Number of Shares
Subaccount. Each Employer Stock Ownership Account shall also include, as
appropriate, a special subaccount for any Employer Stock allocated to the
account in connection with an Exempt Loan pursuant to Section 12.8, which
subaccount shall be subdivided into a Cash Subaccount, a Cost Subaccount, and a
Number of Shares Subaccount.
Section 2.24 Entry Date. The first day of January, April, July and
October of each Plan Year.
Section 2.25. First Carolina Prior Plan. The First Carolina Bank
Employees 401(k) Salary Deferral Plan.
Section 2.26 First Charlotte Prior Plan. The First Charlotte Financial
Corporation Retirement Savings Plan.
Section 2.27 Forfeitures. The divested portion of a Participant's
Employer Matching Contribution Account, Employer Prior Discretionary
Contribution Account, and Employer Stock Ownership Account.
Section 2.28 Fund. Any of the funds allowed as an investment election
under Section 9.2.
Section 2.29 Highly Compensated Employee. The term highly Compensated
Employee includes highly compensated active Employees and highly compensated
former Employees.
A highly compensated active Employee includes any Employee who performs
service for the Employer during the Determination Year and who, during the
Look-Back Year: (i) received compensation from the Employer in excess of $75,000
(as adjusted pursuant to Code Section 415(d)); (ii) received compensation from
the Employer in excess of $50,000 (as adjusted pursuant to Code Section 415(d))
and was a member of the top-paid group for such year; or (iii) was an officer of
the employer and received compensation during such year that is greater than 50
percent of the dollar limitation in effect under Code Section 415(b)(1)(A). 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 of the 100
Employees who received the most compensation from the Employer during the
Determination Year; and (ii) Employees who are 5 percent owners at any time
during the Look-Back Year or Determination Year.
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. The
Look-Back Year shall be the twelve-month period immediately preceding the
Determination Year.
A highly compensated former Employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
Determination Year, performs no service for the Employer during the
Determination Year, and was a highly compensated active Employee for either the
separation year or any Determination Year ending on or after the Employee's 55th
birthday.
7
<PAGE>
If an Employee is, during a Determination Year or Look-Back Year, a
family member of either a 5 percent owner who is an active or former Employee or
a Highly Compensated Employee who is one of the 10 most highly compensated
Employees ranked on the basis of compensation paid by the Employer during such
year, then the family member and the 5 percent owner or top-ten highly
compensated Employee shall be aggregated. In such case, the family member and 5
percent owner or top-ten highly compensated Employee shall be treated as a
single Employee receiving Compensation and Plan contributions or benefits equal
to the sum of such Compensation and contributions or benefits of the family
member and 5 percent owner or top-ten Highly Compensated Employee. For purposes
of this section, 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 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.
Section 2.30 Hour of Service.
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These
hours shall be credited to the Employee for the computation
period in which the duties are performed, and
(b) Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence.
Notwithstanding the preceding sentence:
(1) No more than 501 hours are required to be credited
under this paragraph to an Employee on account of any
single continuous period during which the Employee
performs no duties (whether or not such period occurs
in a single computation period);
(2) An hour for which an Employee is directly or
indirectly paid, or entitled to payment, on account
of a period during which no duties are performed is
not required to be credited to the Employee if such
payment is made or due under a plan maintained solely
for the purpose of complying with applicable
workmen's compensation, or unemployment compensation
or disability insurance laws; and
(3) Hours are not required to be credited for a payment
which solely reimburses an Employee for medical or
medically related expenses incurred by the Employee.
(c) Each hour for which back pay, irrespective of mitigation or
damages, is either awarded or agreed to by the Employer. The
same hours shall not be credited both under paragraph (a) or
paragraph (b), as the case may be, and under this paragraph
(c). These hours shall be credited to the Employee for the
computation period or periods to which the award or agreement
pertains rather than the computation period in which the
award, agreement or payment is made.
(d) Each hour which is required to be credited to an Employee for
military service under applicable law and regulations and
which is not otherwise credited under this Section.
(e) Where the Employer maintains the plan of a predecessor
employer, service for such predecessor employer shall be
treated as service with the Employer.
8
<PAGE>
(f) Hours under this Section shall be calculated and credited
pursuant to Section 2530.200b-2(b) and (c) of the Department
of Labor Regulations which are incorporated herein by
reference.
(g) Solely for purposes of determining whether a Break in Service
for participation and vesting purposes has occurred, an
Employee or former Employee who is absent from work for
maternity or paternity leave shall receive credit either for
the Hours of Service, as described in subsections (a) - (f)
above, which would otherwise have been credited to such
Employee or former Employee but for such absence, or in any
case in which such Hours of Service cannot be determined,
eight Hours of Service per day of absence. The total number of
Hours of Service credited under this subsection (g) shall not
exceed 501. Hours of Service pursuant to this paragraph shall
be credited in the computation period during which the absence
begins if doing so would prevent a Participant from incurring
a one-year Break in Service in that computation period. In any
other case, these hours shall be credited in the following
computation period. For purposes of this paragraph, an absence
from work for maternity or paternity leave means an absence
(1) by reason of pregnancy of the Employee or former Employee,
(2) by reason of the birth of a child of the Employee or
former Employee, (3) by reason of placement of a child with
the Employee or former Employee in connection with the
adoption of such child by such Employee or former Employee, or
(4) for purposes of caring for such child for a period
beginning immediately following such birth or placement.
Notwithstanding the above, no credit shall be given for Hours
of Service pursuant to this subsection (g) unless the Employee
or former Employee furnishes sufficient information to the
Committee to establish that the absence is due to maternity or
paternity leave and the number of days of such absence.
Section 2.31 Inactive Participant. Any person who terminates employment
or otherwise ceases to be a Participant but whose interest in the Trust Fund has
not been wholly distributed.
Section 2.32 Leave of Absence. Any absence, not to exceed a period of
one year, authorized by the Employer under its standard personnel practices as
applied in a uniform and nondiscriminatory manner to all persons similarly
situated. If active service is not resumed upon expiration of a Leave of
Absence, the Employee shall be deemed to have terminated his employment when the
Employee left the active service of the Employer, provided that if such Employee
suffers Disability or dies during an authorized Leave of Absence, the benefits,
if any, to which he or his Beneficiary is entitled shall be determined as if
such Disability or death occurred while in the active service of the Employer.
Section 2.33 Limitation Year. The limitation year shall be the Plan
Year.
Section 2.34 Non-highly Compensated Employee. Any Employee who is not a
Highly Compensated Employee.
Section 2.35 Normal Retirement Age. The sixty-fifth birthday of a
Participant.
Section 2.36 Normal Retirement Date. The first day of the calendar
quarter coincident with or next following the Normal Retirement Age of the
Participant.
Section 2.37 Number of Shares Subaccount. The balance posted to the
record of each Participant or Beneficiary consisting of the number of whole and
fractional shares of Employer Stock purchased by or allocated to his accounts.
Section 2.38 Participant. Every Employee who has met the requirements
of Article 3 and who is not an Inactive Participant.
9
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Section 2.39 PAYSOP Account. The balance posted to the record of each
Participant, Inactive Participant or Beneficiary consisting of the balance of
his PAYSOP Account or Employee PAYSOP Account or both under the Peoples Prior
Plan or Planters Prior Plan, as of December 31, 1990, plus any dividends which
may accrue thereon after that date less any distributions therefrom. Each PAYSOP
Account shall be subdivided into a Cash Subaccount, a Cost Subaccount, and a
Number of Shares Subaccount.
Section 2.40 Peoples Prior Plan. The Peoples Bancorporation and
Adopting Related Employers 401(k) Profit Sharing Plan.
Section 2.41 Plan. The Centura Banks, Inc. 401(k) Plan as herein set
out or as duly amended.
Section 2.42 Planters Prior Plan. The Salary Deferral Thrift Plan of
The Planters Corporation and Subsidiaries.
Section 2.43 Plan Administrator. The Committee.
Section 2.44 Plan Year. The 12-month period ending on December 31 of
each year.
Section 2.45 Qualified Employee. Any Employee. In no event shall a
"leased employee," as defined in Code Section 414(n)(2), be a Qualified
Employee.
Section 2.46 Qualified Matching Contribution Account. The balance
posted to the record of each Participant, Inactive Participant, or Beneficiary
consisting of his allocated share of qualified matching contributions and
adjustments as of each Adjustment Date, less any distributions therefrom.
Section 2.47 Qualified Nonelective Contribution Account. The balance
posted to the record of each Participant, Inactive Participant, or Beneficiary
consisting of his allocated share of qualified nonelective contributions and
adjustments as of each Adjustment Date, less any distributions therefrom.
Section 2.48 Qualifying Year of Service. For the purpose of
participation, the 12-consecutive month period beginning on an Employee's Date
of Employment or Date of Reemployment during which he completes at least 1,000
Hours of Service. After the initial 12-consecutive month period a Qualifying
Year of Service shall mean any Plan Year beginning with the Plan Year which
includes the first anniversary of his Date of Employment or Date of Reemployment
during which he completes at least 1,000 Hours of Service.
Section 2.49 Related Employer. A corporation which is a member of a
controlled group of corporations (within the meaning of Sections 1563(a)(1),
(a)(2) and (a)(3) of the Code) of which the Employer is also a member. Related
Employer shall also mean any other trade or business, whether or not
incorporated, which is under common control, within the meaning of Section
414(c) of the Code, with the Employer and/or all members of an Affiliated
Service Group within the meaning of Section 414(m) of the Code. For purposes of
Sections 9.4 and 9.5 of this Plan, however, the phrase "more than 50 percent"
shall be substituted for the phrase "at least 80 percent" each place it appears
in Section 1563(a)(1) of the Code.
Section 2.50 Trust or Trust Fund. The total of the contributions made
pursuant to the Plan by the Employer and by the Participants and held by the
Trustee in a separate Trust, increased by profits or income thereto and
decreased by loss or expense incurred in the administration of the Trust or
payments therefrom under the Plan.
Section 2.51 Trustee. The bank, trust company, other financial
institution, or individual or individuals holding and managing the Fund
according to the terms of Centura Banks, Inc. 401(k) Plan Trust Agreement.
10
<PAGE>
Section 2.52 Year of Service. For the purposes of vesting and early
retirement, a Plan Year during which an Employee has completed at least 1,000
Hours of Service, subject to the following qualifications and exceptions:
(a) In the case of a Participant who has no vested interest in his
Employer Matching Contribution Account, Employer Stock
Ownership Account and Employer Prior Discretionary
Contribution Account, Years of Service before any period of
consecutive one-year Breaks in Service shall be disregarded if
the number of consecutive one-year Breaks in Service equals or
exceeds the greater of five or the aggregate number of Years
of Service before such period. Any Years of Service
disregarded pursuant to the previous sentence shall also be
disregarded when applying the provisions of that sentence to a
subsequent period of Breaks in Service.
(b) Service performed prior to a Break in Service shall be
disregarded if such Break in Service commenced prior to
January 1, 1983.
(c) Years of Service as of January 1, 1983 shall mean the
continuous service any Employee would have had on January 1,
1983.
(d) For purposes of vesting, Years of Service, as determined
above, with a Related Employer, during the period the
companies are related, shall be considered Years of Service
with the Employer.
(e) Where the Employer maintains the plan of a predecessor
employer, Years of Service, as determined above, with such
predecessor employer shall be treated as Years of Service with
the Employer.
(f) Service prior to December 31, 1990, shall be credited for
those individuals who were participants in the Planters Prior
Plan, subject to subsection (a) of this Section.
(g) Service prior to December 31, 1990, shall be credited for
those individuals who were participants in the Peoples Prior
Plan, subject to subsection (a) of this Section.
(h) Service with companies that are acquired by the Employer or
merged with the Employer shall be credited in accordance with
an amendment to this Plan that specifies how such service
shall be treated. In the absence of stated provisions to the
contrary, service for all purposes for employees who were
employed by a company which adopted this Plan concurrent with
or subsequent to a merger or acquisition shall be credited
only from such date of merger or acquisition. Agreed upon
credits for service with respect to prior mergers or
acquisitions are as follows:
11
<PAGE>
<TABLE>
<CAPTION>
=============================================================================================================================
DATE FROM WHICH SERVICE IS CREDITED
- -----------------------------------------------------------------------------------------------------------------------------
Eligibility
for Early
Acquired Bank Vesting Participation Retirement
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumberland Bank DOH DOH DOH
- -----------------------------------------------------------------------------------------------------------------------------
Mid South Bank DOH DOH Later of
DOH or
1/1/87
- -----------------------------------------------------------------------------------------------------------------------------
Atlantic Savings and Loan Association DOH DOH DOH
- -----------------------------------------------------------------------------------------------------------------------------
Watauga Savings and Loan DOH DOH DOH
- -----------------------------------------------------------------------------------------------------------------------------
Bank of Smithfield DOH DOH DOH
- -----------------------------------------------------------------------------------------------------------------------------
Bank of Pilot Mountain DOH DOH DOH
- -----------------------------------------------------------------------------------------------------------------------------
Murpheesboro, Woodland and Seaboard DOH DOH DOH
branches of NCNB
- -----------------------------------------------------------------------------------------------------------------------------
Hobbsville branch of NCNB DOH DOH DOH
- -----------------------------------------------------------------------------------------------------------------------------
Citizens Federal Savings & Loan DOH DOH DOH
(EFFECTIVE DECEMBER 27, 1991)
- -----------------------------------------------------------------------------------------------------------------------------
First Carolina Bank and Trust Company DOH DOH DOH
(EFFECTIVE JANUARY 1, 1993)
- -----------------------------------------------------------------------------------------------------------------------------
Orange Federal Savings and Loan DOH DOH DOH
Association (EFFECTIVE JANUARY 1, 1993)
- -----------------------------------------------------------------------------------------------------------------------------
Brevard Federal Savings and Loan DOH DOH DOH
Association (EFFECTIVE APRIL 16, 1993)
- -----------------------------------------------------------------------------------------------------------------------------
Granite Savings Bank, SSB (EFFECTIVE DOH DOH DOH
JULY 30, 1993)
- -----------------------------------------------------------------------------------------------------------------------------
First Savings Bank of Forest City, SSB DOH DOH DOH
(EFFECTIVE OCTOBER 15, 1993)
- -----------------------------------------------------------------------------------------------------------------------------
Canton Savings Bank, SSB (EFFECTIVE DOH DOH DOH
DECEMBER 31, 1993)
- -----------------------------------------------------------------------------------------------------------------------------
Robeson Savings Bank, Inc. SSB DOH DOH DOH
(EFFECTIVE DECEMBER 31, 1993)
- -----------------------------------------------------------------------------------------------------------------------------
First Charlotte Financial Corporation DOH DOH DOH
(EFFECTIVE DECEMBER 31, 1993)
- -----------------------------------------------------------------------------------------------------------------------------
First Charlotte Bank and Trust Company DOH DOH DOH
(EFFECTIVE DECEMBER 31, 1993)
=============================================================================================================================
</TABLE>
DOH = Original date of hire with the acquired bank.
12
<PAGE>
(i) Effective only for the Plan Year commencing January 1, 1993,
each Employee who was a Participant under the First Carolina
Prior Plan and whose Service has been calculated under the
First Carolina Prior Plan on an anniversary of employment
commencement basis (provided such basis is not equivalent to
calculation on a Plan Year basis) shall receive credit for a
Year of Service for the applicable computation period ending
within the 1993 Plan Year in addition to receiving credit for
a Year of Service as calculated on a Plan Year basis in this
Section 2.51, provided such Employee has completed 1,000 Hours
of Service in each of such computation periods.
13
<PAGE>
ARTICLE 3
ELIGIBILITY AND PARTICIPATION
Section 3.1 Eligibility. All participants in the Peoples Prior Plan or
Planters Prior Plan on December 30, 1990, shall be Participants in this Plan on
December 31, 1990. Any other Full-Time Qualified Employee who has completed six
consecutive months of service and any other Full-Time or Part-Time Qualified
Employee who has completed a Qualifying Year of Service shall become a
Participant at the time specified in Section 3.2. Notwithstanding the above, if
a Part-Time Qualified Employee completes 1,000 or more Hours of Service during
his first six months of employment, he shall become a Participant at the time
specified in Section 3.2.
For purposes of this Section, a "Full-Time Qualified Employee" is a
Qualified Employee who is expected to complete 1,000 or more Hours of Service
during a Plan Year. A "Part-Time Qualified Employee" is a Qualified Employee who
is expected to complete less than 1,000 Hours of Service during a Plan Year.
Any employee of a bank acquired by or merged with the Employer shall
become a Participant at the time specified in Section 3.2, following the date of
acquisition or merger, provided such employee has completed six months of
service with such acquired or merged bank.
Section 3.2 Participation. Any Qualified Employee who has satisfied the
requirements of Section 3.1 shall become a Participant on the Entry Date
coincident with or next following the date on which such requirements are met
unless such Employee separated from service and did not return to employment
before his Entry Date.
Once a Qualified Employee becomes a Participant, he shall remain a
Participant until he terminates employment with an Employer regardless of the
number of Hours of Service he completes in a Plan Year.
A Qualified Employee who terminates employment after meeting the
requirements of Section 3.1 and is rehired shall become a Participant on the
later of his Date of Reemployment or the first Entry Date after he first met the
eligibility requirements.
Section 3.3 Transfer to or from Eligible Class of Employees. In the
event an Employee who is not a Qualified Employee becomes a Qualified Employee,
such Employee will be eligible to participate immediately if such Employee has
satisfied the minimum service requirements and would otherwise have previously
become a Participant.
Section 3.4 Service with a Related Employer. Service with a Related
Employer not adopting this Plan shall be considered service with the Employer
when determining if a Qualified Employee has completed a Qualifying Year of
Service.
A Participant who transfers employment to a company which is a Related
Employer not adopting this Plan shall remain covered by the Plan, but such
Inactive Participant shall share in Employer matching contributions only to the
extent of his deferrals while a Participant. For vesting purposes, such Inactive
Participant shall continue to accrue Years of Service hereunder. If such
Inactive Participant is transferred again to the Employer, he shall participate
in the Plan on his date of transfer. If such individual remains in the employ of
a Related Employer not adopting this Plan until his termination of employment,
his benefits shall be calculated based on the provisions of Articles 5 and 7.
Section 3.5 Service as a Leased Employee. Each "leased employee" who
performs services for the Employer or Related Employer on a substantially
full-time basis for a period of at least one year shall be considered an
Employee or an employee of a Related Employer as appropriate for purposes of
determining if this Plan satisfies the minimum coverage requirements of Code
Section 410(b). An individual will be considered to have performed services on a
substantially full-time basis if that individual is credited with the lesser of
1,500 Hours of Service or
14
<PAGE>
75% of the Hours of Service that are customarily performed by an Employee or an
Employee of a Related Employer in the particular position.
If a "leased employee" becomes eligible to participate by being hired
in a capacity other than as a "leased employee," service while a "leased
employee" shall be considered when determining such Employee's Qualifying Years
of Service and Years of Service.
15
<PAGE>
ARTICLE 4
CONTRIBUTIONS
Section 4.1 Employee Deferrals. A Qualified Employee who has met the
requirements of Section 3.1 may elect to defer between .5% and 10% of his
Compensation in .5% increments during the Plan Year for which the election is
being made. Such election must be made at least 15 days prior to any Entry Date
following eligibility or such other date as may be established by the Committee
from time to time.
In no event shall a Participant's deferrals during any calendar year
beginning on or after January 1, 1987, to this Plan or any other qualified plan
maintained by the Employer exceed $7,000 (as adjusted pursuant to Code Section
402(g)(5)).
Effective for Plan Years beginning on or after January 1, 1991, a
Participant may change his deferral percentage as of the first day of each
quarter.
A Participant may revoke his deferral election at any time during the
Plan Year. Any Participant who so revokes his election shall be ineligible to
make another election to defer until the first Entry Date following a six month
suspension.
For purposes of this Section 4.1, Compensation used for determining the
amount of any deferral shall be Compensation for the Plan Year for which such
election is made, including any increases in Compensation during the Plan Year.
Only Compensation received while an Employee is eligible to participate in the
Plan shall be taken into account for this purpose.
The election shall specify in writing the percentage to be deferred and
contributed to the Trust.
Deferrals made pursuant to this Section shall be paid to the Trustee as
soon as administratively feasible, but no later than 90 days after the date the
Participant would have received the deferrals as Compensation, and credited to
the Participant's Employee Deferral Account. Any amounts not elected to be
deferred shall be paid to the Participant as current Compensation.
A Participant who participates in another plan may assign to this Plan
any deferrals made during a taxable year that exceed the $7,000 (as adjusted)
limitation by notifying the Committee in writing on or before April 1 of the
year following the year in which the deferral was made, the amount of such
excess deferrals to be assigned to the Plan.
Notwithstanding any other provision of this Plan, the excess deferrals
assigned to this Plan, plus any income and minus any loss allocable thereto,
shall be distributed no later than April 15 to any Participant who assigned such
excess deferrals to this Plan for the preceding year.
Effective for Plan Years beginning on or after January 1, 1991, no
adjustments for income or loss shall be allocable to excess deferrals provided
that the excess deferrals are distributed prior to the Adjustment Date of the
Plan Year following the Plan Year of the excess deferrals.
The amount of a Participant's excess deferrals that must be distributed
for a taxable year pursuant to this Section shall be reduced by any Excess
Contributions previously distributed with respect to the Participant for the
Plan Year beginning with or within such taxable year.
16
<PAGE>
Section 4.2 Employer Matching Contributions.
(a) Basic Matching Contributions. As of each Adjustment Date in
each Plan Year or as of such other dates as shall be
determined by the Employer, the Employer shall contribute to
the Trust an amount which will equal 50% of the first 6% of
the Compensation deferred by the Participant during the Plan
Year.
As of each Adjustment Date, the Employer Matching Contribution
Account of each Participant who made deferrals of Compensation
under Section 4.1 during the calendar year ending on such
Adjustment Date shall be credited with the matching
contribution of the Employer on such Participant's behalf for
such calendar year.
(b) Qualified Matching Contributions. In addition to the matching
contributions described above, as of the final Adjustment Date
in each Plan Year, the Employer may contribute qualified
matching contributions to the Trust in such amount as the
Board shall determine, but not in excess of 50% of the first
6% of the Compensation deferred by the Participants during the
calendar quarter or Plan Year. Participants who terminate
employment during a Plan Year shall not receive a qualified
matching Employer contribution allocation.
As of the Adjustment Date for which the contribution is made,
the Qualified matching contributions made pursuant to this
Section shall be paid to the Trustee and credited to the
Qualified Matching Contribution Account of each Participant
who made deferrals of Compensation under Section 4.1 during
the calendar year ending on such Adjustment Date. Each
Participant shall at all times be fully vested in his
Qualified Matching Contribution Account.
The Committee may elect to treat all or a portion of the
qualified matching contributions as Employee deferrals for
purposes of the Actual Deferral Percentage Test under Section
4.6.
All matching contributions shall be made in cash, shares of
Employer Stock, or both. Any cash contributions shall be used
within a reasonable time to purchase Employer Stock.
Section 4.3 Special Requirements for Employer Contributions to Finance
Exempt Loan. As of the last Adjustment Date in each Plan Year, the Employer
contributions to finance an Exempt Loan shall be allocated among Participants
employed on the last day of the Plan Year and Participants who retired, died or
became disabled during the Plan Year. The Committee, in its discretion, may
allocate all or any portion of such Employer discretionary contributions to
those Employee/Participants of designated employee groups in order to satisfy
the provisions of Section 4.5. Such allocations shall be made to the
Participants in each employee group in the same proportion that the Compensation
of each Participant in a particular employee group bears to the total
Compensation of all participants in such employee group. Notwithstanding the
above, a Participant who terminates employment prior to the last day of a Plan
Year, but who has 501 or more Hours of Service, may receive an allocation for
the Plan Year in accordance with the preceding sentence, to the extent necessary
to satisfy the coverage requirements of Section 410(b) of the Code.
Section 4.4 Qualified Nonelective Contributions. In addition to any
other contributions under this Plan, the Employer may elect to contribute to the
Trust for a Plan Year qualified nonelective contributions in such amount as the
Board shall determine. Effective for Plan Years beginning on and after January
1, 1991, the Employer's qualified nonelective contributions shall be allocated
to those Participants as shall be determined by the Committee, in its
discretion. In no event, however, shall the total contribution for a Plan Year
exceed the maximum amount deductible by the Employer for such Plan Year for
federal income tax purposes, including any credit carry-over from one or more
prior Plan Years.
17
<PAGE>
As of each Adjustment Date in each Plan Year, any qualified nonelective
contributions shall be allocated among Participants, whether or not those
Participants are deferring a portion of Compensation as allowed in Section 4.1,
who are employed on the last day of the calendar quarter ending on such
Adjustment Date, in the same proportion that each of these Participants'
Compensation bears to the total Compensation of all these Participants for such
Plan Year. For purposes of this Section, Compensation shall be measured from the
later of the first day of the Plan Year or the first day of the calendar quarter
after the last Adjustment Date on which a qualified nonelective contribution was
allocated.
Contributions made pursuant to this Section shall be paid to the
Trustee and credited to the Participant's Qualified Nonelective Contribution
Account. Each Participant shall at all times be fully vested in his Qualified
Nonelective Contribution Account.
To the extent a qualified nonelective contribution is authorized by the
Board for the purpose of satisfying the Actual Deferral Percentage test set
forth in Section 4.8, such a contribution shall be made only on behalf of
Non-highly Compensated Employees and only to the extent necessary to satisfy the
requirements of Section 4.8. Such amount shall be contributed to Non-highly
Compensated Employees beginning with the Non-highly Compensated Employee who has
the smallest Actual Deferral Percentage. If two or more Non-highly Compensated
Employees have identical Actual Deferral Percentages, their Actual Deferral
Percentages shall be increased until they equal those of the next largest
Non-highly Compensated Employee, and then shall be increased pro rata until the
test set forth in Section 4.8 is satisfied.
All qualified nonelective contributions shall be made in cash, shares
of Employer Stock, or both. Any cash contributions shall be used within a
reasonable time to purchase Employer Stock.
Section 4.5 Employer Contributions to Finance Exempt Loan.
Notwithstanding the above, the Employer contributions for a Plan Year which are
made on behalf of those Plan Participants who are intended to be the
beneficiaries of an Exempt Loan shall not be less than the amount required to
enable the Trust to discharge any indebtedness payable during the Plan Year in
connection with such Exempt Loan pursuant to Section 12.8.
For each Plan Year during the duration of any such indebtedness, the
number of securities released must equal the number of encumbered securities
held immediately before release for the current plan year multiplied by a
fraction, the numerator of which is the amount of principal and interest paid
for the year, and the denominator of which is the sum of the numerator plus the
principal and interest to be paid for all future years.
Section 4.6 Portability. A Qualified Employee who has been a member of
another qualified retirement plan may, with the consent of the Committee,
transfer assets from the said former plan to the Trust Fund for this Plan. Such
transferred assets will be fully vested at all times and may be transferred to
the Plan of a successor employer at the request of the Inactive Participant and
with the consent of the successor employer, or such assets of an Inactive
Participant may be transferred to an individual retirement account at the
request of the former Employee. Only those assets accumulated in another
qualified plan may be transferred. Transfers may occur through a conduit
individual retirement account. Transfers must be in cash or such other assets as
the Committee may accept. Any such transferred assets shall be held in a
separate account in the name of the Participant and shall reflect the net
earnings or net losses of the trust fund. However, such assets may be commingled
for investment purposes and invested in the same manner as other trust assets.
Provided, however, no amounts may be transferred to this Plan from another plan
if, as a result of such transfer, this Plan would be required to comply with
Code Section 401(a)(11) as a transferee plan, without the Employer's consent.
Section 4.7 Return of Employee Deferrals. Each Participant shall at all
times be fully vested in the amount in his Employee Deferral Account, but a
Participant or his Beneficiary shall be entitled to payment of the amount
credited to such account only upon the occurrence of an event described in and
in accordance with Articles 5, 6, or 7.
18
<PAGE>
Section 4.8 Adjustment of Deferrals. The provisions of this Section
shall generally apply to Plan Years beginning on or after January 1, 1987. In
order to ensure that the Plan remains qualified under Code Section 401(k), the
Committee shall monitor the Employee deferrals and determine whether they
satisfy the Actual Deferral Percentage test referred to in the next paragraph.
The Actual Deferral Percentage test is satisfied only if:
(a) The Actual Deferral Percentage for Eligible Employees who are
Highly Compensated Employees is not more than the Actual
Deferral Percentage for all other Eligible Employees
multiplied by 1.25, or
(b) The excess of the Actual Deferral Percentage for Eligible
Employees who are Highly Compensated Employees over the Actual
Deferral Percentage for all other Eligible Employees is not
more than two (2) percentage points, and the Actual Deferral
Percentage for Eligible Employees who are Highly Compensated
Employees is not more than the Actual Deferral Percentage for
all other Eligible Employees multiplied by 2.0.
If one or more Highly Compensated Employees are subject to both the
Actual Contribution Percentage test as described in Section 4.9 and the Actual
Deferral Percentage test as described above, then the excess, if any, of the sum
of the Actual Deferral Percentage and Actual Contribution Percentage of those
Highly Compensated Employees subject to either or both tests over the greater of
(i) the sum of (1) 125 percent of the greater of the Actual Deferral Percentage
of the Non-highly Compensated Employees or the Actual Contribution Percentage of
the Non-highly Compensated Employees and (2) the lesser of 200 percent or two
plus the lesser of such Actual Deferral Percentage or Actual Contribution
Percentage or (ii) the sum of (1) 125 percent of the lesser of the Actual
Deferral Percentage of the Non-highly Compensated Employees or the Actual
Contribution Percentage of the Non-highly Compensated Employees and (2) the
lesser of 200 percent or two plus the greater of such Actual Deferral Percentage
or Actual Contribution Percentage, shall be treated as an Excess Aggregate
Contribution or Excess Contribution, or both, and corrected in the manner
prescribed in this Article for such excesses. Correction is only required for
those Highly Compensated Employees who are eligible to participate in both an
arrangement subject to the Actual Deferral Percentage test and a plan subject to
the Actual Contribution Percentage test maintained by the Employer. This
paragraph shall not apply, however, if the Actual Contribution Percentage of the
Highly Compensated Employees does not exceed 1.25 multiplied by the Actual
Contribution Percentage of the Non-highly Compensated Employees, or the Actual
Deferral Percentage of the Highly Compensated Employees does not exceed 1.25
multiplied by the Actual Deferral Percentage of the Non-highly Compensated
Employees.
For purposes of this Section 4.8, the following terms shall have the
meanings hereinafter set forth:
(a) The term "Eligible Employee" shall mean an Employee who is
directly or indirectly eligible to make an Employee deferral
under the Plan for a Plan Year.
(b) The term "Actual Deferral Percentage" shall mean, with respect
to the group of Eligible Employees who are Highly Compensated
Employees and with respect to the group of all other Eligible
Employees, the average (expressed as a percentage to the
one-hundredth of one percent) of the Actual Deferral Ratios of
the Employees in each group.
(c) The term "Actual Deferral Ratio" shall mean the ratio
(expressed as a percentage) of the Employee deferrals (and
qualified Matching and/or qualified nonelective contributions
taken into account for purposes of this test pursuant to
Sections 4.2 and 4.4) under the Plan on behalf of each
Eligible Employee for the Plan Year to the Eligible Employee's
Compensation for the Plan Year. However, if an Eligible
Employee who is highly Compensated is eligible to make
Employee deferrals under two or more qualified plans
maintained by the Employer or a Related Employer,
19
<PAGE>
his Actual Deferral Ratio shall be determined as if all such
contributions were made under a single plan.
In the case of a Family Aggregation Group (which is treated as
one Highly Compensated Employee) the Actual Deferral Ratio
shall be the Actual Deferral Ratio determined by combining the
Employee deferrals and Compensation of all Eligible Employees
who are members of the Family Aggregation Group and are Highly
Compensated Employees without regard to the Family Aggregation
Group.
Except as provided above, the Employee deferrals and
Compensation of all members of a Family Aggregation Group are
disregarded in determining the Actual Deferral Percentage for
the group of Eligible Employees who are Highly Compensated
Employees and the group of all other Eligible Employees.
(d) The term "Excess Contributions" means, with respect to any
Plan Year, the excess of the aggregate amount of the Employee
deferrals actually made on behalf of Highly Compensated
Employees for such Plan Year, over the maximum amount which
would satisfy the Actual Deferral Percentage test.
The Excess Contributions of each Highly Compensated Employee
for a Plan Year is determined by a leveling method, under
which the Actual Deferral Ratio of the Highly Compensated
Employee with the highest Actual Deferral Ratio is reduced to
the extent required to (1) enable the Plan to satisfy the
Actual Deferral Percentage test, or (2) cause such Highly
Compensated Employee's Actual Deferral Ratio to equal the
ratio of the Highly Compensated Employee with the next highest
Actual Deferral Ratio. This process is repeated until the Plan
satisfies the Actual Deferral Percentage test. For each Highly
Compensated Employee, the amount of Excess Contribution is
equal to the total Employee deferrals made on behalf of the
Employee minus the amount determined by multiplying the
Employee's Actual Deferral Ratio (after the above leveling) by
his Compensation for such Plan Year.
In the case of a Family Aggregation Group, if the Actual
Deferral Ratio of the group is determined using all family
members, determination and correction of the Excess
Contribution is accomplished in the manner described above and
then allocated among the family members in proportion to the
Employee deferrals of each family member that are combined to
determine the Actual Deferral Ratio. If the Actual Deferral
Ratio of the group is determined using only family members who
would have been Highly Compensated Employees without regard to
the Family Aggregation Group, then the determination and
correction of the Excess Contribution is accomplished first by
reducing in the manner described above; but not below the
Actual Deferral Ratio of the family members of the Family
Aggregation Group who are not otherwise Highly Compensated
Employees. Excess Contributions are determined by taking into
account the contributions of the family members which were
combined to determine the Actual Deferral Ratio of the Family
Aggregation Group and then allocated among such family members
in proportion to each such family member's Employee deferrals.
If further reduction is required, it is accomplished by
reducing all family members on a pro-rata basis.
Each Highly Compensated Employee's Excess Contributions shall
consist first of unmatched Employee deferrals, and then to the
extent necessary, matched Employee deferrals.
(e) The term "Family Aggregation Group" shall mean a group
consisting of an Eligible Employee who is both a Highly
Compensated Employee and either a five-percent owner (as
defined in Section 10.3(c)) or one of the ten most highly paid
Employees, and other Eligible Employees who are that Eligible
Employee's spouse, lineal ascendants or descendants, and the
spouses of such
20
<PAGE>
lineal ascendants and descendants. For this purpose, legal
adoptions shall be taken into account. If an Eligible Employee
is a member of more than one Family Aggregation Group, all
Eligible Employees who are members of those Family Aggregation
Groups shall be treated as members of one Family Aggregation
Group.
If the Actual Deferral Percentage test is not met currently or on a
projected basis, the Committee shall have the right to reduce the amount of the
deferral election of Highly Compensated Participants (as herein defined) in an
equitable manner. Any reduction of the amount to be deferred by Highly
Compensated Participants will apply only to the particular Plan Year or
remainder of such Plan Year for which the Plan fails to satisfy the Actual
Deferral Percentage test.
If voluntary and involuntary adjustments during the Plan Year do not
bring the Plan into compliance with the Actual Deferral Percentage test, the
Committee shall distribute the Excess Contributions and any income or loss
allocable thereto to the Participants to whose accounts such Excess
Contributions were allocated. Such distribution must take place after the close
of the Plan Year in which the Excess Contribution arose and within twelve months
after the close of such Plan Year.
The income (or loss) allocable to Excess Contributions shall equal the
income (or loss) allocable to the Participant's Employee Deferral Account (and,
if applicable, the Qualified Nonelective Contribution Account or the Qualified
Matching Contributions Account or both) for the Plan Year multiplied by a
fraction, the numerator of which is such Participant's Excess Contributions for
the year and the denominator of which is the Participant's account balance
attributable to Employee deferrals (and Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, if any of such contributions are
included in the ADP test) without regard to any income or loss occurring during
such Plan Year. Income or loss allocable to Excess Contributions shall not
include any amount in respect of the period between the close of the Plan Year
of the Excess Contributions and the date of distribution of such Excess
Contributions, provided such distribution is made before the first Adjustment
Date after the close of such Plan Year. Any distribution of Excess Contributions
for a Plan Year made after the first Adjustment Date after the close of such
Plan Year shall be further adjusted in a manner consistent with the method
described above to reflect additional income or loss allocable for the period
between the close of such Plan Year and the Adjustment Date preceding such
distribution.
The Committee may elect to treat a portion of the Employee deferrals as
matching contributions for purposes of the Actual Contribution Percentage test
under Section 4.9, so long as the Actual Deferral Percentage test is met both
with and without the use of such Employee deferrals.
The amount of a Participant's Excess Contributions to be distributed
pursuant to this Section for a Plan Year shall be reduced by any excess
deferrals previously distributed to the Participant for the Participant's
taxable year ending with or within such Plan Year.
Section 4.9 Adjustment of Employer Matching Contributions. The
provisions of this Section shall generally apply to Plan Years beginning on or
after January 1, 1987. In order to ensure that the Plan remains qualified under
Code Section 401(m), the Committee shall monitor the Employer matching
contributions and determine whether they satisfy the Actual Contribution
Percentage test referred to in the next paragraph.
The Actual Contribution Percentage test is satisfied only if:
(a) The Actual Contribution Percentage for Eligible Employees who
are Highly Compensated Employees is not more than the Actual
Contribution Percentage for all other Eligible Employees
multiplied by 1.25, or
(b) The excess of the Actual Contribution Percentage for Eligible
Employees who are Highly Compensated Employees over the Actual
Contribution Percentage for all other Eligible Employees
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is not more than two (2) percentage points, and the Actual
Contribution Percentage for Eligible Employees who are Highly
Compensated Employees is not more than the Actual Contribution
Percentage for all other Eligible Employees multiplied by 2.0.
For purposes of this Section 4.9, the following terms shall have the
meanings hereinafter set forth:
(a) The term "Eligible Employee" shall mean an Employee who is
directly or indirectly eligible to receive an allocation of
matching contributions (including matching contributions
derived from Forfeitures) under the Plan for a Plan Year.
(b) The term "Actual Contribution Percentage" shall mean, with
respect to the group of Eligible Employees who are Highly
Compensated Employees and with respect to the group of all
other Eligible Employees, the average (expressed as a
percentage) of the Actual Contribution Ratios of the Employees
in each group.
(c) The term "Actual Contribution Ratio" shall mean the ratio
(expressed as a percentage) of the Employer matching
contributions, to the extent not taken into account for
purposes of the Actual Deferral Percentage test, qualified
nonelective contributions taken into account for purposes of
this test pursuant to Section 4.4 and Employee deferrals taken
into account for purposes of this test pursuant to Section 4.1
under the Plan on behalf of each Eligible Employee for the
Plan Year to the Eligible Employee's Compensation for the Plan
Year. However, if an Eligible Employee who is Highly
Compensated is eligible to receive Employer matching
contributions allocated to his account under two or more
qualified plans maintained by the Employer or a Related
Employer, his Actual Contribution Ratio shall be determined as
if all such contributions were made under a single plan.
In the case of a Family Aggregation Group (which is treated as
one Highly Compensated Employee) the Actual Contribution Ratio
shall be the Actual Contribution Ratio determined by combining
the actual and deemed Employer matching contributions and
Compensation of all Eligible Employees who are members of the
Family Aggregation Group and are Highly Compensated Employees
without regard to the Family Aggregation Group.
Except as provided above, the actual and deemed Employer
matching contributions and Compensation of all members of a
Family Aggregation Group are disregarded in determining the
Actual Contribution Percentage for the group of Eligible
Employees who are Highly Compensated Employees and the group
of all other Eligible Employees.
(d) The term "Excess Aggregate Contributions" means, with respect
to any Plan Year, the excess of the aggregate amount of the
actual and deemed Employer matching contributions actually
made on behalf of Highly Compensated Employees for such Plan
Year, over the maximum amount which would satisfy the Actual
Contribution Percentage test.
The Excess Aggregate Contributions of each Highly Compensated
Employee for a Plan Year is determined by a leveling method,
under which the Actual Contribution Ratio of the Highly
Compensated Employee with the highest Actual Contribution
Ratio is reduced to the extent required to (1) enable the Plan
to satisfy the Actual Contribution Percentage test, or (2)
cause such Highly Compensated Employee's Actual Contribution
Ratio to equal the ratio of the Highly Compensated Employee
with the next highest Actual Contribution Ratio. This process
is repeated until the Plan satisfies the Actual Contribution
Percentage test. For each Highly Compensated Employee, the
amount of Excess Aggregate Contribution is equal to the total
actual and deemed Employer matching contributions made on
behalf of the Employee minus the amount determined
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by multiplying the Employee's Actual Contribution Ratio (after
the above leveling) by his Compensation for such Plan Year.
In the case of a Family Aggregation Group, if the Actual
Contribution Ratio of the group is determined using all family
members, determination and correction of the Excess Aggregate
Contribution is accomplished in the manner described above and
then allocated among the family members in proportion to the
actual and deemed Employer matching contributions of each
Family member that are combined to determine the Actual
Contribution Ratio. If the Actual Contribution Ratio of the
group is determined using only family members who would have
been Highly Compensated Employees without regard to the Family
Aggregation Group, then the determination and correction of
the Excess Aggregate Contribution is accomplished first by
reducing in the manner described above; but not below the
Actual Contribution Ratio of the family members of the Family
Aggregation Group who are not otherwise Highly Compensated
Employees. Excess Aggregate Contributions are determined by
taking into account the contributions of the family members
which were combined to determine the Actual Contribution Ratio
of the Family Aggregation Group and then allocated among such
family members in proportion to each such family member's
actual and deemed Employer matching contributions. If further
reduction is required, it is accomplished by reducing all
family members on a pro-rata basis.
(e) The term "Family Aggregation Group" shall mean a group
consisting of an Eligible Employee who is both a Highly
Compensated Employee and either a five-percent owner (as
defined in Section 10.3(c)) or one of the ten most highly paid
Employees, and other Eligible Employees who are that Eligible
Employee's spouse, lineal ascendants or descendants, and the
spouses of such lineal ascendants and descendants. For this
purpose, legal adoptions shall be taken into account. If an
Eligible Employee is a member of more than one Family
Aggregation Group, all Eligible Employees who are members of
those Family Aggregation Groups shall be treated as members of
one Family Aggregation Group.
If the Actual Contribution Percentage test is not met on a current or
projected basis, the Committee shall have the right to reduce the amount of the
contribution election of Highly Compensated Participants (as herein defined) in
an equitable manner. Any reduction of the amount to be contributed by Highly
Compensated Participants will apply only to the particular Plan Year or
remainder of such Plan Year for which the Plan fails to satisfy the Actual
Contribution Percentage test.
If adjustments during the Plan Year do not bring the Plan into
compliance with the Actual Contribution Percentage test, the Committee shall
forfeit, to the extent not vested under the Plan, or distribute the Excess
Aggregate Contributions and income allocable thereto to the Participants to
whose accounts such Excess Aggregate Contributions were allocated. Such
distribution or forfeiture must take place after the close of the Plan Year in
which the Excess Aggregate Contribution arose and within twelve months after the
close of such Plan Year. Any distribution or forfeiture of Excess Aggregate
Contributions for any Plan Year shall be made on the basis of the respective
portions of such amounts attributable to each Highly Compensated Employee.
The income or loss allocable to Excess Aggregate Contributions is the
sum of: (1) income or loss allocable to the Participant's Employer Matching
Contribution Account (if any) Qualified Matching Contribution Account (if any,
and if all amounts therein are not used in the ADP test) and, if applicable,
Qualified Nonelective Contribution Account and Employee Deferral Account for the
Plan Year multiplied by a fraction, the numerator of which is such Participant's
Excess Aggregate Contributions for the year and the denominator of which is the
Participant's account balance(s) attributable to the Participant's Employer
Matching Contribution Account (if any) Qualified Matching Contribution Account
(if any, and if all amounts therein are not used in the ADP test) and, if
applicable, Qualified Nonelective Contribution Account and Employee Deferral
Account for the Plan Year without regard to any income or loss occurring during
such Plan Year. Income or loss allocable to Excess Aggregate Contributions shall
not include any amount in respect of the period between the close of the Plan
Year of the Excess Aggregate
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Contributions and the date of distribution or forfeiture of such Excess
Aggregate Contributions, provided such distribution or forfeiture is made before
the first Adjustment Date after the close of such Plan Year. Any distribution or
forfeiture of Excess Aggregate Contributions for a Plan Year made after the
first Adjustment Date after the close of such Plan Year shall be further
adjusted in a manner consistent with the method described above to reflect
additional income or loss allocable for the period between the close of such
Plan Year and the Adjustment Date coinciding with or preceding such distribution
or forfeiture.
Section 4.10. Nondiscrimination as to Benefits. To the extent necessary
to satisfy the provisions of Code Section 401(a)(4) and the regulations
thereunder, this Plan may be restructured and treated as consisting of separate
component plans for testing purposes pursuant to Treasury Regulations Section
1.401(a)(4)-9(c) with respect to specific employee groups designated by the
Committee. Where Exempt Loans have been obtained, pursuant to Section 12.8, to
benefit individual employee groups, this Plan shall be restructured as permitted
in Treasury Regulations Section 1.401(a)(4)-9(c) and this Section 4.10 to test
such employee groups separately under Code Section 401(a)(4), unless the
Committee determines that restructuring is not necessary for the purpose of
satisfying Code Section 401(a)(4). In determining the Employees in a specific
employee group, in no event shall any Employee/Participant be permitted to be
included in more than one such group. Restructuring shall not be permitted with
respect to demonstrating compliance with Code Section 401(k) or 401(m),
effective for Plan Years beginning on or after January 1, 1992.
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ARTICLE 5
BENEFITS
Section 5.1 Normal Retirement and Delayed Retirement Date. A
Participant shall be eligible to retire and receive a retirement benefit
effective as of his Normal Retirement Date. If the Participant remains in the
employ of the Employer after his Normal Retirement Date, he shall continue to be
a Participant in the Plan until his actual retirement. When a Participant
retires on a date other than an Adjustment Date, his benefit shall be determined
as of the next succeeding Adjustment Date, provided that the Committee may, in a
nondiscriminatory manner, cause one or more interim payments to be made to the
Participant beginning as of his actual date of retirement.
Section 5.2 Disability Retirement. If a Participant or Inactive
Participant suffers Disability, his retirement shall be effective as of his date
of Disability. His benefit shall be determined as of any Adjustment Date, as
selected by the Participant or Inactive Participant, coincident with or
succeeding the determination of Disability, but in no event later than the
Adjustment Date coincident with or next succeeding his Normal Retirement Date.
Such Disability benefit shall be payable to him pursuant to Section 5.4 hereof
commencing as of the Adjustment Date chosen based on his account balance as of
such Adjustment Date.
Section 5.3 Early Retirement. A Participant or Inactive Participant who
has not attained his Normal Retirement Date but has attained at least his 55th
birthday may elect early retirement under this Plan to be effective as of the
next or any succeeding Adjustment Date following termination of employment and
written notice to the Employer and to the Committee. Such early retirement
benefit shall be payable to him pursuant to Section 5.4 hereof commencing as of
the Adjustment Date chosen based on his account balance as of such Adjustment
Date.
Section 5.4 Optional Methods of Settlement. Except as provided in
Section 5.8 with respect to any Participant or Inactive Participant who was a
participant in and had an account under the First Charlotte Prior Plan, the
balance of which was transferred to this Plan in a trustee-to-trustee transfer,
each Participant or Inactive Participant shall be offered the following optional
methods of settlement:
(a) Lump Sum: Payment of the Participant's interest in the Plan in
a single sum.
(b) Installments from Trust Fund: Payment of such amount to him in
approximately equal monthly installments over a period elected
by the Participant of not less than five nor more than fifteen
years. If such method of payment would result in payments of
less than $25 per month, such amount shall be paid at the rate
of $25 per month until it is exhausted. The total amount
credited to the accounts of the Inactive Participant shall
remain in the Fund and shall be adjusted as of each Adjustment
Date as provided in the Plan, and such installments shall be
modified to reflect such adjustments. If the Participant dies
prior to the exhaustion of his accounts, the payments shall
continue to his Beneficiary in the manner chosen by the
Participant subject to the provisions of Section 5.5.
(c) Open-Ended Withdrawal: Effective for Plan Years beginning on
and after January 1, 1993, with respect to an Inactive
Participant, payments in such amounts and with such frequency
as may be elected by the Inactive Participant, provided the
Inactive Participant's withdrawal rights shall not be
exercisable in amounts less than the lesser of $500 or the
balance of the account, and not more frequently than once in
each calendar quarter, and shall be exercisable only as of an
Adjustment Date.
All amounts in the Employer Stock Fund shall be paid in Employer Stock
unless the Participant or Inactive Participant elects to take cash. However,
cash will be paid in lieu of fractional shares.
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<PAGE>
Notwithstanding the above, if the value of the Participant's vested
account balance does not exceed $3,500, his vested account shall be distributed
to the Participant as a lump sum.
If the Participant's entire interest is to be distributed in other than
a lump sum, then the amount to be distributed each year must be at least an
amount equal to the quotient obtained by dividing the Participant's entire
interest by (1) the life expectancy of the Participant, or (2) the joint and
last survivor expectancy of the Participant and designated Beneficiary. Life
expectancy and joint and last survivor expectancy are computed by the use of the
return multiples contained in Section 1.72-9 of the Income Tax Regulations. For
purposes of this computation, a Participant's life expectancy may be
recalculated no more frequently than annually, however, the life expectancy of a
nonspouse Beneficiary may not be recalculated.
Notwithstanding the above, the amount to be distributed each year must
not be less than the quotient obtained by dividing the Participant's benefit by
the lesser of (1) the life expectancy of the Participant or joint and last
survivor expectancy of the Participant and designated Beneficiary; or (2) if the
Participant's spouse is not the designated Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of Section 1.401(a)(9)-2 of the
Income Tax Regulations. Distributions after the death of the Participant shall
be calculated using the applicable life expectancy set forth in the preceding
paragraph as the relevant divisor.
With respect to distributions made on or after January 1, 1993, and
notwithstanding any provisions of the Plan to the contrary that would otherwise
limit a distributee's election under this Section, a distributee may elect, at
the time and in the manner prescribed by the Committee, to have any portion of
an eligible rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
As used in this Section, the following definitions shall apply:
(a) "Eligible rollover distribution" shall mean any distribution
of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution
does not include any distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income.
(b) "Eligible retirement plan" shall mean an individual retirement
account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to
the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity.
(c) "Distributee" shall mean an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse
and the Employee's or former Employee's spouse or former
spouse who is the alternate payee under a qualified domestic
relations order, as defined in Section 414(p) of the Code, are
distributees with regard to the interest of the spouse or
former spouse.
(d) "Direct rollover" shall mean a payment by the Plan to the
eligible retirement plan specified by the distributee.
The Committee may prescribe reasonable procedures for a distributee to
elect a direct rollover pursuant to this Section, and may require that the
distributee provide such information and documentation as may be reasonably
necessary to accomplish a direct rollover. The Committee shall not be required
to execute a direct
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rollover of a portion of the balance to the credit of the distributee if such
portion is not equal to at least $500. The Committee shall not be required to
execute a direct rollover with respect to eligible rollover distributions of a
distributee during a year that are reasonably expected to total less than $200.
Furthermore, the Committee shall not be required to divide an eligible rollover
distribution with respect to a distributee into separate distributions to be
paid to two or more eligible retirement plans in direct rollovers.
A distributee who fails to make an affirmative election under this
Section shall be treated as having not made an election for a direct rollover,
provided the distributee has received a written explanation of the direct
rollover option within a reasonable time before the eligible rollover
distribution.
If a distribution is one to which Code Sections 401(a)(11) and 417 do
not apply, such distribution may commence less than 30 days after the notice
required under Regulation 1.411(a)-11(c) is given, provided that: (1) the
Administration Committee clearly informs the Participant that the Participant
has a right to a period of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and (2) the Participant, after
receiving the notice, affirmatively elects a distribution.
The provisions of this Section 5.4, as amended, shall apply to the
Brevard Prior Plan from and after January 1, 1993.
Section 5.5 Commencement of Benefits.
(a) Benefits under this Plan must begin, unless the Participant
elects otherwise, no later than the 60th day after the close
of the Plan Year in which the latest of the following events
occur:
(1) the Participant attains Normal Retirement Age,
(2) the Participant terminates his service with the
Employer, or
(3) the tenth anniversary of the year in which the
Participant commences participation in the Plan.
(b) Benefits for a Participant or Inactive Participant must begin
no later than the earlier of the time specified in Section
5.5(a) or the Participant's or Inactive Participant's Required
Beginning Date, as defined in (c) below.
(c) The Required Beginning Date of a Participant or Inactive
Participant is generally the April 1 of the calendar year
following the calendar year in which the Participant or
Inactive Participant attains age 70 1/2. However, the Required
Beginning Date of a Participant or Inactive Participant who
attains age 70 1/2 before January 1, 1988, shall be determined
in accordance with (1) or (2) below:
(1) The Required Beginning Date of a Participant or
Inactive Participant who is not a 5-percent owner is
the April 1 following the calendar year in which the
later of retirement or attainment of age 70 1/2
occurs.
(2) The Required Beginning Date of a Participant or
Inactive Participant who is a 5-percent owner during
any year beginning after December 31, 1979, is the
April 1 following the later of (i) the calendar year
in which the Participant or Inactive Participant
attains age 70 1/2, or (ii) the earlier of the
calendar year with or within which ends the Plan Year
in which the Participant or Inactive Participant
becomes a 5-percent owner, or the calendar year in
which the Participant or Inactive Participant
retires.
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The Required Beginning Date of a Participant or Inactive
Participant who is not a 5-percent owner and who attains age
70 1/2 during 1988, and who has not retired as of January 1,
1989, is April 1, 1990.
For purposes of this Section, a Participant or Inactive
Participant is considered a 5-percent owner if such
Participant or Inactive Participant is a 5-percent owner as
defined in Section 10.3(c)(2) without regard to whether the
Plan is top-heavy, in any Plan Year beginning with the Plan
Year in which the Participant attains age 66 1/2.
(d) Once distributions have begun to a 5-percent owner under this
Section, they must continue to be distributed, even if the
Participant or Inactive Participant ceases to be a 5-percent
owner in a subsequent year.
Section 5.6 Consent Requirement. Notwithstanding anything in this Plan
to the contrary, no distribution shall commence to a Participant or Inactive
Participant prior to age 65, without the written consent of the Participant or
Inactive Participant, unless his or her vested total account balance does not
exceed $3,500 and did not exceed $3,500 at the time of any prior distribution.
Section 5.7. Distributions to Alternate Payees. Effective for Plan
Years beginning on and after January 1, 1993, solely for purposes of determining
the earliest date as of which the former spouse of a Participant or Inactive
Participant may receive a distribution under this Plan pursuant to a qualified
domestic relations order described in Code Section 414(p), the earliest
retirement age under the Plan shall be deemed to be the Adjustment Date
coinciding with or next succeeding the date on which the order is determined to
be qualified. Nothing in this Section 5.7 shall be interpreted to permit
distribution to the Participant or Inactive Participant except as otherwise
provided in this Plan.
Section 5.8 Special Distribution Requirements for Former First
Charlotte Prior Plan Participants. Effective on and after December 31, 1994,
each Participant or Inactive Participant who was a participant in and had an
account under the First Charlotte Prior Plan, the balance of which was
transferred to this Plan in a trustee-to- trustee transfer, shall be offered the
following optional methods of settlement at the time and in the manner described
in Section 5.5, provided his vested account balance exceeds (or has ever
exceeded) $3,500.
(a) Life Annuity: An annuity payable in equal monthly installments
during the Participant's lifetime only on the last day of each
calendar month in which the Participant shall have lived the
entire month.
(b) Joint and One-half Survivor Annuity: An annuity whereby a
monthly installment shall be paid to the Participant during
his lifetime and thereafter in one-half of such monthly amount
to his surviving spouse during her lifetime on the first day
of each calendar month in which the Participant or his spouse
shall have lived the entire month. If the Participant's
spouse, however, shall die before the commencement of
payments, this option shall be inoperative.
(c) Other Joint and Survivor Annuity: An annuity whereby a monthly
installment shall be paid to the Participant during his
lifetime and thereafter in either such monthly amount or
three-fourths of such monthly amount to his surviving spouse
during her lifetime on the first day of each calendar month in
which the Participant or his spouse shall have lived the
entire month. If the Participant's spouse, however, shall die
before the commencement of payments, this option shall be
inoperative.
(d) Lump Sum: Payment of the Participant's interest in the Plan in
a single sum, as provided in Section 5.4.
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(e) Installments from Trust Fund: Payment of such amount to him in
approximately equal monthly installments over a period elected
by the Participant of not more than fifteen years, as provided
in Section 5.4, but without regard to the limitations in
Section 5.4(b).
Any benefits payable under such optional methods in the form of an
annuity shall be purchased from a legal reserve life insurance company with the
total amount credited to the accounts of the Participant or Inactive
Participant. Such annuity must comply with the distribution requirements of Code
Section 401(a)(9) and the regulations thereunder.
In no event shall payments under any optional method extend beyond the
later of the lifetime of the Participant, the lifetime of the Participant and
the Participant's Beneficiary, the life expectancy of the Participant or the
joint life expectancies of the Participant and his Beneficiary.
If the Participant's entire interest is to be distributed in other than
a lump sum, then the amount to be distributed each year must be at least an
amount equal to the quotient obtained by dividing the Participant's entire
interest by (1) the life expectancy of the Participant, or (2) the joint and
last survivor expectancy of the Participant and designated Beneficiary. Life
expectancy and joint and last survivor expectancy are computed by the use of the
return multiples contained in Section 1.72-9 of the Income Tax Regulations. For
purposes of this computation, a Participant's life expectancy may be
recalculated no more frequently than annually, however, the life expectancy of a
nonspouse Beneficiary may not be recalculated.
Notwithstanding the above, the amount to be distributed each year must
not be less than the quotient obtained by dividing the Participant's benefit by
the lesser of (1) the life expectancy of the Participant or joint and last
survivor expectancy of the Participant and designated Beneficiary; or (2) if the
Participant's spouse is not the designated Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of Section 1.401(a)(9)-2 of the
Income Tax Regulations. Distributions after the death of the Participant shall
be calculated using the applicable life expectancy set forth in the preceding
paragraph as the relevant divisor.
A payment option as set forth in this Section 5.8 shall be elected,
changed or revoked by the Participant, his guardian, or attorney-in-fact, by
written notice filed with the Committee during the election period specified
below; provided, however:
(a) A Beneficiary under an option with benefits payable for a
period certain may be changed by written notice to the
Committee.
(b) A married Participant shall be deemed to have elected a joint
and one-half survivor annuity with his spouse as his
Beneficiary unless he makes an affirmative election not to
take such an annuity.
(c) If the Beneficiary under a joint and one-half survivor option
dies before the commencement of payments, the election shall
be inoperative.
(d) If a timely election shall not have been made, payment shall
be paid as a life annuity to an unmarried Participant, unless
otherwise provided herein.
For purposes of this Section 5.8, a former spouse will be treated as
the spouse to the extent provided under a qualified domestic relations order as
described in Code Section 414(p) and the benefit shall be recalculated, if
necessary, to provide the spouse with the spouse's portion of a joint and
one-half survivor annuity.
Notwithstanding the above, any election made by a Participant not to
provide a joint and survivor annuity to his spouse which is at least as valuable
to the spouse as the joint and one-half survivor annuity shall not take effect
unless the Participant's spouse consents in writing to such election and the
consent acknowledges the effect of such election. The spouse's consent must be
witnessed by a Plan representative or a notary public or it must be
29
<PAGE>
established to the satisfaction of a Plan representative that the consent cannot
be obtained because there is no spouse, because the spouse cannot be located or
because of such other circumstances as the Secretary of the Treasury may
prescribe by regulations.
A Participant may elect the method of benefit payment during the 90-day
period ending on his benefit distribution commencement date. Any election made
during the election period shall be revocable, and another such election may be
made at any time prior to the close of the election period, at which time the
last such election which shall have been made shall be irrevocable. Any such
election, and any revocation thereof, shall be made by notice in writing to the
Committee in a form which is satisfactory to the Committee.
Consistent with regulations prescribed by the Secretary of the Treasury
and no less than 30 days and no more than 90 days before the Participant's
benefit distribution commencement date, a written statement shall be mailed or
personally delivered to him setting forth a general description of the joint and
one-half survivor annuity, as well as the circumstances under which it shall be
provided unless the Participant shall elect another form of payment, the
availability of such election, and a general explanation of the financial effect
of such election. Such written statement shall also include a statement of the
rights of the Participant's spouse as provided in this Section 5.8. It shall
further notify the Participant that he may request in writing at any time during
the election period specified above, an additional written statement of the
terms and conditions of the joint and one-half survivor annuity and the
financial effect of payment in some method other than the joint and one-half
survivor annuity.
Notwithstanding anything in this Plan to the contrary, no distribution
pursuant to this Section 5.8 shall commence to a Participant or Inactive
Participant prior to age 65, without the written consent of the Participant or
Inactive Participant and his or her spouse, unless his or her total account
balance does not exceed $3,500, and did not exceed $3,500 at the time of any
prior distribution. Provided, however, spousal consent is not required if the
distribution is in the form of a joint and one-half survivor annuity.
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ARTICLE 6
DEATH BENEFITS
Section 6.1 Amount and Payment of Death Benefits. As of the Adjustment
Date coincident with or next following the death of a Participant or Inactive
Participant, his Beneficiary shall be entitled to receive the nonforfeitable
balance of the Participant's accounts, if any. If the Participant has retired
and benefit payments have commenced, payments will continue in accordance with
the option chosen under Section 5.4 or Section 5.8 of this Plan.
If benefit payments have not commenced, such amount shall be paid to
the Beneficiary or applied for his benefit in a manner selected by the
Beneficiary, subject to Sections 5.4, 5.8, 6.3 and 6.5. Effective with respect
to the Beneficiary of any Participant or Inactive Participant who is subject to
Sections 5.8 and 6.5, such amount shall generally be paid to the Beneficiary in
the form of a life annuity; however, the Beneficiary may elect to receive
payment in any of the forms available under Section 5.8, subject to Section 6.3.
For purposes of this Section 6.1, distribution of a Participant's
benefit is considered to begin on the date distribution is required pursuant to
Section 5.5(b), (c) and (d). Distributions prior to that date are disregarded.
Section 6.2 Designation of Beneficiary. Each Participant or Inactive
Participant may name a Beneficiary on a form provided by the Committee and
delivered to the Committee. Such designation may include more than one person
with one or more secondary or contingent Beneficiaries and shall be subject to
change upon written request of such Participant or Inactive Participant in the
same manner as the original designation. If a married Participant or Inactive
Participant fails to designate a Beneficiary, he will be deemed to have
designated his spouse as his Beneficiary. If a single Participant or Inactive
Participant fails to name a Beneficiary, payments will be made to his estate. If
a Beneficiary is receiving or is entitled to receive payments from the Plan and
dies before receiving all of the payments due him, any remaining payments shall
be made to the contingent Beneficiary, if any, in a lump sum. If there is no
contingent Beneficiary, the remaining payments shall be made to the estate of
the Beneficiary. If payment is being made to a contingent Beneficiary who dies,
the remaining payments shall be made to the estate of the contingent Beneficiary
in a lump sum.
Notwithstanding the above, a married Participant or Inactive
Participant shall be deemed to have designated his spouse as his Beneficiary
unless the spouse of such Participant or Inactive Participant consents in
writing to another named Beneficiary. The spouse's consent must be witnessed by
a Plan representative or a notary public and must acknowledge the effect of
another Beneficiary designation. Such consent shall not be required if it is
established to the satisfaction of the Committee that the consent cannot be
obtained because there is no spouse, because the spouse cannot be located or
because of such other circumstances as the Secretary of the Treasury may
prescribe by regulations.
Section 6.3 Payment of Death Benefits. Notwithstanding any provision of
the Plan to the contrary, any interest to which a designated Beneficiary is
entitled will be paid (1) over a period not exceeding the later of the lifetime
or life expectancy of the Beneficiary, provided such payment commences within
one year after the Participant's death, or (2) in its entirety within five years
after the Participant's death.
Notwithstanding the above, if the spouse is the designated Beneficiary,
the date on which the distributions are required to begin shall not be earlier
than the date on which the deceased Participant would have attained age 70 1/2;
if the surviving spouse dies before the distributions to such spouse are
required to begin, this Section shall apply as if the spouse were the
Participant. The spouse may elect to have distributions commence within the
90-day period following the date of the Participant's death.
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If the Participant's designated Beneficiary or spouse, if any, does not
survive, or if a single Participant fails to name a Beneficiary, such payments
will be made to the Participant's estate within five years after the
Participant's death.
Section 6.4 Qualified Domestic Relations Order. For purposes of this
Article 6, a former spouse will be treated as the spouse to the extent provided
under a qualified domestic relations order as described in Code Section 414(p).
Section 6.5 Special Beneficiary Designation Requirements for Former
First Charlotte Prior Plan Participants. Effective on and after December 31,
1994, each Participant or Inactive Participant who was a participant in and had
an account under the First Charlotte Prior Plan, the balance of which was
transferred to this Plan in a trustee-to-trustee transfer, shall be subject to
the special Beneficiary designation requirements of this Section 6.5.
(a) Election Period. The period during which a married Participant
may elect a Beneficiary other than his spouse shall begin on
the first day of the Plan Year in which the married
Participant attains age 35 and shall end on the day of the
Participant's death. In the case of a vested married Inactive
Participant, the election period shall not begin later than
the date on which he separates from service with respect to
benefits accrued prior to such separation. An election made
pursuant to this subsection (a) may be changed or revoked
anytime prior to the end of the election period.
(b) Information to be Given Participants. Consistent with
regulations prescribed by the Secretary of the Treasury and
within the period beginning with the first day of the Plan
Year in which a Participant attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which a
Participant attains age 35, a written explanation of the
preretirement survivor benefit described in this Article shall
be mailed or personally delivered it him. Such written
explanation shall set forth the general description of the
preretirement survivor benefit, as well as the circumstances
under which it will be provided unless the Participant shall
designate a Beneficiary other than his spouse and the
availability of such election. Such statement shall also
include a statement of the rights of the Participant's spouse
as provided below. It shall further notify the Participant
that he may make a written request at any time during the
election period specified above, for an additional written
statement of the terms and conditions of the preretirement
survivor benefit and the financial effect of electing a
Beneficiary other than the spouse. In the event a vested
Participant separates from service before attaining age 35,
the information described in this paragraph shall be given to
a vested Participant within the period beginning one year
before the date on which he separates from service and ending
one year after such date. In the event an Eligible Employee
becomes a Participant after attaining age 35, the information
described in this paragraph shall be provided within one year
of the date he becomes a Participant.
(c) Spousal Consent. Any election by a Participant or Inactive
Participant to name a Beneficiary other than his spouse shall
be invalid unless:
(1) (A) the spouse consents in writing to such
election,
(B) such election designates a Beneficiary which
may not be changed without the spouse's
consent or the spouse expressly permits a
designation by the Participant or Inactive
Participant without any requirement of
further consent of the spouse,
(C) the spouse's consent acknowledges the effect
of such election, and
(D) the spouse's consent is witnessed by a Plan
representative or a notary public, or
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(2) It is established to the satisfaction of a plan
representative that the consent of the spouse cannot
be obtained because the spouse cannot be located, or
because of such other circumstances as the Secretary
of the Treasury may by regulations prescribe.
(3) Any consent by a spouse, or the establishment that
the consent of a spouse may not be obtained, shall be
effective only with respect to such spouse.
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ARTICLE 7
VESTING
(a) Each Participant shall have a fully vested interest in his
Employee Deferral Account, his Qualified Matching Contribution
Account, his Qualified Nonelective Contribution Account, his
Employee Voluntary Contribution Account, his Employee Rollover
Contribution Account and his PAYSOP Account at all times.
(b) Service after five consecutive one-year Breaks in Service
shall not be used to increase a Participant's vested interest
in his Employer Matching Contribution Account, his Employer
Stock Ownership Account or his Employer Prior Discretionary
Contribution Account as they existed prior to the five
consecutive one-year Breaks in Service.
(c) Each Participant shall be fully vested in his Employer
Matching Contribution Account, his Employer Prior
Discretionary Contribution Account and his Employer Stock
Ownership Account upon the first to occur of the following
dates:
(1) His Normal Retirement Age (whether or not the
Participant actually retires);
(2) The date on which he first becomes eligible to elect
early retirement (whether or not he actually elects
such early retirement);
(3) The date on which he first qualifies for Disability
retirement;
(4) The date of his death;
(5) The date of completion of five or more Years of
Service.
(d) Prior to the dates above, a Participant shall be vested in the
applicable percentage of his Employer Matching Contribution
Account, Employer Prior Discretionary Contribution Account and
Employer Stock Ownership Account as follows:
Number of
Years of Service Percentage
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
(e) Notwithstanding the above, any Participant who is terminated
as a result of a divestiture required as a condition of the
merger of The Planters Corporation and Peoples Bancorporation
shall be fully vested in all of his accounts as of the date of
such termination.
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ARTICLE 8
DISTRIBUTIONS
Section 8.1 Withdrawal of Employee Deferrals. One time per calendar
year, after attaining age 59 1/2, upon application to the Committee, a
Participant may withdraw all or any portion of his Employee Deferral Account.
Actual distribution shall take place as soon as possible following the
Adjustment Date next succeeding the withdrawal request.
Section 8.2 Withdrawal of Employee Contributions. A Participant may
withdraw from his Employee Voluntary Contribution Account upon thirty days
written notice, the value of that account as of the next succeeding Adjustment
Date.
Section 8.3 Termination of Employment before Retirement. If a
Participant terminates employment before he is eligible for a retirement
benefit, his vested percentage will be determined pursuant to Article 7. If such
Participant's vested interest in his accounts is greater than $3,500, then his
vested interest shall be held in the Trust until the earlier of the date the
Inactive Participant is eligible for and elects to receive a Disability
retirement benefit, elects an early retirement benefit according to Section 5.3
of this Plan or reaches his Normal Retirement Date unless he elects an earlier
distribution as provided below. At that time benefits will be paid as provided
in Article 5. If such Participant's vested interest in his accounts is less than
or equal to $3,500, then his vested interest shall be paid to him as soon as
administratively feasible after he terminates employment.
If a terminated Participant's vested interest is greater than $3,500,
he may request a distribution to be paid as soon as administratively feasible
after he terminates employment.
Such account values shall be determined as of the Adjustment Date
succeeding receipt of the withdrawal request form.
Effective for Plan Years beginning on and after January 1, 1991, any
portion of a Participant's Employer Matching Contribution Account, Employer
Prior Discretionary Contribution Account and Employer Stock Ownership Account
which is not vested under Article 7 shall be forfeited upon the first to occur
of five consecutive one-year Breaks in Service or, effective on and after
October 1, 1994, the end of the quarter after the distribution of the
Participant's entire vested interest in all of his accounts. Any Forfeiture
shall be used first to restore forfeited account balances in accordance with
Section 8.4, and the balance, if any, shall be allocated among Participants in
the same proportion that each of these Participants' Compensation bears to the
total Compensation of all of these Participants for such quarter. In the event a
Forfeiture occurs in an account containing Employer Stock, such stock shall be
forfeited only after other assets. The accounts of Participants which were
forfeited at March 31, 1991, under the provisions of this paragraph prior to its
amendment, shall be allocated at March 31, 1992 in accordance with Section 9.3.
Section 8.4 Vesting When a Participant Terminates Employment, Receives
a Distribution and is Rehired Prior to Five Consecutive One-Year Breaks in
Service. If a terminated Participant receives a distribution, forfeits his
nonvested interest and is rehired prior to the date on which the number of his
consecutive one-year Breaks in Service equals or exceeds five, he will be given
the opportunity to repay all amounts derived from his Employer Stock Ownership
Account, Employer Matching Contribution Account and Employer Prior Discretionary
Contribution Account distributed to him so that any amount forfeited due to his
distribution shall be reinstated to such Accounts. All such repayments must be
made before (1) the Participant has five consecutive one-year Breaks in Service
commencing after such withdrawal or (2) the fifth anniversary of the date the
Participant is rehired, whichever is earlier.
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As of the Adjustment Date following such repayment, the Employer Stock
Ownership Account and Employer Matching Contribution Account of the Participant
shall be restored to their value as of the date of the distribution.
Any restoration required will come from the following sources in the
order listed: (1) Forfeitures, and (2) Employer contributions. Contributions may
be made for such reinstatement even if the Employer has no current or
accumulated Net Profits.
Section 8.5 PAYSOP Account. A Participant shall not be allowed to
withdraw any Employer Stock from his PAYSOP Account before the end of the 84th
month beginning after the month in which it was allocated to the account;
provided, however, that the foregoing restriction shall not apply to a
distribution in case of:
(a) Death, Disability, separation from service, or termination of
the Plan;
(b) A transfer of a Participant to the employment of an acquiring
employer in the case of a sale to the acquiring employer of
substantially all of the assets used by the Employer in a
trade or business conducted by the Employer; or
(c) A disposition of the Employer's interest in a subsidiary when
the Participant continues employment with the subsidiary.
This limitation shall only apply to Employer Stock allocated to a PAYSOP Account
on or before December 31, 1988.
Section 8.6 Deemed Distribution. Any individual whose employment with
the Employer or a Related Employer has terminated prior to that individual
obtaining any nonforfeitable Accrued Benefit under the Plan shall be treated as
having been cashed-out of the Plan on his termination date, and his status as a
Participant in the Plan shall cease as of that date, subject to his right to
again commence participation, as otherwise provided by the Plan.
Section 8.7 Hardship Distributions. In case of hardship, any
Participant may apply to the Committee for distribution of all or a portion of
the value of his Employee Deferral Account as of December 31, 1988, plus any
subsequent deferrals, all or a portion of his Employer Matching Contribution
Account, his Employee Voluntary Contribution Account, or his Employee Rollover
Contribution Account. As used in this Section, a "hardship" will be deemed to
exist if the distribution is necessary in light of immediate and heavy financial
needs of the Participant and if funds to alleviate such financial needs are not
reasonably available from other resources of the Participant.
Effective January 1, 1992, a distribution will be deemed to be made on
account of an immediate and heavy financial need of the Participant only if the
distribution is on account of:
(a) Medical expenses described in Code Section 213(d) incurred by
the Participant, the Participant's spouse, or any dependents
of the Participant (as defined in Code Section 152), provided
that such expenses need not be incurred if a distribution is
necessary to obtain medical care.
(b) Purchase (excluding mortgage payments) or preservation of a
principal residence for the Participant.
(c) Payment of tuition and related educational fees for the next
twelve (12) months of post-secondary education for the
Participant, his or her spouse, children, or dependents.
(d) The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence.
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<PAGE>
(e) Such other needs as may be allowable under the Code or
Treasury Regulations, revenue rulings, notices and other
documents of general applicability.
A distribution deemed to be necessary to satisfy an immediate and heavy
financial need of a Participant is not reasonably available from other resources
of the Participant if all of the following requirements are satisfied:
(a) The distribution is not in excess of the immediate and heavy
financial need of the Participant, including, effective
January 1, 1992, any amounts necessary to pay any federal,
state or local income tax or penalties reasonably anticipated
to result from such distribution.
(b) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently
available under all plans maintained by the Employer.
(c) The Plan, and all other plans maintained by the Employer,
provides that the Participant's elective deferrals and
employee contributions will be suspended for at least twelve
months after receipt of the hardship distribution.
(d) The Plan, and all other plans maintained by the Employer,
provides that the Participant may not make elective deferrals
for the Participant's taxable year immediately following the
taxable year of the hardship distribution in excess of the
applicable limit under Code Section 402(g) for such next
taxable year less the amount of such Participant's elective
deferrals for the taxable year of the hardship distribution.
If the Committee, based on the above standards, reasonably determines a
hardship exists or is imminent, it may direct the distribution of hardship
benefits as of the Adjustment Date coincident with or next succeeding the
determination of hardship; provided, that interim payments may be made if
necessary as determined and made on a uniform basis. The hardship distribution
shall be made in a lump sum payment and shall not cause a suspension of Employer
contributions, unless otherwise required as a condition of receiving such
distribution.
The amount of any hardship distribution under this Section 8.7 shall
not exceed the lesser of:
(a) An amount as determined by the Committee to be sufficient to
alleviate the hardship, including, effective January 1, 1992,
amounts necessary to pay any federal, state or local income
tax or penalties reasonably anticipated to result from such
distribution; or
(b) The value of the Participant's Employee Deferral Account as of
December 31, 1988, plus any Employee deferrals after that date
plus the value of his Employer Matching Contribution Account,
his Employee Voluntary Contribution Account, and his Employee
Rollover Contribution Account.
The hardship withdrawal first must come from the Participant's Employee
Voluntary Contribution Account, then from his Employee Rollover Contribution
Account, then from his Employee Deferral Account, then from his Employer
Matching Contribution Account. Such withdrawals shall reduce the Participant's
investment funds on a pro-rata basis.
Any Participant who receives a hardship withdrawal under the Plan shall
be suspended from making future deferrals to the Plan until the Entry Date next
following a lapse of twelve months from the date of the hardship distribution.
Such Participant's deferrals for the taxable year immediately following the
taxable year of the hardship distribution may not exceed the applicable limit
under Code Section 402(g) for such next taxable year, less the amount of such
Participant's elective deferrals for the taxable year of the hardship
distribution.
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<PAGE>
The Committee shall apply the provisions of this Section on a uniform
and consistent basis to all Participants in similar circumstances and shall make
any rules, regulations, prescribe the use of such forms, and any other powers it
deems necessary to properly carry out the provisions and intent of this Section.
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<PAGE>
ARTICLE 9
ACCOUNTS
Section 9.1 Committee Responsibility. The Committee shall determine the
Participants, Inactive Participants, and Beneficiaries who are entitled to one
or more of the allocations hereinafter described, and it shall, as of the
Adjustment Date, prepare a statement showing the information necessary to make
the proper allocation. This information shall include the full names of all
Participants, Inactive Participants, and Beneficiaries, the amount of Employer
matching and discretionary contributions, the amount of each Participant's
deferral contributions and rollover contributions and the names of the Inactive
Participants whose employment has terminated, along with the dollar amount any
of these Inactive Participants will forfeit and the date the Forfeiture will be
effective.
The Committee shall maintain for each Participant a separate Employee
Deferral Account to record his interest in the Trust Fund which is attributable
to his deferrals and a separate Employer Matching Contribution Account to record
his interest in the Trust Fund which is attributable to Employer matching
contributions and a separate Qualified Nonelective Contribution Account to
record his interest in the Trust Fund which is attributable to qualified
nonelective contributions and a separate Employer Prior Discretionary
Contribution Account to record his interest in the Trust Fund which is
attributable to Employer basic and elective contribution accounts under the
Peoples Prior Plan and a separate Employee Voluntary Contribution Account to
record his interest in the Trust Fund which is attributable to his Employee
voluntary contributions under the Peoples Prior Plan and a separate Employee
Rollover Contribution Account to record his interest in the Trust Fund which is
attributable to Employee rollover contributions and a Qualified Matching
Contribution Account to record his interest in the Trust Fund which is
attributable to qualified matching contributions and a separate Employer Stock
Ownership Account to record his interest in the Trust Fund which is attributable
to the balance of his Employer Stock Ownership Account under the Peoples Prior
Plan and to Employer contributions applied to the repayment of an Exempt Loan,
and a separate PAYSOP Account to record his interest in the Trust Fund which is
attributable to the balance of his PAYSOP Account or Employee PAYSOP Account, or
both, under the Peoples Prior Plan or the Planters Prior Plan.
The accounts of each Participant shall be made up of subaccounts
reflecting the Participants' investment elections and the method of accounting
used under the Plan. Each subaccount shall be adjusted as provided in Section
9.3 of this Plan.
Section 9.2 Investment Elections. Each Participant shall elect the
manner in which his current Participant deferrals and rollovers are to be
invested. In addition, each Participant and Beneficiary of a deceased Inactive
Participant, may elect the manner in which the existing balances of the
Participant's Employee Deferral Account, Employee Rollover Contribution Account,
Employer Prior Discretionary Contribution Account, and Employee Voluntary
Contribution Account are to be invested. Any election must be made at least 30
days prior to the date it is to be effective. Separate elections are permitted
with respect to each Account. Investment elections must be in 25% increments.
The Participant, Inactive Participant, or Beneficiary may choose to have his
contributions or accounts, as applicable, invested in:
(a) Equity Fund. The primary investment objective of the Equity
Fund is the long-term growth of its assets. Its investments
consist of (a) common and preferred stocks and securities
convertible into common stock or other similar types of equity
securities and/or (b) interests in mutual funds or similar
investment companies, cash or cash equivalents.
(b) Balanced Fund. This fund consists principally of a balanced
combination of common/preferred stocks, and high grade
corporate and government bonds.
(c) Capital Preservation Fund. This fund consists principally of
interests in one or more short-term investment funds selected
by the Committee, such as money market instruments and
certificates of deposit.
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<PAGE>
(d) Employer Stock Fund. The Employer Stock Fund consists
principally of common stock of the Employer purchased from
time to time in the open market or authorized but unissued
shares or shares held as treasury stock purchased at the
Committee's direction for the Employer, at prices not greater
than current market prices.
In the absence of an election, a Participant's accounts subject to the
investment election shall be invested in the Capital Preservation Fund.
Notwithstanding the above, a Participant's election to have his
accounts invested in the Employer Stock Fund shall not take effect until such
time as the Fund is properly registered with the Securities and Exchange
Commission. Amounts designated for that fund shall be invested in a money market
account pending registration. Before Employer Stock is purchased with these
assets, Employees will be given the opportunity to redirect the investment of
these assets.
Effective for Plan Years beginning on and after January 1, 1993, if
there is an outstanding Exempt Loan, all Employer contributions for a Plan Year
which are made on behalf of those Plan Participants who are intended to be the
beneficiaries of an Exempt Loan shall first be used to pay off the indebtedness
incurred in connection with the loan. Employer Matching Contributions will be
invested in the Employer Stock Fund.
Section 9.3 Account Adjustments.
(a) Each Participant's Employee Deferral Account, Employee
Voluntary Contribution Account, Employee Rollover Contribution
Account and Employer Prior Discretionary Contribution Account,
shall be made up of subaccounts reflecting his investment
elections. A special subaccount shall also be established for
other accounts, as necessary, to effectuate diversification
elections pursuant to Section 17.3. As of each Adjustment Date
these accounts, disregarding any funds or contributions
invested in the Employer Stock Fund, shall be adjusted in the
manner and order stated below:
(1) Payments: There shall be subtracted the total amount
of any payments made from the accounts since the
preceding Adjustment Date to the Participant or for
his benefit. Payments shall be subtracted from the
subaccount designated by the Participant. If no
designation was made, then payments will be
subtracted proportionately from all subaccounts.
(2) Forfeitures: There shall be subtracted the total
amount of any Forfeitures from the Employer Prior
Discretionary Contribution Account of each
Participant who has forfeited all or a portion of his
accounts as provided in Article 7. Forfeitures shall
be subtracted proportionately from the subaccounts of
the Participant.
(3) Employee Deferrals: There shall be added to the
Employee Deferral Account and to the appropriate
subaccount, as directed by the Participant, 1/2 of
any deferrals of Compensation made since the
preceding Adjustment Date.
(4) Employee Rollovers: There shall be added to the
Employee Rollover Contribution Account and to the
appropriate subaccount, as directed by the
Participant, the entire amount of any rollover
contributions made during the first month of the
quarter and 1/2 of any rollover contributions made
during the second month of the quarter since the
preceding Adjustment Date.
(5) Net Gain or Loss: Each Fund will be valued on the
Adjustment Date at fair market value. Each subaccount
invested in that Fund will be increased or decreased
to reflect
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a proportionate share of the net increase or net
decrease of the Fund since the preceding Adjustment
Date in the same ratio that each subaccount (as
adjusted in (1) through (4) above) bears to the total
of all subaccounts invested in that Fund as of the
preceding Adjustment Date (also adjusted as provided
in subparagraphs (1) through (4) above). The findings
of the Trustee as to the net increase or net decrease
of the value of the funds shall be conclusive.
(6) Employee Deferrals: There shall be added to the
Employee Deferral Account and to the appropriate
subaccount, as directed by the Participant, any
remaining deferrals of Compensation made since the
preceding Adjustment Date.
(7) Employee Rollovers: There shall be added to the
Employee Rollover Contribution Account and to the
appropriate subaccount, as directed by the
Participant, the entire amount of any rollover
contributions made during the third month of the
quarter and any remaining rollover contributions made
during the second month of the quarter since the
preceding Adjustment Date.
(8) Forfeitures: There shall be added to the Employer
Prior Discretionary Contribution Account of each
Participant employed on the last day of the quarter
or who retired, died, or became disabled during the
quarter, a proportionate share of any Forfeitures
from the Employer Prior Discretionary Contribution
Account determined, pursuant to Article 7, in the
same ratio that his Compensation for the quarter
bears to the total Compensation of all Participants
for the quarter.
(9) Transfer of Investment: Any change in the investment
direction by the Participant shall be put into effect
on each Adjustment Date after all adjustments above
have been made. There shall be added or subtracted
any amounts from one investment fund to another. The
subaccount making up the accounts of the Participant
shall reflect such a change.
(b) As of each Adjustment Date, to the extent not inconsistent
with Section 17.3, each Participant's Employer Matching
Contribution Account, Qualified Nonelective Contribution
Account, Qualified Matching Contribution Account, PAYSOP
Account, Employer Stock Ownership Account and the portion of
his Employee Deferral Account, Employee Rollover Contribution
Account and Employer Prior Discretionary Contribution Account
invested in the Employer Stock Fund shall be adjusted by the
following credits and debits in the order stated:
(1) Withdrawals: Adjust account of Participants who have
had a cash withdrawal from the account since the
preceding Adjustment Date by the full and/or
fractional shares repurchased from the respective
Participant's accounts.
(i) Credit the sales proceeds of the full and/or
fractional shares of the Cash Subaccount.
This will be calculated with a market price
per share determined as of the current
Adjustment Date.
(ii) Debit the Cost Subaccount by the original
cost of the full and/or fractional shares
repurchased from the accounts.
(iii) Debit the Number of Shares Subaccount by the
number of shares that were repurchased from
the accounts.
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(2) Withdrawal Debit: Debit the beginning balances of the
period with any withdrawals. The withdrawals will
include appropriate payment data for the Cash, Cost
and Number of Shares Subaccounts when distributions
have occurred since the last Adjustment Date.
(3) Forfeitures: There shall be subtracted the total
amount of any Forfeitures from the Employer Matching
Contribution Account, the Employer Stock Ownership
Account and the Employer Prior Discretionary
Contribution Account of each Participant who has
forfeited all or a portion of his accounts as
provided in Article 7. Forfeitures shall be
subtracted proportionately from the subaccount of the
Participant.
(4) Employee Deferrals: There shall be added to the
Employee Deferral Account 1/2 of any deferrals of
Compensation made since the preceding Adjustment Date
which the Participant has elected to invest in the
Employer Stock Fund. Such deferrals shall be credited
to his Cash Subaccount.
(5) Employer Contributions: There shall be added to the
Employer Matching Contribution Account and/or
Qualified Nonelective Contribution Account, as
appropriate, and credited to the Participant's Cash
Subaccount, 1/2 of the appropriate amount of Employer
contributions determined pursuant to sections 4.2 and
4.4.
(6) Earnings: Credit short term earnings to the Cash
Subaccount on the basis of cash beginning balance, as
adjusted in (1) through (5) above.
(7) Employee Deferrals: There shall be added to the
Employee Deferral Account any remaining deferrals of
Compensation made since the preceding Adjustment Date
which the Participant has elected to invest in the
Employer Stock Fund. Such deferrals shall be credited
to his Cash Subaccount.
(8) Employer Contributions: There shall be added to the
Employer Matching Contribution Account and/or
Qualified Nonelective Contribution Account, as
appropriate, and credited to the Participant's Cash
Subaccount, any remaining amount of Employer
contributions determined pursuant to Sections 4.2 and
4.4.
In the case of a Participant employed on the last day
of the Plan Year, there shall be added to the special
subaccount established for Employer Stock within the
Employer Stock Ownership Account and credited to his
Cash Subaccount, a proportionate share of the
Employer's contribution pursuant to Section 4.3, used
or to be used to repay an Exempt Loan, in the same
ratio that the Participant's Compensation bears to
the total Compensation of all such Participants
entitled to an allocation of the Employer's
discretionary contribution on account of the same
Exempt Loan.
The subaccount of a Participant who retires, dies or
becomes disabled during the Plan Year and has made
deferrals during such year shall share in the
contribution for the Plan Year.
(9) Stock Purchase Prior to Dividend Payment Date: Adjust
subaccounts with share purchases prior to any
dividend payment date occurring since the last
Adjustment Date as follows:
(i) Debit the Cash Subaccount with the total
purchase price of the shares.
(ii) Credit the Cost Subaccount with the total
purchase price of the shares.
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(iii) Credit the Number of Shares Subaccount with
the number of shares purchased.
(10) Dividends: Credit dividend income to the Cash
Subaccount on the basis of the Number of Shares
Subaccount, as adjusted in (9) above, minus share
withdrawals, minus the full and/or fractional shares
repurchased by the Trust that occurred since the
preceding Adjustment Date.
(11) Employer Discretionary Matching Contributions: There
shall be added to the Employer Matching Contribution
Account, and credited to the Participant's Cash
Subaccount, the appropriate amount of Employer
discretionary matching contributions determined
pursuant to Section 4.2.
(12) Stock Purchase After Dividend Payment Date: Adjust
subaccount with share purchases after any dividend
payment date occurring since the last Adjustment Date
as follows:
(i) Debit the Cash Subaccount with the total
purchase price of the shares.
(ii) Credit the Cost Subaccount with the total
purchase price of the shares.
(iii) Credit the Number of Shares Subaccount with
the number of shares purchased.
(13) Forfeitures: There shall be added to the Employer
Matching Contribution Account, the Employer Stock
Ownership Account and the Employer Prior
Discretionary Contribution Account of each
Participant employed on the last day of the quarter
or who retired, died or became disabled during the
quarter, a proportionate share of any Forfeitures
originating from the sources listed above in this
Section 9.3(h)(13) determined, pursuant to Article 7,
in the same ratio that his Compensation for the
quarter bears to the total Compensation of all
Participants for the quarter. Provided, however, in
the event of a forfeiture from an Employer Stock
Ownership Account, the portion of such forfeiture
originating from Employer contributions used to
finance an Exempt Loan shall, if such Exempt Loan
remains outstanding at the time of such forfeiture,
be allocated only among those Participants who are
the intended beneficiaries of such Exempt Loan.
(14) Transfer of Investment: Any change in the investment
direction by the Participant shall be put into effect
on each Adjustment Date after all adjustments above
have been made. The Participant's Cash Subaccount,
Number of Shares Subaccount, and Cost Subaccount
shall be adjusted in the appropriate manner.
For purposes of the above allocation scheme, contributions of Employer
Stock will be treated as cash contributions.
Section 9.4 Limitation on Annual Additions. Notwithstanding the
foregoing, annual additions to each Participant's accounts under all defined
contribution plans sponsored by the Employer or Related Employer for any
Limitation Year shall not exceed the lesser of $30,000 or twenty-five percent
(25%) of the Participant's Compensation (excluding deferrals) for such
Limitation Year.
Compensation, for purposes of this Section 9.4 and Section 9.5, shall
mean a Participant's earned income, wages, salaries, and fees for professional
services, and other amounts received for personal services actually rendered in
the course of employment with the Employer (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips and bonuses), and
excluding the following:
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(a) Employer contributions to a plan of deferred compensation
which are not included in the Employee'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 Employee, or any
distributions from a plan of deferred compensation;
(b) Amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(c) Amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and
(d) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an annuity
described in section 403(b) of the Code (whether or not the
amounts are actually excludable from the gross income of the
Employee).
Compensation for any Limitation Year is the compensation actually paid
or includable in gross income during such year.
Annual additions shall mean the aggregate of Employer contributions,
Employee deferrals, Forfeitures, and the Participant's voluntary contributions
allocated to each Participant's accounts during the Limitation Year in question.
Annual additions shall also include amounts allocated, after March 31, 1984, to
an individual medical account, as defined in section 415(l) of the Code, which
is part of a pension or annuity plan maintained by the Employer and amounts
derived from contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to post-retirement medical
benefits allocated to the separate account of a Key Employee, as defined in Code
Section 419A(d)(3), under a welfare benefit fund, as defined in section 419(e),
maintained by the Employer.
If, due to the allocation of Forfeitures, a reasonable error in
estimating compensation or a reasonable error in determining the amount of
deferrals that could be made for a Participant, the annual additions made to
this Plan on behalf of any Participant exceed the maximum, the Employer shall
treat the excess amount of such annual additions as follows:
(a) So much of the Participant's deferrals (and earnings thereon)
which cause the Participant's accounts to exceed the maximum
limit on annual additions shall be returned to the
Participant. Unmatched deferrals shall be returned prior to
matched deferrals. These amounts shall be disregarded for
purposes of Code Section 402(g), as well as for testing
purposes with respect to the Actual Deferral Percentage and
Actual Contribution Percentage tests of Article 4.
(b) Any Employer matching contributions (and earnings thereon)
that are attributable to any deferrals returned under (a)
above, shall be forfeited and used to reduce subsequent
Employer matching contributions.
(c) If after the application of (a) and (b) above, an excess
amount still exists, the excess amount in the Participant's
Employer Stock Ownership Account shall be allocated and
reallocated to those other Plan Participants who are intended
to be the beneficiaries of an Exempt Loan, the repayment of
which has generated the excess amount.
(d) Any remaining excess amount, including any excess amount that
cannot be completely reallocated in accordance with (c) above
without exceeding the limitations imposed by this Section,
shall be allocated and reallocated to all other Plan
Participants. Any excess amount that cannot be
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reallocated in accordance with the preceding sentence without
exceeding the limitations imposed by this Section will be held
unallocated in a suspense account and shall be allocated and
reallocated in the next Limitation Year and succeeding
Limitation Years (as necessary) to all Plan Participants
before any Employer contributions may be made to the Plan for
that Limitation Year.
(e) Notwithstanding any other provision contained in this Plan,
the Employer shall not contribute any amount that would cause
an allocation to a suspense account as of the date the
contribution is allocated. If the contribution is made prior
to the date as of which it is to be allocated, then such
contribution shall not exceed an amount that would cause an
allocation to the suspense account if the date of the
contribution were an Adjustment Date.
The $30,000 maximum annual addition shall be adjusted to reflect any
cost of living increases pursuant to Section 415(d) of the Code and Regulations
thereunder.
A Participant may not choose to defer an amount that would cause the
annual additions to this Plan alone to exceed the maximum allowed.
Contributions do not fail to be annual additions merely because they
are excess deferrals, Excess Contributions, or Excess Aggregate Contributions,
or merely because such excess deferrals or contributions are corrected through
distribution or recharacterization.
Notwithstanding the above, Employer contributions used to repay an
Exempt Loan, as described in Section 12.8, are treated as annual additions
rather than Employer Stock released and allocated to a Participant's Employer
Matching Contribution Account or Employer Stock Ownership Account with respect
to such repayment. However, if not more than one-third of the Employer
contributions applied to pay principal and/or interest on an Exempt Loan are
allocated to Highly Compensated Employees, then Employer contributions used to
pay interest on an Exempt Loan and any Employer Stock acquired with an Exempt
Loan which is allocated as a Forfeiture will not be treated as an annual
addition for purposes of this Section.
The provisions of this Section shall be effective with respect to
Limitation Years beginning on or after January 1, 1987.
Section 9.5 Limitation on Benefits and Contributions.
(a) Effective for Plan Years beginning on or after January 1,
1993, if an Employee is or was a Participant in one or more
defined benefit plans and one or more defined contribution
plans ever maintained by the Employer or Related Employer
(whether or not terminated), the sum of the defined benefit
plan fraction and his defined contribution plan fraction shall
not exceed 1.0 for any Limitation Year. If the sum of the
defined benefit plan fraction and the defined contribution
fraction shall exceed 1.0 in any Limitation Year for any
Participant in the Plan, the Employer shall adjust the
numerator of the defined benefit plan fraction so that the sum
of the defined benefit plan fraction and the defined
contribution plan fraction shall not be in excess of 1.0 in
any year for such Participant in accordance with the
provisions set forth in the defined benefit plan.
(b) For the purpose of this Section, the term "defined benefit
plan fraction" for any year shall mean a fraction, the
numerator of which is the projected annual benefit payable to
a Participant as of the close of the then current year under
all plans maintained by this Employer or Related Employer and
the denominator of which is the lesser of:
(1) The product of 1.25 multiplied by the maximum dollar
limitation for the Plan Year concerned as provided
under Code Section 415, or
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(2) The product of 1.4 multiplied by the applicable
amount to be taken into account according to the
percentage of compensation limit as defined for this
purpose under Code Section 415.
(c) The term "defined contribution plan fraction" for any year
shall mean a fraction the numerator of which is the aggregate
amount of annual additions, as defined in Section 9.4, made to
a Participant's accounts under all plans maintained by this
Employer or Related Employer as of the close of the then
current year and the denominator of which is the sum of the
lesser of the following amounts determined for such Limitation
Year and for each prior year of service with the Employer or
Related Employer.
(1) The product of 1.25 multiplied by the maximum dollar
limitation for the Plan Year concerned as provided
under Code Section 415, or
(2) The product of 1.4 multiplied by the applicable
amount to be taken into account according to the
percentage of compensation limit as defined for this
purpose under Code Section 415.
For purposes of this Section 9.5, amounts allocated, after
March 31, 1984, to an individual medical account, as defined
in Code Section 4150), which is part of a defined benefit plan
maintained by the Employer are treated as annual additions to
a defined contribution plan. Also, amounts derived from
contributions paid or accrued after December 31, 1985, which
are attributable to post-retirement medical benefits allocated
to the separate account of a Key Employee, as defined in
Section 10.3, under a welfare benefit fund, as defined in Code
Section 419(e), maintained by the Employer, are treated as
annual additions to a defined contribution plan.
The annual additions for any Limitation Year beginning before January 1, 1987,
shall not be recomputed to treat all Employee Voluntary contributions as annual
additions.
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ARTICLE 10
TOP-HEAVY PLAN PROVISIONS
Section 10.1 Determination Date. If, as of the Determination Date, the
Plan is a Top-Heavy Plan, as defined in Section 10.2, the provisions of this
Article 10 shall apply.
The Determination Date for the first Plan Year shall be the last day of
such Plan Year. For all subsequent Plan Years the Determination Date shall be
the last day of the preceding Plan Year.
The Determination Date with respect to any Plan Year shall be the last
day of the preceding Plan Year.
Section 10.2 Top-Heavy Plan.
(a) The Plan shall be considered a Top-Heavy Plan, if, as of the
Determination Date, either
(1) the aggregate of all account balances of Key
Employees under the Plan exceeds 60% of the sum of
all accounts of all Employees under the Plan
excluding former Key Employees, or
(2) the Plan is part of a Top-Heavy Group, as defined in
Section 10.5.
Notwithstanding anything in this subsection (a), if this Plan
is part of an aggregation group, as defined in Section 10.5,
that is found not to be Top-Heavy, then this Plan shall not be
a Top-Heavy Plan.
(b) When determining whether the Top-Heavy rules apply for any
Plan Year:
(1) Rollover contributions initiated by an Employee and
accepted by this Plan after December 31, 1983, will
not be recognized with respect to this Plan if the
rollover contribution came from a plan not maintained
by an Employer or Related Employer.
(2) Any account balances for an Employee who is not
currently a Key Employee, but at one time was a Key
Employee, shall not be recognized for the Plan Year
ending on the Determination Date, and
(3) The account balances for an Employee shall include
aggregate distributions made with respect to such
Employee under the Plan during the five-year period
ending on the Determination Date, except for the
distributions made to former Key Employees excluded
above, and distributions rolled over to a plan
maintained by the Employer or Related Employer.
(4) Effective for Plan Years beginning after December 31,
1984, if an individual has not performed any service
for the Employer at any time during the five-year
period ending on the Determination Date, any accrued
benefit or account balance for such individual shall
not be taken into account.
Section 10.3 Key Employee shall mean any Employee or former Employee
who, at any time during the Plan Year or any of the four preceding Plan Years,
is:
(a) an officer of the Employer having an annual Compensation
greater than 50% of the defined benefit dollar limitation
under Section 415(b)(1)(A) of the Code (as it may be increased
by the Secretary
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of the Treasury for any applicable cost of living increases);
however, the maximum number of officers considered Key
Employees may not exceed (i) three if there are less than 30
Employees, (ii) ten percent of all Employees if there are
between 30 and 500 Employees, or (iii) 50 if there are more
than 500 Employees. Officers shall include only those
administrative executives who regularly and continuously serve
as such. Title alone shall not be determinative of officer
status;
(b) one of the ten Employees earning an annual Compensation of a
least the maximum defined contribution annual additions dollar
limit under Code Section 415 and owning (or considered as
owning within the meaning of Code Section 318) more than both
1/2 percent interest and the largest interests in the
Employer;
(c) a five-percent owner of the Employer, meaning any person who
owns (or is considered as owning within the meaning of Section
318) more than five percent of the outstanding stock of the
Employer; or
(d) a one-percent owner of the Employer having an annual
Compensation from the Employer of more than $150,000, meaning
any person who owns (or is considered as owning within the
meaning of Section 318) more than one percent of the
outstanding stock of the Employer.
For purposes of this Section 10.3, Employee shall mean any Employee of
the Employer or any employee of a Related Employer if the Plan is part of a
Top-Heavy Group with the plan of a Related Employer. Key Employee shall include
any beneficiary of a Key Employee, and former Key Employee shall include any
beneficiary of a former Key Employee.
For purposes of subsections (b), (c), and (d) above, constructive
ownership rules of Code Section 318 shall be applied by substituting "five
percent" for "50 percent" in Code Section 318(a)(2).
For purposes of determining one percent and five percent ownership, the
aggregation rules of Code Section 414(b), (c), and (m) shall not apply.
Notwithstanding anything above, the criteria used in the determination
of Key Employees shall be consistent with Code Section 416, which is
incorporated herein by reference.
Section 10.4 Non-Key Employee shall mean any Employee who is not a Key
Employee.
Section 10.5 Top-Heavy Group.
(a) Top-Heavy Group shall mean an aggregation group where the sum,
as of the Determination Date, of:
(1) the present value of the cumulative accrued benefits
for Key Employees under any defined benefit plan
included in the group and
(2) the sum of the account balances of Key Employees
under any defined contribution plan included in the
group
exceeds 60% of the same amount determined for all Employees,
excluding former Key Employees, under all plans included in
the group. If the Determination Date for each plan in the
aggregation group is not the same, then the top-heavy status
of the group will be determined by adding the results for each
separate plan that fall within the same calendar year. All
plans maintained by the Employer (including plans that have
terminated) during the 5-year period ending
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on a Determination Date must be considered in determining the
Top-Heavy Group as of that Determination Date.
(b) The aggregation group must include:
(1) any plan of the Employer or Related Employer in which
a Key Employee is a participant, and
(2) any plan of the Employer or Related Employer on which
a plan covering a Key Employee depends for
qualification under the requirements of Code Section
401(a)(4) or 410.
(3) The aggregation group may also include, at the
election of the Employer, any plan of the Employer or
Related Employer not required to be included in an
aggregation group if such group would continue to
meet the qualification requirements of Code Sections
401(a)(4) and 410. If such an aggregation group is
found not to be Top-Heavy, then no plan shall be
considered Top-Heavy. If the aggregation group is
found to be Top-Heavy, then all plans in the group,
except the plan which was not required to be
included, would be considered Top-Heavy Plans.
Section 10.6 Minimum Contributions and Benefits for Top-Heavy Plans. If
the Plan is or becomes a Top-Heavy Plan, then, notwithstanding the provisions of
Articles 4 and 9 and except as provided in the next paragraph of this Section
10.6, the minimum Employer contribution for each Plan Year during which the Plan
is a Top-Heavy Plan to each Participant employed on the last day of the Plan
Year who is a Non-Key Employee shall be three percent (3%) of such Non-Key
Employee's Compensation. The minimum Employer contribution shall be provided to
each of these Participants regardless of the number of Hours of Service during
the Plan Year.
This minimum Employer contribution shall not exceed the percentage of
contribution made, or required to be made, for such Plan Year on behalf of the
Key Employee for whom such percentage is the highest. Such highest percentage
shall be determined for each Key Employee by dividing the Employer contribution
for such Key Employee by his Compensation (not to exceed $200,000).
For the purposes of this Section, Forfeitures shall be counted as
Employer contributions. Amounts contributed as a result of a salary reduction
agreement shall also be counted as Employer contributions when determining
contributions made on behalf of Key Employees.
Notwithstanding the above, if an Employee is included in a unit of
Employees covered by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between Employee representatives and the
Employer and there is evidence that the retirement benefits of these Employees
were the subject of good faith bargaining between such Employees and the
Employer, then the provisions of this Article 10 shall not apply to that
Employee.
Section 10.7 Top-Heavy Average Compensation. Top-Heavy Average
Compensation shall mean the average compensation paid during the consecutive
Top-Heavy Years of Service, not to exceed five years, which produce the highest
average compensation. For purposes of this Article, Compensation shall mean
compensation as defined in Code Section 415(e)(3) but including amounts
contributed by the Employer pursuant to a salary reduction agreement which are
excludible from the Employee's gross income under Code Sections 125, 402(e)(3),
402(h)(1)(B) or 403(b).
Section 10.8 Top-Heavy Years of Service. Top-Heavy Years of Service
shall mean Years of Service excluding Plan Years in which the Plan was not a
Top-Heavy Plan and further excluding Years of Service completed in a Plan Year
beginning before January 1, 1984.
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Section 10.9 Top-Heavy Group Minimum-Contribution. In the case of a
Top-Heavy Group consisting of both defined benefit and defined contribution
plans, the required minimum Employer contribution for each Top-Heavy Plan Year
shall be satisfied by the minimum benefit under the defined benefit plan of the
Employer.
The required minimum accrued benefit or Employer contribution for each
Top-Heavy Year of Service for Employees who do not participate in this Plan but
who participate in another Plan of the Top-Heavy Group shall be satisfied by
providing the minimum accrued benefit or contribution under that plan.
Section 10.10 Adjustments in Section 415 Limits for Top-Heavy Plans. If
this Plan is Top-Heavy Plan or if the Plan and one or more other plans
maintained by the Employer or Related Employer in the aggregate are or become a
Top-Heavy Group, then the defined benefit plan fraction, as defined in Section
9.5(b) shall be applied by substituting 1.0 for 1.25 and the defined
contribution plan fraction, as defined in Section 9.5(c), shall be applied by
substituting 1.0 for 1.25.
The above paragraph shall not apply if (a) and (b) below are met:
(a) In the case of a Top-Heavy Group consisting of both defined
contribution and defined benefit plans, a minimum benefit
shall be provided in the defined benefit plan for each Non-Key
Employee who participates in a defined benefit plan equal to
the lesser of three percent (3%) of Top-Heavy Average
Compensation, as defined in Section 10.7, per Top-Heavy Year
of Service after January 1, 1984, or thirty percent (30%) of
Top-Heavy Average Compensation, as defined in Section 10.7.
Notwithstanding, a minimum contribution of 4% of Top-Heavy
Average Compensation shall be provided for each Non-Key
Employee covered only by a defined contribution plan in the
Top-Heavy Group.
(b) The present value of the cumulative accrued benefits
(accounts) of all Key Employees under this Plan and any other
Plan in an aggregation group, as determined under Section
10.5(b), does not exceed ninety percent (90%) of the present
value of the cumulative accrued benefits (accounts) of all
Employees in this Plan or in the aggregation group.
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ARTICLE 11
ADMINISTRATION BY COMMITTEE
Section 11.1 Committee. The Compensation Committee shall consist of not
less than three individuals who shall be appointed by the Board to serve at the
pleasure of the Board. Any member of the Committee may resign, and his
successor, if any, shall be appointed by the Board. The Committee shall be
responsible for the general administration and interpretation of the Plan and
for carrying out its provisions, except to the extent all or any of such
obligations are specifically imposed on the Trustee or the Board. The Committee
shall constitute a named fiduciary under the Plan.
Section 11.2 Committee Officers and Subcommittees. The members of the
Committee shall elect a Chairman and may elect an acting Chairman. They shall
also elect a Secretary and may elect an acting Secretary, either of whom may be,
but need not be, a member of the Committee. The Committee may appoint from its
membership such subcommittees with such powers as the Committee shall determine
and may authorize one or more of its members, or any agent, to execute or
deliver any instruments or to make any payment in behalf of the Committee.
Section 11.3 Committee Meetings. The Committee shall hold such meetings
upon such notice at such places and at such intervals as it may from time to
time determine. Notice of meetings shall not be required if notice is waived in
writing by all of the members of the Committee in office at the time or if all
such members are present at the meeting.
Section 11.4 Committee Action. A majority of the members of the
Committee in office at the time shall constitute a quorum for the transaction of
business. All resolutions or other actions taken by the Committee at any meeting
shall be by vote of a majority of those present at any such meeting and entitled
to vote. Resolutions may be adopted or other action taken without a meeting upon
written consent thereto signed by all of the members of the Committee.
Section 11.5 Committee Records. The Committee shall maintain full and
complete records of its deliberations and decisions. Its records shall contain
all relevant data pertaining to individual Participants and their rights under
the Plan and in the Fund.
Section 11.6 Committee Rules. Subject to the limitations of the Plan
and of the Act, the Committee may from time to time establish rules or by-laws
for the administration of the Plan and the transaction of its business.
Section 11.7 Conflict of Interest. No individual member of the
Committee shall have any right to vote or decide upon any matter relating solely
to himself or to any of his rights or benefits under the Plan (except that such
member may sign unanimous written consent to resolutions adopted or other action
taken without a meeting).
Section 11.8 Committee Authority. Subject to the claims procedure set
forth in Article 15, the Committee shall have the duty and authority to
interpret and construe the provisions of the Plan and to decide any dispute
which may arise regarding the rights of Participants thereunder, and shall have
full discretionary authority in such matters, and its determinations shall apply
uniformly to all persons similarly situated and shall be binding and conclusive
upon all interested persons.
Section 11.9 Advisors. The Committee may engage an attorney, accountant
or any other technical advisor to perform such other duties as shall be required
in connection with the operation of the Plan, and may employ such clerical and
related personnel as the Committee shall deem requisite or desirable in carrying
out the provisions of the Plan.
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Section 11.10 Compensation. No fee or compensation shall be paid to any
member of the Committee for his services as such.
Section 11.11 Expenses. The Committee shall be entitled to
reimbursement out of the Trust Fund for its reasonable expenses properly and
actually incurred in the performance of its duties in the administration of the
Plan.
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ARTICLE 12
ALLOCATION OF RESPONSIBILITIES AMONG NAMED FIDUCIARIES,
MANAGEMENT OF FUNDS AND AMENDMENT OR TERMINATION OF PLAN
Section 12.1 Allocation of Responsibilities. The responsibilities
allocated to the named fiduciaries are as follows:
(a) Board:
(1) to amend the Plan,
(2) to appoint and remove members of the Committee,
(3) to appoint and remove Trustees under the Plan,
(4) to determine the amount to be contributed to the Plan
by the Employer, and
(5) to terminate the Plan.
(b) Committee:
(1) to interpret the provisions of the Plan and to
determine the rights of the Participants under the
Plan, except to the extent otherwise provided in
Article 15 relating to the claims procedure,
(2) to administer the Plan in accordance with its terms,
except to the extent powers to administer the Plan
are specifically delegated to another named fiduciary
or other person or persons as provided in the Plan,
(3) to account for the accounts of Participants,
(4) to direct the Trustees in the distribution of Trust
assets,
(5) to file such reports as may be required to the United
States Department of Labor, the Internal Revenue
Service and any other government agencies for which
reports may be required to be submitted from time to
time,
(6) to comply with requirements of law for disclosure of
Plan provisions and other information relating to the
Plan, to Participants and other interested parties,
(7) to administer the claims procedure, as provided in
Article 15, and
(8) to direct the Trustee to withhold from distributions
made pursuant to this Plan those amounts required by
law, and further to direct the Trustee to make any
reports to Participants and to any other as may be
required by the Internal Revenue Code or other
controlling law, rules or regulations.
(c) Trustee:
(1) to invest and reinvest Trust assets,
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(2) to make distributions to Plan Participants as
directed by the Committee,
(3) to render annual accountings to the Employer as
provided in the Trust Agreement, and
(4) otherwise to hold, administer and control the assets
of the Trust as provided in the Plan and Trust
Agreement.
Section 12.2 Liability for Actions. Except as otherwise provided in the
Act, a named fiduciary shall not be responsible or liable for acts or omissions
of another named fiduciary with respect to fiduciary responsibilities allocated
to such other named fiduciary, and a named fiduciary of the Plan shall be
responsible and liable only for its own acts or omissions with respect to
fiduciary duties specifically allocated to it and designated as its
responsibility.
Section 12.3 Discharge of Duties. All assets of the Plan shall be held
in a Trust forming part of the Plan which shall be administered as a Fund to
provide for the payment of benefits as provided in the Plan to the Participants,
or their successors in interest, out of the income and principal of the Trust.
All fiduciaries (as defined in the Act) with respect to the Plan shall discharge
their duties as such solely in the interest of the Participants and their
successors in interest and (a) for the exclusive purposes of providing benefits
to Participants and their successors in interest and of defraying reasonable
expenses of administering the Plan, including the Trust which is a part of the
Plan, (b) with the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent man 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, and (c) in accordance with the Plan and Trust Agreement, except
to the extent such documents may be inconsistent with the Act. The assets of the
Plan shall never inure to the benefit of the Employer, provided that Forfeitures
can be used to reduce Employer contributions.
Section 12.4 Trust Agreement. The Employer and the Trustee shall enter
into an appropriate Trust Agreement, which shall be a part of the Plan, for the
administration of the Trust under the Plan. Such Agreement shall contain such
powers and reservations as to investment, reinvestment, control and disbursement
of the funds of the Trust, and such other provisions as shall be agreed upon and
set forth therein which are not inconsistent with the provisions of this Plan,
its nature and purposes, and of the Act. Said Trust Agreement shall provide that
the Board may remove the Trustee at any time upon reasonable notice, that the
Trustee may resign at any time upon reasonable notice, and that upon such
removal or resignation of any Trustee, the Board shall designate a successor
Trustee.
Section 12.5 Committee Instructions. All requests, directions,
requisitions and instructions of the Committee to the Trustee shall be in
writing and signed by the Secretary of the Committee or by any one member of the
Committee authorized by the majority to sign.
Section 12.6 Amendment and Termination. The Employer hereby reserves
the right, by action of the Board, in amend or terminate the Plan and Trust or
Trust Agreement at any time, provided that no such amendment or termination
shall have the effect of diverting the Trust Funds to purposes other than for
the exclusive benefit of the Participants.
Section 12.7 Fiduciary Discretion. In discharging the duties assigned
to it under the Plan, the Trustee, the Committee, and any other fiduciary shall
have the discretion to interpret the Plan; to adopt, amend, and rescind rules
and regulations pertaining to their duties under the Plan; and to make all other
determinations necessary or advisable for the discharge of their duties under
the Plan. Such discretionary authority shall be absolute and exclusive if
exercised in a uniform and nondiscriminatory manner with respect to all
similarly situated individuals. The express grant in the Plan of any specific
power to a fiduciary with respect to any duty assigned to it under the Plan
shall not be construed as limiting any power or authority of the fiduciary to
discharge its duties.
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Section 12.8 Exempt Loans.
(a) The Trustee shall have the authority to enter into loans or
subject the Trust to debt provided that any such loan or debt
which would otherwise constitute a prohibited transaction
shall meet all requirements necessary to constitute an "Exempt
Loan" (hereafter "Exempt Loan") within the meaning of Treasury
Regulation Section 54.4975-7(b)(1)(iii) and shall be used
primarily for the benefit of those Plan Participants and
Beneficiaries who are intended to be the beneficiaries of such
Exempt Loan. Such loans may be obtained solely for the benefit
of Participants belonging to a specific employee group, as
shall be determined by the Committee, in its discretion, or
for the benefit of all Plan Participants. The proceeds of any
such Exempt Loan shall be used, within a reasonable time after
the Exempt Loan is obtained, only to purchase Employer Stock,
repay the Exempt Loan, or repay any prior Exempt Loan. Any
such Exempt Loan shall provide for no more than a reasonable
rate of interest, as determined under Treasury Regulation
54.4975-7(b)(7), and must be without recourse against the
Plan. The number of years to maturity under the Exempt Loan
must be definitely ascertainable at all times. The only assets
of the Plan that may be given as collateral for an Exempt Loan
are shares of Employer Stock acquired with the proceeds of the
Exempt Loan and shares of Employer Stock that were used as
collateral on a prior Loan repaid with the proceeds of the
current Exempt Loan. Such Employer Stock so pledged shall be
placed in a suspense account. No person entitled to payment
under an Exempt Loan shall have recourse against Trust assets
other than such collateral, contributions that are available
under the Plan to meet obligations under the Exempt Loan, and
earnings attributable to such collateral and the investment of
such contributions. All Employer contributions with respect to
Plan Participants who are intended beneficiaries of an Exempt
Loan paid during the Plan Year in which such Exempt Loan is
made (whether before or after the date the proceeds of the
Exempt Loan are received), all Employer contributions with
respect to such Participants paid thereafter until the Exempt
Loan has been repaid in full, and all earnings from investment
of such contributions shall be available to meet obligations
under the Exempt Loan, unless otherwise provided by the
Employer at the time any such contribution is made. For each
Plan Year during the duration of the Exempt Loan, the number
of shares of Employer Stock released from such pledge must
equal the number of encumbered shares held immediately before
release for the current Plan Year multiplied by a fraction.
The numerator of the fraction is the amount of principal and
interest paid for the year. The denominator of the fraction is
the sum of the numerator plus the principal and interest to be
paid for all future years. Such years will be determined
without taking into account any possible extension or renewal
periods. In the event such interest is variable, the interest
to be paid in future years must be computed by using the
interest rate applicable as of the end of the Plan Year. If
the collateral includes more than one class of Employer Stock,
the number of shares of each class to be released for a Plan
Year must be determined by applying the same fraction to each
class.
(b) Payments of principal and interest on any such Exempt Loan
during a Plan Year shall be made by the Trustee (as directed
by the Committee) only from (1) Employer contributions to the
Trust made to meet the Plan's obligation under an Exempt Loan
and from any earnings attributable to Employer Stock held as
collateral for an Exempt Loan (both received during or prior
to the Plan Year), less such payment in prior years; (2) the
proceeds of a subsequent Loan made to repay a prior Exempt
Loan; and (3) the proceeds of the sale of any Employer Stock
held as collateral for an Exempt Loan. Such contributions and
earnings must be accounted for separately by the Plan until
the Exempt Loan is repaid.
(c) Employer Stock released by reason of the payment of principal
or interest on an Exempt Loan shall immediately upon payment
be credited pro rata to the Participants' accounts. However,
effective for Plan Years beginning on and after January 1,
1991, Employer Stock released by reason of the payment of
principal or interest on an Exempt Loan shall immediately upon
payment
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be credited pro rata to the accounts of those Participants who
are intended to be the beneficiaries of such Exempt Loan.
(d) The Employer shall contribute to the Trust sufficient amounts
to enable the Trust to pay principal and interest on any such
Exempt Loans as they are due; provided, however, that no such
contribution shall exceed the limitations in Section 9.4. In
the event that such contributions by reason of the limitations
in Section 9.4 are insufficient to enable the Trust to pay
principal and interest on such Exempt Loan as it is due, then
upon the Trustee's request the Employer shall:
(1) Make an Exempt Loan to the Trust, as described in
Treasury Regulation Section 54.4975-7(b)(4)(iii), in
sufficient amounts to meet such principal and
interest payments. Such new Exempt Loan shall also
meet all requirements of an "exempt loan" within the
meaning of Treasury Regulation (Section
54.4975(b)(1)(iii). Employer Stock released from the
pledge of the prior Exempt Loan shall be pledged as
collateral to secure the new Exempt Loan. Such
Employer Stock will be released from this new pledge
and allocated to the Accounts of the Participants in
accordance with applicable provisions of the Plan; or
(2) Purchase any Employer Stock pledged as collateral in
an amount necessary to provide the Trustee with
sufficient funds to meet the principal and interest
repayments. Any such sale by the Plan shall meet the
requirements of Section 408(e) of ERISA; or
(3) Any combination of the foregoing.
However, the Employer shall not, pursuant to the provisions of
this subsection, do, fail to do, or cause to be done any act
or thing which would result in a disqualification of the Plan
as a leveraged employee stock ownership plan under the Code.
(e) Except as provided in Article 17, notwithstanding any
amendment to or termination of the Plan which causes it to
cease to qualify as a leveraged employee stock ownership plan
within the meaning of Section 4975(e)(7) of the Code, no share
of Employer Stock acquired with the proceeds of an Exempt Loan
obtained by the Trust to purchase Employer Stock may be
subject to a put, call, or other option, or buy-sell or
similar arrangement while such shares are held by and when
distributed from the Plan.
(f) Dividends on Employer Stock held in the suspense account and
any earnings on such dividends shall be used to repay the
Exempt Loan used to purchase such Employer Stock until the
Exempt Loan is paid in full.
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ARTICLE 13
MISCELLANEOUS
Section 13.1 Alienation of Benefits. No amount payable or held in the
accounts of any person shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge, except in
the case of a qualified domestic relations order as described in Code Section
414(p) and any attempt to so anticipate, alienate, sell, transfer, assign,
pledge, encumber, or charge the same shall be void; except in the case of a
qualified domestic relations order as described in Code Section 414(p) nor shall
any amount be payable to any assignee, receiver, or trustee in bankruptcy or be
liable for such person's debts, contracts, liabilities, engagements, or torts or
be subject to any legal process to levy upon or attach, except in the case of a
qualified domestic relations order as described in Code Section 414(p).
Section 13.2 Payment in Event of Incapacity. If any person entitled to
any payment under the Plan shall be physically, mentally or legally incapable of
receiving or acknowledging receipt of such payment, the Committee, upon receipt
of satisfactory evidence of his incapacity and satisfactory evidence that
another person or institution is maintaining him and that no guardian or
committee has been appointed for him, may cause any payment otherwise payable to
him to be made to such person or institution so maintaining him.
Section 13.3 Rights of Parties. The establishment of the Plan shall not
be construed as conferring any legal or other rights upon any Employee or any
person for continuation of employment, nor shall it interfere with the right of
the Employer to discharge any Employee or to deal with him without regard to the
effect thereof under the Plan.
Section 13.4 Communication to Employees. The Committee shall
communicate the terms of the Plan to the Employees as required by law.
Section 13.5 Resumption of Employment. For the purpose of the Plan, if
active service is not resumed upon expiration of a Leave of Absence, the
Employee shall be deemed to have terminated his employment when the Employee
left the active service of the Employer. If such Employee suffers Disability or
dies during an authorized Leave of Absence, the benefits, if any, to which he or
his Beneficiary is entitled shall be determined as if such Disability or death
occurred while in the active service of the Employer.
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ARTICLE 14
TERMINATION OF PLAN AND TRUST, MERGER OR CONSOLIDATION OF PLAN
Section 14.1 Termination of Plan and Trust. In the event there is a
termination, partial termination, or complete discontinuance of contributions to
this Plan, all affected Participant's accounts shall be fully vested and
thereafter not subject to forfeiture. The assets shall remain in trust and shall
be paid to the Participants, Inactive Participants, Beneficiaries or other
successors in interest upon the earliest event providing for distribution in
this Plan. Distributions shall be made in the manner allowed in this Plan for
that particular event.
Section 14.2 Merger or Consolidation. In the event of any merger or
consolidation of the Plan with any other Plan or a transfer of assets or
liabilities of the Plan to any other Plan, the amount which each Participant in
the Plan would receive if the Plan were terminated immediately after the merger,
consolidation, or transfer shall be equal to or greater than the amount he would
have been entitled to receive immediately preceding the merger, consolidation,
or transfer if the Plan had then terminated. The extent to which vesting in such
cases is accelerated shall be determined in accordance with the terms of the
merger or consolidation agreement, as appropriate.
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ARTICLE 15
CLAIMS PROCEDURE
Section 15.1 Filing of a Claim for Benefits. A Participant or
Beneficiary (the "claimant") shall make a claim for the benefits provided under
the Plan by filing a written claim with the Committee upon a form approved by
the Committee. In the event a member of the Committee shall be the claimant, all
actions which are required to be taken by the Committee pursuant to this Article
shall be taken instead by another member of the Committee as designated by the
Employer.
Section 15.2 Notification to Claimant of Decision. Notice of a decision
by the Committee with respect to a claim shall be furnished to the claimant
within ninety days following the receipt of the claim by the Committee (or
within ninety days following the expiration of the initial ninety-day period in
a case where there are special circumstances requiring extension of time for
processing the claim). If special circumstances require an extension of time for
processing the claim, written notice of the extension shall be furnished by the
Committee to the claimant prior to the expiration of the initial ninety-day
period. The notice of extension shall indicate the special circumstances
requiring the extension and the date by which the notice of decision with
respect to the claim shall be furnished. Commencement of benefit payments shall
constitute notice of approval of a claim to the extent of the amount of the
approved benefit. If such claim shall be wholly or partially denied, such notice
shall be in writing and worded in a manner calculated to be understood by the
claimant and shall set forth: (a) the specific reason or reasons for the denial,
(b) specific reference to pertinent provisions of the Plan on which the denial
is based, (c) a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such material or
information is necessary, and (d) an explanation of the Plan's claims review
procedure. If the Committee fails to notify the claimant of the decision
regarding his claim in accordance with this Article, the claim shall be deemed
denied, and the claimant shall then be permitted to proceed with the claims
review procedure provided in Section 15.3.
Section 15.3 Claims Review Procedure. Within sixty days following
receipt by the claimant of notice of the claim denial, or within sixty days
following the close of the ninety-day period referred to in Section 15.2, if the
Committee fails to notify the claimant of the decision within such ninety-day
period, the claimant may appeal denial of the claim by filing a written
application for review with the Committee. Following such request for review,
the Committee shall frilly and fairly review the decision denying the claim.
Prior to the decision of the Committee pursuant to Section 15.4, the claimant
shall be given an opportunity to review pertinent documents and to submit issues
and comments in writing.
Section 15.4 Decision on Review. The decision on review of a denied
claim shall be made in the following manner.
(a) The Committee shall make its decision regarding the merits of
the denied claim promptly and within sixty days following
receipt by the Committee of the request for review (or within
120 days after such receipt in a case where there are special
circumstances requiring extension of time for reviewing the
appealed claim) shall deliver the decision to the claimant in
writing. If an extension of time for reviewing the appealed
claim is required because of special circumstances, written
notice of the extension shall be furnished to the claimant
prior to the commencement of the extension. If the decision on
review is not furnished within the prescribed time, the claim
shall be deemed denied on review.
(b) The decision on review shall set forth specific reasons for
the decision, shall be written in a manner calculated to be
understood by the claimant and shall cite specific references
to the pertinent Plan provisions on which the decision is
based.
(c) The decision of the Committee shall be final and conclusive.
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Section 15.5 Action by Authorized Representative of Claimant. All
actions set forth in this Article to be taken by the claimant may likewise be
taken by a representative of the claimant duly authorized by him to act in his
behalf on such matters. The Committee may require such evidence as either may
reasonably deem necessary or advisable of the authority to act of any such
representative.
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ARTICLE 16
GOVERNING LAWS
Section 16.1 Applicable Law. This Plan shall be regulated, construed
and administered under the laws of the State of North Carolina, unless preempted
by federal law.
Section 16.2 Headings. The headings and subheadings in this Plan have
been inserted for convenience and reference only and are to be ignored in any
construction of the provisions hereof.
Section 16.3. Limitations of the Securities Exchange Act of 1934.
Effective for Plan Years beginning on and after January 1, 1992, and
notwithstanding any contrary provision herein, the Plan shall be interpreted
consistently with the limitations imposed on insiders by the Securities Exchange
Act of 1934, as amended, and the Committee is authorized to establish such rules
and procedures, including imposing limitations on insiders, as it determines are
necessary to comply with the requirements of the Securities Exchange Act of
1934, as amended.
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ARTICLE 17
SPECIAL PROVISIONS
Section 17.1 General. Except as otherwise provided in Sections 17.2,
17.5, 17.6 and 17.7, and effective for Plan Years beginning on and after January
1, 1991, this Article shall only apply to Employer Stock which is allocated to a
Participant's or Inactive Participant's PAYSOP Account, Employer Stock Ownership
Account or Employer Matching Contribution Account.
Section 17.2 Options on Distributed Shares of Employer Stock.
(a) If any shares of Employer Stock distributed to a Participant
become subject at any time to restrictions or limitations upon
disposition or transfer or if the shares are not readily
tradeable on an established securities market, the distributes
may be granted at the time the shares of Employer Stock are
distributed to the Participant an option to "put" the shares,
or a part of them, to the Trust and/or the Employer. The put
option shall provide that for a period of fifteen (15) months
after such shares are distributed, the distributes shall have
the right to have the Trust and/or the Employer purchase such
shares at their fair market value. Such put option shall be
exercisable only by a Participant, by the Participant's
donees, or by a person (including an estate or its
distributes) to whom the security passes by reason of a
Participant's death.
(b) Such put option shall be exercisable for a period of at least
fifteen (15) months beginning on the date the Employer Stock
subject to the put option is distributed by the Trust. The
period of time during which a put option is exercisable does
not include any time when a Participant or other distributes
is unable to exercise it because the Trust and/or the Employer
is prohibited from honoring it by applicable Federal or State
law.
(c) The Participant or other distributes shall notify the Employer
in writing that the put option is being exercised.
(d) Shares subject to a put option shall be purchased at their
fair market value. In the absence of a representative public
market for shares of Employer Stock, fair market shall be
determined by the Committee as of the Adjustment Date
coinciding with or immediately preceding date of distribution
of the shares plus a reasonable rate of interest from such
Adjustment Date to the date that the shares are distributed.
However, in the event that the fair market value of Employer
Stock is determined after such Adjustment Date but prior to
the date that the shares are distributed, the fair market
value shall be the more recent valuation plus a reasonable
rate of interest from the date of such valuation to the date
that the shares are distributed.
(e) The payment for the purchase of such shares of stock shall be
set forth in the "put" option and may be either in a lump-sum
or in substantially equal annual, quarterly or monthly
payments over a period not to exceed five (5) years from the
date that the option is exercised with a reasonable rate of
interest on the unpaid principal balance.
(f) All other terms of the put option shall be determined by the
Committee. The terms of the put option and of the
administration of the Employer Stock repurchase provisions of
the Plan shall be according to a uniform, non-discriminatory
policy established by the Committee.
Section 17.3 Diversification of Investments.
(a) For purposes of this Section, "Qualified Participant" shall
mean a Participant who has attained age fifty-five (55) and
who has completed at least ten (10) years of participation.
"Qualified Election
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Period" shall mean the six (6) Plan Year period beginning with
the later of (i) the first Plan Year in which the Participant
first became a Qualified Participant, or (ii) the first Plan
Year beginning after December 31, 1986.
(b) With respect to Employer Stock allocated to a Participant's
account balance, notwithstanding any contrary provision
herein, each Qualified Participant shall be permitted to
direct the Plan as to the investment of up to twenty-five
percent (25%) of the value of such Employer Stock. The
investment direction, which shall be in the form and manner
provided by the Committee, shall be made within ninety (90)
days after the last day of each Plan Year during the
Participant's Qualified Election Period. Within ninety (90)
days after the close of the last Plan Year in the
Participant's Qualified Election Period, a Qualified
Participant may direct the Plan as to the investment of up to
fifty percent (50%) of the value of such Employer Stock. The
statutory diversification election provided for herein, shall
apply only if the fair market value of shares of Employer
Stock allocated to a Participant's accounts is at least five
hundred dollars ($500) as of the Adjustment Date immediately
preceding the date such Qualified Participant is eligible to
make the diversification election.
(c) The Qualified Participant's directions shall be provided to
the Committee in writing, in a form subject to approval by the
Committee, and shall be effectuated no later than one hundred
and eighty (180) days after the close of the Plan Year to
which the direction applies. In the alterative to offering a
diversification election as provided above, the Committee may
adopt uniform and nondiscriminatory procedures such that a
Qualified Participant may elect for the Plan to distribute
(notwithstanding Section 409(d) of the Code) the portion of
the Qualified Participant's Account that is subject to the
diversification election within ninety (90) days after the
last day of the Qualified Election Period. Such distribution
shall be subject to any requirements of the Plan concerning
put options as would otherwise apply to a distribution of
Employer Stock from the Plan. Pursuant to such a distribution,
the Qualified Participant may direct the Plan to transfer the
portion of be Qualified Participant's account balance that is
subject to the election to another qualified plan of the
Employer which accepts such transfers, provided that such plan
permits employee-directed investment and does not invest in
Employer Stock to a substantial degree. Such transfer shall be
made no later than ninety (90) days after the last day of the
Qualified Election Period.
Section 17.4 Independent Appraisals. All valuations of Employer Stock
which are not readily tradable on an established securities market with respect
to activities carried on by the Plan shall be made by an independent appraiser
meeting requirements similar to those contained in Treasury regulations under
Code Section 170(a)(1).
Section 17.5 Voting of Shares.
(a) Voting by Trustee. All unallocated Employer Stock held by the
Trustee, including Employer Stock held in a Suspense Account,
shall be voted by the Trustee with respect to all corporate
matters in its discretion in accordance with Section 409(e) of
the Code. Any shares of Employer Stock to which pass-through
voting rights apply and as to which the Trustee receives no
voting instructions shall not be voted.
(b) Pass-Through Voting. In accordance with Section 409(e)(2) of
the Code, so long as the Employer Stock constitutes a class of
securities required to be registered under Section 12 of the
Securities Exchange Act of 1934, without regard to the
exemption contained in subsection (g)(2)(H) of Section 12,
each Participant or Beneficiary shall have the right to vote
all such Employer Stock allocated to his or her Employer Stock
Account on all matters which require a vote.
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(c) Communication of Voting Rights. The Trustee and Committee
shall use their best efforts to communicate or cause to be
communicated to all Participants the provisions of the Plan
relating to the right to direct the Trustee with respect to
the voting of Employer Stock allocated to the account balance
of Participants or Beneficiaries under the Plan. The Trustee
and Committee shall use their best efforts to distribute or
cause to be distributed to Participants all communications
directed generally to the owners of Employer Stock entitled to
vote. The Trustee and Committee shall use their best efforts
to distribute or cause to be distributed to Participants or
Beneficiaries all communications the Trustee may receive, if
any, for any persons soliciting proxies for any other
interested party (including the Employer) relating to matters
being presented for vote as to which pass-through voting
rights apply. It is intended that before each annual or
special meeting of the stockholders of the Employer, the
Employer will furnish each Participant or Beneficiary with a
copy of the proxy solicitation material for such meeting,
together with a form addressed to the Trustee requesting the
confidential instructions on how the shares of Employer Stock
credited to the Participant's accounts maintained on behalf of
such Participant or Beneficiary in the Employer Stock Account
as of the Adjustment Date preceding the record date should be
voted. Upon receipt of such instructions, the Trustee shall
vote such Employer Stock as instructed.
(d) Effect of Court Order. If a court of competent jurisdiction
shall issue an opinion or order to the Plan, the Employer or
the Trustee which, in the opinion of the Employer's counsel or
Trustee, shall invalidate under ERISA any provisions of this
Article regarding the manner in which Employer Stock held in
the Trust shall be voted or cause any such provision or
provisions to conflict with ERISA, then upon notice thereof to
the Employer or Trustee, as the case may be, such invalid or
conflicting provisions of this Article shall be given no
further force and effect. In such circumstances, the Trustee
shall nevertheless have no discretion to vote Employer Stock
held in the Trust unless required by such order or opinion but
shall follow instructions received by Participants or
Beneficiaries to the extent such instructions have not been
invalidated.
(e) Exercise of Residual Fiduciary Responsibility by Trustee. To
the extent required to exercise any residual fiduciary
responsibility with respect to voting, the Trustee shall take
into account in exercising its fiduciary judgment, unless it
is clearly imprudent to do so, directions timely received from
Participants or Beneficiaries, as such directions are most
indicative of what is in the best interest of Participants and
Beneficiaries. Further, the Trustee, in addition to taking
into consideration any relevant financial factors bearing on
any such decision, shall consider any relevant nonfinancial
factors, including, but not limited to, continuing job
security of Participants as Employees of the Employer,
conditions of employment, employment opportunities and other
similar means, and the prospect of the Participants and
prospective Participants for future benefits under the Plan
(including any subsequent release and allocations of Employer
Stock held in a suspense account).
Section 17.6 Distributions. Notwithstanding any other provision of the
plan, if it would require an earlier payment, a Participant may elect to have
his account balance distributed as follows:
(a) If the Participant separates from service by reason of the
attainment of Normal Retirement Age under the Plan, death, or
disability, the distribution of such portion of the
Participant's account balance will begin not later than one
year after the close of the Plan Year in which such event
occurs unless the Participant otherwise elects under the
provisions of the plan other than this Section.
(b) If the Participant separates from service for any reason other
than those enumerated in paragraph (i) above, and is not
reemployed by the Employer at the end of the fifth Plan Year
following the Plan Year of such separation from service,
distribution of such portion of the Participant's account
balance will begin not later than one year after the close of
the fifth Plan Year following the Plan
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Year in which the Participant separated from service unless
the Participant otherwise elects under the provisions of this
plan other than this Section.
(c) If the Participant separates from service for a reason other
than those described in paragraph (i) above, and is employed
by the Employer as of the last day of the fifth Plan Year
following the Plan Year of such separation from service,
distribution to the Participant, prior to any subsequent
separation from service, shall be in accordance with terms of
the plan other this Section.
In any event, a Participant shall have the right to have his account
balance distributed in Employer Stock rather than cash.
Section 17.7 Tender Offers.
(a) Appointment of Independent Recordkeeper. The provisions of
this Section 17.7 shall apply in the event of a tender
exchange offer within the meaning of the Securities Exchange
Act of 1934, as from time to time amended (hereinafter a
"Tender Offer"), for Employer Stock by a person or persons.
Upon such a Tender Offer for Employer Stock, the Committee,
promptly after receiving notice of commencement of any such
Tender Offer, shall transfer certain of the Committee's record
keeping functions under the Plan to an independent record
keeper. The functions so transferred shall be those necessary
to preserve the confidentiality of any directions given by the
Participants or Beneficiaries in connection with the Tender
Offer. The Trustee shall have no discretion or authority to
sell, exchange or transfer any of such shares pursuant to such
a Tender Offer except to the extent and only to the extent as
herein provided.
(b) Tender Offer for Employer Stock. In the event of a Tender
Offer for Employer Stock, each current or former Participant
(or after the death of a former Participant, his Beneficiary)
(hereinafter referred to as the "Affected Participants") who
has shares of Employer Stock allocated to his account balance
hereunder shall be given the opportunity to direct the Trustee
regarding whether to tender or not to tender the whole shares
of Employer Stock allocated to his account balance. To such
end, as promptly as practicable after a Tender Offer for
Employer Stock is made, the Trustee shall send to all Affected
Participants such Materials and forms for responding as are
appropriate in order to determine the direction of each
Affected Participant. Any form for responding shall
prominently note that a failure by an Affected Participant to
return such form within a specified reasonable time shall be
deemed a direction to the Trustee not to tender the whole
shares of Employer Stock allocated to the account balance of
such Affected Participant. The instructions received by the
Trustee shall be held by the Trustee in confidence and shall
not be divulged or released to any person, including the
Committee or officers or Employees of the Employer. As
promptly as practicable after receiving an Affected
Participant's response form which directs it to tender his
whole shares of Employer Stock, the Trustee shall carry out
the tender of such shares; provided, however, that the Trustee
shall have the right to change or to modify its actions
hereunder to comply with the terms of any valid order of a
court of competent jurisdiction directing it to take certain
actions inconsistent with the requirements of this Section.
After the expiration of the period during which Affected
Participants may direct the Trustee to tender their shares,
the Trustee shall determine the total number of whole shares
it was directed to tender, and the total number of whole
shares it was directed not to tender (either expressly or by
failure to timely respond). If the majority of the allocated
whole shares of Employer Stock were directed to be tendered,
then the Trustee shall also tender, as promptly as
practicable, any fractional or unallocated shares which are
held in the Trust. However, if the majority of the allocated
whole shares of Employer Stock were not directed to be
tendered, the Trustee shall not tender any such fractional or
unallocated shares.
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(c) Fiduciary Designation. Each Affected Participant, for purposes
of Section 17.7, is hereby designated as a "Named Fiduciary"
(within the meaning of Section 403(a)(1) of ERISA) with
respect to the shares of Employer Stock allocated to his
Account.
(d) Confidentiality. The independent record keeper shall solicit
confidentially from each Affected Participant the direction
described in Section 17.7 as to whether such shares are to be
tendered. In carrying out the steps necessary to determine the
directions of Affected Participants under this Section, the
Trustee shall adopt such means as it deems appropriate to
provide Affected Participants with the opportunity to indicate
their directions in a confidential manner, i.e., without the
disclosure of any Affected Participant's individual decision
to the public or the Employer.
IN WITNESS WHEREOF, the Centura Banks, Inc. 401(k) Plan is, by the
authority of the Board of Directors of the Employer, executed on behalf of the
Employer the _____ day of _______________, 1994.
CENTURA BANKS, INC.
By:________________________________
Authorized Officer
ATTEST
- -------------------------
Asst. Secretary
(CORPORATE SEAL)
CENTURA BANK
By:________________________________
Authorized Officer
ATTEST
- -------------------------
Asst. Secretary
(CORPORATE SEAL)
CENTURA SECURITIES, INC.
By:________________________________
Authorized Officer
ATTEST
- -------------------------
Asst. Secretary
(CORPORATE SEAL)
66
<PAGE>
CENTURA INSURANCE SERVICES, INC.
By:________________________________
Authorized Officer
ATTEST
- -------------------------
Secretary
(CORPORATE SEAL)
FCB INVESTMENT CORPORATION
By:________________________________
Authorized Officer
ATTEST
- -------------------------
Secretary
(CORPORATE SEAL)
67
<PAGE>
EXHIBIT 4.3
<PAGE>
NORTH CAROLINA FIRST AMENDMENT TO THE
CENTURA BANKS, INC.
NASH COUNTY 401(k) PLAN
THIS AMENDMENT, made and entered into as of the ___ day of December,
1995, by and between CENTURA BANKS, INC., CENTURA BANK, CENTURA SECURITIES, INC.
and CENTURA INSURANCE SERVICES, INC., each an entity organized under the laws of
the State of North Carolina (hereinafter collectively referred to as the
"Employer"), and CENTURA BANK, a banking association having trust powers in
North Carolina (the "Trustee");
WITNESSETH:
WHEREAS, the Employer has previously established and adopted the
Centura Banks, Inc. 401(k) Plan (the "Plan"), as most recently amended and
restated effective January 1, 1994, for the benefit of its eligible employees;
and
WHEREAS, the Employer reserves the right to amend or modify
the Plan at any time; and
WHEREAS, the Employer desires to amend the Plan (i) to require each
participant who desires a distribution in employer stock to affirmatively elect
distribution in the form of employer stock if fewer than 50 shares would be
distributed to such participant; (ii) to make conforming changes to the Plan's
hardship provisions; (iii) to provide for full vesting of each participant's
Employer Prior Discretionary Contribution Account and consolidation of such
account with the participant's Rollover Account; (iv) to provide that employees
of Cleveland Federal Bank ("Cleveland") who become employed by the Employer
effective as of the date of acquisition of such company by the Employer, shall
be credited with all Years of Service completed with Cleveland for purposes of
vesting and eligibility under the Plan; (v) to provide that employees of First
Southern Bancorp, Inc. and First Southern Savings Bank, SSB ("First Southern")
who become employed by the Employer effective as of the date of acquisition of
such company by the Employer, shall be credited with all Years of Service
completed with First Southern for purposes of vesting and eligibility under the
Plan; (vi) to provide for the reallocation of forfeitures each quarter only to
participants who make Employee Deferrals under the Plan for such quarter of the
Plan Year; and (vii) effective January 1, 1996, to permit Employee Deferrals of
up to 15% of Compensation;
NOW, THEREFORE, in consideration of the premises and the acts and
covenants hereinafter set forth, the Employer and Trustee covenant and agree
that the Centura Banks, Inc. 401(k) Plan shall be amended, subject to Internal
Revenue Service approval, as follows:
<PAGE>
1. A new paragraph shall be added to the end of Section
2.20 of the Plan, which reads as follows:
"Effective January 1, 1996, each Participant's, Inactive
Participant's or Beneficiary's Employer Prior Discretionary
Contribution Account shall become fully vested and nonforfeitable and
shall be consolidated with and maintained under such Participant's,
Inactive Participant's or Beneficiary's Employee Rollover Contribution
Account."
2. A new sentence shall be added to the end of Section
2.27, which reads as follows:
"Effective January 1, 1996, `Forfeiture shall' mean the divested
portion of a Participant's Employer Matching Contribution Account and
Employer Stock Ownership Account."
3. Subsection 2.49(h) of the Plan is amended, effective March 30, 1995,
by adding "Cleveland Federal Bank" to the Acquired Bank section of the chart,
and further adding "Date of Hire" under the Vesting, Participation and
Eligibility for Early Retirement columns of the chart, so that former employees
of Cleveland, who would have otherwise satisfied the eligibility requirements of
the Plan on March 30, 1995, and who are employed by the Employer immediately
after the acquisition shall become Participants of the Plan on such date.
4. Subsection 2.49(h) of the Plan is amended, effective June 2, 1995,
by adding "First Southern Savings Bank, SSB" to the Acquired Bank section of the
chart, and further adding "Date of Hire" under the Vesting, Participation and
Eligibility for Early Retirement columns of the chart, so that former employees
of First Southern, who would have otherwise satisfied the eligibility
requirements of the Plan on June 2, 1995, and who are employed by the Employer
immediately after the acquisition shall become Participants of the Plan on such
date.
5. The first paragraph of Section 4.1 shall be deleted in
its entirety and a new first paragraph is inserted in lieu
thereof, which reads as follows:
"For each Plan Year commencing prior to January 1, 1996, a
Qualified Employee who has met the requirements of Section 3.1 may
elect to defer between .5% and 10% of his Compensation in .5%
increments during the Plan Year for which the election is being made.
Effective for Plan Years beginning on and after January 1, 1996, a
Qualified Employee who has met the requirements of Section 3.1 may
elect to defer between .5% and 15% of his Compensation in .5%
increments during the Plan Year for which the election is being made."
2
<PAGE>
6. A new sentence shall be added to the end of the last
paragraph of Section 5.4, which reads as follows:
"Notwithstanding the foregoing, and effective for distributions made on
and after January 1, 1996, if the number of shares of Employer Stock to
be distributed would be fewer than fifty (50), the Participant shall be
paid in cash unless the Participant affirmatively elects a distribution
in the form of Employer Stock."
7. New language shall be added to the end of Paragraph (c)
of Article 7, which reads as follows:
"Notwithstanding the foregoing, and effective as of January 1, 1996,
each Participant shall be fully vested in his Employer Prior
Discretionary Contribution Account, and such Account shall thereafter
be consolidated with such Participant's Employee Rollover Contribution
Account."
8. Section 8.3 of the Plan shall be amended effective as of January 1,
1996, by deleting the last paragraph in its entirety and inserting a new last
paragraph, which reads as follows:
"Any portion of a Participant's Employer Matching Contribution
Account and Employer Stock Ownership Account which is not vested under
Article 7 shall be forfeited upon the first to occur of five
consecutive one-year Breaks in Service or the end of the quarter after
the distribution of the Participant's entire vested interest in all of
his accounts. Any Forfeiture shall be used first to restore forfeited
account balances in accordance with Section 8.4, and the balance, if
any, shall be allocated among Participants who have made Employee
Deferrals under the Plan for the quarter in the same proportion that
each of these Participants' Compensation bears to the total
Compensation of all of these Participants for such quarter. In the
event a Forfeiture occurs in an account containing Employer Stock, such
stock shall be forfeited only after other assets. Notwithstanding the
foregoing, in the event of a Forfeiture from an Employer Stock
Ownership Account, the portion of such Forfeiture originating from
Employer contributions used to finance an Exempt Loan shall, if such
Exempt Loan remains outstanding at the time of such Forfeiture, be
allocated only among those Participants who are the intended
beneficiaries of such Exempt Loan, and shall be allocated without
regard to whether such Participants have made Employee Deferrals."
9. Section 8.7 of the Plan is deleted in its entirety and
a new Section 8.7 is inserted in lieu thereof, which reads as
follows:
3
<PAGE>
"Section 8.7 Hardship Distributions. In case of hardship, any
Participant may apply to the Committee for distribution of all or a
portion of the value of his Employee Deferral Account as of December
31, 1988, plus any subsequent deferrals, all or a portion of his vested
Employer Matching Contribution Account, his Employee Voluntary
Contribution Account, or his Employee Rollover Contribution Account. As
used in this Section, a "hardship" will be deemed to exist if the
distribution is necessary in light of immediate and heavy financial
needs of the Participant and if funds to alleviate such financial needs
are not reasonably available from other resources of the Participant.
"A distribution will be deemed to be made on account of an
immediate and heavy financial need of the Participant only if the
distribution is on account of:
(a) Medical expenses described in Code Section 213(d)
previously incurred by the Participant, the
Participant's spouse, or any dependents of the
Participant (as defined in Code Section 152),
provided that such expenses need not be incurred if a
distribution is necessary to obtain medical care.
(b) Purchase (excluding mortgage payments) of a
principal residence for the Participant.
(c) Payment of tuition and related educational fees and
room and board expenses for the next twelve (12)
months of post-secondary education for the
Participant, his or her spouse, children, or
dependents.
(d) The need to prevent the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the Participant's
principal residence.
(e) Such other needs as may be allowable under the Code
or Treasury Regulations, revenue rulings, notices and
other documents of general applicability.
"A distribution deemed to be necessary to satisfy an immediate
and heavy financial need of a Participant is not reasonably available
from other resources of the Participant if all of the following
requirements are satisfied:
(a) The distribution is not in excess of the immediate
and heavy financial need of the Participant,
4
<PAGE>
including any amounts necessary to pay any federal,
state or local income tax or penalties reasonably
anticipated to result from such distribution.
(b) The Participant has obtained all distributions, other
than hardship distributions, and all nontaxable loans
currently available under all plans maintained by the
Employer.
(c) The Plan, and all other plans maintained by the
Employer, provides that the Participant's elective
deferrals and employee contributions will be
suspended for at least twelve months after receipt of
the hardship distribution.
(d) The Plan, and all other plans maintained by the
Employer, provides that the Participant may not
make elective deferrals for the Participant's
taxable year immediately following the taxable
year of the hardship distribution in excess of the
applicable limit under Code Section 402(g) for
such next taxable year less the amount of such
Participant's elective deferrals for the taxable
year of the hardship distribution.
"If the Committee, based on the above standards, reasonably
determines a hardship exists or is imminent, it may direct the
distribution of hardship benefits as of the Adjustment Date coincident
with or next succeeding the determination of hardship; provided, that
interim payments may be made if necessary as determined and made on a
uniform basis. The hardship distribution shall be made in a lump sum
payment and shall not cause a suspension of Employer contributions,
unless otherwise required as a condition of receiving such
distribution.
"The amount of any hardship distribution under this Section
8.7 shall not exceed the lesser of:
(a) An amount as determined by the Committee to be
sufficient to alleviate the hardship, including
amounts necessary to pay any federal, state or local
income tax or penalties reasonably anticipated to
result from such distribution; or
(b) The value of the Participant's Employee Deferral
Account as of December 31, 1988, plus any Employee
deferrals after that date plus the value of his
vested Employer Matching Contribution Account, his
Employee Voluntary Contribution Account, and his
Employee Rollover Contribution Account.
5
<PAGE>
"The hardship withdrawal first must come from the
Participant's Employee Voluntary Contribution Account, then from his
Employee Rollover Contribution Account, then from his vested Employer
Matching Contribution Account, then from his Employee Deferral Account.
Such withdrawals shall reduce the Participant's investment funds on a
pro-rata basis.
"Any Participant who receives a hardship withdrawal under the
Plan shall be suspended from making future deferrals to the Plan until
the Entry Date next following a lapse of twelve months from the date of
the hardship distribution. Such Participant's deferrals for the taxable
year immediately following the taxable year of the hardship
distribution may not exceed the applicable limit under Code Section
402(g) for such next taxable year, less the amount of such
Participant's elective deferrals for the taxable year of the hardship
distribution.
"The Committee shall apply the provisions of this Section on a
uniform and consistent basis to all Participants in similar
circumstances and shall make any rules, regulations, prescribe the use
of such forms, and any other powers it deems necessary to properly
carry out the provisions and intent of this Section."
10. A new sentence shall be added to the end of the second
paragraph of Section 9.1 of the Plan, which reads as follows:
"Effective January 1, 1996, each Participant's Employer Prior
Contribution Account shall become fully vested and nonforfeitable and
shall be consolidated with such Participant's Employee Rollover
Contribution Account."
11. Effective January 1, 1996, Section 9.3(b)(13) of the Plan shall be
deleted in its entirety and a new subparagraph (13) shall be inserted in lieu
thereof, which reads as follows:
"(13) Forfeitures: There shall be added to the Employer
Matching Contribution Account and Employer Stock
Ownership Account of each Participant who has made
Employee Deferrals under the Plan during the
quarter and who is employed on the last day of the
quarter or who retired, died or became disabled
during the quarter, a proportionate share of any
Forfeitures originating from the sources listed
above in this Section 9.3(b)(13) determined
pursuant to Article 7, in the same ratio that his
Compensation for the quarter bears to the total
Compensation of all Participants eligible to share
in such allocation for the quarter. Provided,
however, in the event of a forfeiture from an
6
<PAGE>
Employer Stock Ownership Account, the portion of such
forfeiture originating from Employer contributions
used to finance an Exempt Loan shall, if such Exempt
Loan remains outstanding at the time of such
forfeiture, be allocated only among those
Participants who are the intended beneficiaries of
such Exempt Loan."
7
<PAGE>
IN WITNESS WHEREOF, the Employer and Trustee have each caused this
instrument to be executed by their respective duly authorized officers and their
corporate seals to be hereunto affixed, all as of the day and year first above
written.
EMPLOYER:
CENTURA BANKS, INC.
ATTEST:
(Corporate Seal)
____________________________ By:________________________________
Secretary President
CENTURA BANK
ATTEST:
(Corporate Seal)
____________________________ By:________________________________
Secretary President
CENTURA SECURITIES, INC.
ATTEST:
(Corporate Seal)
____________________________ By:________________________________
Secretary President
CENTURA INSURANCE SERVICES, INC.
ATTEST:
(Corporate Seal)
____________________________ By:________________________________
Secretary President
8
<PAGE>
TRUSTEE:
CENTURA BANK
ATTEST:
(Corporate Seal)
____________________________ By:________________________________
Secretary President
9
<PAGE>
EXHIBIT 5
<PAGE>
POYNER & SPRUILL, L.L.P.
Attorneys at Law
3600 Glenwood Avenue
Raleigh, North Carolina 27612
919/783-6400
Fax: 919/783-1075
September 17, 1996
Centura Banks, Inc.
134 North Church Street
Rocky Mount, North Carolina 27804
Gentlemen:
This opinion is rendered for use in connection with the Registration
Statement on Form S-8, prescribed pursuant to the Securities Act of 1933, filed
by Centura Banks, Inc. (the "Company") with the Securities and Exchange
Commission, under which 500,000 shares of the Company's common stock, no par
value per share (the "Common Stock"), are to be registered.
As counsel to the Company, we have examined and are familiar with
originals or copies certified or otherwise identified to our satisfaction, of
such statutes, documents, corporate records, certificates of public officials,
and other instruments as we have deemed necessary for the purpose of this
opinion, including the Company's Restated Articles of Incorporation and By-laws,
both as amended to date, and the record of proceedings of the shareholders and
directors of the Company. Based upon the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly
existing and in good standing as a corporation under the
laws of the State of North Carolina.
2. When the Registration Statement shall have become effective and up
to 500,000 shares of the Common Stock to be originally issued for sale
shall have been originally issued and sold under the terms set forth in
the Registration Statement, such shares will be legally and validly
issued, fully paid, and nonassessable.
We hereby consent to the filing of this Opinion as Exhibit 5 and 24 to
the Registration Statement and to the reference to our name in the Registration
Statement.
Very truly yours,
/s/ POYNER & SPRUILL, L.L.P.
<PAGE>
EXHIBIT 24.2
<PAGE>
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Centura Banks, Inc.
We consent to incorporation by reference in the Registration Statement on Form
S-8 of Centura Banks, Inc. ("Centura") relating to the Centura Banks, Inc.
401(k) Plan of our report dated January 8, 1996, relating to the consolidated
balance sheets of Centura Banks, Inc. and subsidiaries as of December 31, 1995
and 1994, and the related consolidated statements of income, shareholders'
equity and cash flows for each of the years in the three-year period ended
December 31, 1995, which report appears in the December 31, 1995 annual report
on Form 10-K of Centura Banks, Inc. Our report dated January 8, 1996, refers to
the fact that on December 31, 1993, Centura adopted the provisions of the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities".
We consent to incorporation by reference in the Registration Statement on Form
S-8 of Centura Banks, Inc. relating to the Centura Banks, Inc. 401(k) Plan of
our report dated March 22, 1996, relating to the statements of net assets
available for benefits of the Centura Banks, Inc. 401(k) Plan as of December 31,
1995 and 1994, and the related statements of changes in net assets available for
benefits for each of the years in the three-year period ended December 31, 1995,
which report appears in the December 31, 1995 annual report on Form 11-K of
Centura Banks, Inc.
KPMG Peat Marwick LLP
/s/ KPMG Peat Marwick LLP
Raleigh, North Carolina
September 13, 1996
<PAGE>
EXHIBIT 25
<PAGE>
CENTURA BANKS, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of CENTURA BANKS, INC., a North Carolina corporation (the
"Company"), hereby constitutes and appoints JOSEPH A. SMITH, JR., General
Counsel and Corporate Secretary of the Company, with full power of substitution,
as his true and lawful attorney and agent, for him and in his name, place, and
stead, in any and all capacities, to do any and all acts and things and execute
any and all instruments that said attorney and agent may deem necessary or
advisable to enable the Company to comply with the Securities Act of 1933, as
amended (and any other applicable federal, state, and local laws), and any rules
and regulations and requirements of the Securities and Exchange Commission (and
other applicable rules and regulations and requirements) in respect thereof in
connection with the registration under the Securities Act of 1933, as amended
(or other applicable laws), of securities of the Company issuable or deliverable
pursuant to the Company's 401(k) Plan (including 500,000 additional shares of no
par value Common Stock of the Company), including specifically, but without
limiting the generality of the foregoing, the power and authority to sign the
name of the undersigned, in any capacity, to a Company registration statement on
Form S-8 to be filed with the Securities and Exchange Commission in respect of
such securities, and any and all amendments to the said registration statement,
and any and all instruments and documents filed as a part of or executed in
connection with the said registration statement or any amendments thereto, and
to file the same with the Securities and Exchange Commission; hereby ratifying
and confirming all that the said attorneys and agents, or any of them, shall do
or cause to be done by virtue thereof. Any prior powers of attorney previously
granted by us for the above purpose are hereby revoked.
*
*
*
*
*
*
*
*
*
*
*
*
*
IN WITNESS WHEREOF, each of the undersigned has subscribed
<PAGE>
these presents as of August 21, 1996.
/s/ Robert R. Mauldin /s/ Cecil W. Sewell, Jr.
- ------------------------------- ------------------------------
Robert R. Mauldin Cecil W. Sewell, Jr.
Chairman of the Board, Director Director, President, and Chief
and Chief Executive Officer Operating Officer
/s/ Frank L. Pattillo /s/ William H. Wilkerson
- ------------------------------- ------------------------------
Frank L. Pattillo William H. Wilkerson
Director, Group Executive Director and Group Executive
Officer, and Chief Financial Officer
Officer
/s/ H. Tate Bowers /s/ William H. Kincheloe
- ------------------------------- ------------------------------
H. Tate Bowers, Director William H. Kincheloe, Director
/s/ O. Tracy Parks, III /s/ J. Richard Futrell, Jr.
- ------------------------------- ------------------------------
O. Tracy Parks, III, Director J. Richard Futrell, Jr.,
Director
/s/ Richard H. Barnhardt /s/ Charles T. Lane
- ------------------------------- ------------------------------
Richard H. Barnhardt, Director Charles T. Lane, Director
/s/ Thomas A. Betts, Jr. /s/ C. Wood Beasley
- ------------------------------- ------------------------------
Thomas A. Betts, Jr., Director C. Wood Beasley, Director
/s/ Alexander P. Thorpe, III /s/ William H. Redding, Jr.
- ------------------------------- ------------------------------
Alexander P. Thorpe, III, William H. Redding, Jr.,
Director Director
/s/ John H. High /s/ Robert L. Hubbard
- ------------------------------- ------------------------------
John H. High, Director Robert L. Hubbard, Director
/s/ Charles M. Reeves, III /s/ Ernest L. Evans
- ------------------------------- ------------------------------
Charles M. Reeves, III, Director Ernest L. Evans, Director
<PAGE>
/s/ William D. Hoover /s/ Jack A. Moody
- ------------------------------- ------------------------------
William D. Hoover, Director Jack A. Moody, Director
/s/ Clifton H. Moore /s/ Joseph H. Nelson
- ------------------------------- ------------------------------
Clifton H. Moore, Director Joseph H. Nelson, Director
/s/ Joseph L. Wallace, Jr.
- ------------------------------- ------------------------------
George T. Stronach III, Director Joseph L. Wallace, Jr.,
Director
/s/ Charles P. Wilkins /s/ Ann K. Lawson
- ------------------------------- --------------------------
Charles P. Wilkins, Director Ann K. Lawson, Principal
Accounting Officer
