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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM 10-K/A
(Amendment No. 1)
(Mark one)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1997
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____________________ to _______________________
Commission File Number 0-18630
CATHAY BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 95-4274680
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
777 North Broadway, Los Angeles, California 90012
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (213) 625-4700
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the Registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days: Yes [X] No [ ]
Indicate by check if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will to be contained, to the best of
Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of March 6, 1998 was $242,755,116 (computed on the basis of
$33.625 per share, which was the last sale price of the Company's Common Stock
reported by the Nasdaq National Market on March 6, 1998).*
The number of shares outstanding of each of the Registrant's classes of Common
Stock as of March 6, 1998: Common Stock, $.01 par value - 8,952,338 shares.**
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DOCUMENTS INCORPORATED BY REFERENCE
- - Portions of Registrant's definitive proxy materials relating to its 1998
Annual Meeting of Stockholders, as filed, are incorporated by reference
into Part III.
- - Portions of Registrant's Annual Report to Stockholders for the Year
Ended December 31, 1997 (referred to below as "Annual Report to
Stockholders") are incorporated by reference into Parts I, II and IV.
- ----------
* Estimated solely for the purposes of this cover page. The market value
of shares held by the Company's directors, officers and Employee Stock
Ownership Plan have been excluded.
** Includes 34,519 and 34,000 rights, respectively, to receive Common Stock
that are held by former holders of Cathay Bank common stock and former
holders of First Public Savings Bank common stock that have not yet been
submitted for exchange into Common Stock of Cathay Bancorp, Inc.
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ITEM AMENDED
PART VI
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ITEM PAGE
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14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.............. 3
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TEXT OF AMENDMENT
The above-listed Item is hereby amended by deleting the Item in its
entirety appearing in the Form 10-K of Cathay Bancorp, Inc. (the "Company")
filed with the Securities and Exchange Commission on March 30, 1998 (the
"Initial Filing"), and replacing such Item with the corresponding Item that
appears in this Amendment No. 1 to Annual Report on Form 10-K.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
Documents Filed as Part of this Report
(a) (1)Financial Statements
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Financial Statements Page No. in
of Initial Filing of
Cathay Bancorp, Inc. and Subsidiary* Annual Report
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Consolidated Statements of Condition 39
as of December 31, 1997 and 1998
Consolidated Statements of Income 40
for each of the years in the 3-year period
ended December 31, 1997
Consolidated Statements of Changes in Stockholders' 41
Equity for each of the years in the 3-year period
ended December 31, 1997
Consolidated Statements of Cash Flows 42
for each of the years in the 3-year period
ended December 31, 1997
Notes to Consolidated Financial Statements 43-62
Independent Auditors' Report of KPMG Peat Marwick LLP 63
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* Parent-only condensed financial information of the Company as of
December 31, 1997 and 1996 and for the years ended December 31, 1997, 1996 and
1995 is included in Note 15 to the Consolidated Financial Statements on pages 60
through 62 of the Annual Report to Stockholders, which is incorporated herein by
reference.
(a)(2) Financial Statement Schedules
Schedules have been omitted since they are not applicable, they
are not required, or the information required to be set forth in
the schedules is included in the Consolidated Financial
Statements or notes thereto incorporated by reference into this
report.
(a)(3) Exhibits
3.1 Restated Articles of Incorporation. Previously filed with the
Securities and Exchange Commission as an exhibit to Registration
Statement No. 33-33767 and incorporated herein by reference.
3.2 Restated Bylaws. Previously filed with the Securities and
Exchange Commission as an exhibit to Registrant's Annual Report
on Form 10-K for the year ended December 31, 1990 and
incorporated herein by reference.
4.1 Shareholders Rights Plan. Previously filed with the Securities
and Exchange Commission as an exhibit to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1990 and
incorporated herein by reference.
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10.1 Form of Indemnity Agreements between the Company and its
directors and certain officers. Previously filed with the
Securities and Exchange Commission as an exhibit to Registration
Statement No. 33-33767 and incorporated herein by reference.
10.2 Amended and Restated Cathay Bank Employee Stock Ownership Plan
and Trust, each as amended by the First Amendment and Second
Amendment thereto.
10.3 Dividend Reinvestment Plan of the Company. Previously filed with
the Securities and Exchange Commission as an exhibit to
Registration Statement No. 33-33767 and incorporated herein by
reference.
13.1 Certain portions of the Registrant's 1997 Annual Report to
Stockholders incorporated herein by reference.
22.1 Subsidiaries of the Company. Previously filed with the Securities
and Exchange Commission as an exhibit to the Initial Filing of
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997 and incorporated herein by reference.
23.1 Consent of KPMG Peat Marwick LLP
24.1 Power of Attorney. Included on page 20 of the Initial Filing of
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997, previously filed with the Securities and
Exchange Commission, and incorporated herein by reference.
27 Financial Data Schedule. Previously filed with the Securities and
Exchange Commission as an exhibit to the Initial Filing of
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997 and incorporated herein by reference.
(b) Reports on Form 8-K
There were no reportable events.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment to Annual
Report on Form 10-K to be signed on its behalf by the undersigned, thereunto
duly authorized.
CATHAY BANCORP, INC.
Date: April 30, 1998 By: /s/ DUNSON K. CHENG
--------------------------------
Dunson K. Cheng
Chairman and President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Amendment to Annual Report on Form 10-K has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
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SIGNATURE TITLE DATE
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/s/ DUNSON K. CHENG President, Chairman of April 30, 1998
- -------------------------------------- the Board and Director
Dunson K. Cheng (Principal Executive
Officer)
/s/ ANTHONY M. TANG Executive Vice President, April 30, 1998
- -------------------------------------- Chief Financial Officer/
Anthony M. Tang Treasurer and Director
(Principal Financial
Officer) (Principal
Accounting Officer)
* Director April 30, 1998
- --------------------------------------
Ralph Roy Buon-Cristiani
* Director April 30, 1998
- --------------------------------------
Kelly L. Chan
* Director April 30, 1998
- --------------------------------------
Michael M.Y. Chang
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(SIGNATURE CONTINUED)
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* Vice Chairman of the April 30, 1998
- -------------------------------------- Board and Director
George T.M. Ching
* Director April 30, 1998
- --------------------------------------
Wing K. Fat
* Director April 30, 1998
- --------------------------------------
Patrick S.D. Lee
* Director April 30, 1998
- --------------------------------------
Chi-Hung Joseph Poon
* Director April 30, 1998
- --------------------------------------
Thomas G. Tartagilia
* Secretary of the Board April 30, 1998
- -------------------------------------- and Director
Wilbur K. Woo
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*By: /s/ DUNSON K. CHENG
--------------------------------
Dunson K. Cheng
As Attorney-in-Fact
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EXHIBIT INDEX
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Exhibit No.
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3.1 Restated Articles of Incorporation. Previously filed with the
Securities and Exchange Commission as an exhibit to Registration
Statement No. 33-33767 and incorporated herein by reference.
3.2 Restated Bylaws. Previously filed with the Securities and
Exchange Commission as an exhibit to Registrant's Annual Report
on Form 10-K for the year ended December 31, 1990 and
incorporated herein by reference.
4.1 Shareholders Rights Plan. Previously filed with the Securities
and Exchange Commission as an exhibit to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1990 and
incorporated herein by reference.
10.1 Form of Indemnity Agreements between the Company and its
directors and certain officers. Previously filed with the
Securities and Exchange Commission as an exhibit to Registration
Statement No. 33-33767 and incorporated herein by reference.
10.2 Amended and Restated Cathay Bank Employee Stock Ownership Plan
and Trust, each as amended by the First Amendment and Second
Amendment thereto.
10.3 Dividend Reinvestment Plan of the Company. Previously filed with
the Securities and Exchange Commission as an exhibit to
Registration Statement No. 33-33767 and incorporated herein by
reference.
13.1 Certain portions of the Registrant's 1997 Annual Report to
Stockholders incorporated herein by reference.
22.1 Subsidiaries of the Company. Previously filed with the Securities
and Exchange Commission as an exhibit to the Initial Filing of
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997 and incorporated herein by reference.
23.1 Consent of KPMG Peat Marwick LLP
24.1 Power of Attorney. Included on page 20 of the Initial Filing of
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997, previously filed with the Securities and
Exchange Commission, and incorporated herein by reference.
27 Financial Data Schedule. Previously filed with the Securities and
Exchange Commission as an exhibit to the Initial Filing of
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997 and incorporated herein by reference.
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EXHIBIT 10.2
AMENDED AND RESTATED CATHAY BANK
EMPLOYEE STOCK OWNERSHIP PLAN
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TABLE OF CONTENTS
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ARTICLE I NAME, DEFINITIONS & FUNDING POLICY............................................1
Section 1.1: Full Name...........................................................1
Section 1.2: Definitions.........................................................1
Section 1.3: Other Definitions..................................................11
Section 1.4: Funding Policy.....................................................12
ARTICLE II PARTICIPATION...............................................................12
Section 2.1: Eligibility Requirements...........................................12
Section 2.2: Application For Participation And Beneficiary Designation..........13
Section 2.3: Participation......................................................13
Section 2.4: Break In Service Rules For Eligibility Purposes....................13
ARTICLE III CONTRIBUTIONS..............................................................14
Section 3.1: Company Contributions..............................................14
Section 3.2: Payment Of Contributions To The Trustee............................14
Section 3.3: Participant Contributions..........................................15
Section 3.4: No Requirement For Profits.........................................15
ARTICLE IV ALLOCATIONS TO PARTICIPANTS' ACCOUNTS.......................................15
Section 4.1: Stock Account......................................................15
Section 4.2: Cash Account.......................................................15
Section 4.3: Unallocated Stock Account..........................................15
Section 4.4: Allocation Of Gains And Losses.....................................15
Section 4.5: Allocation Of Contributions........................................16
Section 4.6: Allocation Of Cash Dividends On Stock..............................16
Section 4.7: Allocation Of Stock Dividends......................................17
Section 4.8: Release And Allocation Of Leveraged Stock..........................17
Section 4.9: Notice Of Allocations..............................................18
Section 4.10: Miscellaneous Allocation Rules....................................19
Section 4.11: Valuation Of Stock................................................19
Section 4.12: Accounts In General...............................................20
Section 4.13: Limitation On Annual Additions....................................20
ARTICLE V VESTING......................................................................23
Section 5.1: Vesting In Accounts................................................23
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ARTICLE VI DISTRIBUTION OF BENEFITS....................................................24
Section 6.1: Distribution Of Benefits...........................................24
Section 6.2: Methods Of Distribution............................................24
Section 6.3: Timing Of Distributions............................................26
Section 6.4: Postponed Retirement...............................................28
Section 6.5: Distributions Due Missing Persons..................................28
Section 6.6: Transfers To Another Qualified Plan................................29
ARTICLE VII SALE OF STOCK..............................................................29
Section 7.1: Option To Sell Shares Of Stock.....................................29
Section 7.2: Right Of First Refusal.............................................31
ARTICLE VIII TOP-HEAVY PLAN LIMITATIONS................................................31
Section 8.1: Application Of Top-Heavy Rules.....................................31
Section 8.2: Definitions........................................................31
Section 8.3: 60% Test - Special Rules...........................................35
Section 8.4: Minimum Vesting Requirement........................................36
Section 8.5: Minimum Contribution Requirement...................................36
ARTICLE IX INVESTMENTS.................................................................37
Section 9.1: Investment Of Company Contributions................................37
Section 9.2: Leveraged Stock Authorized.........................................37
Section 9.3: Certain Nonterminable Provisions...................................40
Section 9.4: Diversification Of Stock...........................................40
Section 9.5: Voting Of Stock....................................................41
ARTICLE X THE COMMITTEE................................................................42
Section 10.1: Members ..........................................................42
Section 10.2: Committee Action..................................................43
Section 10.3: Rights And Duties.................................................43
Section 10.4: Information.......................................................45
Section 10.5: Compensation, Indemnity And Liability.............................45
Section 10.6: Administrative Expenses Of The Plan...............................45
ARTICLE XI AMENDMENT AND TERMINATION...................................................46
Section 11.1: Amendments........................................................46
Section 11.2: Discontinuance Of Plan............................................47
Section 11.3: Failure To Contribute.............................................48
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ARTICLE XII CLAIMS PROCEDURE............................................................48
Section 12.1: Presentation Of Claim.............................................48
Section 12.2: Notification Of Decision..........................................48
Section 12.3: Review Of A Denied Claim..........................................48
Section 12.4: Decision On Review................................................49
ARTICLE XIII MISCELLANEOUS.............................................................49
Section 13.1: Contributions Not Recoverable.....................................49
Section 13.2: Limitation On Participants' Rights................................50
Section 13.3: Receipt Or Release................................................50
Section 13.4: Nonassignability..................................................50
Section 13.5: Governing Law.....................................................51
Section 13.6: Headings..........................................................51
Section 13.7: Counterparts......................................................51
Section 13.8: Successors And Assigns............................................51
Section 13.9: Gender And Number.................................................51
Section 13.10: Merger, Consolidation Or Transfer Of Plan Assets.................51
Section 13.11: Joinder Of Parties...............................................52
Section 13.12: The Trust........................................................52
Section 13.13: Participation By Affiliated Companies............................52
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AMENDED AND RESTATED CATHAY BANK
EMPLOYEE STOCK OWNERSHIP PLAN
(PRO FORMA - INCORPORATING THE
FIRST AND SECOND AMENDMENTS
TO THE PLAN)
CATHAY BANCORP, INC. has adopted the following complete amendment
and restatement of its employee stock ownership plan that evidences the plan
portion of an employee stock ownership plan and trust for the benefit of the
qualified employees of the Company. The terms of the Plan are as follows:
ARTICLE I
NAME, DEFINITIONS & FUNDING POLICY
Section 1.1: Full Name. This plan shall be known as the:
CATHAY BANK
EMPLOYEE STOCK OWNERSHIP PLAN
It is hereby designated as constituting a defined contribution plan intended to
qualify as a stock bonus plan under Code Section 401 and to constitute an
employee stock ownership plan as described in ERISA Section 407(d)(6)(A) and
Code Section 4975(e)(7). The Plan is designed to invest primarily in qualifying
employer securities as defined in Code Section 409(l). The Trust established in
connection with the Plan shall be known as the:
CATHAY BANK
EMPLOYEE STOCK OWNERSHIP TRUST
Section 1.2: Definitions. As used in this document and in the
Trust, the following words and phrases shall have the following meanings, unless
a different meaning is specified or clearly indicated by the context:
"Accounts" shall mean, collectively, the Stock Account and the
Cash Account that may be established under the Plan for a Participant. If both
of such Accounts are not established for a Participant, then, as to such a
Participant, "Accounts" shall mean the one of such Accounts that is established
for such Participant.
"Adjustment Factor" shall mean the cost of living adjustment
factor prescribed by the Secretary of the Treasury under Code Section 415(d) for
years
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beginning after December 31, 1987, as applied to such items and in such manner
as the Secretary of the Treasury shall provide.
"Affiliated Company" shall mean:
(a) a member of a controlled group of corporations of
which the Company is a member;
(b) an unincorporated trade or business that is under
common control with the Company, as determined in accordance with Code
Section 414(c) and the applicable Regulations;
(c) a member of an affiliated service group of which the
Company is a member, as determined in accordance with Code Section
414(m) and the applicable Regulations; or
(d) any other entity required to be aggregated with the
Company pursuant to the Regulations under Code Section 414(o).
For these purposes, a "controlled group of corporations" shall mean a controlled
group of corporations as defined in Code Section 1563(a), determined without
regard to Code Sections 1563(a)(4) and 1563(e)(3)(C).
"Anniversary Date" shall mean the last day of each Plan Year.
"Article" shall mean an Article of the Plan.
"Beneficiary" shall mean the person or persons, as the context
requires, last designated by a Participant to receive any benefit specified in
the Plan that is payable upon such Participant's death. If there is no
designated Beneficiary or surviving Beneficiary, the Beneficiary shall be the
Participant's surviving spouse; or, if none, the Participant's surviving
descendants (including adopted persons), who shall take on the principle of
representation; or, if none, the Participant's estate; or, if there is no legal
representative appointed to represent the Participant's estate and if the
Participant's vested interest does not exceed $2,000, a person (or the persons)
selected by the Committee who is related to the Participant by blood, adoption
or marriage.
"Board of Directors" shall mean the Board of Directors of the
Company.
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"Break in Service" shall mean a computation period in which an
Employee has failed to complete more than 500 Hours of Service (unless due to an
authorized, unpaid leave of absence granted by the Company in a
nondiscriminatory manner). The computation period shall be, for eligibility and
vesting purposes, the same computation period used in determining an Employee's
Years of Service. Solely for purposes of determining whether a Break in Service
has occurred in any computation period, an individual who is absent from work
for maternity or paternity reasons shall receive credit for the Hours of Service
which would otherwise have been credited to such individual but for such absence
(or, in any case in which such Hours of Service cannot be determined, 8 Hours of
Service per work day of such absence). An absence from work for maternity or
paternity reasons means an absence (i) by reason of the pregnancy of the
individual, (ii) by reason of a birth of a child of the individual, (iii) by
reason of the placement of a child with the individual in connection with the
adoption of such child by such individual, or (iv) for purposes of caring for
such child for a period beginning immediately following such birth or placement.
The Hours of Service credited under this provision shall in no event exceed 501
hours, and they shall be credited (1) in the computation period in which the
absence begins if such crediting is necessary to prevent a Break in Service in
that period, or (2) in all other cases, in the following computation period.
"Cash Account" shall mean the Account maintained by the Committee
for each Participant that is to be credited with such Participant's share of the
Trust's assets (other than Stock) that are allocated to Participants.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
and its successors.
"Committee" shall mean the Committee appointed pursuant to
Article X.
"Company" shall mean CATHAY BANCORP, INC.
"Compensation" shall mean a Participant's Earnings during the
Plan Year, plus any amount that is contributed by the Company pursuant to a
salary reduction agreement and that is not includable in such Participant's
gross income under Code Sections 125, 402(e)(3), 402(h) or 403(b). Despite any
other provisions of the Plan, the maximum amount of Compensation of any
Participant for any Plan Year that shall be considered for all purposes of the
Plan shall be $200,000, as such amount may be adjusted by the Adjustment Factor.
In addition to other applicable limitations set forth in the Plan, and despite
any other provision of the Plan, for Plan Years beginning on or after January 1,
1994, the Compensation of each Participant shall not exceed the Compensation
Limitation (defined below). The Compensation
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Limitation is $150,000, as adjusted for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). The cost-of-living adjustment in
effect for a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined beginning in such calendar year. If such a
determination period consists of fewer than 12 months, the Compensation
Limitation will be multiplied by a fraction, the numerator of which is the
number of months in such determination period, and the denominator of which is
12. For Plan Years beginning on or after January 1, 1994, any reference in the
Plan to the limitation under Code Section 401(a)(17) shall mean the Compensation
Limitation. If Compensation for any prior determination period is taken into
account in determining a Participant's benefits accruing in the current Plan
Year, the Compensation for such prior determination period is subject to the
Compensation Limitation in effect for such prior determination period. For this
purpose, for determination periods beginning before the first day of the first
plan year beginning or after January 1, 1994, the Compensation Limitation is
$150,000. In applying the $200,000 or $150,000 limit, as the case may be, the
family of a "highly compensated employee" (as defined in Code Section 414(q))
who is either (i) a 5% owner of the Company or any Affiliated Company, or (ii)
one of the 10 Employees who received the most Compensation during the Plan Year,
shall be treated as a single Participant. For purposes of the foregoing, a
Participant's "family" shall include the Participant's spouse and lineal
descendants who have not attained age 19 by the close of the Plan Year. If the
$200,000 or $150,000 limit, as the case may be, is exceeded as a result of these
family aggregation rules, then such limit shall be allocated among such family
members in proportion to each family member's Compensation.
"Current Obligation" shall mean any obligation of the Trust
arising from the extension of credit to the Trust in connection with the
purchase by the Trust of Stock and that is either (a) payable in cash within one
year from the date of reference pursuant to the terms of the applicable credit
agreement, or (b) designated by the Committee as subject to current payment with
Trust assets available therefore pursuant to the terms of the Plan.
"Defined Benefit Plan" and "Defined Contribution Plan" shall have
the same meanings as given these terms under ERISA.
"Earnings" shall mean a Participant's annual "compensation", as
that term is defined in Code Section 415, that is actually paid or made
available to the Participant within the Plan Year. A Participant's Earnings
shall include such Participant's wages, salaries, fees for professional services
and other amounts received (without regard to whether or not an amount is paid
in cash) for personal services actually rendered in the course of employment
with the Company or any Affiliated Company to the extent that the amounts are
includable in gross income under the Code (including, but not limited to,
commissions paid salesmen,
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compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips, bonuses, fringe benefits, reimbursements, and
expense allowances). "Earnings" shall not include:
(a) Any contribution made by the Company to a plan of
deferred compensation to the extent that, before the application of the
Code Section 415 limitations to that plan, the contributions are not
includable in the gross income of the Participant for the taxable year
in which contributed. In addition, the Company's contributions, if any,
made on behalf of a Participant to a simplified employee pension plan
described in Code Section 408(k) are not considered Earnings for the
taxable year in which contributed to the extent such contributions are
deductible by the Participant under Code Section 219(b)(7).
Additionally, any distributions from a plan of deferred compensation are
not considered Earnings, regardless of whether such amounts are
includable in the gross income of the Participant when distributed.
However, any amount received by a Participant pursuant to an unfunded
non-qualified plan may be considered Earnings in the year such amounts
are includable in the gross income of the Participant.
(b) Any amount realized from the exercise of a
non-qualified stock option, or when restricted stock (or property) held
by a Participant either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture.
(c) Any amount realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option.
(d) Any other amount that receives special tax benefits,
such as premiums for group term life insurance (but only to the extent
that the premiums are not includable in the gross income of the
Participant), or contributions made by the Company (whether or not
under a salary reduction agreement) towards the purchase of an annuity
contract described in Code Section 403(b) (whether or not the
contributions are excludable from the gross income of the Participant).
(e) Despite the foregoing, "Earnings" with respect to a
Participant who is a non-resident alien (within the meaning of Section
7701(b) of the Code) shall mean wages within the meaning of Section
3401(a) of the Code, but determined without regard to any rules that
limit the remuneration included in wages based on the nature or location
of the employment or the services performed.
"Effective Date" shall mean, except as otherwise expressly
provided, January 1, 1987.
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"Eligibility Computation Period" for each Employee shall mean a
12 consecutive month period beginning on such Employee's Employment Commencement
Date.
"Employee" shall mean every common law employee of the Company
and any Affiliated Company that has adopted the Plan with the permission of the
Board of Directors who is classified in the payroll records of the Company or
any such Affiliated Company as a salaried employee. The term "Employee" shall
not include any leased employee of the Company (within the meaning of Code
Section 414(n)(2)).
"Employer" shall mean, with respect to an Employee, the Company,
any Predecessor Employer, and any Affiliated Company.
"Employment Commencement Date" for each Employee shall mean the
date such Employee is first credited with an Hour of Service.
"Entry Date" shall mean the first day of the first month or the
first day of the seventh month (whichever applies) of each Plan Year.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and its successors.
"Fiduciary" shall mean a person who:
(a) exercises any discretionary authority, discretionary
control, or discretionary responsibility respecting the management or
administration of the Plan;
(b) exercises any authority or control respecting
management or disposition of the Plan's assets; or
(c) renders investment advice for a fee or other
compensation, direct or indirect, with respect to any asset of the Plan,
or has any authority or responsibility to do so.
"Financial Institution" shall mean a bank, trust company, or
other financial institution that is regulated by the United States or any State.
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"Freely Tradable Stock" shall mean Stock that, at the time of
reference, is readily tradable on an established market.
"Hour of Service" shall mean:
(a) Each hour for which an Employee was paid by, or
entitled to payment from, an Employer. Hours under this Subsection (a)
shall be credited to an Employee for the computation period or periods
in which the services were performed. Generally, Hours of Service shall
be determined from the Employer's employment records. Despite the
foregoing, if an Employee's Compensation is not determined on the basis
of certain amounts for each hour worked (such as salaried, commission or
piece-work employees) and if his or her hours are not required to be
counted and recorded by any federal law (such as the Fair Labor
Standards Act), such Employee's Hours of Service need not be determined
from employment records. Instead, such Employee may be credited with 190
Hours of Service for each month in which he or she would be credited
with at least one Hour of Service pursuant to this Subsection (a);
(b) Each hour for which an Employee was paid by, or
entitled to payment from, an Employer on account of a period during
which no services were performed (irrespective of whether the employment
relationship had terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military duty or
leave of absence. No more than 501 Hours of Service shall be credited
under this Subsection (b) for any single continuous period (whether or
not such period occurs in a single computation period);
(c) Each hour for which back pay (irrespective of
mitigation of damages) is either awarded against, or agreed to by, an
Employer. The same Hours of Service shall not be credited under either
Subsection (a) or (b), whichever is applicable, and under this
Subsection (c). Hours of Service under this Subsection (c) shall be
credited for the computation period(s) to which the award or agreement
pertains, rather than the computation period in which the award,
agreement or payment is made; and
(d) Hours under Subsections (a) through (c) above shall be
calculated and credited pursuant to Section 2530.200b-2 of the
Department of Labor Regulations, which is incorporated here by
reference.
"Individual Medical Benefit Account" shall have the same meaning
as is given that term under Code Section 415(l)(2).
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<PAGE> 12
"Investment Manager" shall mean a person or entity who (that) is
(a) registered as an investment advisor under the Investment Adviser's Act of
1940, (b) defined as a bank under that Act, or (c) an insurance company
qualified under the laws of more than one state to manage, acquire and dispose
of trust assets, and who has acknowledged in writing that he (she or it) is a
Fiduciary with respect to the Plan.
"Leveraged Stock" shall mean any Stock that is acquired by the
Trustee on an installment contract from, or with the proceeds of a loan made or
guaranteed by, the Company or other disqualified person within the meaning of
Code Section 4975(e)(2).
"Named Fiduciary" shall have the same meaning as under Section
402(a) of ERISA and shall be determined as provided in Section 10.3.
"Net Profits" shall mean, with respect to any Plan Year, the
Company's net income or profit for such Plan Year, as determined on the basis of
the Company's books of account in accordance with generally accepted accounting
principles, before reduction for income taxes or contributions made by the
Company to the Plan.
"Non-allocation Period" shall mean, with respect to a transaction
for which an election under Code Section 1042(a) is made, the period beginning
on the date of the sale of the Stock and ending on the later of (1) the date
that is 10 years after the date of the purchase of the Company Stock, or (2) the
date of the Plan allocation attributable to the final payment of acquisition
indebtedness incurred in connection with such sale.
"Normal Retirement Age" shall mean a Participant's sixty-fifth
(65th) birthday.
"Normal Retirement Date" shall mean the first day of the month
that coincides with or immediately follows a Participant's Normal Retirement
Age.
"Participant" shall mean any Employee who becomes eligible for
participation in accordance with the provisions of the Plan, and, unless the
context indicates otherwise, includes former Participants.
"Plan" shall mean this document and the plan created by this
document (including, unless the context indicates to the contrary, the Trust
established in connection with the Plan), as it may be amended from time to
time.
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<PAGE> 13
"Plan Year" shall mean the 12 month period that ends on December
31. The Plan Year shall be the "limitation year" for the Plan as defined in the
Code.
"Predecessor Employer" shall mean any predecessor employer of an
Employee that maintained the Plan.
"Prohibited Allocation Group" shall mean all persons who, with
respect to a transaction for which an election under Code Section 1042(a) is
made, are within any one or more of the following categories:
(1) During the Non-allocation Period, the seller of the
Stock.
(2) During the Non-allocation Period, any person who is
related to such seller (within the meaning of Section 267(b) of the
Code), except that it shall not include any lineal descendant of such
seller if 5% or less of the shares of Stock (or other assets of the Plan
in lieu thereof) attributable to such shares is allocated to all such
lineal descendants. If the allocation provisions of Article IV would
result in more than such 5% being so allocated, the Committee may limit
such allocation to such 5% so that such lineal descendants are not
included in the Prohibited Allocation Group.
(3) Any other person who owns (after the application of
Section 318(a) of the Code) more than 25% of (A) any class of
outstanding stock of the Company or any Affiliated Company, or (B) the
total value of any class of outstanding stock of the Company or any
Affiliated Company. For this purpose, such person shall be deemed to own
all Stock allocated to him or her in this or any other qualified
employee benefit plan. Such person shall be included in the Prohibited
Allocation Group if he or she meets such test either (i) at any time
during the 1 year period ending on the date of purchase of the Company
Stock by the Trust, or (ii) on the date as of which such Stock is
allocated to Participants.
"Qualified Holder" shall mean (a) any Participant or any
Beneficiary(ies) or personal representative of a deceased Participant who has
received a distribution of Stock from the Plan), (b) any other party to whom
such Stock is transferred by gift or by reason of death, and (c) any trustee of
an individual retirement account (as defined under Code Section 408) to which
all or any portion of such distributed Stock is transferred pursuant to a
Rollover Contribution.
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<PAGE> 14
"Regulations" shall mean the regulations issued under the Code or
ERISA, or both of them, as well as under any other legislation that applies to
the Plan.
"Rollover Contribution" shall mean a qualified rollover
contribution as defined (before January 1, 1993) in Code Sections 402(a)(5),
402(a)(6), 402(a)(7), 403(a)(4), 408(d)(3) and 409(b)(3)(C), or (after December
31, 1992) in Code Sections 402(c), 403(a)(4), and 408(d)(3), but shall not
include a rollover contribution that is attributable to contributions made on
behalf of a Key Employee in a Top-heavy Plan, unless such a rollover
contribution is permissible under the Code or applicable Regulations.
"Section" shall mean, when used in conjunction with some other
reference (such as the Code or ERISA), a section of such other reference. When
not used in conjunction with some other reference, Section shall refer to a
section of the Plan or Trust, as the context requires. References to a Section
include future amendments, and successors, to it.
"Secretary" shall mean the Secretary or an Assistant Secretary of
the Committee.
"Secretary of the Treasury" shall mean the Secretary of the
Treasury, as defined in Code Section 7701(a)(11).
"Signature Page" shall mean the page(s) at the end of the Plan
entitled "Signature Page."
"Stock" shall mean common stock issued by the Company (or by a
corporation that is a member of the same controlled group of corporations)
having a combination of voting power and dividend rights equal to or in excess
of:
(A) that class of common stock of the Company (or
of any other such corporation) having the greatest voting power,
and
(B) that class of common stock of the Company (or
of any other such corporation) having the greatest dividend
rights.
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<PAGE> 15
"Stock Account" shall mean the account maintained by the
Committee for each Participant that is to be credited which such Participant's
share of the Stock held in the Trust that is allocated to Participants.
"Total Disability" or "Totally Disabled" shall each refer to a
physical or mental impairment that, in the Committee's opinion, (a) is expected
to be either of indefinite duration or result in death, and (b) renders a
Participant unable to satisfactorily perform his or her duties for the Company
or the duties of such other position or job that the Company makes available to
such Participant and for which such Participant is qualified by reason of his or
her training, education or experience. The Committee's opinion must be supported
by the opinion of a qualified physician designated or approved by the Committee.
"Trust" shall mean the trust established in connection with the
Plan, as it may be amended from time to time.
"Trustee" shall mean the person(s) or entity, or combination of
them, serving from time to time as the trustee(s) of the Trust.
"Unallocated Stock Account" shall mean the account maintained by
the Committee for the purpose of holding any Leveraged Stock (until such Stock
is released and allocated pursuant to the applicable provisions of the Plan).
"Welfare Benefit Fund" shall have the same meaning as is given
that term in Code Section 419(e).
"Year of Service" shall mean a computation period in which an
Employee has completed at least 1,000 Hours of Service. The initial computation
period shall be an Employee's Eligibility Computation Period, and shall
thereafter be the 12 consecutive month period beginning on the annual
anniversary date of such Employee's Employment Commencement Date.
Section 1.3: Other Definitions. As used in this document and in
the Trust, the following words and phrases shall have the meanings set forth in
the indicated Sections, unless a different meaning is specified or clearly
indicated by the context:
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<PAGE> 16
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
"Aggregate Account"....................................... 8.2
"Aggregation Group"....................................... 8.2
"Annual Addition"......................................... 4.13
"Claimant"................................................ 12.1
"Committee"............................................... 10.1
"Defined Benefit Plan Fraction"........................... 4.13
"Defined Contribution Plan Fraction"...................... 4.13
"Determination Date"...................................... 8.2
"Eligible Participant".................................... 4.5
"Eligible Retirement Plan"................................ 6.6
"Eligible Rollover Distribution........................... 6.6
"Key Employee"............................................ 8.2
"Non-Key Employee"........................................ 8.2
"Present Value of Accrued Benefit"........................ 8.2
"Qualified Election Period"............................... 9.4
"Qualified Participant"................................... 9.4
"Top-heavy Group"......................................... 8.2
"Top-heavy Plan".......................................... 8.2
"Total Distribution"`..................................... 7.1
"Valuation Date".......................................... 8.2
"1.0 Rule"................................................ 4.13
"1% Owner"................................................ 8.2
"5% Owner"................................................ 8.2
</TABLE>
Section 1.4: Funding Policy. The Plan is to be funded primarily
through the Company's contributions as provided for in the Plan. The Trust's
assets shall be invested as provided for in the trust document in an effort to
safely maximize potential retirement benefits, which shall be paid to
Participants and Beneficiaries as provided for in the Plan.
ARTICLE II
PARTICIPATION
Section 2.1: Eligibility Requirements.
(a) Effective January 1, 1989, each Employee shall become
eligible to participate in the Plan on the Entry Date coincident with or next
following the date on which such Employee shall have completed two Years of
Service, provided that he or she is still an Employee on such Entry Date.
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<PAGE> 17
(b) Despite any other provision of the Plan, any Participant who
is included in a unit of employees covered by a collective bargaining agreement
wherein retirement benefits were the subject of good faith bargaining (within
the meaning of Code Section 410(b)(3)(A)) shall for the Plan Year(s) of such
inclusion, cease to share in future contributions to the Plan, unless such
collective bargaining agreement expressly provides for participation in the
Plan; provided, however, that as to any benefits already earned, such
Participant shall remain a Participant, subject to all the terms of the Plan.
Section 2.2: Application For Participation And Beneficiary
Designation.
(a) Each Employee who becomes eligible to participate in the Plan
shall be given an application for participation. That application shall (i)
specify the beginning date of such Employee's participation, (ii) contain such
Employee's acceptance of the benefits of the Plan and Trust and his or her
agreement to be bound by the terms of the Plan and Trust, and (iii) allow such
Employee to designate the Beneficiary whom he or she desires to receive benefits
in the event of his or her death. A Participant may, from time to time, change
his or her designated Beneficiary by filing a new written designation with the
Committee. The Company, the Trustee, and the Committee may rely upon the
designation of a Beneficiary that was last filed in accordance with the Plan.
(b) Despite the provisions of Subsection (a) above, a married
Participant's Beneficiary shall in all events be such Participant's surviving
spouse, unless such spouse consents to such Participant's designation of a
Beneficiary other than such spouse. A spouse's consent to such a designation
must satisfy the following requirements: (i) it must be in writing; (ii) it must
acknowledge the effect of the Participant's designation of a Beneficiary other
than the spouse; and (iii) it must be witnessed by a designated Plan
representative or a notary public.
Section 2.3: Participation. The participation of a Participant in
the Plan shall begin as of his or her Entry Date and shall continue until the
Participant's entire benefit has been distributed in accordance with the Plan's
terms. A Participant (or his or her Beneficiary) may not receive any
distribution of benefits except as provided for in the Plan.
Section 2.4: Break In Service Rules For Eligibility Purposes.
(a) Except as otherwise provided in this Section, all Years of
Service of an Employee shall be counted in determining such Employee's
eligibility to participate in the Plan.
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<PAGE> 18
(b) In the case of any Employee who has incurred a Break in
Service, such Employee's Years of Service that were completed before such Break
in Service shall not be counted until he or she has completed a Year of Service
after such Break in Service.
(c) This subsection shall apply to any Participant who does not
have any nonforfeitable right to any accrued benefit that is attributable to the
Company's contributions. Such a Participant's Years of Service before any period
of consecutive Breaks in Service shall not be counted if the number of such
consecutive Breaks in Service within such period equals or exceeds the greater
of (i) 5 or (ii) the aggregate number of such Participant's Years of Service
before such period. Such aggregate number of Years of Service shall not include
any Year of Service that is disregarded under the preceding sentence by reason
of such Participant's prior Breaks in Service.
(d) In addition to the foregoing, in the case of any Employee who
incurs a Break in Service before satisfying the Plan's eligibility requirements,
such Employee's Years of Service that were completed before such Break in
Service shall not be counted. Further, a Participant who is re-employed shall
participate immediately upon the date of his or her re-employment.
ARTICLE III
CONTRIBUTIONS
Section 3.1: Company Contributions. The Company has previously
made substantial contributions to the Trust. Subject to the Plan's other
provisions, for each Plan Year in which the Plan is in effect, the Company shall
contribute to the Trust, out of its current or accumulated Net Profits, such
amount, if any, as shall be determined by the Company. Despite the foregoing,
the Company shall be obligated to contribute such amount as shall be necessary
to provide the Trust with funds sufficient to pay any Current Obligation
(including principal, interest, and any acquisition charges) incurred for the
purpose of acquiring Stock. The Company's contribution shall be paid in cash,
Stock, or such other assets as the Company may determine; provided, however,
that the Company shall contribute sufficient cash assets to the extent necessary
to pay any Current Obligation. Furthermore, despite the foregoing, the Company's
contributions are conditioned upon their deductibility under the Code.
Section 3.2: Payment Of Contributions To The Trustee. All
payments of the Company's contributions shall be made directly to the Trustee
and may be made on any date(s) selected by the Company. Despite the foregoing,
the Company's total contribution for each Plan Year must be paid on or before
the date on which the Company's federal income tax return is due, including any
extensions of time obtained for the filing of such return.
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<PAGE> 19
Section 3.3: Participant Contributions. A Participant may not
make nondeductible, voluntarily contributions to the Plan. Similarly, a
Participant may not make a Rollover Contribution to the Plan or a
trustee-to-trustee transfer described in Code Section 401(a)(31).
Section 3.4: No Requirement For Profits. Despite any other
provision of the Plan, the Company may make all contributions to the Plan for
any Plan Year without regard to whether the Company has any Net Profits for the
taxable year or years ending with or within such Plan Year.
ARTICLE IV
ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
Section 4.1: Stock Account. The Committee shall open and maintain
a Stock Account in the name of each Participant, and it shall be credited or
charged with any Stock allocable to such Participant as set forth below.
Section 4.2: Cash Account. The Committee shall open and maintain
a Cash Account in the name of each Participant, and it shall be credited or
charged with any amount allocable to such Participant (other than Stock) as set
forth below.
Section 4.3: Unallocated Stock Account. At such time as any
Leveraged Stock is held in the Trust, the Committee shall open and maintain an
Unallocated Stock Account, and it shall be credited with any unallocated
Leveraged Stock until such Stock is released and allocated as set forth below.
Section 4.4: Allocation Of Gains And Losses. Subject to 4.5(a)(i)
below, as of each Anniversary Date (but before any allocation is made of the
Company's contributions, if any, for the Plan Year ending on such Anniversary
Date, if, and to the extent, made prior to such date), the Committee shall
credit any income and investment gains (whether realized or unrealized) of the
Trust other than with respect to Stock, and shall charge any losses (whether
realized or unrealized) from such assets and unallocated expenses of the Trust,
to the Participants' Cash Accounts in the same proportion that the balance in
each such Cash Account as of such Anniversary Date bears to the total balance in
all Cash Accounts as of such Anniversary Date. In determining the unrealized
investment gains and losses to be credited or charged as of each Anniversary
Date pursuant to this Section, the Trustee shall value the assets of the Trust
at their fair market value as of each such Anniversary Date.
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<PAGE> 20
Section 4.5: Allocation Of Contributions.
(a) Subject to the limitations contained elsewhere in the Plan,
as of each Anniversary Date, the Company's contribution (if any) made on account
of the Plan Year ending on such Anniversary Date shall be allocated as follows:
(i) Any cash contribution shall be applied first to pay
any Current Obligation of the Trust (as it becomes due) incurred for the
purpose of acquiring Stock, and any excess remaining after such
application (and any other asset contributed that is not Stock) shall,
at the election of the Committee, either (A) be used to prepay any loan
obligation of the Trust that arose in connection with the Trust's
purchase of Stock, or (B) be allocated to the Cash Accounts of the
Eligible Participants in accordance with the allocation formula set
forth in Subsection (c) below. Subject to Section 4.6 below, for the
purpose of determining the method of allocation of the excess, the
Current Obligation shall be deemed to have been paid first with cash
dividends, and, if any portion of the Current Obligation shall remain
unpaid after the application of all the cash dividends, the balance due
shall be deemed paid with Company cash contributions for the Plan Year.
(ii) Any contribution of Stock shall be allocated to the
Stock Accounts of the Eligible Participants in accordance with the
allocation formula set forth in Subsection (c) below.
(b) For purposes of this Article, "Eligible Participant" shall
mean, as of any Anniversary Date, (i) each Participant who has completed 1000
Hours of Service on such Anniversary Date, and (ii) any Participant who ceased
to be an Employee during the Plan Year ending with such Anniversary Date by
reason of his or her death, Total Disability, or retirement on or after his or
her Normal Retirement Date.
(c) For purposes of this Article, any item to be allocated
pursuant to the formula set forth in this Subsection (c) shall be allocated to
the Cash Accounts, or Stock Accounts, as the case may be, of the Eligible
Participants in the same ratio as each Eligible Participant's number of Units
bears to the total number of Units of all such Eligible Participants. For
purposes of this Subsection (c), each Eligible Participant shall be credited
with one Unit for each full $100 of Compensation and with one Unit for each Year
of Service.
Section 4.6: Allocation Of Cash Dividends On Stock. Any cash
dividends received by the Trustee on account of the Stock shall, at the
discretion of the Committee, either (a) be used to make any payment on any
installment contract or loan used to acquire Leveraged Stock, or (b) be
allocated to the Participant's Cash Accounts and the Unallocated Stock Account
in proportion to the shares of Stock
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<PAGE> 21
held in the Participant's Stock Accounts and the Unallocated Stock Account,
respectively, as of the record date of such dividend.
Section 4.7: Allocation Of Stock Dividends. Any Stock received by
the Trustee as a stock dividend (or stock split or as a result of a
reorganization or other recapitalization of the Company) shall be credited to
the Participants' Stock Accounts and to the Unallocated Stock Account in
proportion to the shares of Stock held therein as of the record date of such
dividend. Any cash received by the Trustee in lieu of fractional shares in
connection with such a stock dividend shall be allocated as provided in Section
4.6 above.
Section 4.8: Release And Allocation Of Leveraged Stock.
(a) All Leveraged Stock acquired by the Trust shall be held in
the Unallocated Stock Account until released and allocated in accordance with
the provisions of this Section. On each Anniversary Date, Leveraged Stock
acquired in a particular transaction shall be released from the Unallocated
Stock Account as follows:
(i) Subject to the requirements of Treasury Regulation
Section 54.4975-7(b)(8)(ii) and Subsection (ii) below, for each Plan Year until
any loan or installment obligation that was incurred to purchase Leveraged Stock
(a "loan") is fully repaid, the number of shares of Leveraged Stock released
from the Unallocated Stock Account shall equal the number of unreleased shares
immediately before such release for the then current Plan Year multiplied by a
fraction, the numerator of which is the amount of principal paid on such loan
during such Plan Year and the denominator of which is the sum of such numerator
plus the principal to be paid on such loan in all future years during the
duration of the term of such loan (determined without reference to any possible
extensions of renewals thereof). Despite the foregoing, in the event such loan
shall be repaid with the proceeds of a subsequent loan, such repayment shall not
operate to release all such Leveraged Stock but rather such release shall be
effected pursuant to the foregoing provisions of this Section on the basis of
payments of principal on such substitute loan.
(ii) To the extent that Subsection (i) is not applicable by
reason of Treasury Regulation Section 54.4975-7(b)(8)(ii), or if the Committee
irrevocably so elects at the time of the first payment on any loan, then
Subsection (i) shall be applied with respect to all payments on such loan by
deeming all references to "principal" therein to be references to "principal and
interest."
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(b) The Committee shall specify, and advise the Trustee with
respect to:
(i) the amount (if any) of the Company's contribution that
is to be applied (together with the earnings thereon) to pay any Current
Obligation, and
(ii) the amount (if any) of cash dividends held pursuant to
Section 4.6 that is to be applied to pay any Current Obligation.
(c) As of the end of each Plan Year, the value of any Leveraged
Stock released from the Unallocated Stock Account for such Plan Year shall be
allocated among the Eligible Participants in the same proportion as such
Participants would have received allocations pursuant to Section 4.5, as if such
released Stock had been contributed during such Plan Year.
(d) It is intended that the preceding provisions shall be applied
and construed in a manner consistent with the requirements and provisions of
Treasury Regulation Section 54.4975-7(b)(8).
Section 4.9: Notice Of Allocations. After the close of each Plan
Year, the Committee shall notify each Participant as to the allocations made
during the Plan Year pursuant to this Article IV, which notice shall include the
following:
(a) The balance in the Participant's Cash Account and the number
of shares held in the Participant's Stock Account as of the most recent
Anniversary Date;
(b) The amount of Company Contributions and Leveraged Stock (if
any) allocated to the Participant's Accounts for that Plan Year;
(c) The adjustment to the Participant's Accounts to reflect the
Participant's share of undistributed dividends held at year end (if any) and the
net income (or loss) of the Trust for that Plan Year;
(d) The new balance in the Participant's Cash Accounts and the
number of shares held in the Participant's Stock Account, as of the Anniversary
Date of that Plan Year; and
(e) Such other information as may be required by the applicable
regulations.
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Section 4.10: Miscellaneous Allocation Rules.
(a) Allocations of all assets other than Stock shall be made on
the basis of, and expressed in terms of, dollar value. Allocations of Stock
shall be made on the basis of the number of shares of Stock (including
fractional shares).
(b) The Committee may establish accounting procedures for the
purpose of making the allocations, valuations and adjustments to Participants'
Accounts provided for in this Article IV. From time to time, the Committee may
modify such accounting procedures for the purpose of achieving equitable,
nondiscriminatory, and administratively feasible allocations among the Accounts
of Participants in accordance with the general concepts of the Plan and the
provisions of this Article IV.
(c) Despite any other provision of the Plan, if shares of Stock
are purchased by the Trust in a transaction for which an election pursuant to
Code Section 1042(a) is made, none of such shares, nor any other assets of the
Plan in lieu thereof, shall accrue for the benefit of or be allocated, directly
or indirectly, under this Plan or any other qualified employee benefit plan of
the Company or any Affiliated Company, to the Accounts of any member of the
Prohibited Allocation Group. In the event that any member of the Prohibited
Allocation Group is a Participant in the Plan, (i) if there are no Company
contributions to be allocated as of an Anniversary Date other than shares of
Stock and/or other assets which are subject to this provision, such Participant
shall receive no allocation thereof, (ii) no portion of the Cash Account balance
of such Participant may be used to acquire shares of Stock and/or other assets
which are subject to this provision, and (iii) if there are Company
contributions to be allocated as of an Anniversary Date and such includes both
shares of Stock and/or other assets which are subject to this provision and
share and/or other assets which are not subject to this provision, the
allocation shall be made so that such Participant receives no allocation of
Stock or other assets whatsoever to the extent of the percentage of Compensation
received by the other Participants attributable to Stock and/or other assets
which are subject to this provision, provided that if there is additional Stock
and/or other assets to be allocated, then such additional allocations shall be
made to all Participants as otherwise provided in the Article IV. All
allocations of Stock and other assets shall in all respects comply with the
provisions of Section 409(n) of the Code and the Regulations thereunder, all of
which are incorporated herein by reference.
Section 4.11: Valuation Of Stock.
(a) If, on any Anniversary Date or other valuation date required
under the terms of the Plan, Trust, or Regulation Section 54.4975-11(d)(5), the
Stock is not Freely Tradable Stock, the Company shall furnish the Committee with
a certificate of value setting forth the fair market value of the Stock as of
such date. Such
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<PAGE> 24
valuation shall be made (i) in good faith and in accordance with Regulation
Section 54.4975-11(d)(5) and ERISA Section 3(18); and (ii) by an independent
appraiser who satisfies the requirements of the Regulations under Code Section
170(a)(1). The Committee shall use such value for all purposes under the Plan
until a new certificate of value is furnished to the Committee, or until the
Stock becomes Freely Tradable Stock. If the Stock is Freely Tradable Stock, the
Committee shall use the market price of the Stock as its value. This certificate
of value shall be furnished to Qualified Holders of Stock that has been
distributed to a terminated Participant or a Beneficiary.
(b) Any Stock acquired by the Trust with cash shall be valued
initially at the purchase price paid by the Trust. All such initial valuations
are subject to revaluation as of any subsequent date of valuation that may apply
pursuant to the terms of this Plan and/or applicable law.
Section 4.12: Accounts In General.
(a) The credits made to a Participant's Accounts shall not vest
in such Participant any right, title or interest in the Trust, except to the
extent, at the time or times, and upon the terms and conditions set forth in the
Plan. Neither the Company, the Trustee, nor the Committee, to any extent,
warrant, guarantee or represent that the value of any Participant's Accounts at
any time will equal or exceed the amount previously allocated or contributed to
such Accounts.
(b) If at any time there shall be allocated to a Participant's
Stock Accounts more than one class of Stock, the Committee shall direct the
Trustee with respect to whether sub-accounts for each such class of stock shall
be maintained, and if so, all references in this Plan to Stock Accounts shall
include and refer to all such sub-accounts.
Section 4.13: Limitation On Annual Additions.
(a) The following limitations shall apply to the allocations to
each Participant's Accounts in any Plan Year:
(i) As used in the Plan, a Participant's "Annual Addition"
shall mean the sum for any Plan Year of:
(A) Such Participant's share of the Company's
contributions; plus
(B) Such Participant's share of any forfeiture;
plus
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(C) Such Participant's allocable share of the
Company's contributions to any Individual Medical Benefit
Account; and plus
(D) With respect to any Participant who is a Key
Employee, any amount derived from the Company's contributions
paid or accrued after December 31, 1985 in taxable years ending
after such date, and that is attributable to post-retirement
medical benefits allocated to such Participant's account under a
Welfare Benefit Fund maintained by the Company.
(ii) Despite the forgoing, if, for any Plan Year, (A)
there is Leveraged Stock and (B) no more than one-third of the Company's
contributions are allocated to highly compensated employees (as defined
in Code Section 414(q)), then the Annual Addition of a Participant shall
not include (A) his or her share of the Company's contributions for such
Plan Year that are deductible under Code Section 404(a)(9)(B), (ii) his
or her share of forfeitures of Stock acquired with the proceeds of a
loan or installment obligation described in Code Section 404(a)(9)(A),
or (iii) Leveraged Stock that is released from the Unallocated Stock
Account in accordance with Section 4.8.
(iii) Any excess amount applied under Subsection (c) below
in a Plan Year to reduce the Company's contributions on behalf of any
Participant shall be considered to be an Annual Addition for such
Participant for such Plan Year.
(iv) Subject to the adjustments set forth below, during
any Plan Year the maximum Annual Addition for any Participant shall in
no event exceed the lesser of:
(A) $30,000, or, if greater, one-fourth (1/4th) of
the defined benefit dollar limitation set forth in Code Section
415(b)(1) as in effect for the Plan Year; or
(B) 25% of the Participant's Earnings for such Plan
Year.
(v) The earnings limitation referred to in Subsection
(a)(iv)(B) above shall not apply to (A) any contribution for medical
benefits (within the meaning of Code Section 419A(f)(2)) after
separation from service that is otherwise treated as an Annual Addition,
or (B) any amount otherwise treated as an Annual Addition under Code
Section 415(l)(1).
(b) The following additional limitations shall apply to any
Participant when such Participant, in addition to his or her participation in
the Plan (and any
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Welfare Benefit Fund), is also a participant in a Defined Benefit Plan
maintained by the Company or an Affiliated Company:
(i) The amount of (A) the Annual Additions to such
Participant's account(s) or (B) such Participant's normal retirement
benefit in any such plan(s) shall be reduced by each such plan's
committee to the extent necessary to prevent the sum of the Defined
Benefit Plan Fraction (defined below) and the Defined Contribution Plan
Fraction (defined below) for any such year from exceeding 1.0 (the "1.0
Rule") (benefits under Welfare Benefit Funds shall be reduced first,
then benefits under profit sharing plans, then benefits under other
Defined Contribution Plans, and, finally, benefits under Defined Benefit
Plans).
(ii) For the purpose of applying the 1.0 Rule, the Defined
Benefit Plan Fraction and the Defined Contribution Plan Fraction shall
be applied in a manner consistent with the provisions of Code Section
415 and the Regulations under it.
(iii) As used above, "Defined Benefit Plan Fraction" shall
mean a fraction, the numerator of which is the Participant's projected
annual benefit under the Defined Benefit Plan (determined as of the end
of the plan year for such plan), and the denominator of which is the
lesser of:
(A) 1.25 multiplied by the dollar limitation in
effect for such plan year (determined under Code Section
415(b)(1)(A)); or
(B) 1.4 multiplied by 100% of such Participant's
average Earnings for his or her highest 3 consecutive years,
including such plan year (determined under Code Section
415(b)(1)(B)).
(iv) As used above, "Defined Contribution Plan Fraction"
shall mean a fraction, the numerator of which is the sum of the annual
additions to the Participant's account(s) as of the end of the Plan
Year, and the denominator of which is the sum of the lesser of the
following amounts determined for such Plan Year and for each of such
Participant's prior years of service with the Company:
(A) 1.25 multiplied by the dollar limitation in
effect for such Plan Year (determined under Code Section
415(c)(1)(A), but without regard to Code Section 415(c)(6)); or
(B) 1.4 multiplied by 25% of such Participant's
Earnings for such Plan Year (determined under Code Section
415(c)(1)(B), or Code Section 415(c)(7), if applicable).
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(c) If, for any Plan Year, it is necessary to limit the Annual
Addition of any Participant pursuant to Subsections (a) or (b) above, the
following reallocations shall be made:
(i) First, the amount of such Participant's nondeductible,
voluntary contributions for that Plan Year that are included in his or
her Annual Addition shall be refunded to him or her;
(ii) Second, the amount of the Company's contributions,
inclusive of forfeitures, that is allocable to such Participant and that
cause such Participant's Annual Addition to exceed the applicable
limitation shall, instead, be allocated to all other Participants who
are not subject to this limitation, in proportion to their Compensation
for such Plan Year; and
(iii) Third, if the amount of the Company's contributions,
inclusive of forfeitures, is so great as to cause all Participants for
such Plan Year to be subject to the limitations of this Section, then
the excess of the Company's contributions that cannot be allocated for
such Plan Year shall be held in a suspense account and applied against
and reduce the Company's future contributions.
(d) If a suspense account is in existence at any time during a
Plan Year pursuant to Subsection (c)(iii) above, it shall not participate in the
Trust's income, gains and losses.
(e) The limitations of this Section with respect to any
Participant who, at any time, has been a participant in any other Defined
Contribution Plan (whether or not terminated) or in more than one Defined
Benefit Plan (whether or not terminated) maintained by the Company or by an
Affiliated Company shall apply as if all such Defined Contribution Plans or all
such Defined Benefit Plans in which the Participant has been a participant were
one plan.
ARTICLE V
VESTING
Section 5.1: Vesting In Accounts. Each Participant shall at all
times be 100% vested in his or her Accounts.
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ARTICLE VI
DISTRIBUTION OF BENEFITS
Section 6.1: Distribution Of Benefits.
(a) Benefits become distributable to a Participant or to the
Beneficiary of a deceased Participant upon the first to occur of (i) the
Anniversary Date that coincides with or first follows such Participant's Normal
Retirement Date, Total Disability, or death, or (ii) the fifth Anniversary Date
following the Anniversary Date that coincides with or first follows the date a
Participant ceases to be an Employee prior to his or her Normal Retirement Date
for a reason other than Total Disability or death. Such benefits shall be the
vested amounts credited to his or her Accounts as of the Anniversary Date that
coincides with or immediately precedes the first distribution of his or her
benefits, adjusted as of such Anniversary Date if required by Article IV.
However, a Participant (or the Beneficiary of a deceased Participant) must make
a claim for such Participant's benefits prior to any distribution. Despite the
foregoing, the Committee, in its sole discretion, may waive the claim
requirement if such Participant or Beneficiary is unable to submit a claim.
(b) Despite the foregoing provisions, the Committee may, in its
sole discretion, elect to pay a Participant who ceases to be an Employee prior
to his or her Normal Retirement Date for a reason other than his or her death or
Total Disability an immediate lump sum distribution of the amount specified in
subsection (a) above. The Participant's consent to such a distribution is
required if the portion of such distribution representing the vested portion in
his or her Accounts is (or ever has been) in excess of $3,500.
Section 6.2: Methods Of Distribution.
(a) When a Participant's benefits become distributable, the
Committee shall with reasonable promptness direct the Trustee to distribute such
Participant's benefit as follows:
(i) If a Participant's benefits become distributable by
reason of his or her death, the benefit shall be distributed to such deceased
Participant's Beneficiary as an immediate lump sum.
(ii) If a Participant's benefits become distributable for a
reason other than his or her death, the benefit shall be distributed with such
Participant's consent as an immediate lump sum or in installments as set forth
below.
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(A) The Participant may elect, by completing an
appropriate form furnished by the Committee, that his or her benefits be
distributed as follows:
(1) The Participant may elect that his or her
benefits be distributed in up to 5 equal or nearly equal annual
installments.
(2) If the fair market value of a Participant's
Stock Account exceeds $500,000 multiplied by the Adjustment
Factor as of the date distribution is required to begin under
Section 6.3 below, the Participant may elect that his or her
benefits be distributed in substantially equal annual payments
over a period of 5 years plus an additional one year (up to an
additional 5 years) for each $100,000 increment (or fraction of
such increment) by which the value of the Participant's Stock
Account exceeds $500,000.
(3) In addition, the Participant may elect that his
or her benefits shall be paid in equal or nearly equal monthly,
quarterly, semi-annual, or annual installments over a period not
exceeding the life expectancy of the Participant, or the joint
life and last survivor expectancy of the Participant and his or
her Beneficiary. The expected return multiples of Section 1.72-9
of the Regulations under the Code shall be used to determine such
life expectancy.
(B) Despite the foregoing, if the vested amount credited
to such Participant's Accounts is not (nor ever has been) in excess of
$3,500, the Committee may direct the Trustee to distribute such benefit
as an immediate lump sum, without such Participant's consent.
(iii) If a Participant's benefits become distributable for a
reason other than his or her death, and if such Participant dies before his or
her entire benefits have been distributed, his or her Beneficiary shall receive
a death benefit equal to the balance of the remaining installments (if any) or
deferred lump sum (if any) due such deceased Participant.
(iv) Despite any other provision of the Plan, the benefits in
the Participant's Stock Account shall be distributed in the form of Stock.
(v) Despite the foregoing provisions, the Committee may at
any time, with the consent of a Participant or his or her Beneficiary, direct
the Trustee to accelerate any installment payment to such Participant or
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Beneficiary or to reduce the period over which future installments are to be
made, in which latter event the Trustee shall adjust the amount of such
installments accordingly. In addition, a Participant may at any time withdraw
any or all of his or her undistributed benefit, and a Participant's Beneficiary
shall, unless such Participant provided otherwise, have a similar withdrawal
right. If less than all of the undistributed benefit is withdrawn, the remaining
installment payments shall be adjusted accordingly.
(b) The complete distribution of a Participant's benefit as
provided for above shall constitute full payment and satisfaction of any
obligation of the Company, the Trustee or the Committee to such Participant or
to the Beneficiary of a deceased Participant.
(c) If a distribution is one to which Code Sections 401(a)(11)
and 417 do not apply, such distribution may commence fewer than 30 days after
the notice required under Section 1.411(a)-11(c) of the Regulations under the
Code is given, provided that:
(i) the 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
(ii) the Participant, after receiving the notice,
affirmatively elects a distribution.
Section 6.3: Timing Of Distributions.
(a) The following provisions shall govern the timing of the
distribution of a Participant's benefit.
(b) If a Participant's benefits become distributable because of
his or her death or Total Disability, such benefits shall begin to be
distributed as soon as is administratively practical following the Committee's
receipt of written proof of such Participant's death or Total Disability. If a
Participant's benefits become distributable for a reason other than his or her
death or Total Disability, such Participant's benefits shall begin to be
distributed as soon as is administratively practical after the date on which
such Participant's benefits became distributable. Despite the foregoing, and
subject to Subsections (c) and (d) below, a Participant's benefit must begin to
be distributed no later than 60 days after the latest of the close of the Plan
Year in which:
(i) the Participant attained age 65 (or Normal
Retirement Age, if earlier);
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(ii) occurred the 10th anniversary of the year in which the
Participant began participation in the Plan; or
(iii) the Participant ceased to be an Employee.
Despite the foregoing, a Participant may elect a later date on which the
distribution of his or her benefit is to begin, in a manner consistent with the
applicable Regulations. Any failure by a Participant (or, if he or she is
married, such Participant's spouse in the event of such Participant's death) to
consent to an immediate distribution of his or her benefit (provided that such
benefit is otherwise then immediately distributable pursuant to the foregoing
provisions) shall be deemed to be an election to defer distribution to the later
of age 62 or such Participant's Normal Retirement Age.
(c) Despite any other provision of the Plan, one of the following
provisions shall apply:
(i) A Participant's benefit shall be distributed to him or
her not later than April 1 of the calendar year following the calendar
year in which the Participant attains age 70-1/2; or
(ii) Alternatively, distributions to a Participant must
begin no later than the date determined under Subsection (c)(i) above
and must be made, in accordance with the applicable Regulations, over
the life of the Participant or over the lives of such Participant and
his or her designated Beneficiary (or over a period not extending beyond
the life expectancy of the Participant or the life expectancy of the
Participant and his or her designated Beneficiary).
(d) If a Participant dies before his or her entire interest has
been distributed to him or her, the remaining portion of such Participant's
interest must be distributed at least as rapidly as under the method of
distribution being used as of the date of the Participant's death.
(e) If a Participant dies before distribution of his or her
benefit has begun, the entire benefit of such Participant must be distributed
within 5 years after his or her death.
(f) For purposes of subsection (e) above, any portion of a
Participant's benefit that is payable to or for the benefit of his or her
Beneficiary shall be treated as distributed on the date on which such
distribution begins if:
(a) such portion will be distributed in accordance
with the applicable Regulations over such Beneficiary's life (or over a
period not extending beyond such Beneficiary's life expectancy), and
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(b) such distribution must begin not later than the
date that is 1 year after the date of such Participant's death (or such
later date as the Secretary of the Treasury may by Regulations
prescribe). However, if such Beneficiary is the Participant's surviving
spouse, then the date on which the distribution is required to begin
shall be not later than the date on which the Participant would have
attained age 70-1/2, and if such spouse dies before the distribution to
him or her begins, this subsection shall be applied as if such spouse
were the Participant.
(g) For purposes of subsection (f) above, the life expectancy of
a Participant and his or her spouse (other than in the case of life annuity) may
be redetermined on an annual or less frequent basis, and under Regulations
prescribed by the Secretary of the Treasury, any amount paid to a child of a
Participant shall be treated as if it had been paid to such Participant's
surviving spouse if such amount will become payable to such spouse upon such
child attaining majority (or any other designated event permitted under the
applicable Regulations).
(h) Despite the foregoing provisions, the Committee shall not
permit any Participant to receive his or her benefits under a method of
distribution that violates the incidental benefit rule.
Section 6.4: Postponed Retirement. If a Participant continues to
be an Employee beyond his or her Normal Retirement Date, his or her
corresponding participation in the Plan shall likewise continue. In such a case,
to the extent permitted by law and the applicable Regulations, the distribution
of such Participant's benefits will be postponed until he or she actually ceases
to be an Employee. Such Participant's benefits will become payable as of the
first day of the month next following his or her actually ceasing to be an
Employee.
Section 6.5: Distributions Due Missing Persons. If the Trustee is
unable to distribute any benefit due to a Participant or Beneficiary, the
Trustee shall (i) so advise the Committee and (ii) hold such benefit as a
segregated part of the Trust, in which event such benefit shall participate in
the income, gains and losses realized by such segregated Trust fund. The
Committee shall then send a written notice to such Participant or Beneficiary at
his or her last known address, as reflected in the Company's or Committee's
records. If such Participant or Beneficiary shall not have presented himself or
herself to the Company or to the Committee within 3 years of the date of such
written notice, any undistributed benefit (and any income, gains and losses
realized by such segregated part) may be applied against and reduce the
Company's future contributions to the Plan. Despite the foregoing, if at any
subsequent time a valid claim for any undistributed benefit is presented to the
Committee, such benefit that was so applied (and any income, gains and losses
realized by such segregated part) shall be paid directly by the Company to such
claimant.
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Section 6.6: Transfers To Another Qualified Plan. If a
Participant who is a distributee of any Eligible Rollover Distribution (as
defined below) elects to have such distribution paid directly to an Eligible
Retirement Plan and who specifies the Eligible Retirement Plan to which such
distribution is to be paid (in such form and at such time as the Committee may
prescribe), then such distribution shall be made in the form of a direct
trustee-to-trustee transfer to such Eligible Retirement Plan, provided that such
Eligible Retirement Plan accepts such a transfer. The foregoing sentence shall
apply only to the extent that such Eligible Rollover Distribution would be
includable in gross income if not transferred as provided in such sentence
(determined without regard to Code Sections 402(c) and 403(a)(4)). For purposes
of the foregoing:
(i) "Eligible Rollover Distribution" shall have the same meaning
as when used in Code Section 402(f)(2)(A).
(ii) "Eligible Retirement Plan" shall have the meaning given such
term by Code Section 402(c)(8)(B).
ARTICLE VII
SALE OF STOCK
Section 7.1: Option To Sell Shares Of Stock. If a Qualified
Holder receives a distribution consisting in whole or in part of Stock that is
not Freely Tradable Stock at the time of distribution, then such distributed
Stock shall be subject to a put option in the hands of the Qualified Holder,
according to the following provisions:
(a) During the 60-day period following any distribution of such
Stock, a Qualified Holder shall have the right to require the Company to
purchase all or any portion of such distributed Stock held by such Qualified
Holder. A Qualified Holder shall exercise such right by giving written notice to
the Company of the number of shares of distributed Stock that the Qualified
Holder intends to sell to the Company. Such notice must be given within such
60-day period. The purchase price to be paid for any such option Stock shall be
its fair market value determined as of the most recent valuation according to
the valuation rules specified in Article IV.
(b) If a Qualified Holder fails to exercise his or her put option
right under Subsection (a), he or she shall have an additional right to exercise
such option in the first 60-day period of the next following Plan Year. If a
Qualified Holder fails to exercise his or her put option in this 60-day period,
such option right shall expire and the Qualified Holder shall have no further
right to require the Company to purchase such distributed Stock.
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(c) In the application of Subsection (a) and (b), the period
during which a put option is exercisable does not include any time when a
distributee is unable to exercise it because the party bound by the put option
is prohibited from honoring it by applicable federal or state law.
(d) In the event that a Qualified Holder shall exercise a put
option under this Section, then the Company shall pay the purchase price of such
Stock as follows:
(i) If Stock is distributed to a Qualified Holder as part
of a Total Distribution, then the Company shall pay the purchase price
of such Stock in substantially equal installment payments made no less
frequently than annually for no more than 5 years. The first such
payment shall be made within 30 days after the date such put option is
exercised. If the purchase price of the Stock is paid under this
installment method, then the Company shall, at a minimum, (A) provide
adequate security, and (B) state a reasonable rate of interest (at least
equal to the imputed compound rate in effect as of the Exercise Date
pursuant to the Regulations under Code Section 483 or 1274, whichever
shall be applicable) for the full unpaid balance of the option price.
(ii) If Stock is distributed to a Qualified Holder other
than as a Total Distribution (i.e., on an installment basis), then the
Company shall pay the purchase price of such Stock within 30 days after
the date the put option is exercised.
(iii) "Total Distribution" shall mean a distribution to a
Participant or a Beneficiary, within one taxable year, of the
Participant's entire Account balance to the credit of the Participant.
(e) The protections and rights provided in this Section are
nonterminable and continue to exist despite (i) the repayment of any loan, the
proceeds of which are used to purchase Leveraged Stock, and (ii) the cessation
of the Plan's status as an employee stock ownership plan.
(f) The foregoing put options under Subsections (a) and (b) shall
be effective solely against the Company and shall not obligate the Plan or the
other Company in any manner; provided, however, that with the Company's consent,
the Plan or the other Company may elect to purchase any Stock that otherwise
must be purchased by the Company pursuant to a Qualified Holder's exercise of
any such option.
(g) At the time of distribution of Stock that is not Freely
Tradable Stock to a Qualified Holder, the Company shall furnish to such
Qualified Holder the most recent certificate of value prepared by the Company
with respect to such Stock. In addition, the Company shall furnish to such
Qualified Holder a copy of each
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subsequent certificate of value until the put options provided for in this
Section with respect to such distributed Stock expire.
(h) Except as is expressly provided above with respect to any
distributed Stock that is not Freely Tradable Stock, no Participant shall have
any put option rights with respect to Stock distributed under this Plan, and
neither the Company nor this Plan shall have any obligation whatsoever to
purchase any such distributed Stock from any Participant or other Qualified
Holder.
Section 7.2: Right Of First Refusal. In the event a Qualified
Holder holds Stock that is not Freely Tradable Stock, the Qualified Holder may
not transfer, assign or otherwise dispose of any Stock unless the Qualified
Holder has given the Company the right of first refusal in accordance with the
following provisions:
(a) The Qualified Holder must give written notice to the Company
that the Qualified Holder has received an offer by a third party to purchase the
Stock. The Company's right of first refusal shall lapse 14 days after the
Qualified Holder gives such notice to the Company.
(b) The selling price of the Stock and other terms under the
right of first refusal must not be less favorable to the Qualified Holder than
the greater of (i) the value of the security as determined under Regulation
Section 54.4975-11(d)(5), or (ii) the purchase price and other terms offered by
a buyer (other than the Employer or the Plan) making a good faith offer to
purchase the Stock.
(c) The Company may require that a Participant or Beneficiary
entitled to a distribution of Stock sign an appropriate stock transfer agreement
(that evidences the right of first refusal) prior to receiving a certificate for
Stock.
ARTICLE VIII
TOP-HEAVY PLAN LIMITATIONS
Section 8.1: Application Of Top-Heavy Rules. If the Plan is or
becomes a Top-heavy Plan, the limitations and requirements contained in this
Article shall apply and shall supersede any conflicting provision of the Plan.
Section 8.2: Definitions.
(a) Top-heavy Plan. A "Top-heavy Plan" shall mean, with respect
to any plan year, (i) any Defined Benefit Plan maintained by the Company or an
Affiliated Company if, as of the Determination Date, the total Present Value of
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Accrued Benefits under such plan for Key Employees exceeds 60% of the total
Present Value of Accrued Benefits under such plan for all participants in such
plan; and (ii) any Defined Contribution Plan maintained by the Company or an
Affiliated Company if, as of the Determination Date, the total Aggregate
Accounts of Key Employees under the plan exceeds 60% of the total Aggregate
Accounts of all participants under such plan. Each plan of the Company required
to be included in an Aggregation Group shall be treated as a Top-heavy Plan if
the Aggregation Group is a Top-heavy Group.
(b) Top-heavy Group. A "Top-heavy Group" shall mean any
Aggregation Group if the sum of (i) the total Present Value of Accrued Benefits
for Key Employees under all Defined Benefit Plans included in the Aggregation
Group (determined as of the Determination Date for each such plan), and (ii) the
total of the Aggregate Accounts of Key Employees under all Defined Contribution
Plans included in the Aggregation Group (determined as of the Determination Date
for each such plan) exceeds 60% of a similar sum determined for all participants
in such plans. For purposes of determining whether the plans in a Top-heavy
Group exceed the foregoing 60% test, the plans shall be aggregated by adding
together the results for each plan as of the Determination Dates for such plans
that fall within the same calendar year.
(c) Aggregation Group. An "Aggregation Group" shall mean each
plan of the Company or of an Affiliated Company in which a Key Employee is a
participant, and each plan of the Company or of an Affiliated Company that
enables the plan(s) containing a Key Employee to meet the antidiscrimination
requirements of Code Sections 401(a)(4) or 410, including terminating or
terminated plans maintained within the last 5 years ending on the Determination
Date that would, but for such termination, be part of the Aggregation Group. The
Company can elect to include in the Aggregation Group any plan not otherwise
required to be included, if such group, after such election, would continue to
meet the antidiscrimination requirements of Code Sections 401(a)(4) and 410;
provided, however, that any such plan will not be otherwise deemed a Top-heavy
Plan by reason of such election.
(d) Determination Date. With respect to any plan year,
"Determination Date" shall mean the last day of the preceding plan year or, in
the case of the first plan year of any plan, the last day of such plan year.
(e) Present Value of Accrued Benefit: A participant's "Present
Value of Accrued Benefit" as of any Determination Date shall be calculated:
(i) as of the most recent valuation date ("Valuation
Date") which is within the 12-month period ending on such Determination
Date;
(ii) for the first plan year, as if (A) the participant
terminated service as of the Determination Date, or (B) the participant
terminated service
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as of the Valuation Date, but taking into account the estimated Present
Value of Accrued Benefit as of the Determination Date;
(iii) for any other plan year, as if the participant
terminated service as of the Valuation Date; and
(iv) using the interest rate and mortality assumptions set
forth in the Defined Benefit Plan.
(v) Solely for the purposes of determining if the Plan, or
any other plan included in the Aggregation Group, is a Top-heavy Plan,
the accrued benefit of a Non-Key Employee shall be determined under (1)
the method, if any, that uniformly applies for accrual purposes under
all plans maintained by the Company and all Affiliated Companies, or (2)
if there is no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional accrual
rate of Code Section 411(b)(1)(C).
For the foregoing purposes, the Valuation Date must be the same valuation date
used for computing the defined benefit plan minimum funding costs, regardless of
whether a valuation is performed that year.
(f) Aggregate Account: A participant's "Aggregate Account" shall
be determined as follows:
(i) For Defined Contribution Plans not subject to the
minimum funding requirements of Code Section 412, a participant's
Aggregate Account as of any Determination Date shall be the sum of:
(A) such participant's account balance as of the
most recent valuation date ("Valuation Date") occurring within
the 12-month period ending on such Determination Date; plus
(B) an adjustment for contributions due as of such
Determination Date. Such adjustment is generally the amount of
any contributions actually made after the Valuation Date but
before the Determination Date. In the first plan year, such
adjustment shall also reflect any contributions actually made
after the Determination Date that are allocated as of a date in
that first plan year.
(ii) For Defined Contribution Plans subject to the minimum
funding requirements of Code Section 412, a participant's Aggregate
Account as of any Determination Date shall be the sum of:
(A) such participant's account balance as of the
most recent valuation date ("Valuation Date") occurring within
the 12-month
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period ending on such Determination Date, including contributions
that would be allocated as of a date not later than such
Determination Date; plus
(B) an adjustment for contributions due as of such
Determination Date. Such adjustment shall reflect the amount of
any contribution actually made (or due to be made) after the
Valuation Date but before the expiration of the extended payment
period described in Code Section 412(c)(10).
(g) Key Employee. "Key Employee" shall mean any participant of
any plan maintained by the Company or an Affiliated Company who, at any time
during the plan year or any of the 4 preceding plan years, was:
(i) an officer of the Company or an Affiliated Company
whose annual Compensation exceeds 50% of the amount in effect under Code
Section 415(b)(1)(A) for any such plan year (provided, however, that no
more than 50 employees (or, if lesser, the greater of 3 employees or 10%
of all employees) shall be treated as officers; provided further,
however, that if the total number of officers exceeds this numerical
limitation, only the highest compensated officers shall be included);
(ii) one of the 10 employees who (1) has annual
Compensation for a plan year greater than the dollar limitation in
effect under Code Section 415(c)(1)(A) for the calendar year in which
such plan year ends, and (2) owns (or is considered to own under Code
Section 318) both more than a 1/2 percent interest and the largest
interests in the Company or an Affiliated Company;
(iii) a 5% owner (defined below) of the Company or an
Affiliated Company; or
(iv) a 1% owner (defined below) of the Company or an
Affiliated Company whose annual Compensation exceed $150,000, or such
other amount as may be allowed under Code Section 416(i) and the
applicable Regulations.
A participant shall be deemed a "5% owner" if (i) he or she owns more than 5% of
the outstanding stock (or owns stock possessing more than 5% of the total
combined voting power of all classes of stock), if the Company (or the
Affiliated Company, whichever applies) is a corporation; or (ii) he or she owns
more than 5% of the capital or profit interest in the Company (or the Affiliated
Company, whichever applies), if the Company (or the Affiliated Company,
whichever applies) is not a corporation. A similar rule shall apply to the
determination of a "1% owner." In making this determination, (i) the Code
Section 318(a)(2) corporate attribution rules, as modified by Code Section
416(i)(1)(B)(iii), shall apply, and (ii) the business aggregation rules
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of Code Section 414 shall not apply. For purposes of the foregoing definition,
(i) the beneficiary of a Key Employee shall be treated as a Key Employee, and
(ii) the beneficiary of a former Key Employee shall be treated as a former Key
Employee.
(h) Non-Key Employee. "Non-Key Employee" shall mean any
Participant who is not a Key Employee, including any Participant who is a former
Key Employee.
Section 8.3: 60% Test - Special Rules. For purposes of applying
the 60% test described in Section 8.2(a), the following special rules shall
apply:
(a) Participant Contributions. Benefits derived from both
participant contributions (whether voluntary or mandatory, but not deductible
contributions) and the Company's contributions shall be considered.
(b) Previous Distributions. In determining the Present Value of
Accrued Benefit or the Aggregate Account of any participant under any plan (or
plans that form the Aggregation Group), such present value or account shall be
increased by the aggregate of distributions made to such participant from such
plan (or plans forming the Aggregation Group) during the 5-year period ending on
the Determination Date. For this purpose, "participant" shall include an
employee who is no longer employed by the Company or an Affiliated Company.
Despite the foregoing, any distribution to a participant that is made after the
Valuation Date and before the Determination Date for any plan year shall not be
considered a distribution to the extent it is already included in such
participant's Present Value of Accrued Benefit or Aggregate Account as of such
Valuation Date.
(c) Rollover Contributions. Rollover contributions shall be
treated as follows:
(i) The following rules shall apply to related rollovers
and plan-to-plan transfers (ones either not initiated by the participant
or made to a plan maintained by the Company or any Affiliated Company).
If the plan provides such rollover or plan-to-plan transfer, it shall
not be counted as a distribution for purposes of this Section 8.3. If
the plan receives such rollover or plan-to-plan transfer, it shall
consider such rollover or plan-to-plan transfer as part of the
participant's Present Value of Accrued Benefit or Aggregate Account,
regardless of the date on which such rollover or plan-to-plan transfer
was received.
(ii) The following rules apply to unrelated rollovers and
plan-to-plan transfers (ones which are both initiated by a participant
and made from a plan maintained by one employer to a plan maintained by
another employer). If the plan provides such rollover or plan-to-plan
transfer, it shall always consider such rollover or plan-to-plan
transfer as a distribution for
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purposes of this Section 8.3. If the plan receives such rollover or
plan-to-plan transfer, it shall not consider such rollover or
plan-to-plan transfer as part of the participant's Present Value of
Accrued Benefit or Aggregate Account if it was accepted after December
31, 1983.
(d) Change Of Status. The accrued benefit or account of a
participant who was formerly a Key Employee, but who ceased to be a Key Employee
in any plan year, will not be taken into account for such plan year.
(e) No Service For Last 5 Years. If any individual has not
performed services for any employer maintaining the plan during the 5-year
period ending on the Determination Date, the accrued benefit or account of such
individual shall not be taken into account.
Section 8.4: Minimum Vesting Requirement. As the Plan's normal
vesting schedule equals or exceeds the top-heavy vesting schedule, the normal
vesting schedule shall continue to apply if the Plan becomes a Top-heavy Plan.
Section 8.5: Minimum Contribution Requirement.
(a) If the Plan is a Top-heavy Plan, then in no event shall the
Company's annual contribution on behalf of any Non-Key Employee be less than 3%
of such Participant's Compensation. This minimum contribution shall be made even
though, under the other provisions of the Plan, the Participant would not
otherwise be entitled to a contribution on his or her behalf, or would have
received a lesser contribution for the Plan Year, because of (i) the
Participant's failure to complete 1,000 Hours of Service, (ii) the Participant's
failure to make mandatory employee contributions to the Plan, or (iii) the
Participant's exclusion from the Plan because such Participant's Compensation is
less than the Plan's stated amount. Despite the foregoing, no minimum
contribution needs to be made under this Section on behalf of a Participant who
was not an Employee on the last day of the Plan Year.
(b) For Plan Years beginning on or after January 1, 1985, any
Company contribution that is attributable to a salary reduction or similar
arrangement shall be considered for purposes of satisfying the minimum
contribution required by this Section. For Plan Years beginning on or after
January 1, 1989, elective contributions under Code Section 401(k) on behalf of
Key Employees are taken into account in determining the minimum required
contribution under Code Section 416(c)(2), but such contributions on behalf of
Non-Key Employees may not be treated as employer contributions for purposes of
the minimum contribution or benefit requirements of Code Section 416.
(c) If the Company maintains one or more qualified plans in
addition to the Plan, and if the Plan is a Top-heavy Plan, then in accordance
with the
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applicable Regulations, only one such plan need be designated by the Company to
provide the minimum benefit provided for in this Section. However, if such
multiple plans, including the Plan, include a Defined Benefit Plan and a Defined
Contribution Plan, the 1.0 Rule (as it may be modified by the top-heavy plan
transitional rule under Code Section 416(h)(3)) shall be in effect if, and only
if, the following two requirements are satisfied:
(i) Minimum Benefit Requirement. The "3%" set forth in
this Section shall be replaced by "4%".
(ii) The 90% Test. The sum of the Present Value of Accrued
Benefits plus the Aggregate Accounts held for all Key Employees under
the plans cannot exceed 90% of a similar sum determined for all
participants.
For purposes of the 1.0 Rule, all references to "1.25" shall be replaced by
"1.0," if either of the above additional requirements is not met.
ARTICLE IX
INVESTMENTS
Section 9.1: Investment Of Company Contributions. The Plan is
designed to invest primarily in Stock, and the Trustee is specifically
authorized to invest up to 100% of the Trust's assets in Stock. All purchases of
Stock shall be made at prices that, in the Committee's judgment, do not exceed
the fair market value of the Stock, determined as required by Section 4.11
above. The Trustee may purchase Stock for cash or on terms, as directed by the
Committee. Despite the foregoing, sufficient liquidity shall be maintained to
meet the reasonably anticipated requirements of the Trust for payment of
expenses of administration, investment and management and for distribution of
benefits to Participants and Beneficiaries. To the extent the Trustee is not
directed to acquire Stock, the Trustee may, subject to the direction of the
Committee, invest and reinvest the Trust's assets, together with the income
therefrom, in assets other than Stock to the extent consistent with preserving
the Plan's status as an employee stock ownership plan as defined under Code
Section 4975(e)(7).
Section 9.2: Leveraged Stock Authorized. The Committee shall have
the power to direct the Trustee to borrow or raise money, in such amounts and
under such conditions and terms as directed by the Committee, for the purpose of
purchasing or otherwise acquiring Stock. Any such borrowing may be made from the
Company, any shareholder in the Company, or from any other party. In connection
with any such borrowing, and subject to any applicable margin requirement rule,
regulation or statute, the Committee may direct the Trustee to issue its
promissory
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note on behalf of the Trust. No person lending money to the Trustee shall be
obligated to see to the application of the money lent or to inquire into the
validity, expediency or propriety of such borrowing. Any such borrowing from the
Company, or from any other "disqualified person" (as defined in Code Section
4975(e)(2)), or any other "party in interest" (as defined in ERISA Section
3(14)), shall be subject to the following provisions:
(a) The proceeds of the loan shall be used (within a reasonable
period of time after receipt) only to acquire Stock, to pay any charges or fees
incurred in connection with the stock acquisition or loan, and/or to make
payments under any such loan (including prior loans).
(b) Other than the categories of assets specified in Subsection
(c) below, the loan shall be without recourse against the Plan or Trust. The
only Trust assets which may be used as collateral for the loan shall be the
Stock acquired with the proceeds of the loan or Stock used as collateral on a
prior loan that was repaid with the current outstanding loan.
(c) No person entitled to payment under the loan shall have any
recourse, for any payments due under the loan, against any Plan assets other
than the following categories of assets:
(i) Unallocated Leveraged Stock (whether or not
collateralized) acquired with the proceeds of the loan and held in the
Unallocated Stock Account (but only prior to the release therefrom and
allocation to Participants' Accounts as provided under this Plan);
(ii) Company contributions (other than contributions of
Stock) made to meet obligations under the loan;
(iii) Earnings attributable to the unallocated Leveraged
Stock while held in the Unallocated Stock Account (including dividends
thereon while held in the Unallocated Stock Account); and
(iv) Earnings attributable to the investment of the
Company Contributions made to meet obligations under the loan.
Recourse against such assets shall be permissible to the extent allowed under
applicable law governing creditor's remedies, but in no event to an extent
greater than permitted under Subsection (d) below or such other applicable
limitations as may be required in order for such loan transaction to qualify for
the prohibited transaction exemption provided under Code Section 4975(d)(3).
(d) The provisions of this Subsection (d) shall apply in case of
a default in the repayment of the loan:
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(i) In the event of a default, the value of Plan assets
transferred to the lender in satisfaction of such loan shall not exceed
the amount of the default.
(ii) If the lender is a disqualified person (as defined in
Code Section 4975(e)(2)), a transfer of Plan assets upon default shall
be made only upon and to the extent of the failure of the Plan to meet
the payment schedule of the loan.
(iii) For purposes of this Subsection (d), the making of a
guarantee by the Company shall not be deemed to make the Company a
lender; provided, however, that this provision shall not impose any
personal liability on the Trustee.
(e) The terms of the loan must provide that shares of Stock
purchased with the proceeds of the loan shall be placed in the Unallocated Stock
Account. The shares in the Unallocated Stock Account shall be released from the
Unallocated Stock Account (and allocated to the Stock Accounts) as set forth
above. Despite the foregoing, in addition to or in lieu of pledging the acquired
Stock as collateral for the repayment of any loan, the Company may guarantee the
repayment and/or may use Company assets to secure the repayment, and nothing
herein shall require that the repayment of the loan be secured by Stock acquired
with the proceeds thereof.
(f) If the proceeds of a loan are used to acquire Leveraged
Stock, the following items shall be accounted for separately in the books of
account of the Plan until the loan is repaid:
(i) The contributions (other than contributions of Stock)
that are made under the Plan to meet obligations under the loan;
(ii) The earnings attributable to unallocated Leveraged
Stock (purchased with the proceeds of the loan) while held in the
Unallocated Stock Account (including dividends thereon); and
(iii) Earnings attributable to the investment of the
contributions made to meet obligations under the loan.
(g) In the event that there shall be more than one class of
Stock, the class or classes of Leveraged Stock acquired by the Trustee with the
proceeds of the loan, and the relative proportions of the classes of Stock held
by the Trustee, shall comply with any applicable requirements established
pursuant to Regulations under Code Section 4975 so as to insure that the loan
and/or the acquisition of Leveraged Company does not constitute a prohibited
transaction within the meaning of the applicable provisions of the Code and
ERISA.
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(h) The loan shall be primarily for the benefit of Participants
and their Beneficiaries and shall bear no more than a reasonable rate of
interest.
(i) The Committee shall determine, and advise the Trustee with
respect to, the amount of interest charges that are due from time to time by
reason of any variable interest rate (or other similar provision) under any loan
used by the Trustee to acquire Leveraged Stock. The Trustee may rely on the
Committee's determination and directions with respect to the amount of the
interest charges, and the Trustee shall be released from any and all liability
attributable to its reliance thereon.
(j) Any loan entered into by the Plan to purchase Stock shall be
for a definite term, and shall not be payable upon demand of any person, except
where there has been a default. Any such payment upon default shall be subject
to the rules of Subsection (d) above.
Section 9.3: Certain Nonterminable Provisions. Except as is
expressly provided in the Plan with respect to any distributed Leveraged Stock
that is not Freely Tradeable Stock, no such Leveraged Stock shall be subject to
a put, call, or other option, or buy-sell or similar arrangement while held by
and when distributed from the Plan, whether or not at such time the Plan
constitutes an employee stock ownership plan. The provisions of this Section
shall not terminate notwithstanding that the loan used to acquire such Leveraged
Stock shall be repaid or that the Plan ceases at any time to constitute an
employee stock ownership plan.
Section 9.4: Diversification Of Stock.
(a) Election By Qualified Participant. Despite any other
provision of the Plan, each Participant who is a Qualified Participant may
direct the Committee to distribute 25% of the value of the Participant's Stock
Account balance, reduced by the amount of assets for which a prior election
under this Section has been made. Such direction must be made within 90 days
after the last day of each Plan Year during the Participant's Qualified Election
Period. Within 90 days after the close of the last Plan Year in the
Participant's Qualified Election Period, a Qualified Participant may direct the
Committee to distribute 50% of the value of such account balance, reduced by the
amount of assets for which a prior election under this Section has been made.
The Qualified Participant's direction (i) shall be provided to the Committee in
writing, and (ii) shall be effective no later than 180 days after the close of
the Plan Year to which the direction applies.
(b) Definitions. For the purposes of this Section, the following
definitions shall apply:
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(i) "Qualified Participant" shall mean a Participant who
has attained age 55 and who has completed at least 10 years of
participation in the Plan.
(ii) "Qualified Election Period" shall mean, with respect
to any Participant, the six Plan Year period beginning with the first
Plan Year in which the Participant first became a Qualified Participant.
(c) Timing Of Distributions. At the election of the Qualified
Participant, the Committee shall direct the Trustee to distribute the portion of
the Participant's account that is covered by the election within 90 days after
the last day of the period during which the election can be made. Such
distribution shall be subject to the put option and right of first refusal
requirements set forth in Article VII. This Subsection (c) shall apply despite
any other provision of the Plan; provided, however, that if any distribution
pursuant to this Section is in excess of $3,500, the Participant must consent to
such distribution as set forth in the Plan.
Section 9.5: Voting Of Stock.
(a) Effective January 18, 1991, if the Trustee holds any Stock
with voting rights, the Trustee shall vote such stock as follows:
(i) When notice of a stockholders' meeting concerning such a
corporate matter must be mailed to stockholders, the Committee shall cause to be
prepared and delivered to each Participant and Beneficiary who has Stock
allocated to his or her Account, a notice that:
(A) states the full number of shares of Stock allocated to
the Participant's Account, and
(B) instructs the Trustee as to how the Trustee shall vote
the shares at the meeting or adjournment concerning each such matter.
The Committee shall instruct each Participant and Beneficiary to complete and
return the notice to the Trustee.
(ii) The Trustee shall vote all shares of Company stock
allocated to the Accounts of Participants as instructed in the notice.
(iii) Regarding Stock for which the Trustee has not received a
notice that sets forth a Participant's or Beneficiary's instructed votes within
five days prior to such meeting, including all fractional shares of Stock and
all shares of Stock held in the Unallocated Stock Account, the Trustee shall
vote such shares as directed by the Committee.
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(b) The Committee shall in no event make any recommendation to
any Participant regarding the exercise of the Participant's voting rights or any
other rights under the provisions of this Section, nor shall the Committee make
any recommendation as to whether any such rights should or should not be
exercised by the Participant.
(c) All rights (other than voting rights) of Stock held in the
Trust shall be exercised in the same manner and to the same extent as provided
above with respect to the voting rights of the Stock.
ARTICLE X
THE COMMITTEE
Section 10.1: Members.
(a) The Committee shall consist of six members. Its members shall
serve at the pleasure of the Board of Directors. A person so appointed shall
become a member by filing a written notice of acceptance with the Board of
Directors. A member of the Committee may resign by delivering a written notice
of resignation to the Board of Directors. The Board of Directors may remove any
member of the Committee by delivering a written notice of such removal to him or
her. A resignation or removal shall be effective on the date specified in such
notice or resolution. The Trustee shall be promptly notified by the Board of
Directors of any change in the membership of the Committee, and shall be
supplied with specimen signatures of each Committee member.
(b) Vacancies in the membership of the Committee shall be filled
promptly by the Board of Directors. If the Company is not in existence when a
vacancy in the Committee membership arises, such vacancy shall be filled as
follows, in the indicated order of priority:
1st: The remaining member(s) of the Committee shall appoint new
member(s) to fill all vacancies.
2nd: A majority of the adults then entitled to benefits from
the Plan shall appoint new member(s) to fill all
vacancies. If such an adult is not able to participate in
such appointment, then his or her spouse, if any, shall
act for him or her. If there is no such spouse, then such
adult's guardian or conservator shall act for him or her.
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3rd: If vacancies on the Committee are not filled pursuant to
the foregoing, then a court of competent jurisdiction
shall fill such vacancies. The Trust shall pay the
expenses incurred in connection with such court
appointment.
Section 10.2: Committee Action.
(a) The Committee shall choose a Secretary and an Assistant
Secretary (either of whom is referred to below as the "Secretary") who shall
keep minutes of the Committee's proceedings and all records and documents
pertaining to the Committee's administration of the Plan. Any action of the
Committee shall be taken pursuant to the vote of a majority, or pursuant to the
written consent of a majority, of its members. A quorum of the Committee shall
consist of two members. The Secretary may sign any certificate or other document
on behalf of the Committee. The Trustee and all other persons dealing with the
Committee may conclusively rely upon any certificate or other document that is
signed by the Secretary and that purports to have been duly authorized by the
Committee.
(b) A member of the Committee shall not vote or act upon any
matter that relates solely to himself or herself as a Participant. If a matter
arises affecting one member of the Committee as a Participant and the other
members of the Committee are unable to agree on the disposition of such matter,
the Board of Directors shall appoint a substitute member of the Committee in the
place and stead of the affected member, for the sole purpose of passing upon and
deciding that particular matter. If the Company is not in existence then, such
substitute member of the Committee shall be appointed in the manner provided for
in this Article when there is a vacancy in the Committee's membership.
Section 10.3: Rights And Duties.
(a) Except as otherwise set forth in Subsections (b), (c) and (d)
below, all fiduciary responsibility respecting the management or administration
of the Plan and its assets are vested in the Committee, and the Committee shall
be the Named Fiduciary with respect to the Plan's assets, and the
"administrator" of the Plan as defined in Section 3(16)(A) of ERISA.
(b) The Trustee shall (i) have custody of the Plan's assets, (ii)
have the powers designated in the trust document, and (iii) be the Named
Fiduciary with respect to the custody of the Plan's assets.
(c) The Committee may designate one or more Investment Managers
(including the Trustee, if the Trustee is authorized to be an Investment
Manager) to manage the investment of the Plan's assets, and such Investment
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Manager(s) shall be the Named Fiduciary with respect to the management and
investment of the Plan's assets.
(d) The Committee may designate one or more persons or entities
to carry out any of its functions under the Plan, other than those of managing
and controlling the Plan's assets, which may only be done pursuant to
Subsections (b) or (c) immediately above.
(e) The Committee, on behalf of the Participants and their
Beneficiaries, shall enforce the Plan in accordance with its terms, and shall be
charged with the general administration of the Plan, except to the extent that
powers are retained by the Company. The Committee shall have the discretion and
authority to interpret the Plan. The Committee's powers shall include (without
limitation) the power:
(i) to determine all questions relating to the
eligibility of Employees to participate in the Plan;
(ii) to determine, compute and certify to the Trustee the
amount and kind of benefits payable to the Participants and their
Beneficiaries;
(iii) to authorize all disbursements by the Trustee from
the Trust;
(iv) to direct the Trustee with respect to all investments
of the principal or income of the Trust and with respect to other
matters concerning the Trust's assets;
(v) to maintain all the necessary records for the
administration of the Plan, other than those maintained by the Trustee;
and
(vi) to adopt, amend and interpret rules for the
regulation of the Plan that are not inconsistent with its terms and the
applicable law and Regulations.
(f) Members of the Committee and other Fiduciaries shall
discharge their duties with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person, acting in a like capacity
and familiar with such matters, would use in the conduct of an enterprise of a
like character and with like aims. Subject to any right of Participants to
direct how their Accounts will be invested and other provisions of the Plan, the
Committee shall diversify the Plan's investments so as to minimize the risk of
large losses, unless, under the circumstances, it is clearly prudent not to do
so, or unless the Plan specifically provides for the acquisition and holding of
qualifying employer real property or securities, as defined in Sections
407(d)(4) and (5) of ERISA.
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(g) A member of the Committee or other Fiduciary shall be liable
for a breach of fiduciary responsibility of another member or another Fiduciary
only if:
(i) such member or Fiduciary participates knowingly in, or
knowingly undertakes to conceal, an act or omission of such other member
or Fiduciary, knowing that such act or omission is a breach;
(ii) such member or Fiduciary has enabled such other
member or Fiduciary to commit a breach by virtue of his or her failure
to comply with the duty of care set forth above in the administration of
such member's or Fiduciary's own responsibilities as a Fiduciary; or
(iii) such member or Fiduciary has knowledge of a breach
by such other member or Fiduciary, unless such member or Fiduciary makes
reasonable efforts under the circumstances to remedy such breach.
Section 10.4: Information. To enable the Committee to perform its
functions, the Company shall supply complete and timely information to the
Committee on all matters relating to the compensation of all Participants, their
employment, their retirement, death, or the cause for termination of employment,
and such other pertinent information as the Committee may require. The Committee
shall advise the Trustee of such of the foregoing information as may be
pertinent to the Trustee's administration of the Trust.
Section 10.5: Compensation, Indemnity And Liability.
(a) The members of the Committee shall serve without compensation
for their services. No member of the Committee or other Fiduciary need be
bonded, except as required by federal or state law or regulation. The Committee
is authorized to employ such legal counsel or other persons as it may deem
advisable to assist it in the performance of its duties under the Plan.
(b) The Company shall indemnify and hold each member of the
Committee harmless against any and all expenses and liabilities arising out of
membership on the Committee, excepting only expenses and liabilities arising out
of such member's own willful misconduct or gross negligence.
Section 10.6: Administrative Expenses Of The Plan. All expenses
of administering the Plan shall by paid by the Trustee and shall be a charge
against the trust estate, except to the extent that such expenses may be paid by
the Company. The expense of maintaining errors and omissions liability
insurance, if any, covering members of the Committee, the Trustee, or any other
Fiduciary shall be paid by the Company.
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ARTICLE XI
AMENDMENT AND TERMINATION
Section 11.1: Amendments. The Company, through its Board of
Directors, may amend the Plan from time to time, and may amend or cancel any
such amendment. Each amendment must be set forth in a document that is signed by
the Company, and the Plan shall be deemed to have been amended in the manner and
at the time set forth in such document, and all Participants shall be bound by
it. Despite the foregoing, any such amendment shall be subject to the following
provisions:
(a) No amendment shall be effective that attempts to cause any
asset of the Plan to be used for, or diverted to, purposes other than for the
exclusive benefit of the Participants or their Beneficiaries, except for such
changes, if any, that are required to permit the Plan to meet the applicable
requirements of the Code, or as may be made to assure the deductibility for tax
purposes of any contribution by the Company.
(b) No amendment shall have any retroactive effect that would
deprive any Participant of any benefit already vested, nor shall the vesting
provisions of the Plan be amended, unless each Participant with at least 3 Years
of Service is permitted to elect to continue to have the prior vesting
provisions apply to him or her, except for such changes, if any, that are
required to permit the Plan to meet applicable requirements of the Code, or as
may be made to assure the deductibility for tax purposes of any contribution by
the Company. Any such election must be made during the period beginning with the
date the amendment is adopted and ending 60 days after the latest of:
(i) the date the amendment is adopted;
(ii) the date the amendment becomes effective; or
(iii) the date on which the Participant receives written
notice of the amendment from the Company or the Committee.
(c) No amendment shall create or effect any discrimination in
favor of Participants who are highly compensated Employees.
(d) No amendment shall increase the duties or liabilities of the
Trustee without the Trustee's written consent.
(e) No amendment shall decrease any Participant's account balance
or eliminate an optional form of distribution.
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Section 11.2: Discontinuance Of Plan.
(a) The Company expect that the Plan and the contributions under
it will be continued indefinitely, and the Trust is irrevocable. However,
continuance of the Plan is not assumed as a contractual obligation of the
Company, and the Company, through their respective boards of directors, reserve
the right to reduce, temporarily suspend, or discontinue contributions under the
Plan if, and to the extent, permitted under ERISA or the Code. Upon a complete
discontinuance of contributions, the interest of each Participant in each of his
or her Accounts shall become 100% vested, if it is not already fully vested. In
addition, upon a partial termination (within the meaning of Code Section
411(d)(3)), the interest of each affected Participant in each of his or her
Accounts shall become 100% vested, if it is not already fully vested.
(b) The Company, through its Board of Directors, may terminate
the Plan at any time upon delivering a written notice to the Trustee. Upon the
Plan's termination, the interest of each Participant in each of his or her
Accounts shall become 100% vested, if it is not already fully vested. Then the
Trustee, at the direction of the Committee, shall, as is necessary, liquidate
the Stock in the Unallocated Stock Account and use the net proceeds of such
liquidation to pay any loan or installment obligation that was incurred to
purchase Leveraged Stock. The net proceeds in excess of the amount used to repay
such loan shall be allocated to the Participants' Cash Accounts as set forth in
Section 4.5(a)(i). The Trustee, at the direction of the Committee, shall also
liquidate the Trust's assets other than Stock and allocate the net proceeds of
such liquidated assets to the Participants' Cash Accounts, as set forth in
Section 4.5(a)(i).
(c) The Plan shall automatically terminate upon the happening of
any of the following events:
(i) adjudication of the Company as a bankrupt;
(ii) general assignment by the Company to or for the
benefit of creditors; or
(iii) dissolution of the business of the Company,
provided, however, that the Plan may be continued by any successor business
organization or any business organization into which the Company is merged or
consolidated that employs some or all of the Participants, if such business
organization agrees with the Trustee in writing to accept the obligations of the
Plan and to continue it in full force and effect in accordance with Section
13.10.
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Section 11.3: Failure To Contribute. The Company's failure to
contribute to the Trust for any Plan Year shall not, of itself, be a
discontinuance of contributions to the Plan.
ARTICLE XII
CLAIMS PROCEDURE
Section 12.1: Presentation Of Claim. Any Participant or
Beneficiary of a deceased Participant (such Participant or Beneficiary being
referred to below as a "Claimant") may deliver to the Committee a written claim
for a determination with respect to the amounts (i) credited to (or deducted
from) such Claimant's Participant's Account(s), or (ii) distributable to such
Claimant from the Plan. If such a claim relates to the contents of a notice
received by the Claimant, the claim must be made within 60 days after such
notice was received by the Claimant. The claim must state with particularity the
determination desired by the Claimant.
Section 12.2: Notification Of Decision. The Committee shall
consider a Claimant's claim within a reasonable time, and shall notify the
Claimant in writing:
(a) that the Claimant's requested determination has been made,
and that the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in
whole or in part, to the Claimant's requested determination, and such notice
must set forth in a manner calculated to be understood by the Claimant:
(i) the specific reason(s) for the denial of the claim,
or any part of it;
(ii) specific reference(s) to pertinent provisions of the
Plan upon which such denial was based;
(iii) 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
(iv) an explanation of the claim review procedure set
forth in Section 12.3.
Section 12.3: Review Of A Denied Claim. Within 60 days after
receiving a notice from the Committee that a claim has been denied, in whole or
in
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part, a Claimant (or the Claimant's duly authorized representative) may file
with the Board of Directors a written request for a review of the denial of the
claim. Thereafter, but not later than 30 days after the review procedure began,
the Claimant (or the Claimant's duly authorized representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Board of Directors, in its
discretion, may grant.
Section 12.4: Decision On Review. The Board of Directors shall
render its decision on review promptly, and not later than 60 days after the
review procedure begins, unless a hearing is held or other special circumstances
require additional time, in which case the Board of Directors' decision must be
rendered within 120 days after the review procedure. Such decision must be
written in a manner calculated to be understood by the Claimant, and it must
contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon
which the decision was based; and
(c) such other matters as the Board of Directors deems relevant.
ARTICLE XIII
MISCELLANEOUS
Section 13.1: Contributions Not Recoverable. Subject to the next
two sentences, it shall be impossible for any part of the Trust's principal or
income to be used for, or diverted to, purposes other than the exclusive benefit
of the Participants or their Beneficiaries. Despite any other provision of the
Plan, the Company shall be entitled to recover (within one year of the specified
event):
(a) any contribution made to the Trust if (i) the Commissioner of
Internal Revenue, or his delegate, determines that the Plan and the Trust do not
meet the applicable requirements of the Code upon their initial qualification,
with the result that the Trust is not exempt from federal income tax, (ii) such
contribution was conditioned on such initial qualification of the Plan and
Trust, (iii) the application for determination of such initial qualification was
made within the time prescribed by law for filing the Company's tax return for
the taxable year in which the Plan and Trust
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was adopted, or such later date as the Secretary of the Treasury may prescribe,
and (iv) such contribution is returned to the Company within one year after the
date the initial qualification is denied;
(b) any contribution by the Company that was made by a mistake of
fact, provided that such a contribution is returned to the Company within one
year of the contribution;
(c) any contribution by the Company (or any portion of it) that
was disallowed by the Internal Revenue Service as a deduction, provided that
such contribution (or such portion of it), to the extent disallowed, is returned
to the Company within one year of the disallowance of the deduction; and
(d) upon termination of the Plan, any assets held in a suspense
account pursuant to Section 4.6(c)(iii).
Subsections (b) and (c) above shall be operative only if, and to the extent,
expressly authorized by the applicable Regulations, or a Revenue Ruling, Revenue
Procedure, or other official promulgation of the Internal Revenue Service.
Section 13.2: Limitation On Participants' Rights. Participation
in the Plan and Trust shall not give any Employee the right to be retained in
the Company's employ or any right or interest in the Trust other than as
provided in the Plan. The Company reserves the right to dismiss any Employee
without any liability for any claim against the Trust (except to the extent
provided in the Plan) or against the Company. All benefits payable under the
Plan shall be provided solely from the assets of the Trust.
Section 13.3: Receipt Or Release. Any payment to any Participant
or Beneficiary pursuant to the Plan shall, to the extent of it, be in full
satisfaction of all claims against the Trustee, the Committee, the Board of
Directors, and the Company, and the Committee may require such Participant or
Beneficiary, as a condition precedent to such payment, to sign a receipt and
release to such effect.
Section 13.4: Nonassignability.
(a) None of the benefits, payments, proceeds or claims of any
Participant or Beneficiary shall be subject to any claim of any creditor and, in
particular, they shall not be subject to attachment or garnishment or other
legal process by any creditor. In addition, no Participant or Beneficiary shall
have any right to alienate, anticipate, commute, pledge, encumber or assign any
of the benefits or payments or proceeds that he or she may expect to receive,
contingently or otherwise, under the Plan.
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(b) Any restriction or prohibition against the assignment or
alienation of benefits under the Plan shall not apply to a "qualified domestic
relations order" ("QDRO"), as that term is defined in Code Section 414(p). To
the extent provided in any QDRO, a former spouse of a Participant shall be
treated as the spouse or surviving spouse of such Participant for all purposes
under the Plan. Notwithstanding any other provision in this Plan, a lump sum
distribution may be made to an alternate payee under a QDRO at any time after
the Committee has determined that such QDRO satisfies the requirements of Code
Section 414(p) and Section 206(d) of ERISA, and regardless of whether or not the
Participant who is a party to such QDRO is then eligible to receive a
distribution under the Plan.
Section 13.5: Governing Law. The Plan and the Trust shall be
construed, administered, and governed in all respects under and by applicable
federal law and, if they are not inconsistent with federal law, the laws of the
State of California. If any provision is susceptible to more than one
interpretation, the controlling interpretation shall be the one that is
consistent with the Plan being a qualified plan under Code Section 401. If any
provision of the Plan is held by a court of competent jurisdiction to be invalid
or unenforceable, the other provisions shall continue to be fully effective.
Section 13.6: Headings. Headings and subheadings in the Plan are
inserted for convenience of reference only, and they are not to be considered in
construing the provisions of the Plan.
Section 13.7: Counterparts. This Agreement may be signed in
counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute but one and the same document, which may be
sufficiently evidenced by any one counterpart.
Section 13.8: Successors And Assigns. This Agreement shall inure
to the benefit of, and be binding upon, the parties to it, and their successors
and assigns.
Section 13.9: Gender And Number. As used in the Plan, the
masculine, feminine and neuter gender, and the singular and plural number, each
include the other(s), unless the context indicates otherwise.
Section 13.10: Merger, Consolidation Or Transfer Of Plan Assets.
The Plan shall not be merged or consolidated with, nor shall its assets or
liabilities be transferred to, any other plan (the "new plan") unless each
Participant would receive
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in such new plan a benefit immediately after such merger, consolidation or
transfer, if such new plan were then terminated, that is equal to, or greater
than, the benefit he or she would have been entitled to receive immediately
before such merger, consolidation or transfer, if the Plan had been terminated
then.
Section 13.11: Joinder Of Parties. In any action or other
judicial proceeding affecting the Plan, it shall be necessary to join as parties
only the Trustee, the Committee and the Company, and no Participant or other
person having an interest in the Plan shall be entitled to any notice or service
of process.
Section 13.12: The Trust. This Plan and the Trust are both part
of and constitute a single integrated employee benefit plan and trust and shall
be construed together.
Section 13.13: Participation By Affiliated Companies. Upon the
written consent of the Board of Directors, any Affiliated Company may adopt the
Plan. Any Affiliated Company that executes the Signature Page of the Plan shall,
without the need for any further act, be deemed to have adopted the Plan with
the consent of the Board of Directors.
* * * * * * * * *
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<PAGE> 57
The Company has signed the Plan on the date indicated below, to
be effective as of the Effective Date.*
"Company"
Dated: June 21, 1994. CATHAY BANCORP, INC.
By /s/ DUNSON CHENG
------------------------------
Its President
----------------------------
Dated: June 21, 1994. CATHAY BANK
By /s/ DUNSON CHENG
------------------------------
Its President
----------------------------
* As amended by the First Amendment, dated as of October 21, 1994, and the
Second Amendment, dated as of April 20, 1995, thereto.
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<PAGE> 58
EMPLOYEE STOCK OWNERSHIP TRUST
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
Article I - Name and Definitions........................................... 1
1.01 - Name................................................. 1
1.02 - Definitions.......................................... 1
Article II - General Administration........................................ 2
2.01 - The Committee........................................ 2
2.02 - Contributions........................................ 3
2.03 - Trust Fund .......................................... 3
Article III - Powers and Duties of Trustee................................. 3
3.01 - Investment Directions................................ 3
3.02 - Investment in Company Stock.......................... 3
3.03 - Other Investments ................................... 5
3.04 - Management of Investments............................ 5
3.05 - Nominees ............................................ 6
3.06 - Distributions ....................................... 6
3.07 - Loans................................................ 7
Article IV - Insurance Contracts........................................... 11
4.01 - Types of Contracts................................... 11
4.02 - Ownership............................................ 11
4.03 - Beneficiary.......................................... 11
Article V - Trustee's Accounts............................................. 11
5.01 - Records.............................................. 11
5.02 - Annual Accounting.................................... 11
5.03 - Delegations of Duties................................ 12
</TABLE>
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<TABLE>
<CAPTION>
Page
----
<S> <C>
Article VI - Amendment and Termination................................................. 12
6.01 - Permanency......................................................... 12
6.02 - Fund Recovery...................................................... 12
6.03 - Amendments......................................................... 14
6.04 - Termination........................................................ 14
Article VII - Resignation or Removal of Trustee......................................... 15
7.01 - Procedure.......................................................... 15
7.02 - Successor Trustee.................................................. 15
7.03 - Settlement of Accounts............................................. 15
Article VIII - Controversies, Legal Actions and Counsel.................................. 15
8.01 - Controversy........................................................ 15
8.02 - Joinder of Parties................................................. 16
8.03 - Employment of Counsel.............................................. 16
Article IX - Insurer................................................................... 16
9.01 - Insurer Not a Party................................................ 16
9.02 - Authority of Trustee............................................... 16
9.03 - Contract Ownership................................................. 16
9.04 - Limitation of Liability............................................ 16
9.05 - Change of Trustee.................................................. 17
9.06 - Rules of the Insurer............................................... 17
Article X - Miscellaneous.............................................................. 17
10.01 - Taxes.............................................................. 17
10.02 - Third Persons...................................................... 17
10.03 - Nonassignability................................................... 17
10.04 - The Plan........................................................... 17
10.05 - Applicable Law..................................................... 18
10.06 - Trustee's Fees..................................................... 18
10.07 - Notices and Directions............................................. 18
10.08 - Protective Provisions.............................................. 18
10.09 - Spouse's Interest.................................................. 19
10.10 - Gender and Number.................................................. 19
10.11 - Headings........................................................... 19
10.12 - Counterparts....................................................... 19
</TABLE>
-ii-
<PAGE> 60
CATHAY BANK
EMPLOYEE STOCK OWNERSHIP TRUST
(PRO FORMA - INCORPORATING THE
FIRST AND SECOND AMENDMENTS
TO THE TRUST)
THIS TRUST AGREEMENT is entered into between the Employer and the
Trustee, and evidences the trust portion of an Employee Stock Ownership Plan and
Trust established by the Employer for the benefit of its eligible employees.
Article I - Name and Definitions
1.01 - Name - The name of this trust shall be:
CATHAY BANK
EMPLOYEE STOCK OWNERSHIP TRUST
It is intended to qualify as a qualified employees' retirement
trust under the appropriate provisions of the Internal Revenue
Code.
1.02 - Definitions
(a) "Anniversary Date": December 31 of each year.
(b) "Committee": The Committee provided for in the Plan.
(c) "Company": Cathay Bank.
(d) "Company Stock": Shares of any class of stock, preferred or
common, voting or non-voting, which are issued by Cathay
Bancorp, Inc.
(e) "Contract": A policy issued by a life insurance company,
with or without an insurance element.
(f) "Effective Date": January 1, 1985.
(g) "Employer": The Company; any successor assuming the
obligations created herein, and any affiliated or subsidiary
company which adopts this Trust and the Plan and with which
the Company is privileged to file a consolidated income tax
return under the Internal Revenue Code, even though no such
return is actually filed.
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(h) "Exempt Loan": A loan which is made in accordance with
the terms and provisions of this Trust and the Plan and
which is made to the Trust by a person who is a
"Disqualified Person" as defined in Section 4975(e)(2) of
the Internal Revenue Code or a "Party in Interest" as
defined in Section 408(e) of the Employee Retirement Income
Security Act of 1974, or a loan to the Trust which is
guaranteed by such a Disqualified Person or Party in
Interest. For purposes of this Section:
(1) The term "loan" includes a direct loan of cash, a
purchase-money transaction, and an assumption of an
obligation of the Plan or Trust.
(2) The term "guarantee" includes an unsecured guarantee
and the use of assets of a Disqualified Person or
Party in Interest as collateral for a loan, even
though the use of assets may not be a guarantee under
applicable state law.
(i) "Insurer": Any insurance company issuing a Contract for
purposes of the Plan.
(j) "Participant": An Employee of an Employer who is a
"Participant" or "Inactive Participant" in the Plan as those
terms are defined in the Plan.
(k) "Plan": Cathay Bank Employee Stock Ownership Plan which
includes the Plan and Trust Agreement.
(l) "Trustee": The Corporation, person or persons signing this
Trust as Trustee or any successor to such Trustee.
(m) "Trust Fund": The fund held by the Trustee pursuant to the
terms of this Trust and for the purpose of the Plan.
Article II - General Administration
2.01 - The Committee - The Employer shall certify to the Trustee the names
and specimen signatures of the members of the Committee acting from
time to time. The Employer shall keep accurate books and records
with respect to its employees, their service with the Employer and
their compensation and shall certify the same to the Committee.
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<PAGE> 62
2.02 - Contributions - The Employer shall make its contributions to the
Trustee. Such contributions may be in Company Stock, cash or other
property valued at fair market value and acceptable to the Trustee.
2.03 - Trust Fund - The contributions received by the Trustee from the
Employer shall be held and administered pursuant to the terms
hereof without distinction between income and principal and without
liability for the payment of interest thereon except as expressly
provided herein. The Trustee shall have no duty or authority to
compute any amount to be paid to it by the Employer, nor shall it
be responsible for the collection of any contributions to the Trust
Fund.
Article III -Powers and Duties of Trustee
3.01 - Investment Directions - The Trustee shall effect and change
investments of the Trust Fund only as directed in writing by the
Committee; shall neither effect nor change any such investments
without such direction, and shall have no right, duty or
responsibility to recommend investments or investments changes.
Provided, however, that the Trustee may deposit cash on hand from
time to time in any bank or savings account, including the
Trustee's own banking department, without such prior direction.
Such direction by the Committee may be either, general or specific
in its terms, and may be given on an "until revoked" basis.
3.02 - Investment in Company Stock
(a) The Trustee shall invest and reinvest all or any portion of
the trust assets in Company Stock. The acquisition or sale
of Company Stock shall be at fair market value and, if the
acquisition or sale is between the Trustee and a "party in
interest" as defined in Section 408(e) of the Employee
Retirement Income Security Act of 1974 or between the
Trustee and a "disqualified person" as defined in Section
4975(e)(2) of the Internal Revenue Code, then no commission
may be charged to or paid by the Trustee with respect
thereto.
(b) In the event the Trustee invests any part of the Trust
assets, pursuant to the directions of the Committee, in any
securities issued or guaranteed by the Company or any
subsidiary or affiliate of the Company, and the Committee
thereafter directs the Trustee to dispose of such
investment, or any part thereof, under circumstances which,
in the opinion of the counsel for the Trustee,
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<PAGE> 63
require registration of the securities under the Securities
Act of 1933 and/or qualification of the securities under the
Blue Sky laws of any state or states, then the Company, at
its own expense, will take or cause to be taken any and all
such action as may be necessary or appropriate to affect
such registration and/or qualification.
(c) The Trustee shall vote all Company Stock held by it as part
of the Trust assets as follows:
(1) Except as provided in Paragraph (2), the Trustee
shall vote such stock at such time and in such manner
as the Committee shall direct; provided, however,
that if any agreement entered into by the Trustee
provides for the voting of any shares of Company
Stock pledged as security for any obligation of the
Trust, then such shares of Company Stock shall be
voted in accordance with such agreement. If the
Committee shall fail or refuse to give the Trustee
timely instructions as to how to vote any Company
Stock as to which the Trustee otherwise has the right
to vote, the Trustee shall not exercise its power to
vote such Company Stock.
(2) Whenever a vote concerns a corporate matter involving
a corporate merger or consolidation,
recapitalization, reclassification, liquidation,
dissolution, sale of substantially all assets of a
trade or business, or such other similar transaction
as the Secretary of Treasury may prescribe in
Regulations, then the Trustee shall vote Company
Stock allocated to the Participant's Account as
follows:
(A) When notice of a stockholders' meeting
concerning such a corporate matter must be
mailed to stockholders, the Committee shall
cause to be prepared and delivered to each
Participant, Inactive Participant and
beneficiary who has Company Stock allocated
to his or her Account, a notice that:
(i) states the full number of shares of
Company Stock allocated to the
Participant's Account, and
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(ii) instructs the Trustee as to how the
Trustee shall vote the shares at the
meeting or adjournment concerning
each such matter.
The Trustee shall instruct each Participant,
Inactive Participant and beneficiary to
complete and return the notice to the
Trustee.
(B) The Trustee shall vote all shares of Company
stock allocated to the Accounts of
Participants and Inactive Participants as
instructed in the notice.
(C) Regarding Company Stock for which the Trustee
has not received a notice that sets forth a
Participant's or Inactive Participant's
instructed votes within five days prior to
such meeting, including all fractional shares
of Company Stock and all shares of Company
Stock held in a Suspense Account, the Trustee
shall vote such shares in accordance with the
directions of the Committee.
(d) The Trustee shall not obligate itself to purchase shares of
Company Stock, or any other security, from any particular
security holder at an indefinite time determined upon the
happening of an event, such as the death of such security
holder.
3.03 - Other Investments - The Trustee shall, as directed by the
Committee, invest a portion of the trust assets in investments
other than Company Stock. Such investments may include, without
limiting the generality thereof, bonds, notes, mortgages,
commercial paper, preferred stocks, common stocks, real property,
personal property, insurance contracts, saving accounts (including
savings accounts in the Trustee's own banking department),
certificates of deposit, (including certificates of deposit issued
by the Trustee's own banking department), any one or more common
trust funds maintained by the Trustee and mutual funds.
3.04 - Management of Investments - The Trustee shall hold all Plan assets,
and subject to the approval of the Committee, the Trustee may sell,
mortgage, pledge, lease or otherwise dispose of any securities or
other property in the Trust at public or private sale; may vote any
stocks, (including Company Stock) as prescribed in this Agreement
or otherwise consent to or request any action on the part of the
issuer in person or by proxy; may give general
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or specific proxies or powers of attorney with or without powers of
substitutions; may participate in reorganizations,
recapitalizations, consolidations, mergers and similar transactions
with respect to Company Stock or any other securities; may deposit
such Company Stock or other securities in any voting trust, or with
any protective or like committee, or with a Trustee or with
depositories designated thereby; may exercise any subscription
rights and conversion privileges, may sue, defend, compromise,
arbitrate or settle any suit or legal proceeding; and, generally
may exercise any of the powers of an owner, with respect to such
Company Stock and other securities or other property comprising the
Trust assets, all as the Committee may direct.
3.05 - Nominees - The Trustee may register any securities or other
property held by it hereunder in its own name or in the name of its
nominees with or without the addition of words indicating that such
securities are held in a fiduciary capacity, and may hold any
securities in bearer form, but the books and records of the Trustee
shall at all times show that all such investments are part of the
Trust.
3.06 - Distributions - The Trustee shall from time to time, upon the
written direction of the Committee, make distributions from the
Trust Fund to or for the benefit of such persons, in such number of
shares of Company Stock and cash and for such purposes as may be
specified in such directions. In directing the Trustee to make
distributions, the Committee shall follow the provisions of the
Plan and shall not direct that any distribution be made, either
during the existence or upon discontinuance of the Plan, which
would cause any part of the Trust Fund to be used for or diverted
to purposes other than as provided in the Plan and in this Trust.
(a) Where distribution is directed in Company Stock, the Trustee
shall cause an appropriate stock certificate to be issued to
the person entitled thereto and shall mail such certificate
to the Employer for delivery to the Participant. Provided,
however, that the Trustee shall comply with the provisions
of the Plan and the regulations of the Committee relating to
repurchase of such stock by the Trust or by the Company, and
the legending of certificates for such stock to give notice
of such repurchase provisions.
(b) Any portion of a Participant's interest which is to be
distributed in cash shall be paid by the Trustee's mailing
its checks to the Company for delivery to the Participant.
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(c) Any undistributed portion of a Participant's interest shall
be retained in the Trust until the Committee directs its
distribution.
3.07 - Loans - The Trustee is specifically authorized to borrow funds for
the benefit of the Trust. Provided that all loans must be primarily
for the benefit of the Participants and their beneficiaries and,
notwithstanding any other provision of this Trust, all Exempt Loans
to the Trust shall meet the following requirements:
(a) At the time the Exempt Loan is made:
(1) The interest rate for the Exempt Loan and the price
of any Company Stock which is to be acquired with the
proceeds of the Exempt Loan shall not be such as
might drain the Trust of its assets; and
(2) The terms of the Exempt Loan, whether or not between
independent parties, must be at least as favorable to
the Trust as the terms of a comparable loan resulting
from arms-length negotiations between independent
parties.
(b) The Exempt Loan must be for a specific term and not be
payable at the demand of any person except in the case of
default.
(c) The proceeds of an Exempt Loan must be used within a
reasonable time after their receipt by the Trustee only for
any or all of the following purposes:
(1) To acquire Company Stock which is both common stock
and publicly traded stock or, if not publicly traded
stock, is common stock which has a combination of
voting power and dividend rights equal to or in
excess of:
(A) That class of common stock of the Employer having
the greatest voting power; and
(B) That class of common stock of the Employer
having the greatest dividend rights.
(2) To repay such Exempt Loan;
(3) To repay a prior Exempt Loan.
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Except as provided in Sections 5.06 and 5.07 of the Plan, no
Company Stock acquired with the proceeds of an Exempt Loan
may be subject to a put, call or other option, or buy-sell
or similar arrangement while held by and when distributed
from the Trust, whether or not the Plan is then an Employee
Stock Ownership Plan.
(d) The Exempt Loan must be without recourse against the Trust.
The only assets of the Trust which may be given by the
Trustee as collateral on an Exempt Loan shall consist of
shares of Company Stock which have been acquired with the
proceeds of the Exempt Loan or which were used as collateral
on a prior Exempt Loan which has been repaid with proceeds
of the current Exempt Loan. No person entitled to payment
under the Exempt Loan shall have any right to any assets of
the Trust other than:
(1) Collateral given for the Exempt Loan;
(2) Contributions (other than contributions of Company
Stock) that are made under the Plan to meet the
Trust's obligations under the Exempt Loan; and
(3) Earnings attributable to such collateral and the
investment of such contributions.
(e) The payments made with respect to an Exempt Loan by the
Trust during a Plan Year may not exceed an amount equal to
the sum of:
(1) Contributions (other than contributions of Company
Stock) that are made under the Plan to meet the
Trust's obligations under the Exempt Loan; and
(2) Earnings attributable to the collateral given for the
Exempt Loan and the investment of the contributions
described in Subparagraph (1) of this Paragraph (e).
Such contributions and earnings must be accounted for
separately until the Exempt Loan is repaid.
(f) In the event of default upon an Exempt Loan, the value of
Trust assets transferred in satisfaction of the Exempt Loan
must not exceed the amount of the default. In the event the
lender is a "Disqualified Person" as defined in Section
4975(e)(2) of the Internal
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Revenue Code, or "Party in Interest", as defined in Section
408(e) of the Employee Retirement Income Security Act of
1974, the loan must provide for a transfer of Trust assets
only upon and to the extent of the failure of the Trust to
meet the payment schedule of the Exempt Loan. For purposes
of this Paragraph (b), the making of a guarantee does not
make a person a lender.
(g) The interest rate for an Exempt Loan must not exceed a
reasonable rate of interest. In determining a reasonable
rate of interest, all relevant factors shall be considered
including the amount and duration of the loan, the security
and guarantee (if any) involved, the credit standing of the
Trust and the guarantor (if any), and the interest rate
prevailing for comparable loans. Where these factors are
considered, a variable interest rate may be reasonable.
(h) An Exempt Loan must provide for the manner in which Trust
assets used as collateral for the Exempt Loan are to be
released from encumbrance and such provision must be in
compliance with either the "General Rule" or the "Special
Rule" as described below, as selected by the Committee.
(1) General Rule: For each Plan Year during the duration
of the Exempt Loan, the number of shares released
from encumbrance must equal the number of encumbered
shares held immediately before release for the
current Plan Year multiplied by a fraction:
(A) The numerator of which is the amount of principal
and interest paid for the Plan Year; and
(B) The denominator of which is the sum of the
numerator plus the principal and interest to
be paid for all future years.
(2) Special Rule:
(A) For each Plan Year during the duration of the
Exempt Loan, the number of shares released
from encumbrance must equal the number of
encumbered shares held immediately before
release for the current Plan Year multiplied
by a fraction:
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(i) The numerator of which is the amount
of principal paid for the Plan Year;
and
(ii) The denominator of which is the sum
of the numerator plus the principal
to be paid for all future Years.
(B) Anything herein to the contrary
notwithstanding, the Special Rule described
in this Paragraph (2) may only be utilized
with respect to an Exempt Loan if:
(i) The Exempt Loan provides for annual
payments of principal and interest
at a cumulative rate which is not
less rapid at any time than level
annual payments of such amounts for
10 years.
(ii) The interest included in any payment
is disregarded only to the extent
that it would be determined to be
interest under standard loan
amortization tables; and
(iii) The Exempt Loan provides that the
General Rule described in Paragraph
(1) above shall be the method utilized
to determine the assets released from
encumbrance from the time that, by
reason of a renewal, extension or
refinancing, the sum of the expired
duration of the Exempt Loan, the
renewal period, the extension period
and the duration of a new Exempt Loan
exceeds 10 years.
(3) In determining the number of shares to be released
for any Plan Year under either the General Rule or
the Special Rule:
(A) The number of future years under the Exempt
Loan must be definitely ascertainable and
must be determined without taking into
account any possible extensions or renewal
periods.
(B) If the Exempt Loan provides for a variable
interest rate, the interest to be paid for
all future Plan Years
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<PAGE> 70
must be computed by using the interest rate
applicable as of the end of the Plan Year for
which the determination is being made.
(C) If the collateral for an Exempt Loan includes
more than one class of shares, the number of
shares of each class to be released for a
Plan Year must be determined by applying the
applicable fraction provided for in either
Subparagraph (1) or (2) of this Paragraph (h)
to each such class.
Article IV - Insurance Contracts
4.01 - Types of Contracts - In the event that the Trustee is directed by
the Committee to invest part or all of the Trust Fund in Contracts,
the type and amount thereof shall be specified by the Committee in
accordance with the provisions of the Plan. The Trustee shall be
under no duty to make inquiry as to the propriety of the type or
amount so specified.
4.02 - Ownership - Each Contract issued shall provide that the Trustee
shall be the owner thereof with the power to exercise all rights,
privileges, options and elections granted by or permitted under
such Contract or under the rules of the Insurer. The exercise by
the Trustee of any incidents of ownership under any Contract shall
be subject to the direction of the Committee.
4.03 - Beneficiary - The Committee shall from time to time direct the
Trustee in writing as to the designation of beneficiary under a
contract for the death benefits payable thereunder and the Trustee
shall file such designation with the Insurer.
Article V - Trustee's Accounts
5.01 - Records - The Trustee shall maintain accurate records and detailed
accounts of all investments, receipts, disbursements and other
transactions hereunder. Such records shall be available at all
reasonable times to inspection by the Employer or its authorized
representative. The Trustee, at the direction of the Committee,
shall submit to the Committee such reports or other information as
the Committee may reasonably require.
5.02 - Annual Accounting - As soon as practical following each
Anniversary Date, the Trustee shall file with the Committee a
written account setting
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forth a description of all assets purchased and sold, all receipts,
disbursements and other transactions effected by it during the
year ending with such Anniversary Date, and listing the assets held
in the Trust Fund as of such Anniversary Date and indicating their
values. The Trustee may conclusively rely without liability upon
the valuation of Company Stock as determined by the Committee.
(a) The Committee may approve such account either by written
notice of approval delivered to the Trustee or by its
failure to express written objection to such account
delivered to the Trustee within 60 days after the date of
which such account was delivered to the Committee.
(b) Upon the approval of the account by the Committee the
Trustee shall be released and discharged as to all items,
matters and things set forth in such account as if such
account had been settled and allowed by a decree of a court
of competent jurisdiction.
(c) In the absence of fraud or bad faith, the valuation of the
Trust Fund by the Trustee shall be conclusive.
5.03 - Delegation of Duties - The Employer or the Committee, or both, may
at any time employ the Trustee as their agent to perform any act,
keep any records or accounts and make any computations which are
required of the Employer or the Committee by this Trust or the
Plan. The Trustee may be compensated for such employment and such
employment shall not be deemed to be contrary to this Trust.
Nothing done by the Trustee as such agent shall change or increase
its responsibility or liability as Trustee hereunder.
Article VI - Amendment and Termination
6.01 - Permanency - It is the expectation of the Employer that this Trust
and the Plan and the payment of contributions hereunder will be
continued indefinitely but continuance of this Trust and the Plan
is not assumed as a contractual obligation of the Employer. This
Trust may be amended or terminated only as provided in this
Article.
6.02 - Fund Recovery - Except as provided in this Section, it shall be
impossible for any part of the principal or income of the Trust to
be used for, or diverted to, purposes other than the exclusive
benefit of the Participants or their beneficiaries.
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(a) Notwithstanding anything in this Trust to the contrary, this
Trust and the Plan are established and contributions thereto
are made by the Employer on the condition precedent that the
Trust and the Plan shall be initially approved and qualified
by the Internal Revenue Service under the Internal Revenue
Code and its Regulations with respect to employees' trusts
so as to permit the Employer to deduct for income tax
purposes the amount of its contributions to the Trustee and
so that such contributions will not be taxable to the
Participants as income. If it is determined by the Internal
Revenue Service that this Trust and the Plan as applicable
to the Employer are not so initially approved and qualified,
then:
(1) The interest of all then living Participants and
beneficiaries under this Trust shall cease and
terminate to the same extent as though this Trust and
the Plan had not been executed by the Employer;
provided, that amounts previously distributed to such
Participants and beneficiaries shall not be subject
to return by them.
(2) The Trustee shall terminate all Contracts on the
lives of Participants and shall, upon written
direction by the Employer, and within one year after
the denial of qualification of the Plan, pay all
amounts realized therefrom together with all the
balance of the Trust Fund in its hands to the
Employer. This Trust shall thereupon terminate as to
the Employer and the Trustee shall be discharged from
all obligations hereunder.
(3) The Trustee shall recover from the Insurer, upon
terms agreed to by the Insurer, all premiums paid on
Contracts prior to the Employer's receipt of such
adverse determination less any earned term charges
made by the Insurer for any insurance coverage
provided.
(b) In the case of a contribution which is made by the Employer
by a mistake of fact, the contribution shall be returned to
the Employer within one year after the payment of the
contribution.
(c) If a contribution is conditioned upon the deductibility of
the contribution under Section 404 of the Internal Revenue
Code of 1954, then, to the extent the deduction is
disallowed, the
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contribution shall be returned to the Employer (to the
extent disallowed) within one year after the disallowance of
the deduction.
6.03 - Amendments
(a) The Employer shall have the right to amend this Trust from
time to time, and to amend or cancel any amendments.
(b) Such amendments shall be set forth in an instrument in
writing executed by the Employer and by the Trustee. Any
amendment may be current, retroactive or prospective, in
each case provided therein. Provided, however, that no
amendment shall:
(1) Cause any of the assets of the Trust to be used for
or diverted to purposes other than for the exclusive
benefit of Participants and their beneficiaries.
(2) Have any retroactive effect so as to deprive any
Participant or his beneficiary of any benefit already
vested, except that such changes may be made as are
required by the Internal Revenue Service in order for
the Trust to be initially approved and qualified
under the Internal Revenue Code and its Regulations
with respect to employees' trusts so as to permit the
Employer to deduct for income tax purposes the amount
of its contributions made to the Trust and so that
such contributions will not be taxable to
Participants as income.
(3) Create or effect any discrimination in favor of
Participants who are highly compensated, who are
officers of the Employer or who are stockholders of
the Employer.
(4) Increase the duties or liabilities of the Trustee
without its consent.
6.04 - Termination - The Employer shall have the right to terminate its
participation in this Trust by delivering written notice of
termination to the Trustee. A termination by the Employer of the
Plan shall not, in itself, effect a termination of this Trust. Upon
any termination of this Trust, the Trust Fund shall be distributed
by the Trustee as and when directed by the Committee. From and
after the date of such termination and until final distribution of
the Trust Fund, the Trustee shall continue to have all the
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powers provided herein as are necessary or expedient for the
orderly liquidation and distribution of the Trust Fund.
Article VII - Resignation or Removal of Trustee
7.01 - Procedure
(a) Resignation - Any Trustee may resign as Trustee by delivery
of written notice of resignation to the Employer.
(b) Removal - Any Trustee may be removed by the Employer's
delivering written notice of removal to such Trustee.
(c) Effective Time - Any resignation or removal shall take
effect on the date specified in the notice, which date shall
not be less than 60 days after the delivery thereof unless
an earlier date shall be mutually agreed upon.
7.02 - Successor Trustee - Upon any resignation or removal of Trustee, the
Employer shall promptly appoint a successor Trustee. In the event
of the failure to appoint such successor by the effective date of
such resignation or removal, the Trustee on such effective date
may, at its discretion, deliver to the Committee the entire Trust
Fund whereupon, without further act, the then members of such
Committee shall become the successor Trustee and, as such, shall be
vested with all right, title, interest, powers and duties of the
predecessor Trustee.
7.03 - Settlement of Accounts - Upon the effective date of such
resignation or removal of a Trustee, the former Trustee shall
transfer all the Trust Fund to the Successor Trustee, whereupon
such successor shall succeed to all of the powers and duties given
to the Trustee herein. Upon such effective date, the resigning or
removed Trustee shall render to the Committee an account in the
form and manner prescribed for the annual accounting in Section
5.02. The approval of such accounting and discharge of the Trustee
or Trustee member shall be as provided in such Section.
Article VIII - Controversies, Legal Actions and Counsel
8.01 - Controversy - If any controversy arises with respect to this Trust,
the Trustee shall take action as directed by the Committee or, in
the absence of such direction, as it deems advisable, whether by
legal proceedings, compromise or otherwise. The Trustee may retain
the funds or property
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involved without liability pending settlement of the controversy.
If there are insufficient assets in the Trust to save the Trustee
harmless with respect to any expenses or losses to which it may be
subject, then the Trustee shall be under no obligation to take any
legal action of whatever nature.
8.02 - Joinder of Parties - In any action or other judicial proceedings
affecting this Trust, it shall be necessary to join as parties only
the Trustee, the Committee and the Employer, and no Participant or
other persons having any interest in this Trust shall be entitled
to any notice or service of process. Any judgment entered in such a
proceeding or action shall be binding on all persons claiming under
this Trust. Provided, however, that nothing in this Trust shall be
construed as to deprive a Participant of his right to seek
adjudication of his rights by a court of competent jurisdiction.
8.03 - Employment of Counsel - The Trustee may consult with legal counsel
(who may be counsel for an Employer) and shall be fully protected
with respect to any action taken or omitted by it in good faith
pursuant to the advice of counsel.
Article IX - Insurer
9.01 - Insurer Not a Party - The Insurer shall not be deemed to be a
party to this Trust and its obligations shall be measured and
determined solely by the terms of its Contracts and other
agreements executed by it.
9.02 - Authority of Trustee - The Insurer shall accept the signature of
the Trustee to any documents or papers executed in connection with
such Contracts. The signature of the Trustee shall be conclusive
proof to the Insurer that the person on whose life an application
is being made is eligible to have such Contract issued on his life
and is eligible for a Contract of the type and amount requested.
9.03 - Contract Ownership - The Insurer shall deal with the Trustee as the
sole and absolute owner of such Contracts and shall have no
obligation to inquire whether any action or failure to act on the
part of the Trustee is in accordance with or authorized by the
terms of this Trust.
9.04 - Limitation of Liability - The Insurer shall be fully discharged
from any and all liability for any action taken or any amount paid
in accordance with the direction of the Trustee and shall have no
obligation to see to the proper application of the amounts so paid.
The Insurer shall have no
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liability for the operation of this Trust or the Plan, whether or
not in accordance with their terms and provisions.
9.05 - Change of Trustee - The Insurer shall be fully discharged from any
and all liability for dealing with a party or parties indicated on
its records to be the Trustee until such time as it shall receive
at its home office written notice of the appointment and
qualification of a successor Trustee.
9.06 - Rules of the Insurer - Irrespective of any provision in this Trust,
the rules of the Insurer shall govern any action taken by the
Trustee with respect to any Contract.
Article X - Miscellaneous
10.01 - Taxes - If the whole or any part of the Trust Fund shall become
liable for the payment of any estate, inheritance, income or other
tax which the Trustee shall be required to pay, the Trustee shall
have full power to pay such tax out of any property in its hands
for the benefit of the person whose interest hereunder is so
liable. Prior to making any payment, the Trustee may require such
releases or other documents from any lawful taxing authority as it
shall deem necessary. The Trustee shall not be liable for any
nonpayment of tax when it distributes an interest hereunder on
directions from the Committee.
10.02 - Third Persons - All persons dealing with the Trustee are released
from inquiring into the decisions or authority of the Trustee and
from seeing to the application of any moneys, securities or other
property paid or delivered to the Trustee.
10.03 - Nonassignability - None of the benefits, payments claims or
interest hereunder of any Participant nor of his beneficiary shall
be subject to any claim of any creditor and, in particular, the
same shall not be subject to attachment or garnishment or other
legal process by any creditor, nor shall any Participant or his
beneficiary have any right to alienate, anticipate, commute,
pledge, encumber or assign any of the benefits, payments, claims or
interest which he may expect to receive, contingently or otherwise,
under this Trust.
10.04 - The Plan - This Trust and the Plan are both parts of a single,
integrated employee benefit system and shall be construed together.
In the event of any conflict between the terms of this Trust and of
the Plan, such conflict shall be resolved in favor of this Trust.
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10.05 - Applicable Law - Except as provided by Section 514 of the Employee
Retirement Income Security Act of 1974, this Trust shall be
construed, administered and governed, under the laws of the state
of residence of the Employer. If any provision of this Trust shall
be invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective.
10.06 - Trustee's Fees - The Employer shall pay to the Trustee annually its
expenses in administering this Trust and a reasonable compensation
for its services as Trustee at a rate to be agreed upon from time
to time. The Trustee shall have a lien on the Trust Fund for such
compensation and for reasonable expenses (including counsel fees)
and the same may be withdrawn from the Trust Fund unless paid by
the Employer. Provided, however, that no person who serves as a
Trustee and who already receives full-time pay from the Employer
shall receive compensation from the Trust except for reimbursement
of expenses properly and actually incurred.
10.07 - Notices and Directions - Whenever a notice or direction is given by
the Committee to the Trustee, it shall be signed in the name of the
Committee as provided by the Plan. Actions by the Employer shall be
by its board of directors, with such actions certified to the
Trustee by, an appropriately certified copy of the action taken.
The Trustee shall be protected in acting upon any such notice,
resolution, order, certificate or other communication believed by
it to be genuine and to have been signed by the proper party or
parties.
10.08 - Protective Provisions
(a) In the event that this Trust and the Plan referred to
herein, after initially qualifying as a tax exempt Trust
Fund under Section 401 of the Internal Revenue Code of 1954,
shall thereafter cease to be a qualifying trust by reason of
some act or omission on the part of an Employer, the
Employer agrees to indemnify the Trustee and hold the
Trustee harmless against any liability it may incur for
estate taxes as a result of payments made from the Trust to
beneficiaries of deceased Participants after the Trust
ceases to be a qualifying Trust.
(b) Notwithstanding any other provisions contained in this
agreement to the contrary, the Trustee shall have no
obligation to determine the existence of any conversion,
redemption, exchange, subscription or other right relating
to any securities purchased of which notice was given prior
to the purchase of such securities and shall have no
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obligation to exercise any such right unless the Trustee is
advised in writing by the Committee both of the existence of
the right and the desired exercise thereof within a
reasonable time prior to the expiration of the right to
exercise.
10.09 - Spouse's Interest - The interest in the benefits hereunder of a
spouse of a Participant, who has predeceased the Participant shall
automatically pass to the Participant and shall not be transferable
by such spouse in any manner including but not limited to such
spouse's will, nor shall such interest pass under the laws of
intestate succession.
10.10 - Gender and Number - Words used in the masculine shall apply to the
feminine where applicable, and when the context requires, the
plural shall be read as the singular and the singular as the
plural.
10.11 - Headings - Headings in this Trust are inserted for convenience of
reference only and any conflict between such headings and the text
shall be resolved in favor of the text.
10.12 - Counterparts - This Trust may be executed in an original and any
number of counterparts, each of which shall be deemed to be an
original of one and the same instrument.
IN WITNESS WHEREOF the Employer and the Trustee have signed this
Trust and the Trustee has accepted this Trust this 25th day of November, 1985.*
TRUSTEES EMPLOYER
/s/ GERALD T. DEAL By /s/ DUNSON CHENG
- --------------------------- ---------------------------
Gerald T. Deal
/s/ GEORGE CHING Dunson Cheng, President
- --------------------------- ---------------------------
George Ching [Printed Name and Title]
/s/ DUNSON CHENG
- ---------------------------
Dunson Cheng
* As amended by the First Amendment, dated as of May 17, 1990, and the Second
Amendment, dated as of January 18, 1991, thereto.
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EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Cathay Bancorp, Inc.
We consent to the incorporation by reference in the registration statement (No.
33-33767) on Form S-3 of Cathay Bancorp, Inc. of our report dated January 16,
1998, relating to the consolidated statements of condition of Cathay Bancorp,
Inc. and subsidiary as of December 31, 1997 and 1996 and the related
consolidated statements of income, changes in stockholders' equity, and cash
flows for each of the years in the three-year period ended December 31, 1997,
which report appears in the December 31, 1997 annual report on Form 10-K of
Cathay Bancorp, Inc.
KPMG PEAT MARWICK LLP
Los Angeles, California
April 30, 1998
