As filed with the Securities and Exchange Commission on
July 10, 1996
Registration No. 33-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MONOCACY BANCSHARES, INC.
(Exact name of Registrant as specified in its charter)
Maryland 52-1824297
---------- ------------
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
222 East Baltimore Street, Taneytown, Maryland 21787
- ---------------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
TANEYTOWN BANK & TRUST COMPANY
RETIREMENT SAVINGS PLAN
(Full title of the plan)
----------------------------
Frank W. Neubauer Copies To:
President Nicholas Bybel, Jr., Esquire
Monocacy Bancshares, Inc. Robin M. Wilder, Esquire
222 East Baltimore Street Shumaker Williams, P.C.
Taneytown, Maryland 21787 Post Office Box 88
(410) 756-2655 Harrisburg,
- ------------------------- Pennsylvania 17108
(Name, address, including (717) 763-1121
zip code, and telephone
number, including area code,
of agent for service)
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Each Class Amount Proposed Maximum
of Securities to be to be Offering Price
Registered Registered<F1> Per Share<F2>
<S> <C> <C>
Common Stock 200,000 $23.50
$5.00 par value
<CAPTION>
Title of Each Class Proposed Maximum Amount of
of Securities to be Aggregate Registration
Registered Offering Price <F2> Fee
<S> <C> <C>
Common Stock $4,700,000 $1,620.69
$5.00 par value
<FN>
<F1> Based on the maximum number of shares of Monocacy
Bancshares, Inc. common stock, par value $5.00 per share ("Common
Stock") authorized for issuance under the Taneytown Bank & Trust
Company Retirement Savings Plan (the "Retirement Savings Plan").
<F2> Estimated pursuant to Rule 457(c) and (h)(1) solely for the
purpose of calculating the amount of the registration fee based
upon the average of the closing bid and asked prices of the
Common Stock on July 8, 1996, with respect to the 200,000 shares
of Common Stock issuable under the Retirement Savings Plan.
</FN>
</TABLE>
<PAGE>
TO PARTICIPANTS IN THE TANEYTOWN BANK & TRUST COMPANY
RETIREMENT SAVINGS PLAN
Monocacy Bancshares, Inc. (the "Company") has filed a
registration statement concerning its shares of common stock,
$5.00 par value ("Common Stock") that may, from time to time, be
issued pursuant to the retirement savings plan of the subsidiary
of the Company, the Taneytown Bank & Trust Company Retirement
Savings Plan (the "Retirement Savings Plan"). The Prospectus
deemed to form a part of the registration statement consists of
certain documents and explanatory memoranda regarding the
Retirement Savings Plan. Also deemed to comprise part of the
Prospectus, are the following documents, each of which is
specifically incorporated by reference into the registration
statement and each of which is on file with the United States
Securities and Exchange Commission ("SEC") (Periodic Report File
No. 0-22536):
(a) The Company's annual report on Form 10-K for the year
ended December 31, 1995; and (b) the Company's quarterly report
on Form 10-Q for the quarter ended March 31, 1996.
All documents filed with the SEC by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 after the date of the Prospectus and prior to the
termination of the offering made hereby shall be deemed to be
incorporated by reference in the Prospectus and to be a part
thereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded
for purposes of the Prospectus to the extent that a statement
contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of the Prospectus.
The Company will provide without charge to each Plan
participant who so requests, a copy of any or all of the
documents mentioned above as well as all documentation relating
to the Retirement Savings Plan required to be delivered to Plan
participants pursuant to the rules adopted under the Securities
Act of 1933. Requests for such copies should be addressed orally
or in writing to:
Attention: Treasurer
Monocacy Bancshares, Inc.
222 East Baltimore Street
Taneytown, Maryland 21787
(410) 756-2655
July 10, 1996
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this
registration statement the following documents filed by the
Company with the Commission (Periodic Report File No. 0-22536):
(a) Annual Report on Form 10-K for the year ended December
31, 1995; and
(b) The Company's quarterly report on Form 10-Q for the
quarter ended March 31, 1996.
All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act, and prior to the
termination of the offering made hereby shall be deemed to be
incorporated by reference in this registration statement and to
be a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of the Prospectus to the extent that a
statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this
registration statement.
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in
Items 1 and 2 of Part I of Form S-8 will be sent or given to plan
participants as specified in Rule 428(b)(1) and, in accordance
with the instructions to Part I of Form S-8, are not filed with
the Securities and Exchange Commission as part of this
registration statement.
ITEM 4. DESCRIPTION OF SECURITIES
Inapplicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Inapplicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has charter provisions limiting the
personal liability of directors, and officers, for money damages
except that such charter provisions do not limit liability (a)
for, and
II-1
<PAGE>
to the extent of, actual receipt of an improper benefit in money,
property or services or (b) in respect of an adjudication based
upon a finding of active and deliberate dishonesty which was
material to the cause of action adjudicated. The charter
provisions do not affect potential liability of directors and
officers to third parties, such as creditors of the Company, nor
do they affect the right of a state government entity, receiver,
conservator or depositor to sue a director or officer of the
Company for money damages.
The limitation applies to liability for acts or
omissions occurring after February 18, 1988 and not to liability
for acts or omissions occurring prior to that date.
Under Maryland law, directors are required to discharge
their duties in good faith, in a manner reasonably believed to be
in the best interests of the corporation they serve and with the
care that an ordinarily prudent person in a like position would
use under similar circumstances. Maryland courts, however, have
held that a director may not be liable for money damages (as
opposed to equitable relief) unless his conduct constitutes gross
or culpable negligence if the corporation the director serves has
limited the liability of directors for money damages to gross or
culpable negligence in its charter. Because of this charter
provision, a stockholder of the Company will be able to recover
money damages against a director or officer of the Company only
if he is able to prove that (a) the director or officer actually
received an improper benefit in money, property or services (in
which case recovery is limited to the actual amount of such
improper benefit ) or (b) the action, or failure to act, by the
director or officer, was the result of active and deliberate
dishonesty which was material to the cause of action adjudicated
in the proceeding. The principal effect of this charter
provision is that the Company and the shareholders do not have a
cause of action for money damages against directors or officers
for breaches of their fiduciary duties to the Company, or the
shareholders constituting grossly negligent business decisions on
behalf of the Company. Such conduct could relate to any business
matter, including acquisitions and dispositions of property,
financings, takeover proposals and business development programs.
This charter provision does not limit the right of the
Company or the Bank or any shareholder to sue for an injunction
or any other non-monetary relief in the event of a breach of a
director's or officer's duty of care or other breach of duty or
responsibility, although it is possible that the elimination of
money damages may have the practical effect of discouraging such
suits, unless one of the exceptions of the legislation (i.e.,
cases of improper personal benefit or active and deliberate
dishonesty material to the claim) is applicable. This charter
provision does not apply to any act or omission by a director or
officer occurring prior to February 18, 1988, regardless of when
a claim might be asserted. This charter provision does not apply
to claims against directors or officers arising out of their
responsibilities under the federal securities laws. There has
not yet been any judicial interpretation of the precise scope or
validity of these provisions. It is possible that under some
circumstances a court could rule that certain liabilities which
the law purports to allow the Company or the Bank to eliminate
may not be eliminated. The charter provision's coverage extends
only so far as legally permitted.
The charter of the Company provides that the Company
shall indemnify its directors and officers to the fullest extent
required or permitted by Maryland law, including the advance of
expenses under the procedures required, and to the fullest extent
permitted, by law.
II-2
<PAGE>
In addition, the Company shall indemnify such other employees and
agents to the extent authorized by the Board of Directors or the
Company's Bylaws and permitted by law. Such rights of
indemnification are not exclusive of any other rights to which
those seeking indemnification may be entitled. The Board of
Directors may take such action as is necessary to carry out the
indemnification provisions and is expressly empowered to adopt,
approve and amend from time to time such bylaws, resolutions or
contracts implementing such provisions or such further
indemnification arrangements as may be permitted by law. The
charter may not be amended to limit or eliminate such right to
indemnification with respect to acts or omissions occurring prior
to such amendment.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 (the "1933 Act") may be
permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the
1933 Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than
the payment by Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted
by a director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in
the opinion of its counsel the manner has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be
governed by the final adjudication of such issue.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Inapplicable.
ITEMS 8. EXHIBITS
<TABLE>
<CAPTION>
Page Number in
Sequential Numbering
System
Exhibit No. -----------
- -----------
<S> <C> <C>
4 Taneytown Bank & Trust Company
Retirement Savings Plan
(included in Exhibit 99)
5 Opinion of Shumaker Williams, P.C.
23(i) Consent of Stegman & Company
23(ii) Consent of Shumaker Williams, P.C.
(included in Exhibit 5)
II-3
<PAGE>
24 Power of Attorney of Directors and
Officers
(included on Signature Page)
99(i) Taneytown Bank & Trust Company
Retirement Savings Plan
99(ii) Internal Revenue Service
Determination Letter
</TABLE>
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers
or sales are being made, a post-effective
amendment to this registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of
1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the registration statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the registration
statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement;
PROVIDED, HOWEVER, that paragraphs
(a)(1)(i) and (a)(1)(ii) shall not apply
if the information required to be included
in a post-effective amendment by those
paragraphs is contained in periodic
reports filed by the Registrant pursuant
to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are
incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each
post-effective amendment shall be deemed to be a
new registration statement relating to the
securities offered therein, and the offering
of such securities at the time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities
being registered which remain unsold at the
termination of the offering.
II-4
<PAGE>
(b) The undersigned Registrant hereby undertakes
that, for purposes of determining any liability
under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934, and, where applicable,
each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the
Securities Exchange Act of 1934, that is
incorporated by reference in the registration
statement shall be deemed to be a new
registration statement relating to the
securities offered therein, and the offering of
such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling
persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion
of the Securities and Exchange Commission such
indemnification is against public policy as
expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a
claim for indemnification against such
liabilities, other than the payment of the
Registrant of expenses incurred or paid by a
director, officer or controlling person of the
Registrant in the successful defense of any
action suit or proceeding, is asserted by such
director, officer or controlling person in
connection with the securities being registered,
the Registrant will, unless in the opinion of
its counsel the matter has been settled by
controlling precedent, submit to a court of
appropriate jurisdiction the question whether
such indemnification by it is against public
policy as expressed in the Securities Act of
1933 and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized in
the City of Taneytown, State of Maryland on June 24, 1996.
MONOCACY BANCSHARES, INC.
By: /s/ Frank W. Neubauer
--------------------------
Frank W. Neubauer
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Frank W.
Neubauer and Michael K. Walsch, and each of them, his true and
lawful attorney-in-fact, as agent with full power of substitution
and resubstitution for him and in his name, place and stead, in
any and all capacity, to sign any or all amendments to this
Registration Statement and to file the same, will all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-
in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done
in and about the premises, as fully and to all intents and
purposes as they might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or
their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following
persons in the capacities and on the dates indicated.
Capacity Date
-------- ----
/s/ Frank W. Neubauer President and Chief June 24, 1996
- ------------------------ Executive Officer and
Frank W. Neubauer Director (Principal
Executive Officer)
/s/ Michael K. Walsch Executive Vice June 24, 1996
- ------------------------ President and Treasurer
Michael K. Walsch (Principal Financial and
Accounting Officer)
II-6
<PAGE>
/s/ Donald R. Hull Chairman of the Board June 24, 1996
- ------------------------ and Director
Donald R. Hull
/s/ Eric E. Glass Vice Chairman of the June 24, 1996
- ------------------------ Board and Director
Eric E. Glass
/s/ David M. Abramson Director June 24, 1996
- ------------------------
David M. Abramson
/s/ E. Wayne Baumgardner Director June 24, 1996
- ------------------------
E. Wayne Baumgardner
/s/ George B. Crouse Director June 24, 1996
- ------------------------
George B. Crouse
/s/ Glenn E. Eaves Director June 24, 1996
- ------------------------
Glenn E. Eaves
/s/ Jacob M. Yingling Director June 24, 1996
- ------------------------
Jacob M. Yingling
II-7
<PAGE>
INDEX TO EXHIBITS
Exhibit No.
- ------------
4 Taneytown Bank & Trust Company Retirement Savings Plan
(included in Exhibit 99)
5 Opinion of Shumaker Williams, P.C.
23(i) Consent of Stegman & Company
23B(ii) Consent of Shumaker Williams, P.C. (included in
Exhibit 5)
24 Power of Attorney (included on signature page herein)
99(i) Taneytown Bank & Trust Company Retirement Savings Plan
99(ii) Internal Revenue Service Determination Letter
II-8
EXHIBIT 4
Taneytown Bank & Trust Company
Retirement Savings Plan
(included in Exhibit 99)
EXHIBIT 5
Opinion of Shumaker Williams, P.C.
<PAGE>
SHUMAKER WILLIAMS, P.C.
3425 Simpson Ferry Road
Camp Hill, Pennsylvania 17011
(717) 763-1121
July 10, 1996
Mr. Frank W. Neubauer
President and CEO
MONOCACY BANCSHARES, INC.
222 East Baltimore Street
Taneytown, MD 21787
Re: Monocacy Bancshares, Inc. (the "Corporation")
Registration Statement Form S-8
Our File No. 897-94
Dear Mr. Neubauer:
In connection with the above-referenced registration
statement on Form S-8 pertaining to the Taneytown Bank & Trust
Company Retirement Savings Plan (the "Retirement Savings Plan"),
we have acted as Special Corporate Counsel to the Corporation and
have examined all documents, transactions and questions of law
which we deem necessary and appropriate for purposes of rendering
the following opinion.
Based on our examination, it is our opinion that when the
registration statement on Form S-8 is filed and becomes effective
under the Securities Act of 1933, those shares of $5.00 par value
of common stock of the corporation issued or distributed
thereunder and paid for in accordance with the terms of the
Retirement Savings Plan, will be duly authorized, validly issued,
fully-paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit
to the registration statement on Form S-8.
SHUMAKER WILLIAMS, P.C.
By: /s/ J. Steven Lovejoy
-------------------------
J. Steven Lovejoy
JSL/tb:61126
EXHIBIT 23(i)
Consent of Stegman & Company
<PAGE>
[LOGO]
STEGMAN & COMPANY
- --------------------------------
Certified Public Accountants and
Management Consultants since 1915
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement Form S-8 pertaining to the Taneytown Bank & Trust
Company Retirement Savings Plan with respect to the consolidated
financial statements of Monocacy Bancshares, Inc. incorporated by
reference in its Annual Report (Form 10-K) for the year ended
December 31, 1995, filed with the Securities and Exchange
Commission.
/s/ Stegman & Company
----------------------------
STEGMAN & COMPANY
Towson, Maryland
July 2, 1996
Suite 200
405 East Joppa Road
Baltimore, Maryland 21206
410-823-8000
1-800-686-3883
Fax: 410-296-4815
EXHIBIT 23(ii)
Consent of Shumaker Williams, P.C.
(included in Exhibit 5)
EXHIBIT 24
Power of Attorney
(included on signature page herein)
EXHIBIT 99(i)
Taneytown Bank & Trust Company
Retirement Savings Plan
<PAGE>
TANEYTOWN BANK & TRUST COMPANY
RETIREMENT SAVINGS PLAN
Amendment and Restatement
Effective as of January 1, 1993
<PAGE>
TANEYTOWN BANK & TRUST COMPANY RETIREMENT SAVINGS PLAN
Amendment and Restatement
Effective as of January 1, 1993
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
-----------
1.1 ACCRUED BENEFIT 1
1.2 ADMINISTRATOR 1
1.3 AFFILIATED COMPANY(IES) 1
1.4 CODE 1
1.5 COMPENSATION 1
1.6 EFFECTIVE DATE 2
1.7 EMPLOYEE 2
1.8 EMPLOYER 2
1.9 EMPLOYER MATCHING CONTRIBUTION ACCOUNT 2
1.10 EMPLOYER BASIC CONTRIBUTION ACCOUNT 2
1.11 ENTRY DATE 2
1.12 ERISA 2
1.13 HIGHLY COMPENSATED EMPLOYEE 2
1.14 INSIDER 5
1.15 NON-HIGHLY COMPENSATED EMPLOYEE 5
1.16 NORMAL RETIREMENT AGE 5
1.17 NORMAL RETIREMENT DATE 5
1.18 PARTICIPANT 5
1.19 PLAN 5
1.20 PLAN ACCOUNT 5
1.21 PLAN SPONSOR 5
1.22 PLAN YEAR 5
1.23 PRIOR PLAN ACCOUNT 5
1.24 QUALIFIED MATCHING CONTRIBUTION ACCOUNT 5
1.25 QUALIFIED NONELECTIVE CONTRIBUTION ACCOUNT 5
1.26 ROLLOVER CONTRIBUTION ACCOUNT 5
1.27 SALARY REDUCTION CONTRIBUTION ACCOUNT 6
1.28 TRUST 6
1.29 TRUST FUND 6
1.30 TRUSTEE 6
1.31 VALUATION DATE 6
1.32 YEAR OF SERVICE 6
ARTICLE 2
ELIGIBILITY FOR PARTICIPATION
-----------------------------
2.1 INITIAL ELIGIBILITY 10
2.2 SUBSEQUENT ELIGIBILITY 10
2.3 REHIRED PARTICIPANTS 10
i
<PAGE>
ARTICLE 3
CONTRIBUTIONS
-------------
3.1 SALARY REDUCTION CONTRIBUTIONS BY PARTICIPANTS 10
3.2 EMPLOYER MATCHING CONTRIBUTIONS 12
3.3 EMPLOYER BASIC CONTRIBUTIONS 13
3.4 DEDUCTIBILITY OF CONTRIBUTIONS 14
3.5 LIMITS ON ANNUAL ADDITIONS 14
3.6 DISPOSITION OF EXCESS ANNUAL ADDITIONS 16
3.7 CONTRIBUTIONS TO ROLLOVER CONTRIBUTION ACCOUNT 17
3.8 DEFINITION OF "ROLLOVER CONTRIBUTION" 17
3.9 DISTRIBUTION OF EXCESS DEFERRALS 18
3.10 DISTRIBUTION OF EXCESS CONTRIBUTIONS 18
3.11 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS 19
3.12 PARTICIPANTS' INVESTMENT ELECTIONS 20
ARTICLE 4
DISTRIBUTIONS
-------------
4.1 RETIREMENT 21
4.2 DEATH OF PARTICIPANT 22
4.3 DISABILITY 23
4.4 TERMINATION PRIOR TO RETIREMENT 23
4.5 REHIRED PARTICIPANT 25
4.6 COMMENCEMENT OF BENEFITS 25
4.7 NOTICE REQUIREMENTS 25
4.8 CASH-OUT DISTRIBUTIONS 26
4.9 DIRECT ROLLOVERS 26
4.10 REQUIRED DISTRIBUTIONS 26
ARTICLE 5
ADMINISTRATION
--------------
5.1 ADMINISTRATION 27
ARTICLE 6
THE ADMINISTRATOR
-----------------
6.1 MEMBERS 27
6.2 PROCEDURE 27
6.3 POWERS AND RESPONSIBILITIES 28
6.4 CERTIFICATIONS AND INVESTIGATIONS 29
6.5 CLAIMS PROCEDURE 29
6.6 ADVICE 30
6.7 DELEGATION 30
6.8 LIABILITY; INDEMNIFICATION 30
6.9 INSURANCE 31
6.10 BONDING 31
6.11 COMPENSATION 31
ii
<PAGE>
ARTICLE 7
TRUST AND TRUSTEE
-----------------
7.1 TRUST FUND 31
7.2 TRUSTEE CONTROL 31
7.3 INVESTMENT OPTIONS 32
7.4 TRUSTEE APPOINTMENT AND RESIGNATION; REMOVAL AND
SUCCESSION OF TRUSTEES 32
7.5 PRUDENT PERSON RULE 32
7.6 LIABILITY; EXPENSES; COMPENSATION 32
7.7 MANAGEMENT OF ASSETS 33
7.8 RELIANCE BY TRUSTEE 35
7.9 CHANGES IN ADMINISTRATOR 36
7.10 LEGAL COUNSEL 36
7.11 ACCOUNTING OF FUNDS AND TRANSACTIONS 36
7.12 RELIANCE ON TRUSTEE 36
7.13 LEGAL ACTION 36
ARTICLE 8
AMENDMENT
---------
8.1 AMENDMENT 37
8.2 PROCEDURE 38
ARTICLE 9
TERMINATION
-----------
9.1 RIGHT TO TERMINATE 38
9.2 EFFECT OF TERMINATION 38
9.3 PROCEDURE 38
9.4 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS OF THE
EMPLOYER 38
9.5 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS OF THE
PLAN 39
ARTICLE 10
PROVISIONS TO PREVENT DISCRIMINATION
------------------------------------
10.1 NO SECTION 401(a) DISCRIMINATION 39
10.2 UNIFORM TREATMENT 39
ARTICLE 11
IN-SERVICE WITHDRAWALS FROM PLAN ACCOUNTS
-----------------------------------------
11.1 HARDSHIP WITHDRAWALS 39
11.2 WITHDRAWALS FROM ROLLOVER CONTRIBUTION
ACCOUNTS 40
11.3 IN-SERVICE WITHDRAWALS BY INSIDERS 40
iii
<PAGE>
ARTICLE 12
LOANS TO PARTICIPANTS
---------------------
12.1 LOAN ADMINISTRATION 40
12.2 FREQUENCY NUMBER 41
12.3 AMOUNT, AVAILABILITY 41
12.4 NON-DISCRIMINATION 41
12.5 LOAN APPROVAL 41
12.6 INTEREST RATE 41
12.7 COLLATERAL 42
12.8 REPAYMENT 42
12.9 PARTICIPANT CONSENT TO LOAN SET-OFFS 43
12.10 DISTRIBUTIONS PROHIBITED 43
12.11 NO ALIENATION 43
12.12 DISCLOSURE 43
ARTICLE 13
TOP HEAVY PROVISIONS
--------------------
13.1 TOP HEAVY REQUIREMENTS 43
13.2 TOP HEAVY PLAN DEFINITIONS 45
ARTICLE 14
MISCELLANEOUS
-------------
14.1 NO RIGHT TO EMPLOYMENT 46
14.2 HEADINGS 46
14.3 COUNTERPARTS 47
14.4 GOVERNING LAW 47
14.5 RULES AND REGULATIONS 47
14.6 NO ASSIGNMENT OF BENEFITS 47
14.7 EXCLUSIVE BENEFIT 47
14.8 WITHDRAWAL OR TERMINATION BY AN EMPLOYER 48
iv
<PAGE>
TANEYTOWN BANK & TRUST COMPANY RETIREMENT SAVINGS PLAN
Amendment and Restatement
Effective as of January 1, 1993
This amended and restated Plan, the Taneytown Bank & Trust
Company Retirement Savings Plan (the "Plan"), is adopted,
effective as of January 1, 1993, by Monocacy Bancshares, Inc.
(the "Plan Sponsor") and Taneytown Bank & Trust Company (together
with the Plan Sponsor and other subsidiaries of the Plan Sponsor,
the "Employer"). This amended and restated Plan is designed to
afford eligible employees an opportunity to increase their
security at retirement through their own savings and through
Employer contributions during their periods of active employment
while this Plan remains in effect.
Accordingly, the Employer wishes to adopt this amended and
restated Plan, effective as of January 1, 1993, subject, however,
to such amendments as may be required by the Internal Revenue
Service in order that the Plan may qualify as a tax-qualified
"profit-sharing" plan and conditioned on such qualification.
ARTICLE 1
DEFINITIONS
-----------
The following terms, when used in this Plan, have the
meanings set forth below, unless different meanings are clearly
required by the context:
1.1 ACCRUED BENEFIT means the sum of the balances in the
various accounts maintained with respect to a Participant.
1.2 ADMINISTRATOR means the Plan Administrator provided
for in Article 6 of this Plan.
1.3 AFFILIATED COMPANY(IES) means any corporation, trade
or business during any period in which it is, along with the Plan
Sponsor, a member of a controlled group of corporations, a group
of trades or businesses under common control or an affiliated
service group, as described in Code Sections 414(b), 414(c),
414(m) and 414(o).
1.4 CODE means the Internal Revenue Code of 1986 and the
regulations promulgated thereunder, as amended from time to time.
1.5 COMPENSATION means the amount of earnings reflected
as federal taxable wages on the Participant's W-2 Income
Statement, paid by the Employer to a Participant during each Plan
Year (or portion thereof) during which such person is a
Participant, plus amounts which are paid out of an Employee's
remuneration from the Employer and which are "elective
contributions" which are not includible in gross income under
Code Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b), deferrals
under an eligible deferred compensation plan within the meaning
of Code Section 457(b) or employer "pick-up" contributions (under
governmental plans) within the meaning of Code Section 414(h)(2).
Notwithstanding any other provision of this Plan, the
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Compensation of any Participant taken into account under the Plan
for any year may not exceed the dollar limit under Code Section
401(a)(17). This dollar limitation shall be adjusted
automatically at the same time and in the same manner as any
cost-of-living adjustment made by the Secretary of the Treasury
under Code Section 415(d). The Code Section 401(a)(17) dollar
limit is one hundred fifty thousand dollars ($150,000.00) for
1994. In determining the Compensation of a Participant for
purposes of this dollar limitation, the rules in Code Section
414(q)(6) (applicable to five percent (5%) owners and the ten
(10) most highly paid Highly Compensated Employees) shall apply,
except in applying such rules, the term "family" shall include
only the spouse of the Participant and any lineal descendants of
the Participant who have not attained age nineteen (19) before
the close of the Plan Year.
1.6 EFFECTIVE DATE means January 1, 1993, the effective
date of this amendment and restatement of the Plan. The initial
effective date of the Plan was January 1, 1988.
1.7 EMPLOYEE means any person employed by the Employer,
excluding such a person who is a leased employee as defined by
Code Section 414(n) and excluding such a person who is included
in a unit of employees covered by a collective bargaining
agreement where retirement benefits were the subject of good
faith bargaining between the Employee representatives and the
Employer.
1.8 EMPLOYER means, collectively, the Plan Sponsor and
its direct and indirect subsidiary entities and any successor or
successors thereto.
1.9 EMPLOYER MATCHING CONTRIBUTION ACCOUNT means that
portion of a Participant's Plan Account which is attributable to
contributions made under Section 3.2.
1.10 EMPLOYER BASIC CONTRIBUTION ACCOUNT means that
portion of a Participant's Plan Account which is attributable to
contributions made under Section 3.3.
1.11 ENTRY DATE means the January 1 or July 1 coinciding
with or next following the date an Employee satisfies the
eligibility requirements in Article 2.
1.12 ERISA means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
1.13 HIGHLY COMPENSATED EMPLOYEE. The term Highly
Compensated Employee includes active Highly Compensated Employees
and former Highly Compensated Employees, as described in Code
Section 414(q), which currently provides as follows:
An active Highly Compensated Employee includes any Employee
who performs service for the Employer during the determination
year and who, during the "look-back year" (i) received
compensation (as defined below) from the Employer in excess of
seventy-five thousand dollars ($75,000) (as adjusted pursuant to
Section 415(d) of the Code); (ii) received compensation (as
defined below) from the Employer in excess of fifty thousand
dollars ($50,000) (as adjusted pursuant to Section 415(d) of the
Code) and was a member of the top-paid group (top twenty percent
(20%) of non-excludible employees ranked by compensation (as
defined below)) for such year; or (iii) was an officer of the
Employer and received compensation (as defined
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below) during such year that is greater than fifty percent (50%)
of the dollar limitation in effect under Section 415(b)(1)(A) of
the Code. The term highly Compensated Employee also includes: (i)
Employees who are both described in the preceding sentence if the
term "determination year" is substituted for the term "look-back
year" and the Employee is one (1) of the one hundred (100)
Employees who received the most compensation (as defined below)
from the Employer during the determination year; and (ii)
Employees who are five percent (5%) owners at any time during the
look-back year or determination year.
For purposes of (iii) above, no more than fifty (50)
employees (or, if less, the greater of three (3) employees or ten
percent (10%) of employees) shall be treated as officers. If no
officer has satisfied the compensation requirement of (iii) above
during either a determination year or look-back year, the highest
paid officer for such year shall be treated as a Highly
Compensated Employee.
For this purpose, the determination year shall be the Plan
Year. Except as otherwise elected, as provided below, the
look-back year shall be the twelve (12) month period immediately
preceding the determination year.
A former Highly Compensated Employee includes any Employee
who separated from service (or was deemed to have separated)
prior to the determination year, performs no service for the
Employer during the determination year, and was an active Highly
Compensated Employee for either the separation year or any
determination year ending on or after the Employee's fifty-fifth
(55th) birthday.
If an Employee is, during a determination year or look-back
year, a family member of either a five percent (5%) owner who is
an active or former Employee or a Highly Compensated Employee who
is one (1) of the ten (10) most highly compensated Employees
ranked on the basis of compensation (as defined below) paid by
the Employer during such year, then the family member and the
five percent (5%) owner or top ten (10) highly compensated
employee shall be aggregated. In such case, the family member
and five percent (5%) owner or top ten (10) highly compensated
employee shall be treated as a single Employee receiving
compensation (as defined below) and Plan contributions or
benefits equal to the sum of such compensation (as defined below)
and contributions or benefits of the family member and five
percent (5%) owner or top ten (10) highly compensated employee.
For purposes of this Section, family member includes the spouse,
lineal ascendants and descendants of the Employee or former
Employee and the spouses of such lineal ascendants and
descendants.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group, the top one hundred (100)
Employees, the number of Employees treated as officers and the
compensation that is considered, will be made in accordance with
Section 414(q) of the Code and the regulations thereunder.
In determining whether an individual is a Highly Compensated
Employee, the term "compensation" means compensation as defined
in Section 3.5, or any other definition selected by the Plan
Administrator which is permitted under Code Section 415(c)(3),
which is received by the individual during the determination year
or during the look-back year, including,
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however, elective or Salary Reduction Contributions to a
cafeteria plan under Section 125 of the Code, a cash or deferred
arrangement under Section 401(k) of the Code, a simplified
employee pension under Section 402(h) of the Code, or a
tax-sheltered annuity under Section 403(b) of the Code.
Notwithstanding the preceding, in determining whether an
individual is a Highly Compensated Employee, the Employer may
make the following elections:
(a) The Employer may elect to apply the alternative
definition set forth below to determine whether an Employee who
separated from service before January 1, 1987 is a former Highly
Compensated Employee. The election, once made, cannot be changed
without the consent of the Commissioner of the Internal Revenue
Service. Under the alternative definition, a former Highly
Compensated Employee includes any former Employee who separated
from service with the Employer prior to January 1, 1987, and was
described in any one or more of the following groups during
either the Employee's separation year (as defined in Treasury
Regulations under Section 414(q) of the Code) (or the year
preceding such separation year) or any year ending on or after
such Employee's fifty-fifth (55th) birthday (or the last year
ending before such Employee's fifty-fifth (55th) birthday): (i)
the Employee was a five percent (5%) owner of the Employer at any
time during the year; (ii) the Employee received compensation
from the Employer in excess of fifty thousand dollars ($50,000)
during the year. The determinations provided for in this
alternative definition may be made on the basis of the calendar
year, the Plan Year, or any other twelve (12) month period
selected by the Employer and applied on a reasonable and
consistent basis.
(b) In a determination of the top paid twenty percent
(20%) group of Employees for purposes of determining whether an
individual is a Highly Compensated Employee, the Employer may
elect, on a consistent and uniform basis, to modify the
permissible exclusions for months of service, hours per week,
months per year, and age by substituting a shorter period of
service or lower age than that specified in Section 414(q) of the
Code and regulations thereunder. In addition, the Employer may
elect not to exclude those Employees who may be excluded because
(i) they are covered by a bona fide collective bargaining
agreement, (ii) ninety percent (90%) or more of all Employees are
covered by bona fide collective bargaining agreements, and (iii)
the plan being tested does not cover Employees covered by the
collective bargaining agreements. If any of these elections are
made by the Employer, the Employer must apply the test uniformly
for purposes of determining its top paid twenty percent (20%)
group with respect to all its qualified plans and employee
benefit plans and for purposes of the line of business rules set
forth in Section 414(r) of the Code.
(c) The Employer may elect to use the calendar year to
determine whether an Employee is a Highly Compensated Employee in
the look-back year (as defined in Treasury Regulations under
Section 414(q) of the Code) calculation. The calendar year used
will be the calendar year ending with or within the determination
year (as defined in the regulations under Section 414(q) of the
Code). The determination year shall be the months (if any) in
the current Plan Year which follow the end of the calendar
look-back year. If the Employer elects to make the calendar year
calculation election with respect to any plan, entity or
arrangement, such election must apply with respect to all plans,
entities and arrangements of the Employer.
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1.14 INSIDER means any person who (i) within the meaning
of Section 16 of the Securities Exchange Act of 1934 is, directly
or indirectly, the beneficial owner of more than 10% of any class
of equity securities of the Plan Sponsor, (ii) is a director of
the Plan Sponsor, or (iii) is an officer of the Plan Sponsor, or
of any subsidiary of the Plan Sponsor, who performs significant
policy-making functions for the Plan Sponsor.
1.15 NON-HIGHLY COMPENSATED EMPLOYEE means an Employee who
is not a Highly Compensated Employee.
1.16 NORMAL RETIREMENT AGE means the Participant's
sixty-fifth (65th) birthday.
1.17 NORMAL RETIREMENT DATE means the first day of the
month coinciding with or next following a Participant's Normal
Retirement Age.
1.18 PARTICIPANT means any Employee who participates in
the Plan as provided in Article 2 or who makes a contribution to
a Rollover Contribution Account. A Participant shall continue to
be a Participant as long as he or she has a Plan Account.
1.19 PLAN means the Taneytown Bank & Trust Company
Retirement Savings Plan as set forth in this document and as
amended from time to time.
1.20 PLAN ACCOUNT means the amount held under this Plan
for the account of a Participant, and shall equal the sum as to
each Participant of the Participant's Salary Reduction
Contribution Account. Employer Basic Contribution Account,
Employer Matching Contribution Account, Qualified Nonelective
Contribution Account, Qualified Matching Contribution Account,
Prior Plan Account and Rollover Contribution Account.
1.21 PLAN SPONSOR means Monocacy Bancshares, Inc. and its
successors.
1.22 PLAN YEAR means the twelve (12) month period
beginning each January 1 and ending each December 31 during which
this Plan is in effect.
1.23 PRIOR PLAN ACCOUNT means the amount held under this
Plan attributable to the Participant's interest in the Taneytown
Bank and Trust Company Profit Sharing Plan.
1.24 QUALIFIED MATCHING CONTRIBUTION ACCOUNT means that
portion of a Participant's Plan Account which is attributable to
"qualified matching contributions" (as defined in Code Sections
401(k) and (m)).
1.25 QUALIFIED NONELECTIVE CONTRIBUTION ACCOUNT means that
portion of a Participant's Plan Account which is attributable to
"qualified nonelective contributions" (as defined in Code
Sections 401(k) and (m)).
1.26 ROLLOVER CONTRIBUTION ACCOUNT means that portion of a
Participant's Plan Account which is attributable to contributions
made under Section 3.7.
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1.27 SALARY REDUCTION CONTRIBUTION ACCOUNT means that
portion of a Participant's Plan Account which is attributable to
contributions made under Section 3.1(a).
1.28 TRUST means the trust agreement which forms a part of
this Plan.
1.29 TRUST FUND means the assets of the Trust.
1.30 TRUSTEE means the trustee of the Trust serving as
such from time to time.
1.31 VALUATION DATE means the last day of a Plan Year, and
any other date or dates chosen by the Administrator as of which
the Trust is valued pursuant to Article 7.
1.32 YEAR OF SERVICE and other service measurements under
the Plan shall be determined using the special definitions of
this Section. Unless otherwise specified, service shall be
credited for the employment with any Affiliated Company.
This Section shall apply beginning on the Effective Date of
this Restatement. Years of Service prior to the Effective Date
shall be determined according to the terms of the Plan in effect
on the day prior to the Effective Date of this Restatement.
(a) For eligibility purposes:
(i) A PERIOD OF SERVICE means a period of service
commencing on an Employee's Employment Commencement Date or
Reemployment Commencement Date, whichever is applicable, and
ending on the Employee's Severance Date.
(ii) A PERIOD OF SEVERANCE means the period of
time commencing on a Severance Date and ending on the date the
Employee again performs an Hour of Service with the Employer.
(iii) CREDITED SEVERANCE PERIOD means any period
described in (A) or (B) below:
(A) If an Employee severs from service by
reason of quitting, discharge or retirement and then performs an
Hour of Service for the Employer within twelve (12) months of the
Severance Date, the Credited Severance Period shall include the
Period of Severance.
(B) If an Employee severs from service by
reason of quitting, discharge or retirement during an absence
from service of twelve (12) months or less (where such absence
was for any reason other than a quit, discharge, retirement or
death), and then performs an Hour of Service for the Employer
within twelve (12) months of the date on which the Employee was
first absent, the Credited Severance Period shall include the
Period of Severance.
(iv) EMPLOYMENT COMMENCEMENT DATE means the first
day for which the Employee is entitled to be credited with an
Hour of Service for an Employer.
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REEMPLOYMENT COMMENCEMENT DATE means the first date on which the
Employee performs an Hour of Service following a Period of
Severance which is not required to be taken into account under
subsection (iii) above.
(v) SEVERANCE DATE means the earlier of:
(A) The date the Employee quits, retires,
dies, or is discharged from the Employer, or
(B) Except as provided below, the first
anniversary of the first date of a continuous period in which an
Employee remains absent from service (with or without pay) with
the Employer for any reason other than quitting, retirement,
discharge or death, such as vacation holiday, sickness,
disability, leave of absence or layoff; provided, however, that
an Employee who is absent from employment to serve in the Armed
Forces of the United States shall not incur a Severance Date
under this subsection unless he or she fails to return to active
employment with a company that is an Affiliated Company within
the period provided by law for the protection of his or her
re-employment rights.
Notwithstanding the above, an Employee who
is absent from employment by reason of an authorized leave of
absence on account of a vacation, holiday, illness, incapacity
(including disability), layoff, jury duty or any other leave of
absence authorized by the Employer which extends for not more
than two years and who returns from such authorized leave of
absence prior to its expiration date shall not incur a Severance
Date during such authorized leave of absence. If an Employee on
leave of absence fails to answer an inquiry by the Employer as to
the status of the leave of absence, or if the Employer is not
notified of the death or disability of such Employee, and the
Employer has actual knowledge thereof, the Employer may determine
that the leave of absence had or has expired.
(vi) The Severance Date of an Employee who is
absent from employment because of the Employee's pregnancy, the
birth of the Employee's child, the placement of a child with the
Employee in connection with the adoption of such child by the
Employee, or the need to care for such child for a period
beginning immediately following such birth or placement, shall be
the second anniversary of the first date of such absence. The
period between the first and second anniversary of the first date
of absence from work shall be neither a Period of Service nor a
Period of Severance.
The above rule shall apply only if the
Employee furnishes to the Plan Administrator such timely
information as may be required to establish that the absence was
for the above reasons and to determine the period of such
absence.
(vii) An HOUR OF SERVICE means each hour for
which:
(A) An Employee is paid or entitled to
payment for the performance of duties for the Employer;
(B) An Employee is paid, or entitled to
Payment by the Employer on account of a period of time during
which no duties are performed (irrespective of
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whether the employment relationship has terminated) to the extent
such hour must be credited under Department of Labor Regulation
Section 2530.200b-2(a)(2); or
(C) Back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer.
(viii) CONSECUTIVE MONTHS OF SERVICE means the
months contained in all consecutive Periods of Service and
Credited Severance Periods. Periods of Service and Credited
Severance Periods shall be aggregated on the basis that thirty
(30) consecutive days equal a whole Month of Service.
(b) For all other purposes:
(i) A YEAR OF SERVICE means a Computation
Period during which an Employee is credited with at least one
thousand (1,000) Hours of Service.
(ii) A one (1) year BREAK OF SERVICE means a
Computation Period during which an Employee fails to complete
more than five hundred (500) Hours of Service.
(iii) The COMPUTATION PERIOD means the twelve
(12) consecutive month period beginning on the first day of the
Plan Year.
(iv) An HOUR OF SERVICE means:
(A) Each hour for which an Employee is paid
or entitled to payment of the performance of duties for the
Employer during the applicable Computation Period.
(B) Each hour for which an Employee is
paid, or entitled to payment, by the Employer on account of a
period of time during which no duties are performed (irrespective
of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty or leave of absence, except
that:
(1) Not more than five hundred one
(501) Hours of Service shall be credited on account of any single
continuous period during which the Employee performs no duties
(whether or not such period occurs in a single Computation
Period); and
(2) Hours of Service shall not be
counted where such payment is made or is due under a plan
maintained solely for the purpose of complying with applicable
worker's compensation, unemployment or disability insurance
laws, or solely to reimburse an Employee for medical or
medically-related expenses.
(C) Each hour for which back pay,
irrespective of mitigation of damages, is either awarded or
agreed to by the Employer. However, the same Hours of Service
shall not be credited under both (b)(i) and (b)(ii) above. No
more than five hundred one (501) Hours of Service shall be
credited for payment of back pay on account of any single
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continuous period, to the extent that such back pay is agreed to
or awarded for a period of time during which an Employee did not
or would not have performed duties.
(D) Each hour for which an Employee on
leave from employment to serve in the Armed Forces of the United
States would have been paid, directly or indirectly, or entitled
to payment under (b)(i) above assuming that, but for such
military service, he or she would have been regularly engaged in
the performance of his duties. Such hours shall be credited to
the Computation Period in which he or she would have been
regularly engaged in the performance of his or her duties but for
such military service; provided, however, that no Hours of
Service shall be credited under this paragraph unless the
Employee returns to active employment with an Affiliated Company
within the period provided by law for the protection of his or
her re-employment rights.
Hours of Service for reasons other than the
performance of duties shall be determined and credited in
accordance with Department of Labor Regulation sections
2530.200b-2(b) and (c), which is incorporated herein by
reference.
(v) Solely for the purpose of determining
whether a Break in Service has occurred, an Employee who is
absent from employment because of the Employee's pregnancy, the
birth of the Employee's child, the placement of a child with the
Employee in connection with the adoption of such child by the
Employee, or the need to care for such child for a period
beginning immediately following such birth or placement, shall be
credited with:
(A) The Hours of Service which otherwise
normally would have been credited to such individual but for such
absence, or
(B) In any case in which the Plan
Administrator is unable to determine the hours described above,
eight (8) Hours of Service per day of such absence.
The above rule shall apply only if the
Employee furnishes to the Plan Administrator such timely
information as it may require to establish that the absence was
for the above reasons and to determine the number of days of such
absence. Such Hours of Service shall be credited in the
Computation Period in which the absence from work begins, if such
credit is necessary to prevent a Break in Service in that period.
In any other case, such Hours of Service shall be credited in the
immediately following Computation Period. In no event shall more
than five hundred one (501) Hours of Service be credited because
of such pregnancy or placement.
(vi) Hours of Service will be credited based
upon relevant payroll records maintained by the Employer.
However, any Employee for whom records are not maintained shall
be deemed to have worked and will receive credit for ten (10)
Hours of Service for each day in which he or she would be
credited with at least one (1) Hour of Service under subsections
(b)(i), (ii), (iii) and (iv) above.
(vii) If an Employee incurs a Break in Service,
the Employee's Years of Service before the Break in Service will
be taken into account if the individual subsequently is
reemployed by the Employer. In the case of any Participant who
incurs five (5) consecutive
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Breaks in Service, Years of Service completed after such five (5)
year period shall not be taken into account for purposes of
determining the Participant's vested interest in benefits derived
from Employer contributions which accrued before such five (5)
year period. If the Employer is a member of a controlled group
of employers within the meaning of Code Sections 414(b), (c), (m)
or (o), Years of Service for vesting and eligibility purposes
shall be determined as if all members of the controlled group
were a single employer, excluding, however, employment during
periods when the Employer was not a member of the controlled
group.
ARTICLE 2
ELIGIBILITY FOR PARTICIPATION
-----------------------------
2.1 INITIAL ELIGIBILITY. Each person who is an Employee
on the Effective Date and who, on the Effective Date, is credited
with at least six Consecutive Months of Service for eligibility
purposes will become, or continue as, a Participant in the Plan
on the Effective Date.
2.2 SUBSEQUENT ELIGIBILITY. Each Employee who first is
credited with at least six consecutive Months of Service for
eligibility purposes after the Effective Date will become a
Participant on the Entry Date coincident with or next following
the date on which the Employee first is credited with at least
six Consecutive Months of Service for eligibility purposes.
2.3 REHIRED PARTICIPANTS.
(a) An Employee who met the eligibility requirements
of Section 2.1 but who separated from service before the next
Entry Date, shall become a Participant immediately upon
reemployment if he or she returns to employment after such Entry
Date but prior to incurring, a one (1) year Period of Severance.
(b) A Participant who has incurred a one (1) year
Period of Severance shall be eligible to participate in the Plan
immediately upon performance of an Hour of Service upon
reemployment as an Employee, provided that, in the case of a
Participant who does not have a nonforfeitable right to benefits
derived from contributions described in Article 3, the number of
consecutive one (1) year Periods of Severance did not equal or
exceed the greater of five (5) or the aggregate number of Years
of Service before such period.
(c) A Participant who does not have a nonforfeitable
right to benefits derived from contributions described in Article
3, and whose number of consecutive one (1) year Periods of
Severance equaled or exceeded the greater of five (5) or the
aggregate number of Years of Service before such period shall be
treated as a new Employee upon reemployment, and any prior Years
of Service shall not be taken into account for eligibility
purposes.
ARTICLE 3
CONTRIBUTIONS
-------------
3.1 SALARY REDUCTION CONTRIBUTIONS BY PARTICIPANTS.
(a) Each Participant may make a salary reduction
election to reduce his or her Compensation per payroll period in
an amount equal to any whole percentage of his or her
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Compensation which is not less than one percent (1%) nor more
than fifteen percent (15%), subject, however, to the Employer's
right to amend or revoke the Participant's election as provided
in subsection (d) below. In addition, a Participant's Salary
Reduction Contributions to the Plan, and to all other plans,
contracts or arrangements subject to Code Section 402(g), during
any calendar year may not exceed the dollar limitation applicable
to the Plan under Section 402(g) of the Code (nine thousand two
hundred forty dollars ($9,240) for 1995). This dollar limit
shall be adjusted automatically by the cost-of-living adjustment
factor prescribed by the Secretary of the Treasury at the same
time and in the same manner as the cost-of-living adjustment
applied under Code Section 415(d).
(b) Contributions will be made by the Employer to the
Salary Reduction Contribution Account of each Participant in an
amount equal to the amount of the Participant's reduction in
Compensation. All Salary Reduction Contribution Accounts shall
be one hundred percent (100%) vested at all times.
(c) Salary reduction elections shall be made in
writing on such forms, and shall be subject to such uniform
administrative rules, as the Administrator shall establish. A
Participant may amend or revoke his or her salary reduction
election at such times and with such frequency as the
Administrator's uniform rules shall permit.
(d) The Employer shall have the right to amend or
revoke a Participant's salary reduction election (i) if such
election causes the Participant's contributions to exceed the
limits on annual additions imposed by this Section or Section 3.5
or (ii) to insure that this Plan meets the deferral percentage
tests of Code Section 401(k)(3).
(e) The Plan at all times shall be administered so as
to comply with the provisions of Code Section 401(k)(3) and of
Treasury Regulation Section 1.401(k)-1(b). For purposes of
testing compliance with Code Section 401(k)(3), the definition of
"compensation" will be the definition designated by the
Administrator from year to year, and may be limited to
Compensation during that portion of the Plan Year that the
Employee was a Participant, as permitted under applicable law.
(f) The Employer also may uniformly amend or revoke
all Participants' salary reduction elections if the full amount
of Salary Reduction Contributions to the Plan cannot be made for
any Plan Year because the full amount of Salary Reduction
Contributions for a Plan Year will exceed the amount deductible
by the Employer under Code Section 404 (including carryovers) for
the applicable fiscal year of the Employer.
(g) Any amendment or revocation of a Participant's
salary reduction election by the Employer must be made in writing
to the Participant stating the amount of the Salary Reduction
Contribution which the Employer will accept. If the Employer
amends or revokes a Participant's salary reduction election for a
Plan Year, any excess of Salary Reduction Contributions already
made with respect to the Participant for such Plan Year over the
amount of such contributions allowed with respect to the
Participant for such Plan Year shall be returned to the
Participant as provided below.
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(h) If, at the end of any Plan Year, it appears to
the Employer that the above deferral percentage test of Code
Section 401(k)(3) will not be met, the Employer, in lieu of
amending or revoking salary reduction elections as permitted
above, may elect to make an additional contribution for the
benefit of Participants who are Non-Highly Compensated Employees.
The additional contribution shall be allocated in the same manner
as Employer Matching Contributions or in any other manner
determined by the Employer. If the additional contribution is not
allocated as an Employer Matching Contribution, it shall be added
to the Qualified Nonelective Contribution Accounts of
Participants on whose behalf it is made and shall be immediately
one hundred percent (100%) vested and, except as otherwise
provided herein, shall be subject to the distribution provisions
and limitations which are applicable to Salary Reduction
Contributions to the Plan. If the additional contribution is
allocated as an Employer Matching Contribution, it shall be added
to the Qualified Matching Contribution Accounts of Participants
on whose behalf it is made and shall be immediately one hundred
percent (100%) vested and, except as otherwise provided herein,
shall be subject to the distribution provisions and limitations
which are applicable to Salary Reduction Contributions to the
Plan. The amount of the additional contribution shall be such
that the deferral percentage test of Section 401(k)(3) of the
Code will be met. The additional contribution shall be deposited
to Participants' Accounts not later than the earlier of (i) the
date which is prescribed by law for filing the Employer's income
tax return (including any extension thereof) for the taxable year
to which the contribution relates, or (ii) the last day of the
twelve (12) month period immediately following the Plan Year to
which the contribution relates. A Participant may not elect to
receive any portion of the additional contribution as current
Compensation.
3.2 EMPLOYER MATCHING CONTRIBUTIONS.
(a) A matching contribution shall be made by the
Employer to the Employer Matching Contribution Account of each
Participant who makes a contribution to his or her Salary
Reduction Contribution Account for the Plan Year, who is credited
with a Year of Service during the Plan Year and who is employed
by the Employer on the last day of the Plan Year. The matching
contribution for each Participant shall be made at such time as
determined by the Employer, but no later than the date
provided by applicable law for making Employer Matching
Contributions for the Plan Year. The matching contribution for
each Participant shall equal fifty percent (50%) of the
Participant's Salary Reduction Contributions not in excess of six
percent (6%) of Compensation.
Notwithstanding the preceding, effective
January 1, 1995, a matching contribution shall be made by the
Employer for each quarter in the Plan Year to the Employer
Matching Contribution Account of each Participant who makes a
contribution to his or her Salary Reduction Contribution Account
and who is employed by the Employer on the last day of such
quarter. The matching contribution for each Participant shall be
made as soon as practicable following the end of each such
quarter, but no later than the date provided by applicable law
for making Employer Matching Contributions.
(b) The Plan at all times shall be administered so
as to comply with the provisions of Code Section 401(m) and of
Treasury Regulation Sections 1.401(m)-1 and 1.401(m)-2. For
purposes of testing compliance with Code Section 401(m)(2), the
definition of "compensation" will be the definition designated by
the Administrator from year to year, and may be limited to
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Compensation during that portion of the Plan Year that the
Employee was a Participant, as permitted under applicable law.
When required by Treasury Regulation Section 1.401(m)-2(c),
multiple use of the alternative limitation shall be corrected by
reducing the actual contribution percentage of all Highly
Compensated Employees under the Plan.
(c) If, at the end of any Plan Year, it appears to
the Employer that the above contribution percentage test of Code
Section 401(m)(2) will not be met, the Employer, in lieu of
limiting or prohibiting Employee contribution elections as
permitted above or distributing Excess Aggregate Contributions as
permitted in Section 3.11, may elect to make an additional
contribution for participants who are Non-Highly Compensated
Employees. The additional contribution shall be allocated in the
same manner as Employer Matching Contributions or in any other
manner determined by the Employer. If the additional contribution
is not allocated as an Employer Matching Contribution, it shall
be added to the Qualified Nonelective Contribution Accounts of
Participants on whose behalf it is made and shall be immediately
one hundred percent (100%) vested and, except as otherwise
provided herein, shall be subject to the distribution provisions
and limitations which are applicable to Salary Reduction
Contributions to the Plan. If the additional contribution is
allocated as an Employer Matching Contribution, it shall be added
to the Employer Matching Contribution Accounts of Participants on
whose behalf it is made and shall for all purposes herein be
treated as if it were an Employer Matching Contribution. The
amount of the additional contribution shall be such that the
contribution percentage test of Section 401(m) of the Code will
be met. The additional contribution shall be deposited to
Participants' Accounts not later than the earlier of (i) the date
which is prescribed by law for filing the Employer's income tax
return (including any extension thereof) for the taxable year to
which the contribution relates, or (ii) the last day of the
twelve (12) month period immediately following the Plan Year to
which the contribution relates. A Participant may not elect to
receive any portion of the additional contribution as current
Compensation.
3.3 EMPLOYER BASIC CONTRIBUTIONS.
(a) DISCRETIONARY CONTRIBUTIONS. An Employer Basic
Contribution may be made by the Employer for each Participant
eligible to receive an allocation of the contribution, which
contribution shall be allocated to each eligible Participant's
Employer Basic Contribution Account in the proportion that the
Participant's Compensation for the Plan Year bears to the
Compensation of all eligible Participants for the Plan Year. The
amount of the contribution will be established each year at
the discretion of the Board of Directors of the Employer, and the
contribution for each Participant shall be made annually or more
frequently as the Employer may determine. The Employer will
allocate any Employer Basic Contribution for a Plan Year only to
the Account of each Participant who has been credited with at
least one thousand (1,000) Hours of Service during the Plan Year
and who is employed on the last day of the Plan Year.
By making application prior to the last day any
Plan Year, on a form prescribed by the Administrator, a
Participant may elect to receive all or a particular portion of
the Participant's Employer Basic Contribution for such Plan Year
in cash from the Employer. Whether a Participant may receive
all, a portion or none of his or her Employer Basic Contribution
in cash and, if applicable, the particular portion permitted to
be received in cash, shall be communicated to the Participants by
the Employer at the time the amount of the Employer Basic
Contribution is established by the Employer, such permissible
portion, if
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applicable, being expressed a uniform percentage applicable to
all Participants for the Plan Year. Such direct cash payments,
if any, shall be made as soon as practicable after the end of the
Plan Year, but in no event later than the thirtieth (30th) day
following the end of the Plan Year. The remaining portion of the
Participant's Employer Basic Contribution, if any, shall be
credited to the Participant's Employer Basic Contribution Account
as of the last day of the Plan Year.
That portion of the Participant's Employer
Basic Contribution amount that is distributed by the Employer to
a Participant in cash shall not be treated as a contribution
under or a distribution from this Plan.
Except as provided in this Section, all
provisions of the Plan other than the first sentence of Section
3.1(a) and the provisions of Section 3.2 shall apply to Employer
Basic Contributions made to the Plan as if such contributions
were Salary Reduction Contributions.
(b) QUALIFICATION CONTRIBUTIONS. If, for any Plan
Year, the Plan fails to comply with the requirements of Code
Section 401(a)(4), Code Section 410(b) or Code Section
401(a)(26), the Employer may make an additional contribution to
satisfy the requirements of these Code sections. Such additional
contribution may be made to the accounts of Participants or to
accounts established for individuals who otherwise would not be
Participants, as determined by the Employer, and shall be
allocated on the basis of Compensation.
3.4 DEDUCTIBILITY OF CONTRIBUTIONS. Employer
contributions for a Plan Year shall not exceed an amount which,
when combined with all other contributions under the Plan for the
Plan Year, equals the maximum contribution which would be
deductible by the Employer under Code Section 404 (including
carryovers) for the applicable fiscal year of the Employer.
3.5 LIMITS ON ANNUAL ADDITIONS.
(a) BASIC LIMITATIONS. Notwithstanding any other
provision of this Plan, a Participant's total annual additions
under this Plan for any Plan Year shall not exceed the lesser of
(a) thirty thousand dollars ($30,000) or, if greater, one-fourth
(1/4) of the defined benefit dollar limitation set forth in Code
Section 415(b)(1) as in effect for the Plan Year, as adjusted in
Treasury Regulation Section 1.415-2(b)(4)(iii), or (b)
twenty-five percent (25%) of the Participant's Compensation for
such Plan Year. "Annual additions" for this purpose means the
sum of (i) contributions under Sections 3.1, 3.2 and 3.3 of this
Plan allocable to the Participant's Plan Account, and (ii) any
forfeitures allocable to the Participant's Plan Account.
For purposes of this Section, "Compensation"
refers to the Participant's earned income, wages, salaries, and
fees for professional services actually rendered in the course of
employment with the Employer (including, but not limited to,
commissions paid to salespersons, compensation for services on
the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses) and excluding the following:
(i) Employer contributions to a plan of deferred
compensation which are not includible in the Participant's gross
income for the taxable year in which contributed, or Employer
contributions under a simplified employee pension plan to the
extent such
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<PAGE>
contributions are deductible by the Participant, or any
distributions from a plan of deferred compensation;
(ii) Amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or
property) held by the Participant either becomes freely
transferable or is no longer subject to a substantial risk of
forfeiture;
(iii) Amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified stock
option; and
(iv) Other amounts which received special tax
benefits, or contributions made by a Participant (whether or not
under a salary reduction agreement) towards the purchase, of an
annuity described in Code Section 403(b) (whether or not the
amounts are actually excludible from the gross income of the
Participant).
For purposes of applying the limitations of this
Section, Compensation for a limitation year is the Compensation
actually paid or includible in gross income during such year.
Notwithstanding the preceding sentence,
Compensation for a Participant who is permanently and totally
disabled (as defined in Code Section 22(e)(3)) is the
compensation such Participant would have received for the
limitation year if the Participant had been paid at the rate of
compensation paid immediately before becoming permanently and
totally disabled. Such imputed Compensation for the disabled
Participant may be taken into account only if the Participant is
not a Highly Compensated Employee and contributions made on
behalf of such Participant are nonforfeitable when made.
(b) COMBINED LIMITATIONS. After any reduction in any
benefit under a defined benefit plan pursuant to the following
paragraph, if a Participant participates in any other defined
contribution plan sponsored by the Employer which is qualified
under Code Section 401(a), his or her annual additions under such
plan shall be aggregated with his or her annual additions under
this Plan, and his or her annual additions under this Plan shall
be reduced, if necessary, so that the aggregate of such annual
additions does not exceed the limitations set forth in
(a) above.
If a Participant participates or has participated
in any defined benefit pension plan sponsored by the Employer
which is qualified under Code Section 401(a), his or her benefit
under the defined benefit pension plan shall be reduced, if
necessary, so that the sum of (1) and (2) below does not exceed
1.0 for any Plan Year:
(i) (A) the projected annual normal retirement
benefit (assuming continued employment until such Participant's
normal retirement date and constancy of all relevant factors) of
the Participant under the defined benefit pension plans,
determined as of the close of the Plan Year, divided by
(B) the lesser of (A) 1.25 times the dollar
limitation in effect under Code Section 415(b)(1)(A) as of the
close of such Plan Year or (B) 1.4 times the Participant's
average Compensation for his or her "high three
years" (where "high three years" refers to the
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<PAGE>
period of three (3) consecutive calendar years yielding the
highest such average and during which the Participant was a
participant in the defined benefit pension plan), plus
(ii) (A) the sum of the annual additions
credited to the Participant under this Plan (and all other
defined contribution plans required to be aggregated with this
Plan) for the current Plan Year and all prior Plan Years,
determined as of the close of the Plan Year, less any amounts
permitted to be subtracted from such sum under Section 235(g)(3)
of the Tax Equity and Fiscal Responsibility Act of 1982, divided
by
(B) the lesser of (A) 1.25 times the dollar
limitation in effect under Code Section 415(c)(1)(A) (determined
without regard to Code Section 415(c)(6)) for the current Plan
Year and for all prior years of the Participant's employment with
the Employer (regardless of whether a defined contribution plan
was in effect for those years), or (B) thirty-five percent (35%)
of the Participant's Compensation for the current Plan Year and
for prior years of the Participant's employment with the Employer
(regardless of whether a defined contribution plan was in effect
for those years).
If the fraction produced under (2) above would
exceed 1.0, even after the reduction in the Participant's
benefits under the defined benefit plan(s), which shall be done
first, then the contributions for the Participant under this Plan
shall be reduced to the extent necessary in accordance with
Section 4.6.
(c) TRANSITION RULE. At the election of the
Administrator, with respect to any year ending after December 31,
1982, the amount taken into account under subsection (b)(2)(ii)
above with respect to each Participant for all years ending
before January 1, 1983 shall be an amount equal to the amount
determined under (b)(2)(ii) above for the year ending in 1982
times the transition fraction. For purposes of this paragraph,
the term "transition fraction" means a fraction, the numerator of
which is the lesser of fifty-one thousand eight hundred
seventy-five dollars ($51,875) or thirty-five percent (35%) of
the Participant's Compensation (as defined above) for the year
ending in 1981 and the denominator of which is the lesser of
forty-one thousand five hundred dollars ($41,500) or twenty-five
percent (25%) of the Participant's Compensation for the year
ending in 1981.
(d) AGGREGATION OF EMPLOYERS. The foregoing maximum
contributions which may be made under this Plan shall be further
limited by reason of the existence of other qualified retirement
plans maintained by any other members of a controlled group of
corporations, of one of a group of trades or businesses under
common control (as described in Code Sections 414(b) or (c), as
modified by Code Section 415(h)), or of an affiliated service
group (as described in Code Sections 414(m) or (o)) to the extent
such limitation is required by Code Section 415. The
Administrator shall advise affected Participants of any
additional limitation required by the preceding sentence.
3.6 DISPOSITION OF EXCESS ANNUAL ADDITIONS. If the
limitations described in Section 3.5 are exceeded with respect to
any Participant in any Plan Year, then the contributions
allocable to the Participant under this Plan for such Plan Year
shall be reduced to the minimum extent required by such
limitations by first reducing contributions to the Participant's
After-Tax Contribution Account and then contributions
to the Participant's Salary Reduction Contribution Account and
then, if necessary, reducing contributions to the
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<PAGE>
Participant's Employer Contribution Accounts. The Administrator,
in its sole discretion, shall determine if any reduction in the
annual additions to a Participant's Accounts is required by
reason of the limitations set forth in this Article or Code
Section 415. No Participant shall be entitled to any annual
additions (or earnings thereon) made or allocated to the
Participant in excess of such limitations. If it is determined
at any time that the Administrator has erred in accepting and
crediting salary reduction contributions by a Participant or in
allocating Employer contributions to any Participant's Plan
Account for any Plan Year in violation of such limitations, then
(i) the amount of any required reduction in the Participant's
contributions (including earnings thereon) shall be returned to
the Participant and any Employer Matching Contributions
attributable to such Participant contributions shall be
forfeited, and (ii) the amount of any required reduction in the
Employer's contributions (including earnings to the extent
permitted by applicable law) allocable or allocated to the
Participant under this Plan shall be returned to the Employer if
such reduction in the Employer's contributions is attributable to
a mistake of fact by the Employer or the Administrator at the
time the contribution was made. If the reduction in the
Employer's contributions is not attributable to such a mistake of
fact, the amount of the reduction (including earnings) shall be
held in suspense and applied against the Employer's contributions
under Section 3.3 which are next due and owing to the Plan.
3.7 CONTRIBUTIONS TO ROLLOVER CONTRIBUTION ACCOUNT. Any
Employee (whether or not currently eligible to participate in the
Plan) may transfer to the Trust any Rollover Contributions as
defined in Section 3.8. An Employee's Rollover Contribution
shall be credited to and held in the Participant's Rollover
Contribution Account. A Participant's Rollover Contribution
Account shall be one hundred percent (100%) vested in the
Participant at all times. A Rollover Contribution shall not be
taken into account in determining the annual additions to an
Employee's Plan Account under Section 3.5.
3.8 DEFINITION OF "ROLLOVER CONTRIBUTION." The term
"Rollover Contribution" means an amount contributed to the Plan
on or before the sixtieth (60th) day after the day the
contributing Employee received it, if the amount received by the
Employee is a distribution which is eligible for rollover to the
Plan under Code Section 402.
The term "Rollover Contribution" also means assets
representing a Participant's nonforfeitable interest in another
retirement plan qualified under Section 401(a) or 403(a) of the
Code, or in a conduit individual retirement account or annuity,
which assets have been transferred directly from the trustee (or
other fiduciary) of such other plan, account or annuity to the
Trustees of this Plan; provided, however, that such direct
transfer shall not be accepted by the Trustee unless (A) the
transfer constitutes an "elective transfer" under Section
1.411(d)-4 Q&A-3(b) of regulations promulgated by the Secretary
of the Treasury, (B) the plan from which the transfer is made
provides no protected benefits under Section 411(d)(6) of the
Code which are not already provided under the Plan or (C) the
transfer constitutes a direct rollover after December 31, 1992
under Section 402 of the Code.
The Administrator may reject any Rollover
Contribution which is not qualified to be a Rollover Contribution
to the Plan under the foregoing or under the Code. The
Administrator may make all investigations necessary to determine
whether any amount submitted as a Rollover Contribution may be
received.
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<PAGE>
3.9 DISTRIBUTION OF EXCESS DEFERRALS.
(a) IN GENERAL. Notwithstanding any other provision
of the Plan, Excess Deferrals, plus income and minus any loss
allocable thereto, shall be distributed no later than April 15 to
any Participant to whose account Excess Deferrals were assigned
for the preceding taxable year and who claims such Excess
Deferrals for such taxable year. A Participant is deemed to have
claimed the Excess Deferrals for a taxable year to the
extent that the Participant's Excess Deferrals are calculated by
taking into account only Elective Deferrals to this Plan.
(b) DEFINITIONS.
(i) "Elective Deferrals" means any Employer
contributions made to the Plan at the election of the
Participant, in lieu of cash compensation, and shall include
contributions made pursuant to a salary reduction agreement or
other deferral mechanism. With respect to any taxable year, a
Participant's Elective Deferrals equal the sum of all Employer
contributions made on behalf of such Participant pursuant to the
Participant's election to defer under the Plan or under any other
plan or arrangement described in Sections 401(k), 408(k) or
403(b) of the Code.
(ii) "Excess Deferrals" means the amount of
Elective Deferrals for the Participant's taxable year that is
includible in the Participant's gross income under Section 402(g)
of the Code to the extent such Participant's Elective Deferrals
exceed the seven thousand dollar ($7,000) (as indexed) limit
under Section 402(g) of the Code. Excess Deferrals shall be
treated as annual additions under the Plan for purposes of the
limitations under Section 415 of the Code.
(c) CLAIMS. The Participant's claim shall be in
writing, shall be submitted to the Administrator no later than
March 1; shall specify the Participant's Excess Deferrals for the
preceding taxable year; and shall be accompanied by the
Participant's written statement that if such amounts are not
distributed, such Excess Deferrals, when added to amounts
deferred under other plans or arrangements described in Sections
401(k), 408(k) or 403(b) of the Code, exceed the dollar
limitation under Section 402(g) of the Code for the year in which
the deferral occurred.
(d) DETERMINATION OF INCOME. The Excess Deferrals
distributed to a Participant with respect to a taxable year shall
be adjusted for income or loss during the taxable year and, if
elected by the Plan Administrator, during the period from the end
of the taxable year to the date of distribution. The income or
loss allocable to Excess Deferrals for the taxable year (and, if
elected, from the end of the Plan Year to the date of
distribution) shall be determined by the Plan Administrator using
any reasonable method permitted under Section 402(g) of the Code.
3.10 DISTRIBUTION OF EXCESS CONTRIBUTIONS.
(a) IN GENERAL. Notwithstanding any other provision
of the Plan, Excess Contributions, plus any income and minus any
loss allocable thereto, shall be distributed to the appropriate
Highly Compensated Employees after the last day of the Plan Year
in which the Excess Contributions arose and, if possible, within
two and one-half (2-1/2) months after the last day of such Plan
year. If Excess Contributions are distributed more than two and
one-half (2-1/2)
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<PAGE>
months after the last day of the Plan Year in which such Excess
Contributions arose, a ten percent (10%) excise tax will be
imposed on the Employer with respect to such amounts. Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of the
twelfth (12th) month after the last day of the Plan Year in which
the Excess Contributions arose. Excess Contributions shall be
treated as annual additions under the Plan for purposes of the
limitations under Section 415 of the Code. Excess Contributions
for a Participant whose Actual Deferral Percentage was determined
under family aggregation rules shall be distributed among Family
Members in proportion to the contributions of each Family Member
that is aggregated.
(b) EXCESS CONTRIBUTIONS. "Excess Contributions"
means, with respect to any Plan Year, the excess of (i) the
aggregate amount of Employer contributions actually taken into
account in computing the Actual Deferral Percentage of Highly
Compensated Employees for such Plan Year, over (ii) the maximum
amount of such contributions permitted by the Average Deferral
Percentage test. The maximum amount of contributions permitted
for each Highly Compensated Employee shall be determined by a
leveling method under which the actual deferral percentage of the
Highly Compensated Employee with the highest actual deferral
percentage is reduced to the extent required to (i) enable the
Plan to satisfy the Average Deferral Percentage Test under
Section 3.1 or (ii) cause such Highly Compensated Employee's
actual deferral percentage to equal the actual deferral
percentage of the Highly Compensated Employee with the
next highest actual deferral percentage. This process is
continued until the Plan satisfies the Average Deferral
Percentage Test under Section 3.1 and the maximum amount of
contributions permitted for each Highly Compensated Employee is
determined.
(c) DETERMINATION OF INCOME. Excess Contributions
shall be adjusted for income or loss during the Plan Year and, if
elected by the Plan Administrator, during the period from the end
of the Plan Year to the date of distribution. The income or loss
allocable to Excess Contributions for the Plan Year (and, if
elected, from the end of the Plan Year to the date of
distribution) shall be determined by the Plan Administrator using
any reasonable method permitted under Section 401(k) of the Code.
3.11 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
(a) IN GENERAL. Notwithstanding any other provision
of the Plan, Excess Aggregate Contributions, plus income and
minus any loss allocable thereto, shall be forfeited, if
forfeitable, or if not forfeitable, distributed to the
appropriate Highly Compensated Employees after the last day of
the Plan Year in which the Excess Aggregate Contributions arose
and, if possible, within two and one-half (2-1/2) months after
the last day of such Plan Year. If Excess Aggregate
Contributions are distributed more than two and one-half (2-1/2)
months after the last day of the Plan Year in which such Excess
Aggregate Contributions arose, a ten percent (10%) excise tax
will be imposed on the Employer with respect to such amounts.
Excess Aggregate Contributions, plus income and minus any loss
allocable thereto, shall be forfeited, if forfeitable, or if not
forfeitable, distributed no later than the last day of the
twelfth (12th) month after the last day of the Plan Year in which
the Excess Aggregate Contributions arose. Excess Aggregate
Contributions shall be treated as annual additions under the Plan
for purposes of the limitations under Section 415 of the Code.
Excess Aggregate Contributions for a Participant whose
Contribution Percentage was determined under family aggregation
rules shall be distributed among Family
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<PAGE>
Members in proportion to the Contribution Percentage Amounts of
each Family Member that is aggregated. To the extent Employee
Contributions under Section 3.1 are returned to the Participant,
any Employer Matching Contributions attributable to the Employee
Contributions shall be forfeited.
(b) EXCESS AGGREGATE CONTRIBUTIONS. "Excess
Aggregate Contributions" means, with respect to any Plan Year,
the excess of (i) the aggregate Contribution Percentage Amounts
taken into account in computing the numerators of the
Contribution Percentages of Highly Compensated Employees for such
Plan Year, over (ii) the maximum Contribution Percentage Amounts
permitted by the Average Contribution Percentage test. The
maximum amount of contributions permitted for each Highly
Compensated Employee shall be determined by a leveling method
under which the contribution percentage of the Highly Compensated
Employee with the highest contribution percentage is reduced to
the extent required to (i) enable the Plan to satisfy the Average
Contribution Percentage Test under Section 3.2 or (ii) cause such
Highly Compensated Employee's contribution percentage to equal
the contribution percentage of the Highly Compensated Employee
with the next highest contribution percentage. This process is
continued until the Plan satisfies the Average Contribution
Percentage Test under Section 3.2 and the maximum amount of
contributions permitted for each Highly Compensated Employee is
determined. A determination of Excess Aggregate Contributions
shall be made after first determining Excess Deferrals and then
determining Excess Contributions.
(c) DETERMINATION OF INCOME. Excess Aggregate
Contributions shall be adjusted for any income or loss during the
Plan year and, if elected by the Plan Administrator, during the
period from the end of the Plan Year to the date of distribution.
The income or loss allocable to Excess Aggregate Contributions
for the Plan Year (and, if elected, from the end of the Plan Year
to the date of distribution) shall be determined by the Plan
Administrator using any reasonable method permitted under Section
401(m) of the Code.
3.12 PARTICIPANTS' INVESTMENT ELECTIONS.
(a) The Administrator may establish and implement
procedures pursuant to which each Participant and each former
Participant with a vested Plan Account shall be permitted to
direct the investment of all or a portion of his or her Plan
Account into one or more investment options described in Section
3.12(b). If any such Participant or former Participant fails to
make an investment election, such Participant's or former
Participant's Plan Account shall be invested in an investment
option, or a combination of investment options, selected by the
Administrator, which offer(s) reasonable opportunities for
capital appreciation, preservation of capital, and/or liquidity.
Investment elections may be changed at least quarterly, subject,
however, to any rules established by the Administrator and any
rules or restrictions of any insurance company or other entity
serving as the manager or funding vehicle of any of the
investment funds. Investment elections shall be subject to such
uniform rules and procedures as the Administrator shall
establish.
(b) The Administrator shall designate to the Trustee
the investment options to be offered under the Plan and may, from
time to time, change the investment options offered hereunder.
As of the Effective Date (or later in the case of (vi), below),
the investment options
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(i) A Money Market Fund:
(ii) An Income Fund;
(iii) A Growth Fund;
(iv) A Growth and Income Fund;
(v) An Aggressive Growth Fund; and
(vi) Upon receiving direction from the
Administrator, the Trustee shall establish
a Fund primarily invested in the Common
Stock of the Plan Sponsor (hereinafter
referred to as "Company Stock" or the
"Company Stock Fund", as applicable).
Except as otherwise required by law or
deemed advisable by the Administrator, the
assets of the Company Stock Fund shall be
held on a pooled basis.
(c) Each investment fund shall be valued as of each
Valuation Date. Such valuation shall recognize any appreciation
or depreciation in the fair market value of all securities or
other property held by each respective investment fund, including
any cash and accrued earnings, and shall take into account any
accrued expenses and proper charges against the investment fund
as of such Valuation Date.
(d) A Participant who is an Insider may direct the
Trustee to have amounts in his or her Plan Account that are
invested in the Company Stock Fund reinvested in a fund or funds
other than the Company Stock Fund, or to have amounts in his or
her Plan Account that are invested in a fund or funds other than
the Company Stock Fund reinvested in the Company Stock Fund, only
during the period beginning on the third business day following
the date of release or publication of quarterly or annual summary
statements of sales and earnings of the Plan Sponsor and ending
on the twelfth business day following such date of release and
publication.
ARTICLE 4
DISTRIBUTIONS
-------------
4.1 RETIREMENT.
(a) Each Participant who is an Employee on his or her
attainment of Normal Retirement Age, to the extent not then
vested, shall become fully vested and, following termination of
employment, the Participant shall be entitled to receive the full
amount of the Plan Account in a lump sum or, if the Participant
elects, in approximately equal annual installments over a fixed
period not to exceed the joint life expectancies of the
Participant and the Participant's oldest beneficiary determined
under applicable Internal Revenue Service regulations. If the
Participant dies before all installments have been paid, the
balance remaining in the Participant's Plan Account shall be paid
as provided in Section 4.2. Notwithstanding the foregoing,
subject to the provisions of Section 4.8, if a Participant's
Account at retirement is
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<PAGE>
three thousand five hundred dollars ($3,500) or less, the Account
will be paid only in a cash lump sum.
(b) Distribution to a Participant shall be made, or
shall commence, as soon as is practicable after the Participant's
retirement, and after arrangements for payment have been made by
the Administrator and the Trustee; provided, however, unless the
Participant elects otherwise, that distribution shall be made, or
shall commence, not later than sixty (60) days after the end of
the Plan Year in which the later of the Participant's Normal
Retirement Date or Late Retirement Date occurs.
4.2 DEATH OF PARTICIPANT. If a Participant's employment
is terminated because of the death of the Participant, the
Participant's entire Plan Account, to the extent not then vested,
shall become fully vested in the Participant. Upon death, the
Participant's vested Plan Account shall be paid to the
Participant's designated beneficiary who, for a married
Participant, shall be the Participant's spouse, except as
provided below.
Notwithstanding the foregoing, a married Participant
may, by a "qualified election", designate a different beneficiary
or beneficiaries for all or part of his or her Plan Account. A
"qualified election" is a written designation by the Participant
of a beneficiary other than the Participant's spouse which
contains the written consent of the spouse to the payment of the
Plan Account to the beneficiary designated in the election (which
may not be changed without spousal consent) or which contains the
written consent of the spouse which expressly permits beneficiary
designations by the Participant without any requirement of
further consent by the spouse. The spouse must acknowledge the
effect of the waiver and consent and the spouse's signature must
be notarized or witnessed by a Plan representative. If the
consent of the spouse permits beneficiary designations without
further consent by the spouse, the consent must acknowledge and
expressly relinquish the right to limit the consent to the
designation of a specific beneficiary. A spouse may not revoke
his or her qualified election. A qualified election is not
required if it is established to the satisfaction of the
Administrator that there is no spouse or that the spouse cannot
be located. If the spouse is legally incompetent to give
consent, the spouse's legal guardian, even if the guardian is the
Participant, may give consent. Also, if the Participant is
legally separated or the Participant has been abandoned (within
the meaning of local law), and the Participant has a court order
to such effect, a qualified election is not required unless a
qualified domestic relations order (as defined in Code Section
414(p)) provides otherwise.
The Plan Account of a Participant who is not married
when he or she dies will be paid to the beneficiary or
beneficiaries designated by the Participant, and, if no
beneficiary is designated, to the Participant's estate.
Payment of the Participant's Plan Account on death
shall be made in a cash lump sum. Payment of the Participant's
Plan Account on death shall be made as soon as is practicable
following the Participant's death and after arrangements for
payment have been made by the Administrator and the Trustee.
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4.3 DISABILITY.
(a) If a Participant's employment with the Employer
terminates because of disability, the Participant's entire Plan
Account, to the extent not then vested, shall become fully vested
in the Participant and shall be paid to the Participant in a lump
sum or, if elected by the Participant, in approximately equal
annual installments over a fixed period not to exceed the joint
life expectancies of the Participant and the Participant's oldest
beneficiary, as the Participant may elect. Payment shall be
made, or shall commence, as soon as is practicable following the
Administrator's approval of the Participant's disability and
after arrangements for payment have been made by the
Administrator and the Trustee; provided, however, that no payment
shall be made, or shall commence, to a Participant without the
Participant's written consent given in a manner required by
applicable law until the Participant's Normal Retirement Date
unless, as determined under Section 4.8, the Participant's
Account balance at the date of payment or commencement is three
thousand five hundred dollars ($3,500) or less. If applicable,
payments made as a result of permanent disability shall continue
to the Participant's beneficiary if the Participant dies before
all installments have been paid. Notwithstanding the foregoing,
subject to the provisions of Section 4.8, if a Participant's
Account at the date of his or her permanent disability is three
thousand five hundred dollars ($3,500) or less, the Account will
be paid only in a cash lump sum.
(b) A Participant shall be considered disabled if he
or she establishes to the satisfaction of the Administrator that
he or she incurred a physical or mental impairment while the
Participant is employed by an Affiliated Company, which can be
expected to result in death or to last at least twelve (12)
months and which prevents the Participant from performing his or
her usual duties or any other similar duties available in the
Employers employ. Evidence of disability shall include
the certificate of a competent licensed physician selected by the
Participant and approved by the Administrator which confirms that
the Participant is disabled as defined herein.
4.4 TERMINATION PRIOR TO RETIREMENT.
(a) AMOUNT OF DISTRIBUTION: FORFEITURES. If a
Participant's employment terminates for any reason other than
retirement, disability or death, his or her Plan Account shall be
vested in the Participant as follows:
(i) Contributions to the Participant's Employer
Matching Contribution Account shall become vested according to
the following schedule:
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YEARS OF SERVICE FOR VESTING PURPOSES VESTED PERCENTAGE
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
(ii) The Participant's Salary Reduction
Contribution Account Employer Basic Contribution Account,
Qualified Nonelective Contribution Account, Qualified Matching
Contribution Account, Prior Plan Account and Rollover
Contribution Account shall be one hundred percent (100%) vested
at all times.
The vested portion of the terminated
Participant's Plan Account shall be payable as provided in this
Section. The unvested portion of such Plan Account shall be
forfeited and allocated in the manner described below; provided,
however, that a Participant will not receive an allocation of
forfeitures for a Plan Year unless the Participant has met the
requirements for receipt of an allocation of any Employer
Matching Contribution for the Plan Year. The unvested portion of
the terminated Participant's Plan Account shall be forfeited on
the earlier of (1) the date of a cash-out distribution to the
Participant as described in Treasury Regulation Section
1.411(a)-7(d), or (2) the last day of the Plan Year in which the
Participant incurs a Break in Service. Forfeitures shall be
restored, if at all, pursuant to Section 4.5. If any forfeitures
of Employer Matching Contributions remain after being used to
offset forfeiture restorations under Section 4.5, such remaining
forfeitures shall be used to reduce the Employer Matching
Contributions of the Employer for the Plan Year.
(iii) A Participant whose vested percentage is less
than one hundred percent (100%) and who has received an
in-service distribution of any portion of his or her Employer
Matching Contribution Account shall have the vested portion of
the Employer Matching Contribution Account computed under the
formula P (A + D) - D, where P equals the Participant's vested
percentage at the relative time, A equals the Participant's
Employer Matching Contribution Account balance at the relevant
time, and D equals the amount of the Participant's previous
withdrawal or unpaid distribution from the Participant's Employer
Matching Contribution Account.
(b) FORM AND TIMING OF DISTRIBUTION. Subject to the
provisions of Section 4.8, if the value of a terminated
Participant's Plan Account is three thousand five hundred dollars
($3,500) or less, such value shall be paid to the Participant in
a cash lump sum as soon as practicable after the valuation date
coincident with or next following the date of the Participant's
termination of employment. If the value of a terminated
Participant's Plan Account is more than three thousand five
hundred dollars ($3,500), the Participant may elect an immediate
distribution in the form of a lump sum or in substantially equal
annual installments over a fixed period not
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<PAGE>
to exceed the joint life expectancies of the Participant and the
Participant's oldest Beneficiary, or may elect to defer the
distribution until a later date which is no later than the
Participant's Normal Retirement Date. If the value of a
terminated Participant's Plan Account is more than three thousand
five hundred dollars ($3,500), and the Participant does not elect
an earlier distribution, the Participant's Plan Account shall be
paid to the Participant in a cash lump sum or in approximately
equal annual installments over a fixed period not to exceed the
joint life expectancies of the Participant (and the Participant's
oldest Beneficiary), commencing at the Participant's Normal
Retirement Date.
4.5 REHIRED PARTICIPANT. A Participant who is not one
hundred percent (100%) vested in his or her Plan Account upon
termination of employment and who forfeits the unvested portion
of his or her Plan Account as provided in Section 4.4(a) shall be
entitled to a restoration of the forfeited amount only as
provided in this Section. If the vested portion of the Plan
Account of a terminated Participant is paid to the Participant
before the Participant incurs five (5) consecutive Breaks in
Service and if the Participant is rehired before he or she incurs
five (5) consecutive Breaks in Service and repays the amount
distributed before the date which is five (5) years after the
date the Participant is rehired, any unvested portion of the
Participant's Plan Account which previously was forfeited shall
be restored to the Participant's Plan Account. If the vested
portion of the Plan Account of a terminated Participant is not
paid to the Participant before the Participant incurs five (5)
consecutive Breaks in Service and if the Participant is rehired
before he or she incurs five (5) consecutive Breaks in Service,
any unvested portion of the Participant's Plan Account which
previously was forfeited shall be restored to the Participant's
Plan Account. Any Participant who is deemed to have received a
cash-out distribution because he or she was zero percent (0%)
vested upon termination of employment and who is rehired before
incurring five (5) consecutive Breaks in Service shall be deemed
to have repaid the deemed distribution upon his or her date of
rehire. The funds to be used for restoring forfeitures under
this Section shall first be taken from available forfeited
amounts under Section 4.4 at the time the Participant is
re-employed and, if such forfeited amounts are insufficient to
provide the restoration, the funds shall be provided by Employer
contributions.
4.6 COMMENCEMENT OF BENEFITS. A Participant's
distribution must be made or must commence by the first day of
April following the calendar year in which the Participant
attains age seventy and one-half (70-1/2). Notwithstanding the
preceding, if the Participant attained age seventy and one-half
(70-1/2) before January 1, 1988, and such Participant was not a
five percent (5%) owner (as defined in Code Section 416(i)) at
any time during the calendar year in which such Participant
attained age sixty-six and one-half (66-1/2), or during any
subsequent calendar year, the required distribution commencement
date is the first day of April following the later of the
calendar year in which the Participant terminates employment or
the calendar year in which the Participant attains age seventy
and one-half (70-1/2). Notwithstanding the preceding, if the
Participant attained age seventy and one-half (70-1/2) in 1988,
and such Participant was not a five percent (5%) owner of the
Employer (as defined in Code Section 416(i)) at any time during
the calendar year in which such Participant attained age
sixty-six and one-half (66-1/2), or during any subsequent
calendar year, and such Participant had not retired by January 1,
1989, the required distribution commencement date is April 1,
1990.
4.7 NOTICE REQUIREMENTS. No less than thirty (30) days
and no more than ninety (90) days before the date of any
distribution to a Participant prior to the Participant's
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<PAGE>
Normal Retirement Date, the Participant must receive (i) a
general description of the material features, and an explanation
of the relative values, of optional forms of benefit available
under the Plan, and (ii) notice of the Participant's right to
defer the distribution until the Participant's Normal Retirement
Date. The preceding notice requirement under (ii) is not
applicable for any distribution after the Participant's Normal
Retirement Date, and none of the preceding notice requirements
are applicable if the Participant's Plan Account can be cashed
out as provided under Section 4.8.
If a distribution is one to which Code Sections
401(a)(11) and 417 do not apply, such distribution may commence
less than thirty (30) days after the notice required under
Section 1.411(a)11(c) of the Income Tax Regulations is given,
provided that:
(a) the Administrator clearly informs the Participant
that the Participant has a right to a period of at least thirty
(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
(b) the Participant, after receiving the notice,
affirmatively elects an immediate distribution.
4.8 CASH-OUT DISTRIBUTIONS. Notwithstanding any other
provision of the Plan to the contrary, if the present value of a
Participant's vested Plan Account to be distributed does not
exceed three thousand five hundred dollars ($3,500), such
Participant's vested Plan Account will be distributed in a lump
sum as soon as practicable after the date on which the
Participant (or beneficiary) becomes entitled to the
distribution. For purposes of this determination, if at the time
of any distribution the present value of the vested Plan Account
of the Participant exceeds three thousand five hundred dollars
($3,500), then the present value of the vested Plan Account of
the Participant at any subsequent time shall be deemed to exceed
three thousand five hundred dollars ($3,500).
4.9 DIRECT ROLLOVERS. Notwithstanding any other
provision of the Plan to the contrary, for distributions from the
Plan after December 31, 1992, any Participant or beneficiary who
is to receive an Eligible Rollover Distribution may elect the
direct trustee-to-trustee rollover of the distribution to an
Eligible Retirement Plan. A direct rollover election must be made
pursuant to the procedures established by the Plan Administrator
and must specify the Eligible Retirement Plan to which the direct
rollover is to be made. If the Participant or beneficiary elects
a direct rollover as permitted hereunder, the Plan Administrator
shall make the rollover as elected. For purposes of this Section,
the term Eligible Rollover Distribution has the meaning given
such term in Code Section 401(a)(31)(C) and includes only that
portion of a distribution that would be includible in gross
income if not rolled over. For purposes of this Section, the
term Eligible Retirement Plan has the meaning given such term in
Code Section 401(a)(31)(D) and currently means (i) an individual
retirement account described in Code Section 408(a), (ii) an
individual retirement account described in Code Section 408(b)
(other than an endowment contract), (iii) a qualified trust that
is a defined contribution plan, the terms of which permit the
acceptance of direct rollovers and (iv) an annuity plan described
in Code Section 403(a).
4.10 REQUIRED DISTRIBUTIONS. This Section is included in
the Plan to comply with Code Section 401(a)(9) and the
Regulations thereunder. To the extent that there is any conflict
26
<PAGE>
between the provisions of Code Section 401(a)(9) and the
Regulations thereunder and any other provision in the Plan, the
provisions of Code Section 401(a)(9) and the Regulations
thereunder will control. If the Participant's spouse is not the
beneficiary with respect to any distribution of benefits, the
method of distribution elected must satisfy the incidental death
benefit requirements specified in Section 401(a)(9)(G) of the
Code and Treasury Regulation Section 1.401(a)(9)-2. For purposes
of these rules, the life expectancy of the Participant and the
Participant's spouse may be recalculated but only if so elected
by the Participant or by the Participant's spouse, but the life
expectancy of any non-spouse beneficiary may not be recalculated.
ARTICLE 5
ADMINISTRATION
--------------
5.1 ADMINISTRATION. The Administration of this Plan
shall be the responsibility of the following named fiduciaries,
who are designated as such for purposes of ERISA:
(a) The Trustee with respect to the management,
control and investment of the Trust (except to the extent the
Trustee is subject to the direction of the Administrator,
Participants or an investment manager appointed by the Employer
as provided in Section 7.7 and the payment of benefits to
Participants and their beneficiaries;
(b) The Administrator or other person or persons
designated by the Administrator for purposes of determining
appeals with respect to denied claims for benefits; and
(c) The Administrator with respect to controlling and
managing the administration and operation of the Plan as
hereinafter set forth. The Administrator may, through a written
instrument, designate other persons to carry out some or all of
its fiduciary responsibility.
The authority of each named fiduciary in its
designated area of responsibility as aforesaid shall be
exclusive, and no named fiduciary shall have either authority or
responsibility to exercise any discretion or control other than
as specifically delegated to the named fiduciary hereunder. Any
person or group of persons or entity may serve in more than one
fiduciary capacity with respect to the Plan.
ARTICLE 6
THE ADMINISTRATOR
-----------------
6.1 MEMBERS. The Administrator shall be designated by
the Plan Sponsor and may be the Plan Sponsor or a committee of
one or more individuals. The Administrator shall serve until
death, resignation or removal by the Plan Sponsor. The
Administrator may, but need not, be a Participant in the Plan.
6.2 PROCEDURE.
(a) The Administrator may elect from among its
membership, by a majority vote for each, a secretary and such
other officers as the Administrator may deem expedient.
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The Administrator shall meet as often as its Chairperson deems
necessary to carry out its functions. Any other two (2) members
of the Administrator may call a meeting at any time by giving due
notice thereof to the Chairperson and the other Administrator
members.
(b) Action by the Administrator on any matter of
substance or on any matter that requires the exercise of
discretion by the Administrator shall be taken at a meeting of
the Administrator by a majority vote or by unanimous written
consent without a meeting. Action on purely administrative
matters may be taken by any member designated by a majority of
the entire Administrator to act upon such administrative matter.
However, no member of the Administrator who is a Participant
shall vote or act on any question concerning only his or her
rights or his or her beneficiaries' rights under the Plan.
6.3 POWERS AND RESPONSIBILITIES. The Administrator shall
have the following powers and responsibilities:
(a) Under advice of counsel, who may be counsel to
the Employer or counsel of its own selection, construing the
Plan, and remedying any ambiguities, inconsistencies or
omissions.
(b) Determining all questions relative to the
eligibility of employees to be Participants and the benefits of
Participants or beneficiaries.
(c) Establishing reasonable rules for the
administration of the Plan.
(d) Maintaining appropriate records relating to
Participants and their beneficiaries.
(e) Designating to the Trustee the investment
vehicles to be established under Section 7.3 and the portion of
each Participant's Plan Account to be invested in each such
vehicle.
(f) Preparing and filing such reports and returns
with respect to the Plan as are required by law.
(g) Allocating income, gains and losses among Plan
Accounts as provided in Article 4 above.
(h) Performing other duties necessary for the
administration of this Plan which appear to the Administrator to
be necessary or appropriate in order properly to administer and
operate the Plan.
The Administrator shall discharge its duties for the
exclusive purpose of providing benefits hereunder and defraying
the reasonable expenses of operating the Plan and with the skill,
prudence and diligence under the circumstances then prevailing
that a prudent person acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a like
character and with like aims.
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In carrying out its duties herein, the Administrator
shall have discretionary authority to exercise all powers and to
make all determinations, consistent with the terms of the Plan,
in all matters entrusted to it, and its determinations shall be
given deference and shall be final and binding on all interested
parties.
6.4 CERTIFICATIONS AND INVESTIGATIONS.
(a) Whenever in the administration of the Plan a
certification by the Employer is required to be given to the
Administrator, or if the Administrator shall deem it necessary
that a matter be proved by certification of the Employer prior to
taking or omitting any action hereunder, such certification shall
be duly made, and the matter shall be deemed proved, by an
instrument delivered to the Administrator, signed in the name of
the Employer by its duly authorized representative. The
Administrator shall be empowered to act, and shall be protected
in acting, upon such instrument. Further, the Administrator shall
be empowered to act, and shall be protected in acting, upon any
notice, resolution, order, offer, telegram, letter or other
document believed by the Administrator to be genuine and to have
been signed by the proper party or parties.
(b) The Administrator shall not be required to make
any investigation to determine the identity or mailing address of
any person entitled to benefits under this Plan and shall be
entitled to withhold the payment of benefits until the identity
and mailing addresses of persons entitled to benefits are
certified to it by the Employer or by such person.
6.5 CLAIMS PROCEDURE. Any person claiming a benefit
under the Plan (a "Claimant") shall present the claim, in
writing, to the Administrator, and the Administrator shall
respond in writing. If the claim is denied, the written notice
of denial shall state, in a manner calculated to be understood by
the Claimant:
(a) The specific reason or reasons for denial, with
specific references to the Plan provisions on which the denial is
based;
(b) A description of any additional material or
information necessary for the Claimant to perfect his or her
claim and an explanation of why such material or information is
necessary; and
(c) An explanation of the Plan's claims review
procedure.
The written notice denying or granting the Claimant's
claim shall be provided to the Claimant within ninety (90) days
after the Administrator's receipt of the claim, unless special
circumstances require an extension of time for processing the
claim. If such an extension is required, written notice of the
extension shall be furnished by the Administrator to the Claimant
within the initial ninety (90) day period and in no event shall
such an extension exceed a period of ninety (90) days from the
end of the initial ninety (90) day period. Any extension notice
shall indicate the special circumstances requiring the extension
and the date on which the Administrator expects to render a
decision on the claim. Any claim not granted or denied within
the period noted above shall be deemed to have been denied.
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<PAGE>
Any Claimant whose claim is denied, or deemed to be
denied under the preceding sentence, (or such Claimant's
authorized representative) may, within sixty (60) days after the
Claimant's receipt of notice of the denial, or after the date of
the deemed denial, request a review of the denial by notice
given, in writing, to the Administrator. Upon such a request for
review, the claim shall be reviewed by the Administrator (or its
designated representative) which may, but shall not be required
to, grant the Claimant a hearing. In connection with the review,
the Claimant may have representation, may examine pertinent
documents, and may submit issues and comments in writing.
The decision on review normally shall be made within
sixty (60) days of the Administrator's receipt of the request for
review. If an extension of time is required due to special
circumstances, the Claimant shall be notified, in writing, by the
Administrator, and the time limit for the decision on review
shall be extended to one hundred twenty (120) days. The decision
on review shall be in writing and shall state, in a manner
calculated to be understood by the Claimant, the specific reasons
for the decision and shall include references to the relevant
Plan provisions on which the decision is based. The written
decision on review shall be given to the Claimant within the
sixty (60) day (or, if applicable, the one hundred twenty (120)
day) time limit discussed above. If the decision on review is
not communicated to the Claimant within the sixty (60) day (or,
if applicable, the one hundred twenty (120) day) period discussed
above, the claim shall be deemed to have been denied upon review.
All decisions on review shall be final and binding with respect
to all concerned parties.
6.6 ADVICE. The Administrator may secure specialized
advice or assistance as it deems necessary or desirable in
connection with the administration and operation of the Plan and
shall be entitled to rely conclusively upon, and shall be fully
protected in any action or omission taken by it in good faith
reliance upon, any advice or opinion so obtained.
6.7 DELEGATION. The Administrator shall have the power
and authority to delegate from time to time by written instrument
all or any part of its duties, powers or responsibilities under
the Plan, both ministerial and discretionary, as it deems
appropriate, to any person, and in the same manner to revoke any
such delegation of duties, powers or responsibilities. Any
action of such person in the exercise of duties, powers or
responsibilities delegated to such person shall have the same
force and effect for all purposes hereunder as if such action had
been taken by the Administrator. Further, the Administrator may
authorize one or more persons to execute any certificate or
document on behalf of the Administrator, in which event any
person notified by the Administrator of such authorization shall
be entitled to accept and conclusively rely upon any such
certificate or document executed by such person as representing
action by the Administrator until such third person shall have
been notified of the revocation of such authority. Except to the
extent required by ERISA, the Administrator shall not be liable
for any act or omission of any person to whom the Administrator's
duties, powers or responsibilities have been delegated, nor shall
any person to whom any duties, powers or responsibilities have
been delegated have any liabilities with respect to any duties,
powers or responsibilities not delegated to such person, except
to the extent required by ERISA.
6.8 LIABILITY: INDEMNIFICATION. Except to the extent
required by ERISA, no member of the Administrator shall incur any
liability: (i) by virtue of any contract, agreement, bond or
other instrument made or executed by the member or on the
member's
30
<PAGE>
behalf as a member of the Administrator, (ii) for any act or
failure to act, or any mistake or judgment made by the member,
with respect to the business of the Plan, unless resulting from
the member's gross negligence or willful misconduct, or (iii) for
the neglect, omission or wrongdoing of any other member of the
Administrator or of any person employed or retained by the
Administrator. The Employer shall indemnify and hold harmless
each member of the Administrator from the effects and
consequences of the member's acts, omissions and conduct with
respect to the Plan, except to the extent that such effects and
consequences shall result from the member's own willful
misconduct or gross negligence. The foregoing right to
indemnification shall be in addition to such other rights as the
Administrator may enjoy as a matter of law or by reason of
insurance coverage of any kind. Rights granted hereunder shall
be in addition to and not in lieu of any rights to
indemnification to which the Administrator may be entitled
pursuant to the by-laws of the Employer, and, if the
Administrator is an Employee, service as the Administrator shall
be deemed in partial fulfillment of the member's employment
function. In all computations, the Administrator shall be
entitled to rely fully upon data furnished by the Employer and
upon information furnished it by or on behalf of an Employee or
Employees.
6.9 INSURANCE. The Plan may purchase, as an expense of
the Plan, liability insurance for the Plan and/or for its
fiduciaries to cover liability or losses occurring by reason of
an act or omission by a fiduciary. In addition, any fiduciary
may purchase, from and for the fiduciary's own account, insurance
to protect the fiduciary in the event of a breach of fiduciary
duty, and the Employer may also purchase insurance to cover the
potential Liability of one or more persons who serve in a
fiduciary capacity with regard to the Plan.
6.10 BONDING. The Administrator shall arrange for such
bonding as is required by law. Bonding in excess of the amount
required by law shall not be considered required, but shall be
permitted, by this Plan. The costs for such bonding shall be
paid by the Employer or, if the Employer elects, from the Trust.
6.11 COMPENSATION. The Administrator shall serve without
compensation, but all expenses of the Administrator incurred in
the performance of duties hereunder shall be proper charges to
the Trust and shall be paid therefrom unless the Employer, in its
discretion, chooses to pay such expenses.
ARTICLE 7
TRUST AND TRUSTEE
-----------------
7.1 TRUST FUND. The Trust Fund shall consist of all
contributions made by the Employer under Article 3 or transferred
to the Trust Fund as provided herein, and the investments and
reinvestments thereof and the income thereon which shall be
accumulated and added to principal.
7.2 TRUSTEE CONTROL. The Trustee shall hold and invest
the funds and assets received by the Trustee under this Plan
subject to the terms of this Plan and for the purposes herein set
forth. The Trustee shall be responsible only for such funds and
assets as shall actually be received by the Trustee as Trustee
hereunder.
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<PAGE>
So long as a Trustee is acting, title to any of the
assets of the Trust Fund may be held or registered in the name of
a nominee of the Trustee for ease of dealing with the same,
provided that the books of the Trust reflect actual ownership.
The Trustee shall be liable for the acts of its nominees. The
assets so held or registered shall at all times remain in the
possession or under the control of the Trustee.
7.3 INVESTMENT OPTIONS. If procedures are implemented
which permit Participants to direct the investment of their Plan
accounts, the Trustee shall establish such investment options as
the Administrator shall direct, and shall divide the trust among
investment options in accordance with the investment directions
of Participants which are made as provided in this Plan.
Investment options shall be established either by direct
investment or through the medium of a bank, a trust fund, an
insurance contract or regulated investment company mutual fund,
as the Administrator shall direct. Each investment option (a)
shall be held and administered as part of the Trust, but (b)
shall be separately invested and accounted for. The assets of
the Trust invested in each of the options shall be separately
valued at fair market value as of the appropriate Valuation Date.
7.4 TRUSTEE APPOINTMENT AND RESIGNATION; REMOVAL AND
SUCCESSION OF TRUSTEES.
(a) APPOINTMENT OF TRUSTEE. The Trustee shall be
appointed by the Plan Sponsor.
(b) RESIGNATION OR REMOVAL OF TRUSTEE. The Trustee
may resign at any time by filing the Trustee's resignation, in
writing, with the Plan Sponsor. The Plan Sponsor shall have the
power to remove the Trustee at any time, with or without cause,
and to appoint a successor Trustee. Upon resignation or removal,
the Trustee shall render an accounting of its administration
since the last annual accounting and shall transfer and deliver
the assets in hand under this Plan to any remaining or successor
Trustee. Any successor Trustee shall have all the same titles,
rights, powers, authorities, discretions and immunities as the
original Trustee hereunder.
7.5 PRUDENT PERSON RULE. The Trustee shall discharge its
duties under this Plan solely in the interest of Participants and
their beneficiaries and: (i) for the exclusive purpose of
providing benefits to such Participants and beneficiaries and
paying reasonable expenses of administering the Plan; (ii) with
the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent person acting in a like capacity
and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims; (iii) by
diversifying the investments of the Plan so as to minimize the
risk of large losses, unless under the circumstances it is
clearly prudent not to do so; and (iv) in accordance with the
provisions of this Plan insofar as they are consistent with the
provisions of ERISA.
7.6 LIABILITY; EXPENSES; COMPENSATION. The Trustee shall
not be liable for any losses which may be incurred upon the
investments of the Trust Fund except to the extent that any
losses to the Trust Fund shall have been caused by its bad faith,
negligence or willful misconduct or by a breach of its fiduciary
duties under ERISA.
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The Employer agrees to pay all expenses properly and
actually incurred by the Trustee in the administration or
termination of the Trust Fund, including compensation for the
Trustee's services as Trustee and legal expenses, provided that,
if the Trustee already receives full time pay from the Employer,
the Trustee may not receive such compensation. Should the
Employer for any reason fail to pay such expenses, the same shall
be paid out of the Trust Fund. The Trustee shall receive for the
services rendered as Trustee hereunder such reasonable
compensation as the Employer and the Trustee may from time to
time agree upon, unless the Trustee receives full time pay from
the Employer.
7.7 MANAGEMENT OF ASSETS.
(a) POWERS OF THE TRUSTEE OR INVESTMENT MANAGER. The
Trustee who is managing and administering the Trust Fund or, if
applicable, the Investment Manager (as defined in Section 3(38)
of ERISA) which has been appointed by the Employer to manage the
Plan's assets, shall be and hereby is empowered and authorized,
in its sole discretion and subject to current rules and
regulations at the time the investment is made and subject to the
provisions of the Plan with respect to Participant direction (and
voting) of investments:
(i) To invest and reinvest contributions and
any accretions thereto, whether capital gains or income or both,
and the proceeds of any sale, pledge, lease or other disposition
of any assets of the Trust Fund in bonds, notes, mortgages,
commercial paper, coins, stamps, foreign bonds, antiques,
broodmares, gold, art, silver, diamonds, second trusts, option
securities, in any other type of personal property and in real
property; provided, however, that no individually-directed
account may be invested in collectibles as described in Code
Section 408(m). Notwithstanding any other provision of this
Plan, any person having investment authority with regard to the
Trust Fund is hereby authorized to direct the investment of any
part or all of the assets of the trust in any common, collective,
or group trust ("Common Trust"), including but not limited to any
Common Trust which has been qualified under Code Section 401(a)
and is exempt from taxation under Code Section 501(a) now or
hereafter maintained by a bank or trust company which is a
fiduciary with respect to the Plan or trust, as any such Common
Trust may have heretofore been or may hereafter be amended, to be
held subject to all the provisions thereof and to be commingled
with the assets of other trusts participating therein; provided,
however, that any investment and retention of an interest therein
shall be such as will not adversely affect in any manner the
qualified or exempt status of the Plan and trust under Code
Section 401(a) and Section 501(a). To the extent of the
equitable share of the trust in a Common Trust which is qualified
under Code Section 401(a), the Common Trust shall be a part of
the Plan and of the trust, and all of the terms and conditions of
the instrument creating the Common Trust shall be deemed to be
incorporated by reference herein. The power herein conferred is
intended to and shall override any provision of this Plan to the
contrary (including, but not limited to, any investment
limitations contained in or imposed by this Plan).
(ii) To vote any and all stock held hereunder
and to continue any investment in stocks, bonds, real estate
notes or other securities, or real or personal property, which
may at any time form a part of the Trust Fund; provided, however,
that the Trustee shall vote stock of the Employer only upon the
instructions of the Administrator or the Participants, except as
otherwise required under ERISA.
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(iii) To invest, reinvest and change investments;
to sell, mortgage, pledge, lease, assign, transfer and convey any
and all of the Trust Fund property for cash or on credit, at
public or private sale; to exchange any Trust Fund property for
other property; to grant options to purchase or acquire any Trust
Fund property; to determine the prices and terms of sales,
exchanges or options; and to execute, acknowledge and deliver any
and all deeds or other trust instruments of conveyance which may
be required to carry the foregoing powers into effect, without
obligation on the part of the purchaser, lessee, lender, assignee
or transferee, or anyone to whom the property may in any way be
conveyed to see to the application of the purchase money loans or
property exchanged, transferred, assigned or conveyed.
(iv) To allow cash in the Trustee's hands to
remain on deposit in the commercial or savings department of any
bank or trust company supervised by the United States or a State
or agency of either, even if it is a fiduciary or party-in-
interest, at any time and from time to time in a reasonable
amount; and, as to such amount on deposit, the Trustee shall have
liability for such interest as may be paid on such deposit.
(v) To exercise with respect to all investments
all of the rights, powers and privileges of an owner including,
without limiting the foregoing, the power to give proxies and to
pay calls, assessments and other sums deemed necessary for the
protection of the Trust Fund; to participate in voting trusts,
pooling agreements, foreclosures, reorganizations,
consolidations, mergers and liquidations, and in connection
therewith to deposit securities with and transfer title to any
protective or other committee under such terms as the Trustee may
deem advisable; to exercise or sell stock subscriptions or
conversion rights and to accept and retain as an investment
hereunder any securities received through the exercise of any of
the foregoing powers. If the Trustee shall pay more than the par
value of any security purchased, the Trustee shall not be
obligated to establish a sinking fund out of the income of such
investments for repaying to the principal the same amount paid
above par.
(vi) To take any action with respect to
conserving or realizing upon the value of any Trust Fund properly
and with respect to foreclosures, reorganizations, or other
changes affecting the Trust Fund property; to collect, pay,
contest, compromise, or abandon demands of or against the Trust
Fund estate, wherever situated; and to execute contracts, notes,
conveyances and other instruments, including instruments
containing covenants and warranties binding upon and creating a
charge against the Trust Fund estate, and containing provisions
excluding personal liability.
(vii) To employ agents, including investment
counsel, for advice and to manage the investment of the Trust
Fund property, to employ attorneys, auditors, depositories and
proxies, with or without discretionary powers and all such
parties shall have the right to rely upon and execute the written
instructions of the Trustee, and shall not be obligated to
inquire into the propriety of the acts of directions of the
Trustee, other than is required under ERISA.
(viii) To compromise any claims existing in favor
of or made against the Trust Fund.
(ix) To engage in any litigation, either for the
collection of monies or for other properties due the Trust Fund,
provided in defense of any claim against the Trust
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Fund; provided, however, that the Trustee shall not be required
to engage in or participate in any litigation unless the Trustee
shall have been indemnified to its satisfaction against all
expenses and liabilities to which the Trustee may become subject.
(x) To invest and reinvest up to one hundred
percent (100%) of the Trust Fund in qualifying Employer
securities, as defined in Section 407(d)(1) of ERISA. Such
investment must be for the exclusive benefit of employees and
must meet the requirements of Code Section 401(a) and all aspects
thereof as to the common law prudence standard (except as to the
diversification requirement).
(b) INVESTMENT MANAGER. Notwithstanding the
foregoing, the Employer reserves the right to appoint an
investment adviser registered as such under the Investment
Advisers Act of 1940, a bank (as defined in that Act) or an
insurance company qualified to perform investment management
services under the laws of more than one state to manage the
investments of all or any part of the Trust Fund. Upon such
appointment, and acknowledgment by the appointee that it is a
fiduciary as defined in ERISA, the appointee shall have all
rights to manage the investments of that portion of the Trust
Fund over which authority has been granted. The Trustee shall be
relieved of all further responsibility in respect thereof and
shall abide by the instructions of such appointee.
(c) POWERS OF THE PARTICIPANTS. The provisions of
this subsection (c) shall govern the voting and tendering of
stock as long as the resulting voting and tendering (or
nontendering) of stock are proper, are in accordance with the
terms of the Plan, and are not contrary to the provisions of
ERISA. If the voting and tendering (or nontendering) of stock
that would result from the application of the provisions of this
Article are not proper, are not in accordance with the terms of
the Plan or are contrary to the provisions of ERISA, the Trustee
shall vote or tender (or not tender) stock in the manner
consistent with its duties under ERISA. The Trustee shall vote
and tender (or not tender) itself or by proxy, all shares of
stock held in trust under the Plan pursuant to the procedures
established by the Administrator including, if elected by the
Administrator in its discretion, pursuant to instructions
received by the Administrator from Participant's concerning the
vesting and tendering of stock in which their respective accounts
are invested.
Notwithstanding any other provision of the Plan
to the contrary, the Trustee shall pass through to all
Participants and Beneficiaries with an interest in the Common
Stock Fund voting and tendering rights with respect to the Common
Stock held as a part of the Common Stock Fund. The Trustee shall
vote and tender all shares of Common Stock with respect to which
they have not received voting or tendering instructions, as
applicable, in accordance with their fiduciary obligations under
ERISA.
7.8 RELIANCE BY TRUSTEE. The Trustee may rely on any
decision of the Administrator purporting to be made pursuant to
the terms of this Plan and on any list or notice furnished by the
Employer or the Administrator as to any facts, the occurrence of
any events or the existence of any situation, and shall not be
bound to inquire as to the basis of any such decision, list or
notice, and shall incur no obligation or liability for any action
taken or suffered to be taken by them in reliance thereon.
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7.9 CHANGES IN ADMINISTRATOR. The Trustee shall not be
bound to inquire as to changes in the Administrator and shall be
entitled to rely on such information as it may receive from time
to time from the Employer with respect to such membership.
7.10 LEGAL COUNSEL. The Trustee may consult with legal
counsel (who may or may not be counsel for the Employer)
concerning any question which may arise with reference to its
duties under this Plan, and the Trustee may rely in good faith
upon the opinion of such counsel.
7.11 ACCOUNTING OF FUNDS AND TRANSACTIONS.
(a) The Trustee shall keep true and accurate records
of all transactions of the Trust Fund which records shall be
available for inspection on order by authorized representatives
of the Employer or by Participants at reasonable times.
Although a separate Account for each Participant
under the Plan shall be maintained as herein provided, it shall
not be necessary for the Trustee to make or maintain an actual
physical division of the assets of the Trust Fund until the time
shall arrive for the payment to a Participant or a beneficiary or
beneficiaries of a Participant, and, at such time or times, the
Trustee need only make an actual division of so much of any
Account as may be necessary to satisfy the particular payments to
be made.
(b) On the last day of the Plan Year, or more often
as directed by the Employer, the Trustee shall prepare and
deliver to the Employer an accounting of the funds and
transactions since the last previous such accounting of the Trust
Fund. In the absence of the filing in writing with the Trustee
by the Employer of exceptions or objections to such accounting
within one hundred twenty (120) days after the delivery of such
accounting to the Employer, the Employer shall be deemed to have
approved such accounting, and in such a case or upon the written
approval by the Employer of such an accounting, the Trustee shall
be released, relieved and discharged with respect to all matters
and things disclosed in such accounting as though such accounting
had been settled by decree of a court of competent jurisdiction.
7.12 RELIANCE ON TRUSTEE. No person contracting or in any
way dealing with the Trustee shall be under any obligation to
ascertain or inquire: (i) into any powers of the Trustee, (ii)
whether such powers have been properly exercised, or (iii) about
the sources or applications of any funds received from or paid to
the Trustee. Any person contracting or in any way dealing with
the Trustee may rely on the exercise of any power or authority as
the conclusive evidence that the Trustee possesses such power or
authority.
7.13 LEGAL ACTION. In the case of any suit or proceeding
regarding this Plan to which the Trustee is a party, the Trustee
shall be reasonably reimbursed for any and all costs, including
attorney's fees and for all necessary expenses which it has
incurred or become liable on account thereof or on account of any
other phase of its administration of the Trust Fund, and it shall
be entitled to reimburse itself for said expenses out of the
Trust Fund. In order to protect the Trust Fund against depletion
as the result of ill-advised litigation, it is agreed that in the
event any Participant, beneficiary or Employee brings any legal
action against the Trustee, the result of which shall be adverse
to the party bringing such suit, the court costs and attorney's
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fees to the Trustee in defending such suit shall be charged to
such extent as is allowed by a court of competent jurisdiction,
and as is possible, directly to the account of said Participant,
beneficiary or Employee, and only the excess, if any, of such
costs and fees over and above the Participant's separate share of
the fund shall be included in the expense in determining the
earnings or loss to the Trust Fund.
ARTICLE 8
AMENDMENT
---------
8.1 AMENDMENT. Except as herein limited, the Plan
Sponsor shall have the right to amend this Plan at any time to
any extent that it may deem advisable. Any amendment of the Plan
shall be set forth in an instrument in writing approved by the
Plan Sponsor's Board of Directors. All Participants, the Plan
Sponsor, all Employers, the Administrator and the Trustee shall
be bound by any amendment to this Plan except that:
(a) No amendment shall increase the duties or
liabilities or the Administrator or the Trustee without the
consent of such party;
(b) No amendment shall have the effect of vesting in
the Employer any interest in or control over any of the assets
held by the Trustee pursuant to this Plan; and
(c) No amendment shall have the effect of the
elimination of a benefit protected under Code Section 411(d)(6)
with respect to the Plan, unless such elimination is permitted
under Treasury regulation Sections 1.401(a)-4 and 1.411(d)-4.
(d) No amendment to the Plan's vesting schedule shall
deprive any Participant of any vested interest in his or her
Accrued Benefit. If the Plan's vesting schedule is amended, any
Participant having not less than three (3) Years of Service shall
be permitted to elect, in writing, to the Administrator, to have
his or her Vested Percentage computed under the Plan without
regard to such amendment, provided such Participant's Vested
Percentage at some point under the amended schedule may be less
than such Participant's Vested Percentage at some point under the
prior vesting schedule.
The period during which the vesting schedule
election must be made by the Participant shall begin no later
than the date the Plan amendment is adopted and end no later than
the latest of the following dates:
(i) The date which is sixty (60) days after the
day the amendment is adopted;
(ii) The date which is sixty (60) days after the
day the amendment becomes effective;
(iii) The date which is sixty (60) days after the
day the Participant is issued written notice of the amendment by
the Employer or Administrator.
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8.2 PROCEDURE. An amendment under this Article shall be
valid only if it is approved by the Plan Sponsor's Board of
Directors at a duly called meeting at which a quorum thereof is
present or by written consent of the members of the Employer's
Board of Directors executed in accordance with applicable state
law.
ARTICLE 9
TERMINATION
-----------
9.1 RIGHT TO TERMINATE. It is expected that this Plan
and the payment of contributions hereunder will continue
indefinitely, but the continuance of this Plan is not assumed as
a contractual obligation of any Employer. The Plan Sponsor shall
have the right at any time, and without the consent of any party,
to terminate this Plan in its entirety.
9.2 EFFECT OF TERMINATION. Upon a termination of this
Plan, upon a partial termination of the Plan as determined under
applicable rules and regulations of the Internal Revenue Service
or upon a complete discontinuance of contributions to the Plan,
the Plan Account of each Employee with respect to whom the Plan
is being terminated (including any Participant who has not
received a complete distribution of his or her vested Plan
Account and has not incurred, as of the date of the termination
at least five (5) Breaks in Service) or with respect to whom
contributions are being discontinued shall become fully vested.
Upon such termination or partial termination, the Administrator
shall instruct the Trustee to transfer to each Participant or
retired Participant (or his or her beneficiaries) with respect to
whom the Plan is being terminated, by suitable instrument of
transfer and delivery thereof, all assets held by the Trustee for
such Participant or retired Participant (or his or her
beneficiaries). If, however, the Employer or any entity within a
controlled group (determined under the Code) with the Employer
maintains another defined contribution plan other than an
employee stock ownership plan (as defined by Code Section
4975(e)(7)), the Plan Accounts of all Participants will be
determined and transferred to such other defined contribution
plan, unless the Participant consents to an immediate
distribution from the Plan.
9.3 PROCEDURE. Discontinuance or termination under this
Article shall be valid only if it is approved by the Plan
Sponsor's Board of Directors (or by the terminating Employer's
Board of Directors in the case of a partial termination of the
Plan as to that Employer's Employees) at a duly called meeting at
which a quorum thereof is present or by written consent of the
members of the Plan Sponsor's Board of Directors (or by the
terminating Employer's Board of Directors in the case of a
partial termination of the Plan as to that Employer's Employees)
executed in accordance with applicable state law.
9.4 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS OF THE
EMPLOYER. In the event of merger or consolidation of an
Employer, or transfer of all or substantially all of its assets
to any corporation or other business, provisions may be made by
any successor organization for the continuance of this Plan, and
said successor shall in such event be substituted in place of the
Employer by an appropriate instrument confirming such
substitution and adopting this Plan. Notice of such substitution
delivered to the Trustee shall be authority to the Trustee to
recognize such successor in place of the Employer. The
continuation of this Plan shall be by a separate plan and trust,
to which the Trustee shall transfer the Plan Accounts of
Employees of that Employer.
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9.5 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS OF THE
PLAN. In the event of the merger, consolidation or transfer of
the assets of the Plan with any other pension or profit sharing
plan, such action shall be on terms providing that each
Participant in this Plan would (if the transferee plan then
terminated) receive a benefit immediately after the merger,
consolidation or transfer which is not less than the benefit the
Participant would have been entitled to receive immediately
before such action (if the Plan had then terminated).
ARTICLE 10
PROVISIONS TO PREVENT DISCRIMINATION
------------------------------------
10.1 NO SECTION 401(a) DISCRIMINATION. No contributions
made to the Trust Fund by the Employer, nor benefits received
from the Trust Fund by the Participants or their beneficiaries,
shall be discriminatory within the meaning of Code Section 401.
10.2 UNIFORM TREATMENT. This Plan shall be administered
and construed in a uniform and non-discriminatory manner,
treating similarly situated Participants alike.
ARTICLE 11
IN-SERVICE WITHDRAWALS FROM PLAN ACCOUNTS
-----------------------------------------
11.1 HARDSHIP WITHDRAWALS. No amounts may be withdrawn
from a Participant's Plan Account prior to the Participant's
retirement, death, disability or other termination of service
with the Employer, except in the case of financial hardship. A
Participant may withdraw all or part of his or her Plan Account
(exclusive of earnings attributable to his or her Salary
Reduction Contribution Account) while the Participant is an
Employee, if the Participant is suffering an immediate and heavy
financial hardship. A hardship withdrawal may not exceed the
amount which is necessary to alleviate the Participant's
financial hardship. The determination of the existence of an
immediate and heavy financial hardship and of the amount
necessary to alleviate the financial hardship shall be made based
upon all the relevant facts and circumstances and in accordance
with either set of standards set forth below.
A distribution will be deemed to be made on account
of an immediate and heavy financial hardship of the Participant
if the distribution is on account of (1) medical expenses
described in Code Section 213(d) previously incurred by the
Participant, the Participant's spouse, or any dependents of the
Participant (as defined in (Code Section 152) or necessary for
these persons to obtain medical care described in Code Section
213(d); (2) costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage payments); (3)
the payment of tuition and related educational fees for the next
twelve (12) months of post-secondary education for the
Participant, or for the Participant's spouse, children, or
dependents (as defined in Code Section 152); (4) payments
necessary to prevent the eviction of the Participant from his or
her principal residence or foreclosure on the mortgage of the
Participant's principal residence; (5) any other event which is
deemed an immediate and heavy financial hardship by the Secretary
of Treasury; or (6) any federal, state or local income taxes or
penalties reasonably anticipated to result from the hardship
distribution.
A distribution will be deemed to be necessary to
alleviate the Participant's immediate and heavy financial
hardship if the following requirements are satisfied: (1) the
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distribution is not in excess of the amount of the immediate and
heavy financial hardship of the Participant; and (2) the
Participant has obtained all distributions, other than hardship
distributions, and all non-taxable (at the time of the loan)
loans currently available under the Plan, and all other plans
maintained by the Employer.
A Participant who receives a hardship distribution
may not make Salary Reduction Contributions to the Plan (or to
any other qualified or non-qualified plans of deferred
compensation (including stock option, stock purchase and similar
plans, and any cash or deferred arrangement that is part of a
cafeteria plan under Code Section 125) maintained by the
Employer, other than the mandatory employee contribution to a
defined benefit plan and other than health or welfare plans) for
the twelve (12) month period beginning on the date of receipt of
the hardship distribution, and the aggregate of Salary Reduction
Contributions made by the Participant for the calendar year of
the hardship distribution and the calendar year immediately
following the year of distribution cannot exceed the dollar
limitation in Code Section 402(g). Notwithstanding any other
provision of the Plan, if a Participant is suspended from making
Salary Reduction Contributions for a period of twelve (12) months
because of a hardship withdrawal, such Participant may resume
making Salary Reduction Contributions immediately following such
twelve (12) month period.
11.2 WITHDRAWALS FROM ROLLOVER CONTRIBUTION ACCOUNTS. A
Participant may at any time withdraw all or any portion of the
Participant's Rollover Contribution Account, subject, however, to
such uniform rules as to required notice, frequency of
withdrawals, minimum withdrawal amounts at any one time, and the
like, as the Administrator may establish.
11.3 IN-SERVICE WITHDRAWALS BY INSIDERS. No Participant
who is an Insider may elect to withdraw that portion of his or
her Plan Account that is invested in the Company Stock Fund prior
to his or her termination of employment with the Employer unless
such election is made in the period during which the Insider is
permitted to make a fund-to-fund investment election involving
the Company Stock Fund under Section 3.12.
ARTICLE 12
LOANS TO PARTICIPANTS
---------------------
12.1 LOAN ADMINISTRATION. The Trustee, or, in the case of
a directed Trustee, the Plan Sponsor (the "Loan Administrator")
is authorized to establish and administer a loan program as
provided herein.
Effective January 1, 1995, parties in interest (as
defined in ERISA Section 3(14)) who are Participants, or who are
beneficiaries who have become entitled to receive a benefit under
the Plan, may make written application to the Loan Administrator
for a loan. The Loan Administrator shall review the loan
application and approve or deny the application in writing, in
accordance with the uniform and non-discriminatory loan policy
set forth in this Article. Any such loan shall be made from the
assets of, and shall be charged against, the borrower's Plan
Account. Any such loan shall be charged against the sub-accounts
of the borrower's Plan Account in the following order: (a) the
Salary Reduction Account; and (b) the Employer Matching
Contribution Account.
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12.2 FREQUENCY, NUMBER. Until a loan from the Plan to a
borrower, including any interest due, is completely repaid, such
borrower shall not be permitted to borrow additional amounts from
the Plan. In addition, a borrower may borrow from the Plan only
once in any one Plan Year.
12.3 AMOUNT, AVAILABILITY. The minimum amount which a
borrower may borrow at any one time from the Plan, exclusive of
interest, is one thousand dollars ($1,000).
The maximum amount which a borrower may borrow from
the Plan, when added to the outstanding balance of all other
loans from the Plan and from any other qualified plans maintained
by the Employer and any entity required to be aggregated with the
Employer pursuant to Code Section 72(p), exclusive of interest,
shall not exceed the lesser of: (i) fifty thousand dollars
($50,000), reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the borrower during
the one (1) year period ending on the day before the date on
which such loan was made, over the outstanding balance of loans
from the Plan to the borrower on the date on which such loan was
made; or (ii) fifty percent (50%) of the borrower's vested Plan
Account, determined as of the origination date of the loan in the
same manner as provided in Section 12.7. A borrower's vested
interest in the Plan shall be determined in accordance with Code
Section 72(p)(2)(A). In addition, the Loan Administrator shall
approve a loan made pursuant to this Article only if the Loan
Administrator determines, in his or her sole and absolute
discretion, that the amount of such loan is reasonable based on
factors that are legally considered by commercial entities in
the business of making similar loans. In no event shall a loan be
made which would be taxed under Code Section 72(p) as a
distribution from the Plan.
12.4 NON-DISCRIMINATION. Loans shall be available to all
parties in interest (as defined above) who are Participants, or
who are beneficiaries who have become entitled to receive a
benefit under the Plan, on a reasonably equivalent basis, without
regard to an individual's race, color, religion, age, sex or
national origin. In approving such loans, the Loan Administrator
shall not discriminate in favor of highly compensated employees
(within the meaning of Code Section 414(q)) as to the general
availability of loans, as to the terms of repayment, or as to the
amount of such loans in proportion to the vested portion of the
Borrower's Plan Account. Notwithstanding anything in this Plan
to the contrary, all loans shall comply with the requirements of
Section 408(b)(1) of ERISA.
12.5 LOAN APPROVAL. The Loan Administrator shall not take
the purpose of the loan into account in approving or disapproving
a loan application. The Loan Administrator shall approve or deny
the loan application based on the same factors which commercial
lenders in the business of making similar types of loans legally
recognize for purposes of loan availability. The Loan
Administrator may examine such factors as creditworthiness,
financial need, adequacy of security and risk of loss to the Plan
in the event of default. Based on these factors, Participants
and beneficiaries other than active employees may be offered
loans on different terms and conditions due to valid economic
differences.
12.6 INTEREST RATE. Each loan shall bear a rate of
interest equal to the Taneytown Bank & Trust Company prime rate
as of the first (1st) day of the month in which the loan
application properly is submitted to the Loan Administrator. The
Loan Administrator may from time to time set appropriate
processing and loan administration fees.
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12.7 COLLATERAL. Each loan, to the extent of the amount
of the indebtedness, including interest, shall be secured by the
assignment of up to fifty percent (50%) of the borrower's vested
Plan Account, determined as of the origination date of the loan,
supported by the borrower's collateral promissory note for the
payment of the indebtedness, including interest, payable to the
order of the Trustee. No more than fifty percent (50%) of the
borrower's vested Plan Account, determined as of the origination
date of the loan, may be used as collateral for loans hereunder.
Subject to applicable provisions of law, each loan shall be
further supported by the Participant's execution of an agreement,
in a form specified by the Loan Administrator, to repay the loan
by payroll deduction over a term and in a manner specified by the
Loan Administrator. In addition to the assignment of any part of
the borrower's Plan Account, the Loan Administrator may require
such additional collateral as he or she may deem necessary to
adequately secure such loan. The Loan Administrator shall choose
collateral that the Plan can sell or foreclose on in the event of
default, that will not leave the Plan with a loss of principal or
interest and that would be sufficient in the same context in a
commercial setting. The assignment of any part of the borrower's
Plan Account provided for above shall be void for any period of
time during which the loan fails to comply with Code Section
4975(d)(1) and Section 408(b)(1) of ERISA.
12.8 REPAYMENT. Except as provided in regulations or
other formal guidance issued by the Secretary of the Treasury or
by the Department of Labor, and subject to any limitations which
may apply in the case of a borrower who is not an active
Employee, loans shall be repaid by payroll deductions. Any loan
to a borrower shall be repaid in such manner and over such period
as will constitute level amortization of such loan over the term
of the loan (with payments not less frequently than quarterly),
and the term of the loan shall not exceed such period (not to
exceed five years, or such longer period as may be allowed
without causing the loan to be taxed under Code Section 72(p) as
a distribution from the Plan) as the Loan Administrator shall
determine. All payments by a borrower on any such loan,
including interest, shall be credited to such borrower's Plan
Account.
The events of default shall be listed specifically in
the borrower's Loan Agreement. The Loan Agreement provisions are
deemed part of the Plan with respect to that borrower for
purposes of complying with Department of Labor regulation Section
2550.408b-l(d)(2). Generally, a borrower is in default if one or
more of the following events occurs: (a) any false or misleading
representation, warranty, or statement is made by the borrower in
connection with the borrower's Loan Agreement; (b) failure by the
borrower to pay any loan obligation when due; (c) failure by the
borrower to observe or perform any warranty, covenant, condition
or agreement under the Loan Agreement; (d) the borrower's death
or retirement; (e) the borrower's request for a distribution of
the borrower's Plan Account (other than a hardship distribution
of that portion of the Participant's vested account which is not
used as collateral for any loan hereunder); or (f) the borrower's
termination of employment. If a borrower defaults in the
repayment of the loan, the borrower's Plan Account used as
collateral shall be charged with the full unpaid balance of the
loan, including any accrued but unpaid interest, as of the
earliest date on which the borrower may elect to receive a
distribution of a portion or all of his or her Plan Account. If
the borrower's Plan Account used as collateral is insufficient to
repay the remaining balance of the loan, including interest, such
borrower shall be liable for and continue to make payments on any
balance still due. Any costs incurred by the Trustee or Loan
Administrator
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in collecting amounts due, including attorney's fees, shall be
added to the principal balance of the loan and treated
accordingly.
12.9 PARTICIPANT CONSENT TO LOAN SET-OFFS. No loan shall
be made to a Participant unless the Participant consents, in
writing, to the loan and to the fact that, if the loan defaults,
the Participant's account may be reduced as provided in this
Article, before the Participant attains the age of sixty-five
(65). The consent of the Participant must be made within the
ninety (90) day period before the making of the loan. For
purposes of this Section, any renegotiation, extension, renewal
or other revision of a loan shall be treated as a new loan made
on the day of the renegotiation, extension, renewal or other
revision.
12.10 DISTRIBUTIONS PROHIBITED. No distribution (other
than a hardship distribution of that portion of the Participant's
vested Plan Account which is not used as collateral for any loan
hereunder) under the Plan shall be made to any Participant or
former Participant or to a beneficiary of any such Participant
unless all unpaid loans, including accrued interest, have been
repaid or otherwise discharged.
12.11 NO ALIENATION. A loan made to a borrower shall not
be treated as an assignment or alienation of any portion of the
borrower's Plan Account due to the fact that the loan will be
secured by the borrower's Plan Account and all loans made to
Participants and beneficiaries shall be made in a manner to be
exempt from the tax imposed on prohibited transactions under Code
Section 4975(d)(1).
12.12 DISCLOSURE. Every borrower must receive from the
Loan Administrator a statement which describes the procedure for
loan application, the events constituting default and the steps
which will be taken by the Plan in the event of default, and a
clear statement of the charges involved in each loan transaction.
The statement of charges shall include the dollar amount of the
loan and the annual interest rate.
ARTICLE 13
TOP HEAVY PROVISIONS
--------------------
13.1 TOP HEAVY REQUIREMENTS. Notwithstanding anything
contained herein to the contrary, if the Plan is a Top Heavy Plan
for any Plan Year, then the Plan shall meet the following
requirements for such Plan Year:
(a) MINIMUM VESTING REQUIREMENTS. Vesting shall be
determined in accordance with one of the following schedules as
designated by the Administrator by written resolution, except
that if the vesting schedule then in effect is more favorable in
all respects to Participants than either of the following
schedules, the vesting schedule then in effect shall continue to
apply:
(i) A Participant will have a fully vested
interest in his or her Plan Account upon completion of not more
than three (3) Years of Service for vesting purposes; or
(ii) A Participant's vested interest in his or
her Plan Account will be determined under a schedule which is not
less favorable to the Participant than the following:
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YEARS OF VESTING SERVICE VESTED INTEREST
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
If the Administrator fails to designate one of the
preceding schedules, Schedule (ii) shall be deemed to have been
designated.
If this Plan is found to be a Top Heavy Plan and
subsequently ceases to be a Top Heavy Plan, then the vested
interest of a Participant with fewer than three (3) Years of
Service on the date on which the Plan ceases to be a Top Heavy
Plan in benefits accrued with respect to Plan Years after the
Plan ceases to be a Top Heavy Plan shall be determined without
regard to the preceding schedules; the vested interest of a
Participant with more than three (3) Years of Vesting Service on
that date shall in that event, upon the Participant's election,
continue to be determined by the preceding schedules.
Notwithstanding the preceding, if the Plan's normal
vesting schedule is more favorable than the Top Heavy schedule
above, the Plan's normal vesting schedule shall continue to apply
when the Plan is a Top Heavy Plan. In addition, a Participant's
vested percentage will not be reduced as the result of the Plan's
change from Top Heavy to Non-Top Heavy status or from Non-Top
Heavy to Top Heavy status.
(b) MINIMUM CONTRIBUTION REQUIREMENT. This Plan will
provide a minimum contribution allocation for such Plan Year for
each Participant who is eligible to participate in the Plan for
the Plan Year (regardless of whether he or she has earned a Year
of Service during the Plan Year), who is employed by the Employer
on the last day of the Plan Year and who is a Non-Key Employee in
an amount equal to at least three percent (3%) of such
Participant's Compensation (as defined in Section 3.5(a)) for
such Plan Year. The three percent (3%) minimum contribution
allocation requirement shall be increased to four percent (4%)
for any year in which the Employer also maintains a defined
benefit pension plan if such increase is necessary to avoid the
application of Code Section 416(h)(1), relating to special
adjustments to Code Section 415 limits for Top Heavy Plans, and
if the adjusted limitations of Code Section 416(h)(1) would
otherwise be exceeded if such minimum contribution allocation
were not so increased.
The minimum contribution allocation requirements
set forth hereinabove shall be reduced in the following
circumstances:
(i) The percentage minimum contribution
allocation required hereunder shall in no event exceed the
percentage contribution allocation made for the Key Employee for
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<PAGE>
whom such percentage is the highest for the Plan Year, after
taking into account contribution allocations and benefits under
other qualified plans in this Plan's aggregation group as
provided in Code Section 416(c)(2)(B)(ii); and
(ii) No minimum contribution will be required
(or the minimum contribution will be reduced, as the case may be)
for a Participant under this Plan for any Plan Year if the
Participant's Employer maintains another qualified plan under
which a minimum benefit or contribution is being funded or made
for such year for the Participant in accordance with Code Section
416(c).
(c) ADDITIONAL SUPER TOP HEAVY REQUIREMENT. If the
Plan is a Super Top Heavy Plan for any Plan Year, the limitations
on annual additions contained in Article 4 shall be adjusted
pursuant to Code Section 416(h).
13.2 TOP HEAVY PLAN DEFINITIONS. For purposes of this
Article, the following terms shall have the meanings provided
below:
(a) A plan is a "TOP HEAVY PLAN" if, as of the
Determination Date, the aggregate of the accounts of Key
Employees under a defined contribution plan exceeds sixty percent
(60%) of the aggregate of the accounts of all employees under
such plan or, in the case of a defined benefit plan, the present
value of the cumulative accrued benefits under the plan for Key
Employees exceeds sixty percent (60%) of the present value of the
cumulative accrued benefits under the plan for all employees, all
as adjusted by and determined in accordance with the provisions
of Code Section 416(g). The determination of whether a plan is
Top Heavy shall be made after aggregating each Plan of the
sponsoring Employer in which at least one Key Employee
participates and each other plan of the sponsoring Employer which
enables any plan in which at least one Key Employee participates
to meet the requirements of Code Section 401(a)(4) or 410, and
after aggregating any plan not required to be aggregated by the
foregoing if such aggregated group of plans, taking such plan
into account, continues to meet the requirements of Code Sections
401(a)(4) and 410. A plan is a "SUPER TOP HEAVY PLAN" if, as of
the Determination Date, the plan would meet the test specified
above for being a Top Heavy Plan if ninety percent (90%) were
substituted for sixty percent (60%) in each place it appears in
this subsection (a).
(b) The "DETERMINATION DATE" for purposes of
determining whether a plan is Top Heavy for a particular plan
year is the last day of the preceding plan year (or, in the case
of the first plan year of a plan, the last day of the first plan
year).
(c) A "KEY EMPLOYEE" is any employee or former
employee (including a beneficiary of such employee or former
employee) who at any time during the plan year or any of the four
(4) preceding plan years is:
(i) An officer of the plan sponsor or any
corporation required to be aggregated with the plan sponsor under
Code Sections 414(b), (c), (m) or (o) who has annual compensation
(as defined below) from the plan sponsor or any corporation
required to be aggregated with the plan sponsor under Code
Sections 414(b), (c), (m) or (o) of more than fifty percent (50%)
of the amount in effect under Code Section 415(b)(1)(A) for the
plan year (but in no event shall
45
<PAGE>
the number of officers taken into account as Key Employees exceed
the lesser of (i) fifty (50) or, (ii) the greater of three (3) or
ten percent (10%) of all employees).
(ii) One (1) of the ten (10) Employees owning
(or considered as owning within the meaning of Code Section 318)
both more than a one-half percent (1/2%) ownership interest and the
largest percentage ownership interests in the Employer, and (ii)
as annual compensation (as defined below) of more than the amount
in effect under Code Section 415(c)(1)(A). For purposes of this
Section, if two (2) Employees have the same interests in the
Employer, the Employee having greater annual compensation (as
defined below) from the Employer shall be treated as having a
larger interest;
(iii) A person owning (or considered as owning
within the meaning of Code Section 318) more than five percent
(5%) of the outstanding stock of the plan sponsor or stock
possessing more than five percent (5%) of the total combined
voting power of all stock of the plan sponsor; or
(iv) A person who has an annual compensation (as
defined below) from the plan sponsor (or any corporation required
to be aggregated with the plan sponsor under Code Sections
414(b),(c), (m) or (o)) of more than one hundred fifty thousand
dollars ($150,000) and who would be described in subparagraph
(iii) hereof if one percent (1 %) were substituted for five
percent (5%).
For purposes of applying Code Section 318 to the
provisions of this subsection (c), subparagraph (C) of Code
Section 318(a)(2) shall be applied by substituting five percent
(5%) for fifty percent (50%). In addition, the rules of
subsections (b), (c) and (m) of Code Section 414 shall not apply
for purposes of determining ownership of the plan sponsor under
this subsection (c).
For purposes of determining whether an Employee
is a Key Employee, annual compensation means compensation as
defined in Code Section 415(c)(3), but including amounts
contributed by the Employer pursuant to a salary reduction
agreement which are excludible from the Employee's gross income
under Code Sections 125, 402(a)(8), 402(h) or 403(b).
(d) A "NON-KEY EMPLOYEE" is any participant in a plan
(including a beneficiary of such participant) who is not a Key
Employee.
ARTICLE 14
MISCELLANEOUS
------------
14.1 NO RIGHT TO EMPLOYMENT. Participation in this Plan
shall not give any person the right to be retained in the employ
of the Employer, or any right or interest in this Plan other than
as herein provided.
14.2 HEADINGS. The headings and sub-headings in this
instrument are inserted for convenience of reference only and are
nol to be considered in construing the provisions hereof.
46
<PAGE>
14.3 COUNTERPARTS. This instrument may be executed in any
number of counterparts, each of which shall be deemed an
original, and said counterparts shall constitute but one and the
same instrument, which may be sufficiently evidenced by any one
counterpart.
14.4 GOVERNING LAW. This Plan shall be construed,
administered and governed in all respects under and by the laws
of the State of Maryland, except to the extent Maryland law shall
have been preempted by ERISA.
14.5 RULES AND REGULATIONS. By becoming a Participant,
every Participant shall thereby be deemed to have agreed to abide
by the rules and regulations of the Administrator made in
accordance with this Plan, and to sign all papers necessary for
the compliance therewith.
14.6 NO ASSIGNMENT OF BENEFITS. Except as expressly
provided herein, no benefits under the Plan may be assigned or
alienated, and the Trustee shall pay all amounts payable
hereunder, and shall distribute all assets distributable
hereunder, to any person, into the hands of such person and not
unto any other person or corporation whatsoever, whether claiming
by his or her authority or otherwise; nor may said payments be
anticipated. Except as expressly provided herein, the interest
of any Participant hereunder may not be assigned or encumbered,
nor shall it be subject to attachment or other judicial process.
However, deposit to the credit of the account of any person in a
bank or trust company designated by such person in writing shall
be deemed to be the equivalent of payment into the hands of such
person. Notwithstanding the foregoing, amounts held for the
benefit of a Participant may be paid in accordance with a
"qualified domestic relations order" as defined in Code Section
414(p) (or a domestic relations order entered before January 1,
1985 which, in the judgment of the Administrator, is entitled to
be treated as a qualified domestic relations order), so long as
the payment complies with Code Section 414(p). A domestic
relations order shall not fail to be a "qualified domestic
relations order" if it provides for the payment of a portion or
all of a Participant's Plan Account in one of the forms of
payment provided under the Plan to an "alternate payee" prior to
the Participant's "earliest retirement age", as defined in Code
Section 414(p) and the Plan shall permit such distribution
notwithstanding any other provision of the Plan to the contrary.
14.7 EXCLUSIVE BENEFIT. The Trust Fund shall be held by
the Trustee for the exclusive purpose of providing benefits to
Participants and their beneficiaries and defraying reasonable
expenses of administering the Plan. No part of the Trust shall
ever inure to the benefit of the Employer, except that:
(a) Any contribution made to the Trust Fund by the
Employer which is attributable to a mistake of fact may be
returned to the Employer within one year after such contribution
was made;
(b) All contributions shall be conditioned on the
initial qualification of the Plan under Code Section 401, and if
the Plan does not qualify, then such contributions may be
returned to the Employer (or in the case of Salary Reduction
Contributions to the appropriate Participants) within one year
after the date of denial of qualification of the Plan.
47
<PAGE>
(c) All contributions shall be conditioned on their
deductibility under Code Section 404, and any nondeductible
contribution will be returned to the Employer (or, in the case of
Salary Reduction Contributions, to the affected Participants)
within one year after the date of disallowance of such deduction.
(d) If a return of contributions pursuant to the
foregoing is due to a good faith mistake of fact or a good faith
mistake in determining the deductibility of the contribution:
(i) The amount which may be returned to the
Employer is the excess of the amount contributed over the amount
that would have been contributed had there not occurred a mistake
of fact or a mistake in determining the deduction; and
(ii) Gains attributable to such excess
contribution may not be withdrawn, but losses attributable
thereto must reduce the amount to be returned; and
(iii) In no event may a return of contributions
be due which would cause the Account of any Participant to be
reduced to an amount less than the amount which would have been
credited to the Participant's Account if the mistaken amount not
been contributed.
(e) If the return of contributions is due to the
non-deductibility for federal tax purposes under Code Section 404
or any statute of similar impact, such amount shall be deemed
forfeited within one year after the date of disallowance of the
deduction and shall be applied to reduce future Employer
Contributions due hereunder.
14.8 WITHDRAWAL OR TERMINATION BY AN EMPLOYER.
(a) Any Employer, by action of its board of directors
or other governing authority and notice to the Plan Sponsor, the
Administrator and the Trustee, may withdraw from the Plan and
Trust at any time, or may terminate the Plan and Trust with
respect to its Employees at any time, without affecting other
Employers not withdrawing or terminating. A withdrawing Employer
may arrange for the continuation of this Plan and Trust in
separate forms for its own Employees, with such amendments, if
any, as it may deem proper, and may arrange for continuation of
the Plan and Trust by merger with an existing plan and trust, and
transfer of Trust Fund assets. The Plan Sponsor may, in its
absolute discretion, terminate an Employer's participation in
this Plan at any time, without the consent of any Employer,
Participant or beneficiary.
(b) An Employer which withdraws from or terminates
its participation in this Plan shall direct the Trustee to
liquidate the share of the Trust Fund allocable to its Employees
or their beneficiaries, as determined by the Administrator. If
the Employer is not terminating the Plan, such share shall be
transferred to a successor trust upon receipt of evidence
satisfactory to the Administrator that the successor trust
qualifies under Code Section 401(a). If the Employer is
terminating the Plan, such share shall be distributed as provided
in Article .
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<PAGE>
IN WITNESS WHEREOF, as evidence of its adoption of this
Plan, the Plan Sponsor, the Employer has caused this Plan to be
executed, and the Trustee has joined herein to evidence its
acceptance of the provisions of the Plan applicable to the
Trustee, generally effective as of January 1, 1993.
ATTEST/WITNESS: TANEYTOWN BANK & TRUST COMPANY
(As Employer)
/s/ Kathleen A. Ford By: /s/ Frank W. Neubauer, Jr.
- -------------------------- -------------------------------
Print Title: President and Chief
Name: Kathleen A. Ford Executive Officer
Print
Name: Frank W. Neubauer, Jr.
Date: December 7, 1995
MONOCACY BANCSHARES, INC. (As
Plan Sponsor)
/s/ Kathleen A. Ford /s/ Frank W. Neubauer, Jr.
- ------------------------- -------------------------------
Print Title: President and Chief
Name: Kathleen A. Ford Executive Officer
Print
Name: Frank W. Neubauer, Jr.
Date: December 7, 1995
TRUST DIVISION - TANEYTOWN BANK
& TRUST COMPANY (As Trustee)
/s/ Elizabeth R.Benjamin /s/ Brian M. Etzler
- -------------------------- -------------------------------
Print Title: Vice President and
Name: Elizabeth R. Benjamin Trust Officer
Print
Name: Brian M. Etzler
Date: December 7, 1995
49
EXHIBIT 99(ii)
Internal Revenue Service Determination Letter
<PAGE>
INTERNAL REVENUE SERVICE
DISTRICT DIRECTOR DEPARTMENT OF THE TREASURY
31 HOPKINS PLAZA
BALTIMORE, MD 21201-0000
Employer Identification Number:
Date: February 27, 1996 52-0247790
File Folder Number:
TANEYTOWN BANK & TRUST COMPANY 521021298
222 E. BALTIMORE STREET Person to Contact:
TANEYTOWN, MD 21787 Gloria E. Cieri
Contact Telephone Number:
(410) 962-2330
Plan Name:
TANEYTOWN BANK & TRUST
COMPANY
RETIREMENT SAVINGS PLAN
Plan Number: 005
Dear Applicant:
We have made a favorable determination on your plan,
identified above, based on the information supplied. Please keep
this letter in your permanent records.
Continued qualification of the plan under its present form
will depend on its effect in operation. (See section 1.401-1(b)(3)
of the Income Tax Regulations.) We will review the status of the
plan in operation periodically.
The enclosed document explains the significance of this
favorable determination letter, points out some features that may
affect the qualified status of your employee retirement plan, and
provides information on the reporting requirements for your plan.
It also describes some events that automatically nullify it. It
is very important that you read the publication.
This letter relates only to the status of your plan under
the Internal Revenue Code. It is not a determination regarding
the effect of other federal or local statutes.
This determination letter is applicable for the amendment(s)
adopted on April 25, 1995.
This plan has been mandatorily disaggregated, permissively
aggregated, or restructured to satisfy the nondiscrimination
requirements.
This plan satisfies the nondiscrimination in amount
requirement of section 1.401(a)(4)-1(b)(2) of the regulations on
the basis of a design-based safe harbor described in the
regulations.
This letter is issued under Rev. Proc. 93-39 and considers
the amendments required by the Tax Reform Act of 1986 except as
otherwise specified in this letter.
This plan satisfies the nondiscriminatory current
availability requirements of section 1.401(a)(4)-4(b) of the
regulations with respect to those benefits, rights, and features
that are currently available to all employees in the plan's
coverage group. For this purpose, the plan's coverage group
consists of those employees treated as currently benefiting for
purposes of demonstrating that the plan satisfies the minimum
coverage requirements of
<PAGE>
- 2 -
TANEYTOWN BANK & TRUST COMPANY
section 410(b) of the Code.
This letter may not be relied upon with respect to whether
the plan satisfies the qualification requirements as amended by
the Uruguay Round Agreements Act, Pub. L. 103-465.
If you have questions concerning this matter, please contact
the person whose name and telephone number are shown above.
Sincerely yours,
/s/ Paul M. Harrington
----------------------
Paul M. Harrington
District Director
Enclosure(s)
Publication 794
