------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
BB&T CORPORATION
------------------------ ----------------
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0939887
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation of organization) Number)
200 West Second Street
Winston-Salem, North Carolina 27101
------------ -----------------------------------
(Address of principal executive offices, including zip code)
BB&T CORPORATION
401(K) SAVINGS PLAN
(Full title of the plan)
Jerone C. Herring, Esq.
BB&T Corporation
200 West Second Street
3rd Floor
Winston-Salem, North Carolina 27101
(336) 733-2180
--------------------------------
(Name, address and telephone number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered (1) registered per share (2) price (2) fee (2)
- -------------- ----------- ------------- ----------- -------
Common
Stock, par value
$5.00 per share 11,000,000 shares $ 26.001 $286,011,000 $75,506.90
- --------------------------------------------------------------------------------
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
as amended, this registration statement also covers an indeterminate
amount of plan interests to be offered or sold pursuant to the BB&T
Corporation 401(k) Savings Plan.
(2) Pursuant to Rule 457(c) and (h)(1), based on the average ($26.001)
of the high ($26.188) and low ($25.813) prices of the Registrant's
Common Stock on May 5, 2000, as reported on the New York Stock Exchange.
----------------
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
- ------ ---------------------------------------
The following documents filed by BB&T Corporation (the
"Company" or "BB&T") with the Securities and Exchange Commission (the
"Commission") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the Commission on March 14, 2000, and the
Annual Report on Form 11-K of the BB&T Corporation 401(k) Savings Plan (or its
predecessor plan) (the "Plan") for the fiscal year ended December 31, 1998,
filed with the Commission on June 29, 1999;
(b) The Company's Current Reports on Form 8-K filed with the
Commission on January 12, 2000, February 7, 2000, February 9, 2000, April 11,
2000 and April 28, 2000, respectively;
(c) The description of the Company's Common Stock, par value
$5.00 per share, contained in the Company's Registration Statement on form 8-A
filed with the Commission on September 4, 1991 with respect to such Common
Stock, including any amendment or report filed for the purposes of updating such
description;
(d) The Company's Registration Statement on Form 8-A relating
to the Company's shareholder rights plan, filed with the Commission on January
10, 1997; and
(e) All other reports filed pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year referred to in (a)
above; and
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such documents.
Pursuant to General Instruction E to Form S-8, the contents of
Registration Statement No. 33-54713 and Registration Statement No. 33-57867,
relating to the offer and sale of the Registrant's Common Stock and related plan
interests under the Plan or predecessor plans of the BB&T Corporation 401(k)
Savings Plan, are incorporated by reference in this Registration Statement on
Form S-8.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
- ------ --------------------------------------
The legality of the securities offered hereby has been passed
upon by Jerone C. Herring, Esquire, Executive Vice President and General Counsel
of the Company, who owns approximately 67,203 shares of Common Stock.
Item 6. Indemnification of Directors and Officers.
- ------ -----------------------------------------
Sections 55-8-50 through 55-8-58 of the North Carolina
Business Corporation Act contain specific provisions relating to indemnification
of directors and officers of North Carolina corporations. In general, such
sections provide that: (i) a corporation must indemnify a director or officer
who is wholly successful in his defense of a proceeding to which he is a party
because of his status as such, unless limited by the articles of incorporation,
and (ii) a corporation may indemnify a director or officer if he is not wholly
successful in such defense if it is determined as provided by statute that the
director or officer meets a certain standard of conduct, except that when a
director or officer is liable to the corporation or is adjudged liable on the
basis that personal benefit was improperly received by him, the corporation may
not indemnify him. A director or officer of a corporation who is a party to a
proceeding may also apply to a court for indemnification, and the court may
order indemnification under certain circumstances set forth in statute. A
corporation may, in its articles of incorporation or bylaws or by contract or
resolution of the board of directors, provide indemnification in addition to
that provided by statute, subject to certain conditions.
II - 1
<PAGE>
The registrant's bylaws provide for the indemnification of any
director or officer of the registrant against liabilities and litigation
expenses arising out of his status as such, excluding: (i) any liabilities or
litigation expenses relating to activities that were at the time taken known or
believed by such person to be clearly in conflict with the best interest of the
registrant and (ii) that portion of any liabilities or litigation expenses with
respect to which such person is entitled to receive payment under any insurance
policy.
The registrant's articles of incorporation provide for the
elimination of the personal liability of each director of the registrant to the
fullest extent permitted by law.
The registrant maintains directors' and officers' liability
insurance that, in general, insures: (i) the registrant's directors and officers
against loss by reason of any of their wrongful acts and (ii) the registrant
against loss arising from claims against the directors and officers by reason of
their wrongful acts, all subject to the terms and conditions contained in the
policy.
Certain rules of the Federal Deposit Insurance Corporation
limit the ability of certain depository institutions, their subsidiaries and
their affiliated depository institution holding companies to indemnify
affiliated parties, including institution directors. In general, subject to the
ability to purchase directors and officers liability insurance and to advance
professional expenses under certain circumstances, the rules prohibit such
institutions from indemnifying a director for certain costs incurred with regard
to an administrative or enforcement action commenced by any federal banking
agency that results in a final order or settlement pursuant to which the
director is assessed a civil money penalty, removed from office, prohibited from
participating in the affairs of an insured depository institution or required to
cease and desist from or take an affirmative action described in Section 8(b) of
the Federal Deposit Insurance Act (12 U.S.C. ss. 1818(b)).
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed as a part of this
Registration Statement:
Number Description
------ -----------
4.1 Amended and Restated Articles of Incorporation of the Company, as
amended, which are incorporated by reference to Exhibit 3(a) to the
Company's Annual Report on Form 10-K for the year ended December 31,
1996, filed with the Commission on March 17, 1997.
4.2 Articles of Amendment to the Articles of Incorporation of the
Company, which are incorporated by reference to Exhibit 3(a)(ii) to
the Company's Annual Report on Form 10-K for the year ended December
31, 1997, filed with the Commission on March 18, 1998.
4.3 Bylaws of the Company, as amended, which are incorporated by
reference to Exhibit 3(b) to the Company's Annual Report on Form
10-K for the year ended December 31, 1997, filed with the Commission
on March 18, 1998.
4.4 Rights Agreement dated as of December 17, 1996 between the Company
and Branch Banking and Trust Company, Rights Agent, which is
incorporated by reference to Exhibit A filed under Form 8-A, filed
with the Commission on January 10, 1997.
5 Opinion of Jerone C. Herring, Esq., Executive Vice President and
General Counsel to the Company.
23.1 Consent of Jerone C. Herring, Esq., Executive Vice President and
General Counsel to the Company, which is contained in his opinion
filed as Exhibit 5.
II - 2
<PAGE>
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney of Directors and Officers of the Company.
99 BB&T Corporation 401(k) Savings Plan.
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 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by
the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in the Registration Statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or
controlling person of the Company 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 Company 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
and will be governed by the final adjudication of such issue.
II - 3
<PAGE>
SIGNATURES
THE REGISTRANT
Pursuant to the requirements of the Securities Act of 1933, BB&T
Corporation 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 Winston-Salem, State of North Carolina, on this
8th day of May, 2000.
BB&T CORPORATION
By: /s/ Jerone C. Herring
Jerone C. Herring
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on May 8, 2000.
/s/ John A. Allison IV * /s/ Scott E. Reed *
- -------------------------------------- ---------------------
Name: John A. Allison IV Name: Scott E. Reed
Title: Chairman of the Board and Title: Senior Executive Vice President
Chief Executive Officer and Chief Financial Officer
(principal executive officer) (principal financial officer)
/s/ Sherry A. Kellett * /s/ Paul B. Barringer *
- -------------------------------------- -------------------------------
Name: Sherry A. Kellett Name: Paul B. Barringer
Title: Executive Vice President Title: Director
and Controller
(principal accounting officer)
/s/ Alfred E. Cleveland * /s/ W. R. Cuthbertson, Jr. *
- -------------------------------------- ------------------------------------
Name: Alfred E. Cleveland Name: W. R. Cuthbertson, Jr.
Title: Director Title: Director
/s/ Ronald E. Deal * /s/ A. J. Dooley, Sr. *
- -------------------------------------- -------------------------------
Name: Ronald E. Deal Name: A. J. Dooley, Sr.
Title: Director Title: Director
/s/ Tom D. Efird * /s/ Paul S. Goldsmith *
- -------------------------------------- -------------------------------
Name: Tom D. Efird Name: Paul S. Goldsmith
Title: Director Title: Director
/s/ L. Vincent Hackley * /s/ Jane P. Helm *
- -------------------------------------- --------------------------
Name: L. Vincent Hackley Name: Jane P. Helm
Title: Director Title: Director
/s/ Richard Janeway * /s/ J. Ernest Lathem *
- -------------------------------------- ------------------------------
Name: Richard Janeway, M.D. Name: J. Ernest Lathem, M.D.
Title: Director Title: Director
II - 4
<PAGE>
/s/ James H. Maynard * /s/ Joseph A. McAleer *
- -------------------------------------- -------------------------------
Name: James H. Maynard Name: Joseph A. McAleer
Title: Director Title: Director
/s/ Albert O. McCauley * /s/ Richard L. Player, Jr. *
- -------------------------------------- ------------------------------------
Name: Albert O. McCauley Name: Richard L. Player, Jr.
Title: Director Title: Director
/s/ C. Edward Pleasants, Jr. * /s/ Nido R. Qubein *
- -------------------------------------- ----------------------------
Name: C. Edward Pleasants, Jr. Name: Nido R. Qubein
Title: Director Title: Director
/s/ E. Rhone Sasser * /s/ Jack E. Shaw *
- -------------------------------------- --------------------------
Name: E. Rhone Sasser Name: Jack E. Shaw
Title: Director Title: Director
/s/ Harold B. Wells *
- --------------------------------------
Name: Harold B. Wells
Title: Director
*By: /s/ Jerone C. Herring
Name: Jerone C. Herring
Attorney-in-Fact
THE PLAN
Pursuant to the requirements of the Securities Act of 1933, the
Trustee has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Winston-Salem,
State of North Carolina, on this 8th day of May, 2000.
BB&T CORPORATION 401(K) SAVINGS PLAN
By: Branch Banking and Trust Company, N.A.
As Trustee
By: /S/ Robert E. Greene
Name: Robert E. Greene
Title: President
II - 5
<PAGE>
EXHIBIT INDEX
to
Registration Statement on Form S-8 of
BB&T Corporation
Exhibit No. Description
4.1 Amended and Restated Articles of Incorporation of the Company, as
amended, which are incorporated by reference to Exhibit 3(a) to the
Company's Annual Report on Form 10-K for the year ended December 31,
1996, filed with the Commission on March 17, 1997.
4.2 Articles of Amendment to the Articles of Incorporation of the Company,
which are incorporated by reference to Exhibit 3(a)(ii) to the
Company's Annual Report on Form 10-K for the year ended December 31,
1997, filed with the Commission on March 18, 1998.
4.3 Bylaws of the Company, as amended, which are incorporated by reference
to Exhibit 3(b) to the Company's Annual Report on Form 10-K for the
year ended December 31, 1997, filed with the Commission on March 18,
1998.
4.4 Rights Agreement dated as of December 17, 1996 between the Company and
Branch Banking and Trust Company, Rights Agent, which is incorporated
by reference to Exhibit A filed under Form 8-A, filed with the
Commission on January 10, 1997.
5 Opinion of Jerone C. Herring, Esq., Executive Vice President and
General Counsel to the Company.
23.1 Consent of Jerone C. Herring, Esq., Executive Vice President and
General Counsel to the Company, which is contained in his opinion
filed as Exhibit 5.
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney of Directors and Officers of the Company.
99 BB&T Corporation 401(k) Savings Plan.
<PAGE>
EXHIBIT 5
<PAGE>
EXHIBIT 5
---------
EXHIBIT 5
[BB&T Letterhead]
May 8, 2000
BB&T Corporation
200 West Second Street
Winston-Salem, North Carolina 27101
Re: Registration Statement on Form S-8 Relating to BB&T
Corporation 401(k) Savings Plan
Ladies and Gentlemen:
I am familiar with the proceedings taken by BB&T Corporation (the
"Company") in connection with the preparation and filing with the Securities and
Exchange Commission (the "Commission") of a Registration Statement on Form S-8
under the Securities Act of 1933, as amended, pertaining to the offer and sale
of up to 11,000,000 shares of the Company's Common Stock, par value $5.00 per
share (the "Shares"), and an indeterminate number of plan interests, pursuant to
the terms of the BB&T Corporation 401(k) Savings Plan, as effective as of
January 1, 2000 (the "Plan").
As counsel for the Company, the Plan and the Registration Statement have
been reviewed under my direction, and I have examined and am familiar with the
records relating to the organization of the Company, including its articles of
incorporation, bylaws and all amendments thereto, and the records of all
proceedings taken by the Board of Directors of the Company pertinent to the
rendering of this opinion.
Based on the foregoing, and having regard for such legal considerations as
I have deemed relevant, I am of the opinion that the Shares have been duly
authorized and, upon issuance of the Shares and receipt by the Company of the
consideration therefor in accordance with the terms of the Plan, the Shares will
be validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion with the Commission as
Exhibit 5 to the Registration Statement. In giving this consent, I do not admit
that I am within the category of persons whose consent is required by Section 7
of the Securities Act, or other rules and regulations of the Commission
thereunder.
Sincerely,
/S/ Jerone C. Herring
Jerone C. Herring
Executive Vice President and
General Counsel
<PAGE>
EXHIBIT 23.2
<PAGE>
EXHIBIT 23.2
------------
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated April 27, 2000,
included in BB&T Corporation's Form 8-K dated April 28, 2000, and to all
references to our firm included in this registration statement. Our report dated
January 24, 2000, included in BB&T Corporation's financial statements previously
filed on Form 10-K and incorporated by reference in this registration statement
is no longer appropriate since restated financial statements have been presented
giving effect to a business combination accounted for as a pooling of interests.
/S/ ARTHUR ANDERSEN LLP
Charlotte, North Carolina,
May 8, 2000.
<PAGE>
EXHIBIT 24
<PAGE>
EXHIBIT 24
----------
POWER OF ATTORNEY
Each of the undersigned, being a director and/or officer of BB&T
Corporation (the "Company"), hereby nominates, constitutes and appoints John A.
Allison, Scott E. Reed and Jerone C. Herring, or any one of them severally, to
be his or her true and lawful attorney-in-fact and to sign in his or her name
and on his or her behalf in any and all capacities stated below, and to file
with the Securities and Exchange Commission (the "Commission"), a Registration
Statement on Form S-8 (the "Registration Statement") relating to the offer and
sale of the Company's common stock, $5.00 par value per share, and related plan
interests, pursuant to the terms of the BB&T Corporation 401(k) Savings Plan,
and to file any and all amendments, including post-effective amendments, to the
Registration Statement, making such changes in the Registration Statement as
such attorney-in-fact deems appropriate, and generally to do all such things on
his or her behalf in any and all capacities stated below to enable the Company
to comply with the provisions of the Securities Act of 1933, as amended, and all
requirements of the Commission.
This Power of Attorney has been signed by the following persons in the
capacities indicated on April 25, 2000.
/s/ John A. Allison IV /s/ Scott E. Reed
- -------------------------------------- -------------------------
Name: John A. Allison IV Name: Scott E. Reed
Title: Chairman of the Board and Title: Senior Executive Vice President
Chief Executive Officer and Chief Financial Officer
(principal executive officer) (principal financial officer)
/s/ Sherry A. Kellett /s/ Paul B. Barringer
- -------------------------------------- -----------------------------
Name: Sherry A. Kellett Name: Paul B. Barringer
Title: Executive Vice President Title: Director
and Controller
(principal accounting officer)
/s/ Alfred E. Cleveland /s/ W. R. Cuthbertson, Jr.
- -------------------------------------- ----------------------------------
Name: Alfred E. Cleveland Name: W. R. Cuthbertson, Jr.
Title: Director Title: Director
/s/ Ronald E. Deal /s/ A. J. Dooley, Sr.
- -------------------------------------- -----------------------------
Name: Ronald E. Deal Name: A. J. Dooley, Sr.
Title: Director Title: Director
/s/ Tom D. Efird /s/ Paul S. Goldsmith
- -------------------------------------- -----------------------------
Name: Tom D. Efird Name: Paul S. Goldsmith
Title: Director Title: Director
/s/ L. Vincent Hackley /s/ Jane P. Helm
- -------------------------------------- ------------------------
Name: L. Vincent Hackley Name: Jane P. Helm
Title: Director Title: Director
/s/ Richard Janeway /s/ J. Ernest Lathem
- -------------------------------------- ----------------------------
Name: Richard Janeway, M.D. Name: J. Ernest Lathem, M.D.
Title: Director Title: Director
<PAGE>
/s/ James H. Maynard /s/ Joseph A. McAleer
- -------------------------------------- -----------------------------
Name: James H. Maynard Name: Joseph A. McAleer
Title: Director Title: Director
/s/ Albert O. McCauley /s/ Richard L. Player, Jr.
- -------------------------------------- ----------------------------------
Name: Albert O. McCauley Name: Richard L. Player, Jr.
Title: Director Title: Director
/s/ C. Edward Pleasants, Jr. /s/ Nido R. Qubein
- -------------------------------------- --------------------------
Name: C. Edward Pleasants, Jr. Name: Nido R. Qubein
Title: Director Title: Director
/s/ E. Rhone Sasser /s/ Jack E. Shaw
- -------------------------------------- ------------------------
Name: E. Rhone Sasser Name: Jack E. Shaw
Title: Director Title: Director
/s/ Harold B. Wells
- --------------------------------------
Name: Harold B. Wells
Title: Director
<PAGE>
EXHIBIT 99
<PAGE>
BB&T CORPORATION 401(K)
SAVINGS PLAN
EFFECTIVE DATE: JANUARY 1, 2000
<PAGE>
TABLE OF CONTENTS
BB&T CORPORATION 401(K)
SAVINGS PLAN
Page
----
Section 1. Definitions .............................................1
1.1 Account .................................................1
1.2 Accrued Benefit .........................................2
1.3 Actual deferral percentage or ADP .......................2
1.4 Adjustment date .........................................3
1.5 Affiliated employer .....................................3
1.6 Board ...................................................3
1.7 A break in service ......................................4
1.8 Code ....................................................4
1.9 Committee ...............................................4
1.10 Company .................................................4
1.11 Company stock ...........................................4
1.12 Compensation ............................................4
1.13 Computation period ......................................5
1.14 Contribution percentage .................................5
1.15 Disability ..............................................6
1.16 Effective date ..........................................6
1.17 Elective deferral or elective deferrals .................7
1.18 Eligible employee .......................................7
1.19 Employee ................................................8
1.20 Entry date ..............................................8
1.21 ERISA ...................................................8
1.22 Excess aggregate contributions ..........................9
1.23 Excess contributions ....................................9
1.24 Excess elective deferral ................................9
1.25 Highly compensated participant ..........................9
1.26 Hour of service ........................................10
1.27 Leased employee ........................................12
1.28 Matching contributions .................................12
1.29 Nonhighly compensated participant ......................13
1.30 Normal retirement age ..................................13
1.31 Participant ............................................13
1.32 Participating Employer .................................14
1.33 Plan ...................................................14
1.34 Plan year ..............................................14
1.35 Predecessor plan .......................................14
1.36 Qualified nonelective contributions ....................14
1.37 Retire or retirement ...................................14
1.38 Salary reduction contributions .........................14
1.39 Service ................................................14
<PAGE>
1.40 Spouse or surviving spouse .............................15
1.41 Statutory compensation .................................15
1.42 Testing compensation ...................................15
1.43 Trust or trust fund ....................................16
1.44 Trustee ................................................16
1.45 Trust agreement ........................................16
1.46 Year of service ........................................16
Section 2. Contributions to the Trust and Allocation Thereof ......16
2.1 Salary Reduction Contributions .........................16
2.2 Matching Contributions .................................23
2.3 Discretionary Supplemental Employer Contributions ......28
2.4 General Limitations ....................................28
Section 3. Vesting ................................................29
3.1 General ................................................29
3.2 Forfeitures ............................................29
3.3 Change in Vesting Schedule .............................29
3.4 Predecessor Plan .......................................30
Section 4. Pretermination Distributions; Loans ....................30
4.1 Hardship ...............................................30
4.2 Distributions After Age 59 1/2 .........................32
4.3 Distributions Prior to Age 59 1/2 ......................33
4.4 Loans ..................................................34
4.5 Termination of Service Prior To Distribution ...........35
Section 5. Termination Distributions ..............................35
5.1 Distributions on Account of Retirement or Disability ...35
5.2 Distributions on Account of Death ......................38
5.3 Special Provisions and Definitions .....................38
5.4 Distributions on Account of Other Termination of
Service ..............................................41
5.5 Directions .............................................42
5.6 Distributions to Alternate Payees ......................43
5.7 Valuation ..............................................43
5.8 Distributions from Salary Reduction Contribution
(before-tax) Accounts, Employer Basic Matching
Contribution Accounts and QNEC Accounts ..............43
Section 6. Adjustment of Accounts .................................44
6.1 Adjustment of Accounts .................................45
6.2 Loan Account ...........................................45
6.3 General ................................................46
Section 7. Participant Direction of Investments ...................46
7.1 Participant Directed Investments .......................46
7.2 General ................................................47
ii
<PAGE>
Section 8. Administration by Committee ............................48
8.1 Membership of Committee ................................48
8.2 Committee Officers; Subcommittee .......................48
8.3 Committee Meetings .....................................48
8.4 Transaction of Business ................................48
8.5 Committee Records ......................................49
8.6 Establishment of Rules; Interactive Voice and
Other Systems ........................................49
8.7 Conflicts of Interest ..................................49
8.8 Correction of Errors ...................................49
8.9 Authority to Interpret Plan ............................50
8.10 Third Party Advisor ....................................50
8.11 Compensation of Members ................................51
8.12 Committee Expenses .....................................51
8.13 Indemnification of Committee ...........................51
Section 9. Management of Funds and Amendment of Plan ..............51
9.1 Fiduciary Duties .......................................51
9.2 Trust Agreement ........................................53
9.3 Authority to Amend .....................................53
9.4 Requirements of Writing ................................54
Section 10. Allocation of Responsibilities Among
Named Fiduciaries ....................................54
10.1 Duties of Named Fiduciaries ............................54
10.2 Co-fiduciary Liability .................................55
Section 11. Benefits Not Assignable; Facility of Payments ..........55
11.1 Benefits Not Assignable ................................55
11.2 Payments to Minors and Others ..........................56
Section 12. Termination of Plan and Trust; Merger or
Consolidation of Plan ................................56
12.1 Complete Termination ...................................56
12.2 Partial Termination ....................................57
12.3 Merger or Consolidation ................................57
12.4 Protection of Benefits .................................58
Section 13. Communication to Employees .............................58
Section 14. Claims Procedure .......................................58
14.1 Filing of a Claim for Benefits .........................58
14.2 Notification to Claimant of Decision ...................58
14.3 Procedure for Review ...................................59
14.4 Decision on Review .....................................59
14.5 Action by Authorized Representative of Claimant ........60
iii
<PAGE>
Section 15. Portability of Participant Accounts ....................60
15.1 Definitions ............................................60
15.2 Construction ...........................................61
Section 16. Rollovers ..............................................61
16.1 Timing .................................................61
16.2 Eligibility ............................................62
16.3 Maximum Amount .........................................62
16.4 Accounting .............................................62
16.5 Transfers Prior to Becoming a Participant ..............62
Section 17. Special Provisions Relating to Transfers From
Qualified Plans ......................................62
17.1 Accounting .............................................62
17.2 Liability of Trustee ...................................63
17.3 Protected Benefits Under Section 411(d)(6) of
the Code .............................................63
17.4 Authority of Committee .................................63
17.5 Impermissible Transfers ................................63
Section 18. Special Top-Heavy Provisions ...........................63
18.1 Definitions ............................................64
18.2 Top-Heavy Requirements .................................66
Section 19. Limitations on Allocations .............................67
19.1 Limitations ............................................67
19.2 Adjustments ............................................67
19.3 Participation in this Plan and a Defined Benefit Plan ..69
19.4 Definitions ............................................70
Section 20. Parties to the Plan; Transfers of Employees ............72
20.1 Application of Plan and Trust Agreement ................72
20.2 Service with a Participating Employer ..................72
20.3 Contributions by each Participating Employer ...........72
20.4 Authority of Board .....................................73
Section 21. Compliance with the Uniformed Services Employment and
Reemployment Rights Act of 1994 ........................73
21.1 Treatment of USERRA Contributions ......................73
21.2 Rights With Respect to Salary Reduction Contributions ..74
21.3 Special Service Crediting Rules ........................74
21.4 Loans ..................................................75
21.5 Definitions ............................................75
21.6 Construction ...........................................75
Section 22. Special Provisions Applicable to ESOP ..................75
22.1 Investment .............................................75
iv
<PAGE>
22.2 Distributions ..........................................75
22.3 Restrictions on Company stock ..........................75
22.4 Proxy Voting ...........................................76
22.5 Valuations .............................................76
22.6 Diversification ........................................76
22.7 Dividends ..............................................77
Section 23. Miscellaneous Provisions ...............................77
23.1 Notices ................................................77
23.2 Lost Distributees ......................................77
23.3 Reliance on Data .......................................77
23.4 Bonding ................................................78
23.5 Receipt and Release for Payments .......................78
23.6 No Guarantee ...........................................78
23.7 Headings ...............................................78
23.8 Continuation of Employment .............................78
23.9 Construction ...........................................79
EXHIBIT A Testing Compensation
EXHIBIT B Participating Employers
EXHIBIT C Plan Loan Rules
for Participant Loans
v
<PAGE>
BB&T CORPORATION 401(K)
SAVINGS PLAN
INTRODUCTION
------------
Effective as of July 1, 1982, Branch Banking & Trust Company
("BB&T") established a savings and thrift plan (the "prior plan") for the
benefit of its employees and the employees of its participating affiliates. The
prior plan was entitled the "Savings and Thrift Plan for the Employees of Branch
Banking & Trust Company." The prior plan was last restated effective as of
January 1, 1994. On February 28, 1995, BB&T Corporation (the "Company")
(formerly, the Southern National Corporation) and BB&T Financial Corporation,
the former parent corporation of BB&T, were merged. As a result of the corporate
merger, the Company became the parent corporation of BB&T and the sponsor of the
prior plan. Effective as of January 1, 1996, the name of the prior plan was
changed to the "Southern National Corporation 401(k) Savings Plan." As a result
of the change in the Company's corporate name to BB&T Corporation, the name of
the prior plan was ultimately changed to the "BB&T Corporation 401(k) Savings
Plan." This plan amends and restates the prior plan effective as of January 1,
2000.
<PAGE>
BB&T CORPORATION
401(K) SAVINGS PLAN*
Section 1.Definitions:
---------------------
As used in the plan, including this Section 1, and in the
trust agreement which is a part of the plan, references to one gender shall
include the other and, unless otherwise indicated by the context:
1.1 "Account" means the aggregate of the separate accounts
maintained by the Committee with respect to each participant. The separate
accounts so maintained shall include one or more of the following:
1.1.1 "Salary reduction contribution (before-tax) account"
means the subaccount of the participant that is credited with salary
reduction contributions made by the participant to the plan or the
predecessor plan (as defined in Section 1.35).
1.1.2 "Voluntary contribution (after-tax) account" means the
subaccount of the participant that is credited with after-tax
contributions made by the participant to the predecessor plan.
1.1.3 "Employer basic matching contribution account" means
the subaccount of the participant that is credited with basic matching
contributions made on behalf of the participant to the plan pursuant to
Section 2.2.1(i).
1.1.4 "Employer supplemental matching contribution account"
means the subaccount of the participant that is credited with
supplemental matching contributions made on behalf of the participant
to the plan pursuant to Section 2.2.1(ii) and matching contributions
made to the predecessor plan prior to January 1, 2000.
1.1.5 "Employer profit sharing contribution account" means
the subaccount of the participant that is credited with supplemental or
profit sharing contributions made on behalf of the participant to the
plan or the predecessor plan.
- --------
*Note: Except as otherwise provided in Section 1.16, this plan amends and
supersedes as of January 1, 2000, the BB&T Corporation 401(k) Savings Plan,
which was first adopted July 1, 1982 and last amended and restated effective as
of January 1, 1994. Reference is made to the BB&T Corporation 401(k) Savings
Plan Trust Agreement, of even date herewith, which is a part of the plan.
<PAGE>
1.1.6 "ESOP account" means the subaccount of the participant
that is credited with ESOP contributions made on behalf of the
participant to the predecessor plan. If a participant was a participant
in more than one ESOP previously established under the predecessor
plan, a separate ESOP account shall be maintained for the participant
under each such ESOP.
1.1.7 "Prior plan account" means the subaccount of the
participant that is credited with contributions made on behalf of the
participant to the Thrift Plan for the Employees of Branch Banking &
Trust Company and the Profit Sharing Plan for the Employees of Branch
Banking & Trust Company prior to their merger into the predecessor plan
on January 1, 1986.
1.1.8 "PAYSOP account" means the subaccount of the participant
that is credited with employer contributions made on behalf of the
participant to the Southern National Employee Stock Ownership Plan
prior to its merger into the predecessor plan on May 13, 1996 or to the
United Carolina Bancshares Corporation Dollar Plus Savings Plan prior
to its merger into the predecessor plan on December 12, 1997.
1.1.9 "QNEC account" means the subaccount of the participant
that is credited with qualified nonelective contributions made on
behalf of the participant to the plan or the predecessor plan.
1.1.10 "Loan account" means the subaccount of the participant
that is credited with payments of principal and interest as provided in
Section 6.2.
1.1.11 "Rollover account" means the subaccount of the
participant that is credited with rollover contributions made by the
participant to the plan or the predecessor plan.
1.2 "Accrued Benefit" means with respect to each participant
the balance in his account as of the applicable adjustment date following
adjustment thereof as provided in Section 6.
1.3 "Actual deferral percentage" or "ADP" with respect to a
participant for a plan year means the ratio (expressed as a percentage and
calculated to the nearest one-hundredth of a percentage point) of: (i) the
salary reduction contributions, if any, made to the trust under the plan by a
Participating Employer on behalf of the participant for the plan year other than
salary reduction contributions distributed to the participant pursuant to the
provisions of Section 19.2(i) (relating to the return of contributions in excess
of the limitations of Section 415 of the Code); to (ii) his testing compensation
(as defined in Section 1.42) for that portion of the plan year during which he
2
<PAGE>
was a participant. Pursuant to regulations issued by the Secretary of the
Treasury, the Committee may elect to take into account matching contributions
made on behalf of any participant to any qualified plan maintained by the
Participating Employer or an affiliated employer for purposes of determining the
ADP of such participant. In no event will matching contributions which are taken
into account for purposes of determining the ADP of a participant, be taken into
account in determining the contribution percentage of such participant.
Notwithstanding the foregoing, the ADP of a nonhighly compensated participant
shall be determined without regard to any excess elective deferrals made under
the plan or any other plan maintained by an affiliated employer with respect to
him. The ADP for a specified group of participants for a plan year shall be the
average (expressed as a percentage and calculated to the nearest one-hundredth
of a percentage point) of the ADPs calculated separately for each participant in
such group. The ADP of a participant who is eligible to make a salary reduction
contribution under the plan but does not do so, or who is not eligible to make a
salary reduction contribution because allocations to his account would exceed
the dollar limitation or the statutory compensation limitation in Section 19.1,
shall be zero. The determination and treatment of the ADP of any participant
shall satisfy such other requirements as may be prescribed by the Secretary of
the Treasury.
1.4 "Adjustment date" means each day on which the New York
Stock Exchange is open for business. The last adjustment date in each plan year
is sometimes referred to herein as the "year-end adjustment date."
1.5 "Affiliated employer" means: (i) any corporation that is
a member of a controlled group of corporations (as defined in Section 414(b) of
the Code) which includes the Company; (ii) any trade or business (whether or not
incorporated) that is under common control (as defined in Section 414(c) of the
Code) with the Company; (iii) any organization (whether or not incorporated)
that is a member of an affiliated service group (as defined in Section 414(m) of
the Code) which includes the Company; and (iv) any other entity required to be
aggregated with the Company pursuant to Section 414(o) of the Code.
3
<PAGE>
1.6 "Board" means the Board of Directors of the Company.
1.7 A "break in service" means a computation period in which
an employee does not complete more than 500 hours of service and shall occur at
the beginning of such computation period.
1.8 "Code" means the Internal Revenue Code of 1986, as
amended, and rules and Treasury Regulations issued thereunder.
1.9 "Committee" means the administrative Committee provided
for in Section 8.
1.10 "Company" means BB&T Corporation, a North Carolina
corporation with its principal office at Winston-Salem, North Carolina.
1.11 "Company stock" means shares of common stock issued by
the Company which are readily tradable on an established securities market. As
of the effective date, the Company stock is listed on the New York Stock
Exchange under the Symbol "BBT."
1.12 "Compensation" means wages within the meaning of Section
3401(a) of the Code and all other payments of compensation to an employee by the
Participating Employer (in the course of the Participating Employer's trade or
business) for which the Participating Employer is required to furnish the
employee a written statement under Sections 6041(d), 6051(a)(3) and 6052 of the
Code, but determined without regard to any rules that limit the remuneration
included in wages based on the nature or location of the employment or the
services performed, plus any amounts contributed by the Participating Employer
pursuant to a salary reduction agreement which are not includible in the gross
income of the employee under Section 125, 402(e)(3), 402(h) or 403(b)
4
<PAGE>
of the Code, if any, and less reimbursements or other expense allowances, fringe
benefits, moving expenses, deferred compensation, and welfare benefits. For plan
years beginning on or after January 1, 1989, but prior to January 1, 1994, the
annual compensation of each employee taken into account shall not exceed
$200,000. This limitation shall be adjusted by the Secretary of the Treasury at
the same time and in the same manner as under Section 415(d) of the Code, except
that the dollar increase in effect on January of any calendar year is effective
for plan years beginning in such calendar year and the first adjustment to the
$200,000 limitation is effective on January 1, 1990. For plan years beginning on
or after January 1, 1994, the annual compensation of each employee taken into
account under the plan shall not exceed $150,000, as adjusted by the
Commissioner for increases in the cost of living in accordance with Section
401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which
compensation is determined (the "determination period") beginning in such
calendar year. The $200,000 limitation and the $150,000 limitation, whichever
shall be applicable, shall be hereinafter referred to as the "annual
compensation limitation." If a determination period consists of fewer than 12
months, the annual compensation limitation will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is 12.
1.13 "Computation period" means a 12 consecutive month
period, as follows:
1.13.1 For purposes of plan participation, the computation
period initially shall be the 12 consecutive month period beginning on
the date an employee first completes an hour of service. Thereafter,
the computation period shall be the plan year, beginning with the plan
year containing the first anniversary of the date the employee first
completed an hour of service.
1.13.2 For all other purposes under the plan, the computation
period shall be the plan year.
5
<PAGE>
1.14 "Contribution percentage" with respect to a participant
for a plan year means the ratio (expressed as a percentage and calculated to the
nearest one-hundredth of a percentage point) of: (i) the matching contributions
made to the trust under the plan on the participant's behalf for the plan year;
to (ii) his testing compensation (as defined in Section 1.42) for that portion
of the plan year during which he was a participant. The contribution percentage
for a specified group of participants for a plan year shall be the average
(expressed as a percentage and calculated to the nearest one-hundredth of a
percentage point) of the contribution percentages calculated separately for each
participant in such group. Pursuant to regulations issued by the Secretary of
the Treasury, the Committee may elect to take into account elective deferrals
made on behalf of any participant to any qualified plan maintained by the
Participating Employer or an affiliated employer for purposes of determining the
contribution percentage of such participant. Notwithstanding the foregoing,
salary reduction contributions distributed to a participant pursuant to the
provisions of Section 19.2(i) (relating to the return of contributions in excess
of the limitations of Section 415 of the Code) and matching contributions
forfeited by a participant pursuant to the provisions of Section 2.2.4 (relating
to the forfeiture of matching contributions attributable to excess
contributions, excess elective deferrals and excess aggregate contributions) may
not be taken into account for purposes of determining the contribution
percentage of such participant. The determination and treatment of the
contribution percentage of any participant shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
1.15 "Disability" means a condition for which a participant
is entitled to disability benefits under the BB&T Corporation Disability Plan.
1.16 "Effective date" of the plan means January 1, 2000.
However, in order to comply with the Retirement Protection Act of 1994, the
Uniformed Services Employment and Reemployment Rights Act of 1994, the Small
Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, and the
Internal Revenue Service Restructuring and Reform Act of 1998, which are first
effective as of an earlier date, the following Sections of the plan are
effective as indicated below:
6
<PAGE>
Section Effective Date
------- --------------
Section 1.3 January 1, 1997
Section 1.12 January 1, 1997
Section 1.14 January 1, 1997
Section 1.25 January 1, 1997
Section 1.27 January 1, 1997
Section 1.39 January 1, 1998
Section 1.41 January 1, 1998
Section 2.1.4 January 1, 1997
Section 2.2.3 January 1, 1997
Section 5.1.2(h) January 1, 1997
Section 5.3.1 January 1, 1997
Section 5.3.3(f) January 1, 1997
Section 15.1.1 January 1, 1999
Section 19.1 January 1, 1995
Section 21 October 13, 1996
1.17 "Elective deferral" or "elective deferrals" means, with
respect to any taxable year of a participant, the sum of:
(a) Any employer contribution under a qualified cash or
deferred arrangement (as defined in Section 401(k) of the Code) to the
extent not includible in the participant's gross income for the taxable
year under Section 402(e)(3) of the Code, including a salary reduction
contribution made on behalf of the participant under Section 2.1 of the
plan;
(b) Any employer contribution under a simplified employee
pension plan (as defined in Section 408(k) of the Code) to the extent
not includible in the participant's gross income for the taxable year
under Section 402(h)(1)(B) of the Code;
(c) Any employer contribution made on behalf of the
participant to purchase an annuity contract under Section 403(b) of the
Code pursuant to a salary reduction agreement (within the meaning of
Section 3121(a)(5)(D) of the Code); and
(d) Any elective employer contribution made on behalf of a
participant under Section 408(p)(2)(A)(i) of the Code.
Notwithstanding any provisions of the plan to the contrary, the elective
deferrals of any participant for any taxable year of the participant made under
this plan, and any other qualified plan maintained by the Company or an
affiliated employer, shall not in the aggregate exceed $10,500 (or such greater
7
<PAGE>
amount as may be permitted under Section 402(g)(4), (5) or (8) of the Code). See
Section 2.1.1 of the plan permitting distribution of excess elective deferrals.
1.18 "Eligible employee" means each employee of a
Participating Employer except the following:
(a) An employee included in a unit of employees covered by a
bona fide collective bargaining agreement with a Participating Employer
that does not specifically provide for coverage of the employee under
the plan; provided, that retirement benefits were the subject of good
faith bargaining between the Participating Employer and employee
representatives.
(b) An employee who is a nonresident alien and receives no
earned income (within the meaning of Section 911(d)(2) of the Code)
from the Participating Employer constituting income from sources within
the United States (within the meaning of Section 861(a)(3) of the
Code).
(c) An individual who is deemed to be an employee solely
because he is a leased employee.
(d) An individual who is an employee of an affiliated
employer that has not adopted the plan and is on a temporary assignment
to a Participating Employer.
See Section 1.31 for provisions governing participation in the plan by an
eligible employee.
1.19 "Employee" means, except as otherwise provided herein,
an individual in the service of a Participating Employer if the relationship
between him and the employer is the legal relationship of employer and employee.
In determining who is an employee for purposes of the plan, the following
provisions shall apply:
1.19.1 All leased employees shall be treated as employees.
1.19.2 An individual who is identified on the books and
records of a Participating Employer as other than a common law employee
shall not be treated as an employee for purposes of the plan regardless
of a later agency or judicial determination to the effect that such
individual is a common law employee of a Participating Employer.
8
<PAGE>
See Sections 1.18 and 1.31 for provisions governing eligibility of an employee
to become a participant in the plan.
1.20 Entry date means the first day of each calendar month.
1.21 ERISA means the Employee Retirement Income Security Act
of 1974, as amended (including amendments of the Code affected thereby), and
rules and regulations issued thereunder.
1.22 Excess aggregate contributions means, with respect to
any plan year, the excess of:
(a) The aggregate amount of matching contributions (and
any elective deferrals taken into account in computing the contribution
percentage) actually made to the trust on behalf of highly compensated
participants for such plan year; over
(b) The maximum amount of such contributions permitted under
the limitations described in Section 2.2.2.
1.23 "Excess contributions" means, with respect to any plan
year, the excess of:
(a) The aggregate amount of salary reduction contributions
(and any matching contributions taken into account in computing the
ADP) actually made to the trust on behalf of highly compensated
participants for such plan year; over
(b) The maximum amount of such contributions permitted under
the limitations of Section 2.1.4.
1.24 "Excess elective deferral" for any taxable year of a
participant means the amount of the elective deferral on behalf of a participant
for any taxable year of such participant in excess of $10,500 (or such greater
amount as may be permitted pursuant to the provisions of Sections 402(g)(4), (5)
and (8) of the Code). Excess elective deferral also shall refer to the specific
amount of elective deferrals for the taxable year of the participant which the
participant allocates to this plan pursuant to the provisions of Section 2.1.1.
9
<PAGE>
1.25 Highly compensated participant means any participant who
is a highly compensated employee. "Highly compensated employee" means any
employee who:
(a) during the plan year or preceding plan year was at any
time a 5 percent owner (as defined in Section 416(i)(1)(B) of the
Code); or
(b) during the preceding plan year received statutory
compensation (as defined in Section 1.41) from the Company and
affiliated employers in excess of $80,000 (as adjusted pursuant to
Section 414(q)(1) of the Code) and was in the top-paid group of
employees for such preceding plan year.
For purposes of this Section 1.25, the following provisions shall apply:
1.25.1 An employee who performs service for the Company or any
affiliated employer at any time during a plan year shall be in the
top-paid group of employees for such year if such employee is in the
top 20 percent of the employees of the Company and its affiliated
employers ranked on the basis of statutory compensation paid during
such year.
1.25.2 A former employee shall be treated as a highly
compensated employee if he was a highly compensated employee when he
separated from service, or was a highly compensated employee at any
time after attaining age 55.
The determination of who is a highly compensated employee, including the
determination of the number and identity of employees in the top-paid group,
shall be made in accordance with Section 414(q) of the Code.
1.26 "Hour of service" means the following:
1.26.1 Each hour for which an employee is paid, or entitled to
payment, by the Company or an affiliated employer for the performance
of duties. Each such hour shall be credited to the computation period
in which the duties are performed.
1.26.2 Each hour for which an employee is paid, or entitled to
payment, by the Company or an affiliated employer for a period of time
during which no duties are performed, irrespective of whether the
employment relationship has terminated, by reason of vacation, holiday,
illness, incapacity (including disability), lay-off, jury duty,
military duty or leave of absence. Each such hour shall be credited to
the computation period in which no duties are performed. In applying
this Section 1.26.2, the following provisions shall apply:
10
<PAGE>
(i) The number of hours to be credited to any single
continuous period (whether or not such period occurs in a
single computation period)for which hours are credited shall
be the lesser of: (a) 501 hours, or (b) the number of hours
for which the employee is paid with respect to such single
continuous period;
(ii) No hours shall be credited with respect to
payments made to the employee for the purpose of complying
with applicable workers' compensation, unemployment
compensation or disability insurance laws, or payments made
solely to reimburse an employee for medical or medically
related expenses incurred by the employee; and
(iii) An amount paid to an employee by the Company or
an affiliated employer indirectly, such as by a trust, fund or
insurer to which the Company or affiliated employer makes
contributions or pays premiums, shall be deemed to be paid by
the Company or affiliated employer.
1.26.3 Each hour (to the extent not included in Section 1.26.1
or 1.26.2) for which back pay, irrespective of mitigation of damages,
has been either awarded or agreed to by the Company or an affiliated
employer. Each such hour shall be credited to the computation period or
periods to which the award or agreement pertains rather than to the
computation period in which the award, agreement or payment is made.
1.26.4 Each hour for which an employee is not actually in
service but is required to be given credit for service under any law of
the United States, including, but not limited to, the Family and
Medical Leave Act of 1993. Each such hour shall be credited to the
computation period or periods for which the employee is required to be
given credit for service.
1.26.5 Solely for the purpose of determining whether an
employee has incurred a break in service, each hour with respect to a
period during which he is absent from work for maternity or paternity
reasons which otherwise would be credited to such employee but for such
absence, or if such hours cannot be determined, 8 hours of service per
day of such absence. For purposes of this Section 1.26.5, an absence
from work for maternity or paternity reasons means an absence (a) by
reason of the pregnancy of the employee; (b) by reason of the birth of
a child of the employee; (c) by reason of the placement of a child with
the employee in connection with the adoption of such child by such
employee; or (d) for purposes of caring for such child for a period
beginning immediately following such birth or placement. The hours of
service credited under this Section 1.26.5 shall be credited with
respect to the computation period in which the absence begins, if
necessary to prevent a break in service in such computation period. In
all other cases, such hours of service shall be credited to the
subsequent computation period. No more than 501 hours of service shall
be required to be credited for maternity or paternity reasons. No
credit shall be given under this Section 1.26.5, unless the employee
furnishes to the Committee such timely information as the Committee
reasonably may require to establish that the absence is for a reason
described in this Section 1.26.5 and the number of days for which there
was such an absence.
11
<PAGE>
1.26.6 Solely for the purpose of determining whether an
employee has incurred a break in service, an employee who is absent
from work due to a leave of absence approved by the Participating
Employer for which he is not paid (other than a leave of absence for
maternity or paternity reasons) shall be credited with each hour of
service such employee would otherwise be credited with but for such
leave of absence. The hours of service credited pursuant to this
Section 1.26.6 shall be credited with respect to the computation period
in which the absence begins, if necessary to prevent a break in service
in such computation period. In all other cases, such hours of service
shall be credited to the subsequent computation period. No more than
501 hours of service shall be required to be credited due to such leave
of absence. The hours of service granted pursuant to the provisions of
this Section 1.26.6 shall be disregarded if the participant does not
return to service upon the expiration of such leave of absence;
provided that this sentence shall not apply if the employee dies or
becomes disabled during such leave of absence.
An employee for whom the Company or an affiliated employer maintains records of
hours for which payment for the performance of duties is made shall be credited
with hours of service on the basis of such records. Any other employee shall be
credited with 45 hours of service for each week if under this Section 1.26 he
would be credited with at least one hour of service for such week. The
provisions of this Section 1.26 shall be applied in accordance with the
provisions of Department of Labor Regulations Sections 2530.200b-2(b) and (c),
which are incorporated herein by reference.
1.27 "Leased employee" means any individual, other than an
employee of the Company or an affiliated employer (the "recipient employer"),
who, pursuant to an agreement between the recipient employer and any other
person (the "leasing organization") has performed services for the recipient
employer, or the recipient employer and related persons determined in accordance
with Section 414(n) of the Code, on a substantially full-time basis for a period
of at least one year, and such services are performed under the primary
direction or control of the recipient employer. Contributions or benefits
provided a leased employee by the leasing organization that are attributable to
services performed for the recipient employer shall be treated as provided by
the recipient employer. A leased employee shall not be considered an employee
of the recipient employer if: (a) such individual is covered by a money purchase
12
<PAGE>
pension plan providing (i) a nonintegrated employer contribution rate of at
least 10 percent of statutory compensation, (ii) immediate participation, and
(iii) full and immediate vesting; and (b) leased employees do not constitute
more than 20 percent of the recipient employer's nonhighly compensated work
force as defined in Section 414(n)(5)(C)(ii) of the Code.
1.28 "Matching contributions" means the amounts contributed
to the plan by a Participating Employer pursuant to the provisions of Section
2.2. The amounts contributed to the plan by a Participating Employer pursuant
to Section 2.2.1(i) are sometimes referred to herein as "basic matching
contributions." The amounts contributed to the plan by a Participating Employer
pursuant to Section 2.2.1(ii) are sometimes referred to herein as "supplemental
matching contributions."
1.29 "Nonhighly compensated participant" means a participant
who is not a highly compensated participant.
1.30 "Normal retirement age" of a participant means age 65.
The "normal retirement date" of a participant means the date the participant
attains his normal retirement age.
1.31 "Participant" means with respect to any plan year an
eligible employee who has entered the plan and any former employee who has an
accrued benefit under the plan. An eligible employee or former employee on the
effective date who was a participant in the predecessor plan immediately
preceding the effective date, or who was eligible to enter the predecessor plan
as a participant on the effective date, shall be a participant in this plan as
of the effective date. For purposes of Section 2.1.1 (making salary reduction
contributions), an eligible employee who has not otherwise entered the plan
shall become a participant as of the entry date next following the completion of
90 days of service. For purposes of Section 2.2.1 (receiving matching
13
<PAGE>
contributions), an eligible employee shall become a participant as of the entry
date next following the later of (i) the close of the first computation period
in which he completes 1,000 or more hours of service; or (ii) attainment of age
21. For the purpose of applying the foregoing provisions of this Section 1.31,
the following provisions shall apply: (i) an eligible employee who is not in
service on the date he is eligible to enter the plan shall not enter the plan
until he reenters service as an eligible employee, whereupon he immediately
shall enter the plan; and (ii) a participant who terminates service and later
reenters service shall reenter the plan as of the date he reenters service as an
eligible employee.
1.32 "Participating Employer" means the Company and each
employer that has adopted the plan and is listed on Exhibit B attached hereto.
See Section 20 for special provisions concerning Participating Employers.
1.33 "Plan" means the BB&T Corporation 401(k) Savings Plan
as herein set out or as duly amended. That portion of the plan consisting of
the ESOP accounts shall constitute a stock bonus plan and an employee stock
ownership plan within the meaning of Section 4975(e)(7) of the Code (the
"ESOP"). See Section 22 for special rules that apply to the ESOP. The remainder
of the plan shall constitute a profit sharing plan.
1.34 "Plan year" means the 12-month period ending on
December 31 of each year.
1.35 "Predecessor plan" means the BB&T Corporation 401(k)
Savings Plan in effect prior to January 1, 2000, and any other plan which was
merged into such plan or whose assets and liabilities were transferred to such
plan prior to such date. The term "predecessor plan" shall also include any plan
which is merged into this plan or whose assets and liabilities are transferred
to this plan after the effective date.
1.36 "Qualified nonelective contributions" means a
contribution made by the Company pursuant to Section 2.1.4(iv) of the plan.
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1.37 "Retire or retirement" means the participant's
termination of service on or after his normal retirement date.
1.38 "Salary reduction contributions" means the
contributions described in Section 2.1 which are made to the plan by a
Participating Employer on behalf of a participant who has elected to defer a
specified percentage of his compensation.
1.39 "Service" means employment by a Participating Employer
or an affiliated employer as an employee. An employee's service shall also
include his service with an employer that is acquired by a Participating
Employer or one of its affiliated employers, whether by merger, acquisition of
assets or stock, or otherwise; provided that, the employee becomes an employee
of a Participating Employer or one of its affiliated employers as a result of
such acquisition.
1.40 "Spouse" or "surviving spouse" means the legally
married spouse or surviving spouse of a participant; provided, that a former
spouse shall be treated as the spouse or surviving spouse to the extent provided
under a qualified domestic relations order described in Section 414(p) of the
Code.
1.41 "Statutory compensation" means wages within the meaning
of Section 3401(a) of the Code and all other payments of compensation to an
employee by a Participating Employer (in the course of the Participating
Employer's trade or business) for which the Participating Employer is required
to furnish the employee a written statement under Sections 6041(d), 6051(a)(3)
and 6052 of the Code, other than amounts paid or reimbursed by the Company for
moving expenses incurred by the employee to the extent that at the time of the
payment it is reasonable to believe that these amounts are deductible by the
employee under Section 217 of the Code. Compensation must be determined for this
purpose without regard to any rules under Section 3401(a) of the Code that limit
the remuneration included in wages based on the nature or location of the
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employment or the services performed. The statutory compensation of an employee
shall include any elective deferral (as defined in Section 402(g)(3) of the
Code) and any other amount which is contributed or deferred by the Participating
Employer at the election of the employee and which is not includible in the
gross income of the employee by reason of Sections 125 or 457 of the Code. For
purposes of Section 18, the statutory compensation of a participant shall be
limited to the annual compensation limitation set forth in Section 1.12.
1.42 "Testing compensation" means any of the definitions of
compensation which are set forth on Exhibit A attached hereto, as designated by
the Committee. Notwithstanding the foregoing, a participant's testing
compensation shall be subject to the annual compensation limitation set forth in
Section 1.12. The definition of compensation designated by the Committee for a
particular plan year shall be used for purposes of determining the testing
compensation of all participants for such year.
1.43 "Trust" or "trust fund" means the trust fund held by
the Trustee under the plan.
1.44 "Trustee" means the entity appointed by the Company to
administer the trust.
1.45 "Trust agreement" means the trust agreement between the
Company and the Trustee which shall be a part of the plan.
1.46 "Year of service" means the following:
1.46.1 With respect to service prior to the effective date,
years of continuous service as determined pursuant to the terms of the
predecessor plan.
1.46.2 With respect to service on or after the effective date,
1,000 or more hours of service during a computation period; provided,
that no year of service following 5 consecutive breaks in service shall
be taken into account in determining the vested percentage of an
employee's accrued benefit that accrued before such breaks in service.
1.46.3 Years of service shall include any period during which
an employee would have been a leased employee but for the requirement
that a leased employee perform service for the Company, or the Company
and related persons determined in accordance with Section 414(n)(6) of
the Code, on a substantially full-time basis for a period of at least
one year.
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Section 2. Contributions to the Trust and Allocation Thereof:
--------- -------------------------------------------------
2.1 Salary Reduction Contributions:
2.1.1 Amount of salary reduction contributions; Excess
elective deferrals: Each eligible employee who becomes a participant
and is in service may elect in the manner provided by the Committee to
reduce his compensation by a whole number percentage not less than 1
percent and not more than 16 percent. The amount of the participant's
salary reduction shall be contributed by the Participating Employer to
the trust for each plan year as a salary reduction contribution in
accordance with the provisions of Section 2.1.2. In no event shall the
salary reduction contribution made to this plan with respect to a
participant for any taxable year of the participant exceed $10,500 (or
such greater amount as may be permitted pursuant to the provisions of
Sections 402(g)(4), (5) and (8) of the Code) (the "maximum dollar
limit"). In the event of an excess elective deferral (determined by
taking into account only the plan and any other plans maintained by an
affiliated employer), the Participating Employer shall notify the
Committee in writing on behalf of the participant of such excess
elective deferral and the amount thereof shall be adjusted for income
and losses allocable thereto and distributed to the participant (a
"corrective distribution") no later than the April 15 following the end
of the taxable year during which such excess elective deferral was
made. The income or loss allocable to an excess elective deferral under
the plan for the participant's taxable year of the excess elective
deferral shall be determined by multiplying the income or loss
allocable to the participant's salary reduction contribution
(before-tax) account for such taxable year by a fraction the numerator
of which is the excess elective deferral made to the plan for such
taxable year and the denominator of which is equal to the sum of: (i)
the balance in the participant's salary reduction contribution
(before-tax) account as of the beginning of such taxable year; and (ii)
the participant's salary reduction contributions for such taxable year.
Income or loss allocable to an excess elective deferral for the taxable
year shall not include income or loss for the period between the end of
the taxable year and the date of the corrective distribution. The
excess elective deferral which otherwise would be distributed to the
participant shall be reduced in accordance with Treasury regulations by
the amount of any excess contributions distributed previously to the
participant. If the participant is also a participant in another plan
or arrangement under which elective deferrals were made and the
elective deferrals made under such other plan or arrangement and this
plan in the aggregate exceed the maximum dollar limit for such
participant's taxable year, then not later than March 1 following the
close of the taxable year during which the excess elective deferral was
made, the participant may notify the Committee in writing that all or
part of the salary reduction contribution made on his behalf under the
plan represents an excess elective deferral for his preceding taxable
year and request that his salary reduction contribution under the plan
be reduced by a specified amount. The specified amount shall be
adjusted for income and loss allocable thereto in the same manner as
heretofore provided in this Section 2.1.1. In no event may the
participant receive from the plan as a corrective distribution with
respect to a plan year an amount in excess of such participant's salary
reduction contributions under the plan for the plan year, as adjusted
for income and losses allocable thereto. Distributions of excess
elective deferrals to participants may be made notwithstanding any
other provision of the plan or Code. The amount of any excess elective
deferral distributed to the participant pursuant to this Section 2.1.1
shall not be treated as an annual addition for purposes of Section 19.
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2.1.2 Time for making salary reduction contributions: A
participant's salary reduction contributions shall be accumulated
through payroll deductions and paid by the Participating Employer to
the Trustee as of the earliest date on which such contributions can
reasonably be segregated from the general assets of the Participating
Employer, but in no event later than the 15th business day of the month
following the month in which such amounts would otherwise have been
payable to the participant in cash.
2.1.3 Administrative rules governing salary reduction
contributions:
(i) An election pursuant to Section 2.1.1 (a "deferral
election") shall be made by the participant in accordance with such
rules and procedures as are adopted by the Committee from time to time.
The participant's deferral election shall become effective as of the
beginning of the first full payroll period commencing on or after the
date of receipt by the Committee of such deferral election, unless
otherwise provided by the Committee. Unless modified or revoked by the
participant, the deferral election shall continue in effect until such
time as he terminates service. A new deferral election with respect to
a participant who terminates service and later reenters service and
becomes a participant shall become effective at the beginning of the
first full payroll period commencing on or after the date such
participant reenters the plan.
(ii) Subject to the provisions of Section 2.1.3(v), a
participant unilaterally may modify his deferral election as of any
date to increase or decrease the portion of his compensation subject to
salary reduction within the percentage limits set forth in Section
2.1.1. Any such modification shall be made in the manner provided by
the Committee and shall become effective at the beginning of the first
full payroll period commencing on or after the date of receipt of the
modified election by the Committee unless otherwise provided by the
Committee.
(iii) Subject to the provisions of Section 2.1.3(v), a
participant unilaterally may revoke his deferral election at any time
by providing notice to the Committee in the manner provided by the
Committee. The revocation shall become effective at the beginning of
the first full payroll period commencing on or after the date such
notification is received by the Committee. A participant may resume
salary reduction contributions at any time by making a new deferral
election in accordance with the provisions of Section 2.1.3(i).
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(iv) The Committee may amend or revoke a deferral election
with a participant at any time if the Committee determines that such
amendment or revocation is necessary to ensure that the annual
additions (as defined in Section 19) to the accounts of a participant
do not exceed the annual addition limitations (described in Section 19)
for such participant or that the requirements of Section 2.1.4 are met
for such plan year.
(v) Notwithstanding the provisions of this Section 2.1.3 to
the contrary, a participant who is also a participant in the BB&T
Corporation Non-Qualified Defined Contribution Plan or the BB&T
Corporation Supplemental Defined Contribution Plan for Highly
Compensated Employees may only amend or revoke a deferral election
effective as of the first day of each plan year.
(vi) The Company shall establish a payroll deduction system
to assist it in making salary reduction contributions. The Committee
from time to time may adopt policies or rules governing the manner in
which such contributions may be made so that the plan may be
administered conveniently.
2.1.4 Limitations on salary reduction contributions:
(i) Subject to the provisions of Section 2.1.4(vi), all
deferral elections made by highly compensated participants with respect
to any plan year shall be valid only if one of the tests set forth in
Section 2.1.4(ii) is satisfied for such plan year.
(ii) For each plan year, the ADP for the group of highly
compensated participants for such plan year shall bear to the ADP for
the group of nonhighly compensated participants for such plan year a
relationship that satisfies either of the following tests:
(a) The ADP for the group of highly compensated
participants is not more than the ADP for the group of
nonhighly compensated participants multiplied by 1.25; or
(b) The ADP for the group of highly compensated
participants is not more than the ADP for the group of
nonhighly compensated participants multiplied by 2, and the
excess of the ADP for the group of highly compensated
participants over the ADP for the group of nonhighly
compensated participants is not more than 2 percentage points
(or such lesser amount as the Secretary of the Treasury shall
prescribe by regulation to prevent the multiple use of this
alternative limitation with respect to any highly compensated
participant).
For purposes of applying the provisions of this paragraph (ii), the
following provisions shall apply:
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(1) A participant is a highly compensated participant
for a particular plan year if he meets the definition of a
highly compensated participant in effect for that plan year. A
participant is a nonhighly compensated participant for a
particular plan year if he does not meet the definition of a
highly compensated participant in effect for that plan year.
(2) Pursuant to regulations issued by the Secretary
of the Treasury, the Committee may elect to include all or
part of the matching contributions under the plan or any other
qualified plan that it sponsors for purposes of calculating
the ADP with respect to each participant. Notwithstanding the
foregoing, matching contributions shall be treated as salary
reduction contributions for purposes of calculating the ADP of
each participant only if the conditions described in Section
1.401(k)-1(b)(5) of the Treasury Regulations are satisfied.
Matching contributions which are treated as salary reduction
contributions pursuant to the provisions of this subparagraph
(1) shall not be distributable other than upon one of the
events described in Section 5.8(a) through (f).
(3) If 2 or more plans of the Participating Employer
or an affiliated employer that include cash or deferred
arrangements described in Section 401(k) of the Code are
aggregated for purposes of Section 410(b) of the Code (other
than for purposes of the average benefit percentage test), the
cash or deferred arrangements included in such plans shall be
treated as one arrangement. Notwithstanding the foregoing,
plans may be aggregated in order to satisfy the tests set
forth in Section 2.1.4(ii) only if they have the same plan
year and use the same ADP testing method.
(4) If a highly compensated participant is a
participant under 2 or more cash or deferred arrangements
(described in Section 401(k) of the Code) of the Participating
Employer or an affiliated employer, all such cash or deferred
arrangements shall be treated as one cash or deferred
arrangement for the purpose of determining the ADP with
respect to such highly compensated participant.
Notwithstanding the foregoing, the provisions of this
subparagraph (4) shall not apply if the plans of which such
cash or deferred arrangements are a part may not be aggregated
for purposes of Section 410(b) of the Code (other than the
average benefit percentage test).
(5) The group of highly compensated participants and
the group of nonhighly compensated participants shall include
any participant defined as such, regardless of whether he
elects to make a salary reduction contribution under the plan.
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(6) The Company shall maintain records sufficient to
demonstrate satisfaction of the ADP test.
(7) Notwithstanding anything to the contrary in the
plan, the determination and treatment of salary reduction
contributions and the ADP of any participant shall satisfy
Section 1.401(k)-1(b) of the Treasury Regulations and such
other requirements as may be prescribed by the Secretary of
the Treasury.
(iii) If at the end of any plan year neither of the tests set
forth in Section 2.1.4(ii) is satisfied, then within 2 1/2 calendar
months following the end of each plan year, but in no event later than
the year-end adjustment date following the close of such 2 1/2 month
period (the "distribution date"), the salary reduction contribution for
such plan year of each highly compensated participant shall be reduced
by his share of the excess contribution for such plan year. Reductions
shall be made pursuant to the steps in the following order:
(1) Step one: The actual deferral percentage of the
highly compensated participant with the highest actual
deferral percentage shall be reduced by the amount required to
cause the highly compensated participant's actual deferral
percentage to equal the actual deferral percentage of the
highly compensated participant with the next highest actual
deferral percentage. This process shall be repeated until the
plan satisfies one of the tests set forth in Section
2.1.4(ii). The dollar amount of each reduction made pursuant
to this step one shall be determined for each highly
compensated participant. Such amount shall not be distributed
to the affected highly compensated participant, but instead
shall be used in steps two and three below.
(2) Step two: The dollar amount of the reduction
determined for each highly compensated participant in
accordance with step one above shall be aggregated. Such
amount shall be allocated in accordance with step three below.
(3) Step three: The salary reduction contributions of
the highly compensated participant with the highest dollar
amount of salary reduction contributions shall be reduced by
the amount required to cause that highly compensated
participant's salary reduction contributions to equal the
dollar amount of the salary reduction contributions of the
highly compensated participant with the next highest dollar
amount of salary reduction contributions. This process shall
be repeated until the total amount of salary reduction
contributions so reduced equals the aggregate dollar amount
determined in step two above.
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All salary reduction contributions so reduced, adjusted for income and
losses allocable thereto, shall be designated by the Company as excess
contributions and distributed to the participant no later than the
distribution date. The income or loss allocable to the participant's
share of the excess contribution for the plan year of such excess
contribution shall be determined by multiplying the amount of the
income or loss allocable to the participant's salary reduction
contributions (and any matching contributions treated as salary
reduction contributions) for such plan year by a fraction the numerator
of which is the excess contribution on behalf of the participant for
such plan year, and the denominator of which is equal to the sum of:
(i) the balance in his account attributable to salary reduction
contributions (and any matching contributions treated as salary
reduction contributions) as of the beginning of such plan year; and
(ii) the participant's salary reduction contributions for such plan
year (and any matching contributions treated as salary reduction
contributions). Income or loss allocable to the participant's share of
the excess contribution shall not include income or loss for the period
between the end of the plan year and the date of distribution. The
excess contribution that otherwise would be distributed to the
participant shall be reduced in accordance with Treasury Regulations by
the amount of any excess elective deferrals previously distributed to
the participant. The amount of any excess contribution shall be treated
as an annual addition for purposes of Section 19 for the plan year in
which such excess contribution was made. Distributions of excess
contributions to participants may be made notwithstanding any other
provision of the plan or Code. In no event may the amount of the excess
contributions distributed for a plan year with respect to any highly
compensated participant exceed the amount of salary reduction
contributions made in behalf of the highly compensated participant for
such plan year, as adjusted for income and losses allocable thereto.
(iv) In lieu of applying the three-step process described in
Section 2.1.4(iii), the Company may, within 30 days after the end of
the plan year, make a qualified nonelective contribution with respect
to such plan year on behalf of nonhighly compensated participants in an
amount determined by the Company to be sufficient to satisfy one of the
tests set forth in Section 2.1.4(ii). Such qualified nonelective
contribution shall be allocated to the QNEC accounts of those
participants entitled to share in such contribution pursuant to the
provisions of Section 2.1.5(ii). On such allocation, the qualified
nonelective contribution shall be considered a salary reduction
contribution subject to all provisions of the plan regarding salary
reduction contributions other than Section 4.1. The Company shall pay
such qualified nonelective contribution with respect to a plan year to
the Trustee within 30 days after the end of such plan year.
Notwithstanding anything contrary contained in the plan, qualified
nonelective contributions shall be treated as salary reduction
contributions for purposes of the tests set forth in Section 2.1.4(ii)
only if the conditions described in Section 1.401(k)-1(b)(5) of the
Treasury Regulations are satisfied.
(v) If at any time during a plan year the Company in its
discretion determines that neither of the tests set forth in Section
2.1.4(ii) will be met for such plan year, then the Company in its
discretion shall have the unilateral right during the plan year to
require prospective reduction of the percentage of the compensation of
highly compensated participants that may be subject to deferral
elections for part or all of the balance of such year.
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(vi) Notwithstanding anything to the contrary in the plan, for
purposes of applying the tests set forth in Section 2.1.4, the plan
shall be treated as comprising two plans, one which benefits the
eligible employees who have not yet attained age 21 and completed a
year of service ("testing plan A") and one which benefits all other
eligible employees in accordance with Section 1.410(b)-6 (b)(3)
("testing plan B"). Testing plan B is intended to satisfy the
nondiscrimination requirements set forth in Section 2.1.4 by compliance
with the safe harbor methods described in Section 401(k)(12) of the
Code (the "401(k) safe harbor"). Notwithstanding the foregoing, if for
any plan year testing plan B does not comply with the 401(k) safe
harbor, the salary reduction contributions made on behalf of the
participants in testing plan B shall satisfy the requirements of
Section 2.1.4. Testing plan A is not intended to satisfy the 401(k)
safe harbor. Consequently, with respect to each plan year, the salary
reduction contributions made on behalf of the participants in testing
plan A shall satisfy the requirements of Section 2.1.4.
2.1.5 Allocation to salary reduction contribution (before-tax)
accounts:
(i) Salary reduction contributions made by the Participating
Employer shall be allocated to the salary reduction contribution
(before-tax) account of a participant as of the last day of the payroll
period for which such contribution is made. The salary reduction
contribution (before-tax) account of each participant shall be
accounted for separately from the participant's other accounts under
the plan.
(ii) If the Company elects to make a qualified nonelective
contribution with respect to any plan year, such contribution shall be
allocated to the QNEC account of each nonhighly compensated participant
with respect to whom a salary reduction contribution was made to the
trust for such plan year. Such allocation shall be in the proportion
that each such participant's compensation bears to the total
compensation of all such participants. Qualified nonelective
contributions made for a plan year shall be allocated to a
participant's QNEC account as of the adjustment date the contribution
is received in the trust by the Trustee.
2.2 Matching Contributions:
2.2.1 Amount and allocation of matching contributions: For
each payroll period during a plan year, the Participating Employer
shall make a contribution to the plan on behalf of each participant.
The matching contribution for each payroll period shall equal the sum
of:
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(i) 100 percent of the amount of the salary reduction
contribution made on behalf of such participant during such
payroll period up to 4 percent of his compensation with
respect to such payroll period (the "basic matching
contribution"). The amount of the salary reduction
contribution made on behalf of the participant during such
payroll period in excess of 4 percent shall be disregarded in
determining the amount of the participant's basic matching
contribution.
(ii) 100 percent of the amount of the salary
reduction contribution made on behalf of such participant
during such payroll period in excess of 4 percent but not in
excess of 6 percent of his compensation with respect to such
payroll period (the "supplemental matching contribution"). The
amount of the salary reduction contribution made on behalf of
the participant during such payroll period in excess of 6
percent shall be disregarded in determining the amount of the
participant's supplemental matching contribution.
The basic matching contribution made with respect to each participant
shall be allocated to his Employer basic matching contribution account.
The supplemental matching contribution made with respect to each
participant shall be allocated to his Employer supplemental matching
contribution account. Matching contributions shall be paid by the
Participating Employer to the Trustee as soon as administratively
feasible following the end of the payroll period for which such
contributions are being made, but in no event later than the last day
of the next following calendar quarter.
2.2.2 Limitations on matching contributions: Subject to the
provisions of Section 2.2.6, the following provisions shall apply with
respect to matching contributions under the plan:
(A) Contribution percentage limitation: For each plan
year the contribution percentage for the group of highly
compensated participants for such plan year shall bear to the
contribution percentage for the group of nonhighly compensated
participants for such plan year a relationship that satisfies
either of the following tests:
(i) The contribution percentage for the
group of highly compensated participants is not more
than the contribution percentage for the group of
nonhighly compensated participants multiplied by
1.25; or
(ii) The contribution percentage for the
group of highly compensated participants is not more
than the contribution percentage for the group of
nonhighly compensated participants multiplied by 2,
and the excess of the contribution percentage for the
group of highly compensated participants over the
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contribution percentage for the group of nonhighly
compensated participants is not more than 2
percentage points (or such lesser amount as the
Secretary of the Treasury shall prescribe by
regulations to prevent the multiple use of this
alternative limitation with respect to any highly
compensated participant).
(B) For purposes of applying the provisions of this
Section 2.2.2, the following provisions shall apply:
(i) A participant is a highly compensated
participant for a particular plan year if he meets
the definition of a highly compensated participant in
effect for that plan year. A participant is a
nonhighly compensated participant for a particular
plan year if he does not meet the definition of a
highly compensated participant in effect for that
plan year.
(ii) Pursuant to regulations issued by the
Secretary of the Treasury, the Committee may elect to
take into account elective deferrals under the plan
or any other qualified plan of the Participating
Employer for purposes of computing the contribution
percentages.
(iii) If 2 or more plans of the
Participating Employer or an affiliated employer are
aggregated for purposes of Sections 401(a)(4) or
410(b) of the Code (other than for purposes of the
average benefit percentage test), the contribution
percentage of each participant under the plan shall
be determined as if all such plans were a single
plan. Notwithstanding the foregoing, plans may be
aggregated in order to satisfy the tests set forth in
Section 2.2.2(A) only if they have the same plan year
and use the same contribution percentage testing
method.
(iv) If a highly compensated participant is
a participant in 2 or more plans described in Section
401(a) of the Code or cash or deferred arrangements
described in Section 401(k) of the Code maintained by
the Participating Employer or an affiliated employer
to which matching contributions, nondeductible
voluntary contributions or elective deferrals are
made on behalf of such highly compensated
participant, all such plans and arrangements shall be
25
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treated as a single plan for the purpose of
determining the contribution percentage of such
highly compensated participant. Notwithstanding the
foregoing, the provisions of this subparagraph (iv)
shall not apply if the plans may not be aggregated
for purposes of Section 410(b) of the Code.
(v) The determination of who is a highly
compensated participant or a nonhighly compensated
participant shall include any employee who is
eligible to receive matching contributions or, if the
Committee takes elective deferrals into account, make
elective deferrals.
(vi) The Company shall maintain records
sufficient to demonstrate satisfaction of the tests
set forth in Section 2.2.2(A) and the amount of
elective deferrals, if any, used in such tests.
(vii) Notwithstanding anything to the
contrary in the plan, the determination and treatment
of matching contributions and the contribution
percentage of any participant shall satisfy Section
1.401(m)-1(b) of the Treasury Regulations and such
other requirements as may be prescribed by the
Secretary of the Treasury.
2.2.3 Correction of excess matching contributions: If at the
end of any plan year, neither of the tests set forth in Section
2.2.2(A) is satisfied, the Committee shall adjust the matching
contributions of the highly compensated participants within 2 1/2
calendar months following the end of each plan year, but in no event
later than the year-end adjustment date following the close of such 2
1/2 month period (the "distribution date"). The matching contribution
of each highly compensated participant shall be reduced by his share of
the excess aggregate contributions for such plan year. Reductions shall
be made pursuant to the following procedure:
(1) Step one: The contribution percentage of the
highly compensated participant with the highest contribution
percentage shall be reduced by the amount required to cause
the highly compensated participant's contribution percentage
to equal the contribution percentage of the highly compensated
participant with the next highest contribution percentage.
This process shall be repeated until the plan satisfies one of
the tests set forth in Section 2.2.2(A). The dollar amount of
each reduction made pursuant to this step one shall be
determined for each highly compensated participant. Such
amount shall not be distributed to the affected highly
compensated participant, but instead shall be used in steps
two and three below.
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(2) Step two: The dollar amount of the reduction
determined for each highly compensated participant in
accordance with step one above shall be aggregated. Such
amount shall be allocated in accordance with step three below.
(3) Step three: The matching contributions of the
highly compensated participant with the highest dollar amount
of matching contributions shall be reduced by the amount
required to cause that highly compensated participant's
matching contributions to equal the dollar amount of the
matching contributions of the highly compensated participant
with the next highest dollar amount of matching contributions.
This process shall be repeated until the total amount of
matching contributions so reduced equals the aggregate dollar
amount determined in step two above.
All matching contributions so reduced, adjusted for income and losses
allocable thereto, shall be designated by the Participating Employer as
excess aggregate contributions and distributed to the participant no
later than the distribution date. The income or loss allocable to the
participant's share of the excess aggregate contributions for the plan
year of such excess aggregate contributions shall be determined by
multiplying the amount of the income or loss allocable to the
participant's matching contributions and any elective deferrals treated
as matching contributions for such plan year by a fraction the
numerator of which is the excess aggregate contributions of the
participant for such plan year, and the denominator of which is equal
to the sum of: (i) the balance in the participant's account
attributable to matching contributions and any elective deferrals
treated as matching contributions as of the beginning of such plan
year; and (ii) the matching contributions and any elective deferrals
treated as matching contributions which were made on behalf of the
participant for such plan year. The income or loss allocable to the
participant's share of the excess aggregate contributions for the plan
year shall not include income or loss for the period between the end of
the plan year and the date of distribution. Distributions to
participants of excess aggregate contributions may be made
notwithstanding any other provision of the plan or Code. The amount of
any excess aggregate contribution shall be treated as an annual
addition for purposes of Section 19 for the plan year in which such
excess aggregate contribution was made.
2.2.4 Forfeiture of matching contributions: Notwithstanding
anything to the contrary in the plan, if all or part of a participant's
salary reduction contribution is treated as an excess contribution, an
excess elective deferral or an excess aggregate contribution, the
matching contribution made with respect to such salary reduction
contribution, adjusted for income and losses allocable thereto, and
which is not distributed in order to enable the plan to comply with one
of the tests set forth in Section 2.2.2(A) shall be forfeited by the
participant within 2 1/2 calendar months following the end of the plan
year for which the matching contribution was made (the "forfeiture
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date"). The income or loss allocable to the forfeited matching
contribution for the plan year of such matching contribution shall be
determined by multiplying the amount of the income or loss allocable to
the participant's matching contributions for such plan year by a
fraction, the numerator of which is the forfeited matching contribution
for such plan year, and the denominator of which is equal to the sum
of: (i) the balance in the participant's account attributable to
matching contributions as of the beginning of such plan year; and (ii)
the matching contributions made on behalf of the participant for such
plan year. Income or loss allocable to the forfeited matching
contribution shall not include income or loss for the period between
the end of the plan year and the forfeiture date. Forfeitures of
matching contributions (including income or losses allocable thereto)
shall reduce the amount of matching contributions which the
Participating Employer otherwise is obligated to make pursuant to
Section 2.2, if any.
2.2.5 Multiple use: If multiple use of the alternative
limitation (as defined in Treasury Regulation Section 1.401(m)-2)
exists with respect to any plan year, the Committee shall reduce the
contribution percentage of each highly compensated participant by
applying the three-step process described in Section 2.2.3 of the plan.
2.2.6 Nondiscrimination testing: Notwithstanding anything to
the contrary in the plan, for purposes of applying the tests set forth
in Section 2.2.2, the plan shall be comprised of testing plan A (as
defined in Section 2.1.4(vi)) and testing plan B (as defined in Section
2.1.4(vi)). Testing plan B is intended to satisfy the nondiscrimination
requirements set forth in Section 2.2.2 by compliance with the safe
harbor methods described in Section 401(m)(11) of the Code (the "401(m)
safe harbor"). Notwithstanding the foregoing, if for any plan year the
plan does not comply with the 401(m) safe harbor, the matching
contributions made on behalf of the participants in testing plan B
shall satisfy the requirements of Section 2.2.2. Testing plan A is
deemed to satisfy the requirements of Section 2.2.2 since participants
in testing plan A are not eligible to receive matching contributions.
2.3 Discretionary Supplemental Employer Contributions: In
addition to the contributions provided for in Section 2.1 and 2.2, the
Participating Employer may from time to time make a supplemental contribution
(the "supplemental employer contribution") on behalf of each participant who
becomes an eligible employee as a result of a corporate transaction (as defined
in this Section 2.3) involving the Participating Employer and is designated by
the Committee to receive a supplemental employer contribution. The purpose of
the supplemental employer contribution is to make up for all or any portion of
the contribution the participant would have received under his former employer's
tax-qualified defined contribution plan had the corporate transaction not
occurred during the applicable plan year. The Committee shall determine whether
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a supplemental employer contribution shall be made by the Participating Employer
pursuant to the provisions of this Section 2.3 and the amount thereof, and shall
designate the participants eligible to receive such contribution. The
supplemental employer contribution for a plan year, if any, shall be allocated
among the eligible participants in the same proportion that the compensation of
each such participant bears to the compensation of all eligible participants for
such plan year. For purposes of this Section 2.3, a corporate transaction means
any corporate transaction resulting in an individual's transfer of employment
from an unrelated entity to the Participating Employer, including without
limitation, a corporate merger or consolidation and a sale of the assets of a
trade or business. Supplemental employer contributions shall be credited to the
eligible participants' Employer profit sharing contribution accounts.
2.4 General Limitations: In no event shall a Participating
Employer contribute an amount (including salary reduction contributions,
matching contributions, supplemental employer contributions and qualified
nonelective contributions) for any limitation year (as defined in Section 19.4)
which would cause the annual addition limitations in Section 19 to be exceeded.
Each contribution to the plan by a Participating Employer shall be conditioned
on being deductible under Section 404 of the Code for the plan year for which
such contribution is made. The initial contribution to the plan shall be
conditioned on the plan being qualified under Section 401(a) of the Code.
Section 3. Vesting:
--------- -------
3.1 General: Except as otherwise provided in this Section
3.1, the interest of a participant in his account shall be fully vested at all
times. Notwithstanding the foregoing, a participant who engages in misconduct
including, but not limited to, embezzlement, larceny, theft, and other dishonest
acts, or who engages in direct competition with a Participating Employer or any
other affiliated employer while a participant shall forfeit his interest in his
Employer supplemental matching contribution account and his ESOP account, if
any, if he terminates service prior to the earlier of attainment of his normal
retirement age or completion of 5 or more years of service. For purposes of this
Section 3.1, all years of service of an employee shall be taken into account.
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3.2 Forfeitures: The amounts forfeited pursuant to Section
3.1 shall be combined with the amounts forfeited by all other participants
during such plan year. The aggregate of such forfeitures shall be applied as
follows:
(i) First, to restore amounts previously forfeited
from accounts in accordance with Section 5.4.1; and
(ii) Second, to reduce the amount of matching contributions
which the Participating Employer is otherwise obligated to make
pursuant to Section 2.2.
3.3 Change in Vesting Schedule: If an amendment to the plan
directly or indirectly affects the determination of a participant's vested
percentage, or the plan is deemed amended by an automatic change to or from the
top-heavy vesting schedule in Section 18.2.2, each participant in service with
at least 3 years of service may irrevocably elect to have his vested percentage
determined without regard to such amendment. The participant may make such
election during the period beginning on the date such amendment is adopted and
ending on the date that is 60 days after the latest of the date (a) such
amendment is adopted; (b) such amendment is effective; or (c) the Committee
advises the participant in writing of such amendment.
3.4 Predecessor Plan: In no event shall the vested
percentage of the accrued benefit of a participant on the effective date who was
a participant in the predecessor plan immediately preceding such effective date
be less than the vested percentage of his accrued benefit under the predecessor
plan had such plan continued in effect through the date such vested percentage
is determined.
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Section 4. Pretermination Distributions; Loans:
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4.1 Hardship Distributions: A participant in service may
file a written request with the Committee for a distribution from his salary
reduction contribution (before-tax) account and his Employer basic matching
contribution account due to hardship. A distribution will be on account of
hardship only if the distribution is on account of an immediate and heavy
financial need of the participant and is necessary to satisfy such financial
need. The request must specify the nature of the hardship, the total amount
requested, and the total amount of the actual expense incurred or to be incurred
on account of the hardship. The Committee, in its discretion, shall determine
whether a hardship constitutes an immediate and heavy financial need, and the
decision of the Committee to grant or deny a hardship distribution shall be
final; provided, that all participants who request such distributions and are
similarly situated shall be treated alike and in a nondiscriminatory manner.
If the Committee determines that a hardship exists, the Committee shall direct
the Trustee to make a distribution to the participant of the amount approved by
the Committee. The distribution shall be made in cash from the participant's
separate accounts which are available for a hardship distribution as provided in
this Section 4.1. The amount available for such distribution shall be
determined as of the adjustment date the hardship distribution request is
actually processed by the Trustee. In no event shall the amount available for a
hardship distribution exceed the amount in the participant's separate accounts
available for a hardship distribution as of such adjustment date (reduced by any
previous hardship distribution not reflected as of such adjustment date),
excluding income credited to such accounts after December 31, 1988.
Notwithstanding the foregoing, with respect to a participant who was a
participant in the United Carolina Bancshares Corporation Dollar Plus Savings
Plan on June 30, 1997, in no event shall the amount available for a hardship
distribution exceed the amount in such participant's separate accounts available
for a hardship distribution as of such adjustment date (reduced by any previous
hardship distribution not reflected as of such adjustment date), excluding all
income credited to such accounts. The circumstances giving rise to hardship
shall be limited to:
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(i) Expenses for medical care described in Section 213(d) of
the Code previously incurred by the participant, the participant's
spouse, or any dependent of the participant (as defined in Section 152
of the Code), or expenses necessary for such persons to obtain such
medical care;
(ii) Costs directly related to the purchase (excluding
mortgage payments) of a principal residence of the participant;
(iii) Payment of tuition, related educational fees and room
and board expenses, for the next 12 months of post-secondary education
for the participant, the participant's spouse or any dependent of the
participant; or
(iv) The need to prevent eviction of the participant from
his principal residence, or foreclosure on the mortgage of the
participant's principal residence.
A hardship distribution shall not be made in excess of the amount of the
immediate and heavy financial need of the participant. The amount of the
immediate and heavy financial need of the participant may include any amounts
necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the receipt of the hardship distribution.
The following special provisions shall apply to all hardship distributions:
(a) No hardship distribution shall be made until the
participant has obtained all distributions and all nontaxable loans
currently available under all tax-qualified retirement plans of the
Participating Employer and its affiliated employers, including, without
limitation, distributions pursuant to Sections 4.2 and 4.3 and loans
pursuant to Section 4.4;
(b) Except as otherwise provided in Regulation Section
1.401(k)-1(d)(2)(iv)(B)(4), the participant's elective deferrals under
all of the qualified and nonqualified plans of deferred compensation
maintained by the Participating Employer and its affiliated employers,
shall be suspended for a period of 12 months following receipt of the
hardship distribution; and
(c) The participant may not make elective deferrals to any
tax-qualified plans of deferred compensation maintained by the
Participating Employer and its affiliated employers for his taxable
year immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Section 402(g) of
the Code for such next taxable year, reduced by the amount of his
elective deferrals for the taxable year of the hardship distribution.
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Any distribution made pursuant to this Section 4.1 shall be withdrawn from the
participant's separate accounts described below in the following order of
priority:
(i) salary reduction contribution (before-tax) account; and
(ii) Employer basic matching contribution account.
With respect to each such account, the amount of the withdrawal shall be
withdrawn by the Trustee from the participant's fund accounts (as defined in
Section 7.1.1) with respect to such account on a pro rata basis. The Committee
from time to time may adopt additional policies or rules governing the manner in
which hardship distributions are made so that the plan may conveniently be
administered.
4.2 Distributions After Age 59: In accordance with
procedures adopted by the Committee, a participant who has attained age 59 1/2
may withdraw all or any portion of his account. The balance in the participant's
account available for withdrawal pursuant to the provisions of this Section 4.2
shall be determined as of the date the withdrawal request is actually processed
by the Trustee. Any withdrawal made pursuant to this Section 4.2 shall be
withdrawn by the Trustee from the participant's fund accounts (as defined in
Section 7.1.1) with respect to such account on a pro rata basis.
4.3 Distributions Prior to Age 59: In accordance with
procedures adopted by the Committee, a participant who has not yet attained age
59 1/2 may withdraw all or any portion of his voluntary contribution (after-tax)
account, if any, his Employer supplemental matching contribution account, his
Employer profit sharing contribution account, if any, his ESOP account, if any,
his prior plan account, if any, and his rollover account, if any. Only two
withdrawals may be made by a participant pursuant to the provisions of this
Section 4.3 during each plan year. Notwithstanding the foregoing, no amount
shall be withdrawn from the Employer supplemental matching contribution account,
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the prior plan account (excluding for this purpose any amount attributable to
after-tax employee contributions), his Employer profit sharing contribution
account or the ESOP account unless the participant has been a participant in the
plan (including for this purpose his participation in the predecessor plan) for
at least 60 months or unless the amounts being withdrawn have been in the
participant's account (including for this purpose his account under the
predecessor plan) for at least 24 months. The balance in the participant's
account available for withdrawal pursuant to the provisions of this Section 4.3
shall be determined as of the date the withdrawal request is actually processed
by the Trustee. Any withdrawal made pursuant to this Section 4.3 shall be
withdrawn by the Trustee from the participant's separate accounts described
below in the following order of priority:
(i) voluntary contribution (after-tax) account;
(ii) the portion of the participant's prior plan account
attributable to after-tax employee contributions and
earnings thereon;
(iii) the remaining portion of the participant's prior plan
account;
(iv) Employer profit sharing contribution account;
(v) Employer supplemental matching contribution account;
(vi) rollover account; and
(vii) ESOP account.
With respect to each such account, the amount of the withdrawal shall be
withdrawn by the Trustee from the participant's fund accounts (as defined in
Section 7.1.1) with respect to such account on a pro rata basis.
4.4 Loans: The Committee, in accordance with its uniform,
nondiscriminatory policy, shall direct the Trustee to permit any participant in
service or a participant or beneficiary who is a party-in-interest as defined in
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Section 3(14) of ERISA (the "borrower"), to borrow from his vested account
(excluding for this purpose his ESOP account, if any, and his PAYSOP account, if
any), subject to the following requirements:
4.4.1 Loans shall be withdrawn from the participant's fund
accounts (as defined in Section 7.1.1) on a pro rata basis. Loans shall
be available to all borrowers on a reasonably equivalent basis. Loans
shall not be available to highly compensated participants in an amount
greater than to nonhighly compensated participants. In no event shall
the principal amount of the loan be less than $1,000. A participant may
have only one loan outstanding at any time and only one loan request
may be submitted in a plan year. In no event shall a participant be
entitled to borrow from his ESOP account, if any, or his PAYSOP
account, if any. Notwithstanding the foregoing, if a participant who
was a participant in a predecessor plan that is merged into this plan
has more than one loan outstanding under the predecessor plan as of the
date of such plan merger, such loans shall remain outstanding and be
payable in accordance with their terms.
4.4.2 The Trustee shall provide to each borrower who is
approved for a loan a statement of the charges involved in the loan
transaction, including the amount financed and the annual interest
rate. The borrower shall execute any documents as the Committee deems
necessary or advisable to consummate the loan and provide reasonable
safeguards.
4.4.3 The principal amount of any loan made to a borrower,
when added to the outstanding balance of all loans from the plan, shall
not exceed the lesser of:
(i) $50,000, reduced by the excess of: (a) the
highest outstanding balance of loans from the plan during the
one-year period ending on the day before the date such loan is
made, over (b) the outstanding balance of loans from the plan
on the date such loan is made; or
(ii) One-half of the vested accrued benefit of the
borrower. The vested accrued benefit shall be determined as of
the adjustment date the loan is actually processed by the
Trustee.
For the purpose of this limitation, the principal amounts of all loans
from all plans of the Participating Employer and affiliated employers
shall be aggregated.
4.4.4 Each loan shall require that payment of principal and
interest shall be amortized in level payments over a period of not less
than 12 months nor more than 60 months from the date of the loan. Each
Participating Employer shall establish a procedure for withholding from
the regular payroll checks of a participant the amounts necessary to
satisfy the repayment obligation under the note. All amounts so
withheld shall be transferred immediately to the Trustee.
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4.4.5 Each loan shall be secured by a pledge of up to 50
percent of the vested accrued benefit of the borrower, as determined on
the date of such loan.
4.4.6 A loan shall bear a reasonable rate of interest
determined as of the date of origination of the loan in the manner
established by the Committee. The principal amount of the loan shall be
an investment allocated solely to the account of the borrower, and the
interest paid thereon shall be allocated solely to the account of the
borrower.
4.4.7 In addition to the provisions of this Section 4.4, each
loan shall be subject to and made in accordance with the Plan Loan
Rules attached hereto as Exhibit C.
4.5 Termination of Service Prior To Distribution : If a
participant's termination of service occurs after a request for a hardship
distribution, withdrawal or loan is approved in accordance with the provisions
of this Section 4 but prior to distribution, such approval shall be void, and
the vested accrued benefit of such participant shall be payable hereunder as if
such approval had not been made.
Section 5. Termination Distributions:
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5.1 Distributions on Account of Retirement or Disability:
5.1.1 Distributions to participants: As of the adjustment
date coincident with or next following the date a participant retires
or terminates service on account of disability, his vested accrued
benefit, determined as of such adjustment date, shall be paid to him or
applied for his benefit under one of the following options, as elected
by the participant:
(a) Term certain: Payment to him of his vested
accrued benefit in approximately equal monthly installments
over a whole number of years, as elected by the participant
(the "term"), not exceeding the life expectancy of the
participant or the joint life expectancy of the participant
and his beneficiary; provided that in no event shall monthly
installments be less than $100 per month. If the participant
dies before expiration of the term, payments shall continue to
his beneficiary for the remainder of the term.
(b) Lump sum: Payment to him of his vested accrued
benefit in a single lump sum payment.
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(c) Combination of term certain and lump sum:
Payment to him of his vested accrued benefit in any
combination of the forms of payment described in (a) and (b)
above.
(d) Direct rollover: Payment to an eligible
retirement plan as provided in Section 15.
Such election must be made in writing and filed with the Committee on
or before the adjustment date as of which payment is to commence and
shall be irrevocable on or after such adjustment date. If a participant
fails to elect one of the foregoing options, his vested accrued benefit
shall be paid to him under Section 5.1.1(b).
5.1.2 Applicable provisions: The following provisions
shall apply for purposes of this Section 5.1:
(a) Deferral: Subject to the provisions of Section
5.1.2(b), a participant's benefit shall remain in the plan
until the participant elects to receive a distribution of his
benefit in accordance with the provisions of this Section 5
and procedures adopted by the Committee.
(b) Required distribution: A participant's benefit
must be distributed or begin to be distributed no later than
the participant's required beginning date (as defined in
Section 5.3.3(f)).
(c) Required minimum distribution: If all or any
portion of a participant's benefit is to be distributed in
installments, the total amount of the distributions for each
calendar year must be equal to or greater than the amount
obtained by dividing the participant's benefit (as defined in
Section 5.3.3(e)) by the lesser of (i) the applicable life
expectancy (as defined in Section 5.3.3(a)), or (ii) if the
participant's spouse is not the designated beneficiary (as
defined in Section 5.3.3(b)), the applicable divisor
determined from the table set forth in Section 1.401(a)(9)-2
Q&A 4 of the Treasury Regulations (the "minimum
distribution"). Distributions after the death of the
participant shall be made using the applicable life expectancy
without regard to Section 1.401(a)(9)-2 of the Treasury
Regulations. The minimum distribution required for the
participant's first distribution calendar year (as defined in
Section 5.3.3(c)) must be made on or before the participant's
required beginning date. The minimum distributions for other
calendar years, including the minimum distribution for the
distribution calendar year in which the participant's required
beginning date occurs, must be made on or before December 31
of each such distribution calendar year.
(d) Form of distribution: Distributions from the plan
shall be made in cash. Notwithstanding the foregoing, if a
portion of a participant's vested accrued benefit is invested
in Company stock, such participant may direct the Committee to
distribute such portion of his accrued benefit in shares of
Company stock.
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(e) Distributions following return to service:
Notwithstanding the foregoing provisions of this Section 5.1,
if a participant receiving benefit payments from the plan
reenters service prior to his normal retirement date, such
payments shall cease during the period he is in service. When
he subsequently retires, dies or otherwise terminates service,
his then vested accrued benefit shall be payable to or with
respect to him pursuant to the applicable provisions of the
plan.
(f) Direction of investment: If all or any portion
of the accrued benefit of a participant is payable to him in
installments, such participant shall continue to be eligible
to direct the Trustee as to the investment and reinvestment of
his accrued benefit pursuant to the provisions of Section 7.
His accrued benefit shall continue to be adjusted as of each
adjustment date pursuant to Section 6 and the amount of the
installment payments to him shall be adjusted as of each
year-end adjustment date to reflect the adjusted amount of his
accrued benefit as of such adjustment date.
(g) Predecessor plan: Notwithstanding any other
provision hereof, if a participant in the predecessor plan is
receiving benefits under the predecessor plan as of the
effective date, the amount of the benefit payable to such
participant and the manner and time for payment thereof shall
be determined in accordance with the provisions of the
predecessor plan. If a participant in a predecessor plan
separated from service prior to the effective date of this
plan and is entitled to a deferred benefit commencing after
the effective date, the amount of such benefit shall be
determined in accordance with the provisions of the
predecessor plan, and the manner and time of payment shall be
determined under the plan.
(h) Required consent: Subject to the provisions of
Section 12.1, any distribution to a participant who has a
vested accrued benefit which exceeds the cash-out limit (as
defined in this Section 5.1.2(h)) shall require the
participant's consent if such distribution is to commence
prior to the participant's attainment of normal retirement
age. The consent requirements of this Section 5.1.2(h) shall
be deemed satisfied if the participant's vested accrued
benefit does not exceed the cash-out limit. If a participant
has begun to receive benefit payments in installments and at
least one installment payment has not yet been made, the
vested accrued benefit of the participant is deemed to exceed
the cash-out limit if his vested accrued benefit exceeded the
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cash-out limit in effect as of the date payment of his benefit
first commenced. The cash-out limit in effect for dates in
plan years beginning before January 1, 2000 is $3,500. The
cash-out limit in effect for dates in plan years beginning on
or after January 1, 2000 is $5,000. Thereafter, the cash-out
limit in effect on a particular date is the amount described
in Section 411(a)(11)(A) for the plan year which includes such
date.
5.2 Distributions on Account of Death: On the death of the
participant, the following provisions shall apply:
5.2.1 Death after distributions begin: If the participant dies
after distribution of his vested accrued benefit has begun, payments
shall continue following his death only if his benefit was payable
under an option providing for such payments, and any remaining portion
of his vested accrued benefit shall continue to be distributed to his
beneficiary at least as rapidly as under the method of distribution in
effect at his death.
5.2.2 Death before distributions begin: If the participant
dies before distribution of his vested accrued benefit begins, payment
of his vested accrued benefit to his beneficiary shall commence as of
any adjustment date following the date of the participant's death, as
elected by the beneficiary. The participant's vested accrued benefit
shall be payable under a method of payment described in Section 5.1.1,
as elected by the beneficiary. Distribution of the participant's entire
vested accrued benefit must be completed no later than December 31 of
the calendar year containing the 5th anniversary of the participant's
death; provided, however, that if payment is to be made to a designated
beneficiary (as defined in Section 5.3.3(b)), distribution of the
participant's entire vested accrued benefit may be made in
substantially equal installments over a period not exceeding the life
expectancy of the designated beneficiary.
5.3 Special Provisions and Definitions: The following
provisions apply for purposes of this Section 5:
5.3.1 Small amount: Notwithstanding any other provision of
the plan, if the vested accrued benefit of a participant does not
exceed the cash-out limit as of the adjustment date coincident with his
termination of service for any reason, including death, then such
benefit shall be paid in a lump sum as soon as practicable following
such termination of service to the person entitled thereto without
regard to any election made by the participant or beneficiary.
5.3.2 Designation of beneficiary: The beneficiary or
beneficiaries of a participant shall be determined in accordance with
the following provisions:
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(a) Surviving spouse: If the participant dies leaving
a surviving spouse, the participant's beneficiary shall be
such spouse unless the participant designates another
beneficiary (which may include more than one person, natural
or otherwise, and one or more contingent beneficiaries) by
filing a qualified election with the Committee. A "qualified
election" means a beneficiary designation by the participant
on a form provided the Committee, which contains a consent and
acknowledgment of the effect of such consent executed by the
surviving spouse and witnessed by a representative of the
Committee or a notary public. Consent of the spouse shall not
be required if the spouse cannot be located or if other
circumstances exist which excuse obtaining the consent under
applicable law or regulations. The qualified election of a
participant may be revoked at any time by action of the
participant alone, in which case the surviving spouse shall be
the beneficiary. Any other change in beneficiary shall be made
only by the filing of a revised qualified election. If a
beneficiary named in a qualified election dies before
receiving any payment due him from the trust fund, the payment
shall be made to the contingent beneficiary, if any, named in
the qualified election. If there is no such contingent
beneficiary, the payment shall be made to the surviving
spouse. If the surviving spouse dies before receiving all
payments due under the plan, the remaining payments shall be
made to the estate of the surviving spouse.
(b) Other beneficiary: If a participant dies without
leaving a surviving spouse, the participant's beneficiary
(which may include more than one person, natural or otherwise,
and one or more contingent beneficiaries) shall be the
beneficiary designated by the participant on the beneficiary
designation form filed with the Committee. Designation of a
beneficiary under this subparagraph (b) shall be revocable by
the participant at any time prior to death. If the participant
fails to designate a beneficiary, the benefit of the
participant shall be payable to his estate. If a beneficiary
is entitled to receive payments from the trust fund and dies
before receiving all payments due him, remaining payments
shall be made to the contingent beneficiary, if any. If there
is no contingent beneficiary, such payments shall be made to
the estate of the beneficiary.
(c) Disclaimer: Any beneficiary may disclaim all or
any part of the benefit to which such beneficiary is entitled
hereunder by filing a disclaimer with the Committee at least
10 days before payment of such benefit is to commence. Such
disclaimer shall be made in form satisfactory to the Committee
and shall be irrevocable when filed. The benefit disclaimed
shall be payable from the trust fund in the same manner as if
the beneficiary who filed the disclaimer dies on the date of
such filing.
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5.3.3 Definitions: The following definitions apply for
purposes of this Section 5:
(a) "Applicable life expectancy" means the life
expectancy (or joint and last survivor expectancy) calculated
using the attained age of the participant (or designated
beneficiary) as of the participant's (or designated
beneficiary's) birthday in the applicable calendar year
reduced by one for each calendar year which has elapsed since
the date the life expectancy was calculated. If life
expectancy is being recalculated, the applicable life
expectancy is the life expectancy as so calculated. The
applicable calendar year is the first distribution calendar
year, and, if life expectancy is being recalculated, each
succeeding calendar year.
(b) "Designated beneficiary" of a participant means
any beneficiary who is a natural person.
(c) "Distribution calendar year" means a calendar
year for which a distribution is required to satisfy the
requirements of Section 5.1.2(c). For distributions beginning
before the participant's death, the first distribution
calendar year shall be the calendar year immediately preceding
the calendar year containing the participant's required
beginning date. For distributions beginning after the
participant's death, the first distribution calendar year
shall be the calendar year in which distributions are required
to begin pursuant to Section 5.2.
(d) "Life expectancy" means life expectancy and joint
and last survivor life expectancy computed by use of the
expected return multiples in Tables V and VI of Section 1.72-9
of the Treasury Regulations. Unless otherwise elected by the
participant, or spouse, in the case of distributions described
in Section 5.2.2, by the time distributions are required to
begin, life expectancy shall be recalculated annually. Such
election shall be irrevocable as to the participant or spouse.
The life expectancy of a nonspouse beneficiary may not be
recalculated.
(e) "Participant's benefit" means his accrued benefit
as of the year-end adjustment date in the calendar year
immediately preceding the distribution calendar year (the
"valuation calendar year") increased by any contribution or
forfeiture allocated to the participant's account as of any
date in the valuation calendar year after such year-end
adjustment date and decreased by any distribution made in the
valuation calendar year after such year-end adjustment date.
Notwithstanding the foregoing, if any portion of the minimum
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distribution for the first distribution calendar year is made
in the second distribution calendar year on or before the
required beginning date, the amount of the minimum
distribution made in the second distribution calendar year
shall be treated as if it had been made in the immediately
preceding distribution calendar year.
(f) "Required beginning date" means April 1 of the
calendar year following the later of (A) the calendar year in
which the participant attains age 70 1/2, or (B) the calendar
year in which the participant retires. Notwithstanding the
foregoing, the required beginning date of a participant who is
a 5 percent owner (as defined in Section 416 of the Code)
shall be April 1 of the calendar year following the calendar
year in which the participant attains age 70 1/2.
Notwithstanding anything to the contrary contained in the plan, all
distributions under this Section 5 shall be determined and made in accordance
with Section 401(a)(9) of the Code, including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of the Treasury
Regulations, which are incorporated herein by reference.
5.4 Distributions on Account of Other Termination of Service:
The following provisions shall apply if a participant terminates service for
reasons other than retirement, disability or death:
5.4.1 Election to receive benefit following termination: The
participant may elect to receive his vested accrued benefit as of any
adjustment date following the date of his termination of service for
any reason other than retirement, disability or death. The adjustment
date as of which payment is to commence shall be referred to herein as
his "distribution adjustment date." The manner of distribution shall be
determined under the applicable provisions of Section 5.1. The
participant's election shall be made on or before the distribution
adjustment date in accordance with procedures adopted by the Committee.
Such election shall be disregarded if the participant is in service on
the distribution adjustment date. The following provisions shall apply
if the participant is not fully vested in his accrued benefit as of his
distribution adjustment date:
(a) The amount in his account which is not vested
shall be forfeited pursuant to Section 3.2.
(b) If he reenters service and repays to the trust
the full amount of the distribution received from the trust on
or before the earlier of the year-end adjustment date of the
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plan year in which he incurs his 5th consecutive break in
service following termination or the 5th anniversary of the
date he reenters service, such repaid amount shall be credited
as of the adjustment date coincident with or next following
such repayment to the subaccount or subaccounts of the
participant from which the distribution was previously made to
the participant. Following such repayment, the Trustee shall
credit to his subaccount or subaccounts from forfeitures taken
as of the adjustment date on or next following the date of
repayment, the amount previously forfeited from each such
subaccount, if any. If forfeitures are not sufficient to
credit this amount to the participant, such amount shall be
contributed by the Participating Employer to the Trustee on or
before such adjustment date.
5.4.2 Future distribution: If any part of a the participant's
vested accrued benefit is not distributed pursuant to Section 5.4.1, it
shall be held under the plan until the earlier of his normal retirement
date or the date of his death, whereupon it shall be paid to him or his
beneficiary in the same manner as if the participant were then in
service. If the vested accrued benefit of a participant is held in the
plan for future payment, the participant shall continue to be eligible
to direct the investment and reinvestment of his accrued benefit
pursuant to the provisions of Section 7.
5.4.3 Waiver of election period: If a distribution is one to
which Sections 401(a)(11) and 417 of the Code do not apply, such
distribution may commence less than 30 days after the date the notice
required under Section 1.411(a)-11(c) of the Treasury Regulations is
given, provided that:
(a) the Committee clearly informs the participant
that the participant has a right to a period of at least 30
days after receiving the notice to consider the decision of
whether or not to elect a distribution (and, if applicable, a
particular distribution option); and
(b) the participant, after receiving the notice,
affirmatively elects a distribution.
If a distribution is made pursuant to this Section 5.4 to a participant before
he attains age 55, the Committee shall advise him that an additional income tax
may be imposed in an amount equal to 10 percent of the portion of the amount
that is includible in his gross income for such taxable year.
5.5Directions : In accordance with procedures adopted by the
Committee, the Trustee shall be notified of a participant's request for a
withdrawal or a loan, retirement, disability, death or termination of service.
The Trustee shall be directed to make a distribution to the person or persons
entitled thereto from the trust at such time and in such manner as required by
the provisions of this Section 5.
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5.6 Distributions to Alternate Payees: All rights and
benefits, including elections, provided to a participant in the plan shall be
subject to the rights afforded to any "alternate payee" under a "qualified
domestic relations order." Furthermore, a distribution to an "alternate payee"
shall be permitted if such distribution is authorized by a "qualified domestic
relations order," even if the affected participant has not separated from
service and has not reached the "earliest retirement age" under the plan. For
purposes of this Section 5.6, "alternate payee," "qualified domestic relations
order" and "earliest retirement age" shall have the meaning set forth under
Section 414(p) of the Code.
5.7 Valuation: Notwithstanding any provision in this
Section 5 to the contrary, the value of a participant's vested accrued benefit
for purposes of any distribution made pursuant to this Section 5 shall be
determined as of the adjustment date such distribution is actually processed by
the Trustee. No additional earnings, losses or expenses shall be credited or
debited to the participant's account following the adjustment date such
distribution is actually processed by the Trustee.
5.8 Distributions from Salary Reduction Contribution
(before-tax) Accounts, Employer Basic Matching Contribution Accounts and QNEC
Accounts : Notwithstanding anything to the contrary contained elsewhere in the
plan, a participant's salary reduction contribution (before-tax) account,
Employer basic matching contribution account, if any, and QNEC account, if any,
shall not be distributable other than upon:
(a) The participant's separation from service, death, or
disability;
(b) Termination of the plan without establishment or
maintenance of another defined contribution plan other than an employee
stock ownership plan as defined in Section 4975(e)(7) of the Code, a
simplified employee pension plan as defined in Section 408(k) of the
Code, or a SIMPLE IRA plan as defined in Section 408(p) of the Code;
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(c) The date of the sale or other disposition by the
Participating Employer to an unrelated entity of substantially all of
the assets (within the meaning of Section 409(d)(2) of the Code) used
by the Participating Employer in a trade or business of the
Participating Employer, where (i) the participant is employed by such
trade or business and continues employment with the entity acquiring
such assets, and (ii) the Participating Employer continues to maintain
the plan after the sale or other disposition. The sale of 85 percent of
the assets used in the trade or business shall be deemed a sale of
"substantially all" of the assets used in such trade or business;
(d) The date of the sale or other disposition by the
Participating Employer of the Participating Employer's interest in a
subsidiary (within the meaning of Section 409(d)(3) of the Code) to an
unrelated entity, where (i) the participant is employed by such
subsidiary and continues employment with such subsidiary following such
sale or other disposition, and (ii) the Participating Employer
continues to maintain the plan after the sale or other disposition;
(e) The participant's attainment of age 59 1/2; or
(f) The participant's hardship (as defined in Section 4.1).
Notwithstanding anything to the contrary contained herein, an event shall not be
treated as described in clause (b), (c) or (d) above with respect to any
participant unless the participant receives a lump sum distribution (as defined
in Section 401(k)(10)(B)(ii) of the Code) by reason of the event.
Section 6. Adjustment of Accounts:
--------- ----------------------
The Committee shall establish and maintain a salary reduction
contribution (before-tax) account, an Employer basic matching contribution
account and an Employer supplemental matching contribution account with respect
to each participant. The Committee shall also establish and maintain a voluntary
contribution (after-tax) account, an Employer profit sharing contribution
account, an ESOP account, a PAYSOP account, a prior plan account, a QNEC
account, a loan account, and a rollover account with respect to each participant
if any one or more of such accounts are required by the plan. The Committee
shall also keep an allocation suspense account if such account is required
pursuant to Section 19.2.
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6.1 Adjustment of Accounts: The account of each
participant shall be valued daily as of each adjustment date in accordance with
the provisions of this Section 6.1 and procedures adopted by the Trustee. The
value of each participant's account (other than that portion of his account
attributable to his loan account, if any) shall be converted to units.
Thereafter, when the participant's account is credited with an allocation of any
salary reduction contributions, matching contributions, supplemental employer
contributions, qualified nonelective contributions, direct transfers from
another qualified plan or rollover contributions, the value of such allocation
shall be used to purchase units and added to such participant's account. When
any distributions, withdrawals, transfers between investment funds, and/or
administrative fees are charged against the participant's account in accordance
with the terms of the plan, the number of units equal in value to the amount
paid from the participant's account shall be deducted from the outstanding
units.
6.2 Loan Account: Notwithstanding the provisions of this
Section 6, the portion of the account of a participant evidenced by a note
described in Section 4.4.2 shall be maintained in a special loan account on
behalf of the participant. The loan account shall be a part of the account of
the participant, and there shall be credited to the loan account any payments of
principal or interest made with respect to such note. As of the close of
business on each adjustment date, any cash balances in the loan account shall be
debited to the loan account and shall be allocated among the investment funds in
accordance with the most recent effective future contribution investment
direction of the participant. If for any reason a participant does not have a
future contribution investment direction in effect, such proceeds shall be
invested by the Trustee in the investment fund designated by the Committee.
6.3 General: The Committee shall have and may exercise all
powers necessary or advisable in order to implement the provisions of this
Section 6 and to ensure that the accounts maintained under the plan are fairly
and accurately adjusted as of each adjustment date.
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Section 7. Participant Direction of Investments:
--------- ------------------------------------
7.1 Participant Directed Investments: Notwithstanding any
other provision of the plan but subject to the provisions of Section 6, each
participant may direct the Trustee as to the investment or reinvestment of his
account, subject to the following provisions:
7.1.1 Investment funds; fund accounts: The Committee shall
determine from time to time the investment options ("investment funds")
available to participants. Each participant shall be entitled to direct
the Trustee as to the investment of contributions made on his behalf
and the amount credited to his account among the investment funds. The
Committee shall keep accounts subsidiary to each participant's separate
accounts described in Section 1.1 (other than the loan account) with
respect to the amount to his credit in each investment fund, the "fund
accounts."
7.1.2 Investment of contributions: In accordance with
procedures adopted by the Committee, a participant may direct
investment of any contribution allocable to his account among the
investment funds in whole multiples of 5 percent. Such designation
shall remain in effect unless and until the participant provides for a
different designation. If for any reason a participant fails to direct
the investment of the entire contribution allocable to his account, the
contribution for which no direction is made shall be invested by the
Trustee as directed by the Committee.
7.1.3 Investment of account: Subject to the provisions of
Section 22.6, in accordance with procedures adopted by the Committee, a
participant shall be entitled to reallocate the amount credited to his
account or each of his fund accounts among the investment funds in
whole multiples of 5 percent.
7.1.4 Notice requirements: In accordance with procedures
adopted by the Committee and the Trustee, the participants shall notify
the Trustee of all directions made in accordance with this Section 7.1.
7.1.5 Rights in directed investment funds: Notwithstanding the
fact that all or a portion of a participant's account may be invested
in an investment fund and may be expressed in units in a particular
investment fund, such references shall mean the aggregate of the dollar
amount which is credited to the participant's account at any point in
time. Nothing contained in this Section 7 shall be deemed to give any
participant any interest in any specific property in any investment
fund or any interest in the plan, other than the right to receive
payments or distributions in accordance with the plan or to exercise
any other right specifically granted to the participant under the plan.
7.1.6 Proxy voting:
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(i) Notwithstanding anything to the contrary in the
plan, a participant whose account is invested in an investment
fund which invests solely in shares of Company stock (his
"Company stock fund account") or who has an ESOP account or a
PAYSOP account shall be entitled to direct the Trustee as to
the manner in which shares of Company stock allocated as of a
record date to his Company stock fund account, his ESOP
account and his PAYSOP account shall be voted, or shall be
tendered in the event of a tender offer for such shares. The
Trustee shall vote or tender such shares of Company stock as
directed by the participant. If the participant instructions
are not timely received with respect to such shares, the
Trustee shall vote or tender such shares as directed by the
Committee. The Committee shall provide for the solicitation
and tabulation of voting or tender instructions from
participants in a confidential manner. Prior to the voting or
tendering of such shares, the Committee shall distribute to
each participant who has a Company stock fund account, an ESOP
account or a PAYSOP account the same information as is
furnished to the shareholders of the Company in a proxy
statement.
(ii) Notwithstanding anything to the contrary in the
plan, a participant whose account is invested in an investment
fund (other than an investment fund described in subparagraph
(i)) shall be entitled to direct the Trustee as to the manner
in which shares of such investment fund allocated as of a
record date to his fund account shall be voted. The Trustee
shall vote such shares as directed by the participant. If the
participant instructions are not timely received with respect
to such shares, the Trustee shall vote such shares as directed
by the Committee. The Committee shall provide for the
solicitation and tabulation of voting instructions from
participants in a confidential manner. Prior to the voting of
such shares, the Committee shall distribute to each
participant who has shares in an investment fund to which the
provisions of this subparagraph (ii) apply, the same
information as is furnished to the other shareholders of the
investment fund in a proxy statement.
7.2 General: To the extent approved by the Trustee, the
Committee may establish any rules or resolutions necessary to implement the
provisions of this Section 7. The Trustee shall have and may exercise all powers
necessary or advisable in order to implement the provisions of this Section 7.
If the Trustee cannot transfer funds among the investment funds on an adjustment
date as provided in this Section 7, the Trustee shall effect such transfer as
soon as possible thereafter.
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Section 8. Administration by Committee:
--------- ---------------------------
8.1 Membership of Committee: The Committee shall consist of
not less than 3 individuals appointed by the Board to serve at the pleasure of
the Board. Any member of the Committee may resign, and his successor, if any,
shall be appointed by the Board. The Committee shall be responsible for the
general administration and interpretation of the plan and for carrying out its
provisions except to the extent all or any of such obligations specifically are
imposed on the Trustee or the Board or delegated to one or more other persons,
including the plan administrator. The Chairman of the Committee shall be the
plan administrator and agent for service of legal process on the plan.
8.2 Committee Officers; Subcommittee: The members of the
Committee shall elect a chairman and may elect an acting chairman. They also
shall elect a secretary and may elect an acting secretary, either of whom may
but need not be a member of the Committee. The Committee may appoint from its
membership such subcommittees with such powers as the Committee determines and
may authorize one or more of its members or any agent to execute or deliver any
instrument or make any payment on behalf of the Committee.
8.3 Committee Meetings: The Committee shall hold such
meetings upon such notice and at such places and intervals as it from time to
time determines. Notice of meetings shall not be required if waived in writing
by all members of the Committee at the time in office or if all such members are
present at the meeting.
8.4 Transaction of Business: A majority of the members of
the Committee at the time in office shall constitute a quorum for the
transaction of business. All resolutions or other actions taken by the Committee
at any meeting shall be by vote of a majority of those present and entitled to
vote at any such meeting. Resolutions may be adopted or other action taken
without a meeting upon written consent thereto signed by all members of the
Committee.
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8.5 Committee Records: The Committee shall maintain full
and complete records of its deliberations and decisions. The minutes of its
proceedings shall be conclusive proof of the facts of the operation of the plan.
The records of the Committee shall contain all relevant data pertaining to
individual participants and their rights under the plan and in the trust fund.
8.6 Establishment of Rules; Interactive Voice and Other
Systems: Subject to the limitations of the plan and ERISA, the Committee from
time to time may establish rules or bylaws for administration of the plan and
transaction of its business. The Committee may authorize the use of various
communication channels, including without limitation, an interactive voice
system and an interactive Internet site, which will allow participants to review
general information about their accounts and to initiate certain transactions
and elections under the plan. The Committee from time to time shall adopt
policies and rules governing the manner in which any such communication channel
will be utilized by participants so that the plan may be conveniently
administered.
8.7 Conflicts of Interest: No individual member of the
Committee shall have any right to vote or decide on any matter relating solely
to himself or his rights or benefits under the plan (except that such member may
sign unanimous written consent to resolutions adopted or other action taken
without a meeting), except for elections as to payment of benefits.
8.8 Correction of Errors: The Committee may correct errors
and, so far as practicable, may adjust any benefit or credit or payment
accordingly. The Committee in its discretion may waive any notice requirement
in the plan; provided, that a waiver of a requirement to notify the Trustee
shall be made only with the consent of the Trustee. A waiver of notice in one
case shall not be a waiver of notice in any other case. Any power or authority
the Committee has discretion to exercise under the plan shall be
exercised in a nondiscriminatory manner.
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8.9 Authority to Interpret Plan: Subject to objective plan
terms and the claims procedure set forth in Section 14, the Committee and plan
administrator shall have the duty and discretionary authority to interpret and
construe the provisions of the plan and decide any dispute which may arise
regarding the rights of participants hereunder, including the discretionary
authority to construe uncertain provisions of the plan and to make
determinations as to eligibility for participation and benefits under the plan.
Determinations by the Committee and plan administrator shall apply uniformly to
all persons similarly situated and shall be binding and conclusive upon all
interested persons. Such determinations shall only be set aside if the Committee
and the plan administrator are found to have acted arbitrarily and capriciously
in interpreting and construing the provisions of the plan.
8.10 Third Party Advisor: The Committee may engage an
attorney, accountant or any other technical adviser on matters regarding the
operation of the plan and to perform such other duties as may be required in
connection therewith. The Committee may employ such clerical and related
personnel as it deems requisite or desirable in carrying out the provisions of
the plan. The Committee may delegate any one or more of its duties and
responsibilities under the plan to any person or persons, including but not
limited to, the employees of the Company and the plan administrator. From time
to time, but no less frequently than annually, the Committee shall review the
financial condition of the plan and determine the financial and liquidity needs
of the plan as required by ERISA. The Committee shall communicate such needs to
the Company and Trustee so that the funding policy and investment policy
may be coordinated appropriately to meet such needs.
8.11 Compensation of Members: No member of the Committee,
who receives compensation from the Company for services as a full-time employee,
shall receive any fee or compensation for his services as such.
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8.12 Committee Expenses: The Committee shall be entitled to
reimbursement out of the trust fund for its reasonable expenses properly and
actually incurred in the performance of its duties in the administration of the
plan; provided, that the Company, in the discretion of the Board, may pay such
expenses.
8.13 Indemnification of Committee: To the maximum extent
permitted by ERISA, no member of the Committee personally shall be liable by
reason of any contract or other instrument executed by him or on his behalf as a
member of the Committee or for any mistake of judgment made in good faith. The
Company shall indemnify and hold harmless, directly from its own assets
(including the proceeds of any insurance policy the premiums for which are paid
from the Company's own assets), each member of the Committee and each other
officer, employee, or director of the Company to whom any duty or power relating
to the administration or interpretation of the plan is delegated or allocated
against any unreimbursed or uninsured cost or expense (including any sum paid in
settlement of a claim with the prior written approval of the Board) arising out
of any act or omission to act in connection with the plan, unless arising out of
such person's own fraud, bad faith, willful misconduct or gross negligence.
Section 9. Management of Funds and Amendment of Plan:
--------- -----------------------------------------
9.1 Fiduciary Duties: All assets of the plan shall be held
in the trust for the exclusive benefit of participants and their beneficiaries.
Such assets shall be administered as a trust fund to provide for the payment of
benefits as provided in the plan to participants or their successors in interest
out of the income and principal of the trust. All fiduciaries with respect to
the plan (as defined in ERISA) shall discharge their duties as such solely in
the interest of the participants and their successors in interest and (i) for
the exclusive purposes of providing benefits to participants and their
successors in interest and defraying reasonable expenses of administering the
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plan as provided in Section 8.12 of 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, and (iii) in
accordance with the plan and trust agreement, except to the extent such
documents may be inconsistent with the then applicable federal laws relating to
fiduciary responsibility. The trust fund shall be used for the exclusive benefit
of participants and their beneficiaries and to pay administrative expenses of
the plan and trust. No portion of the trust fund shall ever revert to or inure
to the benefit of the Participating Employer or any affiliated employers (except
as otherwise provided in Sections 19 and 9.1). Notwithstanding the foregoing
provisions of this Section 9.1, the following provisions shall apply:
9.1.1 Initial qualification: If the plan receives an adverse
determination with respect to the initial qualification of the plan
under Section 401(a) of the Code, on written request of the Company,
the Trustee shall return to the Company the amount of such contribution
(increased by earnings attributable thereto and reduced by losses
attributable thereto) within one calendar year after the date that
qualification of the plan is denied; provided, that the application for
the determination is made by the time prescribed by law for filing the
Company's federal income tax return for the taxable year in which the
plan is adopted or such later date as the Secretary of the Treasury may
prescribe;
9.1.2 Disallowed contribution: On written request of the
Company, the Trustee shall return a disallowed contribution to the
extent the deduction is disallowed under Section 404 of the Code
(reduced by losses attributable thereto, but not increased by earnings
attributable thereto) to the Company within one year after the date the
deduction is disallowed; and
9.1.3 Mistake of fact: If a contribution or any portion
thereof is made by the Participating Employer by mistake of fact, on
written request of the Company, the Trustee shall return the
contribution or such portion (reduced by losses attributable thereto,
but not increased by earnings attributable thereto) to such
Participating Employer within one year after the date of payment to the
Trustee.
9.2 Trust Agreement: The Company, on behalf of each
Participating Employer, and the Trustee shall enter into an appropriate trust
agreement for the administration of the trust. The trust agreement shall contain
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such powers and reservations as to investment, reinvestment, control and
disbursement of the funds of the trust, and such other provisions not
inconsistent with the provisions of the plan and its nature and purposes, as
shall be agreed on and set forth therein. Such agreement shall provide that the
Board may remove the Trustee at any time upon reasonable notice, the Trustee may
resign at any time upon reasonable notice, and on such removal or resignation
the Board shall designate a successor trustee.
9.3 Authority to Amend: The Board, acting on behalf of the
Participating Employer, shall have the right at any time and from time to time
to amend or terminate the plan and the trust agreement; provided, that (i)
except as provided in Section 9.1, no such amendment shall have the effect of
diverting the trust fund to purposes other than the exclusive benefit of
participants, and (ii) no such amendment that alters the duties,
responsibilities or liabilities of the Trustee shall be made unless the Trustee
consents thereto in writing. No amendment to the plan shall decrease a
participant's accrued benefit as of the date of such amendment. A plan amendment
which has the effect of (a) eliminating a retirement-type subsidy or (b)
eliminating an optional form of distribution shall be treated as reducing
accrued benefits. Notwithstanding the foregoing, and until otherwise decided by
the Board, the officer of the Company specifically designated in resolutions
adopted by the Board shall have the authority to amend the plan to (i) comply
with changes in laws or government rules or regulations applicable to the plan;
(ii) maintain the tax-qualified status of the plan; (iii) provide for the merger
or consolidation of another plan into this plan, or the transfer of the assets
or liabilities of another plan to this plan, and, in connection therewith to
comply with the provisions of the Treasury Regulations under Section 411(d)(6)
of the Code; and (iv) revise the Exhibits attached hereto. See Section 12 for
provisions regarding termination of the plan.
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9.4 Requirements of Writing: All requests, directions,
requisitions and instructions of the Committee to the Trustee shall be in
writing, signed by such person or persons as designated by the Committee.
Section 10. Allocation of Responsibilities Among Named Fiduciaries:
---------- ------------------------------------------------------
10.1Duties of Named Fiduciaries: The named fiduciaries with
respect to the plan and the fiduciary duties and other responsibilities
allocated to each, which shall be carried out in accordance with the other
applicable terms and provisions of the plan, shall be as follows:
10.1.1 Board:
(i) To appoint and remove members of the
Committee; and
(ii) To appoint and remove trustees under the plan.
10.1.2 Committee:
(i) To interpret the provisions of the plan and
determine the rights of participants under the plan, except to
the extent otherwise provided in Section 14 relating to the
claims procedure;
(ii) To administer the plan in accordance with its
terms, except to the extent powers to administer the plan
specifically are delegated to another named fiduciary or other
person or persons as provided in the plan;
(iii) To account for the interests of participants
in the plan; and
(iv) To direct the Trustee in the distribution of
trust assets.
10.1.3 Plan administrator:
(i) To file such reports as may be required with
the United States Department of Labor, the Internal Revenue
Service and any other government agency to which reports may
be required to be submitted from time to time;
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(ii) To comply with requirements of the law for
disclosure of plan provisions and other information relating
to the plan to participants and other interested parties; and
(iii) To administer the claims procedure to the
extent provided in Section 14.
10.1.4 Trustee:
(i) To invest and reinvest trust assets subject to
the provisions of Section 7;
(ii) To make distributions to participants as
directed by the Committee;
(iii) To render annual accountings to the Company as
provided in the trust agreement; and
(iv) Otherwise to hold, administer and control the
assets of the trust as provided in the plan and trust
agreement.
10.2 Co-fiduciary Liability: Except as otherwise provided in
ERISA, a named fiduciary shall not be responsible or liable for any act or
omission of another named fiduciary with respect to fiduciary responsibilities
allocated to such other named fiduciaries. A named fiduciary of the plan shall
be responsible and liable only for its own acts or omissions with respect to
fiduciary duties specifically allocated to it and designated as its
responsibility.
Section 11. Benefits Not Assignable; Facility of Payments:
---------- ---------------------------------------------
11.1 Benefits Not Assignable: Except as otherwise provided
in Section 5.6 and this Section 11.1, no portion of the accrued benefit of any
participant shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge. Any attempt so to
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the
same shall be void. No portion of such accrued benefit shall be payable in any
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manner to any assignee, receiver or trustee, liable for the participant's debts,
contracts, liabilities, engagements or torts, or be subject to any legal process
to levy upon or attach. Notwithstanding the foregoing, an offset to a
participant's accrued benefit against an amount that the participant is ordered
or required to pay the plan with respect to a judgment, order, or decree issued,
or a settlement entered into, on or after August 5, 1997, shall be permitted in
accordance with Code Sections 401(a)(13)(C) and (D).
11.2 Payments to Minors and Others: If any individual
entitled to receive a payment under the plan shall be physically, mentally or
legally incapable of receiving or acknowledging receipt of such payment, the
Committee, upon the receipt of satisfactory evidence of his incapacity and
satisfactory evidence that another person or institution is maintaining him and
that no guardian or committee has been appointed for him, may cause the
payment otherwise payable to him to be made to such person or institution so
maintaining him. Payment to such person or institution shall be in full
satisfaction of all claims by or through the participant to the extent of the
amount thereof.
Section 12. Termination of Plan and Trust; Merger or Consolidation of Plan:
- ---------- --------------------------------------------------------------
12.1 Complete Termination: In the event of a termination of
the plan (including a cessation of contributions which results in a termination
of the plan), all contributions to the plan shall cease and no additional
participants shall enter the plan. The assets under the plan shall remain or
become fully vested in the participants, beneficiaries or other successors in
interest. Such vested benefit of each such individual shall be held in the plan
for distribution in accordance with the provisions of Section 5; provided, that
the Committee in its discretion may provide at any time for liquidation of the
trust and distribution to the participants of their accrued benefits as provided
in Section 5. If, upon termination, the plan does not offer an annuity option
(purchased from a commercial provider) and neither the Participating Employer
nor any affiliated employer maintains another defined contribution plan (other
than an employee stock ownership plan defined in Section 4975(e)(7) of the
Code), the participant's accrued benefit may, without the participant's consent,
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be distributed to the participant. However, if the Participating Employer or any
affiliated employer maintains another defined contribution plan (other than an
employee stock ownership plan defined in Section 4975(e)(7) of the Code), the
participant's accrued benefit may, without the participant's consent, be
transferred to such other plan if the participant does not consent to an
immediate distribution. Notwithstanding the foregoing, all distributions upon
termination of the plan shall be subject to the limitations set forth in Section
5.8 of the plan. For purposes of the plan, a termination of contributions or a
suspension or reduction of such contributions amounting in effect to a
termination of contributions shall be a termination of the plan.
12.2 Partial Termination: In the event of a partial
termination of the plan, the provisions of Section 12.1 regarding a complete
termination shall apply in determining interests and rights of the participants
and their beneficiaries with respect to whom the partial termination occurs and
to the portion of the trust fund allocable to such participants and
beneficiaries.
12.3 Merger or Consolidation: In the event of any merger or
consolidation of the plan with any other plan, or a transfer of assets or
liabilities of the plan to any other plan (which merged, consolidated or
transferee plan is referred to in this Section 12.3 as the "successor plan"),
the amount each participant would receive if the successor plan (and this plan,
if he has any interest remaining therein) were terminated immediately after the
merger, consolidation or transfer shall equal or be greater than the amount he
would have received if this plan (and the successor plan, if he had any interest
therein immediately prior to the merger, consolidation or transfer) were
terminated immediately preceding the merger, consolidation or transfer. From
time to time, the Company or one of its affiliated employers will acquire the
assets and employees of other companies by corporate merger or otherwise. In
connection therewith, the Company or one of its affiliated employers will become
the sponsor of the tax-qualified defined contribution plan or plans maintained
by the acquired company (the "acquired plans"). From time to time, pursuant to a
Retirement Plan Merger Agreement, one or more acquired plans will be merged into
this plan. The Retirement Plan Merger Agreements providing for such plan mergers
will be attached hereto as Exhibit D.
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12.4 Protection of Benefits: No termination, partial
termination, merger or consolidation or transfer of assets of the plan shall
reduce a participant's accrued benefit or eliminate an optional form of
distribution. For purposes of this Section 12.4, a termination, partial
termination, merger or consolidation of the plan that has the effect of
decreasing a participant's accrued benefit or eliminating an optional form of
benefit with respect to benefits attributable to service before the amendment
shall be treated as reducing an accrued benefit.
Section 13. Communication to Employees:
---------- --------------------------
The Company shall communicate the principal terms of the plan
to the participants and beneficiaries in accordance with the requirements of
ERISA. The Company shall make available for inspection by participants and their
beneficiaries, during reasonable hours at the principal office of the Company
and at such other places as may be required by ERISA, a copy of the plan, trust
agreement and such other documents as may be required by ERISA.
Section 14. Claims Procedure:
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The following claims procedure shall apply with respect to the
plan:
14.1 Filing of a Claim for Benefits: If a participant or
beneficiary (the "claimant") believes he is entitled to benefits under the plan
that are not being paid to him or accrued for his benefit, he may file a written
claim therefor with the plan administrator. If the plan administrator is the
claimant, all actions required to be taken by the plan administrator pursuant to
this Section 14 shall be taken instead by another member of the Committee
designated by the Committee.
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14.2 Notification to Claimant of Decision: Within 90 days
after receipt of a claim by the plan administrator, or within 180 days if
special circumstances require an extension of time, the plan administrator shall
notify the claimant of its decision with regard to the claim. If special
circumstances require an extension of time, a written notice of the extension
shall be furnished to the claimant prior to commencement of the extension
setting forth the special circumstances and the date by which the decision will
be furnished. If such claim is wholly or partially denied, notice thereof shall
be written in a manner calculated to be understood by the claimant and shall set
forth: (i) the specific reason or reasons for the denial; (ii) specific
reference to pertinent plan provisions on which the denial is based; (iii) a
description of any additional material or information necessary for the claimant
to perfect the claim and an explanation of why such material or information is
necessary; and (iv) an explanation of the procedure for review of the denial. If
the plan administrator fails to notify the claimant of the decision in timely
manner, the claim shall be deemed denied as of the close of the initial 90-day
period (or the extension period, if applicable).
14.3 Procedure for Review: Within 60 days following receipt
by the claimant of notice denying his claim in whole or in part, or, if such
notice is not given, within 60 days following the latest date on which such
notice timely could have been given, the claimant may appeal denial of the claim
by filing a written application for review with the Committee. Following such
request for review, the Committee shall fully and fairly review the decision
denying the claim. Prior to the decision of the Committee, the claimant shall be
given an opportunity to review pertinent documents and submit issues and
comments in writing.
14.4 Decision on Review: The decision on review of a claim
denied in whole or in part by the plan administrator shall be made in the
following manner:
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14.4.1 Notification to claimant of decision: Within 60 days
following receipt by the Committee of the request for review, or within
120 days if special circumstances require an extension of time, the
Committee shall notify the claimant in writing of its decision with
regard to the claim. If special circumstances require an extension of
time, written notice of the extension shall be furnished to the
claimant prior to the commencement of the extension. If the decision on
review is not furnished in a timely manner, the claim shall be deemed
denied as of the close of the initial 60-day period (or the extension
period, if applicable).
14.4.2 Format and content of decision: The decision on review
of a claim that is denied in whole or in part shall set forth specific
reasons for the decision written in a manner calculated to be
understood by the claimant and shall cite the pertinent plan provisions
on which the decision is based.
14.4.3 Effect of decision: The decision of the Committee
shall be final and conclusive.
14.5 Action by Authorized Representative of Claimant: All
actions set forth in this Section 14 to be taken by the claimant may be taken by
a representative of the claimant duly authorized by him to act on his behalf on
such matters. The plan administrator and the Committee may require such evidence
as either reasonably deems necessary or advisable of the authority of any such
representative to act.
Section 15. Portability of Participant Accounts:
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Notwithstanding any provision of the plan to the contrary that
would otherwise limit a distributee's election under this Section 15, a
distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover.
15.1 Definitions: The following definitions shall apply for
purposes of this Section 15:
15.1.1. Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
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annually) made for the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of 10
years or more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; any hardship distribution
described in Section 401(k)(2)(B)(i)(iv); and the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
15.1.2 Eligible retirement plan: An eligible retirement plan
is an individual retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in Section 408(b) of
the Code, an annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
15.1.3 Distributee: A distributee includes an employee or
former employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's spouse or
former spouse who is the alternate payee under a qualified domestic
relations order, as defined in Section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
15.1.4 Direct rollover: A direct rollover is a payment by
the plan to the eligible retirement plan specified by the distributee.
15.2 Construction: Notwithstanding anything contained in
this Section 15 to the contrary, the provisions of this Section 15 shall at all
times be construed and enforced according to the requirements of Section 401(a)
(31) of the Code and the Treasury Regulations thereunder, as the same may be
amended from time to time.
Section 16. Rollovers:
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An eligible employee who receives a distribution of all or
part of his interest from another retirement plan (including another plan
maintained by the Participating Employer or an affiliated employer) which is
qualified under Section 401(a) of the Code on the date of distribution may, with
the consent of the Committee in accordance with procedures adopted by the
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Committee, transfer all or a part of such distribution to the Trustee under this
plan. The amount so transferred may only include cash, shares of Company stock
or other property approved by the Committee. In applying the provisions of this
Section 16, the following provisions shall apply:
16.1 Timing: The transfer to the Trustee must occur on or
before 60 days following receipt by the eligible employee of such distribution.
If such distribution previously was deposited in an individual retirement
account or individual retirement annuity as defined in Section 408 of the Code,
the transfer must occur on or before 60 days following receipt by the eligible
employee of all or any portion of the balance to his credit under such
individual retirement account or individual retirement annuity.
16.2 Eligibility: The distribution made to the eligible
employee must be an eligible rollover distribution as defined in Section 15.1.1.
16.3 Maximum Amount: The amount transferred to the Trustee
shall be limited to the maximum rollover amount as provided in Section 402(c)(2)
of the Code.
16.4 Accounting: The amount transferred to the Trustee shall
be credited to the eligible employee's rollover account. The assets in the
rollover account shall be administered by the Trustee in the same manner as
other trust assets.
16.5 Transfers Prior to Becoming a Participant: If an
eligible employee who makes such a transfer has not completed the participation
requirements of Section 1.31, his rollover account shall represent his sole
interest in the plan until he becomes a participant.
Section 17. Special Provisions Relating to Transfers From Qualified Plans:
- ---------- -------------------------------------------------------------
With the approval of the Committee and in accordance with
procedures adopted by the Committee, the Trustee shall receive and hold as a
part of the trust fund assets transferred (the "transferred assets") directly
from the trustee or custodian of any other retirement plan (the "transferor
plan") that is qualified under Section 401(a) of the Code. Such transferred
assets may only include cash or shares of Company stock. In applying the
provisions of this Section 17, the following provisions shall apply:
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17.1 Accounting: The transferred assets of each participant
shall be credited to the subaccounts of the participant as described in Section
1.1 as determined by the Committee, taking into account the applicable vesting
schedule, the source of the transferred assets, amounts subject to special tax
treatment and withdrawal rules. Additional subaccounts shall be established, if
required, to accommodate these objectives.
17.2 Liability of Trustee: The Trustee under the plan shall
not be liable or responsible for any acts or omissions in the administration of
any transferor plan or the trust thereunder of any other person or entity who
was trustee, custodian or other fiduciary under such transferor plan. The
Trustee under the plan shall be held harmless from such liability or
responsibility.
17.3 Protected Benefits Under Section 411(d)(6) of the Code:
The protected benefits of the transferor plan, as defined in Section 411(d)(6)
of the Code, shall be preserved with respect to the transferred assets.
17.4 Authority of Committee: To the extent not inconsistent
with the provisions of this Section 17, the Committee may make rules or bylaws
supplementing and implementing the provisions of this Section 17.
17.5 Impermissible Transfers: Notwithstanding any provisions
of this Section 17 to the contrary, the Committee shall not permit nor the
Trustee accept any direct or indirect transfers (as that term is defined and
interpreted under Section 401(a)(11) of the Code and the Treasury Regulations
thereunder) from a defined benefit plan, money purchase plan (including a target
benefit plan), stock bonus or profit-sharing plan which would otherwise have
provided for a life annuity form of payment to the employee.
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Section 18. Special Top-Heavy Provisions:
---------- ----------------------------
The following special provisions shall apply and supersede any
conflicting provision in the plan with respect to any plan year in which the
plan is determined to be top-heavy (as described in Section 18.1.7):
18.1 Definitions: The following definitions shall apply for
purposes of this Section 18:
18.1.1 "Company" means the Participating Employer and its
affiliated employers.
18.1.2 "Company contributions" for purposes of Section 18.2.1
may include matching contributions to the extent permitted under
Section 416 of the Code and the regulations issued thereunder.
18.1.3 "Determination date" means the last day of the
preceding plan year.
18.1.4 "Key employee" means any employee or former employee
(and the beneficiaries of such employee) who at any time during the
determination period is an officer of the Company if such individual's
annual statutory compensation exceeds 50 percent of the dollar
limitation under Section 415(b)(1)(A) of the Code, an owner (or
considered an owner under Section 318 of the Code) of one of the 10
largest interests in the Company if such individual's statutory
compensation exceeds 100 percent of the dollar limitation under Section
415(c)(1)(A) of the Code, a 5 percent owner of the Company, or a 1
percent owner of the Company who has an annual statutory compensation
of more than $150,000. Annual statutory compensation means statutory
compensation as defined in Section 1.41 of the plan. The determination
period shall be the plan year containing the determination date and the
preceding 4 plan years. The determination of who is a key employee will
be made in accordance with Section 416(i)(1) of the Code. A non-key
employee means any employee who is not a key employee.
18.1.5 "Permissive aggregation group" means the required
aggregation group and any other plan or plans of the Company which,
when considered as a group with the required aggregation group, would
continue to satisfy the requirements of Sections 401(a)(4) and 410 of
the Code.
18.1.6 "Required aggregation group" means (i) each qualified
plan of the Company in which at least one key employee participates or
participated at any time during the determination period (regardless of
whether the plan has terminated), and (ii) any other qualified plan of
the Company which enables a plan described in (i) to meet the
requirements of Section 401(a)(4) or 410 of the Code.
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18.1.7 "Top-heavy plan" means, for any plan year beginning
after December 31, 1983, the plan if any of the following conditions
exists:
(i) The top-heavy ratio for the plan exceeds 60
percent and the plan is not part of any required aggregation
group or permissive aggregation group.
(ii) This plan is a part of a required aggregation
group but not part of a permissive aggregation group and the
top-heavy ratio for such group exceeds 60 percent.
(iii) This plan is a part of a required aggregation
group and part of a permissive aggregation group and the
top-heavy ratio for the permissive aggregation group exceeds
60 percent.
18.1.8 "Top-heavy ratio" means the following:
(i) If the Company maintains one or more defined
contribution plans (including any simplified employee pension
plan) and has not maintained any defined benefit plan which
during the 5 year period ending on the determination date(s)
has or has had accrued benefits, the top-heavy ratio for this
plan alone or for the required or permissive aggregation
group, as appropriate, shall be a fraction, the numerator of
which is the sum of the accrued benefits of all key employees
as of the determination date(s) including any part of any
accrued benefit distributed in the 5 year period ending on the
determination date(s), and the denominator of which is the sum
of all accrued benefits including any part of any accrued
benefit distributed in the 5 year period ending on the
determination date(s), both computed in accordance with
Section 416 of the Code. Both the numerator and denominator of
the top-heavy ratio are increased to reflect any contribution
not actually made as of the determination date, but which is
required to be taken into account on that date under Section
416 of the Code.
(ii) If the Company maintains one or more defined
contribution plans (including any simplified employee pension
plan) and the Company maintains or has maintained one or more
defined benefit plans which during the 5 year period ending on
the determination date(s) has or has had any accrued benefits,
the top-heavy ratio for any required or permissive aggregation
group as appropriate is a fraction, the numerator of which is
the sum of accrued benefits under the aggregated defined
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contribution plan or plans for all key employees, determined
in accordance with paragraph (i) above, and the present value
of accrued benefits under the aggregated defined benefit plan
or plans for all key employees as of the determination
date(s), and the denominator of which is the sum of the
accrued benefits under the aggregated defined contribution
plan or plans for all participants, determined in accordance
with paragraph (i) above, and the present value of accrued
benefits under the defined benefit plan or plans for all
participants as of the determination date(s), all determined
in accordance with Section 416 of the Code. The accrued
benefits under a defined benefit plan in both the numerator
and denominator of the top-heavy ratio are increased for any
distribution of an accrued benefit made in the 5 year period
ending on the determination date.
(iii) For purposes of paragraphs (i) and (ii) above,
the value of account balances and the present value of accrued
benefits will be determined as of the most recent valuation
date that falls within or ends with the 12-month period ending
on the determination date, except as provided in Section 416
of the Code for the first and second plan years of a defined
benefit plan. The account balances and accrued benefits of a
participant who (a) is not a key employee but who was a key
employee in a prior year, or (b) is not credited with at least
one hour of service with any employer maintaining the plan at
any time during the 5 year period ending on the determination
date will be disregarded. Calculation of the top-heavy ratio,
and the extent to which distributions, rollovers, and
transfers are taken into account shall be made in accordance
with Section 416 of the Code. Deductible employee
contributions will not be taken into account for purposes of
computing the top-heavy ratio. When aggregating plans, the
value of account balances and accrued benefits will be
calculated with reference to the determination dates that fall
within the same calendar year. The accrued benefit of a
participant other than a key employee shall be determined
under (a) the method, if any, that uniformly applies for
accrual purposes under all defined benefit plans maintained by
the Company, or (b) if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule of Section 411(b)(1)(C) of
the Code.
18.1.9 "Valuation date" means the year-end adjustment date as
defined in Section 1.4.
18.2 Top-Heavy Requirements: Notwithstanding any other
provisions of the plan, the plan must satisfy the following requirements for any
plan year in which the plan is a top-heavy plan:
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18.2.1 Minimum allocation requirements: Except as otherwise
provided in (a) and (b) below, the Company contributions allocated to
his account on behalf of any participant who is not a key employee
shall not be less than the lesser of 3 percent of such participant's
statutory compensation or, if the Company has no defined benefit plan
which designates this plan to satisfy Section 416 of the Code, the
largest percentage of Company contributions allocated on behalf of any
key employee for that year. The minimum allocation shall be determined
without regard to any Social Security contribution. This minimum
allocation shall be made even though, under other plan provisions, the
participant otherwise is not entitled to receive an allocation, or
would have received a lesser allocation for the year, because of (i)
the participant's failure to complete 1,000 hours of service (or any
equivalent provided in the plan), (ii) the participant's failure to
make mandatory employee contributions to the plan, or (iii) statutory
compensation less than a stated amount. The provisions of this Section
18.2.1 shall not apply: (a) to any participant who was not employed by
the Company on the last day of the plan year, or (b) to any participant
to the extent the participant is covered under any other plan or plans
of the Company that provide that the minimum allocation or benefit
requirement applicable to top-heavy plans shall be met in the other
plan or plans. The minimum allocation required (to the extent required
to be nonforfeitable under Section 416(b) of the Code) shall not be
forfeited under Section 411(a)(3)(B) or 411(a)(3)(D) of the Code. If
any additional Company contribution is required to be made on behalf of
a participant to satisfy the provisions of this Section 18.2.1, such
Company contribution shall be allocated to the Employer supplemental
matching contribution account of the participant. Notwithstanding the
foregoing, if the Company maintains any other defined contribution
plan, the Company shall provide a minimum allocation under one such
plan equal to 3 percent of statutory compensation for each non-key
employee who is entitled to a minimum allocation under each of the
plans.
18.2.2 Minimum vesting requirements: For any plan year in
which the plan is top-heavy, "3 or more years of service" shall be
substituted for "5 or more years of service" in Section 3.1. The
provisions of this Section 18.2.2 shall apply to all benefits within
the meaning of Section 411(a)(7) of the Code, including benefits
accrued before the plan became top-heavy. Further, no reduction in
vested benefits shall occur in the event the plan's status as top-heavy
changes for any plan year. However, this Section 18.2.2 shall not apply
to the account of any employee who does not complete an hour of service
after the plan first becomes top-heavy, and such employee's vested
interest in such accounts shall be determined without regard to this
Section 18.
Section 19. Limitations on Allocations:
---------- --------------------------
19.1 Limitations: Subject to the provisions of Sections 19.3
and 19.4, in no event shall the sum of the annual additions to the account of a
participant for any limitation year beginning on or after January 1, 1987, under
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this plan and any other defined contribution plan (as defined in Section 19.4)
of the Company, exceed in the aggregate the lesser of: (a) $30,000, referred to
herein as the "dollar limitation," or (b) 25 percent of such participant's
statutory compensation received during the limitation year, referred to herein
as the "statutory compensation limitation." The amount of the dollar limitation
shall be adjusted in accordance with the Code to reflect increases in the cost
of living. If the limitations provided in this Section 19.1 would be exceeded
for any limitation year with respect to any participant, any required reduction
in the annual additions to his account shall be made as provided in Section
19.2.
19.2 Adjustments: If, as a result of a reasonable error in
estimating a participant's statutory compensation, a reasonable error in
determining the amount of elective deferrals that may be made by a participant
under the limitations of this Section 19, or other limited facts and
circumstances, the dollar limitation or statutory compensation limitation set
forth in Section 19.1 would be exceeded for any limitation year, such excess
with respect to a participant for such limitation year shall be disposed of as
follows:
(i) First, salary reduction contributions, and any gains
attributable thereto, to the extent of any excess shall be distributed
to the participant.
(ii) Thereafter, if further reductions are necessary, then
such participant's share of the employer contributions (other than
salary reduction contributions) for the limitation year shall be
reduced to the extent of any such remaining excess. The amount of the
reduction shall be reallocated among the remaining participants in the
ratio that each such participant's statutory compensation during the
limitation year in question bears to the aggregate statutory
compensation of all such participants during such limitation year and
before any salary reduction contributions, matching contributions, or
supplemental employer contributions for such limitation year are
allocated. If all of the amount of such reduction with respect to the
participant and the amount of any reduction with respect to any other
participant cannot be reallocated without causing the account of each
other participant to exceed the dollar limitation or the statutory
compensation limitation, then such amount shall be credited to a
separate account, designated as the "allocation suspense account."
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(iii) The allocation suspense account shall contain the excess
amounts of employer contributions from all limitation years and
earnings thereon. Such excess amounts shall be allocated for each
succeeding limitation year among the accounts of participants in the
ratio that each such participant's statutory compensation for the
limitation year in question bears to the aggregate statutory
compensation of all such participants during such limitation year and
before any salary reduction contributions, matching contributions, or
supplemental employer contributions for such year are allocated. The
allocation suspense account shall be invested by the Trustee in the
investment fund designated by the Committee. The allocation suspense
account shall be adjusted annually for additions thereto and
distributions therefrom. If the plan is terminated, any balance in the
allocation suspense account shall be returned to the Company.
Notwithstanding the foregoing, each suspense account maintained under
the ESOP portion of the predecessor plan because of the limitations of
Section 415 of the Code shall continue to be allocated among the
participants in accordance with the applicable provisions of the
predecessor plan.
Notwithstanding the foregoing, in no event shall salary reduction contributions
be distributed pursuant to paragraph (i) of this Section 19.2 to a participant
who is a highly compensated employee. Any excess with respect to such a
participant shall be disposed of in the manner described in paragraph (ii) of
this Section 19.2.
19.3 Participation in this Plan and a Defined Benefit Plan:
This Section 19.3 shall apply with respect to limitation years beginning prior
to January 1, 2000. If at any time a participant is a participant in the plan
and in a defined benefit plan of the Company, in no event shall the sum of the
defined benefit fraction (as defined in this Section 19.3) and the defined
contribution fraction (as defined in this Section 19.3) for any limitation year
exceed 1.0. For purposes of this Section 19.3, and except as otherwise provided
in this Section 19, the "defined benefit fraction" for any limitation year of a
defined benefit plan shall be a fraction the numerator of which is the projected
annual benefit of the participant under all defined benefit plans (as determined
as of the close of such limitation year), and the denominator of which is the
lesser of (i) the product of 1.25 and the dollar limitation in effect for
defined benefit plans for such limitation year (referred to herein as the
"defined benefit dollar limitation"), and (ii) the product of 1.4 and 100
percent of the participant's average annual statutory compensation for the
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period of 3 consecutive calendar years (or the actual number of consecutive
years of employment with the Company if the participant was employed by the
Company for less than 3 consecutive years) which will produce the highest
average (referred to herein as the "defined benefit statutory compensation
limitation"). The "defined contribution fraction" for any limitation year of the
plan shall be a fraction the numerator of which is the sum of the annual
additions to the participant's accounts under the plan and all other defined
contribution plans maintained by the Company through the close of such
limitation year, and the denominator of which is the sum of the lesser of (A) or
(B) for such limitation year and each prior limitation year during which the
participant was an employee of the Company (regardless of whether a plan was in
existence during those years), where (A) is the product of 1.25 and the dollar
limitation in effect for such limitation year (determined without regard to
Section 415(c)(6) of the Code), and (B) is the product of 1.4 and the statutory
compensation limitation for the limitation year. If the limitation provided in
this Section 19.3 would be exceeded for any limitation year, the reduction in
the sum of the defined benefit fraction and the defined contribution fraction
necessary to comply with the limitation shall be made in the defined
contribution fraction.
19.4 Definitions: For the purpose of applying the rules of
this Section 19, the following provisions shall apply: (a) the "limitation year"
shall be the plan year; (b) "Social Security retirement age" means the age at
which a participant is eligible to retire and receive an unreduced benefit under
the Social Security Act; (c) all defined benefit plans of the Company shall be
considered as a single plan, and all defined contribution plans of the Company
shall be considered as a single plan; (d) "projected annual benefit" means the
annual normal retirement benefit payable in the form of a single life annuity
(with no ancillary benefits) to which a participant would be entitled under the
terms of the defined benefit plan if the following factors are assumed: (i) the
participant will continue employment with the Company until he reaches Social
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Security retirement age (or until his then current age, if he has previously
reached Social Security retirement age); (ii) the participant's statutory
compensation for the limitation year will remain the same until the date the
participant attains Social Security retirement age; and (iii) all other relevant
factors used to determine benefits under the defined benefit plan for the
limitation year will remain constant for all future limitation years; (e) the
"annual addition" with respect to any limitation year of the plan beginning on
or after January 1, 1987 means the sum of the following items allocated on
behalf of a participant: (i) Company contributions, including, without
limitation, excess contributions, excess aggregate contributions; (ii) all
forfeitures; (iii) the amount of the participant's nondeductible employee
contributions for the limitation year (nondeductible employee contributions
shall be considered made with respect to a particular plan year if such
contributions actually are made by the participant during such plan year or
within 30 days after the close of such plan year); (iv) amounts allocated after
March 31, 1984 to an individual medical account, as defined in Section 415(l) of
the Code, which is part of a defined benefit plan maintained by the Company; and
(v) amounts derived from contributions paid or accrued after December 31, 1985,
in taxable years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account of a key
employee, as defined in Section 419A(d) of the Code, under a welfare benefit
fund, as defined in Section 419(e) of the Code, maintained by the Company;
provided, that the following are not "annual additions": (1) transfers of funds
from one qualified plan to another; (2) rollover contributions (as defined in
Sections 402(c)(4), 403(a)(4), 403(b)(8) and 408(d)(3) of the Code); (3)
repayments of loans made to a participant from the plan; (4) repayments of
distributions received by an employee pursuant to Section 411(a)(7)(B) of the
Code; (5) repayments of distributions received by an employee pursuant to
Section 411(a)(3)(D) of the Code (mandatory contributions); (6) employee
contributions to a simplified employee pension which are excludible from gross
income under Section 408(k)(6) of the Code; (7) deductible employee
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contributions to a qualified plan; and (8) excess elective deferrals distributed
to a participant pursuant to Section 2.1.1 of the plan; (f) "defined
contribution plan" means a plan, including this plan, that provides for an
individual account for each participant and for benefits based solely on the
amount contributed to the participant's account and any income, expenses, gains
and losses, and forfeitures of accounts of other participants that may be
allocated to such participant's account; and "defined benefit plan" means any
plan that is not a defined contribution plan; provided, that only plans which
are described in Section 415(k)(1) of the Code shall be included within the
definition of a defined contribution plan or a defined benefit plan, as the
case may be; (g) any affiliated employer shall be considered to be the
Company; provided that for the purposes of this Section 19, determination of
the members of a controlled group of employers and employers under common
control pursuant to Sections 414(b) and (c) of the Code shall be made by
substituting the phrase "more than 50 percent" for the phrase "at least 80
percent" where it appears in such Code sections; and (h) notwithstanding
anything in this Section 19 to the contrary, the limitations, adjustments and
other requirements prescribed in this Section 19 shall comply with Section 415
of the Code.
Section 20. Parties to the Plan; Transfers of Employees:
---------- -------------------------------------------
The employers listed on Exhibit B are employer-parties to the
plan. By separate agreement with the Company, one or more additional employers
may become parties to the plan. The following provisions shall apply to all
parties to the plan except as otherwise expressly provided herein or in such
separate agreement:
20.1 Application of Plan and Trust Agreement: The plan shall
apply as a single plan with respect to each Participating Employer as if it were
only one employer-party.
20.2 Service with a Participating Employer: Service for
purposes of the plan shall be interchangeable among each Participating Employer
and shall not be deemed interrupted or terminated by the transfer at any time of
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an employee from the service of one Participating Employer to service of another
Participating Employer. In addition, service as an ineligible employee shall be
taken into account in determining an employee's eligibility to become a
participant and his vested accrued benefit under the plan.
20.3 Contributions by each Participating Employer:
Notwithstanding any provision of the plan to the contrary, the following special
provisions shall apply:
20.3.1 Salary reduction contributions to the plan with respect
to each Participating Employer shall be determined and paid separately
by each Participating Employer in accordance with the provisions of the
plan applicable to such Participating Employer. If a participant is in
the service of more than one Participating Employer during a plan year,
each such Participating Employer shall be responsible for any salary
reduction contribution to be made to the plan pursuant to the
participant's deferral election with respect to the compensation paid
by such Participating Employer to such participant. If a participant
who is eligible to make salary reduction contributions to the plan
pursuant to Section 2.1 is transferred to ineligible employee status,
he shall not be entitled to make any additional salary reduction
contributions to the plan on or after the first payroll date which
commences on or after the date he is transferred to ineligible employee
status. If an individual who is not eligible to make salary reduction
contributions to the plan pursuant to Section 2.1 is transferred to
eligible employee status, he shall be entitled to make salary reduction
contributions to the plan pursuant to Section 2.1 on and after the date
he is transferred to eligible employee status.
20.3.2 Matching contributions to the plan with respect to each
Participating Employer shall be determined and paid separately by each
Participating Employer in accordance with the provisions of the plan
applicable to such Participating Employer. If a participant is in the
service of more than one Participating Employer during a plan year,
each such Participating Employer shall be responsible for any matching
contributions to be made on behalf of such participant with respect to
the salary reduction contributions made by such Participating Employer
on behalf of such participant and the compensation paid by such
Participating Employer to such participant. If a participant who is
eligible to receive an allocation of matching contributions pursuant to
Section 2.2 is transferred to ineligible employee status, he shall not
be entitled to receive an allocation of matching contributions pursuant
to Section 2.2 on or after the date he is transferred to ineligible
employee status. If an individual who is not eligible to receive an
allocation of matching contributions pursuant to Section 2.2 is
transferred to eligible employee status, he shall be entitled to
receive an allocation of matching contributions pursuant to Section 2.2
on and after the date he is transferred to eligible employee status.
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20.4 Authority of Board: Except as otherwise provided in
Section 9.3, the Board shall have the power to amend or terminate the plan and
trust agreement as applied to each Participating Employer and the proper
officers of each Participating Employer shall be authorized to execute all
documents and take all other actions as shall be deemed necessary or advisable
to effectuate and carry out any such amendment as applied to such party.
Section 21. Compliance with the Uniformed Services Employment
---------- -------------------------------------------------
and Reemployment Rights Act of 1994:
-----------------------------------
Notwithstanding any provision of the plan to the contrary, the
following special provisions shall apply with respect to a participant's
reemployment rights under the Uniformed Services Employment and Reemployment
Rights Act of 1994 ("USERRA"):
21.1 Treatment of USERRA Contributions: Any contributions
(the "USERRA contributions") made to the plan by the Participating Employer or a
participant by reason of such participant's reemployment rights under USERRA,
shall not be subject to the maximum dollar limit in Section 2.1.1 or the annual
addition limitations in Section 19, and shall not be taken into account in
applying such limitations to other contributions under the plan or any other
plan, with respect to the plan year in which such USERRA contributions are made.
USERRA contributions shall, however, be subject to such limitations with respect
to the plan year to which the USERRA contributions relate. The plan shall not be
treated as failing to meet the requirements of Sections 401(a)(4), 401(k)(3),
401(k)(11), 401(k)(12), 401(m), 410(b) or 416 of the Code by reason of the
USERRA contributions.
21.2 Rights With Respect to Salary Reduction Contributions:
21.2.1 A participant who is entitled to reemployment rights
under USERRA may elect to make additional salary reduction
contributions (the "make-up contributions") to the plan during the
period which begins on the date such participant reenters service with
the Participating Employer and has the same length as the lesser of (i)
the product of 3 and the period of the participant's qualified military
service which resulted in such rights, and (ii) 5 years. The maximum
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amount of the make-up contributions a participant may make to the plan
pursuant to this Section 21.2 shall be the maximum amount that the
participant could have made to the plan during the period of the
participant's qualified military service if the participant had
continued in service during such period and continued to receive his
compensation from the Participating Employer. Proper adjustment shall
be made to the amount determined under the preceding sentence for any
salary reduction contributions actually made by the participant during
his period of qualified military service.
21.2.2 With respect to each participant who actually makes
make-up contributions to the plan, the Participating Employer shall
contribute to the trust under the plan the matching contributions with
respect to such make-up contributions that would have been required by
Section 2.2 had such make-up contributions been made during the period
of the participant's qualified military service.
21.2.3 Earnings shall not be credited to any contributions
made pursuant to this Section 21 until such contributions are actually
received by the plan.
21.3 Special Service Crediting Rules: A participant
entitled to reemployment rights under USERRA shall not be treated as having
incurred a break in service by reason of such participant's period of qualified
military service. Each period of qualified military service shall be treated as
service for purposes of determining such participant's vested accrued benefit.
21.4 Loans: If a participant who is entitled to reemployment
rights under USERRA has a plan loan outstanding, loan repayments may be
suspended during his period of qualified military service.
21.5 Definitions: The following definitions shall apply for
purposes of this Section 21:
21.5.1 "Qualified military service" means any service in the
uniformed services (as defined in USERRA) by any participant if such
participant is entitled to reemployment rights under USERRA with
respect to such service.
21.5.2 "Compensation" means the compensation the participant
would have received during his period of qualified military service if
the participant were not in qualified military service, determined
based on the rate of pay the participant would have received from the
Participating Employer but for his absence during his period of
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qualified military service. If the compensation the participant would
have received during such period is not reasonably certain,
compensation shall mean the participant's average compensation from the
Participating Employer during the 12-month period immediately preceding
his qualified military service (or, if shorter, the period of service
immediately preceding his qualified military service).
21.6 Construction: Notwithstanding anything contained in this
Section 21 to the contrary, the provisions of this Section 21 shall at all times
be construed and enforced according to the requirements of USERRA and Section
414(u) of the Code.
Section 22. Special Provisions Applicable to ESOP:
---------- -------------------------------------
Notwithstanding any provision of the plan to the contrary, the
following special provisions shall apply to the ESOP:
22.1 Investment: The ESOP is designed to invest primarily in
Company stock.
22.2 Distributions: Distributions from the ESOP shall be made
in cash. Notwithstanding the foregoing, a participant or beneficiary may direct
the Committee to distribute his ESOP account in shares of Company stock.
22.3 Restrictions on Company stock: Notwithstanding repayment
of an exempt loan or any amendment or termination of the ESOP that causes it to
cease to be a leveraged employee stock ownership plan with the meaning of
Section 4975(e)(7) of the Code, no Company stock acquired with the proceeds of
an exempt loan shall be subject to a put, call or other option, or buy-sell or
similar arrangement while such stock is held by and when distributed from the
ESOP, except as may be required by Regulation Section 54.4975-7(b)(10).
22.4 Proxy Voting: The ESOP accounts shall be subject to the
pass-through voting requirements set forth in Section 7.1.6.
22.5 Valuations: All purchases of Company stock by the ESOP
shall be made at a price not in excess of fair market value. All sales of
Company stock by the ESOP shall be made at a price not less than fair market
value. Any sale of Company stock to a disqualified person (as defined in Section
4975(e)(2) of the Code) or a party-in-interest (as defined in Section 3(14) of
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ERISA) shall conform to the requirements of Section 408(e) of ERISA. For all
purposes of the ESOP, the fair market value of Company stock shall be the price
of the Company stock prevailing on a national securities exchange which is
registered under Section 6 of the Securities Exchange Act of 1934. Fair market
value shall be determined as of the applicable date of the transaction.
22.6 Diversification: Each participant may elect quarterly,
in accordance with procedures adopted by the Committee, to have Company stock
allocated to his ESOP account transferred from his ESOP account to his Employer
supplemental matching contribution account, liquidated and invested in one or
more of the investment funds made available to participants pursuant to the
provisions of Section 7.1.1 (other than an investment fund that invests solely
in shares of Company stock), except that, unless a participant is a "qualified
participant" (a) no such transfer shall be allowed if the participant has a
Company stock fund account (as defined in Section 7.1.6) and (b) a participant
may not transfer Company stock from his ESOP account in any quarter in which the
participant has directed all or any portion of his account in an investment fund
which invests solely in shares of Company stock. A "qualified participant" is
any participant who has attained age 55 and has been a participant in the ESOP
for at least 10 plan years.
22.7 Dividends: Cash dividends paid on shares of Company
stock allocated to the participant's ESOP account shall be either distributed to
the participant or reinvested in shares of Company stock, as determined by the
Committee.
Section 23. Miscellaneous Provisions:
---------- ------------------------
23.1 Notices: Each participant who is not in service and each
beneficiary shall be responsible for furnishing the Committee with his current
address for mailing notices, reports, and benefit payments. Any notice required
or permitted to be given to such participant or beneficiary shall be deemed
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given if directed to such address and mailed by first class mail. If any check
mailed to such address is returned as undeliverable to the addressee, mailing of
checks shall be suspended until the participant or beneficiary furnishes the
proper address. This provision shall not require the mailing of any notice or
notification otherwise permitted to be given by posting or other publication.
23.2 Lost Distributees: A benefit shall be deemed forfeited
if the Committee is unable after a reasonable period of time to locate the
participant or beneficiary to whom payment is due; provided, that such benefit
shall be reinstated if a claim is made by or on behalf of the participant or
beneficiary for the forfeited benefit.
23.3 Reliance on Data: The Company, Committee, Trustee, and
plan administrator may rely on any data provided by a participant or
beneficiary, including representations as to age, health, and marital status.
Such representations shall be binding on any party seeking to claim a benefit
through a participant, and the Company, Committee, Trustee and plan
administrator shall have no obligation to inquire into the accuracy of any
representation made at any time by a participant or beneficiary.
23.4 Bonding: Every fiduciary, except a bank or an insurance
company, shall be bonded for each plan year to the extent required by ERISA. The
bond shall provide protection to the plan against any loss by reason of acts of
fraud or dishonesty by the fiduciary alone or in connivance with others. The
cost of the bond shall be an expense of the trust and shall be paid by the
Trustee subject to the provisions of the trust agreement and of Section 8.12 of
the plan.
23.5 Receipt and Release for Payments : Each participant by
participating in the plan conclusively shall be deemed to agree to look solely
to the assets held under the trust for payment of any benefit to which such
participant may be entitled by reason of such participation. Any payment made
from the plan to or with respect to any participant or beneficiary, or pursuant
to a disclaimer by a beneficiary, shall be in full satisfaction of all claims
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hereunder against the plan, the Company and all fiduciaries with respect to the
plan to the extent of such payment. As a condition precedent to payment, the
recipient of any payment from the plan may be required by the Committee to
execute a receipt and release with respect thereto in such form as is acceptable
to the Committee.
23.6 No Guarantee: The Trustee, Committee, Company and plan
administrator in no way guarantee the trust fund from loss or depreciation, nor
do they guarantee the payment of any money or other assets from the trust fund
that may be or become due to any person. Nothing herein contained shall give any
participant or beneficiary an interest in any specific part of the trust fund or
any other interest except the right to receive benefits from the trust fund in
accordance with the provisions of the plan and trust.
23.7 Headings: The headings and subheadings of the plan are
inserted for convenience of reference and shall be ignored in any construction
of the provisions hereof.
23.8 Continuation of Employment: The establishment of the
plan shall not confer any legal or other right upon any employee or person for
continuation of employment, nor shall it interfere with the right of the
Participating Employer to discharge any employee or to deal with him without
regard to the effect thereof under the plan.
23.9 Construction: The provisions of the plan shall be
construed and enforced according to the laws of the State of North Carolina,
except to the extent such laws are superseded by the provisions of ERISA.
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IN WITNESS WHEREOF, the BB&T Corporation 401(k) Savings Plan
is, by authority of the Board of Directors of the Company, executed in behalf of
the Company, the 2nd day of February, 2000.
BB&T CORPORATION
By: /s/ Robert E. Greene
-------------------------
Authorized Officer
Attest:
- --------------------------------
(Assistant) Secretary
[Corporate Seal]
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EXHIBIT A
TESTING COMPENSATION
1. "Compensation" means for any participant the wages, salary
and fees for professional services and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services actually
rendered by the participant in the course of his service with the Participating
Employer to the extent that the amounts are includible in gross income
(including but not limited to commissions, compensation for services on the
basis of a percentage of profits, bonuses, fringe benefits, reimbursements or
other expense allowances under a nonaccountable plan as described in Treasury
Regulation Section 1.62-2(c)), plus the participant's elective deferrals (as
defined in Section 402(g)(3) of the Code) and any other amount which is
contributed or deferred by the Participating Employer at the election of the
participant and which is not includible in the gross income of the participant
by reason of Sections 125 or 457 of the Code; amounts described in Code Section
104(a)(3), 105(a) and 105(h), but only to the extent that such amounts are
includible in the gross income of the participant; amounts paid or reimbursed by
the Participating Employer for moving expenses incurred by the participant, but
only to the extent that at the time of the payment it is reasonable to believe
that these amounts are not deductible by the participant under Code Section 217;
the value of a non-qualified stock option granted to the participant by the
Participating Employer, but only to the extent that the value of the option is
includible in the gross income of the participant for the taxable year in which
granted; and the amount includible in the gross income of a participant upon
making the election described in Code Section 83(b); and excluding contributions
made by the Participating Employer to any plan of deferred compensation which
are not includible in the participant's gross income for the taxable year in
which contributed; contributions made by the Participating Employer under a
simplified employee pension plan; any distributions from a plan of deferred
compensation; amounts realized from the exercise of a non-qualified stock option
or from the sale or other disposition of stock acquired under a qualified stock
option; amounts realized when restricted stock (or property) held by the
participant either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture; and any other amount paid by the Participating
Employer that receives special tax benefits or is excluded under the definition
of compensation under Section 415 of the Code and Treasury Regulation Section
1.415-2(d)(3). If elected by the Committee, compensation may be modified to
exclude any amounts contributed by the Participating Employer pursuant to a
salary reduction agreement which are not includible in the gross income of the
participant under Section 125, 402(e)(3), 402(h) or 403(b) of the Code.
2. "Compensation" means for any participant the wages, salary
and fees for professional services and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services actually
rendered by the participant in the course of his service with the Participating
Employer to the extent that the amounts are includible in gross income
(including but not limited to commissions, compensation for services on the
basis of a percentage of profits, bonuses, fringe benefits, reimbursements or
other expense allowances under a nonaccountable plan as described in Treasury
Regulation Section 1.62-2(c)), plus the participant's elective deferrals (as
defined in Section 402(g)(3) of the Code) and any other amount which is
contributed or deferred by the Participating Employer at the election of the
participant and which is not includible in the gross income of the participant
by reason of Sections 125 or 457 of the Code; and excluding contributions made
<PAGE>
by the Participating Employer to any plan of deferred compensation which are not
includible in the participant's gross income for the taxable year in which
contributed; contributions made by the Participating Employer under a simplified
employee pension plan; any distributions from a plan of deferred compensation;
amounts realized from the exercise of a non-qualified stock option or from the
sale or other disposition of stock acquired under a qualified stock option;
amounts realized when restricted stock (or property) held by the participant
either becomes freely transferable or is no longer subject to a substantial risk
of forfeiture; and any other amount paid by the Participating Employer that
receives special tax benefits or is excluded under the definition of
compensation under Section 415 of the Code and Treasury Regulation Section
1.415-2(d)(3). If elected by the Committee, compensation may be modified to
exclude any amounts contributed by the Participating Employer pursuant to a
salary reduction agreement which are not includible in the gross income of the
participant under Section 125, 402(e)(3), 402(h) or 403(b) of the Code.
3. "Compensation" means for any participant his wages from the
Participating Employer as defined in Section 3401(a) of the Code and all other
payments of compensation to the participant by the Participating Employer (in
the course of the Participating Employer's trade or business) for which the
Participating Employer is required to furnish the participant a written
statement under Sections 6041(d) and 6051(a)(3) of the Code, but determined
without regard to any rules that limit the remuneration included in wages based
on the nature or location of the employment or the services performed (such as
the exception for agricultural labor in Section 3401(a)(2) of the Code), plus
the participant's elective deferrals (as defined in Section 402(g)(3) of the
Code) and any other amount which is contributed or deferred by the Participating
Employer at the election of the participant and which is not includible in the
gross income of the participant by reason of Sections 125 or 457 of the Code. If
elected by the Committee, compensation may be modified to (i) exclude any
amounts contributed by the Participating Employer pursuant to a salary reduction
agreement which are not includible in the gross income of the participant under
Section 125, 402(e)(3), 402(h) or 403(b) of the Code; and/or (ii) exclude
amounts paid or reimbursed by the Participating Employer for moving expenses
incurred by the participant, but only to the extent that at the time of payment
it is reasonable to believe that these amounts are deductible by the participant
under Section 217 of the Code.
4. "Compensation" means for any participant his wages from the
Participating Employer as defined in Section 3401(a) of the Code, for federal
income tax withholding purposes, but determined without regard to any rules that
limit the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in Section 3401(a)(2) of the Code), plus the participant's elective
deferrals (as defined in Section 402(g)(3) of the Code) and any other amount
which is contributed or deferred by the Participating Employer at the election
of the participant and which is not includible in the gross income of the
participant by reason of Sections 125 or 457 of the Code. If elected by the
Committee, compensation may be modified to exclude any amounts contributed by
the Participating Employer pursuant to a salary reduction agreement which are
not includible in the gross income of the participant under Section 125,
402(e)(3), 402(h) or 403(b) of the Code.
ii
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EXHIBIT B
Participating Employers
Branch Banking and Trust Company
Branch Banking and Trust Company of South Carolina
Branch Banking and Trust Company of Virginia
BB&T Insurance Services, Inc.
BB&T Investment Services, Inc.
BB&T Leasing Corporation
Agency Technologies, Inc.
AutoBase Information Systems, Inc.
Regional Acceptance Corporation
Car Mart, Inc.
FARR Associates, Inc.
Prime Rate Premium Finance Corporation
BB&T Factors Corporation
Scott & Stringfellow, Inc.
Scott & Stringfellow Realty, Inc.
Scott & Stringfellow Capital Management
Freedom Financial Services, Inc.
Rose Shannis Financial Services, LLC
<PAGE>
EXHIBIT C
PLAN LOAN RULES
FOR PARTICIPANT LOANS
This is an explanation of the rules for taking a personal loan
from your vested account under the Plan. All loans are made strictly in
accordance with the provisions of the Plan and in accordance with the rules
adopted by the Committee. In addition to the items outlined in these rules, it
is important to know that if you have not requested all loans available under
any defined contribution plan in which you participate, you will be restricted
from taking a hardship withdrawal under the Plan. In the case of any item not
covered by this explanation, or in the event of any conflict between this
explanation and the Plan, the Plan document always will control.
1. AMOUNT YOU CAN BORROW
---------------------
The amount of any loan made to you must be at least $1,000. In
addition, the amount of your loan from this Plan, when added to the outstanding
balance of loans from any other tax-qualified retirement plan of the Company,
may not exceed the lesser of:
(A) $50,000, reduced by the highest outstanding balance of any
plan loans to you during the one year period ending the day before the
loan is made; or
(B) 50 percent of the current fair market value of your vested
account under the Plan.
The money you receive from the loan will be taken from the
investment funds in which your account is invested on a pro rata basis.
2. REPAYMENTS
----------
Period. The repayment period for a loan may not be less than
12 months nor more than 60 months.
Frequency. Generally, repayments will be withheld by the
Company from each regular paycheck you receive in sufficient amounts to maintain
your loan repayment schedule until all principal and interest due are paid.
Investments. Your loan repayments will be credited to your
separate accounts from which the loan proceeds were obtained on a pro rata basis
and invested in the investment funds in the same manner as contributions are
invested, based on your current investment elections.
3. INTEREST RATE
-------------
Your loan must bear a reasonable rate of interest as
determined by the Committee at the time your loan is made. The Committee has
determined the appropriate interest rate to be "BB&T's Prime Rate plus 1
<PAGE>
percent," as quoted on the day the loan request is made. An annual statement of
interest paid for each year that the loan is outstanding is available upon
request.
4. WHEN LOANS CAN BE TAKEN
-----------------------
If you wish to borrow from your vested account under the Plan,
call the BB&T Benefits Phone at 1-800-228-8076. You can have only one loan
outstanding at any time and only one loan request may be submitted in a plan
year. This means that if you already have a loan outstanding that has not been
repaid, you must repay that loan. Your loan generally will be disbursed to you
within 25 days from the date your loan request is made.
Your loan will be processed based on the information you
provide over the BB&T Benefits Phone. You will not be required to sign a Loan
Origination Form prior to receiving the loan check. However, when you request
your loan by telephone, you will receive a Participant Loan Agreement setting
forth the terms of the loan and containing certain disclosures required by law.
When you receive and endorse, deposit or cash the loan check, you will agree to
the terms of the loan as set forth in the Participant Loan Agreement and the
assignment of your account as collateral for the loan (see paragraph 5 below)
(i.e., your endorsement of the loan check signifies your agreement to repay the
loan pursuant to the terms of the Participant Loan Agreement).
5. SECURITY FOR YOUR LOAN
----------------------
Your loan will be secured by a pledge of your vested account
under the Plan. In the normal course, your account will not automatically be
used to repay the loan or any interest due. However, if you terminate employment
with the Company for any reason, the remaining unpaid balance of your loan plus
any accrued interest will be recharacterized as a taxable distribution to you
from the Plan unless you fully repay the loan immediately following your
termination of employment or agree to continue making loan repayments by having
your checking or other designated account automatically drafted by the Trustee
in accordance with the loan repayment schedule. If your loan is recharacterized
as a taxable distribution, the unpaid balance plus any accrued interest will be
reported to the Internal Revenue Service ("IRS") by the Trustee as taxable
income to you for the year in which you terminate employment.
6. ACCELERATED LOAN REPAYMENTS
---------------------------
Loans may be repaid in full ahead of schedule at any time
without penalty. Prepayments of less than the full amount outstanding will not
be accepted. To repay your loan in full, you must contact BB&T Benefits Phone
and obtain a payoff amount. You should then submit a cashiers check or money
order in such amount to Institutional Trust Services, Raleigh, North Carolina
17401-0401.
7. TERMINATION OF EMPLOYMENT
-------------------------
If you terminate employment with the Company for any reason
and have an outstanding loan balance, you may:
<PAGE>
(A) fully repay the loan immediately following your
termination;
(B) continue to make loan repayments by having your checking
or other designated account automatically drafted by the Trustee in
accordance with the loan repayment schedule; or
(C) have the loan balance recharacterized as a taxable
distribution to you.
If your loan balance is recharacterized as a distribution as described above and
in paragraph 5 above, this distribution will be taxable income to you and may be
subject to tax penalties for early distribution if you are under age 59 1/2.
8. LEAVE OF ABSENCE
----------------
If you are granted a leave of absence from the Company for any
reason and have an outstanding loan for which payroll deduction repayments are
no longer possible, you may:
(A) fully repay the loan at the time your leave begins;
(B) continue to make loan repayments by having your checking
or other designated account automatically drafted by the Trustee in
accordance with the loan repayment schedule;
(C) have the loan balance recharacterized as a taxable
distribution to you; or
(D) suspend loan repayments for up to 12 months. Under this
option, your loan repayments when you return to work may be doubled
until you return to your original loan repayment schedule.
If you decide to suspend repayments, your loan must still be repaid within 60
months of the date the loan was originally issued. If your loan repayments are
suspended for more than 12 months or if the loan has not been repaid within 60
months of the date the loan was originally issued, the loan will be in default
and you will be treated as having received a taxable distribution equal to the
outstanding balance of your loan plus any accrued interest.
If you choose to continue to make loan repayments, but you fail to do so, the
loan will be in default and you will be treated as having received a taxable
distribution equal to the outstanding balance on your loan plus any accrued
interest.
If you are treated as having received a taxable distribution, the tax penalty
for early distribution may also apply.
<PAGE>
9. DEFAULT AND FORECLOSURE
-----------------------
While you are working, loan repayments automatically will be
withheld from your paychecks to keep your loan obligation current. However,
should your paychecks stop because of an unpaid leave of absence, termination of
employment, or other reason, and you fail to make two scheduled loan repayments
on the date they are due (or, if you previously missed one scheduled repayment,
you fail to make one more scheduled repayment), your loan will be considered in
default. Upon default, the outstanding balance of the loan plus any accrued
interest will become due and payable immediately. The unpaid balance will be
recharacterized as a distribution to you as described in paragraph 5 above and
will be reported to you and to the IRS as a taxable distribution. The tax
penalty for early distribution may also apply. During the term of your loan you
may miss one scheduled repayment before your loan will be considered in default.
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