As filed with the Securities and Exchange Commission on July 30, 1999
Registration No. 333-
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================================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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USABANC.COM, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2806495
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1535 Locust Street
Philadelphia, Pennsylvania 19102
(Address of principal executive offices) (Zip code)
USABanc.com, Inc. Employee Stock Purchase Plan
USABanc.com, Inc. Employee Savings Plan
(Full title of the plan)
-----------------------------------------
Kenneth L. Tepper
Chief Executive Officer and President
USABanc.com, Inc.
1535 Locust Street
Philadelphia, Pennsylvania 19102
(Name and address of agent for service)
(215) 569-4200
(Telephone number, including area code, of agent for service)
With a copy to
Ronald J. Frappier, Esq.
Jenkens & Gilchrist, P.C.
1445 Ross Avenue, Suite 3200
Dallas, Texas 75202-2799
(214) 855-4500
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================================================
<S> <C> <C> <C> <C>
Amount Proposed maximum Proposed maximum
Title of securities to be offering price aggregate Amount of
to be registered registered(1)(2)(3) per share(4)(5) offering price(4)(5) registration fee(5)
- -------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $1.00 per share 300,000 shares $11.5625 $3,468,750 $964.31
===============================================================================================================================
<FN>
(1) Consists of 150,000 shares of common stock available for purchase by
employees of USABanc.com, Inc. pursuant to the USABanc.com, Inc.
Employee Stock Purchase Plan and 150,000 shares of common stock
available for purchase by employees of USABanc.com, Inc. pursuant to
the USABanc.com, Inc. Employee Savings Plan.
(2) Pursuant to Rule 416, this registration statement is deemed to cover
the additional shares to be offered or issued to prevent dilution
resulting from any future stock split, stock dividend or similar
transaction.
(3) Pursuant to Rule 416(c), this registration statement also covers
an indeterminate amount of interests to be offered or sold pursuant
to the USABanc.com, Inc. Employee Savings Plan.
(4) Estimated solely for purpose of calculating the registration fee.
(5) Calculated pursuant to Rule 457(c) and (h) solely for the purposes of
computing the registration fee, based on the average of the highest and
the lowest selling price per share of the common stock as quoted on the
NASDAQ SmallCap Market on July 23, 1999. Pursuant to Rule 457(h)(3) no
registration fee is required to be paid with respect to interests to be
offered or sold pursuant to the USABanc.com, Inc. Employee Savings
Plan.
</FN>
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Information specified in Part I of Form S-8 (Items 1 and 2) will be
sent or given to USABanc.com, Inc. Employee Stock Purchase Plan and USABanc.com,
Inc. Employee Savings Plan participants as specified by Rule 428(b)(1) under the
Securities Act of 1933.
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
USABanc.com, Inc. (the "Company" or the "Registrant") and the
USABanc.com, Inc. Employee Savings Plan hereby incorporate by reference in this
registration statement the following documents previously filed with the
Securities and Exchange Commission (the "Commission"):
(1) The Company's Annual Report on Form 10-KSB filed with the
Commission for the year ended December 31, 1998;
(2) The Company's Quarterly Report on Form 10-QSB filed with the
Commission for the quarter ended March 31, 1999;
(3) The Company's Current Report on Form 8-K filed with the
Commission on May 21, 1999;
(4) The Company's Current Report on Form 8-K filed with the
Commission on March 16, 1999; and
(5) The description of the Company's Common Stock set forth in
the Company's Registration Statement on Form SB-2 (No. 333-83041)
filed with the Commission on July 16, 1999, including any
amendment or report filed for the purpose of updating such
description.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), subsequent to the date of this registration
statement shall be deemed to be incorporated herein by reference and to be a
part hereof from the date of the filing of such documents until such time as
there shall have been filed a post-effective amendment that indicates that all
securities offered hereby have been sold or that deregisters all securities
remaining unsold at the time of such amendment.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interest of Named Experts and Counsel.
None.
Item 6. Indemnification of Directors and Officers.
The Company's Articles of Incorporation and bylaws provide that the
Company will indemnify every person who is or was a director or executive
officer of the Company to the fullest extent permitted by law. This
indemnification applies to all expenses and liabilities reasonably incurred in
connection with any proceeding to which the director or executive officer may
become involved by reason of being or having been a director or executive
officer of the Company. Pennsylvania law, under which the Company is
incorporated, allows the Company to indemnify its directors and officers if the
indemnified person acted in good faith and in a manner such person
II-1
<PAGE>
reasonably believed to be in, or not opposed to, the best interest of the
Company and, with respect to any criminal proceeding, had no reasonable cause to
believe his conduct was unlawful. The Company maintains a director and officer
liability insurance policy covering each of the Company's directors and
executive officers.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The following documents are filed as a part of this Registration
Statement.
Exhibit Description
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4.1 USABanc.com, Inc. Employee Stock Purchase Plan
4.2 USABanc.com, Inc. Employee Savings Plan
5.1 Opinion of Jenkens & Gilchrist, a Professional
Corporation
23.1 Consent of Jenkens & Gilchrist, a Professional
Corporation (included in Exhibit 5.1)
23.2 Consent of Grant Thornton LLP
24 Power of Attorney (included on signature page)
--------------
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:
a. to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
b. 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; and
c. 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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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; and
(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 undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
II-2
<PAGE>
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, 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 of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
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 Philadelphia, Commonwealth of Pennsylvania, on July
30, 1999.
USABANC.COM, INC.
By: /s/ Kenneth L. Tepper
-------------------------------------
Kenneth L. Tepper,
Chief Executive Officer and President
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints Kenneth L. Tepper and Brian M.
Hartline, and each of them, each with full power to act without the other, his
true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any or all amendments to this registration
statement, and to file the same with all exhibits thereto and other documents in
connection therewith, with the Commission, granting unto each of said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person hereby
ratifying and confirming that each of said attorneys-in-fact and agents or his
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Kenneth L. Tepper President, Chief Executive Officer July 30, 1999
- ------------------------- and Director (Principal Executive Officer)
Kenneth L. Tepper
/s/ Brian M. Hartline Chief Financial Officer (Principal July 30, 1999
- ------------------------- Accounting and Financial Officer)
Brian M. Hartline
/s/ George M. Laughlin Chairman of the Board July 30, 1999
- -------------------------
George M. Laughlin
Director
- ------------------------- --------------
Clarence L. Rader
/s/ Zeev Shenkman Vice Chairman of the Board July 30, 1999
- -------------------------
Zeev Shenkman
/s/ Jeffrey A. D'Ambrosio Director July 30, 1999
- -------------------------
Jeffrey A. D'Ambrosio
Director
- ------------------------- -------------
George C. Fogwell, III
<PAGE>
Director ------------
- --------------------------
John A. Gambone
Director
- -------------------------- ------------
Carol J. Kaufman
/s/ Wayne O'Leevy Director July 30, 1999
- --------------------------
Wayne O'Leevy
</TABLE>
<PAGE>
The Plan.
Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the USABanc.com, Inc. Employee Savings
Plan) have duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Philadelphia,
Commonwealth of Pennsylvania, on July 30, 1999.
USABANC.COM, INC. EMPLOYEE SAVINGS PLAN
By: USABanc.com,Inc.
By: /s/ Kenneth L. Tepper
----------------------------------------------
Kenneth L. Tepper
Chief Executive Officer and President
Exhibit 4.1
USABanc.com, Inc.
Employee Stock Purchase Plan
1. Purpose and Effective Date
The USABanc.com, Inc. Employee Stock Purchase Plan (the
"Plan") is designed to encourage and assist employees of USABanc.com, Inc. and
its subsidiaries to acquire an equity interest in USABanc.com, Inc. through the
purchase of shares of USABanc.com, Inc. common stock, $1.00 par value, (the
"Common Stock"). It is the intention of USABanc.com, Inc. to have the Plan
qualify as an "employee stock purchase plan" under section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the provisions of the Plan
shall be construed so as to comply with the requirements of section 423. This
Plan is first effective August 1, 1999.
2. Administration
(a) The Plan shall be administered by the Compensation
Committee designated by the USABanc.com, Inc. Board of Directors (the
"Committee") which shall consist of at least two persons, each of whom is a
"non-employee director" as defined under Rule 16b-3 under the Securities
Exchange Act of 1934 (the "Exchange Act"), and an "outside director" as defined
under section 162(m) of the Code (the "Non-Employee Director"). If any Committee
member does not qualify as a Non-Employee Director, then such member shall not
participate in any way with respect to Committee action under the Plan and shall
not be treated as a member of the Committee for purposes of the Plan. The
Committee may appoint a secretary and shall make such rules and regulations for
the conduct of its business as it shall deem advisable.
(b) The Committee shall hold meetings at such times and
places as it may determine. Acts approved at a meeting by a majority of the
directors who are members of the Committee or acts approved in writing by the
unanimous consent of the directors who are members of the Committee (not
counting any director who is an employee for either purpose) shall be the valid
acts of the Committee.
(c) Subject to the express provisions of the Plan, the
Committee shall have plenary authority in its discretion to interpret and
construe any and all provisions of the Plan, to adopt rules and regulations for
administering the Plan, and to make all other determinations deemed necessary or
advisable for administering the Plan. The Committee may correct any defect or
omission or reconcile any inconsistency in the Plan, in the manner and to the
extent it shall deem desirable. The Committee's determination on the foregoing
matters shall be final, binding and conclusive.
(d) Subject to the limitations of Section 18, the Committee
shall have the power to amend the Plan from time to time. In particular, the
Committee may increase the option price and/or decrease the option term or make
any other changes which the Committee, in its sole discretion, determines are
necessary or desirable to preclude the establishment of this Plan or the grant
or exercise of any option under it from resulting in a charge to earnings under
applicable rules of the Financial Accounting Standards Board.
<PAGE>
(e) The Committee shall have the authority to delegate the
regular operation and administration of the Plan to the appropriate officers and
employees of USABanc.com, Inc.
(f) Each Committee member shall be acting in the capacity of
a director of USABanc.com, Inc. in connection with the administration of the
Plan or the granting of options under the Plan.
(g) Each Committee member shall be entitled to
indemnification by USABanc.com, Inc. in accordance with the provisions and
limitations of its By-Laws, as the same may be amended from time to time, in
connection with or arising out of any action, suit or proceeding with respect to
the administration of the Plan or the granting of options under the Plan in
which he may be involved by reason of his being or having been a Committee
member, whether or not he continues to be a Committee member at the time of the
action, suit or proceeding.
3. Number of Shares
(a) A maximum of 150,000 shares of Common Stock, subject to
adjustment upon changes in capitalization of USABanc.com, Inc. as provided in
Subsection (b), may be purchased under the Plan. Shares sold under the Plan may
be newly issued shares or treasury shares now held or hereafter acquired, but
all shares sold under the Plan, regardless of source, shall be counted against
the 150,000 share limitation.
(b) The aggregate number of shares and class of shares as to
which options may be granted hereunder, the number of shares covered by each
outstanding option and the option exercise price thereof shall be appropriately
adjusted in the event of a stock dividend, stock split, recapitalization or
other change in the number or class of issued and outstanding equity securities
of USABanc.com, Inc. resulting from a subdivision or consolidation of the Common
Stock and/or other outstanding equity security or a recapitalization or other
capital adjustment (not including the issuance of Common Stock upon the
conversion of other securities of USABanc.com, Inc. which are convertible into
Common Stock) affecting the Common Stock which is effected without receipt of
consideration by USABanc.com, Inc. The Committee shall have authority to
determine the adjustments to be made under this Subsection and any such
determination by the Committee shall be final, binding and conclusive.
4. Eligibility Requirements
(a) Each Covered Employee, as defined in Subsection (b), shall
become eligible to participate in the Plan for the first full payroll period
beginning more than 90 days after his commencement of employment; provided,
however, each Covered Employee on August 1, 1999 shall be eligible on the first
Enrollment Date without regard to length of service.
(b) "Covered Employee" means each Employee, as defined in
Subsection (c), other than:
(i) An employee who, immediately upon enrollment in
the Plan, would own stock directly or indirectly, or hold options, warrants or
rights to acquire stock, which in the aggregate
<PAGE>
represents five percent or more of the total combined voting power or value of
all classes of stock of USABanc.com, Inc.;
(ii) An employee who is customarily employed less
than 20 hours per week or less than five months in any calendar year; and
(iii) An employee who is prohibited by the laws of
the nation of his residence or employment from participating in the Plan.
(c) "Employee" shall mean any individual who is an employee
within the meaning of section 3401(c) of the Code and the Treasury Regulations
thereunder of USABanc.com, Inc. or a Participating Subsidiary. Unless otherwise
designated by the Board of Directors, each corporation described in section
424(e) or (f) of the Code shall be a "Participating Subsidiary".
5. Enrollment and Reenrollment
Each eligible Covered Employee may become a Participant
effective for (a) the first full payroll period that begins after he satisfies
the eligibility requirements of Section 4 and (b) on the first payroll period
that ends in April or October of each year (the "Enrollment Dates") by
completing and delivering an executed enrollment form 15 days before such
Enrollment Date. The first day of the first payroll period beginning on or after
August 1, 1999 shall be the first Enrollment Date.
6. Grant of Option on Enrollment or Reenrollment
(a) Each Covered Employee who enrolls or re-enrolls in the
Plan is granted, as of the Enrollment Date, an option to purchase shares of
Common Stock from USABanc.com, Inc. under the Plan. Any Participant who has not
withdrawn from the Plan will be automatically re-enrolled in the Plan and
granted a new option on each Enrollment Date.
(b) Each option granted under the Plan shall have the
following terms.
(i) The option shall expire on the last "Trading
Day" of March or September next following an Enrollment Date, or after such
shorter option period as may be established by the Committee from time to time.
A "Trading Day" is any day on which regular trading occurs on any established
stock exchange or market system on which the Common Stock is traded.
(ii) Payment for shares under the option shall be
made only through payroll withholding in accordance with Section 7.
(iii) Purchase of shares upon exercise of the option
will be effected only on the Purchase Dates established in accordance with
Section 8.
(iv) The price per share under the option will be
determined as provided in Section 8.
<PAGE>
(v) Unless otherwise established by the Committee
before an Enrollment Date for all options to be granted on such Enrollment Date,
the maximum number of shares available for purchase under an option granted to a
Participant will be determined by dividing $25,000 by the "fair market value"
(as defined in Subsection 8(e)) of a share of Common Stock on the Enrollment
Date and by multiplying the result by the number of calendar years included in
whole or in part in the period from the Enrollment Date to the expiration of the
options.
(vi) The option (together with all other options then
outstanding under this and all other similar stock purchase plans of
USABanc.com, Inc. and any subsidiary of USABanc.com, Inc.) will in no event give
the Participant the right to purchase shares in a calendar year which have a
fair market value in excess of $25,000, determined at the applicable Enrollment
Dates.
(vii) The option will in all respects be subject to
the terms and conditions of the Plan, as interpreted by the Committee from time
to time.
7. Payroll Withholding and Tax Withholding
(a) Each Participant shall elect, before the Enrollment Date
as of which his participation is effective, to have amounts withheld from his
compensation during the option period at a rate equal to any whole percentage,
up to a maximum of ten percent (10%), or such lesser percentage as the Committee
may establish from time to time. For this purpose, compensation includes regular
salary payments, overtime pay, commissions and Participant elective
contributions to benefit plans which are excluded from taxation under section
402 or 125 of the Code, but excludes all other payment including, without
limitation, payment of deferred compensation, employer matching contributions to
the USABanc.com, Inc. Employee Savings Plan, long-term disability, workers'
compensation payments, relocation payments, performance bonuses and expense
reimbursements (including but not limited to travel, entertainment, and moving
expenses). Each Participant shall designate a rate of withholding in his
enrollment form and may elect to increase or decrease the rate of withholding
effective as of any subsequent Enrollment Date, by delivery not later than 15
days before such Enrollment Date, of written notice setting forth the amended
withholding rate.
(b) USABanc.com, Inc. shall credit payroll withholdings to a
bookkeeping account for each Participant as soon as practicable after the
withholding occurs. The amounts so withheld shall remain general assets of
USABanc.com, Inc. until applied to the purchase of shares of Common Stock under
the Plan. USABanc.com, Inc. shall have no obligation to pay interest on
withholdings to any Participant and shall not be obligated to segregate
withholdings.
(c) Upon disposition (within in the meaning of section 424(c)
of the Code) of shares acquired by exercise of an option, each Participant shall
pay, or make provision adequate to USABanc.com, Inc. for payment of all federal,
state, and other taxes and any other amounts that USABanc.com, Inc. determines,
in its discretion, are then required (whether or not by tax withholding),
including any such payment or withholding that USABanc.com, Inc. determines in
its discretion is necessary to allow USABanc.com, Inc. to claim tax deductions
or other benefits in connection with the disposition. A Participant shall make
such similar provisions for any other payment that USABanc.com, Inc. determines,
in its discretion, are required due to the exercise of an option, including such
provisions as are necessary to allow USABanc.com, Inc. to claim tax deductions
or other benefits in connection with the exercise of the option.
<PAGE>
8. Purchase of Shares
(a) On each "Purchase Date" USABanc.com, Inc. shall apply the
funds then credited to each Participant's payroll withholdings account to the
purchase of whole shares of Common Stock. A "Purchase Date" shall be the last
Trading Day of the March or September immediately preceding an Enrollment Date,
or on such other day as may be established by the Committee from time to time.
(b) The cost to the Participant of shares purchased under any
option shall be not less than 85%, or such greater percentage as the Committee
shall determine, of the lower of:
(i) the fair market value of the Common Stock on the
Enrollment Date as of which such option was granted; or
(ii) the fair market value of the Common Stock on the
Purchase Date of such shares.
(c) Any funds in an amount less than the cost of one share of
Common Stock remaining in a Participant's payroll withholdings account on a
Purchase Date after any purchase made pursuant to Subsection (a) shall be
carried forward in such account for application on the next Purchase Date.
(d) If on any Purchase Date, the number of shares available
under the Plan are less than the number all Participants would otherwise be
entitled to purchase on such date, purchases shall be reduced proportionately to
eliminate the difference. Any funds that cannot be applied to the purchase of
shares due to such a reduction shall be refunded to Participants as soon as
administratively feasible.
(e) For purposes of the Plan, the fair market value of the
Common Stock as of any date shall be the closing price of the Common Stock on
such date as listed on the NASDAQ Small Market Quotations (or such other listing
as the Committee selects).
9. Withdrawal from the Plan
A Participant may withdraw from the Plan in full (but not in
part) at any time, effective after written notice thereof is received by
USABanc.com, Inc. All funds credited to a Participant's payroll withholdings
account shall be distributed to him without interest as soon as administratively
feasible after notice of withdrawal is received. Any Covered Employee who has
withdrawn from the Plan may enroll in the Plan again on any subsequent
Enrollment Date in accordance with the provisions of Section 5.
10. Termination of Employment
Participation in the Plan terminates immediately when a
Participant ceases to be a Covered Employee for any reason whatsoever (including
death, disability or transfer to a subsidiary that is not a Participating
Subsidiary). As soon as administratively feasible after termination,
USABanc.com, Inc. shall pay to the Participant or his beneficiary or legal
representative, all amounts credited to the Participant's
<PAGE>
payroll withholdings account; provided, however, that if a Participant ceases to
be a Covered Employee because of the commencement of employment with a
subsidiary that is not a Participating Subsidiary, funds then credited to such
Participant's payroll withholdings account shall be applied to the purchase of
whole shares of Common Stock at the next Purchase Date and any funds remaining
after such purchase shall be paid to the Participant.
11. Distribution upon Death
As soon as administratively feasible after the death of a
Participant, amounts credited to his account shall be paid in cash to the
executor, administrator, or other legal representative of the Participant's
estate. Such payment shall relieve USABanc.com, Inc. of further liability with
respect to the Plan on account of the deceased Participant.
12. Assignment
(a) The rights of a Participant under the Plan shall not be
assignable by such Participant, by operation of law or otherwise, except to the
extent permitted by Section 11. No Participant may create a lien on any funds,
securities, rights, or other property held by USABanc.com, Inc. for the account
of the Participant under the Plan.
(b) A Participant's right to purchase shares under the Plan
shall be exercisable only during the Participant's lifetime and only by him,
except that a Participant may direct USABanc.com, Inc. in the enrollment form to
issue share certificates to the Participant and his spouse in community
property, to the Participant jointly with one or more other persons with right
of survivorship, or to certain forms of trusts approved by the Committee.
13. Administrative Assistance
(a) The Committee may retain a brokerage firm, bank, or other
financial institution to assist in the purchase or sale of shares, delivery of
reports, or other administrative aspects of the Plan. If the Committee so
elects, each Participant shall (unless prohibited by the laws of the nation of
his employment or residence) be deemed upon enrollment in the Plan to have
authorized the establishment of an account on his behalf at such institution.
Shares purchased by a Participant under the Plan shall be issued to and held in
the account established for such Participant.
(b) The Committee may restrict the transfer of Shares
purchased under the Plan out of any account established with an institution
pursuant to Subsection (a) as the Committee determines is necessary or desirable
to facilitate administration of the Plan or compliance with Section 7 of the
Plan.
14. Costs
All costs and expenses incurred in administering the Plan
shall be paid by USABanc.com, Inc., except that any stamp duties or transfer
taxes applicable to participation in the Plan may be charged to the accounts of
Participants to whom such expenses are attributable. Any brokerage fees for the
purchase of shares by a Participant shall be paid by USABanc.com, Inc., but
brokerage fees for the resale of shares by a Participant shall be paid by the
Participant.
<PAGE>
15. Equal Rights and Privileges
All Covered Employees shall have equal rights and privileges
with respect to the Plan so that the Plan qualifies as an "employee stock
purchase plan" within the meaning of section 423 of the Code and the Treasury
Regulations thereunder. Any provision of the Plan which is inconsistent with
section 423 of the Code shall without further act or amendment be reformed to
comply with the requirements of section 423. This Section 15 shall take
precedence over all other provisions of the Plan.
16. Applicable Law
Except to the extent superseded by Federal law, the Plan shall
be governed by the substantive laws (excluding the conflict of laws rules) of
the Commonwealth of Pennsylvania.
17. Gender and Number
Except where otherwise clearly indicated by context, the
masculine shall include the feminine and the singular shall include the plural.
18. Modification and Termination
(a) The Committee may amend, alter, or terminate the Plan at
any time, including amendments to outstanding options. No amendment shall be
effective unless within 12 months after it is adopted by the Committee, it is
approved by the holders of a majority of the votes cast at a duly held
shareholders' meeting, if such amendment would:
(i) increase the number of shares reserved for
purchase under the Plan; or
(ii) amend the requirements regarding the class
of Employees eligible to purchase Common Stock under the Plan.
(b) In the event the Plan is terminated, the Committee may
elect to terminate all outstanding options either immediately or upon completion
of the purchase of shares on the next Purchase Date, or may elect to permit
options to expire in accordance with their terms (and participation to continue
through such expiration dates). If the options are terminated prior to
expiration, all funds contributed to the Plan that have not been used to
purchase shares shall be returned to the Participants as soon as
administratively feasible.
(c) In the event of the sale of all or substantially all of
the assets of USABanc.com, Inc. or the merger of USABanc.com, Inc. with or into
another corporation, or the dissolution or liquidation of USABanc.com, Inc., a
Purchase Date shall occur on the Trading Day immediately preceding the date of
such event, unless otherwise provided by the Committee in its sole discretion,
including provision for the assumption or substitution of each option under the
Plan by the successor or surviving corporation, or a parent or subsidiary
thereof.
<PAGE>
19. Rights as an Employee
Nothing in the Plan shall be construed to give any person the
right to remain in the employ of USABanc.com, Inc. or a Participating Subsidiary
or to affect the right of USABanc.com, Inc. or a Participating Subsidiary to
terminate the employment of any person at any time with or without cause.
20. Rights as a Shareholder; Delivery of Certificates
Participants shall be treated as the owners of their shares
effective as of the Purchase Date.
21. Board and Shareholder Approval
The Plan was approved by the Compensation Committee of the
Board of Directors on June 16, 1999 and will be submitted to the shareholders
within one year of that date.
USABanc.com, Inc.
By
----------------------------
Its
----------------------------
Date
----------------------------
USABANC.COM, INC.
EMPLOYEE SAVINGS PLAN
(Effective August 1, 1999)
<PAGE>
Exhibit 4.2
USABANC.COM, INC.
EMPLOYEE SAVINGS PLAN
(Effective August 1, 1999)
USABanc.com, Inc. (the "Company") hereby adopts the USABanc.com, Inc.
Employee Savings Plan (the "Plan") effective August 1, 1999, subject to the
subsequent condition that the Internal Revenue Service issues a determination
that the Plan meets all applicable requirements of section 401(a) of the Code
(as defined in subsection 1(f)), that employer contributions thereto are
deductible under section 404 of the Code and that the trust fund maintained with
respect thereto is tax exempt under section 501(a) of the Code. The Plan, as
herein amended and restated, shall apply only to an Employee who is credited
with an Hour of Service (as defined in subsection 1(o)) on or after August 1,
1999.
i
<PAGE>
<TABLE>
<CAPTION>
USABANC.COM, INC.
EMPLOYEE SAVINGS PLAN
(Effective August 1, 1999)
TABLE OF CONTENTS
-----------------
Section Page
<S> <C> <C>
1 DEFINITIONS.....................................................................................1
(a) Accrued Benefit ..............................................................1
(b) Administrator or Plan Administrator ..........................................1
(c) Annual Additions .............................................................1
(d) Board of Directors ...........................................................1
(e) Break in Service .............................................................1
(f) Code .........................................................................1
(g) Committee ....................................................................2
(h) Company ......................................................................2
(i) Compensation .................................................................2
(j) Disability ...................................................................2
(k) Employee .....................................................................2
(l) ERISA ........................................................................3
(m) Fiduciary ....................................................................3
(n) Fund .........................................................................3
(o) Hour of Service ..............................................................3
(p) Investment Category ..........................................................4
(q) Investment Manager ...........................................................4
(r) Limitation Year ..............................................................4
(s) Matching Account .............................................................4
(t) Member .......................................................................4
(u) Normal Retirement Date .......................................................4
(v) Parent Company Stock .........................................................4
(w) Participating Company ........................................................5
(x) Period of Service ............................................................5
(y) Period of Severance ..........................................................5
(z) Plan .........................................................................5
(aa) Plan Year ....................................................................5
(ab) Related Entity ...............................................................5
(ac) Rollover Account .............................................................6
(ad) Salary Reduction Account .....................................................6
(ae) Service ......................................................................6
(af) Severance Date ...............................................................6
(ag) Trust Agreement ..............................................................8
(ah) Trustee ......................................................................8
ii
<PAGE>
USABANC.COM, INC.
EMPLOYEE SAVINGS PLAN
(Effective August 1, 1999)
TABLE OF CONTENTS
-----------------
Section Page
(ai) Valuation Date ...............................................................8
2 ADMINISTRATION OF THE PLAN......................................................................9
(a) Allocation of Responsibility. ...............................................9
(b) Plan Administrator. .........................................................9
(c) Committee. ..................................................................9
(d) Powers of Board of Directors. ..............................................10
(e) Powers of Trustee. .........................................................11
(f) Claims. ....................................................................11
(g) Fiduciary Compensation. ....................................................12
(h) Plan Expenses. .............................................................12
(i) Fiduciary Insurance. .......................................................12
(j) Indemnification. ...........................................................12
3 PARTICIPATION IN THE PLAN......................................................................13
(a) Initial Eligibility..........................................................13
(b) Measuring Service. .........................................................14
(c) Termination and Requalification. ...........................................14
(d) Commencement of Participation. .............................................14
(e) Special Rule for Rollovers. ................................................15
(f) Termination of Membership. .................................................15
4 MEMBER AND PARTICIPATING COMPANY CONTRIBUTIONS.................................................16
(a) Salary Reduction Contributions. ............................................16
(b) Salary Reduction Contribution Limitations. .................................16
(c) Salary Reduction Account. ..................................................18
(d) Participating Company Matching Contributions.................................18
(e) Matching Account. ..........................................................20
(f) Compliance with Salary Reduction Contributions
Discrimination Tests.......................................................20
(g) Compliance with Participating Company Matching
Contributions Discrimination Tests. ......................................24
(h) Payroll Taxes. .............................................................28
(i) Rollovers....................................................................28
(j) Other Member Contributions. ................................................29
(k) Deductibility. .............................................................29
iii
<PAGE>
USABANC.COM, INC.
EMPLOYEE SAVINGS PLAN
(Effective August 1, 1999)
TABLE OF CONTENTS
-----------------
Section Page
(l) Military Service. ..........................................................29
5 MAXIMUM CONTRIBUTIONS AND BENEFITS.............................................................30
(a) Defined Contribution Limitation. ...........................................30
(b) Combined Limitation..........................................................31
(c) Combined Limitation Computation..............................................31
(d) Definition of "Compensation" for Code Limitations............................32
(e) Transition Provision.........................................................34
6 ADMINISTRATION OF FUNDS........................................................................35
(a) Investment Control. ........................................................35
(b) Parent Company Stock. ......................................................35
(c) Member Elections. ..........................................................35
(d) No Member Election. ........................................................36
(e) Facilitation. ..............................................................36
(f) Valuations. ................................................................36
(g) Allocation of Gain or Loss. ................................................36
(h) Bookkeeping. ...............................................................37
7 BENEFICIARIES AND DEATH BENEFITS. ............................................................38
(a) Designation of Beneficiary. ................................................38
(b) Beneficiary Priority List. .................................................38
(c) Proof of Death. ............................................................39
(d) Divorce. ...................................................................39
8 BENEFITS FOR MEMBERS...........................................................................40
(a) Retirement Benefit...........................................................40
(b) Death Benefit. .............................................................40
(c) Disability Benefit. ........................................................40
(d) Termination of Employment Benefit............................................40
(e) Time of Forfeiture. ........................................................40
9 DISTRIBUTION OF BENEFITS.......................................................................42
(a) Commencement.................................................................42
(b) Benefit Form. ..............................................................43
(c) Benefit Election. ..........................................................43
iv
<PAGE>
USABANC.COM, INC.
EMPLOYEE SAVINGS PLAN
(Effective August 1, 1999)
TABLE OF CONTENTS
-----------------
Section Page
(d) Distributions in Kind. .....................................................43
(e) Deferred Payments. .........................................................43
(f) Withholding. ...............................................................43
(g) Compliance with Code Requirements. .........................................43
(h) Distribution Limitations. ..................................................44
(i) Rollover Election............................................................44
10. IN-SERVICE DISTRIBUTIONS.......................................................................47
(a) General Rule.................................................................47
(b) Elective Distributions.......................................................47
(c) Age 59 1/2...................................................................47
(d) Hardship.....................................................................47
11 LOANS..........................................................................................50
(a) Availability.................................................................50
(b) Minimum Requirements.........................................................50
(c) Accounting...................................................................52
12 TITLE TO ASSETS................................................................................53
13 AMENDMENT AND TERMINATION......................................................................54
(a) Amendment....................................................................54
(b) Termination..................................................................54
(c) Conduct on Termination.......................................................54
14 LIMITATION OF RIGHTS...........................................................................56
(a) Alienation...................................................................56
(b) Qualified Domestic Relations Order Exception.................................56
(c) Employment...................................................................56
15 MERGERS, CONSOLIDATIONS OR TRANSFERS OF PLAN ASSETS............................................58
16 PARTICIPATION BY RELATED ENTITIES..............................................................59
(a) Commencement.................................................................59
(b) Termination..................................................................59
(c) Single Plan..................................................................59
v
<PAGE>
USABANC.COM, INC.
EMPLOYEE SAVINGS PLAN
(Effective August 1, 1999)
TABLE OF CONTENTS
-----------------
Section Page
(d) Delegation of Authority......................................................59
17 TOP-HEAVY REQUIREMENTS.........................................................................60
(a) General Rule.................................................................60
(b) Calculation of Top-Heavy Status..............................................60
(c) Definitions..................................................................60
(d) Combined Benefit Limitation..................................................63
(e) Vesting......................................................................63
(f) Minimum Contribution.........................................................63
18 MISCELLANEOUS..................................................................................65
(a) Incapacity...................................................................65
(b) Reversions...................................................................65
(c) Employee Data................................................................66
(d) In Writing Requirement.......................................................66
(e) Doubt as to Right to Payment.................................................66
(f) Inability to Locate Distributee..............................................66
(g) Estoppel of Members and Their Beneficiaries..................................67
(h) Law Governing................................................................67
(i) Pronouns.....................................................................67
(j) Interpretation...............................................................67
</TABLE>
vi
<PAGE>
1. DEFINITIONS
-----------
(a) "Accrued Benefit" shall mean on any date of determination
the value of a Member's share of the Fund.
(b) "Administrator" or "Plan Administrator" shall mean a plan
administrator within the meaning of the Code and ERISA. The Company shall be the
Administrator.
(c) "Annual Additions" shall mean the sum for any Limitation
Year of (i) employer contributions, (ii) employee contributions, (iii)
forfeitures and (iv) amounts described in sections 415(l) and 419A(d) of the
Code, which are (A) allocated to an account which provides medical benefits
under section 401(h) or 419(c) of the Code and (B) treated as "Annual Additions"
to the account of a Member under such provisions of the Code. "Annual Additions"
shall include excess contributions as defined in section 401(k)(8)(B) of the
Code, excess aggregate contributions as defined in section 401(m)(6)(B) of the
Code and excess deferrals as described in section 402(g) of the Code, regardless
of whether such amounts are distributed or forfeited. "Annual Additions" shall
not include (i) rollover contributions (as defined in sections 402(c),
403(a)(4), 403(b)(8) and 408(d)(3) of the Code), (ii) employee contributions to
a simplified employee pension plan which are excludable from gross income under
section 408(k)(6) of the Code or (iii) "buy-back" contributions made under
subsection 8(d)(iv) of the Plan.
(d) "Board of Directors" shall mean the Board of Directors of
the Company or any committee or delegee thereof designated in accordance with
subsection 2(d).
(e) "Break in Service" shall mean a Period of Severance of at
least five years.
(f) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the same as may be further amended from time to time.
1
<PAGE>
(g) "Committee" shall mean the individual or group of
individuals designated to control and manage the operation and administration of
the Plan to the extent set forth herein.
(h) "Company" shall mean USABanc.com, Inc.
(i) "Compensation" shall mean the base salary, hourly wages
(including overtime wages), bonus, commissions and other incentives paid to an
Employee for services by a Participating Company. "Compensation" shall also
include amounts of base salary, hourly wages, bonus, commissions and other
incentives which an Employee elects to have withheld from his remuneration for
services under this Plan or a plan which meets the requirements of section 125
of the Code. "Compensation" shall not include (i) income from exercise of stock
options, receipt or vesting of restricted stock grants, exercise of stock
appreciation rights or similar equity-based compensation arrangements, (ii)
severance or termination pay, (iii) deferred compensation, (iv) expense
reimbursements or allowances of any kind, including, but not limited to, tuition
reimbursement and car allowances, (v) moving expenses, and (vi) the value of
welfare benefits or perquisites or similar items (whether or not includible in
gross income). "Compensation" with respect to any Member for any Plan Year shall
be limited to $160,000 (or an increased amount permitted in accordance with a
cost of living adjustment under section 415(d) of the Code); provided, however,
"Compensation" for the 1999 Plan Year shall be limited to $66,666.66.
(j) "Disability" shall mean a medically determinable physical
or mental impairment which qualifies a Member for Social Security disability
benefits. "Disability" shall be determined by the Committee in its absolute
discretion on the basis of such medical evidence as the Committee deems
necessary or desirable.
(k) "Employee" shall mean each and every person who is an
employee of a Participating Company or a Related Entity. The term "Employee"
shall also include a person who is a
2
<PAGE>
"leased employee" (within the meaning of section 414(n)(2) of the Code) with
respect to a Participating Company or a Related Entity. Notwithstanding the
foregoing, no person who is a "leased employee" or who a Participating Company
determines is not its employee for purposes of wage withholding required under
section 3401, et. seq. of the Code (regardless of whether an administrative
agency or court rules that such person is a Participating Company's employee for
any purpose) shall be eligible to participate in this Plan or be deemed an
"Employee" for purposes of eligibility to participate in this Plan.
(l) "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended, and the same as may be further amended from time to
time.
(m) "Fiduciary" shall mean a person who, with respect to the
Plan, (i) exercises any discretionary authority or discretionary control
respecting management of the Plan or exercises any authority or control with
respect to management or disposition of the Plan's assets, (ii) renders
investment advice for a fee or other compensation, direct or indirect, with
respect to any monies or other property of the Plan, or has any authority or
responsibility to do so, or (iii) has any discretionary authority or
discretionary responsibility in the administration of the Plan.
(n) "Fund" shall mean the assets of the Plan. All Investment
Categories shall be part of the Fund.
(o) "Hour of Service" shall mean each hour (i) for which an
Employee is directly or indirectly paid, or entitled to payment, by a
Participating Company or a Related Entity for the performance of duties or (ii)
for which back pay, irrespective of mitigation of damages, has been either
awarded or agreed to by a Participating Company or a Related Entity. These hours
shall be credited to the Employee for the period or periods in which the duties
were performed or to which the award or agreement pertains irrespective of when
payment is made. The same hours shall not be credited under both (i) and (ii)
above.
3
<PAGE>
(p) "Investment Category" shall mean any separate investment
fund which is made available under the terms of the Plan.
(q) "Investment Manager" shall mean any Fiduciary (other than
a Trustee) who:
(i) has the power to manage, acquire, or dispose
of any asset of the Plan,
(ii) is:
(A) registered as an investment advisor
under the Investment Advisers Act of 1940;
(B) a bank, as defined in that Act; or
(C) an insurance company qualified to
perform services described in subsection 1(q)(i) above under the laws of more
than one state; and
(iii) has acknowledged in writing that he is a
Fiduciary with respect to the Plan.
(r) "Limitation Year" shall mean the consecutive twelve-month
period commencing on January 1st and ending on December 31st.
(s) "Matching Account" shall mean the portion of the Member's
Accrued Benefit derived from Participating Company contributions under
subsection 4(d) hereof adjusted as provided in subsection 4(e).
(t) "Member" shall mean each Employee of a Participating
Company who satisfies the requirements for participation under Section 3 hereof
and each other person who has an Accrued Benefit held under the Plan.
(u) "Normal Retirement Date" shall mean the date on which a
Member attains age 65.
(v) "Parent Company Stock" shall mean USABanc.com, Inc. common
stock, $1.00 par value.
4
<PAGE>
(w) "Participating Company" shall mean each Related Entity
with respect to the Company which adopts or is deemed to adopt this Plan
pursuant to Section 16. The term shall also include the Company, unless the
context otherwise requires.
(x) "Period of Service" shall mean the period of time
commencing on the date on which an Employee first is credited with an Hour of
Service or, if applicable, on the date following a Period of Severance of one
year or more on which an Employee first is credited with an Hour of Service
provided he requalifies for participation under subsection 3(c), and ending on
the next following Severance Date; provided, however, the period beginning on
the anniversary of the date of an Employee's absence due to maternity or
paternity and ending on the second anniversary thereof shall not be included in
a Period of Service. A Period of Severance of less than one year shall be
included in a Period of Service for all purposes.
(y) "Period of Severance" shall mean the period of time
commencing on an Employee's Severance Date and ending on the date on which the
Employee first again is credited with an Hour of Service, exclusive of periods
during which an Employee is on an unpaid leave pursuant to the Family and
Medical Leave Act of 1993.
(z) "Plan" shall mean the USABanc.com, Inc. Employee Savings
Plan as set forth herein effective August 1, 1999, and the same as may be
amended from time to time.
(aa) "Plan Year" shall mean the consecutive twelve-month
period commencing on January 1st and ending on December 31st, except that the
first Plan Year shall begin on August 1, 1999 and end on December 31, 1999.
(ab) "Related Entity" shall mean (i) all corporations which
are members with a Participating Company in a controlled group of corporations
within the meaning of section 1563(a) of the
5
<PAGE>
Code, determined without regard to sections 1563(a)(4) and (c)(3)(C) of the
Code, (ii) all trades or businesses (whether or not incorporated) which are
under common control with a Participating Company as determined by regulations
promulgated under section 414(c) of the Code, (iii) all trades or businesses
which are members of an affiliated service group with a Participating Company
within the meaning of section 414(m) of the Code and (iv) any entity required to
be aggregated with a Participating Company under regulations prescribed under
section 414(o) of the Code (to the extent provided in such regulations);
provided, however, for purposes of Section 5, the definition shall be modified
to substitute the phrase "more than 50%" for the phrase "at least 80%" each
place it appears in section 1563(a)(1) of the Code. Furthermore, for purposes of
crediting Hours of Service for eligibility to participate and Service for
purposes of vesting, employment as a "leased employee," within the meaning of
section 414(n) of the Code, of a Participating Company or a Related Entity shall
be treated as employment for a Participating Company or a Related Entity. An
entity is a "Related Entity" only during those periods in which it is included
in a category described in this subsection.
(ac) "Rollover Account" shall mean the portion of the Member's
Accrued Benefit derived from contributions made under subsection 4(i)(i) hereof,
adjusted as provided in subsection 4(i)(ii).
(ad) "Salary Reduction Account" shall mean the portion of the
Member's Accrued Benefit derived from contributions made under subsection 4(a)
hereof, adjusted as provided in subsection 4(c).
(ae) "Service" shall mean the sum of an Employee's Periods of
Service. Service is measured in completed years and days, where 365 days of
Service equal one completed year of Service.
(af) "Severance Date" shall mean the earlier of (i) the date
an Employee quits, is discharged (or severed, if later), retires or dies or (ii)
the first anniversary of the date an Employee is absent
6
<PAGE>
from the employ of all Participating Companies and all Related Entities for any
reason other than an approved leave of absence granted in writing by the Company
according to a uniform rule applied without discrimination or in accordance with
applicable law provided the Employee returns to the employ of a Participating
Company or a Related Entity upon completion of the leave. However, if the
Employee was on any period of unpaid leave taken pursuant to the Family and
Medical Leave Act of 1993, he shall not incur a Severance Date for purposes of
subsection l(c) until the leave expires or, if applicable, the date determined
under the last sentence of this subsection. Further, an Employee who terminates
Service to enter the military service of the United States shall not suffer a
Severance Date as of such date provided (i) such Employee's rights are protected
by the Uniform Services Employment and Reemployment Rights Act of 1994 or other
federal law and (ii) such Employee returns to employment with a Participating
Company or a Related Entity within the period required by law for preservation
of his rights. Under such circumstances, an Employee shall receive credit for
Service for his entire period of absence. If an Employee on an approved leave of
absence or qualified military service does not return to the employ of a
Participating Company or a Related Entity upon completion of his leave or
expiration of the period provided by law in the case of qualified military
service, his Severance Date generally shall be the last day for which he
received his regular pay. In addition, for purposes of subsection 1(e), an
Employee shall not suffer a Severance Date until the second anniversary of the
date on which such Employee is absent from work (i) by reason of the Employee's
pregnancy, (ii) by reason of the birth of the Employee's child, (iii) by reason
of the placement of a child with such Employee in connection with an adoption of
such child by the Employee or (iv) for purposes of caring for a child for a
period beginning immediately following birth or placement.
7
<PAGE>
(ag) "Trust Agreement" shall mean the agreement or agreements
between the Company and a Trustee under which all or a portion of the Fund is
held.
(ah) "Trustee" shall mean such person, persons or corporate
fiduciary designated to manage and control all or a portion of the Fund pursuant
to the terms of the Plan and a Trust Agreement.
(ai) "Valuation Date" shall mean any business day the New York
Stock Exchange is open for trading and such other dates as the Committee may
specify from time to time. With respect to a Member's Accrued Benefit, the
business day of initial investment of new contributions or liquidation of a
Member's investment credited to an Investment Category for reinvestment or
distribution shall be the "Valuation Date" for purposes of determining the
amount of investment, reinvestment or distribution.
8
<PAGE>
2. ADMINISTRATION OF THE PLAN
--------------------------
(a) Allocation of Responsibility. The Board of Directors, the
Administrator, the Committee, each Trustee and each Investment Manager (if any)
possess certain specified powers, duties, responsibilities and obligations under
the Plan's governing instruments. It is intended under this Plan that each
Fiduciary be responsible solely for the proper exercise of its own functions and
that each not be responsible for any act or failure to act of another, unless
otherwise responsible as a breach of its fiduciary duty or for breach of duty by
another Fiduciary under ERISA's rules of co-fiduciary responsibility. Any person
may serve in more than one fiduciary capacity.
(b) Plan Administrator. The Plan Administrator shall file all
reports and distribute to Members and beneficiaries reports and other
information required under ERISA or the Code and shall discharge all other
duties of a plan administrator under ERISA or the Code with respect to the Plan.
(c) Committee. The Committee shall be the Plan's named
fiduciary (within the meaning of ERISA) and shall have the power and duty to
control and manage the operation and administration of the Plan which shall
include, but shall not be limited to, the performance of the following acts:
(i) the filing of all reports required of the
Plan, other than those which are the responsibility of the Administrator;
(ii) the distribution to Members and beneficiaries
of all reports and other information required of the Plan, other than reports
and information required to be distributed by the Administrator;
(iii) the keeping of complete records of the
administration of the Plan;
9
<PAGE>
(iv) the promulgation of rules and regulations for
administration of the Plan consistent with the terms and provisions of the Plan
and the Trust Agreement and the establishment of a procedure to determine the
qualified status of a domestic relations order;
(v) the establishment of a funding policy and
method for the Plan, including, but not limited to, selecting or establishing
Investment Categories for the Plan; and
(vi) the absolute discretion to interpret the Plan
and its terms, including the absolute discretion to determine any questions of
fact arising under the Plan and to make all decisions required by the Plan.
The Committee's interpretation of the Plan and any actions and decisions taken
in good faith by the Committee based on its interpretation shall be final and
conclusive. The Committee may correct any defect, or supply any omission, or
reconcile any inconsistency in the Plan in such manner and to such extent as
shall be expedient to carry the Plan into effect and shall be the sole judge of
such expediency. The Committee may (i) delegate all or a portion of the
responsibilities of controlling and managing the operation and administration of
the Plan to one or more persons, and (ii) appoint agents, investment advisors,
counsel, physicians or other representatives to render advice with regard to any
of its responsibilities under the Plan.
(d) Powers of Board of Directors. The Board of Directors is
responsible for appointing and removing each Trustee, each Investment Manager
(if any) and the Committee and for amending the Plan, each Trust Agreement, and
each asset management agreement (if any). The Board of Directors may delegate
any power or duty it has under the Plan or a Trust Agreement, including, but not
limited to, amending the Plan or a Trust Agreement, to a committee of the Board
of Directors, to any officer(s) or Employee(s) of the Company or a Related
Entity or to any other person or entity, in which
10
<PAGE>
case such delegee and not the Board of Directors, shall be responsible for
exercise of the delegated functions.
(e) Powers of Trustee. Each Trustee and each Investment
Manager (if any) is responsible for the management and control of the portion of
the Fund over which it has control to the extent provided in its Trust Agreement
or asset management agreement, respectively.
(f) Claims. If, pursuant to the rules, regulations or other
interpretations of the Plan, the Committee denies, the claim of a Member or
beneficiary for benefits under the Plan, the Committee shall provide written
notice, within 90 days after receipt of the claim, setting forth in a manner
calculated to be understood by the claimant:
(i) the specific reasons for such denial;
(ii) the specific reference to the Plan provisions on
which the denial is based;
(iii) a description of any additional material or
information necessary to perfect the claim and an explanation of why such
material or information is needed; and
(iv) an explanation of the Plan's claim review
procedure and the time limitations of this subsection applicable thereto.
A Member or beneficiary whose claim for benefits has been denied may request
review by the Committee of the denied claim by notifying the Committee in
writing within 60 days after receipt of the notification of claim denial. As
part of said review procedure, the claimant or his authorized representative may
review pertinent documents and submit issues and comments to the Committee in
writing. The Committee shall render its decision to the claimant in a manner
calculated to be understood by the claimant not later than 60 days after receipt
of the request for review, unless special circumstances require an extension of
time, in which case decision shall be rendered as soon after the sixty-day
period as possible, but not later than
11
<PAGE>
120 days after receipt of the request for review. The decision on review shall
state the specific reasons therefor and the specific Plan references on which it
is based.
(g) Fiduciary Compensation. Each Fiduciary who already
receives full-time pay from a Participating Company or a Related Entity shall
serve without compensation from the Plan for his services as such, but he shall
be reimbursed pursuant to subsection 2(h) for any reasonable expenses incurred
by him in the administration of the Plan. A Fiduciary who is not already
receiving full-time pay from a Participating Company may be paid such reasonable
compensation as shall be agreed upon.
(h) Plan Expenses. All expenses of administration of the Plan
shall be paid out of the Fund unless paid by the Company or a Member. According
to uniform rules, the Committee may charge expenses to a particular Investment
Category, a particular Member's Accrued Benefit or a particular Member if the
Committee determines that such allocation of expense or charge is desirable for
the equitable administration of the Plan.
(i) Fiduciary Insurance. If the Committee so directs, the Plan
shall purchase insurance to cover the Plan from liability or loss occurring by
reason of the act or omission of a Fiduciary provided such insurance permits
recourse by the insurer against the Fiduciary in the case of a breach of a
fiduciary obligation by such Fiduciary.
(j) Indemnification. The Company shall indemnify and hold
harmless to the maximum extent permitted by its by-laws each Fiduciary who is an
Employee or who is an officer or director of a Participating Company or any
Related Entity from any claim, damage, loss or expense, including litigation
expenses and attorneys' fees, resulting from such person's service as a
Fiduciary of the Plan provided the claim, damage, loss or expense does not
result from the Fiduciary's gross negligence or intentional misconduct.
12
<PAGE>
3. PARTICIPATION IN THE PLAN
-------------------------
(a) Initial Eligibility
(i) Service Requirement. Each and every Employee
of a Participating Company on August 1, 1999 who is not excluded under
subsection 3(a)(ii) shall be eligible to make contributions under subsection
4(a) and be allocated matching contributions under subsection 4(d) for payroll
periods commencing on or after August 1, 1999. Each and every Employee of a
Participating Company who first is credited with an Hour of Service after August
1, 1999 who is not excluded under subsection 3(a)(ii) shall be eligible to make
contributions under subsection 4(a) for payroll periods commencing more than 90
days after he first is credited with an Hour of Service and be allocated
matching contributions under subsection 4(d) for payroll periods beginning on or
after the January 1st or July 1st after he completes one year of Service.
(ii) Excluded Employees. Notwithstanding the
foregoing provision of this subsection,
(A) no Employee whose terms and conditions
of employment are determined by a collective bargaining agreement between
employee representatives and a Participating Company shall be eligible to
participate unless such collective bargaining agreement provides to the
contrary, in which case such Employee shall be eligible to participate upon
compliance with such provisions for eligibility and participation as such
agreement shall provide; except that no Employee who has selected, or in the
future selects, a union shall become ineligible during the period between his
selection of the union and the execution of the first collective bargaining
agreement which covers him;
(B) no person who is an Employee by reason
of the second sentence of subsection l(k) shall be eligible to participate;
13
<PAGE>
(C) no person a Participating Company
determines is not its employee for purposes of federal income tax withholding
shall be eligible to participate, regardless of whether an administrative agency
or court rules that such Person is a Participating Company's employee for any
purpose; and
(D) no Employee who is a nonresident alien
and who receives no earned income (within the meaning of section 911(d)(2) of
the Code) from a Participating Company which constitutes income from sources
within the United States (within the meaning of section 861(a)(3) of the Code)
shall be eligible to participate.
(b) Measuring Service. For purposes of measuring Service to
satisfy the eligibility provisions, the computation period shall begin with the
date on which the Employee first is credited with an Hour of Service.
(c) Termination and Requalification. An Employee who has
satisfied an applicable Service requirement of subsection 3(a) and who
subsequently becomes ineligible for any reason shall requalify for participation
on the date on which he is next credited with an Hour of Service in an eligible
job classification under sub-section 3(a). An Employee who has a Period of
Severance of one year or more shall he treated as a new Employee with respect to
any Service requirement he has not satisfied as of his Severance Date.
(d) Commencement of Participation. An Employee who satisfies
all the requirements for eligibility under subsection 3(a) shall become a Member
on the Entry Date following his timely election authorizing amounts be withheld
from his Compensation and be credited to his Salary Reduction Account under the
Plan. An Employee who satisfies all the requirements for eligibility under
subsection 3(a) and who does not elect to have amounts withheld from his
Compensation shall be deemed a participant in the
14
<PAGE>
Plan to the extent required by ERISA on the date as of which his election to
have amounts withheld could have become effective.
(e) Special Rule for Rollovers. An Employee of a Participating
Company who will be eligible to participate in the Plan after satisfying the
Service requirement of subsection 3(a) may make a contribution to the Plan under
subsection 4(i). An individual who makes a contribution under subsection 4(i)
shall become a Member on the date of his contribution; however, such individual
shall not be considered to be a Member for purposes of the remainder of Section
4 until he satisfies the Service requirement of subsection 3(a).
(f) Termination of Membership. An Employee who becomes a
Member shall remain a Member as long as he has an Accrued Benefit held under the
Plan.
15
<PAGE>
4. MEMBER AND PARTICIPATING COMPANY CONTRIBUTIONS
----------------------------------------------
(a) Salary Reduction Contributions. Each Employee who becomes
eligible to participate under subsection 3(a) may contribute any even multiple
of 1%, not to exceed 15%, of his Compensation for a payroll period, as he shall
elect in a manner prescribed by the Committee. The Committee may limit further
the amount of contribution for all Members or a class of Members as the
Committee determines is necessary or desirable to facilitate Plan administration
or comply with applicable Code provisions. The initial election to contribute
may be effective for any payroll period beginning after the Employee satisfies
the Service requirement of subsection 3(a). Such contribution shall be
accomplished through direct reduction of Compensation in each payroll period
that the election is in effect. For purposes of the Code, such contribution
shall be deemed to be made by the Member's employer. A Member may elect to
increase, reduce or terminate his contributions as of any payroll period. All
such elections shall be made in a manner and shall become effective on the date
prescribed therefor by the Committee. Contributions made by Participating
Companies under this subsection shall be made at such times as the Company
determines and shall be allocated to the Salary Reduction Accounts of the
Members from whose Compensation the contributions were withheld in an amount
equal to the amount withheld.
(b) Salary Reduction Contribution Limitations. Contributions
under subsection 4(a) shall be limited as provided below:
(i) Exclusion Limit. The maximum amount of
contribution which any Member may make in any calendar year under subsection
4(a) is $10,000 (or such increased annual amount resulting from a cost of living
adjustment pursuant to sections 402(g)(5) and 415(d)(1) of the Code), reduced by
the amount of elective deferrals by such Member under all other plans, contracts
or arrangements of any Participating Company or Related Entity. If the
contribution under subsection 4(a)
16
<PAGE>
for a Member for any calendar year exceeds $10,000 (or such increased annual
amount resulting from an adjustment described above), the Committee shall direct
the Trustee to distribute the excess amount (plus any income and minus any loss
allocable to such amount) to the Member not later than the April 15th following
the close of such calendar year. If (A) a Member participates in another plan
which includes a qualified cash or deferred arrangement or other program subject
to the limitations of section 402(g) of the Code, (B) such Member contributes in
the aggregate more than the exclusion limit under this Plan and the
corresponding provisions of the other plan and (C) the Member notifies the
Committee not later than the March 1st following the close of such calendar year
of the portion of the excess the Member has allocated to this Plan, then the
Committee may direct the Trustee to distribute to the Member not later than
April 15th following the close of such calendar year the excess amount (plus any
income and minus any loss allocable to such amount) which the Member allocated
to this Plan. A Member shall be deemed to have given the notification described
in (C) above if the excess results from contributions solely to this Plan or
plans sponsored by Related Entities.
(ii) Discrimination Test Limits. The Committee
may limit the maximum amount of contribution for Members who are "highly
compensated employees" (as defined below) to the extent it determines that such
limitation is necessary to keep the Plan in compliance with section 401(a)(4) or
section 401(k)(3) of the Code. Any limitation shall be effective for all payroll
periods following the announcement of the limitation. For purposes of Section 4
of the Plan, the term "highly compensated employee" shall mean an Employee who
is described in either or both of the following groups:
(A) an Employee who is a 5% owner, as
defined in section 416(i)(1) of the Code, at any time during the current Plan
Year or the last preceding Plan Year;
17
<PAGE>
(B) an Employee who receives
"compensation" (as defined below) in excess of $80,000 (or an increased amount
resulting from a cost of living adjustment) during the preceding Plan Year and
was in the "top-paid" group (as defined below) for the preceding Plan Year.
For purposes hereof, the following rules and
definitions shall apply:
(C) The "top-paid" group consists of the
top 20% of Employees ranked on the basis of "compensation" received during the
year. For purposes of determining the number of Employees in the "top-paid"
group, Employees described in section 414(q)(5) of the Code and Q&A 9(b) of
section 1.414(q)-1T of the regulations thereunder are excluded.
(D) "Compensation" is compensation within
the meaning of section 415(c)(3) of the Code, and for the 1997 Plan Year also
includes elective or salary reduction contributions to a cafeteria plan, cash or
deferred arrangement or tax-sheltered annuity under sections 125, 402(e)(3),
402(h)(3), and 403(b) of the Code.
(E) Employers aggregated under section
414(b), (c), (m), or (o) of the Code are treated as a single employer, subject
to application of the "separate line of business rules" exception under section
410(b)(5) of the Code.
(c) Salary Reduction Account. Each Member's salary reduction
contributions, as adjusted for investment gain or loss and income or expense,
constitute such Member's Salary Reduction Account. A Member shall at all times
have a nonforfeitable interest in the portion of his Accrued Benefit derived
from his Salary Reduction Account.
(d) Participating Company Matching Contributions
(i) Timing. The Participating Companies shall
make matching contributions with respect to each calendar quarter of the Plan
Year.
18
<PAGE>
(ii) Eligibility. Each Member who is eligible
under subsection 3(a) and who has not had a Severance Date before the last
business day of a calendar quarter shall be allocated a matching contribution.
(iii) Amount. Each Participating Company shall
contribute with respect to each Member employed by it who is eligible under
subsection 3(a) Parent Company Stock in an amount determined under subsection
4(d)(v) based on 50% of the Member's salary reduction contribution for each
payroll period ended in the quarter; provided, however, the matching
contribution shall apply only to the first 6% of the Member's Compensation for a
payroll period. Accordingly, the maximum amount of matching contribution is
based on 3% of a Member's Compensation for a payroll period.
(iv) Forfeitures. Amounts in the Matching Accounts
of Members which have been forfeited pursuant to the provisions of subsections
8(d) and 8(e) hereof during a Plan Year shall be applied to reduce Participating
Company contributions required under subsection 4(d)(iii).
(v) Calculation. The Participating Companies shall
satisfy the obligation to make matching contributions by the direct issuance to
the Trustee of Parent Company Stock with a value equal to the required matching
contributions determined by valuing the contributed Parent Company Stock at the
lower of the closing price thereof on the first Valuation Date and last
Valuation Date of the calendar quarter for which they are made as listed on the
NASDAQ Small Market Quotation (or such other listing as the Committee selects).
(vi) Payment Date. The Participating Companies
shall pay over to the Fund all contributions required under this subsection no
later than the due date, including extensions, for filing the Participating
Companies' federal income tax returns for the taxable year ended coincident with
or immediately following the end of the Plan Year with respect to which such
contributions are to be made.
19
<PAGE>
(e) Matching Account. The Participating Company contributions
allocated to a Member under subsection 4(d) as adjusted for the investment gain
or loss and income or expense constitute the Member's Matching Account. A Member
shall have a nonforfeitable interest in the portion of his Accrued Benefit
derived from his Matching Account to the extent provided under Section 8.
(f) Compliance with Salary Reduction Contributions Discrimi-
nation Tests
(i) Rule. In no event shall the "actual deferral
percentage" (as defined below) for Members who are "highly compensated
employees" in a testing group for any Plan Year bear a relationship to the
"actual deferral percentage" for Members who are not "highly compensated
employees" in such testing group which does not satisfy either subsection
4(f)(i)(A) or (B) below. The test shall be separately performed for each testing
group. Each group of Members who participate in the Plan pursuant to a
collective bargaining agreement shall be a separate testing group and all other
Members shall be a separate testing group.
(A) The requirement shall be satisfied
for a Plan Year if the "actual deferral percentage" for the Plan Year for the
group of Members who are "highly compensated employees" for the Plan Year is not
more than the "actual deferral percentage" for the preceding Plan Year of all
other Members multiplied by 1.25.
(B) The requirement shall be satisfied
for a Plan Year if (1) the excess of the "actual deferral percentage" for the
Plan Year for the Members who are "highly compensated employees" for the Plan
Year over the "actual deferral percentage" for the preceding Plan Year of all
Members who are not "highly compensated employees" for the preceding Plan Year
is not more than two percentage points (or such lower amount as may be required
by applicable regulations under the Code) and (2) the "actual deferral
percentage" for Members who are "highly compensated employees" for the Plan
20
<PAGE>
Year is not more than the "actual deferral percentage" of all Members who are
not "highly compensated employees" for the preceding Plan Year multiplied by two
(or such lower multiple as may be required by applicable regulations under the
Code).
(C) The Plan may test using the "actual
deferral percentage" for non- highly compensated employees for the current Plan
Year rather than the preceding Plan Year if the Administrator so elects in
accordance with applicable rules promulgated pursuant to the Code. The
Administrator may only revoke such an election in accordance with applicable
rules promulgated pursuant to the Code. Further, unless the Company makes an
election under section 401(k)(3)(E) of the Code, the "actual deferral
percentage" of non-highly compensated employees for the first Plan Year shall be
3%.
(D) If the Company elects to apply
section 410(b)(4)(B) of the Code in determining whether the Plan satisfies the
requirements of subsection 4(f), the Company may exclude from consideration all
non-highly compensated employees who would not have been eligible to participate
if the Plan contained the greatest age and service requirements permitted under
section 410(a)(1)(A) of the Code.
(ii) ONEC or Refund. If the relationship of the
"actual deferral percentages" does not satisfy subsection 4(f)(i) for any Plan
Year, the Participating Companies may make "qualified nonelective contributions"
(within the meaning of the regulations promulgated under section 401(k) of the
Code) in an equal dollar amount for all or a class of eligible "nonhighly
compensated employees". Such contributions shall be treated for all purposes of
the Plan as contributions made by a Member under subsection 4(a) for the Plan
Year for which they are made and shall be a subaccount of the Member's Salary
Reduction Account. If the Participating Companies do not make such contributions
or such contributions do not result in satisfaction of subsection 4(f)(i), then
the Committee shall direct the Trustee
21
<PAGE>
to distribute the "excess contribution" (as defined below) for such Plan Year
(plus any income and minus any loss allocable thereto for the Plan Year in which
the contributions were made as determined under the Plan's method for allocating
income and loss) within twelve months after the close of the Plan Year to the
"highly compensated employees" on the basis of the amount of contributions
attributable to each until the "excess contribution" is eliminated. The portion
of the "excess contribution" attributable to a "highly compensated employee" is
determined by reducing the dollar amount of contributions paid over to the Fund
on behalf of the "highly compensated employees", starting with the highest
dollar amount of such contributions, until the "excess contribution" is
eliminated. The amount of "excess contributions" to be distributed shall be
reduced by excess deferrals previously distributed for the taxable year ending
in the same Plan Year and excess deferrals to be distributed for a taxable year
shall be reduced by excess contributions previously distributed for the Plan
Year beginning in such taxable year. Any refund made to a Member in accordance
with this subsection shall be drawn from his Salary Reduction Account.
(iii) Additional Definitions. For purposes of this
subsection 4(f), the term "Member" shall mean each Employee eligible to make
Contributions under subsection 4(a) at any time during a Plan Year. The "actual
deferral percentage" for a specific group of Members for a Plan Year shall be
the average of the "actual deferral ratio" for each Member in the group for such
Plan Year. The "actual deferral ratio" for a particular Member for a Plan Year
shall be the ratio of the amount of contributions made under subsection 4(a) no
later than twelve months after the close of the Plan Year for such Member out of
amounts that would have been received by him in the Plan Year but for his
election under subsection 4(a) and which are allocated to the Member on or
before the last day of the Plan Year without regard to participation or
performance of services thereafter to the Member's "compensation" for such Plan
Year. For this purpose, "compensation" means compensation for service performed
for a Participating Company
22
<PAGE>
which is currently includable in gross income or which is excludable from gross
income pursuant to an election under a qualified cash or deferred arrangement
under section 401(k) of the Code or a cafeteria plan under section 125 of the
Code; provided, however, the Committee may elect to limit compensation for all
Members to amounts paid during the portion of the Plan Year during which the
Member was eligible to participate in the Plan or use any definition of
compensation permissible under section 414 of the Code and the regulations
thereunder. The "excess contribution" for any Plan Year is the excess of the
aggregate amount of contributions paid over to the Fund pursuant to subsection
4(a) on behalf of "highly compensated employees" for such Plan Year over the
maximum amount of such contributions permitted for "highly compensated
employees" under subsection 4(f)(i).
(iv) Aggregation of Contributions. The "actual
deferral ratio" for any Member who is a "highly compensated employee" for the
Plan Year and who is eligible to make elective contributions excludable from
income under sections 401(k) and 402(a)(8) of the Code to any plan maintained by
a Participating Company or a Related Entity shall be determined as if all such
contributions were made under this Plan.
(v) Aggregation of Plans. In the event that this Plan
satisfies the requirements of section 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other plans satisfy
the requirements of section 401(a)(4) or 410(b) of the Code only if aggregated
with this Plan, then subsection 4(f)(i) shall be applied by determining the
"actual deferral ratios" of Members as if all such plans were a single plan.
(vi) Testing Alternatives. To the extent permitted
by the Code, the Plan may treat contributions made under subsection 4(a) as
contributions made under subsection 4(d), and vice versa, to facilitate
satisfaction of any applicable nondiscrimination requirement.
23
<PAGE>
(g) Compliance with Participating Company Matching Contri-
butions Discrimination Tests.
(i) Rule. In no event shall the "actual contribution
percentage" (as defined below) for Members who are "highly compensated
employees" for any Plan Year bear a relationship to the "actual contribution
percentage" for Members who are not "highly compensated employees" which does
not satisfy either subsection 4(g)(i)(A) or (B) below. The requirement of this
subsection shall not apply to Members who participate in this Plan pursuant to a
collective bargaining agreement, and any such Members shall be excluded from the
testing group.
(A) The requirement shall be satisfied for
a Plan Year if the "actual contribution percentage" for the Plan Year for the
group of Members who are "highly compensated employees" for the Plan Year is not
more than the "actual contribution percentage" for the preceding Plan Year of
all Members who are not "highly compensated employees" for the preceding Plan
Year multiplied by 1.25.
(B) The requirement shall be satisfied for
a Plan Year if (1) the excess of the "actual contribution percentage" for the
Plan Year for the Members who are "highly compensated employees" for the Plan
Year over the "actual contribution percentage" of all Members who are not
"highly compensated employees" for the preceding Plan Year is not more than two
percentage points (or such lower amount as may be required by applicable
regulations under the Code) and (2) the "actual contribution percentage" for the
Plan Year for Members who are "highly compensated employees" for the Plan Year
is not more than the "actual contribution percentage" for the preceding Plan
Year of all Members who are not "highly compensated employees" for the preceding
Plan Year multiplied by two (or such lower multiple as may be required by
applicable regulations under the Code).
24
<PAGE>
(C) The Plan may test using the "actual
contribution percentage" for non-highly compensated employees for the current
Plan Year rather than the preceding Plan Year if the Administrator so elects in
accordance with applicable rules promulgated pursuant to the Code. The
Administrator may only revoke such an election in accordance with applicable
rules promulgated pursuant to the Code. Further, unless the Company makes an
election under section 401(m)(3) of the Code, the "actual contribution
percentage" of non-highly compensated employees for the first Plan Year shall be
3%.
(D) If the Company elects to apply sec-
tion 410(b)(4)(B) of the Code in determining whether the Plan satisfies the
requirements of subsection 4(g) for Plan Years, the Company may exclude from
consideration all non-highly compensated employees who would not have been
eligible to participate if the Plan contained the greatest age and service
requirements permitted under section 410(a)(1)(A) of the Code.
(ii) Refund. If the relationship of the "actual
contribution percentages" does not satisfy subsection 4(g)(i) for any Plan Year,
then the Administrator shall direct the Trustee to distribute the "excess
aggregate contribution" (as defined below) for such Plan Year (plus any income
and minus any loss allocable thereto for the Plan Year in which the
contributions were made as determined under the Plan's method for allocating
income and loss) within twelve months after the close of the Plan Year to the
"highly compensated employees" on the basis of the amount of contributions
attributable to each until the "excess aggregate contribution" is eliminated.
The portion of the "excess aggregate contribution" attributable to a "highly
compensated employee" is determined by reducing the dollar amount of
contributions paid over to the Fund on behalf of the "highly compensated
employees", starting with the highest dollar amount of such contributions, until
the "excess aggregate contribution" is eliminated. Any refund made to a Member
in accordance with this subsection shall be drawn from his Matching Account.
25
<PAGE>
Notwithstanding the foregoing, if a Member does not have a 100% nonforfeitable
right to his Matching Account under subsection 8(d)(ii), the forfeitable portion
of any amount withdrawn from his Matching Account shall be forfeited and the
vested portion shall be distributed to the Member.
(iii) Allocation of Forfeitures. Any amounts
forfeited by "highly compensated employees" under this subsection shall be
applied to reduce Participating Company contributions made pursuant to
subsection 4(d). Notwithstanding the foregoing, no forfeiture arising under this
subsection shall be allocated to the account of any "highly compensated
employee."
(iv) Additional Definitions. For purposes of this
subsection 4(g), the term "Member" shall mean each Employee not covered by a
collective bargaining agreement eligible to receive a matching contribution
under subsection 4(d) at any time during a Plan Year. The "actual contribution
percentage" for a specific group of Members for a Plan Year shall be the average
of the "actual contribution ratio" for each Member in the group for such Plan
Year. The "actual contribution ratio" for a particular Member for a Plan Year
shall be the ratio of the sum of (A) the amount of contributions made under
subsection 4(d) no later than twelve months after the close of the Plan Year for
such Member which are allocated to the Member on or before the last day of the
Plan Year without regard to participation or performance of services thereafter
plus (B) elective contributions of a nonhighly compensated employee which are
permitted to be treated as matching contributions under regulations promulgated
under section 401(m) of the Code and (C) after tax employee contributions which
are Annual Additions, to the Member's "compensation" for such Plan Year. For
this purpose, "compensation" means compensation for service performed for a
Participating Company which is currently includable in gross income or which is
excludable from gross income pursuant to an election under a qualified cash or
deferred arrangement under section 401(k) of the Code or a cafeteria plan under
section 125 of the Code; provided, however, the
26
<PAGE>
Administrator may elect to limit compensation for all Members to amounts paid
during the portion of the Plan Year during which the Member was eligible to
participate in the Plan or use any definition of compensation permissible under
section 414(s) of the Code and the regulations thereunder. The "excess aggregate
contribution" for any Plan Year is the excess of the aggregate amount of
matching contributions paid over to the Fund pursuant to subsection 4(d) on
behalf of "highly compensated employees" for such Plan Year over the maximum
amount of such matching contributions permitted for "highly compensated
employees" under subsection 4(g)(i).
(v) Aggregation of Contributions. The "actual
contribution ratio" for any Member who is a "highly compensated employee" for
the Plan Year and who is eligible to make after-tax contributions to any plan
subject to section 415 of the Code maintained by a Participating Company or a
Related Entity or to have employer matching contributions within the meaning of
section 401(m)(4)(A) of the Code allocated to his account under two or more
plans described in section 401(a) of the Code that are maintained by a
Participating Company or a Related Entity shall be determined as if all such
contributions were made under this Plan and each other plan.
(vi) Aggregation of Plans. In the event that this
Plan satisfies the requirements of section 401(a)(4) or 410(b) of the Code only
if aggregated with one or more other plans, or if one or more other plans
satisfy the requirements of section 401(a)(4) or 410(b) of the Code only if
aggregated with this Plan, then subsection 4(g)(i) shall be applied by
determining the "actual contribution ratios" of Members as if all such plans
were a single plan.
(vii) Aggregate Limit -- Multiple Use of Alterna-
tive Limitation. The provisions of section 1.401(m)-2(b) of the regulations
under section 401(m) of the Code are hereby incorporated by reference. If the
limitation thereof is exceeded, it shall be corrected through reduction of the
"actual
27
<PAGE>
contribution percentage" in the manner specified in subsection 4(g)(ii) with
respect to "highly compensated employees" eligible under both subsection 4(a)
and subsection 4(d) of the Plan.
(viii) Testing Alternatives. To the extent permit-
ted by the Code, the Plan may treat contributions made under subsection 4(a) as
contributions made under subsection 4(d), and vice versa, to facilitate
satisfaction of any applicable nondiscrimination requirement.
(h) Payroll Taxes. The Participating Companies shall withhold
from the Compensation of the Members and remit to the appropriate government
agencies such payroll taxes and income withholding as the Company determines is
or may be necessary under applicable statutes or ordinances and the regulations
and rulings thereunder.
(i) Rollovers
(i) Contributions. Each Employee eligible under
subsection 3(e) and each Member actively employed by a Participating Company may
contribute to the Fund an amount constituting an "eligible rollover
distribution" from a "qualified trust," both within the meaning of section
402(c)(4) of the Code, from a previous employer's retirement plan (or an
individual retirement account consisting solely of an "eligible rollover
distribution" from a "qualified trust").
(ii) Rollover Account. Each Member's contributions
under subsection 4(i)(i), as adjusted for investment gain or loss and income or
expense, constitute such Member's Rollover Account. A Member shall at all times
have a nonforfeitable interest in the portion of his Accrued Benefit derived
from his Rollover Account.
(iii) Refunds. If an Employee makes a contribution
under this subsection 4(i) which the Committee subsequently determines is not
eligible for contribution under section 402 of the Code,
28
<PAGE>
then the Committee shall take such corrective action as it determines is
necessary or appropriate under applicable law.
(j) Other Member Contributions. A Member shall not be
permitted to make contributions to the Plan other than as permitted under
subsection 4(a), 4(i) or 8(d)(iv).
(k) Deductibility. All Participating Company contributions are
expressly conditioned upon their deductibility for federal income tax purposes.
Nondeductible contributions shall be abated and to the extent permitted by
applicable law, refunded, starting with contributions made under subsection
4(d).
(l) Military Service. Notwithstanding any provision of this
Plan to the contrary, contributions and benefits with respect to qualified
military service shall be provided in accordance with section 414(u) of the
Code.
29
<PAGE>
5. MAXIMUM CONTRIBUTIONS AND BENEFITS
----------------------------------
(a) Defined Contribution Limitation. In the event that the
amount allocable to a Member from contributions to the Fund with respect to any
Plan Year would cause the Annual Additions allocated to any Member under this
Plan plus the Annual Additions allocated to such Member under any other plan
maintained by a Participating Company or a Related Entity to exceed for any
Limitation Year the lesser of (i) $30,000 (or, if greater, one-fourth of the
dollar limitation in effect under subsection 415(b)(1)(A) of the Code for such
Limitation Year) or (ii) 25% of such Member's compensation (as defined in
subsection 5(d)) for such Limitation Year, then such amount allocable to such
Member shall be reduced by the amount of such excess to determine the actual
amount of the contribution allocable to such Member with respect to such Plan
Year. If the excess amount results from a reasonable error in determining the
amount of contribution that may be made under subsection 4(a) without violating
the limitation of this subsection, then the excess amount with earnings
attributable thereto shall be refunded to the Member. If, (i) as a result of
allocution of forfeitures, (ii) a reasonable error in estimating a Member's
annual compensation (as defined in subsection 5(d)), or (iii) under other
limited facts and circumstances that the Commissioner of Internal Revenue finds
justify the availability of the remedy next following, the excess amount with
earnings attributable thereto allocable to a Member's Accrued Benefit shall be
held in a suspense account and shall be used to reduce contributions allocable
to the Member for the next Limitation Year (and succeeding Limitation Years as
necessary) provided the Member is covered by the Plan as of the end of the
Limitation Year. However, if the Member is not covered by the Plan as of the end
of the Limitation Year, then the excess amount shall be held unallocated in a
suspense account and shall be allocated, after adjustment for investment gains
or losses, among all Employees eligible to make
30
<PAGE>
contributions under subsection 4(a) for such Limitation Year as an equal
percentage of their Compensation for such Limitation Year. No excess amount may
be distributed to a Member or former Member.
(b) Combined Limitation. In addition to the limitation of
subsection 5(a), if a Participating Company or a Related Entity maintains or
maintained a defined benefit plan and the amount required to be contributed to
the Fund with respect to any Plan Year would cause the aggregate amount
allocated to any Member under all defined contribution plans maintained by any
Participating Company or Related Entity to exceed the maximum allocation as
determined in subsection 5(c), then such amount required to be contributed with
respect to such Member shall he reduced by the amount of such excess to
determine the actual amount of the contribution with respect to such Member for
such Plan Year. Notwithstanding the foregoing, if an excess amount is
contributed with respect to any Member, then the excess allocation shall be
reallocated or held in a suspense account in accordance with subsection 5(a).
The limitation of this subsection shall be applied to the Member's benefit from
the defined benefit plan prior to reduction of the Member's Annual Additions
under this Plan.
(c) Combined Limitation Computation. The maximum allocation is
the amount of Annual Additions which may be allocated to a Member's benefit
without permitting the sum of the defined benefit plan fraction (as hereinafter
defined) and the defined contribution plan fraction (as hereinafter defined)
from exceeding 1.0 for any Limitation Year. The defined benefit plan fraction
applicable to a Member for any Limitation Year is a fraction, the numerator of
which is the projected annual benefit of the Member under the plan determined as
of the close of the Limitation Year and the denominator of which is the lesser
of (i) the product of 1.25 multiplied by the maximum then permitted dollar
amount of straight life annuity payable under the defined benefit plan maximum
benefit provisions of the Code and (ii) the product of 1.4 multiplied by the
maximum permitted amount of straight life annuity, based on the Member's
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<PAGE>
compensation, payable under the defined benefit plan maximum benefit provisions
of the Code. For purposes of this subsection 5(c), a Member's projected annual
benefit is equal to the annual benefit, expressed in the form of a straight life
annuity, to which the Member would he entitled under the terms of the defined
benefit plan based on the assumptions that (i) the Member will continue
employment until reaching his normal retirement age under the plan (or current
age, if later) at a rate or compensation equal to that for the Limitation Year
under consideration and (ii) all other relevant factors used to determine
benefits under the plan for the Limitation Year under consideration will remain
constant for future Limitation Years. The defined contribution plan fraction
applicable to a Member for any Limitation Year is a fraction, the numerator of
which is the sum of the Annual Additions for all Limitation Years allocated to
the Member as of the close of the Limitation Year and the denominator of which
is the sum of the lesser, separately determined for each Limitation Year of the
Member's employment with a Participating Company or Related Entity, of (i) the
product of 1.25 multiplied by the maximum dollar amount of Annual Additions
which could have been allocated to the Member under the Code for such Limitation
Year and (ii) the product of 1.4 multiplied by the maximum amount, based on the
Member's compensation, of Annual Additions which could have been allocated to
the Member for such Limitation Year.
(d) Definition of "Compensation" for Code Limitations. For
purposes of the limitations on the allocation of Annual Additions to a Member
and maximum benefits under a defined benefit plan as provided for in this
Section 5, "compensation" for a Limitation Year shall mean the sum of amounts
paid by a Participating Company or a Related Entity to the Member with respect
to personal services rendered by the Member during the Limitation Year plus (i)
amounts received by the Member (A) through accident or health insurance or under
an accident or health plan maintained or contributed to by a Participating
Company or a Related Entity and which are includable in the gross income of the
Member, (B) through a
32
<PAGE>
plan contributed to by a Participating Company or a Related Entity providing
payments in lieu of wages on account of a Member's permanent and total
disability, or (C) as a moving expense allowance paid by a Participating Company
or a Related Entity and which arc not deductible by the Member for federal
income tax purposes; (ii) the value of a non-statutory stock option granted by a
Participating Company or a Related Entity to the Member to the extent included
in the Member's gross income for the taxable year in which it was granted; (iii)
the value of property transferred by a Participating Company or a Related Entity
to the Member which is includable in the Member's gross income due to an
election by the Member under section 83(b) of the Code; and (iv) elective
deferrals as defined in section 402(g)(3) of the Code and any amount which is
contributed or deferred by a Participating Company or Related Entity at the
election of an Employee and which is not included in gross income of the
Employee by reason of section 125 or 457 of the Code. "Compensation" shall not
include (i) contributions made by a Participating Company or a Related Entity to
a deferred compensation plan to the extent that, before application of the
limitations of section 415 of the Code to the plan, such contributions are not
includable in the Member's gross income for the taxable year in which
contributed, except as provided in the preceding provision; (ii) Participating
Company or Related Entity contributions made on behalf of a Member to a
simplified employee pension plan to the extent they are deductible by the Member
under section 219(h) of the Code, (iii) distributions from a deferred
compensation plan (except from an unfunded nonqualified plan when includable in
gross income), (iv) amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by a Member either becomes
freely transferable or is no longer subject to a substantial risk of forfeiture,
(v) amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified or incentive stock option, and (vi) other amounts
which receive special tax benefits such as
33
<PAGE>
premiums for group term life insurance (to the extent excludable from gross
income), except that elective deferrals under sections 402(g)(3), 125 or 457 of
the Code shall not be excluded.
(e) Transition Provision. Notwithstanding the foregoing
provisions of this Section 5, the benefit of a Member on January 1, 1987 under a
defined benefit pension plan shall not be less than it was on December 31, 1986
by reason of the reduction in the dollar limit of section 415(b) of the Code
which then became effective. However, amounts in excess of the limitation by
reason of changes in the terms and conditions of a defined benefit pension plan
made after May 5, 1986 shall not be preserved.
34
<PAGE>
6. ADMINISTRATION OF FUNDS
-----------------------
(a) Investment Control. The management and control of the
assets of the Plan shall be vested in the Trustee designated from time to time
by the Company through its Board of Directors; provided, however, the Company
through its Board or Directors may appoint one or more Investment Managers to
manage, acquire or dispose of any assets of the Plan. The Committee shall
instruct the Trustee or an Investment Manager to establish Investment Categories
for selection by the Members and may at any time add to or delete from the
Investment Categories.
(b) Parent Company Stock. The Committee shall establish an
Investment Category consisting primarily of Parent Company Stock. All dividends
or other distributions with respect thereto shall be applied to purchase
additional Parent Company Stock. Each Member's Matching Account shall be
invested in the Parent Company Stock Investment Category. The Trustee may
acquire the Parent Company Stock from any source, including the public market,
in private transactions, from the Company's treasury shares or from authorized
but unissued shares and shall acquire or liquidate Parent Company Stock in
accordance with procedures adopted under the Trust Agreement from time to time.
(c) Member Elections. In accordance with rules established by
the Committee and subject to subsection 6(b), each Member shall have the right
to designate the Investment Category or Categories in which new contributions to
and prior balances in the Member's Salary Reduction Account and Rollover Account
are invested. Any designation or change in designation of Investment Category
shall be made in 1% increments in such manner and subject to such limitations as
the Committee shall from time to time specify. The designation or change shall
become effective as of the Entry Date specified by the Committee on or after
which it is received. Any election of Investment Category by any Member shall,
on its effective date, cancel any prior election. A Member's Matching Account
shall be invested in the Parent
35
<PAGE>
Company Stock Investment Category. A Member shall have no right to direct
investment of his Matching Account. The limited right to elect Investment
Categories as Set forth herein shall be the sole and exclusive investment power
granted to Members. The Committee may limit the right of a Member (i) to
increase or decrease his contributions to a particular Investment Category, (ii)
to transfer amounts to or from a particular Investment Category or (iii) to
transfer amounts between particular Investment Categories, if such limitation is
required by the rules establishing an Investment Category. The Committee may
promulgate separate accounting and administrative rules to facilitate the
establishment or maintenance of an Investment Category.
(d) No Member Election. If a Member does not make a written
election of Investment Category, then, except as provided at subsection 6(b),
the Committee shall direct that all amounts allocated to such Member be invested
in the Investment Category which, in the opinion of the Committee, best protects
principal.
(e) Facilitation. Notwithstanding any instruction from any
Member for investment of funds in an Investment Category as provided for herein,
the Trustee shall have the right to hold uninvested or invested in a short-term
investment fund any amounts intended for investment or reinvestment until such
time as investment may be made in accordance with subsection 6(b) or 6(c) and
the Trust Agreement.
(f) Valuations. The Fund and each Investment Category shall be
valued at fair market value as of each Valuation Date.
(g) Allocation of Gain or Loss. The Trustee shall maintain a
separate account for each Member investment in each Investment Category.
36
<PAGE>
(h) Bookkeeping. The Committee shall direct that separate
bookkeeping accounts be maintained to reflect each Member's Salary Reduction
Account, elective contributions under subsection 4(a), qualified nonelective
contribution, Matching Account and Rollover Account.
37
<PAGE>
7. BENEFICIARIES AND DEATH BENEFITS.
--------------------------------
(a) Designation of Beneficiary. Each Member shall have the
right to designate one or more beneficiaries and contingent beneficiaries to
receive any benefit to which such Member may be entitled hereunder in the event
of the death of the Member prior to the complete distribution of such benefit by
filing a written designation with the Committee on the form prescribed by the
Committee. Such Member may thereafter designate a different beneficiary at any
time by filing a new written designation with the Committee. Notwithstanding the
foregoing, if a married Member designates a beneficiary other than his spouse,
such designation shall not he valid unless the spouse consents thereto in
writing witnessed by a notary public or authorized representative of the Plan. A
spouse's consent given in accordance with the Committee's rules shall be
irrevocable by the spouse with respect to the beneficiary then designated by the
Member unless the Member makes a new beneficiary designation. Any written
designation shall become effective only upon its receipt by the Committee or its
designee. If the beneficiary designated pursuant to this subsection dies on or
before the commencement of distribution of benefits and the Member fails to make
a new designation, then his beneficiary shall be determined pursuant to
subsection 7(b). Notwithstanding the above, to the extent provided in a
qualified domestic relations order (within the meaning of section 414(p) of the
Code) the former spouse of the Member may he treated as the spouse of the Member
for purposes of this subsection, and the current spouse will not be treated as
the Member's spouse for such purposes.
(b) Beneficiary Priority List. If (i) a Member omits or fails
to designate a beneficiary, (ii) no designated beneficiary survives the Member
or (iii) the Committee determines that the Member's beneficiary designation is
invalid for any reason, then the death benefits shall be paid to the Member's
surviving spouse, or if the Member is not survived by his spouse, then to the
Member's estate. If the
38
<PAGE>
Member's designated beneficiary dies after the Member but before distribution of
benefits, then the death benefits shall be paid to the beneficiary's estate.
(c) Proof of Death. The Committee may, as a condition
precedent to making payment to any beneficiary, require that a death
certificate, burial certificate or other evidence of death acceptable to it be
furnished.
(d) Divorce. If a Member designates his spouse as beneficiary
and subsequent to making the designation a decree of divorce is issued which
terminates the Member's marriage to such spouse, then the Member's prior
beneficiary designation shall be invalid and, unless the Member makes a new
designation, the Member shall he treated as having died without designating a
beneficiary.
39
<PAGE>
8. BENEFITS FOR MEMBERS
--------------------
The following are the only post-employment benefits provided by the
Plan:
(a) Retirement Benefit
(i) Valuation. Each Member who retires on or
after his Normal Retirement Date shall be entitled to a retirement benefit equal
to 100% of the Member's Accrued Benefit on the Valuation Date as of which his
Accrued Benefit is liquidated for distribution. Distribution will be made at the
time and in the manner provided by Section 9. The Accrued Benefit of a Member
who continues in Service after his Normal Retirement Date shall become
nonforfeitable upon his attaining his Normal Retirement Date.
(ii) Late Retirement. A Member who continues
employment beyond his Normal Retirement Date shall continue to participate in
the Plan.
(b) Death Benefit. In the event of the death of a Member, 100%
of the Member's Accrued Benefit on the Valuation Date after his death as of
which his Accrued Benefit is liquidated for distribution shall constitute his
death benefit and shall be distributed pursuant to Sections 7 and 9 (i) to his
designated beneficiary or (ii) if no designation of beneficiary is then in
effect, to the beneficiary determined pursuant to subsection 7(b).
(c) Disability Benefit. In the event a Member suffers a
Disability before actual retirement, 100% of the Member's Accrued Benefit on the
Valuation Date after his Disability occurs as of which his Accrued Benefit is
liquidated for distribution shall constitute his Disability benefit.
(d) Termination of Employment Benefit
(i) Valuation. In the event a Member terminates
employment with all Participating Companies and all Related Entities for reasons
other than those covered by subsections 8(a)- 8(c) above, the Member shall be
entitled to receive a benefit equal to 100% of his Accrued Benefit derived from
his Salary Reduction and Rollover Accounts and the nonenforceable portion (as
determined under the vesting schedule at subsection 8(d)(ii)) of the Member's
Matching Account, on the Valuation Date on which his Accrued Benefit is
liquidated for distribution.
(ii) Vesting Schedule. The nonforfeitable portion
of a Member's Accrued Benefit derived from his Matching Account is determined
from the table below.
Period of Service Nonforfeitable Percentage
----------------- -------------------------
Less than 3 year 0%
3 years or more 100%
(iii) Crediting Service. For purposes of determin-
ing Service under subsection 8(d)(ii), the following rules shall apply.
(A) If a Member has a Break in Service,
then his Period of Service thereafter shall not be taken into account for
purposes of determining the nonforfeitable percentage of the Member's Accrued
Benefit derived from Participating Company contributions which accrued prior to
such Break in Service.
(B) If a Member has a Break in Service
and no nonforfeitable interest, then his Periods of Service prior to such Break
in Service shall not be credited for any purpose.
(C) In all other cases, a Member shall
receive credit for all his Periods of Service.
(e) Time of Forfeiture. The nonvested portion of the
Matching Account of a Member who separates with no vested interest therein shall
be forfeited on the date of separation, subject to the right
40
<PAGE>
to restoration as described below. Forfeitures shall be applied to offset the
Participating Company matching contributions for the Plan Year in which the
forfeiture occurs. If a Member has no nonforfeitable interest in his Matching
Account upon termination of employment and the Member returns to employment
covered by the Plan before suffering a Break in Service, the Member's Matching
Account shall be restored in an amount equal to the dollar amount of the
forfeiture, unadjusted by gains or losses subsequent to the forfeiture.
Restoration shall be made first from forfeitures in the Plan Year of repayment
and second from Participating Company contributions.
41
<PAGE>
9. DISTRIBUTION OF BENEFITS
------------------------
(a) Commencement
(i) Vested and Retirement Benefit. Generally, vested
and retirement benefits shall begin to be paid as soon after the Member's
termination of employment as is administratively feasible, but not sooner than
30 days after the Member receives the notice required by section 1.411(a)-11(c)
of the regulations under section 411(a)(11) of the Code unless the Member
receives written notice that he has a right to a period of at least 30 days
after receipt of the notice to consider whether or not to elect a distribution
and affirmatively elects after receipt of the notice to accept a distribution
rather than the rollover provided for under subsection 9(i). In addition, if the
Member's nonforfeitable Accrued Benefit exceeds $5,000, distribution of benefits
shall not begin unless the Member consents to such distribution in writing. If
the Member does not consent to the distribution, his Accrued Benefit shall be
retained in the Fund. Distribution shall commence as soon as administratively
feasible after the Member's request for distribution or, if earlier, when a
required distribution date under subsection 9(a)(ii) occurs.
(ii) Limitation and Required Commencement Date.
In no event other than with the written consent of the Member shall the payment
of benefits commence later than the 60th day after the close of the Plan Year in
which the latest of the following occurs:
(A) The Member's Normal Retirement Date;
(B) The Member's termination of employment;
or
(C) The tenth anniversary of the year in
which the Member first commenced participation in the Plan.
Furthermore, distribution of benefits must commence on or before the April 1st
of the calendar year following the calendar year in which the Member attains age
70-1/2 or has a Severance Date, whichever
42
<PAGE>
is later; provided, however, if a Member was a 5% owner (as defined in section
416 of the Code) with respect to the Plan at any time during the Plan Year
ending in the calendar year in which he attained age 70-1/2, then distribution
of benefits must commence no later than the April 1st of the calendar year
following the calendar year in which the Member attains age 70-1/2.
(iii) Death Benefits. The payment of death benefits
under the Plan shall be made at such time as the Member's beneficiary shall
request but not later than the December 31st of the fifth calendar year
following the calendar year or the Member's date of death.
(b) Benefit Form. All benefits shall be distributed in
one lump sum.
(c) Benefit Election. The election or change of election
of a time of distribution of benefits shall be in writing on forms prescribed by
the Committee.
(d) Distributions in Kind. A Member may direct that the
Portion of his Accrued Benefit held in Parent Company Stock be distributed to
him in kind, except that the value of a fractional share shall be distributed in
cash.
(e) Deferred Payments. If payment of benefits is deferred, the
undistributed value of the benefit shall be retained in the Fund subject to the
administrative provisions of the Plan and the Trust Agreement.
(f) Withholding. All distributions under the Plan are subject
to federal, state and local tax withholding as required by applicable law as in
effect from time to time.
(g) Compliance with Code Requirements. All forms of benefit
distributions and required benefit commencement dates shall be subject to and in
compliance with section 401(a)(9) of the Code and the regulations thereunder,
including the minimum distribution incidental benefit requirement. All required
distributions under section 401(a)(9) of the Code shall be made in one lump sum.
The provisions
43
<PAGE>
of section 401(a)(9) of the Code and the regulations thereunder, including
proposed regulation sections 1.401(a)(9)-l and 2, shall override any provision
of the Plan inconsistent therewith.
(h) Distribution Limitations. Amounts contributed pursuant to
subsection 4(a) of the Plan shall not be distributed earlier than upon
occurrence of one of the following events:
(i) The Member's retirement, death, disability or
separation from service (within the meaning of sections 401(a) and (k) of the
Code);
(ii) The termination of the Plan without establish-
ment or maintenance of another defined contribution plan (other than an ESOP or
SEP);
(iii) The Member's attainment of age 59-1/2 or
suffering hardship;
(iv) The sale or other disposition by a Participa-
ting Company to an unrelated corporation of substantially all of the assets used
in a trade or business, but only with respect to employees who continue
employment with the acquiring corporation and provided the acquiring corporation
does not maintain the Plan after the disposition; and
(v) The sale or other disposition by a Participa-
ting Company of its interest in a subsidiary to an unrelated entity but only
with respect to employees who continue employment with the subsidiary and
provided the acquiring entity does not maintain the Plan after the disposition.
Subsections 9(h)(ii), (iv) and (v), above, apply only if the distribution is in
the form of a lump sum. Subsections 9(h)(iv) and (v), above, apply if the
transferor corporation continues to maintain the Plan. This subsection 9(h)
shall not be construed as giving a Member a right to a distribution not
otherwise expressly provided for by another subsection of the Plan.
(i) Rollover Election. Notwithstanding any provision or the
Plan to the contrary that would otherwise limit a "distributee's" election under
this subsection, a "distributee" may elect, at the time
44
<PAGE>
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". For purposes of this
subsection, the definitions specified below shall apply:
(i) 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 annually) made for the life
(or life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; any distribution to the extent
such distribution is required under section 401(a)(9) of the Code; any hardship
distribution described in section 401(k)(2)(B)(i)(IV) of the Code; and the
portion of any distribution that is not includable in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(ii) Eligible Retirement Plan. An eligible retire-
ment 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 an individual retirement annuity.
(iii) 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 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 off the
spouse or former spouse.
45
<PAGE>
(iv) Direct Rollover. A direct rollover is a pay-
ment by the Plan to the eligible retirement plan specified by the distributee.
46
<PAGE>
10. IN-SERVICE DISTRIBUTIONS.
------------------------
(a) General Rule. Except as provided in subsections
10(b)-10(d) below, a Member shall not be permitted to receive any distribution
from the Plan prior to his Severance Date.
(b) Elective Distributions. A Member may elect that all or a
portion of his Rollover Account be distributed to him as soon as
administratively feasible following his delivery of a written request to the
Committee on the form the Committee prescribes for that purpose.
(c) Age 59-1/2. A Member who has attained age 59-1/2 may elect
that all or a portion of his Salary Reduction Account be distributed to him as
soon as administratively feasible following his delivery of a written request to
the Committee on the form the Committee prescribes for that purpose.
(d) Hardship. A Member shall have the right to receive an
in-service distribution from his Salary Reduction Account on account of
hardship. A distribution is on account of hardship only if the distribution both
(i) is made on account of an immediate and heavy financial need of the Member
and (ii) is necessary to satisfy such financial need.
(i) Need. A distribution shall be deemed to be made
on account of an immediate and heavy financial need of the Member if the
distribution is on account of (A) medical expenses described in section 213(d)
of the Code incurred or to be incurred by the Member, the Member's spouse or any
dependent of the Member (as defined in section 152 of the Code); (B) purchase
(excluding mortgage payments) of a principal residence for the Member; (C)
payment of tuition and related educational fees, including room and board
expenses, for the next twelve months of post-secondary education for the Member,
the Member's spouse, child or any dependent of the Member (as defined in section
152 of the Code); (D) the need to prevent the eviction of the Member from his
principal residence or foreclosure on the mortgage of the Member's principal
residence; or (E) such other reason as the
47
<PAGE>
Commissioner of Internal Revenue specifies as a deemed immediate and heavy
financial need through the publication of regulations, revenue rulings, notices
or other documents of general applicability.
(ii) Satisfaction of Need. A distribution shall
be deemed to be necessary to satisfy an immediate and heavy financial need of a
Member only if all of the requirements or conditions set forth below are
satisfied or agreed to by the Member, as appropriate.
(A) The distribution is not in excess of
the amount of the immediate and heavy financial need of the Member, which amount
shall be deemed to include anticipated federal, state and local income taxes and
penalties.
(B) The Member has obtained all distri-
butions, other than hardship distributions, and all nontaxable loans currently
available under all plans subject to section 415 of the Code maintained by any
Participating Company or any Related Entity.
(C) The Member's elective contributions
under this Plan and each other deferred compensation plan (within the meaning of
regulations under section 401(k) of the Code) maintained by a Participating
Company or a Related Entity in which the Member participates shall be suspended
for twelve full calendar months after receipt of the distribution.
(D) The Member does not (and is not per-
mitted to) make elective contributions under this Plan or any other plan main-
tained by a Participating Company or a Related Entity for the 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 the Member's elective contributions for the taxable
year of the hardship distribution.
(iii) Limitations. Distributions on account of
hardship shall be limited, to the lesser of the value of the Member's Salary
Reduction Account or the sum of the Member's elective
48
<PAGE>
contributions under subsection 4(a). The Committee may prescribe rules with
respect to the order of Investment Category from which the distribution shall be
paid.
(iv) Prior Withdrawal. A Member shall not be per-
mitted to receive a distribution under this subsection 10(d) until be has
withdrawn all amounts which are withdrawable under subsections 10(b) and (c).
(v) Fees. The Committee may adopt a rule pursuant
to subsection 2(h) imposing a reasonable fee on a Member who elects a
distribution under subsection 10(d) for processing his distribution.
49
<PAGE>
11. LOANS.
-----
(a) Availability. The Committee shall direct that a bona fide
loan be made from the Fund to any Member who requests the same, provided the
Member (i) pays any application or processing fee which the Committee uniformly
charges with respect to loan requests and (ii) on the date the loan would be
disbursed is employed by a Participating Company or Related Entity. All such
loans shall be subject to the requirements of this Section which shall be deemed
to include written rules prescribed by the Committee from time to time with
respect to loans. Eligibility for and the rules with respect to loans shall be
uniformly applied.
(b) Minimum Requirements. Loans shall be subject to the fol-
lowing rates:
(i) Principal Amount. The principal amount of the
loan to a Member may not be less than $1,000 and may not exceed, when added to
the outstanding balance of all other loans to the Member from the Plan, the
lesser of (A) $50,000, reduced by the excess of the highest outstanding balance
of loans to the Member from the Plan during the one-year period ending on the
day before the date on which such loan was made over the outstanding balance of
loans to the Member from the Plan on the date on which such loan is made or (B)
50% of the Member's nonforfeitable Accrued Benefit on the date on which the loan
is made. Notwithstanding the foregoing limitation, the principal amount of' any
loan shall not include any amount in the Member's Matching Account.
(ii) Maximum Term. The term of the loan may not
exceed five years. If a Member's employment with all Participating Companies and
Related Entities terminates for any reason, the loan shall be due and payable on
the last day of the calendar quarter following the calendar quarter in which
employment terminated.
50
<PAGE>
(iii) Interest Rate. The interest rate shall be a
rate charged by commercial lenders for comparable loans on the date the loan
request is approved, as determined by the Committee.
(iv) Repayment. The loan shall be repaid over its
term in level installment payments corresponding to the Member's payroll period.
As a condition precedent to approval of the loan, the Member shall be required
to authorize payroll withholding in the amount of each installment for all
periods he is employed by a Participating Company. Notwithstanding the
foregoing, the loan repayment of a Member who is in qualified military service
within the meaning of section 414(u) of the Code shall be suspended to the
extent permitted by section 414(u) of the Code.
(v) Collateral. The loan shall be secured by 50%
of the Member's nonforfeitable Accrued Benefit;
(vi) Distribution of Accrued Benefit. If the non-
forfeitable portion of a Member's Accrued Benefit is to be distributed prior to
the Member's payment of all principal and accrued interest due on any loan to
such Member, the distribution shall include as an offset the amount of unpaid
principal and interest due on the loan and the note shall be distributed.
(vii) Notes. All loans shall be evidenced by a note
containing such terms and conditions as the Committee shall require.
(viii) Multiple Loans. A Member shall be permitted
only one outstanding loan at any time and may apply for only one loan during any
twelve-month period.
(ix) Fees. The Committee may adopt a rule pursuant to
subsections, 2(h) and 11(a) of the Plan imposing a reasonable fee on a Member
who borrows under this Section 11 for processing his loan application, preparing
his loan documentation or administering his loan.
51
<PAGE>
(c) Accounting. The Committee may prescribe rules with respect
to the order of the Accounts and Investment Categories from which the principal
amount of any loan shall be drawn. The loan shall be treated as a separate
Investment Category of the borrowing Member. All payments of principal and
interest with respect to such loan shall be credited to the borrowing Member,
with repayment of principal credited to the Member's Accounts from which it was
withdrawn in the order the Committee prescribes. The repayment shall be invested
in accordance with the Member's current election for new contributions.
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12. TITLE TO ASSETS.
---------------
No person or entity shall have any legal or equitable right or interest
in the contributions made by any Participating Company, or otherwise received
into the Fund, or in any assets of the Fund, except as expressly provided in the
Plan.
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13. AMENDMENT AND TERMINATION.
-------------------------
(a) Amendment. The provisions of this Plan may be amended by
the Board of Directors (or its delagee as authorized by subsection 2(d)) from
time to time and at any time in whole or in part, provided that no amendment
shall be effective unless the Plan as so amended shall be for the exclusive
benefit of the Members and their beneficiaries, and that no amendment shall
operate to deprive any Member of any rights or benefits accrued to him under the
Plan prior to such amendment. No amendment to the Plan's vesting schedule shall
reduce the nonforfeitable percentage of any Member to an amount less than it was
on the later of the amendment's effective date or adoption date as determined
without regard to such amendment. Further, each Member who has completed three
Years of Service on the later of the date an amendment to the Plan's vesting
schedule is adopted or effective shall have his nonforfeitable percentage
determined without regard to the amendment if such provides a greater
nonforfeitable percentage.
(b) Termination. While it is the Company's intention to
continue the Plan in operation indefinitely, the Company nevertheless expressly
reserves the right by action of the Board of Directors to terminate the Plan in
whole or in part or discontinue contributions. Any such termination, partial
termination or discontinuance of contributions shall be effected only upon
condition that such action is taken as shall render it impossible for any part
of the corpus of the Fund or the income therefrom to be used for, or diverted
to, purposes other than the exclusive benefit of the Members and their
beneficiaries.
(c) Conduct on Termination. If the Plan is to be terminated at
any time, the Company shall give written notice to the Trustee which shall
thereupon revalue the assets of the Fund and the accounts of the Members as, of
the date of termination, partial termination or discontinuance of contributions
and, after discharging and satisfying any obligations of the Plan, shall
allocate all unallocated
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assets to the Accrued Benefits of the Members at the date of termination,
partial termination or discontinuance of contributions in accordance with
subsection 6(g). Upon termination, partial termination or discontinuance of
contributions, the Accrued Benefits of Members affected thereby shall become
fully vested and shall not thereafter be subject to forfeiture in whole or in
part. The Committee shall instruct the Trustee to continue to control and manage
the Fund for the benefit of Members to whom distributions will be made at the
time and in the manner provided in Section 9. Notwithstanding the foregoing,
incident to a termination or a discontinuance of contributions, the Company may
amend the Plan and the Trust Agreement to provide for distribution of Accrued
Benefits to each affected Member provided such distribution does not violate any
applicable provision of subsection 9(h) of the Plan or section 401(a) or 401(k)
of the Code.
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14. LIMITATION OF RIGHTS.
--------------------
(a) Alienation. None of the payments, benefits or rights of
any Member shall be subject to any claim of any creditor of such Member and, in
particular, to the fullest extent permitted by law, shall be free from
attachment, garnishment, trustee's process, or any other legal or equitable
process available to any creditor of such Member. No Member shall have the right
to alienate, anticipate, commute, pledge, encumber or assign any of the benefits
or payments which be may expect to receive, contingently or otherwise, under
this Plan, except the right to designate a beneficiary or beneficiaries in
accordance with the Plan. This subsection shall not apply to the enforcement of
a federal tax levy made pursuant to the Code, the collection by the United
States on a judgment resulting from an unpaid tax assessment, the pledging of a
Member's Accrued Benefit as security for a loan made to such Member under
Section 11 or any other exception set forth in the regulations under section
401(a)(13) of the Code.
(b) Qualified Domestic Relations Order Exception. Subsection
14(a) shall not apply to the creation, assignment or recognition of a right to
any benefit payable with respect to a Member under a qualified domestic
relations order within the meaning of section 414(p) of the Code.
Notwithstanding Sections 8-10, distribution to an alternate payee pursuant to a
qualified domestic relations order shall be made (i) at the time specified in
such order or (ii) if the order permits, as soon after the Committee approves
the order as is administratively feasible provided such distribution is
permitted under applicable provisions of the Code.
(c) Employment. Neither the establishment of the Plan, nor any
modification thereof, nor the creation of any fund, trust or account, nor the
payment of any benefit shall be construed as giving any Member or Employee, or
ally person whomsoever, any legal or equitable right against any Participating
Company, the Trustee or the Committee, unless such right shall be specifically
provided for in the Trust
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Agreement or the Plan or conferred by affirmative action of the Company, the
Trustee or the Committee in accordance with the terms and provisions of the Plan
or as giving any Member or Employee the right to be retained in the employ of
any Participating Company. All Members and other Employees shall remain subject
to discharge to the same extent as if the Plan had never been adopted.
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15. MERGERS, CONSOLIDATIONS OR TRANSFERS OF PLAN ASSETS
---------------------------------------------------
In the case of any Plan merger or Plan consolidation with, or transfer
of assets or liabilities of the Plan to, any other plan, each Member in the Plan
must be entitled to receive a benefit immediately after the merger,
consolidation, or transfer (if the Plan were then to terminate) which is equal
to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had been
terminated).
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16. PARTICIPATION BY RELATED ENTITIES.
---------------------------------
(a) Commencement. Any entity which is a Related Entity with
respect to the Company may, with the permission of the Board of Directors, elect
to adopt this Plan and the accompanying Trust Agreement. If the Board of
Directors designates a Related Entity as a Participating Company, then it shall
be deemed a Participating Company without the necessity for action by its
separate board of directors.
(b) Termination. The Company may, by action of the Board of
Directors, determine at any time that any such Participating Company shall
withdraw and establish a separate plan and fund. The withdrawal shall be
perfected by a duly executed instrument delivered to the Trustee instructing the
Trustee to segregate the assets of the Fund allocable to the Employees of such
Participating Company and pay them over to the separate fund. On the date a
Participating Company ceases to be a Related Entity, its participation in the
Plan shall terminate and Members in its employ shall be treated as having a
Severance Date; however, no affected Member shall be eligible for distribution
of his Accrued Benefit unless the Committee determines that distribution will
not adversely affect the Plan's qualified status under the Code. Alternatively,
the Board of Directors may, but is not required to, provide for a transfer in
accordance with Section 15 of the Accrued Benefits of affected Members to a
separate plan which the former Related Entity adopts.
(c) Single Plan. The Plan shall at all times be administered
and interpreted as a single plan for the benefit of the Employees of all
Participating Companies.
(d) Delegation of Authority. Each Participating Company, by
adopting (or being deemed to have adopted) the Plan, acknowledges that the
Company has all the rights and duties thereof under the Plan and the Trust
Agreement, including the right to amend the same.
59
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17. TOP-HEAVY REQUIREMENTS.
----------------------
(a) General Rule. For any Plan Year in which the Plan is a
top-heavy plan or included in a top-heavy group, as determined under subsection
17(b), the special requirements of this Section shall apply.
(b) Calculation of Top-Heavy Status. The Plan shall be a
top-heavy plan (if it is not included in an "aggregation group") or a plan
included in a top-heavy group (if it is included in an "aggregation group") with
respect to any Plan Year if the sum as of. the "determination date" of the
"cumulative accounts" of "key employees" for the Plan Year exceeds 60% of a
similar sum determined for all "employees," excluding "employees" who were "key
employees" in prior Plan Years only.
(c) Definitions. For purposes of this Section 17, the
following definitions shall apply to be interpreted in accordance with the
provisions of section 416 of the Code and the regulations thereunder;
(i) "Aggregation Group" shall mean the plans (if
a Participating Company or a Related Entity included below within the following
categories:
(A) each such plan in which a "key employee"
is a participant including a terminated plan in which a "key employee" was a
participant within the five-years ending on the "determination date";
(B) each other such plan which enables any
plan in subsection (A) above to meet the requirements of section 401(a)(4) or
410 of the Code; and
(C) each other plan not required to be
included in the "aggregation group" which the Company elects to include in the
"aggregation group" in accordance with the "permissive
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aggregation group" rules of the Code if such group would continue to meet the
requirements of sections 401(a) and 410 of the Code with such plan being taken
into account.
(ii) "Cumulative Account" for any "employee" shall
mean the sum of the amount of his accounts under this Plan plus all defined
contribution plans included in the "aggregation group" (if any) as of the most
recent valuation date for each such plan within a twelve-month period ending on
the "determination date," increased by any contributions due after such
valuation date and before the "determination date" plus the present value of his
accrued benefit under all defined benefit pension plans included in the
"aggregation group" (if any) as of the "determination date." For a defined
benefit plan, the present value of the accrued benefit as of any particular
"determination date" shall be the amount determined under (A) the method, if
any, that uniformly applies for accrual purposes under all plans maintained by
the Participating Companies and all Related Entities, or (B) if there is no such
method, as if such benefit accrued not more rapidly than under the slowest
accrual rate permitted under the fractional accrual rule of section 411
(b)(1)(C) of the Code, as of the most recent valuation date for the defined
benefit plan, under actuarial equivalent factors specified therein, which is
within a twelve-month period ending on the "determination date." For this
purpose, the valuation date shall be the date for computing plan costs for
purposes of determining the minimum funding requirement under section 412 of the
Code. "Cumulative accounts" of "employees" who have not performed services for
any Participating Company or a Related Entity for the five-year period ending on
the "determination date" shall be disregarded. An "employee's" "cumulative
account" shall be increased by the aggregate distributions during the five-year
period ending on the "determination date" made with respect to him under any
plan in the aggregation group. Rollovers and direct plan-to-plan transfers to
this Plan or to a plan in the "aggregation group" shall
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<PAGE>
be included in an "employee's" "cumulative account" unless the transfer is
initiated by the "employee" and made from a plan maintained by an employer which
is not a Participating Company or a Related Entity.
(iii) "Determination Date" shall mean with respect to
any Plan Year the last day of the preceding Plan Year, except that the
"determination date" for the first Plan Year shall be the last day of that Plan
Year.
(iv) "Employee" shall mean any person (including a
beneficiary thereof) who has or had an accrued benefit held under this Plan or a
plan in the "aggregation group" including this Plan at any time during the
current or any one of the four preceding Plan Years. Any "employee" other than a
"key employee" described in subsection 17(c)(v) shall be considered a "non-key
employee" for purposes of this Section 17.
(v) "Key Employee" shall mean any "employee" or
former "employee" (including a beneficiary thereof) who is, at any time during
the Plan Year, or was, during any one of the four preceding Plan Years any one
or more of the following:
(A) an officer of a Participating Company
or a Related Entity whose compensation (as defined in subsection 5(d)) exceeds
50% of the dollar limitation in effect under section 415(b)(1)(A) of the Code,
unless 50 other such officers (or, if lesser, a number of such officers equal to
the greater of three or 10% of the "employees") have higher annual compensation;
(B) one of the ten persons employed by a
Participating Company or a Related Entity both having annual compensation (as
defined in subsection 5(d)) greater than the limitation in effect under section
415(c)(1)(A) of the Code, and owning (or considered as owning within the meaning
of section 318 of the Code) the largest interests (but at least more than a 0.5%
interest) in the Participating
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Companies and all Related Entities. For purposes of this subsection (B), if two
"employees" have the same interest, the one with the greater compensation shall
be treated as owning the larger interest;
(C) any person owning (or considered as
owning within the meaning of section 318 of the Code) more than 5% of the
outstanding stock of all Participating Companies or Related Entities or stock
possessing more than 5% of the total combined voting power of such stock;
(D) a person who would be described in
subsection (C) above if 1% were substituted for 5 % each place the same appears
in subsection (C) above, and who has annual compensation of more than $150,000.
For purposes of determining ownership under this subsection, section
318(a)(2)(C) of the Code shall be applied by substituting 5% for 50%.
(d) Combined Benefit Limitation. For purposes of the
calculation of the combined limitation of subsection 5(c), "1.0" shall be
substituted for "1.25" each place the same appears in that subsection.
(e) Vesting. The nonforfeitable portion of a Member's Accrued
Benefit derived from his Matching Account shall continue to vest according to
the schedule set forth in subsection 8(d)(ii).
(f) Minimum Contribution. Minimum Participating Company
contributions for a Member who is not a "key employee" shall be required in an
amount equal to the lesser of 3% of compensation (as defined in subsection 5(d))
or the highest percentage of such compensation limited to $150,000 (or an
increased amount resulting from a cost of living adjustment under section 415(d)
of the Code) contributed for any "key employee" under subsections 4(a) and 4(d).
For purposes of meeting the minimum contribution requirement, employer social
security contributions and elective contributions on behalf of "employees" other
than "key employees" shall be disregarded. Each "non-key employee" of a
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<PAGE>
Participating Company who has not separated from service at the end of the Plan
Year and who has satisfied the eligibility requirements or subsection 3(a) shall
receive any minimum contribution provided under this Section 17 without regard
to (i) whether he is credited with 1,000 Hours of Service in the Plan Year, (ii)
earnings level for the Plan Year or (iii) whether be elects to make
contributions under subsection 4(a). If an "employee" participates in both this
Plan and another defined contribution plan maintained by a Participating Company
or a Related Entity, the minimum benefit shall be provided under the other plan.
Furthermore, if an "employee" participates in both this Plan and a defined
benefit plan maintained by a Participating Company or a Related Entity, the
minimum benefit shall be provided under the defined benefit plan.
64
<PAGE>
18. MISCELLANEOUS.
-------------
(a) Incapacity. If the Committee receives a copy of a
certified court order, or other binding legal certification, that a person
entitled to receive any benefit payment is under a legal disability or is
incapacitated in any way so as to be unable to manage his financial affairs, the
Committee shall direct that payments be made to such person's legally appointed
guardian or other representative. Any payment of a benefit in accordance with
the provisions of this subsection shall be a complete discharge of any liability
to make such payment.
(b) Reversions. In no event, except as provided herein, shall
the Trustee return to a Participating Company any amount contributed by it to
the Plan.
(i) Mistake of Fact. In the case of a contribution
made by a good faith mistake or fact, the Trustee shall return the erroneous
portion of the contribution, without increase for investment earnings, but with
decrease for investment losses, if any, within one year after payment of the
contribution to the Fund.
(ii) Deductibility. To the extent deduction of any
contribution determined by the Company to be deductible is disallowed, the
Trustee shall return that portion of the contribution, without increase for
investment earnings but with decrease for investment losses, if any, for which
deduction has been disallowed within one year after the disallowance of the
deduction.
(iii) Limitation. No return of contribution shall be
made under this subsection which adversely affects the Plan's qualified status
under regulations, rulings or other published positions of the Internal Revenue
Service or reduces a Member's Accrued Benefit below the amount it would have
been had such contributions not been made.
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<PAGE>
(iv) Compliance Refund. This subsection shall not
preclude refunds made in accordance with subsection 4(b)(i), 4(f)(ii), 4(g)(ii)
or 4(i)(iii).
(c) Employee Data. The Committee or the Trustee may require
that each Employee provide such data as it deems necessary upon his becoming a
Member in the Plan. Each Employee, upon becoming a Member, shall be deemed to
have approved of and to have acquiesced in each and every provision of the Plan
for himself, his personal representatives, distributees, legatees, assigns, and
beneficiaries.
(d) In Writing Requirement. Unless otherwise required by law,
a requirement that a transaction or consent under the Plan be "in writing" may,
at the discretion of the Committee, be effected through an interactive telephone
system or by other types of electronic communication.
(e) Doubt as to Right to Payment. If at any time any doubt
exists as to the right or any person to any payment under the Plan or the amount
or time of such payment (including, without limitation, any case of doubt as to
identity, or any case in which any notice has been received from any other
person claiming any interest in amounts payable hereunder, or any case in which
a claim from other persons may exist by reason of community property or similar
laws), the Committee may direct the Trustee to hold such sum as a segregated
amount in trust until such right or amount or time is determined or until order
of a court of competent jurisdiction, or to pay such sum into court in
accordance with appropriate rules of law or to make payment only upon receipt of
a bond or similar indemnification (in such amount and in such form as is
satisfactory to the Committee).
(f) Inability to Locate Distributee. Notwithstanding any other
provision of the Plan, if the Committee cannot locate any person to whom a
payment is due under this Plan, the benefit in respect of which such payment is
to be made shall be forfeited at such time as the Committee shall determine in
its
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<PAGE>
sole discretion (but in all events prior to the time such benefit would
otherwise escheat under any applicable state law); provided, that such benefit
shall be reinstated if such person subsequently makes a valid claim for such
benefit.
(g) Estoppel of Members and Their Beneficiaries. The
Participating Companies, Committee and Trustee may rely upon any certificate,
statement or other representation made to them by an Employee, Member or
beneficiary with respect to age, length of service, leave of absence, date of
cessation of employment, marital status, or other fact required to be determined
under any other provisions of this Plan, and shall not be liable on account of
the payment of any moneys or the doing of any act in reliance upon any such
certificate, statement or other representation. Any such certificate, statement
or other representation made by an Employee or Member shall be conclusively
binding upon such Employee or Member and his beneficiary, and such Employee,
Member or beneficiary shall thereafter and forever be estopped from disputing
the truth and correctness of such certificate, statement or other
representation. Any such certificate statement or other representation made by a
Member's beneficiary shall be conclusively binding upon such beneficiary and
such beneficiary shall thereafter and forever be estopped from disputing the
truth and correctness of such certificate, statement or other representation.
(h) Law Governing. This Plan shall be construed, administered
and applied in a manner consistent with the laws of the Commonwealth of
Pennsylvania where those laws are not superseded by federal law.
(i) Pronouns. The use of the masculine pronoun shall be
extended to include the feminine gender wherever appropriate.
(j) Interpretation. The Plan is a profit sharing plan
including a qualified, tax exempt trust under sections 401(a) and 501(a) of the
Code and a qualified cash or deferred arrangement under
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section 401(k)(2) of the Code. The Plan shall be interpreted in a manner
consistent with its satisfaction of all requirements of the Code applicable to
such a plan.
IN WITNESS WHEREOF, and as evidence of the adoption of this Plan by the
Company, it has caused the same to be signed by its officers thereunto duly
authorized, and its corporate seal to be affixed hereto, this _____ day of July,
1999.
USABANC.COM, INC.
Attest:
- ---------------------------- By:
Secretary ------------------------------
(Corporate Seal)
68
Exhibit 5.1
[LETTERHEAD OF JENKENS & GILCHRIST]
July 30, 1999
USABanc.com, Inc.
1535 Locust Street
Philadelphia, Pennsylvania 19102
Re: USABanc.com, Inc. - Registration Statement on Form S-8
Gentlemen:
We are counsel to USABanc.com, Inc., a Pennsylvania corporation (the
"Company"), and have acted as such in connection with the preparation of the
Registration Statement on Form S-8 (the "Registration Statement") to be filed
with the Securities and Exchange Commission on or about July 30, 1999, under the
Securities Act of 1933, as amended (the "Securities Act"), relating to 300,000
shares (the "Shares") of the $1.00 par value common stock (the "Common Stock")
of the Company that have been or may be issued by the Company pursuant to the
USABanc.com, Inc. Employee Stock Purchase Plan between the Company and the
signatories thereto (the "Plan") and the USABanc.com, Inc. Employee Savings Plan
(the "Savings Plan") between the Company and the employees of the Company
participating in the Savings Plan.
You have requested an opinion with respect to certain legal aspects of
the proposed offering. In connection therewith, we have examined and relied upon
the original, or copies identified to our satisfaction, of (1) the Articles of
Incorporation of the Company, as amended, and the Bylaws of the Company, as
amended; (2) minutes and records of the corporate proceedings of the Company
with respect to the establishment of the Plan and the Savings Plan, the
reservation of 150,000 Shares to be issued pursuant to the Plan, and the
issuance of the shares of Common Stock pursuant to the Plan and related matters;
(3) the Registration Statement and exhibits thereto, including the Plan and the
Savings Plan; and (4) such other documents and instruments as we have deemed
necessary for the expression of opinions herein contained. In making the
foregoing examinations, we have assumed the genuineness of all signatures and
the authenticity of all documents submitted to us as originals, and the
conformity to original documents of all documents submitted to us as certified
or photostatic copies. As to various questions of fact material to this opinion,
and as to the content and form of the Articles of Incorporation, as amended, the
Bylaws, as amended, minutes, records, resolutions and other documents or
writings of the Company, we have relied, to the extent deemed reasonably
appropriate, upon representations or certificates of officers or directors of
the Company and upon documents, records and instruments furnished to us by the
Company, without independent check or verification of their accuracy.
Based upon our examination, consideration of, and reliance on the
documents and other matters described above, and assuming that:
(1) the Shares to be sold and issued in the future will be duly issued
and sold in accordance with the terms of the Plan and the Savings Plan;
(2) the Company maintains an adequate number of authorized but unissued
shares and/or treasury shares available for issuance to those persons who
purchase Shares pursuant to the Plan and the Savings Plan; and
(3) the consideration for the Shares issued pursuant to the Plan and
the Savings Plan is actually received by the Company as provided in the Plan and
exceeds the par value of such shares;
then, we are of the opinion that, the Shares issued or sold in accordance with
the terms of the Plan and the Savings Plan will be duly and validly issued,
fully paid and nonassessable.
<PAGE>
The Company is a Pennsylvania corporation. We are licensed to practice
law only in Texas. For purposes of expressing the opinions herein, we have
assumed, with your consent, that the law of the State of Texas is the same as
the law of the Commonwealth of Pennsylvania with respect to the matters covered.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to references to us included in or made a part of the
Registration Statement. In giving this consent, we do not admit that we come
within the category of persons whose consent is required under Section 7 of the
Securities Act or the Rules and Regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
Jenkens & Gilchrist,
A Professional Corporation
By: /s/ Ronald J. Frappier
----------------------
Ronald J. Frappier,
Authorized Signatory
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated March 22, 1999 (except for Note 21, as
to which the date is June 15, 1999) accompanying the consolidated financial
statements of USABanc.com, Inc. and Subsidiaries included in the Annual Report
on Form 10-KSB for the year ended December 31, 1998 which is included in this
Registration Statement. We consent to the incorporation by reference of the
aforementioned report in the Registration Statement.
/s/ Grant Thornton LLP
- ----------------------
Grant Thornton LLP
July 30, 1999
Philadelphia, Pennsylvania
