AMENDMENT NO. 3
TO THE
FIRST SECURITY INCENTIVE SAVINGS
PLAN AND TRUST AGREEMENT
(As Amended and Restated Effective January 1, 1999)
AMENDMENT NO. 3 to the First Security Incentive Savings Plan and Trust
Agreement, as amended and restated effective January 1, 1999 ("PLAN"), between
FIRST SECURITY CORPORATION, a corporation organized under the laws of the State
of DELAWARE ("CORPORATION"), and FIRST SECURITY BANK, N.A., as Trustee.
I. Subsection 10.1(j) is clarified by the addition of the following
sentences at the end thereof:
"This subsection applies to distributions that must commence by April
1, 1999, but does not apply to Participants who attain age 70 1/2 in
1999. Distributions to Participants who attain age 70 1/2 in 1999
shall be made pursuant to subsection (k) below."
II. This amendment is effective as of the 1st day of January 1999.
IN WITNESS WHEREOF, the Corporation has executed this Amendment in
SALT LAKE CITY, UTAH, this 20th day of June, 2000.
FIRST SECURITY CORPORATION
By:
-----------------------------
Title:
--------------------------
"CORPORATION"
IN WITNESS WHEREOF, the Trustee hereby consents to Amendment No. 3 to
this Plan and Trust.
FIRST SECURITY BANK, N.A.
By:
-----------------------------
Title:
--------------------------
"TRUSTEE"
AMENDMENT NO. 2
TO THE
FIRST SECURITY INCENTIVE SAVINGS
PLAN AND TRUST AGREEMENT
(As Amended and Restated Effective January 1, 1999)
AMENDMENT NO. 2 to the First Security Incentive Savings Plan and Trust
Agreement, as amended and restated effective January 1, 1999 ("PLAN"), between
FIRST SECURITY CORPORATION, a corporation organized under the laws of the State
of DELAWARE ("CORPORATION"), and FIRST SECURITY BANK, N.A., as Trustee.
I. Paragraph 8.2 to the Plan is hereby deleted in its entirety and
replaced with the following:
8.2 MATCHING AND PROFIT SHARING ACCOUNTS
EFFECTIVE AS OF JANUARY 1, 2000 ALL PARTICIPANTS' MATCHING AND PROFIT
SHARING ACCOUNTS ARE FULLY VESTED AND NONFORFEITABLE AT ALL TIMES.
II. This amendment is effective as of the 1st day of January 2000.
IN WITNESS WHEREOF, the Corporation has executed this Amendment in SALT
LAKE CITY, UTAH, this 25th day of January 2000.
FIRST SECURITY CORPORATION
By:
-----------------------------
Title:
--------------------------
"CORPORATION"
IN WITNESS WHEREOF, the Trustee hereby consents to Amendment No. 2 to this
Plan and Trust.
FIRST SECURITY BANK, N.A.
By:
-----------------------------
Title:
--------------------------
"TRUSTEE"
SUMMARY OF MATERIAL MODIFICATIONS TO THE
FIRST SECURITY INCENTIVE SAVINGS
PLAN AND TRUST AGREEMENT
(As Amended and Restated Effective January 1, 1999)
1. EMPLOYER. The legal name, address, telephone number and Federal Employer
Identification number of the Employer are:
First Security Corporation
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
(000) 000-0000
EIN: 00-0000000
2. IDENTIFICATION OF PLAN. The Plan is known as the First Security Incentive
Savings Plan, as amended and restated effective as of January 1, 1999. The
Employer has assigned 002 as the Plan Identification number.
3. MATERIAL MODIFICATION. The Plan was amended effective January 1, 2000 to
state that all Participants' Matching and Profit Sharing Accounts are fully
vested and nonforfeitable at all times.
4. ADDITIONAL INFORMATION. If you desire additional information regarding this
change, please contact the undersigned at the Employer's address or
telephone number.
DATED this 25th day of January 2000.
FIRST SECURITY CORPORATION
By:
-----------------------------
Its:
----------------------------
AMENDMENT NO. 1
TO THE
FIRST SECURITY INCENTIVE SAVINGS
PLAN AND TRUST AGREEMENT
(As Amended and Restated Effective January 1, 1999)
AMENDMENT NO. 1 to the First Security Incentive Savings Plan and Trust
Agreement, as amended and restated effective January 1, 1999, between FIRST
SECURITY CORPORATION, a corporation organized under the laws of the State of
DELAWARE ("CORPORATION"), and FIRST SECURITY BANK, N.A., as Trustee.
I. Section 2.14 is hereby amended to add the following subsection at the
end thereof, so as to provide in part that the definition of Eligible Employee
means any Employee who:
(f) is not an employee of Zions Bancorporation or any of its
subsidiaries immediately prior to the effective date of the merger between
First Security Corporation and Zions Bancorporation.
II. This amendment is effective as of the 21st day of December 1999.
IN WITNESS WHEREOF, the Corporation has executed this Amendment in SALT
LAKE CITY, UTAH, this ____ day of December 1999.
FIRST SECURITY CORPORATION
By:
---------------------------------
Title:
------------------------------
"CORPORATION"
IN WITNESS WHEREOF, the Trustee hereby consents to Amendment No. 1 to this
Plan and Trust.
FIRST SECURITY BANK, N.A.
By:
---------------------------------
Title:
------------------------------
"TRUSTEE"
FIRST SECURITY INCENTIVE SAVINGS PLAN
AND TRUST AGREEMENT
AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1999
TABLE OF CONTENTS
PAGE
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ARTICLE I ESTABLISHMENT AND PURPOSE............................................................. 1
ARTICLE II DEFINITIONS........................................................................... 2
2.1 Accounting Date....................................................................... 2
2.2 Accounts.............................................................................. 2
2.3 After Tax Contribution................................................................ 2
2.4 Approved Absence...................................................................... 2
2.5 Beneficiary or Beneficiaries.......................................................... 2
2.6 Board of Directors or Board........................................................... 2
2.7 Code.................................................................................. 2
2.8 Committee............................................................................. 2
2.9 Compensation.......................................................................... 3
2.10 Controlled Group...................................................................... 4
2.11 Corporation........................................................................... 4
2.12 Disability............................................................................ 4
2.13 Effective Date........................................................................ 4
2.14 Eligible Employee..................................................................... 4
2.15 Eligible Spouse....................................................................... 5
2.16 Employee.............................................................................. 5
2.17 Employee Stock Ownership Plan or ESOP................................................. 5
2.18 Employer Stock........................................................................ 5
2.19 Employment Date....................................................................... 5
2.20 ERISA................................................................................. 5
2.21 First Security Stock Fund............................................................. 5
2.22 Highly Compensated Employee........................................................... 6
2.23 Hour of Service....................................................................... 6
2.24 Investment Fund....................................................................... 9
2.25 Investment Manager.................................................................... 9
2.26 Leased Employee....................................................................... 9
2.27 Matching Contribution................................................................. 9
2.28 Non-Highly Compensated Employee....................................................... 9
2.29 Normal Retirement Age................................................................. 9
2.30 One Year Break in Service............................................................. 9
2.31 Participant........................................................................... 9
2.32 Participating Employer................................................................ 10
2.33 Period of Service..................................................................... 10
2.34 Period of Severance................................................................... 10
2.35 Plan.................................................................................. 10
2.36 Plan Administrator.................................................................... 10
2.37 Plan Entry Date....................................................................... 10
2.38 Plan Year............................................................................. 11
TABLE OF CONTENTS
PAGE
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2.39 Preacquisition Service................................................................ 11
2.40 Predecessor Plan...................................................................... 11
2.41 Prior Plan............................................................................ 11
2.42 Profit Sharing Contribution........................................................... 11
2.43 Qualified Domestic Relations Order.................................................... 11
2.44 Reemployment Date..................................................................... 11
2.45 Related Company....................................................................... 11
2.46 Rollover Contribution................................................................. 12
2.47 Salary Deferral Contribution.......................................................... 12
2.48 Severance Date........................................................................ 12
2.49 Supplemental Contribution............................................................. 14
2.50 Trust Agreement....................................................................... 14
2.51 Trustee............................................................................... 14
2.52 Trust Fund............................................................................ 14
2.53 Valuation Date........................................................................ 14
2.54 Vested Percentage..................................................................... 14
2.55 Year of Participation Service......................................................... 14
2.56 Year of Vesting Service............................................................... 15
ARTICLE III ELIGIBILITY AND PARTICIPATION......................................................... 16
3.1 Eligibility........................................................................... 16
3.2 Participation......................................................................... 16
3.3 Participation upon Reemployment....................................................... 18
ARTICLE IV CONTRIBUTIONS TO THE PLAN............................................................. 19
4.1 Salary Deferral Contributions......................................................... 19
4.2 After Tax Contributions............................................................... 19
4.3 Matching Contribution................................................................. 19
4.4 Supplemental Contributions............................................................ 20
4.5 Profit Sharing Contributions.......................................................... 20
4.6 Rollover Contributions................................................................ 21
4.7 Date of Contributions................................................................. 21
4.8 Qualified Military Service............................................................ 21
ARTICLE V LIMITATIONS ON CONTRIBUTIONS.......................................................... 23
5.1 Definitions for Nondiscrimination Tests............................................... 23
5.2 Nondiscrimination Tests............................................................... 24
5.3 Correction of Excess Contributions.................................................... 26
5.4 Limit on Deferrals.................................................................... 28
5.5 Limit on Annual Additions............................................................. 29
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TABLE OF CONTENTS
PAGE
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ARTICLE VI ACCOUNT ADMINISTRATION................................................................ 32
6.1 Plan Accounts and Allocation of Contributions......................................... 32
6.2 Allocation of Investment Earnings and Losses.......................................... 33
ARTICLE VII INVESTMENT OF FUNDS................................................................... 35
7.1 Investment Funds...................................................................... 35
7.2 Investment Elections.................................................................. 35
7.3 Changes in Investment Elections....................................................... 36
7.4 Transfers Between Investment Funds.................................................... 36
7.5 Committee May Amend Rules............................................................. 36
ARTICLE VIII VESTING AND FORFEITURES............................................................... 37
8.1 Fully Vested Accounts................................................................. 37
8.2 Matching and Profit Sharing Accounts.................................................. 37
8.3 Forfeitures........................................................................... 38
ARTICLE IX WITHDRAWALS AND LOANS DURING EMPLOYMENT............................................... 40
9.1 Application........................................................................... 40
9.2 Withdrawal from After Tax Accounts.................................................... 40
9.3 Hardship Withdrawals from Salary Deferral Accounts.................................... 40
9.4 Withdrawals After Attaining Age 65.................................................... 41
9.5 Plan Loans............................................................................ 42
9.6 Valuing Withdrawals and Loans......................................................... 44
ARTICLE X PAYMENT OF BENEFITS................................................................... 45
10.1 Distribution.......................................................................... 45
10.2 Beneficiary Designation............................................................... 47
10.3 Benefits to Minors and Legal Incompetents............................................. 48
10.4 Unclaimed Benefits.................................................................... 49
10.5 General Conditions.................................................................... 49
10.6 Qualified Domestic Relations Order.................................................... 49
ARTICLE XI ADMINISTRATION OF PLAN................................................................ 52
11.1 Fiduciaries........................................................................... 52
11.2 The Corporation....................................................................... 52
11.3 The Plan Administrator................................................................ 52
11.4 The Committee......................................................................... 52
11.5 Delegation of Administrative Powers................................................... 54
11.6 Trustee............................................................................... 54
11.7 Claims Procedures..................................................................... 55
11.8 Indemnification....................................................................... 56
iii
TABLE OF CONTENTS
PAGE
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ARTICLE XII AMENDMENT, TERMINATION, AND MERGER.................................................... 58
12.1 Amendment............................................................................. 58
12.2 Change in Vesting Schedule............................................................ 58
12.3 Plan Termination...................................................................... 59
12.4 Merger................................................................................ 59
ARTICLE XIII MISCELLANEOUS PROVISIONS.............................................................. 60
13.1 No Guarantee of Employment............................................................ 60
13.2 No Guarantee of Value of Trust Fund Assets............................................ 60
13.3 Rights to Trust Fund Assets........................................................... 60
13.4 Correction of Errors.................................................................. 61
13.5 Severability.......................................................................... 61
13.6 Applicable Law........................................................................ 61
13.7 Plan Expenses......................................................................... 61
13.8 Exclusive Benefit; Return of Contributions............................................ 61
13.9 Headings and Subheadings.............................................................. 62
13.10 Notification of Address............................................................... 62
13.11 Gender................................................................................ 62
ARTICLE XIV TOP-HEAVY PLAN RESTRICTIONS........................................................... 63
14.1 General............................................................................... 63
14.2 Definitions........................................................................... 63
14.3 Top-Heavy Definition.................................................................. 64
14.4 Vesting Percentage.................................................................... 66
14.5 Minimum Benefits or Contributions and Section 415 Limitations......................... 67
ARTICLE XV TRUSTEE, POWERS AND DUTIES............................................................ 69
15.1 Acceptance............................................................................ 69
15.2 Receipt of Contributions.............................................................. 69
15.3 Investment Powers..................................................................... 69
15.4 Records and Statements................................................................ 72
15.5 Fees and Expenses from Fund........................................................... 72
15.6 Parties to Litigation................................................................. 72
15.7 Professional Agents................................................................... 74
15.8 Distribution of Cash or Property...................................................... 74
15.9 Distribution Directions............................................................... 74
15.10 Third Party/Multiple Trustees......................................................... 74
15.11 Resignation........................................................................... 74
15.12 Removal............................................................................... 75
15.13 Interim Duties and Successor Trustee.................................................. 75
15.14 Valuation of Trust.................................................................... 75
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TABLE OF CONTENTS
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15.15 Limitation on Liability - If Investment Manager, Ancillary Trustee or
Independent Fiduciary Appointed....................................................... 75
15.16 Investment in Group Trust Fund........................................................ 76
15.17 Appointment of Ancillary Trustee or Independent Fiduciary............................. 76
15.18 First Security Stock Fund Rules....................................................... 78
15.19 Employer Securities - Authority to Hold and Acquire Certain Employer
Related Investments................................................................... 79
APPENDIX A EMPLOYEE STOCK OWNERSHIP PLAN PROVISIONS.............................................. 82
A1.1 Definitions........................................................................... 82
A1.2 Designation of ESOP Portion and Establishment of ESOP Accounts........................ 82
A1.3 Allocation of Participating Employer Contributions Between ESOP
and Non-ESOP Accounts................................................................. 83
A1.4 Transfers Between ESOP and Non-ESOP Accounts.......................................... 83
A1.5 Distribution Rules for ESOP Accounts.................................................. 83
A1.6 Pass-Through of Dividends Paid on Participating Employer Stock Held
in ESOP Accounts...................................................................... 84
A1.7 Effective Diversification of Investments.............................................. 84
A1.8 Pass-Through of Voting Rights with Respect to Employer Stock.......................... 85
A1.9 Section 401(m) Nondiscrimination Testing.............................................. 00
XXXXXXXX X PREACQUISITION SERVICE................................................................ 87
APPENDIX C ANNUITY DISTRIBUTIONS................................................................. 88
C1.1 Annuity Distributions to Participants and Surviving Spouses........................... 88
C1.2 Waiver Election - Qualified Joint and Survivor Annuity................................ 91
C1.3 Waiver Election - Preretirement Survivor Annuity...................................... 92
C1.4 Merger / Direct Transfer.............................................................. 93
v
ARTICLE I
ESTABLISHMENT AND PURPOSE
First Security Corporation (the "Corporation"), a corporation organized under
the laws of the State of Delaware, established the First Security Deferred
Payment Profit Sharing Plan (the "Profit Sharing Plan") effective as of January
1, 1960, and entered into a certain Trust Agreement, dated October 17, 1960 for
the purpose of providing retirement benefits to eligible employees of the
Corporation and other adopting Participating Employers.
The Profit Sharing Plan was amended and restated in its entirety and was renamed
as the First Security Incentive Savings Plan and Trust Agreement (the "Plan"),
generally effective January 1, 1989. Effective January 1, 1996, provisions for
an Employee Stock Ownership Plan ("ESOP") within the meaning of Section
4975(e)(7) of the Code were made a part of the Plan.
Effective January 1, 1999 (or as of such other date as is provided herein for
certain provisions), again, the Corporation has amended and restated the Plan in
its entirety. The Plan, as amended and restated, is intended to continue to
qualify under Section 401(a) of the Internal Revenue Code (the "Code") as a
profit sharing plan with a qualified cash or deferred arrangement that satisfies
Code Section 401(k) and is funded by a trust intended to be exempt from tax
under Code Section 501(a).
Except as otherwise stated, the provisions of the Plan as amended and restated
shall not apply to the benefits payable to or on account of an employee who
retired or whose employment with the Corporation or any adopting Participating
Employer terminated prior to January 1, 1999. The rights and benefits of such an
employee shall be determined under the Plan as in effect when the employee
retired or terminated employment.
Notwithstanding any provision of the Plan to the contrary, nothing in this
restatement shall be construed to reduce a Participant's accrued benefit in
violation of Code Section 411(d)(6) except as permitted by law.
1
ARTICLE II
DEFINITIONS
The terms and phrases in this Article shall have the following meanings when
used in this Plan in capitalized form unless a different meaning is clearly
required by the context. Masculine pronouns include the feminine, plural nouns
include the singular, and singular nouns include the plural except where the
context indicates otherwise.
2.1 ACCOUNTING DATE is the last day of the Plan Year.
2.2 ACCOUNTS means the accounts held by the Trustee for a Participant as
described in Section 6.1(a).
2.3 AFTER TAX CONTRIBUTION means a Participant contribution made to the Plan.
Except with respect to repayment of a defaulted loan to the After Tax Loan
Account, effective January 1, 1985, After Tax Contributions shall not be
permitted under the Plan.
2.4 APPROVED ABSENCE means an absence from work, including an absence due to
temporary disability or pursuant to the Family Medical Leave Act of 1993,
granted and approved pursuant to the policy of the Corporation or Related
Company on the basis of uniform and nondiscriminatory rules.
2.5 BENEFICIARY OR BENEFICIARIES means the person or persons, including a
trustee or a personal representative, last designated in writing by a
Participant to receive the benefits specified hereunder in the event of the
Participant's death in accordance with Section 10.2 of the Plan.
2.6 BOARD OF DIRECTORS OR BOARD means the Board of Directors of the
Corporation, the Executive Committee of the Board of Directors of the
Corporation or a delegatee of the Executive Committee.
2.7 CODE means the Internal Revenue Code of 1986, as amended.
2.8 COMMITTEE means the Committee appointed by the Board pursuant to Section
11.4 to exercise the duties and responsibilities delegated to the Committee
under Article XI.
2
2.9 COMPENSATION means, except as otherwise provided in the Plan:
(a) Subject to subsections (b) and (c), an Employee's regular earnings
reportable as taxable income on a form W-2 by a Participating Employer
(including base pay, overtime, commissions, and performance related
bonuses) which are received and paid for each payroll cycle and any
amounts not includable as taxable income on the Employee's form W-2 by
reason of a salary reduction arrangement with an employer under Code
Section 125, 401(k), 402(e)(3), or 402(h) which if paid would have
been Compensation.
(b) "Compensation" shall not include reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving expenses,
welfare benefits, severance benefits, cash paid in lieu of vacation
time not taken, bonuses not related to job performance (including,
without limitation, relocation bonuses, Christmas bonuses, referral
bonuses and signing bonuses), and other non-performance related and
non-cash income (including, without limitation, plan distributions and
stock appreciation rights), nor shall "Compensation" include:
(1) Any distributions from a plan of deferred compensation whether or
not includable in the gross income of the Employee when
distributed;
(2) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an
Employee becomes freely transferable or is no longer subject to a
substantial risk of forfeiture;
(3) Amounts realized from the sale, exchange or other disposition of
stock held by an Employee which were acquired under a qualified
stock option;
(4) Other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent
that the premiums are not includable in the gross income of the
Employee); and
Prior to January 1, 1994, annual Compensation taken into account under the
Plan shall not exceed two hundred thousand dollars ($200,000), as adjusted
by the Commissioner of Internal Revenue. On and after January 1, 1994,
Compensation shall be limited to one hundred fifty thousand dollars
($150,000) for each Plan Year. This dollar limit on Compensation shall be
increased in ten thousand dollar ($10,000) increments by the Commissioner
of Internal Revenue pursuant to Code Section 401(a)(17) to reflect
increases in the cost of living. These adjustments to the compensation
limit do not apply retroactively to prior Plan Years.
3
2.10 CONTROLLED GROUP means any two or more corporations, trades, or businesses
which constitute a controlled group or an affiliated service group of which
the Corporation is a member, or are under common control with the
Corporation, within the meaning of Code Section 414(b), (c), (m), or (o),
but only for the period during which such relationship exists. For purposes
of applying the limits of Section 5.5, members of a Controlled Group shall
be determined under Code Section 415(h).
2.11 CORPORATION means First Security Corporation, a Delaware corporation, or
any successor corporation resulting from a merger, consolidation, or
transfer of substantially all the corporation's assets (provided, in the
case of an asset transfer, such successor shall expressly agree in writing
to continue this Plan).
2.12 DISABILITY means the Participant, because of a physical or mental
disability, will be unable to engage in any substantial gainful activity
for an indefinite period which the Committee or its delegate considers will
be of long continued duration. The Plan considers a Participant disabled on
the date the Committee or its delegate determines the Participant satisfies
the definition of Disability. The Committee or its delegate may require a
Participant to submit to a physical examination in order to confirm
Disability. The Committee or its delegate will apply the provisions of this
Section 2.12 in a nondiscriminatory, consistent and uniform manner.
2.13 EFFECTIVE DATE means, January 1, 1999, except to the extent a different
effective date is required pursuant to a statute including, without
limitation, Uruguay Round Agreements Act, Uniformed Services Employment and
Reemployment Rights Act of 1994, the Small Business Job Protection Act of
1996, and the Taxpayer Relief Act of 1997, or Treasury Regulations, or is
stated in the Plan document. "ESOP Effective Date" shall have the meaning
set forth in Appendix A.
2.14 ELIGIBLE EMPLOYEE means any Employee who:
(a) receives Compensation from the Corporation or a Participating
Employer, but excluding any member of a Participating Employer's Board
of Directors whose sole Compensation from the Corporation consists of
director's fees and reimbursement for expenses properly and actually
incurred in his or her role as a member of the Board of Directors of a
Participating Employer;
(b) is not (other than pursuant to an Approved Absence) laid off, on leave
of absence or on active duty in the armed forces of any nation or
international body (other than as a member of the Armed Forces of the
United States of America);
(c) is not a Leased Employee or classified by the Corporation or Related
Company as an independent contractor regardless of the classification
imposed on such individual by the Internal Revenue Service or other
governmental agency or by a court of competent jurisdiction;
4
(d) does not belong to a collective bargaining unit which has entered into
a collective bargaining agreement with a Related Company, where
retirement benefits have been the subject of good faith bargaining,
unless the agreement provides that such benefits are to be provided by
the Plan; and
(e) is not a nonresident alien who is not receiving any U.S. source
income.
2.15 ELIGIBLE SPOUSE means the person to whom a Participant is married on the
date of his death. "Eligible Spouse" also includes a former spouse to the
extent required by a Qualified Domestic Relations Order.
2.16 EMPLOYEE means an individual who is employed by a Participating Employer
and whose Compensation is subject to the withholding of income tax. A
Leased Employee shall be treated as an Employee of the recipient
Participating Employer to the extent required by Section 414(n) of the Code
in order for the Plan to qualify under Section 401(a) of the Code. However,
contributions or benefits provided by the leasing organization which are
attributable to service performed for the recipient Participating Employer
shall be treated as provided by such Participating Employer.
Notwithstanding the foregoing, a Leased Employee shall not be treated as an
Employee if (a) the Leased Employee is covered by a money purchase pension
plan sponsored by the leasing organization which provides: (i)
nonintegrated employer contribution rate of at least 10 percent of
compensation (ii) immediate participation and (iii) full and immediate
vesting, and (b) Leased Employees do not constitute more than 20 percent of
the Corporation's non-highly compensated work force.
2.17 EMPLOYEE STOCK OWNERSHIP PLAN OR ESOP is the portion of the Plan designated
as an "employee stock ownership plan" ("ESOP") with the meaning of Section
4975(e)(7) of the Code by Appendix A attached hereto and by reference made
a part of the Plan as if the provisions of said Appendix A were set forth
fully herein.
2.18 EMPLOYER STOCK means the common stock of the Corporation or other Employer
Securities as defined in Section 15.19 of the Plan.
2.19 EMPLOYMENT DATE means the date on which an Employee first completes an Hour
of Service for the Corporation or a Related Company.
2.20 ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
2.21 FIRST SECURITY STOCK FUND means the Investment Fund consisting primarily of
investments in Employer Stock as provided in Sections 15.18 and 15.19 of
the Plan.
5
2.22 HIGHLY COMPENSATED EMPLOYEE means any Employee who performs services during
the current year and is included in one of the following groups: (1) is a
5% owner, as defined in Section 416(i)(1)(B)(i) of the Code, at any time
during the Plan Year or twelve-month period preceding the Plan Year, or (2)
is an employee who earned Compensation in excess of $80,000 (indexed in
accordance with Code Section 415(d)) for the twelve-month period preceding
the Plan Year.
Unless otherwise determined by the Participating Employer, there shall be
no election to identify Highly Compensated Employees to include only
Employees who earn Compensation (as defined in Code Section 415(c)(3)(D))
in excess of $80,000 and who are in the top 20% of Employees by
Compensation.
The definition of "Compensation" for purpose of this Section 2.22 is total
wages paid for services as defined in Code Section 415(c)(3)(D), including
overtime, tips, commissions, bonuses, and deferral contributions pursuant
to Section 4.1 of this Plan or to a cafeteria plan described in Code
Section 125.
2.23 HOUR OF SERVICE means:
(a) Each hour for which an Employee is directly or indirectly compensated
or entitled to compensation by a Related Company;
(b) Each hour, to a maximum of 1,000 hours, for which an Employee is paid
or entitled to payment by a Related Company for a period of time
during which no duties are performed (irrespective of whether a
termination of employment has occurred) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty,
military duty, or leave of absence; and
(c) Each hour for which back-pay, irrespective of mitigation of damages,
is either awarded or agreed to by a Related Company. (These Hours of
Service shall be credited to the Employee for the Plan Year or
computation period to which the award or agreement pertains; not the
year in which the award, agreement, or payment is made.)
(d) An Employee who is on an authorized unpaid leave of absence due to
maternity or paternity or is absent because he is on active duty with
the U.S. armed forces shall be credited with the number of Hours of
Service which would have been credited to such Employee but for such
absence. If, however, the Employee does not return to employment with
a Related Corporation (other than because of death, Disability or
attaining Normal Retirement Age) at the end of the authorized leave or
within the time that reemployment rights for servicemen are guaranteed
by federal law, such hours shall not be credited except as may be
otherwise required under the provisions of this Section. Leaves of
absence, if any, shall be authorized by each Related Company under
uniform rules applied in a nondiscriminatory manner.
6
(e) The number of Hours of Service to be credited under subsection (a)
above shall be (1) in the case of an Employee paid on an hourly basis,
the actual number of Hours of Service for which such Employee is paid
or entitled to payment for the performance of duties, or (2) in the
case of an Employee paid on a salaried basis, based on an equivalency
of ninety-five (95) hours in each semi-monthly period during which an
hour of service is performed.
(f) In the case of payments made or due an Employee pursuant to subsection
(b) or subsection (c) with respect to the periods described in
subsection (b) during which no duties were performed, if such payments
are calculated on the basis of "units of time" (such as hours, days,
weeks or months), the number of Hours of Service to be credited to the
Employee shall be the number of regularly scheduled working hours
included in such units of time, or if the Employee has no regularly
scheduled working hours, the number of Hours of Service to be credited
shall be based on an eight (8) hour day and/or forty (40) hour week.
If such payments relating to periods during which no duties were
performed are not based on "units of time", the Hours of Service to be
credited to the Employee shall be calculated in accordance with the U.
S. Department of Labor regulations which can be found at 29 CFR
2530.200b-2(b), (c) and (f) or any successor Internal Revenue
Regulations which may be promulgated by the Internal Revenue Service
pursuant to the ERISA Reorganization Plan of 1978.
(g) In addition to the Hours of Service to be credited in accordance with
the provisions above, an Employee shall be credited with Hours of
Service at the rate of eight (8) hours per day, subject to a maximum
of forty (40) hours per week, for the following periods during which
the Employee is not directly or indirectly paid, or entitled to
payment by a Related Company:
(1) Any leave of absence for military service in the Armed Forces of
the United States during which the Employee's reemployment rights
are guaranteed by federal law, provided the Employee applies for
reemployment with a Participating Employer after his separation
from military service within the time required by such law.
(2) All or any portion, as determined by the Committee on the basis
of a uniform policy applied without discrimination, of any other
leave of absence which is granted for a reason that the
Committee, on the basis of a uniform policy applied without
discrimination, specifies as a reason for which Hours of Service
shall be credited.
Notwithstanding the foregoing:
(1) The same Hour of Service shall not be credited under more than
one subsection or paragraph of this section;
7
(2) No Hours of Service shall be credited to an Employee with respect
to hours for which the Employee is paid or entitled to payment if
such payment is made or due under a plan maintained solely for
the purpose of complying with applicable workmen's compensation,
or unemployment compensation or disability insurance laws; and
(3) No Hours of Service shall be credited for a payment to an
Employee which solely reimburses an Employee for medical or
medically related expenses incurred by the Employee.
2.24 INVESTMENT FUND means each pooled investment fund, interest-bearing deposit
or fixed income contract designated by the Committee as an investment
option, as well as the First Security Stock Fund, in which a Participant
may elect to have his Accounts invested, as provided in Article VII.
2.25 INVESTMENT MANAGER means a fiduciary designated by the Committee under this
Plan to whom has been delegated the responsibility and authority to manage,
acquire or dispose of Plan assets (a) who (1) is registered as an
investment adviser under the Investment Advisors Act of 1949; (2) is a
bank, as defined in that Act, or (3) is an insurance company qualified to
perform investment advisory service under the laws of more than one state;
and (b) who has acknowledged in writing that he is a fiduciary under ERISA
with respect to the management, acquisition and control of Plan assets.
2.26 LEASED EMPLOYEE means any person (other than a common law employee) who
pursuant to an agreement between the Participating Employer and any other
person (leasing organization) has performed services for the Participating
Employer (or for the Participating Employer and related persons determined
in accordance with Code Section 414(n)(6)) on a substantially full time
basis for a period of time of at least one year and such services are
performed under the primary direction or control by the recipient
Participating Employer.
2.27 MATCHING CONTRIBUTION means a Participating Employer contribution made
pursuant to Section 4.3.
2.28 NON-HIGHLY COMPENSATED EMPLOYEE means any Employee who is not a Highly
Compensated Employee.
2.29 NORMAL RETIREMENT AGE means age 65.
2.30 ONE YEAR BREAK IN SERVICE means a Period of Severance equal to 12
consecutive months.
2.31 PARTICIPANT means an Eligible Employee (a) who has satisfied the
requirements of Section 3.1 or (b) who has an Account. Where the context is
appropriate, "Participant" also includes a former Eligible Employee who has
an Account.
8
2.32 PARTICIPATING EMPLOYER means FIRST SECURITY CORPORATION, FIRST SECURITY
BANK, NA, and other subsidiaries of the "CORPORATION" that have been or are
in the future permitted by First Security Corporation to join the Plan as
an additional Participating Employer in accordance with this Plan.
"Participating Employer" may also include certain Related Companies for the
purposes described in Section 2.45. Notwithstanding any other provision in
the Plan to the contrary, the first listed Participating Employer, First
Security Corporation (sometimes herein referred to as the "Corporation")
shall have the power, acting alone and without the consent of any other
entity or person, to amend or terminate the Plan, to appoint the Trustee
and members of the Committee or to exercise other powers reserved to the
Corporation or the Participating Employer, and such act by the Corporation
shall be binding on the other Participating Employers that have adopted the
Plan and all other persons interested in the Plan. The Corporation shall
act through a resolution of its Board of Directors or the Executive
Committee of its Board of Directors, or, if applicable, may act through a
delegatee of its Board or Executive Committee. A reference to
"Participating Employer" shall be deemed to include the Corporation,
provided that notwithstanding anything in the Plan to the contrary, any
power reserved to the Participating Employer may be exercised by the
Corporation, acting alone, without the necessity of further action or
consent by the Trustee, other Participating Employers, the Committee, the
Plan Administrator or any other person.
2.33 PERIOD OF SERVICE means the period of time which elapses between a
Participant's Employment Date, or Reemployment Date, as applicable, and the
next following Severance Date, expressed in completed years and months with
twelve months (whether or not consecutive) aggregated to equal one year and
thirty days (whether or not consecutive) aggregated to equal one month. A
Participant's Period of Service includes a Period of Severance if the
Participant's Reemployment Date is within one year of the last Hour of
Service credited.
2.34 PERIOD OF SEVERANCE means the period of time beginning on the day after a
Participant's Severance Date and ending on the day before his Reemployment
Date.
2.35 PLAN means the First Security Incentive Savings Plan and Trust Agreement as
set forth herein and as amended from time to time.
2.36 PLAN ADMINISTRATOR means the Corporation unless the Corporation designates
another person to hold the position of Plan Administrator. In addition to
its other duties, the Plan Administrator has full responsibility for
compliance with the reporting and disclosure rules under ERISA as respects
this Plan.
2.37 PLAN ENTRY DATE means the first day of each month during the Plan Year, and
any subsequent day after the initial Plan Entry Date on which the Employee
is eligible to participate.
9
2.38 PLAN YEAR means the calendar year.
2.39 PREACQUISITION SERVICE means service with a corporation or other entity
acquired by the Company or a Participating Employer rendered prior to such
acquisition (by purchase, merger or otherwise). No Preacquisition Service
shall be taken into account for eligibility purposes under Article III or
for vesting purposes under Article VIII except:
(a) to the extent required by applicable federal law;
(b) as provided in Appendix B; or
(c) if credit for such Preacquisition Service is expressly authorized by a
written resolution of the Board.
In any case in which applicable federal law may require the inclusion of
such Preacquisition Service by virtue of the maintenance of a Predecessor
Plan or otherwise, the Board shall act promptly to adopt such resolution.
The adoption of a resolution specifying credit for Preacquisition Service,
for eligibility purposes and/or vesting purposes, shall not apply for any
other purpose other than the purpose(s) specifically set forth in such
resolution.
2.40 PREDECESSOR PLAN means any plan whose assets have been merged, in whole or
in part, into this Plan or was maintained by an employer whose employees
became Employees of the Corporation or Participating Employer.
2.41 PRIOR PLAN means the Plan as in effect prior to the amendment and
restatement set forth herein.
2.42 PROFIT SHARING CONTRIBUTION means a Participating Employer contribution
made pursuant to Section 4.5.
2.43 QUALIFIED DOMESTIC RELATIONS ORDER means a domestic relations order which
the Plan Administrator has determined satisfies the requirements of Code
Section 414(p).
2.44 REEMPLOYMENT DATE means the date on which a former Employee first performs
an Hour of Service for a Participating Employer following the Employee's
Severance Date (for vesting purposes) or separation from service (for
eligibility purposes).
2.45 RELATED COMPANY means each member of the Controlled Group and each
predecessor employer to the extent required by Section 414(a) of the Code.
If a Participating Employer is a member of a Controlled Group including a
Related Company, the term "Participating Employer" includes the Related
Company members for purposes of crediting Hours of Service, applying the
participation test and the coverage test under Section 410(b) of the Code,
determining Years of Participation Service and One year Breaks in Service
under Articles II and VIII, applying the limitations of Section 5.5,
10
applying the top heavy rules and the minimum benefit requirements of
Article XIV, the definitions of Employee, Highly Compensated Employee,
Compensation and Leased Employee, and for any other purpose to the extent
required by the applicable Code section or by a Plan provision, provided
that the Board or the Committee shall act to recognize such service credits
in accordance with applicable law and the provisions of this Plan. However,
only a Participating Employer described in Section 2.32 may contribute to
the Plan and only an Employee employed by a Participating Employer
described in Section 2.32 (and who is otherwise an Eligible Employee) is
eligible to participate in this Plan.
2.46 ROLLOVER CONTRIBUTION means a contribution made pursuant to Section 4.6.
2.47 SALARY DEFERRAL CONTRIBUTION means a Participating Employer contribution
made pursuant to Section 4.1.
2.48 SEVERANCE DATE means the earlier of:
(a) the date an Employee dies, retires, quits, or is discharged, and
(b) the first anniversary of the Employee's absence for any other reason;
provided, however, that a Participant shall not incur a Severance Date
solely by reason of being absent from active employment on account of (i)
Approved Absence, (ii) vacation, (iii) holidays, or (iv) non-business
hours. If an Employee dies, retires, quits, or is discharged prior to the
first anniversary of an absence described in (b), the Employee's Severance
Date is the last day on which the Employee was credited with an Hour of
Service. Notwithstanding the foregoing, if an Employee is absent from work
for more than twelve (12) months because of the Employee's pregnancy, the
birth of a child of the Employee, the adoption of a child by the Employee
or for the purpose of caring for such a child immediately following birth
or adoption, the Employee's Severance Date is the second anniversary of
such absence; provided, however, that the Employee furnishes to the Plan
Administrator such timely information as the Plan Administrator may
reasonably request to establish that an absence is for one of these
reasons. The period between the first and second anniversaries of the
Employee's first day of absence from work for one of the reasons listed in
the preceding sentence shall be neither a Period of Service nor a Period of
Severance. Notwithstanding anything herein to the contrary, an Employee on
military leave will not incur a Severance Date during any period in which
reemployment is guaranteed by law, and contributions, benefits and service
credit with respect to qualified military service will be provided in
accordance with Section 414(u) of the Code; provided, that if he does not
resume active employment during his guaranteed reemployment period, he
shall incur a Severance Date on the last day of such period.
Subject to governing law, nothing in this Section 2.48 shall prevent the
Corporation and the Participant or other Employee in question from mutually
determining that his status as an Employee shall terminate at any
designated time, either with or without cause.
11
2.49 SUPPLEMENTAL CONTRIBUTION means a Participating Employer contribution made
pursuant to Section 4.4.
2.50 TRUST AGREEMENT means Article XV of this Plan document, as amended from
time to time.
2.51 TRUSTEE means First Security Bank, N.A., or any successor in office who
accepts the position of Trustee in accordance with Article XV.
2.52 TRUST FUND means that trust fund created by and maintained under the Trust
Agreement for the purpose of holding the assets of and funding the benefits
provided by the Plan.
2.53 VALUATION DATE means each business day on which U.S. financial markets are
open or such other dates as may be specified by the Committee. Valuation
Date may include other less frequent dates for non-mutual fund assets (but
not less frequently than annually).
2.54 VESTED PERCENTAGE means the nonforfeitable percentage of a Participant's
Accounts determined under Article VIII or Article XIV, as applicable.
2.55 YEAR OF PARTICIPATION SERVICE means a computation period during which an
Employee is credited with at least one thousand (1,000) Hours of Service.
An Employee's initial computation period is the twelve-month period
commencing on the Employee's Employment Date or Reemployment Date, as
applicable. The second computation period commences on the first day of the
Plan Year which begins during the initial computation period, and
thereafter, the computation period is the Plan Year.
(a) For purposes of determining the Years of Participation Service, all
Hours of Service shall be included, except that Preacquisition Service
shall be taken into account only as provided in Appendix B of the
Plan;
(b) For an Employee who is on an Approved Absence, such Employee shall be
credited with the number of Hours of Service (but not to exceed forty
(40) Hours of Service) for each week during the Plan Year in which he
is on an Approved Absence equal to the most recent weekly number of
hours regularly scheduled for such Employee for the performance of
duties; an Employee shall not be credited with an Hour of Service
under this subsection for an hour with respect to which he is credited
with an Hour of Service under Section 2.23;
(c) Under no circumstances shall an Employee be credited with more than
one (1) Year of Participation Service with respect to any Plan Year.
12
2.56 YEAR OF VESTING SERVICE means all aggregated Periods of Service, but shall
not include any Period of Service disregarded under the terms of the
Predecessor Plan. Years of Vesting Service also includes any service
recognized for vesting purposes under the Prior Plan. Preacquisition
Service shall only be taken into account in determining Years of Vesting
Service pursuant to Appendix B.
13
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY
(a) An Eligible Employee becomes a Participant on the first Plan Entry
Date following the later of attainment of age 21 or the completion of
one Year of Participation Service, provided he is then an Eligible
Employee and he files an election to participate in accordance with
Section 3.2. An Eligible Employee who does not file an election to
participate when first eligible to do so may become a Participant on
any subsequent Plan Entry Date by filing the election in accordance
with Section 3.2, provided he is then an Eligible Employee.
(b) An Employee who satisfies the requirements in paragraph (a) but who is
not an Eligible Employee shall become a Participant on the first Plan
Entry Date coinciding with or next following the date he becomes an
Eligible Employee and files an election to participate in accordance
with Section 3.2.
(c) A Participant who ceases to be an Eligible Employee but has not
incurred a Separation from Service shall be treated as a "limited
participant" in the Plan and shall resume participation upon again
becoming an Eligible Employee and filing an election to participate in
accordance with Section 3.2.
Under this Section 3.1(c), the Committee shall limit that
Participant's sharing in the allocation of Profit Sharing
Contributions and Participant forfeitures, if any, under the Plan by
disregarding his or her Compensation paid by the Participating
Employer for services rendered in his capacity as a "limited
participant". However during such period as a "limited participant",
the Participant, without regard to employment classification,
continues to receive credit for vesting under Article VIII for each
included Year of Vesting Service and the Participant's Account
continues to share fully in Trust allocations under Section 6.1.
(d) If an Employee who is not a Participant becomes eligible to
participate in the Plan by reason of a change in employment
classification, he will participate in the Plan immediately as if he
had satisfied the eligibility conditions of Section 3.1(a) and would
have been a participant had he not been ineligible to participate
during his Period of Service. Furthermore, the Plan takes into account
all of the Participant's included Years of Vesting Service with the
Participating Employer prior to his becoming eligible to participate.
3.2 PARTICIPATION
(a) SALARY DEFERRAL. Each Eligible Employee who has satisfied the
applicable service requirements under Section 3.1 and who desires to
have Salary Deferral
14
Contributions made on his behalf shall file an election to participate
in accordance with enrollment procedures prescribed by the Committee.
The election to participate shall provide that the Participant's
Compensation in each payroll period shall be reduced by any whole
number percentage from 1% to 17%; provided, however, that the amount
of the reduction does not exceed the limits set forth in Section 5.4.
Each plan year, the Committee may reduce the maximum percentage
reduction allowable for Highly Compensated Employees. For Non-Highly
Compensated Employee Participants, the reduction percentage may exceed
17% to the extent such Participant elects to treat dividends on
Employer stock as Salary Deferral Contributions. Salary Deferral
Contributions shall be made through payroll deductions from the
Participant's Compensation and shall be deemed to be Participating
Employer contributions to the Plan for federal income tax purposes,
and to the extent permitted, for purposes of other federal, state and
local taxes. A Participant's election to make Salary Deferral
Contributions shall constitute an election to have the Participant's
Compensation reduced by the amount of the Salary Deferral
Contributions.
(b) AFTER TAX CONTRIBUTIONS. Effective January 1, 1985, After Tax
Contributions to this Plan shall no longer be permitted.
(c) RULES GOVERNING ELECTIONS TO PARTICIPATE.
(1) An Election shall be effective with respect to payroll periods
beginning after the Plan Entry Date following the timely filing
of an election to participate.
(2) An election to participate may be by an interactive electronic
system. The Participant will receive a written confirmation of
his election.
(3) The Committee shall establish procedures and deadlines for filing
elections to participate which shall be communicated to Eligible
Employees.
(4) An election to participate may be amended by timely filing a
written amendment on the form provided by the Committee or by
filing the amendment by using an interactive electronic system.
Any such amendments shall be made following the procedures
prescribed by the Committee, which election shall be put into
effect at the time prescribed by the Committee's procedures.
Amendments will be effective with respect to the payroll period
beginning on or after the Plan Entry Date following the timely
filing of an amended election to participate.
(5) An election to participate may be revoked at any time by the
Committee or by using an interactive electronic system. The
Participant will receive a written confirmation of his electronic
revocation. The Participant may
15
revoke his election to make Salary Deferral Contributions. The
revocation shall be effective with respect to the payroll period
beginning on or after the processing of the amended election to
participate. Any such revocation shall be made by following the
procedures prescribed by the Committee, which election shall be
put into effect at the time prescribed by the Committee's
procedures. A Participant who has revoked his election can
subsequently file a new election to participate according to this
Section.
(6) At the time of making or amending an election to participate, an
Eligible Employee shall also specify the Investment Fund(s) in
which his Accounts shall be invested.
(7) The election to participate of a Participant who ceases to be an
Eligible Employee (other than a limited participant under Section
3.1(c)) shall be deemed revoked as of the date of such change in
status.
3.3 PARTICIPATION UPON REEMPLOYMENT
(a) A Participant whose employment with a Participating Employer
terminates will re-enter the Plan as a Participant on his Reemployment
Date. An Eligible Employee who satisfies the Plan's eligibility
conditions but who terminates employment with the Participating
Employer prior to becoming a Participant will become a Participant on
the later of the Plan Entry Date on which he would have entered the
Plan had he not terminated employment or his Reemployment Date. Any
Employee who terminates employment prior to satisfying the Plan's
eligibility conditions becomes a Participant in accordance with the
provisions of Section 3.1.
16
ARTICLE IV
CONTRIBUTIONS TO THE PLAN
4.1 SALARY DEFERRAL CONTRIBUTIONS
In lieu of paying a Participant his full Compensation in a payroll period,
the Participating Employer shall make a Salary Deferral Contribution on the
Participant's behalf in an amount equal to the amount of Compensation that
the Participant has elected to defer under Section 3.2(a). In no event,
however, shall the Salary Deferral Contributions made on behalf of a
Participant exceed the limitations of Article V. The Committee may
prospectively revoke, amend, or temporarily suspend a Participant's
election to participate to the extent it deems necessary to satisfy those
limits in any Plan Year.
4.2 AFTER TAX CONTRIBUTIONS
Except with respect to repayment of a defaulting loan to the After Tax Loan
Account, effective January 1, 1985, After Tax Contributions to this Plan
shall no longer be permitted.
4.3 MATCHING CONTRIBUTION
The Participating Employer shall make a Matching Contribution each payroll
period on behalf of each Participant who has had Salary Deferral
Contributions made on his behalf during the payroll period. The Matching
Contribution made on a Participant's behalf shall be equal to 50% of the
first 6% of the Participant's Compensation that is contributed to the Plan
as Salary Deferral Contributions. Matching Contributions shall not exceed
the lesser of 3% of a Participant's Compensation for the Plan Year or the
maximum amount permissible under Article V.
Salary Deferral Contributions are not eligible for Matching Contributions
to the extent they:
(a) are made in the same amount as a dividend in accordance with Section
A1.6 of "Appendix A" attached hereto, or
(b) are excess deferrals under Section 5.4.
In addition to the Matching Contributions contributed as provided above to
the Participant's Account for each payroll period, at the end of the Plan
Year and following the determination of the Matching Contributions to be
made for the last payroll period for the Plan Year, the Participating
Employer shall make an additional Matching Contribution on behalf of the
Participant as described in (a) through (b), below. Such additional
Matching Contributions shall be made, only if (1) the Participant is still
employed by the Participating Employer on the last day of the Plan Year,
and (2) the
17
Participant has not already or will not otherwise be allocated Matching
Contributions equal to 50% of the total Salary Deferral Contributions
allocated to the Participant for the Plan Year (not including deferral
contributions that (i) are made in the same amount as a dividend in
accordance with Section A1.6 of Appendix A of the Plan, (ii) are excess
deferrals under Section 5.4 or (iii) are in excess of 6% of the
Participant's Compensation for that portion of the Plan Year the individual
was an Eligible Employee). Additional Matching Contributions for a
Participant shall be equal to the following amount:
(a) 50% of the Salary Deferral Contributions allocated to the Participant
for the Plan Year (not including deferral contributions described in
clauses (2)(i) through (2)(iii) of this Section 4.3); less
(b) the amount of Matching Contributions allocated to the Participant for
the Plan Year attributable to the Matching Contributions made or to be
made as provided above for each payroll period during such Plan Year.
Accordingly, if the above calculation results in an amount of zero or a
negative number for a particular Participant, then no such additional
Matching Contribution shall be made for such Plan Year to the Plan for such
Participant.
4.4 SUPPLEMENTAL CONTRIBUTIONS
The Participating Employer may, in its discretion, make a Supplemental
Contribution for any Plan Year for the purpose of passing the tests
described in Section 5.2.
Supplemental Contributions are intended to be qualified non-elective
contributions or qualified matching contributions (as described in Section
401(m)(4) of the Code) and shall be made only if the applicable
requirements of Section 401(m) and Regulation Sections 1.401(k)-1(g)(13)
and 1.401(m)-1(b)(5) are satisfied. Supplemental Contributions shall be
allocated to the Supplemental Account, in a manner that does not violate
the nondiscrimination requirements of Code Section 401(a)(4) to all
Employees who are not highly compensated employees (as defined in Section
414(q)) and who are (a) Eligible Employees, (b) Eligible Employees who have
satisfied the service requirements of Section 3.1(a), or (c) Participants
on whose behalf Salary Deferral or Matching Contributions were made during
the Plan Year. Supplemental Contributions may be treated as Salary Deferral
Contributions, provided the conditions in Regulation Section
1.401(k)-1(b)(5) are satisfied.
4.5 PROFIT SHARING CONTRIBUTIONS
The Participating Employer may, in its discretion, make a Profit Sharing
Contribution for any Plan Year. Such contribution shall be allocated as a
uniform percentage of Compensation to those Eligible Employees who are
Participants on the last day of the Plan Year.
18
4.6 ROLLOVER CONTRIBUTIONS
An Eligible Employee, whether or not he has met the age and service
requirement of Section 3.1(a) may make a Rollover Contribution if permitted
by the Committee. The Committee shall not discriminate in favor of highly
compensated employees (as defined in Code Section 414(q)) in approving
Rollover Contributions. A Rollover Contribution shall be credited to the
Participant's Rollover Account. A Rollover Contribution shall be permitted
only if the amount to be contributed is an eligible rollover distribution
(as defined by Code Section 402(c)(4)) or a direct rollover from the
trustee of a qualified plan (as described in Code Section 401(a)(31) and
the regulations promulgated thereunder), the requirements of Code Sections
402(c) and 408(d)(3) are satisfied, and the Participant complies with the
procedures established by the Committee. Rollover Contributions must be
made by check. Subject to the approval of the Committee, a participant loan
may be a part of a Rollover Contribution. However, the Plan will not accept
a loan offset as part of a Rollover Contribution. Before the direct
rollover is accepted, the Committee may request whatever information it
deems necessary to complete the transfer. If the Committee subsequently
discovers that the Contribution does not satisfy these requirements, the
Rollover Account including any investment earnings (or less investment
losses) shall be immediately distributed to the Participant.
4.7 DATE OF CONTRIBUTIONS
The Participating Employer shall forward all Salary Deferral Contributions
to the Trustee as soon as administratively possible after they were
withheld, but in no event later than the date specified in Section
2510.3-102 of the Department of Labor regulations.
(a) All other Participating Employer contributions shall be deposited with
the Trustee no later than the due date, including extensions, for the
Participating Employer's income tax return for the Participating
Employer's tax year for which the contribution is made.
(b) Rollover Contributions shall be forwarded to the Trustee, for
investment in the Trust Fund as soon as administratively possible
after they are received by the Participating Employer.
4.8 QUALIFIED MILITARY SERVICE
Notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will
be provided in accordance with Code Section 414(u).
If a Participant returns to employment with the Participating Employer
after a leave of absence due to service in the Armed Forces of the United
States, the Participant shall have the right to elect Salary Deferral
Contributions to be made on his behalf in an amount that would have been
allowed for the period of his or her absence. If the
19
Participant chooses to make these contributions, the contributions must be
made before the end of a period equal to three times the period of military
service, but not longer than five years after reemployment.
The Participating Employer shall make all contribution allocations that
would have been made if the Participant had not been on military leave.
Compensation for purposes of contribution requirements shall be
Compensation computed at the rate that the employee would have earned if
the employee had not been on military leave. If that rate cannot be
calculated, Compensation shall be determined on the basis of the employee's
average rate of pay during the 12 months preceding the military leave.
20
ARTICLE V
LIMITATIONS ON CONTRIBUTIONS
5.1 DEFINITIONS FOR NONDISCRIMINATION TESTS
The following terms have the following meanings for purposes of Sections
5.2, 5.3 and 5.4:
(a) ACTUAL CONTRIBUTION PERCENTAGE means, for a Plan Year, the
Participant's Matching Contributions expressed as a percentage of
Compensation. The Actual Contribution Percentage of a Highly
Compensated Employee who is eligible to participate in two or more
plans maintained by a Participating Employer which are described in
Section 401(a) of the Code and under which matching contributions or
employee contributions are made, shall be determined as if all such
plans were a single plan or arrangement. The Actual Contribution
Percentage of a Participant who receives no Matching Contributions is
zero.
(b) ACTUAL DEFERRAL PERCENTAGE means, for a Plan Year, a Participant's
Salary Deferral Contributions expressed as a percentage of
Compensation. If an Eligible Employee elects to make no Salary
Deferral Contributions, his Actual Deferral Percentage shall be zero.
Salary Deferral Contributions shall be taken into account for a Plan
Year only if the Compensation to which the Contribution relates would
have been paid (but for the deferral) during the Plan Year. Salary
Deferral Contributions which are distributed under Section 5.5(d) as
excess Annual Additions are disregarded. The Actual Deferral
Percentage of a Non-Highly Compensated Employee shall be determined
without regard to any Salary Deferral Contributions made in excess of
the 402(g) Limit (described in Section 5.4). The Actual Deferral
Percentage of a Highly Compensated Employee who is eligible to
participate in two or more plans maintained by a Participating
Employer which are described in Code Section 401(a) and which include
a cash or deferred arrangement described in Code Section 401(k), shall
be determined as if all such plans were a single plan or arrangement.
(c) AVERAGE ACP means the average (expressed as a percentage) of the
Actual Contribution Percentages for a group of Employees.
(d) AVERAGE ADP means the average (expressed as a percentage) of the
Actual Deferral Percentages for a group of Employees.
(e) COMPENSATION means
(1) an Employee's Total Compensation (as defined in Section
5.5(b)(4)) plus
21
(2) any amounts deferred pursuant to Code Section 125, 401(k),
402(e)(3), 402(h) or 403(b) under an arrangement maintained by a
Participating Employer.
"Compensation" in any Plan Year shall not include any amounts in
excess of the amount in effect under Code Section 401(a)(17) for the
calendar year in which the Plan Year begins. Solely for the purposes
of determining an Employee's Actual Deferral Percentage or Actual
Contribution Percentage, "Compensation" shall include only amounts
earned while the Employee was eligible under Section 3.1 to
participate (unless the Committee requires the Plan Year to be used)
and the Committee may calculate Compensation without regard to amounts
described in subparagraph (2) or use any other definition of
compensation permitted under Code Section 414(s) or the regulations
issued thereunder, provided it applies the same definition uniformly
in any Plan Year.
5.2 NONDISCRIMINATION TESTS
Notwithstanding any provision of the Plan to the contrary, the
nondiscrimination tests of paragraphs (a) and (b) (as modified by (c) of
this Section 5.2) shall be passed for each Plan Year. If the tests are not
satisfied, the Committee shall take action pursuant to Section 5.3 to
ensure that the tests are passed. For purposes of these tests, all plans
which are treated as one plan for purposes of Code Section 401(a)(4) or
410(b) (except for employee stock ownership plans described in Code Section
4975(c)(7)) shall be treated as one plan, provided that such plans have the
same plan year.
(a) For all Plan Years beginning after December 31, 1997, the Average ADP
of the group of Highly Compensated Employees shall not exceed the
greater of the following (adjusted as required by paragraph (c)
below):
(1) 1.25 times the Average ADP of the group of Non-Highly Compensated
Employees for the preceding Plan Year, or
(2) 2.0 times the Average ADP of the group of Non-Highly Compensated
Employees for the preceding Plan Year, but not more than two
percentage points higher than the Average ADP of the group of
Non-Highly Compensated Employees for the preceding Plan Year.
For the Plan Year beginning January 1, 1997, the maximum permitted ADP
for the group of Eligible Employees who are Highly Compensated
Employees shall be determined, as set forth above, by reference to the
1997 Plan Year ADP for the group of Non-Highly Compensated Employees.
Notwithstanding the foregoing, the Participating Employer may elect to
apply these two tests using the Average ADP for the group of
Non-Highly Compensated
22
Employees for the current Plan Year, except that if such an election
is made, it may not be changed except as provided by the Secretary of
the Treasury.
(b) For Plan Years beginning after December 31, 1997, the Average ACP of
the group of Highly Compensated Employees shall not exceed the greater
of the following (adjusted as required by paragraph (c) below):
(1) 1.25 times the Average ACP of the group of Non-Highly Compensated
Employees for the preceding Plan Year, or
(2) 2.0 times the Average ACP of the group of Non-Highly Compensated
Employees for the preceding Plan Year but not more than two
percentage points higher than the average ACP of the Non-Highly
Compensated Employees for the preceding Plan Year.
For the Plan Year beginning January 1, 1997, the maximum permitted ACP
for the group of Eligible Employees who are Highly Compensated
Employees shall be determined, as set forth above, by reference to the
1997 Plan Year ACP for the group of Non-Highly Compensated Employees.
Notwithstanding the foregoing, the Participating Employer may elect to
apply these two tests using the Average ACP for the group of
Non-Highly Compensated Employees for the current Plan Year, except
that if such an election is made, it may not be changed except as
provided by the Secretary of the Treasury.
The nondiscrimination test of paragraph (b) need not be performed if
there are no Matching Contributions in a Plan Year or all Matching
Contributions are treated for testing purposes as Salary Deferral
Contributions (as described in Section 5.3(d)).
(c) The limits set forth in paragraphs (a) and (b) for Highly Compensated
Employees shall be reduced as necessary to prevent multiple use of the
limitations of subparagraphs (a)(2) and (b)(2). Multiple use occurs if
the sum of the Average ADP and the Average ACP of the group of Highly
Compensated Employees exceeds the greater of (1) or (2) below.
(1) The sum of:
(A) 1.25 times the greater of:
(i) the Average ADP of the Non-Highly Compensated Employees
for the preceding Plan Year who are eligible to make
Salary Deferral Contributions, or
23
(ii) the Average ACP of the Non-Highly Compensated Employees
for the preceding Plan Year who are eligible to have
Matching Contributions made on their behalf, and
(B) two plus the lesser of (A)(i) or (A)(ii), provided that this
number does not exceed two times the lesser of (A)(i) or
(A)(ii).
(2) The sum of:
(A) 1.25 times the lesser of:
(i) the Average ADP of the Non-Highly Compensated Employees
for the preceding Plan Year who are eligible to make
Salary Deferral Contributions, or
(ii) the Average ACP of the Non-Highly Compensated Employees
for the preceding Plan Year who are eligible to have
Matching Contributions made on their behalf, and
(B) two plus the greater of (A)(i) or (A)(ii), provided that
this number does not exceed two times the greater of (A)(i)
or (A)(ii).
5.3 CORRECTION OF EXCESS CONTRIBUTIONS
If the Average ADP or the Average ACP (or both) of the group of Highly
Compensated Employees exceeds the limits of Section 5.2 for any Plan Year,
the Committee shall take one or more of the actions described in this
Section as it deems appropriate in order to meet the limits of Section 5.2
for such Plan Year.
(a) The Committee may reduce the Salary Deferral Contributions of the
Highly Compensated Employees in a manner prescribed by Code Section
401(k)(8)(C), applicable regulations, and other IRS guidance. The
determination of the amount of Salary Deferral Contributions which
must be reduced shall be made after determining the deferrals in
excess of the 402(g) Limit (as described in Section 5.4). The reduced
Salary Deferral Contributions (and earnings thereon) shall be
distributed in accordance with paragraphs (e) and (g).
The Committee will determine the respective shares of excess
contributions by starting with the Highly Compensated Employee(s) who
has made the greatest contribution, reducing his contribution to the
next highest contribution, then, if necessary, reducing the
contribution of the Highly Compensated Employee(s) who has made the
next greatest contribution (including the contribution of the Highly
Compensated Employee(s) whose contribution the Committee already has
reduced), and continuing in this manner until the average ADP for the
Highly Compensated Group satisfies the ADP test.
24
(b) The Committee may reduce the Matching Contributions of the Highly
Compensated Employees in a manner prescribed by Code Section
401(m)(6)(C), applicable regulations, and other IRS guidance. The
determination of the amount of Matching Contributions which must be
reduced shall be determined after determining the deferrals in excess
of the 402(g) Limit (as described in Section 5.4) and the excess
Salary Deferral Contributions under paragraph (a). The reduced
Matching Contributions (and earnings thereon) shall be distributed in
accordance with paragraph (e).
The Committee will determine the respective shares of excess aggregate
contributions by starting with the Highly Compensated Employee(s) who
has received the greatest contribution, reducing his contribution to
the next highest contribution, then, if necessary, reducing the
contribution of the Highly Compensated Employee(s) who has received
the next greatest contribution (including the contribution of the
Highly Compensated Employee(s) whose contribution the Committee
already has reduced), and continuing in this manner until the average
ACP for the Highly Compensated Group satisfies the ACP test.
(c) Solely for the purposes of passing the test set forth in Section
5.2(a), the Committee may, in its discretion, elect to treat
Supplemental Contributions which are 100% vested when made (and which
are not subject to distribution prior to age 65 except on account of
separation from service) as Salary Deferral Contributions.
Supplemental Contributions which are so used shall not be tested under
Section 5.2(b), but shall otherwise continue to be treated as
Supplemental Contributions for all other purposes under the Plan. This
paragraph shall apply only if the requirements of Regulation Section
1.401(k)-1(b)(5) are satisfied.
(d) The Committee may, in its discretion, elect to treat Salary Deferral
Contributions in any Plan Year as Matching Contributions. Salary
Deferral Contributions which are so used shall not be tested under
Section 5.2(a), but shall otherwise continue to be treated as Salary
Deferral Contributions for all other purposes under the Plan. This
paragraph shall apply only if the requirements of Treasury Regulation
Section 1.401(m)-1(b)(5) are satisfied.
(e) If the Committee reduces Salary Deferral Contributions or Matching
Contributions pursuant to paragraphs (a) and (b), the excess
contributions (and any earnings allocable thereto) shall be
distributed to the affected Participants no later than the last day of
the Plan Year following the Plan Year for which the contributions were
made; provided, however, that unvested excess contributions (and
earnings allocable thereto) shall be forfeited or used to reduce the
next Participating Employer contributions to the Plan.
(1) Earnings and any allocable losses shall be calculated in a manner
permitted under Treasury Regulation Section
1.401(k)-1(f)(4)(ii)(C) or
25
1.401(m)-1(e)(3)(ii)(C). The period between the end of the Plan
Year and the date of distribution (the "gap period") shall be
considered.
(2) The distribution shall be made without consent or notice, and
shall be disregarded for purposes of the minimum distribution
requirements of Code Section 401(a)(9).
(3) If a Matching Contribution was made on account of Salary Deferral
Contributions which are then distributed to a Participant
pursuant to this Section, the Matching Contribution (and any
earnings allocable thereto) shall be forfeited and used to reduce
future Participating Employer contributions.
(f) If a Participating Employer makes a Supplemental Contribution with
respect to a Plan Year, the Committee shall include the Supplemental
Contributions for purposes of the tests in Sections 5.2(a) and/or
5.2(b) to the extent necessary to pass the applicable test, provided
that no portion of the Contribution is taken into account more than
once. Supplemental Contributions shall satisfy the requirements
applicable to "qualified nonelective employer contributions" or
"qualified matching contribution" under Treasury Regulation Sections
1.401(k)-1 and 1.401(m)-1.
(g) The amount of excess contributions to be distributed will be reduced
by excess deferrals (as described in Section 5.4) previously
distributed for the taxable year ending with or within the Plan Year.
5.4 LIMIT ON DEFERRALS
(a) Notwithstanding any other provision of the Plan to the contrary, a
Participant shall not be permitted to defer under Section 3.2(a) an
amount in any taxable year of the Participant in excess of the $10,000
limitation of Code Section 402(g) as adjusted by the Secretary of the
Treasury under Code Section 415(d) (the "402(g) Limit"). All
arrangements under which a Participant makes elective deferrals (as
defined in Code Section 402(g)(3)) shall be aggregated and treated as
a single arrangement. Salary Deferral Contributions which are
distributed as excess annual additions under Code Section 415 are
disregarded for purposes of the 402(g) Limit. Salary Deferral
Contributions which are distributed under Section 5.3 are taken into
account for the 402(g) Limit. Salary Deferral Contributions to a
Participant's Account shall automatically cease when the 402(g) Limit
is reached in any taxable year.
(b) If, through administrative error or otherwise, the Salary Deferral
Contributions to a Participant's Account exceed the 402(g) Limit
(without regard to elective deferrals under any other plan), any
excess Salary Deferral Contributions (plus any income and minus any
loss allocable thereto) shall be distributed to the
26
Participant no later than the first April 15 following the year of the
deferral, but may be distributed in the year of deferral if the
following requirements are satisfied:
(1) the Participant designates in writing that the distribution is an
excess deferral,
(2) the distribution is made after the Plan receives the excess
deferral,
(3) the Committee designates the distribution as a distribution of an
excess deferral.
(c) If the Participant's deferrals under this Plan exceed the 402(g) Limit
when aggregated with the Participant's other elective deferrals (as
defined in Code Section 402(g)(3)), the excess Salary Deferral
Contributions (and any earnings thereon) shall be distributed to the
Participant no later than the first April 15 following the year of
deferral, provided that the Participant submits a written claim to the
Committee no later than April 1 following the year of deferral. The
claim shall be in such form as specified by the Committee and shall
state the amount of the excess Salary Deferral Contributions for the
preceding year and shall include the Participant's written statement
that if such amounts are not distributed, they will, when added to
amounts deferred under other plans or arrangements, exceed the 402(g)
Limit for the year of the deferral.
(d) The amount of excess Salary Deferral Contributions that may be
distributed pursuant to this Section shall be determined after the
application of Section 5.3(a).
(e) Earnings on distributed excess Salary Deferral Contributions shall be
calculated in a manner permitted under Treasury Regulation Section
1.402(g)-1(e)(5)(iii).
5.5 LIMIT ON ANNUAL ADDITIONS
(a) BASIC LIMITATION. Notwithstanding any other provision of this Plan to
the contrary, the Annual Additions with respect to a Participant in
any Limitation Year shall not exceed the lesser of:
(1) $30,000, or
(2) 25% of the Participant's Total Compensation for such Limitation
Year.
(b) DEFINITIONS. For purposes of this Section 5.5, the following
terms when capitalized have the following meanings:
(1) ANNUAL ADDITIONS means in a Limitation Year the sum of:
27
(A) Participating Employer contributions (including Salary
Deferral Contributions, Matching Contributions,
Supplemental Contributions and Profit Sharing
Contributions) allocated to the Participant's accounts
in any Defined Contribution Plan (unless distributed
pursuant to Section 5.4);
(B) forfeitures allocated to the Participant's accounts in
any Defined Contribution Plan;
(C) the Participant's contributions to any Defined
Contribution Plan; and
(D) amounts described in Code Section 415(l)(1) or
419A(d)(2).
Salary Deferral Contributions which are distributed because
they are in excess of the 402(g) Limit will be considered an
Annual Addition unless the distribution is made no later
than April 15 following the year of deferral.
(2) DEFINED CONTRIBUTION PLAN means any plan described in Code
Section 414(i) which is maintained by any member of the
Controlled Group.
(3) LIMITATION YEAR means the Plan Year.
(4) TOTAL COMPENSATION means a Participant's taxable
compensation reportable on Form W-2. This definition of
"Total Compensation" is intended to comply with the safe
harbor definition of compensation, as described in Treasury
Regulation Section 1.415-2(d)(11)(i), including any
modifications stated therein. Alternatively, the Committee
may use any other definition of compensation permissible
under Treasury Regulation Section 1.415-2(d) as "Total
Compensation" provided it applies the definition uniformly
to all Participants in any given Limitation Year. For Plan
Years beginning on or after January 1, 1998, "Total
Compensation" shall include any amounts not includible in
the Participant's taxable income by reason of a salary
reduction agreement with a Participating Employer under Code
Section 125, 401(k) or 402(h) which if paid would have been
reported as taxable income on the Participant's IRS Form
W-2.
(c) COMBINED PLAN LIMITATION. If a Participant also participates (or
has participated) in a defined benefit plan (as defined in Code
Section 414(j)) maintained by any member of the Controlled Group,
the Participant's Annual Additions and projected annual benefit
(within the meaning of Code Section 415(e)(2)) under the defined
benefit plan(s) shall not exceed the limits imposed by Code
Section 415(e). Except as otherwise provided in the defined
28
benefit plan(s), the Participant's annual benefit under such
plan(s) shall be reduced as necessary to comply with Code Section
415(e) before the Annual Additions to this Plan are reduced.
Effective for Limitation Years beginning on or after January 1,
2000, the combined plan limits of Code Section 415(e) shall no
longer apply to Annual Additions made after December 31, 1999.
(d) CORRECTION OF EXCESS ANNUAL ADDITIONS. If the Annual Additions to
a Participant's Accounts would exceed the limitation set forth in
paragraph (a) because of a reasonable error in determining the
Participant's Total Compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning
of Code Section 402(g)(3)) that may be made with respect to any
individual under the limits of Code Section 415, or under other
limited facts and circumstances that the Commissioner finds
justify the availability of the rules set forth below, the Annual
Additions shall be reduced in the following manner to the extent
necessary to comply with the limitations of paragraph (a):
(1) The contributions made by the Participant to, first, any
other Defined Contribution Plan maintained by a member of
the Controlled Group, then to this Plan, and any earnings
attributable to such contributions shall be refunded to the
Participant to the extent necessary to reduce the
Participant's Annual Additions to the amount set forth in
paragraph (a).
(2) If additional reductions are necessary, the Participant's
Salary Deferral Contributions shall be refunded to the
extent necessary to reduce the Participant's Annual
Additions to the amount set forth in paragraph (a).
(3) If additional reductions are necessary, the remaining excess
Annual Additions shall be held in a suspense account and
used to reduce the Participating Employer's contributions
for that Participant in subsequent Limitation Years provided
that the Participant is covered by the Plan at the end of
the Limitation Year in question. If the Participant is not
covered by the Plan at that time, the suspended excess
Annual Additions shall be allocated and reallocated to the
Accounts of the remaining Participants. If no Account can
receive a further allocation without exceeding the
limitation, the unallocated amount shall continue to be held
in a suspense account and allocated in the next year before
any other Participating Employer or Employee Contribution is
made. The Committee shall determine which contributions are
excess Annual Additions for purposes of this suspense
procedure on a consistent, nondiscriminatory basis.
29
ARTICLE VI
ACCOUNT ADMINISTRATION
6.1 PLAN ACCOUNTS AND ALLOCATION OF CONTRIBUTIONS
(a) The Committee shall establish one or more of the following Accounts as
necessary for each Participant (or Eligible Employee, as the case may
be):
(1) Salary Deferral Account
(2) After Tax Account
(3) Matching ESOP Account
(4) Matching Non-ESOP Account
(5) Supplemental Account
(6) Profit Sharing ESOP Account
(7) Profit Sharing Non-ESOP Account
(8) Rollover Account
(9) Transfer Account
(10) PAYSOP Accounts
(11) Xxxxxxxxx Mortgage Account
(12) After-Tax Loan Account
(13) ESOP Deferral Account
(b) The Committee shall allocate contributions among a Participant's
Accounts as follows subject to the terms of Appendix A:
(1) Salary Deferral Contributions shall be allocated to the
Participant's Salary Deferral Account.
(2) Except as provided in (10) below, effective January 1, 1985,
After Tax Contributions were no longer permitted under the Plan.
After Tax Contributions made prior to January 1, 1985 shall
remain in the After Tax Account.
(3) Matching Contributions shall be allocated to the Participant's
Matching Account. Effective January 1, 1996, except as provided
in Section 7.2(b) fifty percent (50%) of the Matching
Contributions that the Employer makes on behalf of a Participant
shall be made in the form of cash or Employer Stock and allocated
to the Matching ESOP Account. The remaining fifty percent (50%)
shall be allocated to the Matching Non-ESOP Account.
(4) Supplemental Contributions shall be allocated to the
Participant's Supplemental Account.
30
(5) Profit Sharing Contributions shall be allocated to the
Participant's Profit Sharing Account. Effective January 1, 1996,
one hundred percent (100%) of the Profit Sharing Contributions
that the Employer makes shall be made in the form of cash or
Employer Stock and allocated to the Profit Sharing ESOP Account.
Profit Sharing Contributions made by the Employer for Plan Years
ending before January 1, 1985, as well as Profit Sharing
Contributions transferred out of the Profit Sharing ESOP Account
as provided in Article VII shall be allocated to the Profit
Sharing Non-ESOP Account.
(6) Rollover Contributions shall be allocated to the Participant's
Rollover Account.
(7) Funds transferred from the trustee of another tax qualified plan
in a trustee to trustee transfer or a merger are allocated to The
Participant's Transfer Account.
(8) The funds received from the trustee of the First Security
Employee Stock Ownership Plan are allocated to the PAYSOP
Account.
(9) Matching funds transferred from the Xxxxxxxxx Mortgage Plan are
allocated to the Xxxxxxxxx Mortgage Account.
(10) After-Tax payments by a Participant that are to be credited
against a defaulted loan shall be allocated to the After-Tax Loan
Account.
(11) Dividends paid on Employer Stock held in ESOP Accounts that are
deferred by the Participant pursuant to Section A1.6 shall be
allocated to the ESOP Deferral Account.
6.2 ALLOCATION OF INVESTMENT EARNINGS AND LOSSES
(a) The Trustee or its delegate shall determine the fair market values of
the assets of the Investment Funds, and shall determine the fair
market value of each Participant's Account, as of each Valuation Date.
(b) The Committee shall establish accounting procedures for the purpose of
allocating Trust Fund earnings and losses among Accounts and the
treatment of contributions and distributions since the preceding
Valuation Date. The Committee may modify its procedures as necessary
to achieve an equitable and nondiscriminatory allocation of earnings
and losses among Accounts.
(c) The Committee may change the Valuation Date if it determines that the
allocation of earnings and losses would otherwise result in
inequitable treatment of some
31
Participants, provided, however, the assets shall be valued on at
least one day in each Plan Year.
32
ARTICLE VII
INVESTMENT OF FUNDS
7.1 INVESTMENT FUNDS
The Committee shall, from time to time, select a diversified group of
Investment Funds for the investment of the Trust Fund. The Committee shall
furnish descriptions of each Investment Fund to Participants. The Plan
provides an opportunity for Participants (and their Beneficiaries) to
exercise control over the investment of their Accounts by choosing from a
range of investment alternatives and is intended to be described in Section
404(c) of ERISA.
7.2 INVESTMENT ELECTIONS
(a) If a Participant has not yet attained age 53, 50% of his Matching
Contributions and 100% of his Profit Sharing Contributions shall be
invested in the First Security Stock Fund with the Employee Stock
Ownership Plan. For such a Participant, the remaining 50% of his
Matching Contributions and all contributions to his other Accounts,
except Profit Sharing ESOP and PAYSOP Accounts, shall be apportioned
among one or more of the Investment Funds the Participant may specify
according to the procedures prescribed by the Committee.
(b) If a Participant has attained age 53, all contributions to his
Accounts shall be apportioned among one or more of the Investment
Funds the Participant may specify according to the procedures
prescribed by the Committee, except to the extent an election under
subsection A1.7 (c) (1) is in effect.
(c) The selection among the available Investment Funds pursuant to Section
7.2(a) and Section 7.2(b) is the sole responsibility of each
Participant. No Participating Employer, representative of the
Participating Employer, the Committee, or any Investment Manager is
authorized to make any recommendation to any Participant with respect
to Investment Fund selection.
(d) A Participant shall, upon his initial participation in the Plan, elect
to have the contributions to his Accounts invested in one or more of
the available Investment Funds. The election shall be according to the
procedures prescribed by the Committee. The Participant shall receive
a written confirmation of his election(s). Investment elections and
changes thereto, with respect to each Investment Fund, must be made in
increments of 1%. Investment elections must add up to 100%. If, at any
time, a Participant does not have a valid election on file with the
Committee, the Participant shall be deemed to have elected that all of
his accounts be invested in an available Investment Fund under the
Plan that, in the Committee's sole discretion, has conservative risk
and return characteristics. An investment election made in accordance
with this Article shall remain in effect
33
with respect to all future contributions allocated to the
Participant's Accounts unless or until changed in accordance with the
provisions of Section 7.3.
7.3 CHANGES IN INVESTMENT ELECTIONS
A Participant may elect to change the investment instructions with respect
to future contributions at any time according to the procedures prescribed
by the Committee. Such changes shall be effective no later than the next
Valuation Date and will apply to contributions received following the
effective date of the election.
7.4 TRANSFERS BETWEEN INVESTMENT FUNDS
Except for the amounts required to be invested in First Security Stock
under Section 7.2(a), a Participant may elect to reapportion amounts in his
Accounts among the Investment Funds by properly following procedures
prescribed by the Committee on a daily basis, specifying the desired
rearranged balance request. The amounts required to be invested in the
First Security Stock Fund under Section 7.2(a) cannot be transferred out of
the ESOP until the Participant has attained age 53. Any such election will
be effective no later than the next Valuation Date.
7.5 COMMITTEE MAY AMEND RULES
The Committee may adopt uniform rules providing for additional or different
dates for the changes of or transfers between Investment Funds and may
impose uniform limitations on changes or transfers as it deems appropriate.
34
ARTICLE VIII
VESTING AND FORFEITURES
8.1 FULLY VESTED ACCOUNTS
All amounts credited to a Participant's Salary Deferral, After Tax,
Supplemental, Xxxxxxxxx Mortgage, Rollover Accounts PAYSOP, After Tax Loan,
ESOP Deferral and Transfer Accounts shall be fully vested and
nonforfeitable at all times.
8.2 MATCHING AND PROFIT SHARING ACCOUNTS
(a) The amounts credited to a Participant's Matching and Profit Sharing
Accounts shall be fully vested and nonforfeitable upon his death,
Disability or attaining Normal Retirement Age, while employed. Such
amounts shall also be fully vested and nonforfeitable on the date the
Participant's employment is servered under (1), (2), or (3) below:
(1) The Employee must have been involuntarily terminated due to a
reduction in force with an actual severance date between July 5,
1995 and December 31, 1995, and must have been notified by the
Corporation that the Employee's separation is due to a reduction
in force, with a severance date between July 5, 1995 and December
31, 1995.
(2) The Employee must have been identified between July 5, 1995 and
December 31, 1995 by the Corporation for a separation as a part
of VISION, and the Employee must have been notified by the
Corporation that the separation as a part of VISION, with a
severance date after July 5, 1995 and before December 31, 1996,
qualifies the Employee for Enhanced Severance Pay under VISION.
(3) The Employee is identified by the Committee as one whose job
functions have been transferred to a third party and whose
employment with the Corporation is terminated as a direct result
of this transfer. This provision does not apply to employees
whose job functions are eliminated and employment is terminated,
such as a reduction in force termination except with respect to
terminations described in (1) and (2), above.
(b) Except as provided in paragraph (a), a Participant's Matching and
Profit Sharing Accounts shall become vested and nonforfeitable upon
the Participant's completing five years of Vesting Service.
35
8.3 FORFEITURES
(a) If a Participant terminates employment when the Participant's Vested
Percentage in his Matching and Profit Sharing Accounts is less than
100%,
(1) the vested portion of his Accounts shall be distributed as
provided in Article X, and
(2) the unvested portion of his Accounts shall be forfeited as of the
date of such distribution.
If the Participant's Vested Percentage is zero, there shall be a
deemed distribution of the vested Account balance upon termination of
employment and the unvested balance shall be forfeited.
(b) If a Participant who ceases to be an Employee is subsequently
reemployed as an Employee , any amount forfeited pursuant to paragraph
(a) shall be restored to the Participant's Accounts from which
forfeited; provided, however, that if the Participant received a
distribution of the vested portion of his Accounts, the forfeited
amounts shall be reinstated only if the Participant repays the amount
previously distributed before the fifth anniversary of the
Reemployment Date (or, if earlier, before another distribution is
made). If a deemed distribution of zero dollars was made on the
Participant's previous termination of employment, he shall be deemed
to have repaid the distribution upon reemployment as an Employee.
(c) Forfeitures will be restored from amounts forfeited as of the
Valuation Date coincident with or immediately following the date on
which the Participant is reemployed or, if later, repays his
distribution, and, to the extent such forfeitures are not sufficient,
by a special Participating Employer contribution. The amount restored
shall be equal to the amount forfeited, unadjusted by any subsequent
gains or losses.
(d) Until the Committee restores the Participant's Accounts, as described
in Section 8.3(c), the Trustee will invest the cash-out amount the
Participant has repaid in a segregated Account maintained solely for
the Participant. The Trustee must invest the amount in the
Participant's segregated Account in Federally insured interest bearing
savings account(s) or time deposit(s) (or a combination of both), or
in other fixed income investments. Until commingled with the balance
of the Trust Fund on the date the Committee restores the Participant's
Accounts, the Participant's segregated Account remains a part of the
Trust, but it alone shares in any income it earns and it alone bears
any expense or loss it incurs. Unless the repayment qualifies as a
rollover contribution, the Committee will direct the Trustee to repay
to the Participant as soon as is administratively practicable the
36
full amount of the Participant's segregated Account if the Committee
determines that the Plan prevents restoration as of the applicable
Accounting Date, notwithstanding the Participant's repayment.
(e) Forfeitures not used to restore Participants' Accounts shall be used
to reduce future Participating Employer contributions or as determined
by the Committee, to pay expenses of Plan administration.
37
ARTICLE IX
WITHDRAWALS AND LOANS DURING EMPLOYMENT
9.1 APPLICATION
This Article IX applies only to active Employees of a Participating
Employer.
9.2 WITHDRAWAL FROM AFTER TAX ACCOUNTS
Except as provided in 9.4, a Participant may not withdraw any portion of
the balance in his After Tax Account or After Tax Loan Account
9.3 HARDSHIP WITHDRAWALS FROM SALARY DEFERRAL ACCOUNTS OR XXXXXXXXX MORTGAGE
ACCOUNT
A Participant may request a withdrawal from his Salary Deferral Account or
Xxxxxxxxx Mortgage Account on account of hardship, subject to the rules set
forth in this Section after he has withdrawn all of his other Accounts
which are available for withdrawal, and after he has taken all available
plan loans pursuant to Section 9.7.
(a) The maximum amount of the withdrawal shall not exceed the lesser of:
(1) the balance of the Participant's Salary Deferral Account as of
December 31, 1988, plus the amount of the Salary Deferral
Contributions made after that date plus the balance of the
Xxxxxxxxx Mortgage Account, and
(2) the amount necessary to meet the hardship need and any amounts
(up to an additional 20%) necessary to pay any federal, state or
local income taxes or penalties reasonably anticipated to result
from the distribution.
(b) The Participant's request shall be in accordance with such procedures
as are established by the Committee. The Committee shall review all
hardship requests on the basis of criteria which do not discriminate
in favor of highly compensated employees (as defined in Code Section
414(q)).
(c) A hardship withdrawal will be granted only on account of an immediate
and heavy financial need. The need may have been reasonably
foreseeable or voluntarily incurred by the Participant. An immediate
and heavy financial need shall exist if it is on account of:
(1) unreimbursed expenses incurred (or to be incurred) by the
Participant, his spouse, or his dependents (as described in Code
Section 152) for medical care described in Code Section 213(d);
38
(2) the purchase (excluding mortgage payments) of the principal
residence of the Participant,
(3) tuition and related educational fees for the next year of
post-secondary education for the Participant, his spouse or his
dependents,
(4) the need to prevent the eviction from or the foreclosure on the
Participant's principal residence, or
(5) such other reason as the Commissioner of the Internal Revenue
from time to time publishes in official documents of general
applicability.
(d) A hardship withdrawal will be granted only to the extent that the
amount (plus up to an additional 20% for federal taxes) requested does
not exceed the amount required to satisfy the need, and the need
cannot be satisfied from any other resources reasonably available to
the Participant. A need cannot be satisfied from other sources if both
(1) and (2) are satisfied.
(1) The Participant has withdrawn or borrowed the entire Vested
Percentage of his Accounts to the extent available under this
Article.
(2) The Committee shall determine that the need cannot be satisfied
from other sources if the Participant agrees that:
(A) Salary Deferral Contributions on his behalf to this Plan
(and all other plans of the Participating Employer) shall be
suspended for twelve months after receipt of the hardship
distribution, and
(B) the maximum Salary Deferral Contribution that can be made on
his behalf for the taxable year next following the taxable
year of the hardship distribution shall be an amount equal
to the excess of the 402(g) Limit (as defined in Section
5.4) for such next year over the amount of Salary Deferral
Contributions made on his behalf in the taxable year of the
hardship distribution.
9.4 WITHDRAWALS AFTER ATTAINING AGE 65
A Participant who has attained age 65 may withdraw all or any portion of
the Vested Percentage of his Accounts, subject to the following rules:
(a) The Participant's request shall be in writing on such forms and in
accordance with such procedures as the Committee specifies.
39
(b) A withdrawal pursuant to this Section shall not affect the
Participant's continued participation in the Plan.
9.5 PLAN LOANS
The Committee, in its sole discretion and based on uniform and
nondiscriminatory standards adopted by the Committee in writing, may direct
the Trustee to make a loan to a party in interest (as defined in ERISA
Section 3(14)) who is an active Participant, the (the "Borrower") provided
the following conditions are met. The Committee specifically reserves the
right to cease making loans at any time without prior notice. Active
Participants for this purpose include Eligible Employees who have not yet
satisfied the eligibility requirements, but who have a Rollover Account
balance in the Plan.
(a) APPLICATION PROCEDURE. The Borrower shall submit a loan application in
accordance with such procedures and rules as the Committee specifies
in writing from time to time, and shall include the written consent of
the Borrower and his spouse, where applicable, witnessed by a notary
public acknowledging the loan and the possible subsequent reduction in
the Borrower's Accounts as security for such a loan. The Committee may
impose a loan application fee provided it does so on a
nondiscriminatory and consistent basis.
(b) NUMBER OF LOANS. A Borrower may have no more than one loan outstanding
at any time. A Borrower who defaults on a loan will not be eligible
for a new loan until the prior defaulted loan is repaid.
(c) AMOUNT OF LOAN. The principal amount of the loan shall not be less
than $1,000 and shall not exceed the lesser of:
(1) $50,000 reduced by the excess of:
(A) the highest outstanding balance of loans to the Borrower
from the Plan during the 12-month period ending on the day
before the date the loan was made, over
(B) the outstanding balance of loans to the Borrower from the
Plan on the date the loan was made; or
(2) One half of the Vested Percentage of the Borrower's Accounts.
(d) SOURCE OF LOAN FUNDS. No loan may be funded from that portion of any
account invested in the First Security Stock Fund.
40
(e) COLLATERAL. Each loan shall be secured by no more than 50% of the
Vested Percentage of the Borrower's Accounts and shall be supported by
his collateral promissory note for the amount of the loan, including
interest, payable to the order of the Trustee, requiring periodic
payments of interest and principal no less frequently than quarterly.
The remaining balance of the Borrower's Accounts shall remain
unencumbered.
(f) MINIMUM AND MAXIMUM TERM. The Committee shall determine the term of
each loan which shall not exceed five years, must be no less than one
year, and shall be in one-year increments.
(g) INTEREST RATE. The Committee shall establish the interest rate for the
term of the loan. The Committee shall make a good faith effort to
determine a reasonable rate of interest (in accordance with Labor
Regulations Section 2550.408b-1). The Committee may establish a higher
rate of interest for loans which are not paid through payroll
deduction.
(h) AMORTIZATION SCHEDULE. The loan shall be subject to a substantially
level amortization schedule, as determined by the Committee at the
time the loan is made.
(i) LOAN PAYMENTS. Loan payments shall be made by payroll deduction. If
payroll deduction is not possible (because the Borrower is terminated
or on leave of absence, does not receive a paycheck for a payroll
period or receives a paycheck which is insufficient to cover the loan
payment), the Borrower shall be obligated to submit loan payments by
check or by money order to the Committee in accordance with the
original amortization schedule and the Committee shall transfer such
payment to the Trustee upon receipt. Loan payments made by check or
money order may be subject to additional fees to cover the costs of
processing. Loan repayments may be suspended for up to twelve-months
for a Borrower on an approved leave of absence. When payment
recommences, the term of the loan cannot be extended and the Borrower
shall either (1) pay increased loan payments to account for the
suspension of loan payments or (2) continue paying the loan payment
amount in effect before the suspension and then pay the outstanding
balance with the final loan payment. The Committee may charge the
Borrower an additional fee if the loan payment amounts are
recalculated.
(j) ALLOCATION OF LOAN PAYMENTS. All loan payments shall be allocated
among the Investment Funds in the same proportions as would a current
contribution to such Accounts. If there is no current contribution
being made, payments shall be allocated to the Investment Fund, which
in the Committee's sole discretion, has conservative risk and return
characteristics.
(k) PREPAYMENT. A Borrower may repay, at any time and without penalty, the
entire principal balance then outstanding and any interest due to date
on the prepaid portion. Such repayment shall be made to the Committee,
and the Committee
41
shall transfer such prepaid amount to the Trustee upon receipt.
Partial prepayment is not permitted.
(l) DEFAULT. A Plan loan shall be in default and become due and payable in
full if any payment is not made within 180 days following the date the
loan payment was due. The Committee shall give the Borrower (or his
Beneficiary) written notice of default and allow the Borrower to cure
the default until the last business day of the calendar quarter
following the end of the calendar quarter in which the required loan
payment was due. If the default is not cured, the Committee shall
institute foreclosure procedures (consistent with any Plan
restrictions on distributions from the Borrower's Accounts). A
Borrower's eligible rollover distribution (as defined by Code Section
402(c)(4)) shall not include any offset amount resulting from the
Borrower's failure to timely repay his outstanding loan balance.
(m) OUTSTANDING LOAN BALANCE AT DEATH OR TERMINATION OF EMPLOYMENT.
Notwithstanding paragraph (l), the outstanding balance of a Plan loan
(including accrued interest) shall become due and payable upon the
Borrower's death or, except with respect to parties in interest,
termination of employment. If the arrangements to pay off the balance
are not made within 90 days, the Committee shall declare the loan in
default and satisfy the obligation from the Vested Percentage of the
Borrower's Account. An eligible rollover distribution (as defined by
Code Section 402(c)(4)) shall not include any offset amount resulting
from the Borrower's failure to timely repay his outstanding loan
balance.
(n) WRITTEN LOAN PROCEDURES. Loans under this Section 9.5 shall be
governed by the terms of the First Security Incentive Savings and
Trust Agreement Participant Loan Program which is hereby incorporated
by reference herein.
9.6 VALUING WITHDRAWALS AND LOANS
(a) The amount of any withdrawal or loan shall be based on the balance of
the Participant's Accounts on the Valuation Date following the date
the requests are collected for processing.
(b) Withdrawals and loans shall be funded pro rata from the Investment
Funds in which the Participant's Account(s) are invested., excluding
the ESOP and PAYSOP Accounts.
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ARTICLE X
PAYMENT OF BENEFITS
10.1 DISTRIBUTION
(a) A Participant shall be entitled to receive the Vested Percentage of
his Accounts upon termination of employment from all members of the
Controlled Group whether for retirement, quit, discharge or
Disability. The Committee shall value the Vested Percentage of the
Participant's Accounts on the Valuation Date following the date
Participants' requests for benefits are collected for processing, (or
the date of termination of employment, if later), which shall not be
less than weekly.
(b) The Plan does not provide any annuity distributions to Participants
nor to surviving spouses unless this Plan is the direct or indirect
transferee from a plan subject to Section 417 of the Code. Provisions
describing transfers subject to Section 417 of the Code, and
provisions governing the distribution of such transfers are described
in Appendix C.
(c) A Participant or Beneficiary may elect distribution (i) in a lump sum
of cash (or to the extent that a Participant's Accounts are invested
in the First Security Stock Fund, in whole shares of Employer Stock,
provided that the Participant or Beneficiary so elects, or (ii) in
such amount or amounts of the Vested Percentage of his or her accounts
as he or she may elect from time to time, provided that each such
distribution must be in an amount of at least one thousand dollars
($1,000)
(d) If the distribution is an eligible rollover distribution (as defined
in Section 402(c)(4) of the Code), a Participant can direct the Plan
Administrator to have all or a portion (expressed as a whole
percentage provided the amount is at least $500) of the distribution
directly rolled over to an eligible retirement plan (as defined in
Section 402(c)(8)(B) of the Code) and the balance, if any, paid to
him. A request for a direct rollover shall be in writing on a form
provided by the Plan Administrator submitted according to procedures
and deadlines established by the Plan Administrator. The Participant
must provide all information required by the Plan Administrator to
effect the direct rollover. A Participant may direct a distribution to
be rolled to more than one eligible retirement plan.
(e) If a distribution is not subject to Code Sections 401(a)(11) and 417,
it may be made less than 30 days after the notice required under
Treasury Regulation Section 1.411(a)-11(c) is given, provided that:
(1) the Plan Administrator clearly informs the Participant that he is
entitled to have at least 30 days after the date the notice to
consider whether to elect a distribution or to defer
distribution, and
43
(2) the Participant, after receiving the notice, affirmatively elects
to receive a distribution.
(f) If the value of a Participant's Accounts exceeds $5,000, distribution
shall not be made to a Participant before the earlier of:
(1) the date the Participant consents to the distribution, or
(2) the Participant attains Normal Retirement Age.
The Committee shall inform the Participant of his right to defer
commencement under this paragraph. A Participant's failure to consent
shall be treated as an election to defer to the earlier of (1) and
(2).
(g) Distribution shall commence as soon as administratively practicable
following the event described in paragraph (a). Notwithstanding the
foregoing, unless the Participant elects otherwise, a Participant's
benefits shall be paid no later than the 60th day after the close of
the Plan Year in which the latest of the following events occurs: (1)
the Participant attains Normal Retirement Age; (2) the 10th
anniversary of the Participant's entry into the Plan; or (3) the
Participant ceases to be an Employee. The Participant's failure to
elect distribution shall be deemed to be an election to defer payment
of benefits.
(h) If the Participant dies before distribution commences, the Vested
Percentage of his Accounts shall be valued for purposes of
distribution on the Valuation Date coinciding with the date
investments are liquidated for payment, and then distributed
(1) in a single sum payment to the Participant's Beneficiary as soon
as administratively practicable after the date of death, but in
no event later than the fifth anniversary of the Participant's
death, or
(2) if the value exceeds $5,000, in substantially equal monthly
installments to the Beneficiary over a period certain not to
exceed the life expectancy of the Beneficiary, commencing not
later than the first anniversary of the Participant's death.
If the Beneficiary is the Participant's Eligible Spouse and the
Vested Percentage of the Participant's Accounts exceeds $5,000,
the Eligible Spouse may elect to defer distribution to any future
date but not beyond the date the Participant would have attained
age 70 1/2. The Eligible Spouse's election to defer distribution
is not valid if made more than 90 days before the annuity
starting date (as defined in Code Section 417(f)(2)). If
distribution is deferred, the Accounts shall be valued on the
Valuation Date following the date requests for distribution are
collected for
44
processing, which shall not be less than weekly. The Eligible
Spouse may choose to use the direct rollover option described in
paragraph (d), but only to an individual retirement account or
annuity. If the Eligible Spouse dies before distribution is made
(or completed), the Accounts shall be paid to the Beneficiary
designated by the Eligible Spouse, or if none, pursuant to
Section 10.2(c), as though the Eligible Spouse were the
Participant.
(i) If the Participant dies after distribution commences, the
remaining portion of his vested interest with the Plan will be
distributed at least as rapidly as under the method of
distribution in effect at death.
(j) Effective January 1, 1999 (and prior to January 1, 2000),
distribution of the Participants' benefits from the Plan shall
commence no later than April 1 following the calendar year in
which the Participant attains age 70 1/2.
(k) Effective January 1, 2000:
(1) If a Participant of the Plan is not a 5% owner of Employer
Stock within the meaning of Code Section 401(a)(9),
distribution of the Participant's benefits from the Plan
shall commence no later than the April 1 following the later
of (1) the calendar year in which the Participant attains
age 70 1/2 (if the Participant is still actively employed by
a Participating Employer), or (2) the calendar year in which
the Participant actually retires.
(2) If a Participant of the Plan is a 5% owner of Employer Stock
within the meaning of Code Section 401(a)(9), distribution
of the Participant's benefits from the Plan shall commence
no later than the April 1 following the calendar year in
which the Participant attains age 70 1/2.
(3) Distributions required to be made by this Section 10.1(k)
shall be made in accordance with this Article. Distributions
due to attainment of age 70 1/2 to a Participant no longer
employed by a Participating Employer, or to a 5% owner
whether employed by a Participating Employer or not, are
distributions made to satisfy Code Section 401(a)(9) and are
not eligible for the direct rollover option described in
paragraph (d).
10.2 BENEFICIARY DESIGNATION
(j) Subject to the provisions of paragraph (b), each Participant shall
designate a Beneficiary to whom the Vested Percentage of his Accounts
will be paid if the Participant dies before receiving his entire
Accounts. Each Beneficiary designation shall be in writing, signed by
the Participant, on a form furnished by the Committee. The Participant
may from time to time change his Beneficiary designation. Each
subsequent change in Beneficiary designation filed with the Committee
will cancel all previous Beneficiary designations.
45
(k) No designation of a Beneficiary other than the Participant's Eligible
Spouse shall be effective unless the Eligible Spouse consents in
writing to such designation, the Eligible Spouse's consent
acknowledges the effect of such designation, and the Eligible Spouse's
signature is witnessed by a notary public. The revocation of a
Beneficiary designation and designation of a new Beneficiary (other
than the Eligible Spouse) shall not be effective unless the spousal
consent requirements of the preceding sentence are satisfied. Any
consent by an Eligible Spouse shall be effective only with respect to
such spouse. Notwithstanding the foregoing, spousal consent shall not
be required if it is established to the satisfaction of the Committee
that spousal consent cannot be obtained because there is no Eligible
Spouse, or because the Eligible Spouse cannot be located. If the
Eligible Spouse is legally incompetent to give consent, the legal
guardian of the Eligible Spouse (even if it is the Participant) may
give consent. If the Participant and the Eligible Spouse are legally
separated (or the Participant has been abandoned under local law) and
the Participant has a court order to such effect, spousal consent is
not required unless a Qualified Domestic Relations Order provides
otherwise.
(l) If a Participant fails to designate a Beneficiary in the manner
provided above, if the Participant's Eligible Spouse fails to consent
as provided above, or if the designated Beneficiary predeceases the
Participant, the Participant's benefits shall be paid in accordance
with the following order of priority: the Participant's (1) surviving
spouse, (2) surviving issue (by right of representation), (3)
surviving parents, and (4) estate.
10.3 BENEFITS TO MINORS AND LEGAL INCOMPETENTS
(m) In the event any amount is payable under the Plan to a minor, payment
shall not be made to the minor, but instead shall be paid to that
person's then living parent(s) to act as custodian or, if no parent of
that person is then living, to a custodian selected by the Committee
to hold the funds for the minor under the Uniform Gifts to Minors Act
in effect in the jurisdiction in which the minor resides. If no parent
is living and the Committee decides not to select another custodian to
hold the funds for the minor, then payment shall be made to the duly
appointed and currently acting guardian of the estate for the minor
or, if no guardian of the estate for the minor is duly appointed and
currently acting within sixty (60) days after the date the amount
becomes payable, payment shall be deposited with the court having
jurisdiction over the estate of the minor.
(n) In the event any amount is payable under the Plan to a person for whom
a conservator has been legally appointed, the payment shall be
distributed to the duly appointed and currently acting conservator,
without any duty on the part of the Committee to supervise or inquire
in the application of any funds so paid.
46
(o) Subject to the foregoing, if any Beneficiary is physically or mentally
incapable of giving a valid receipt for any payment due him and no
legal representative has been appointed, the Committee may, in its
discretion, direct the Trustee to make such payment to any person or
institution maintaining the Participant Beneficiary. If such
individual has a legal representative, payment shall be made to the
legal representative.
(p) Any payment made in accordance with the provisions of this Section
shall completely discharge any liability for the making of such
payment under the provisions of the Plan. The Committee and Trustee
shall not be required to see to the application of any such
distributions. Distributions made pursuant to this Section 10.3 shall
operate as a complete discharge of the Committee, the Trustee, and the
Plan Administrator.
10.4 UNCLAIMED BENEFITS
If, after diligent efforts to do so, the Plan Administrator is unable to
locate a Participant or Beneficiary who is entitled to receive a benefit
under the Plan within three years after the date such benefit is required
to be distributed, such benefit shall be used to defray the reasonable
expenses of administering the Plan. If the Participant or Beneficiary is
thereafter located, his benefits shall be reinstated (without adjustment
for earnings or losses) by making, if necessary, a special contribution to
the Plan as soon as reasonably practicable.
10.5 GENERAL CONDITIONS
(a) Payment of benefits under this Plan to a Participant or Beneficiary,
or to their legal representative, shall constitute full satisfaction
of claims hereunder against the Trustee, the Corporation, the
Committee and the Plan Administrator.
(b) All benefits under the Plan shall be distributed from the Trust Fund.
Neither Participating Employers nor the Corporation shall be liable or
responsible therefor.
(c) The Committee may require the Participant to submit a request (in
writing or otherwise) for payment of benefits to the Committee
containing such forms as the Committee reasonably requires to make
distribution.
10.6 QUALIFIED DOMESTIC RELATIONS ORDER
The Committee will comply with provisions of an order it determines to be a
Qualified Domestic Relations Order. An alternate payee (as defined in Code
Section 414(p)(8)) may choose to use the direct rollover option described
in Section 10.1(d). Except as provided in (c) below, distribution shall not
be made prior to the earliest retirement age
47
on which the Participant could receive his Accounts. For purposes of this
Section, "earliest retirement age" means the earlier of:
(a) the date on which the Participant is entitled to a distribution under
the Plan, or
48
(b) the later of:
(1) the date the Participant attains age 50, or
(2) the earliest date on which the Participant could begin receiving
benefits under the Plan if the Participant separated from
service.
(c) a distribution to an alternate payee prior to the Participant's
attainment of earliest retirement age is available only if: (1) the
order specifies distribution at that time or permits an agreement
between the Plan and the alternate payee to authorize an earlier
distribution; and (2) if the present value of the alternate payee's
benefits under the Plan exceeds $5,000, and the order requires, the
alternate payee consents to any distribution occurring prior to the
Participant's attainment of earliest retirement age. Nothing in this
Section 10.6 gives a Participant a right to receive distribution at a
time otherwise not permitted under the Plan nor does it permit the
alternate payee to receive a form of payment not otherwise permitted
under the Plan.
49
ARTICLE XI
ADMINISTRATION OF PLAN
11.1 FIDUCIARIES
The Committee, the Trustee and each Investment Manager shall be the
fiduciaries of the Plan (hereinafter called "fiduciaries"), but only with
respect to the specific responsibilities of each for the operation and
administration of the Plan and Trust Fund. Each fiduciary shall have only
those specific powers, duties, responsibilities and obligations as are
specifically given it under the Plan and Trust Agreement.
11.2 THE CORPORATION
The Corporation shall have sole responsibility for making contributions
provided under the Plan, determining the amount of any annual contribution,
appointing and removing members of the Committee, and amending or
terminating the Plan and Trust Agreement. Any action by the Corporation
under this Plan shall be made by resolution of its Board of Directors, or
by any person duly authorized by resolution of the Board of Directors to
take such action.
11.3 THE PLAN ADMINISTRATOR
The Corporation shall be the "Plan Administrator" of the Plan as defined by
ERISA Section 3(16)(A).
11.4 THE COMMITTEE
A committee (hereinafter referred to as the "Committee") shall be appointed
consisting of not less than three members who shall be selected by, and
serve at the pleasure of, the Board of Directors. The Board of Directors
may, from time to time, vary the number of the membership of the Committee
within the aforementioned limits. A member of the Committee may be removed
or appointed by the Board of Directors for any reason or for no reason and
at any meeting of such Board, whether or not called for such purpose. A
member of the Committee may resign by delivering a written notice of
resignation to the Board of Directors at least ten (10) days prior to the
effective date of such resignation. Vacancies in the membership of the
Committee shall be filled promptly by the Board of Directors.
The Committee may, by majority action, choose from its number a Chairman to
preside at its meeting and a Secretary, who need not be a member of the
Committee. The Secretary shall keep minutes of the Committee's proceedings
and all records and documents pertaining to the Committee's administration
of the Plan and perform such other duties and functions as the Committee
may prescribe. It may in a like manner designate any one or more of its
members or its Secretary to execute any instrument or
50
document upon its behalf, and the action of such person shall have the same
force and effect as if taken by the entire Committee. Any action of the
Committee shall be taken pursuant to the vote or written consent of a
majority of its members present, and such action shall constitute the
action of the Committee and be binding the same as if all members had
joined therein. A member of the Committee shall not vote or act upon any
matter which relates solely to himself as a Participant. The Chairman or
any other member or members of the Committee designated by the Chairman may
execute any certificate or other written direction on behalf of the
Committee. The Trustee or any third person dealing with the Committee may
conclusively rely upon any certificate or other written direction so
signed.
The Committee's powers shall include all powers of the Plan Administrator
and specifically, but without limitation, the full and absolute discretion
to do the following:
(a) to construe and interpret the Plan, its interpretation thereof in good
faith to be final and conclusive on all Employees, Participants,
Beneficiaries and all other persons;
(b) to decide all questions concerning the Plan and the eligibility of any
person to participate in the Plan;
(c) to make and enforce such rules and regulations as it shall deem
necessary and proper for the efficient administration of the Plan;
(d) to adopt uniform and nondiscriminatory administrative procedures to
determine whether a court order is a Qualified Domestic Relations
Order;
(e) to select Investment Funds consistent with the objectives of the Plan
and the requirements of ERISA;
(f) to grant or deny in-service withdrawal requests and loan applications
and adopt procedures to administer withdrawals and loans;
(g) to compute the amount of any distribution which shall be payable to
any Participant or Beneficiary in accordance with the provisions of
the Plan, and to determine the person or persons to whom such benefits
shall be paid;
(h) to authorize the Trustee to make distributions;
(i) to employ actuaries, attorneys, accountants, consultants, investment
counselors, trustees, and other experts to act as the Committee's
agents and to assist the Committee in fulfilling its duties and
obligations as Plan Administrator, provided, however, that such
assistants shall not have discretionary authority over management or
administration of the Plan or investment of Plan assets unless
51
specifically delegated in writing by the Committee and accepted in a
signed writing by the delegee;
(j) to appoint additional or successor Trustees and, in accordance with
the Trust Agreement, to appoint Investment Managers to manage the
Trust Fund and/or any Investment Fund thereunder;
(k) to administer claims procedures; and
(l) to perform necessary and proper functions in the operation of the
Plan.
Decisions of the Committee made in good faith upon any matters within the
scope of its authority shall be final and binding on the Participating
Employers, the Trustee, Participants, their Beneficiaries and all others.
11.5 DELEGATION OF ADMINISTRATIVE POWERS
The Committee may allocate any of its duties and powers to one or more of
its members and may delegate any such duties and powers to one or more
persons, by an action in writing. The Committee may revoke any such
allocation or delegation at any time by advising the affected party in
writing that delegation of any or all responsibility will be terminated.
Revocation shall become effective on or after receipt of written notice by
the affected party. Any party who has accepted the delegation of any or all
of the responsibilities designated under this section above may at any time
advise the Committee in writing that it wishes to terminate such
acceptance. Termination shall become effective on or after receipt of
written notice by the Committee.
11.6 TRUSTEE
(a) APPOINTMENT OF TRUSTEE. First Security Bank, N.A., is the Trustee.
Successor Trustees shall be appointed and may be removed pursuant to
Sections 15.11 and 15.12 of the Plan.
(b) DUTIES OF TRUSTEE. The Trustee, upon accepting this appointment,
agrees to accept the provisions hereof and to carry out provisions of
the Plan and Trust Agreement to be performed by the Trustee. Not in
limitation thereof, the Trustee shall be the owner of the assets held
in the Trust Fund under this Plan and shall be entitled to exercise
each and every incident of ownership unless there is an express
provision to the contrary in the Plan or Trust Agreement. Unless an
Investment Manager has been appointed, the Trustee shall have
exclusive authority to manage and control Plan assets and shall invest
and reinvest Plan assets as provided in the Plan and Trust Agreement.
The Trustee shall receive all Participating Employer and Employee
contributions, but shall not be responsible for the collection of any
contributions under the Plan and shall have no power to inquire into
the accuracy of any contributions made by a Participating Employer.
52
The Trustee shall make payments out of the Trust Fund to Participants
and Beneficiaries in accordance with the directions of the Committee.
The Trustee shall have such further duties as are set out in the Trust
Agreement.
11.7 CLAIMS PROCEDURES
The Committee may adopt procedures for Participants and Beneficiaries to
submit claims under the Plan. All such procedures shall be deemed modified
to the extent necessary to comply with the requirements of ERISA. Subject
to ERISA's requirements and such other procedures as the Committee may
adopt, the following procedures of this Section shall apply and shall be
the minimum requirements for administering claims under the Plan.
(a) NOTICE OF DENIAL. Whenever a Participant terminates employment with
the Participating Employer, the Committee shall compute and report the
Participant's Vested Percentage of his Accounts. If the Participant
(or Beneficiary) believes he is entitled to a greater benefit, he may
file a written request for review of the benefit determination by the
Committee. The Committee may require additional information if
necessary to process the request. Similarly, Participants and
Beneficiaries may file with the Committee a written request for review
of any other determination under the Plan affecting benefits claimed
by such individuals. The Committee (or its delegate) shall review the
request, and within 90 days of the Participant's request, the
Committee shall provide written notice to any claimant whose claim for
benefits under the Plan is being denied, in whole or in part. Such
notice shall be written in a manner calculated to be understood by the
claimant and shall include:
(1) The specific reason or reasons for such denial;
(2) Specific references to pertinent Plan provisions upon which the
denial is based;
(3) A description of any additional material or information which may
be needed to clarify the request, including an explanation of why
such information is required; and
(4) An explanation of this Plan's claim review procedures.
(b) EXTENSION OF TIME. However, if an extension of time is required by
special circumstances, written notice may be furnished to the claimant
within the 90-day period referred to above which states the special
circumstances requiring the extension and the date by which a decision
can be expected, which shall be no more than 180 days from the date
the claim was filed. If no notice is received within 90 days of the
date the claim is submitted, the claimant may assume his claim has
been denied and may submit an appeal for review of the claim.
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(c) REVIEW PROCEDURE. Any claimant whose claim for benefits has been
denied by the Committee may appeal to the Committee for a review of
the denial by making a written request therefore within 60 days of
receipt of a notification of denial. The claimant may upon request to
the Committee examine any pertinent documents. The claimant may, if he
chooses, submit to the Committee written issues, comments or other
information upon which the claimant relies in support of his claim, or
may request a representative to make such written submissions on his
behalf.
(1) Within 60 days after receipt of a request for review, the
Committee shall notify the claimant in writing of its decision,
and, if the Committee confirms the denial in whole or in part,
the notice shall set forth the reasons for the decision and
specific reference to those Plan provisions upon which the
decision is based.
(2) Notwithstanding the foregoing, if the Committee determines that
special circumstances require additional time for processing, the
Committee may extend such 60-day period, but not by more than an
additional 60 days, and shall notify the claimant of such
extension. If no notice is received within the 60-day period (or
extended period, if applicable), the claim shall be deemed
denied.
11.8 INDEMNIFICATION
The Committee and any delegates appointed pursuant to Section 11.5 shall be
bonded in accordance with the provisions of Section 412(a) of ERISA and
regulations issued thereunder. The expense of any such bond and all
expenses of the Committee or such delegates shall be paid by the Trust Fund
to the extent not paid by the Corporation and the Corporation shall furnish
the Committee or such delegates with all clerical or other assistance
necessary in the performance of their duties. The Committee is authorized
at the expense of the Corporation to employ such legal counsel and advisors
as it may deem advisable to assist in the performance of its duties
hereunder.
To the extent permitted by law, the Corporation shall, and hereby does,
indemnify and hold harmless members of the Board of Directors, the members
of the Committee and any other Employees who may be deemed to be
fiduciaries of the Plan, from and against any and all losses, claims,
damages or liabilities (including attorney's fees and amounts paid, with
the approval of the Corporation, in settlement of any claim) arising out of
or resulting from the implementation of a duty, act or decision with
respect to the Plan, so long as such duty, act or decision does not involve
gross negligence or willful misconduct on the part of any such individual.
Any individual person so indemnified shall, within 60 days after receipt of
notice of any action, suit or proceeding, notify the Corporation and offer
in writing to the Corporation the opportunity at its own expense, to handle
and defend such action, suit or proceeding, and the Corporation shall have
the right, but not the obligation, to conduct the defense in any such
action, suit or proceeding. Failure to
54
give the Corporation such notice shall relieve the Corporation of any
liability under this Section. The Corporation may satisfy its obligations
under this provision (in whole or in part) by the purchase of a policy or
policies of insurance.
55
ARTICLE XII
AMENDMENT, TERMINATION, AND MERGER
12.1 AMENDMENT
The Board of Directors reserves the right at any time to modify or amend
any or all of the provisions of the Plan and to amend or cancel any
amendments. The Board of Directors may delegate the power to amend this
Plan to the Committee or other delegates. Such amendment shall be stated in
an instrument in writing, executed in the same manner as this Plan. No
modification or amendment will reduce any Participant's Account balance
determined as of the later of the effective date of the amendment or the
date the amendment is adopted, except to the extent allowed by law; and
provided further, that no amendment shall have the effect of revesting in
any Participating Employer any part of the assets of the Plan or of
diverting any part of the assets of the Plan to purposes other than for the
exclusive benefit of the Participants and their Beneficiaries or to defray
reasonable expenses of Plan administration at any time prior to the
satisfaction of all liabilities under the Plan. No amendment which affects
the rights, duties or obligations of the Trustee shall be effective without
its express consent.
12.2 CHANGE IN VESTING SCHEDULE
(a) If the Plan's vesting schedule is amended (by application of Article
XIV or otherwise), each Participant who has completed three years of
service (whether or not consecutive) with an Participating Employer
and whose Vested Percentage will be determined on any date after the
effective date of the amendment, may elect to have his Vested
Percentage determined under the prior vesting schedule. An election
need not be provided to any Participant whose Vested Percentage after
the amendment would at all times be greater than what his Vested
Percentage would have been under the prior vesting schedule. Once
made, the election is irrevocable.
(b) The election period will begin no later than the date the Plan
amendment is adopted and end no earlier than the 60th day after the
latest of the following dates:
(1) The date the amendment is adopted; or
(2) The date the amendment becomes effective; or
(3) The date the Participant is issued written notice of the
amendment by the Plan Administrator.
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12.3 PLAN TERMINATION
(a) Each Participating Employer reserves the right to terminate the Plan,
in whole or in part, with respect to part or all of its Employees, by
resolution of its board of directors. The Board of Directors of the
Corporation reserves the right to terminate the Plan in its entirety.
Upon termination or partial termination, including the permanent
cessation of contributions by an Participating Employer, the Accounts
of affected Participants shall become fully vested and nonforfeitable.
An affected Participant shall have no recourse toward satisfaction of
his nonforfeitable benefits other than from Plan assets.
(b) If a partial termination (within the meaning of Treasury Regulation
Section 1.411(d)-2(b)) of the Plan occurs, all affected Participants
shall have a Vested Percentage of 100% in their Accounts as of the
date of the partial termination.
(c) Upon termination or partial termination of the Plan, the Accounts of
affected Participants may continue to be held in the Trust or may be
distributed to the Participants as determined by the Committee but
only to the extent permitted by law. Distributions shall be made in
accordance with Article X.
12.4 MERGER
(a) Neither the merger of any Participating Employer with any other
organization nor the merger of this Plan with any other qualified
retirement plan shall in and of itself result in the termination of
this Plan or be deemed a termination of employment with respect to any
Employee.
(b) In the event of a merger or consolidation of this Plan with any other
Plan, or a transfer of assets or liabilities from this Plan to another
plan, each Participant's Account balances immediately after the
merger, consolidation, or transfer shall not be less than they were
immediately prior to the merger, consolidation or transfer. For
purposes of this Section, each Participant's Account balance shall be
determined as if the Plan had terminated as of the date of merger,
consolidation, or transfer.
57
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 NO GUARANTEE OF EMPLOYMENT
Nothing contained in this Plan or in the forms issued pursuant to this Plan
shall be construed as a contract of employment between a Participating
Employer and any Employee, or as a right of any Employee to be continued in
the employment of a Participating Employer or to be rehired by a
Participating Employer, or as a limitation of the right of a Participating
Employer to discharge any of its Employees, with or without cause.
13.2 NO GUARANTEE OF VALUE OF TRUST FUND ASSETS
Neither the Trustee, the Corporation, the Committee, the Plan Administrator
nor any Participating Employer in any way guarantees the Trust Fund from
loss or depreciation.
13.3 RIGHTS TO TRUST FUND ASSETS
No Participant shall have any right to, or interest in, any assets of the
Trust Fund upon termination of employment or otherwise, except as provided
from time to time under this Plan, and then only to the extent of the
benefits payable under the Plan to such Participant out of the assets of
the Trust Fund. Except to the extent required by a Qualified Domestic
Relations Order, no benefit, payment or distribution under this Plan shall
be subject either to the claim of any creditor of a Participant, spouse, or
Beneficiary, or to attachment, garnishment, levy (other than a federal tax
levy under Code Section 6331), execution or other legal or equitable
process, by any creditor of such person, and no such person shall have any
right to alienate, commute, anticipate or assign (either at law or equity)
all or any portion of any benefit, payment or distribution under this Plan.
The Trust Fund shall not in any manner be liable for or subject to the
debts, contracts, liabilities, engagements or torts of any person entitled
to benefits hereunder.
Additionally, the foregoing shall not prevent the Plan from offsetting a
Participant's benefits if a Participant is ordered or required to make
payments to the Plan and if:
(a) the order or requirement arises under a judgement, order, decree, or
settlement for certain crimes or violations of ERISA;
(b) the judgement, order, decree, or settlement agreement expressly
provides for the offset of all or part of the amount ordered or
required to be paid to the Plan against the Participant's benefits.
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13.4 CORRECTION OF ERRORS
If an error in any Account or record (including the amount of a
distribution) is discovered which would result in any Participant's Account
being more or less than it would have been had the error not been
discovered or had the record been correct, the Committee and the Trustee
shall correct the error by adjusting, to the extent reasonable and
practical, the Accounts or records, as the case may be, including adjusting
the amount of a distribution. Any such correction shall be conclusive and
binding on all Participants.
13.5 SEVERABILITY
In the event any Article, paragraph, subparagraph or specific provision is
found to be illegal or invalid for any reason, such illegality or
invalidity shall not affect the remaining provisions of the Plan and Trust
Agreement, and the Plan and Trust Agreement shall be construed and enforced
as if such illegal and invalid provision had never been set forth in the
Plan or Trust Agreement.
13.6 APPLICABLE LAW
The provisions of the Plan shall be construed, administered and enforced in
accordance with ERISA and other applicable federal law, and to the extent
not preempted, the laws of the State of Utah.
13.7 PLAN EXPENSES
All expenses of administering the Plan and Trust Fund shall be paid by the
Plan unless paid by the Participating Employer in its discretion.
13.8 EXCLUSIVE BENEFIT; RETURN OF CONTRIBUTIONS
Contributions made by the Participating Employer to the Plan shall be made
irrevocably and it shall be impossible for the assets of the Plan to inure
to the benefit of the Participating Employer or to be used in any manner
other than for the exclusive purpose of providing benefits to Participants
and Beneficiaries, and for defraying reasonable expenses of administering
the Plan; provided, however, that nothing herein shall be construed to
prohibit the return to a Participating Employer of all or part of a
Participating Employer contribution
(a) which is made by the Participating Employer by a mistake of fact,
provided the return of such contribution is made within one year after
the payment thereof; or
(b) to the extent a deduction thereof under Code Section 404 is
disallowed, as long as the return is made within one year after the
disallowance. All contributions shall be deemed to be so conditioned
unless the Participating Employer expressly provides otherwise.
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13.9 HEADINGS AND SUBHEADINGS
Headings and subheadings in this agreement are inserted for convenience of
records only and are not to be considered in the construction of the
provisions hereof.
13.10 NOTIFICATION OF ADDRESS
Each Participant, former Participant and Beneficiary shall file with his
Participating Employer from time to time in writing, his current post
office address and shall notify his Participating Employer of each change
in his post office address in accordance with such procedures as the
Participating Employer or Committee shall establish. The Participating
Employer, Committee and Trustee shall be entitled to rely on the last post
office address furnished to the Participating Employer by such person for
purposes of providing notice to such person, payment of benefits or any
other purpose.
13.11 GENDER
The masculine gender as used herein includes the feminine gender.
60
ARTICLE XIV
TOP-HEAVY PLAN RESTRICTIONS
14.1 GENERAL
This Article shall be interpreted in accordance with Section 416 of the
Code and the regulations thereunder. Regardless of how the terms defined in
this Article are otherwise defined in the Plan, the definitions in this
Article shall govern for the purposes of this Article.
14.2 DEFINITIONS
(a) The "Benefit Amount" for any Employee means (1) in the case of any
Defined Benefit Plan, the present value of his normal retirement
benefit, determined on the Valuation Date as if the Employee
terminated on such Valuation Date, plus the aggregate amount of
distributions made to such Employee within the five-year period ending
on the Determination Date (except to the extent already included on
the Valuation Date) and (2) in the case of any Defined Contribution
Plan, the sum of the amount credited, on the Determination Date, to
each of the accounts maintained on behalf of such employee (including
amounts reflecting any nondeductible employee contributions) under
such plan plus the aggregate amount of distributions made to such
Employee within the five-year period ending on the Determination Date.
(b) "Company" means any Company (including unincorporated organizations)
participating in the Plan or plans included in the "aggregation group"
as defined in this Article.
(c) "Determination Date" means the last day of the preceding Plan Year or,
in the case of the first Plan Year of the Plan, the last day of the
Plan Year.
(d) "Employees" means employees, former employees, beneficiaries, and
former beneficiaries who have a Benefit Amount greater than zero on
the Determination Date.
(e) "Key Employee" means any Employee who, during the Plan Year containing
the Determination Date or during the four preceding Plan Years, is:
61
(1) one of the ten (10) Employees of the Company receiving annual
compensation therefrom of more 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) both a
more than 1/2 percent interest and the largest interest in such
Company (if two Employees have the same interest the Employee
having the greater annual compensation from the Company shall be
treated as having a larger interest);
(2) a five percent owner of the Company;
(3) a one percent owner of the Company who receives annual
compensation above one hundred fifty thousand dollars ($150,000);
or
(4) an officer of the Company having an annual compensation greater
than fifty percent (50%) of the amount in effect under Section
415(b)(1)(A) of the Code for any such Plan Year (however, no more
than the lesser of (i) fifty (50) employees or (ii) the greater
of three employees or ten percent (10%) of the Company's
employees shall be treated as officers).
For purposes of this definition, "compensation" means all earnings
reported on an Employee's Form W-2 for the calendar year that ends
within the Plan Year. This definition shall be interpreted in
accordance with Sections 414(q)(7), 415(c)(3) and 416(i) of the Code
and the regulations promulgated thereunder and such rules are hereby
incorporated by reference.
(f) "Valuation Date" means the first day (or such other date which is used
for computing plan costs for minimum funding purposes) of the twelve
(12) month period ending on the Determination Date.
(g) "Years of Service" shall be calculated using the Plan rules that
normally apply for determining vesting service.
14.3 TOP-HEAVY DEFINITION
This Plan shall be top-heavy for any Plan Year if, as of the Determination
Date, the sum of the Benefit Amounts of all Employees who are Key Employees
exceeds sixty percent (60%) of the sum of the Benefit Amounts for all
Employees. For purposes of this calculation only, the following rules shall
apply:
(a) The Benefit Amounts of all Employees who are not Key Employees and who
were Key Employees during any prior Plan Year shall be disregarded.
(b) The Benefit Amounts of all Employees who have not performed any
service for the Company at any time during the five-year period ending
on the Determination Date shall be disregarded.
62
(c) This calculation shall be made by aggregating any plans qualified
under Section 401(a) of the Code in which a Key Employee participates
or which enables this Plan to meet the requirements of Section
401(a)(4) or 410 of the Code; all plans so aggregated constitute the
"aggregation group." The Company may also aggregate any such plan to
the extent that such plan, when aggregated with this aggregation
group, continues to meet the requirements of Section 401(a)(4) and
Section 410 of the Code.
(d) This calculation shall be made in accordance with Section 416 of the
Code and the regulations thereunder and such rules are hereby
incorporated by reference.
14.4 VESTING PERCENTAGE
For any Plan Year in which the Plan is Top-Heavy, each active Participant
who is a Non-Key Employee shall have a Vested Percentage in his Accounts
(other than Salary Deferral, After Tax, Supplemental, Rollover, PAYSOP,
After Tax Loan, ESOP Deferral, Transfer and Xxxxxxxxx Mortgage) of not less
than that provided under the following schedule:
Years of Vesting Service Vested Percentage
Less than 2 0%
2 20%
3 40%
4 60%
5 or more 100%
Regardless of whether the Plan is Top Heavy, a Participant shall continue
to be 100% vested in his Salary Deferral, After Tax, Supplemental,
Rollover, PAYSOP, After Tax Loan, ESOP Deferral, Transfer and Xxxxxxxxx
Mortgage Accounts. Except to the extent inconsistent with these provisions,
the minimum vesting standards under Code Section 411, including Section
411(a)(10) (regarding changes in the vesting schedule) are applicable.
Notwithstanding the preceding paragraph, if the Plan is no longer top-heavy
in a Plan Year following a Plan Year in which it was top-heavy, a
Participant's vesting percentage shall be computed under the vesting
schedule that otherwise exists under this Plan. However, in no event shall
a Participant's vested percentage in his accrued benefit be reduced. In
addition, a Participant shall have the option of remaining under the
vesting schedule set forth in this Section if he has completed three years
of Vesting Service. The period for exercising such option shall begin on
the first day of the Plan Year for which the Plan is no longer top-heavy
and shall end 60 days after the later of (i) the first day of such Plan
Year or (ii) the day the Participant is issued written notice of such
option by the Employer or Committee.
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14.5 MINIMUM BENEFITS OR CONTRIBUTIONS AND SECTION 415 LIMITATIONS
(a) If the Plan is top-heavy for any Plan Year, the following provisions
shall apply to such Plan Year:
(1) Except to the extent not required by Section 416 of the Code or
any other provision of law, notwithstanding any other provision
of this Plan, if this Plan and all other plans which are part of
the aggregation group are Defined Contribution Plans, each
Participant (and any other employee required by Section 416 of
the Code) other than Key Employees shall receive an allocation of
employer contributions and forfeitures from a plan which is part
of the aggregation group at least equal to three percent (or, if
lesser, the largest percentage allocated to any Key Employee for
the Plan Year) of such Participant's compensation within the
meaning of Section 415(c) of the Code for such Plan Year (the
"defined contribution minimum"). For purposes of this subsection,
salary reduction contributions on behalf of a Key Employee must
be taken into account. For purposes of this subsection, a non-Key
Employee shall be entitled to a contribution if he is employed on
the last day of the Plan Year (1) regardless of his level of
compensation, (2) without regard to whether he has made any
mandatory contributions required under the plan, and (3)
regardless of whether he has less than 1,000 hours of service (or
the equivalent) for the accrual computation period.
(2) Except to the extent not required by Section 416 of the Code or
any other provision of law, notwithstanding any other provisions
of this Plan, if this Plan or any other plan which is part of the
aggregation group is a Defined Benefit Plan each Participant who
is a participant in any such Defined Benefit Plan (who is not a
Key Employee) who accrues a full Year of Vesting Service during
such Plan Year shall be entitled to an annual normal retirement
benefit from a Defined Benefit Plan which is part of the
aggregation group which shall not be less than the product of (1)
the employee's average compensation for the five consecutive
years when the employee had the highest aggregate compensation
and (2) the lesser of two percent per Year of Vesting Service or
20 percent (the "defined benefit minimum"). A non-Key Employee
shall not fail to accrue a benefit merely because he is not
employed on a specified date or is excluded from participation
because (1) his compensation is less than a stated minimum or (2)
he fails to make mandatory employee contributions. For purposes
of calculating the defined benefit minimum, (1) compensation
shall not include compensation in Plan Years after the last Plan
Year in which the Plan is top-heavy and (2) a Participant shall
not receive a year of service in any Plan Year in which the Plan
is not top-heavy. This defined benefit minimum shall be expressed
as a life annuity (with no ancillary benefits) commencing at
normal retirement age. Benefits paid in any other form or time
shall be the actuarial equivalent (as provided in the plan for
retirement benefit
64
equivalence purposes) of such life annuity. Except to the extent
not required by Section 416 of the Code or any other provisions
of law, each Participant (other than Key Employees) who is not a
participant in any such Defined Benefit Plan shall receive the
defined contribution minimum (as defined in Paragraph (a)(1)
above).
(3) If a non-Key Employee is covered by plans described in both
paragraphs (1) and (2) above, he shall only be entitled to the
minimum described in paragraph (1) and "three percent (3%)" shall
be replaced by five percent (5%). Notwithstanding the preceding
sentence, if the accrual rate under the plan described in
paragraph (2) would comply with this Section 14.5 absent the
modifications required by this Section, the minimum described in
paragraph (1) above shall not be applicable.
(b) If the joint limitation provisions of Code Section 415(e) are
applicable, unless the Plan qualifies under an exception as described
in Section 416(h)(2) of the Code, "1.0" shall be substituted for
"1.25" in the application of subsections (2)(B) and (3)(B) of Code
Section 415(e) and Code Section 415(e)(7)(B)(i) shall be applied by
substituting "$41,500" for "$51,875."
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ARTICLE XV
TRUSTEE, POWERS AND DUTIES
15.1 ACCEPTANCE
The Trustee accepts the Trust created under the Plan and agrees to perform
the obligations imposed. The Trustee must provide bond for the faithful
performance of its duties under the Trust to the extent required by ERISA.
15.2 RECEIPT OF CONTRIBUTIONS
The Trustee is accountable to the Corporation for the funds contributed to
it by the Employer, but does not have any duty to see that the
contributions received comply with the provisions of the Plan. The Trustee
is not obliged to collect any contributions from the Employer, nor is
obliged to see that funds deposited with it are deposited according to the
provisions of the Plan.
15.3 INVESTMENT POWERS
(a) TRUSTEE POWERS. The Trustee has full discretion and authority with
regard to the investment of the Trust Fund, except with respect to a
Plan asset under the control or direction of a properly appointed
Investment Manager or with respect to a Plan asset properly subject to
Participant or Committee direction of investment. The Trustee must
coordinate its investment policy with Plan financial needs as
communicated to it by the Committee. The Trustee is authorized and
empowered, but not by way of limitation, with the following powers,
rights and duties:
(1) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds, put and
call options traded on a national exchange, United States
retirement plan bonds, corporate bonds, debentures, convertible
debentures, commercial paper, U.S. Treasury bills, U.S. Treasury
notes and other direct or indirect obligations of the United
States Government or its agencies, improved or unimproved real
estate situated in the United States, limited partnerships,
insurance contracts of any type, mortgages, notes or other
property of any kind, real or personal, and to buy or sell
options on common stock on a nationally recognized exchange with
or without holding the underlying common stock, to buy and sell
commodities, commodity options and contracts for the future
delivery of commodities, and to make any other investments the
Trustee deems appropriate, as a prudent man would do under like
circumstances with due regard for the purposes of this Plan. Any
investment made or retained by the Trustee in good faith is
proper but
66
must be of a kind constituting a diversification considered by
law suitable for trust investments.
(2) To retain in cash so much of the Trust Fund as it may deem
advisable to satisfy liquidity needs of the Plan and to deposit
any cash held in the Trust Fund in a bank account at reasonable
interest.
(3) To invest, if the Trustee is a bank or similar financial
institution supervised by the United States or by a State, in any
type of deposit of the Trustee (or of a bank related to the
Trustee within the meaning of Code Section 414(b)) at a
reasonable rate of interest or in a common trust fund, as
described in Code Section 584, or in a collective investment
fund, the provisions of which govern the investment of such
assets and which the Plan incorporates by this reference, which
the Trustee (or its affiliate, as defined in Code Section 1504)
maintains exclusively for the collective investment of money
contributed by the bank (or the affiliate) in its capacity as
trustee and which conforms to the rules of the Comptroller of
the Currency.
(4) To manage, sell, contract to sell, grant options to purchase,
convey, exchange, transfer, abandon, improve, repair, insure,
lease for any term even though commencing in the future or
extending beyond the term of the Trust, and otherwise deal with
all property, real or personal, in such manner, for such
considerations and on such terms and conditions as the Trustee
decides.
(5) To credit and distribute the Trust as directed by the Committee.
The Trustee is not obliged to inquire as to whether any payee or
distributee is entitled to any payment or whether the
distribution is proper or within the terms of the Plan, or as to
the manner of making any payment or distribution. The Trustee is
accountable only to the Committee for any payment or distribution
made by it in good faith on the order or direction of the
Committee.
(6) To borrow money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(7) To compromise, contest, arbitrate or abandon claims and demands,
in its discretion.
(8) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to
participate in any voting trusts, mergers, consolidations or
liquidations, and to exercise or sell stock subscriptions or
conversion rights. The Trustee exercises all voting rights with
respect to Employer stock held in Non-ESOP Accounts by the Plan
and shall exercise those rights in accordance with the
instructions of Participants to the extent of their Non-ESOP
Accounts' interest in the First
67
Security Stock Fund. The Trustee will establish procedures for
distributing proxy material to, and soliciting voting
instructions from, Participants on all corporate matters that are
subject to vote of the Employers' shareholders. Any shares with
respect to which no instructions are received must be voted in
the same proportion as shares with respect to which the Trustee
does receive instructions on Non-ESOP Accounts.
(9) To lease for oil, gas and other mineral purposes and to create
mineral severances by grant or reservation; to pool or unitize
interests in oil, gas and other minerals; and to enter into
operating agreements and to execute division and transfer orders.
(10) To hold any securities or other property in the name of the
Trustee or its nominee, with depositories or agent depositories
or in another form as it may deem best, with or without
disclosing the trust relationship.
(11) To perform any and all other acts in its judgement necessary or
appropriate for the proper and advantageous management,
investment and distribution of the Trust.
(12) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make
payment or delivery of the funds or property until final
adjudication is made by a court of competent jurisdiction.
(13) To file all tax returns required of the Trustee.
(14) To furnish to the Corporation, the Plan Administrator and the
Committee an annual statement of account showing the condition of
the Trust Fund and all investments, receipts, disbursements and
other transactions effected by the Trustee during the Plan Year
covered by the statement and also stating the assets of the Trust
held at the end of the Plan Year, which accounts are conclusive
on all persons, including the Corporation, the Plan Administrator
and the Committee, except as to any act or transaction concerning
which the Corporation, the Plan Administrator or the Committee
files with the Trustee written exceptions or objections within 90
days after the receipt of the accounts or for which ERISA
authorizes a longer period within which to object.
(15) To begin, maintain or defend any litigation necessary in
connection with the administration of the Plan, except that the
Trustee is not obliged or required to do so unless indemnified to
its satisfaction.
(b) PARTICIPANT LOANS. This Section 15.3(b) specifically authorizes the
Trustee to make loans on a nondiscriminatory basis to a Participant or
to a Beneficiary in
68
accordance with the loan policy established by the Committee,
provided: (1) the loan policy satisfies the requirements of Section
9.5; (2) loans are available to all Participants and Beneficiaries on
a reasonably equivalent basis and are not available in a greater
amount for Highly Compensated Employees than for other Employees; (3)
any loan is adequately secured and bears a reasonable rate of
interest; (4) the loan provides for repayment within a specified time;
(5) the default provisions of the note prohibit offset of Vested
Percentage of the Participant's Accounts prior to the time the Trustee
otherwise would distribute the Participant's Accounts; (6) the amount
of the loan does not exceed (at the time the Plan extends the loan)
the Vested Percentage of the Participant's Accounts; and (7) the loan
otherwise conforms to the exemption provided by Code
Section 4975(d)(1).
(c) INVESTMENT IN QUALIFYING EMPLOYER SECURITIES AND QUALIFYING EMPLOYER
REAL PROPERTY. The Trustee may invest in qualifying employer
securities or qualifying employer real property, as defined in and as
limited by ERISA. The aggregate investments in qualifying employer
securities and in qualifying employer real property may not exceed
100% of the value of Plan assets.
15.4 RECORDS AND STATEMENTS
The records of the Trustee pertaining to the Plan must be open to the
inspection of the Plan Administrator, Committee and the Corporation at all
reasonable times and may be audited from time to time by any person or
persons as the Corporation, Plan Administrator or Committee may specify in
writing. The Trustee must furnish the Plan Administrator or Committee with
whatever information relating to the Trust Fund the Plan Administrator or
Committee considers necessary.
15.5 FEES AND EXPENSES FROM FUND
The Trustee will receive reasonable annual compensation as may be agreed
upon from time to time between the Corporation and the Trustee. No person
who is receiving full pay from the Corporation may receive compensation for
services as Trustee. The Trustee will pay from the Trust Fund all fees and
expenses reasonably incurred by the Plan, to the extent such fees and
expenses are for the ordinary and necessary administration and operation of
the Plan, unless the Corporation pays the fees and expenses. Any fee or
expense paid, directly or indirectly, by the Corporation is not a
Corporation contribution to the Plan, provided the fee or expense relates
to the ordinary and necessary administration of the Fund.
15.6 PARTIES TO LITIGATION
Except as otherwise provided by ERISA, no Participant or Beneficiary is a
necessary party or is required to receive notice of process in any court
proceeding involving the Plan, the Trust Fund or any fiduciary of the Plan.
Any final judgement entered in any proceeding will be conclusive upon the
Corporation, the Plan Administrator, the Committee, the Trustee,
Participants and Beneficiaries.
69
15.7 PROFESSIONAL AGENTS
The Trustee may employ and pay from the Trust Fund reasonable compensation
to agents, attorneys, accountants and other persons to advise the Trustee
as in its opinion may be necessary. The Trustee may delegate to any agent,
attorney, accountant or other person selected by it any non-Trustee power
or duty vested in it by the Plan, and the Trustee may act or refrain from
acting on the advice or opinion of any agent, attorney, accountant or
other person so selected.
15.8 DISTRIBUTION OF CASH OR PROPERTY
The Trustee may make distribution under the Plan in cash or property, or
partly in each, at its fair market value as determined by the Trustee.
15.9 DISTRIBUTION DIRECTIONS
If no one claims a payment or distribution made from the Trust, the
Trustee must promptly notify the Committee and then dispose of the payment
in accordance with the subsequent direction of the Committee.
15.10 THIRD PARTY/MULTIPLE TRUSTEES
No person dealing with the Trustee is obligated to see to the proper
application of any money paid or property delivered to the Trustee, or to
inquire whether the Trustee has acted pursuant to any of the terms of the
Plan. Each person dealing with the Trustee may act upon any notice,
request or representation in writing by the Trustee, or by the Trustee's
duly authorized agent, and is not liable to any person in so acting. The
certificate of the Trustee that it is acting in accordance with the Plan
will be conclusive in favor of any person relying on the certificate. If
more than two persons act as Trustee, a decision of the majority of such
persons controls with respect to any decision regarding the administration
or investment of the Trust Fund or any portion of the Trust Fund with
respect to which such persons act as Trustee. However, the signature of
only one Trustee is necessary to effect any transaction on behalf of the
Trust.
15.11 RESIGNATION
The Trustee may resign its position at any time by giving 30 days' written
notice in advance to the Corporation and to the Committee. If the
Corporation fails to appoint a successor Trustee within 60 days of its
receipt of the Trustee's written notice of resignation, the Trustee will
treat the Corporation as having appointed itself as Trustee and as having
filed its acceptance of appointment with the former Trustee.
70
15.12 REMOVAL
The Corporation, by giving 30 days' written notice in advance to the
Trustee, may remove any Trustee. In the event of the resignation or
removal of a Trustee, the Corporation must appoint a successor Trustee if
it intends to continue the Plan. If two or more persons hold the position
of Trustee, in the event of the removal of one such person, during any
period the selection of a replacement is pending, or during any period
such person is unable to serve for any reason, the remaining person or
persons will act as the Trustee.
15.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE
Each successor Trustee succeeds to the title to the Trust vested in his
predecessor by accepting in writing his appointment as successor Trustee
and filing the acceptance with the former Trustee and the Committee
without the signing or filing of any further statement. The resigning or
removed Trustee, upon receipt of acceptance in writing of the Trust by the
successor Trustee, must execute all documents and do all acts necessary to
vest the title of record in any successor Trustee. Each successor Trustee
has and enjoys all of the powers, both discretionary and ministerial,
conferred under this Agreement upon his predecessor. A successor Trustee
is not personally liable for any act or failure to act of any predecessor
Trustee, except as required under ERISA. With the approval of the
Corporation and the Committee, a successor Trustee, with respect to the
Plan, may accept the account rendered and the property delivered to it by
a predecessor Trustee without incurring any liability or responsibility
for so doing.
15.14 VALUATION OF TRUST
The Trustee must value the Trust Fund as of each Valuation Date to
determine the fair market value of the Accounts of each Participant in the
Trust.
15.15 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER, ANCILLARY TRUSTEE OR
INDEPENDENT FIDUCIARY APPOINTED
The Trustee is not liable for the acts or omissions of any Investment
Manager the Committee may appoint, nor is the Trustee under any obligation
to invest or otherwise manage any asset of the Plan which is subject to
the management of a properly appointed Investment Manager. The Committee,
the Trustee and any properly appointed Investment Manager may execute a
letter agreement as a part of this Plan delineating the duties,
responsibilities and liabilities of the Investment Manager with respect to
any part of the Trust Fund under the control of the Investment Manager.
The limitation on liability described in this Section 15.15 also applies
to the acts or omissions of any ancillary trustee or independent fiduciary
properly appointed under Section 15.17 of the Plan. However, if a Trustee,
pursuant to the delegation described in Section 15.17 of the Plan,
appoints an ancillary trustee, the Trustee is responsible for the
71
periodic review of the ancillary trustee's actions and must exercise its
delegated authority in accordance with the terms of the Plan and in a
manner consistent with ERISA. The Corporation, the Trustee and an
ancillary trustee may execute a letter agreement as a part of this Plan
delineating any indemnification agreement between the parties.
15.16 INVESTMENT IN GROUP TRUST FUND
The Trustee, for collective investment purposes, may combine into one
trust fund the Trust created under this Plan with the Trust created under
any other qualified retirement plan the Corporation maintains. However,
the Trustee must maintain separate records of account for the assets of
each Trust in order to reflect properly each Participant's accrued benefit
under the plan(s) in which he is a Participant.
The Corporation specifically authorizes the Trustee to invest all or any
portion of the assets comprising the Trust Find in any group trust fund
which at the time of the investment provides for the pooling of the assets
of plans qualified under Code Section 401(a). This authorization applies
solely to a group trust fund exempt from taxation under Code
Section 501(a) and the trust agreement of which satisfies the requirements
of Revenue Ruling 81-100. The provisions of the group trust fund
agreement, as amended from time to time, are by this reference
incorporated within this Plan and Trust. The group trust funds to which
this authorization applies are pooled funds of or mutual funds sponsored
by First Security Bank, N.A., First Security Corporation or a subsidiary
or affiliate of First Security Corporation.
15.17 APPOINTMENT OF ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY
The Corporation, in writing, may appoint any person in any State to act as
ancillary trustee with respect to a designated portion of the Trust Fund.
An ancillary trustee must acknowledge in writing its acceptance of the
terms and conditions of its appointment as ancillary trustee and its
fiduciary status under ERISA. The ancillary trustee has the rights,
powers, duties and discretion as the Corporation may delegate, subject to
any limitations or directions specified in the instrument evidencing
appointment of the ancillary trustee and to the terms of the Plan or of
ERISA. The investment powers delegated to the ancillary trustee may
include any investment powers available under Section 15.3 of the Plan
including the right to invest any portion of the assets of the Trust Fund
in a common trust fund, as described in Code Section 584, or in any
collective investment fund, the provisions of which govern the
investment of such assets and which the Plan incorporates by this
reference, but only if the ancillary trustee is a bank or similar
financial institution supervised by the United States or by a State and
the ancillary trustee (or its affiliate, as defined in Code Section
1504) maintains the common trust fund or collective investment fund
exclusively for the collective investment of money contributed by the
ancillary trustee (or its affiliate) in a trustee capacity and which
conforms to the rules of the Comptroller of the Currency. The
Corporation also may appoint as an ancillary trustee, the trustee of
any group trust fund designated for investment pursuant to the
provisions of Section 15.16 of the Plan.
72
The ancillary trustee may resign its position at any time by providing at
least 30 days' advance written notice to the Corporation, unless the
Corporation waives this notice requirement. The Corporation, in writing,
may remove an ancillary trustee at any time. In the event of resignation
or removal, the Corporation may appoint another ancillary trustee, return
the assets to the control and management of the Trustee or receive such
assets in the capacity of ancillary trustee. The Corporation may delegate
its responsibilities under this Section 15.17. to a Trustee under the
Plan.
If the U.S. Department of Labor ("the Department") requires engagement of
an independent fiduciary to have control or management of all or a portion
of the Trust Fund, the Corporation will appoint such independent
fiduciary, as directed by the Department. The independent fiduciary will
have the duties, responsibilities and powers prescribed by the Department
and will exercise those duties, responsibilities and powers in accordance
with the terms, restrictions and conditions established by the Department
and, to the extent not inconsistent with ERISA, the terms of the Plan. The
independent fiduciary must accept its appointment in writing and must
acknowledge its status as a fiduciary of the Plan.
15.18 FIRST SECURITY STOCK FUND RULES
The following special rules shall apply to the First Security Stock Fund:
(a) STOCK FUND INVESTMENT. It is contemplated that the First Security
Stock Fund will be invested to the fullest extent possible by the
Trustee in Employer Stock in accordance with the following
provisions:
(1) STOCK PURCHASES. Whenever there is a cash balance in the First
Security Stock Fund, the Trustee shall make a determination of
whether the amount of cash in the First Security Stock Fund is
in excess of the amount of cash necessary for purposes of the
Plan, taking into account anticipated cash distributions from
the First Security Stock Fund. If the Trustee determines at
any time during the calendar quarter that the cash portion of
the First Security Stock Fund is in excess of such cash needs
of the Plan, purchases of stock shall be made by the Trustee
(a) from First Security Corporation or a Participating
Employer, or (b) in the open market.
(2) STOCK SALES. As soon as practicable after the Trustee
determines that the cash portion of the First Security Stock
Fund is insufficient to meet the cash needs of the Plan, sales
of stock shall be made by the Trustee (a) to First Security
Corporation or a Participating Employer, or (b) in the open
market.
73
(3) TERMS OF SALES AND PURCHASES. The price or fair market value
for purchases or sales of Employer Stock shall be determined
as follows:
(A) The acquisition price of purchases not made on the open
market shall be not more than the average of the closing
bid and asked prices for such shares on the date of the
transaction as determined through NASDAQ. The sale price
of shares sold otherwise than on the open market shall
be for a price which is not less than the average of
such closing bid and asked prices on the date of the
transaction. No commission shall be charged on such
sales or purchases not on the open market.
(B) The price of sales or purchases on the open market shall
be the net amount received or paid on trades made on the
open market.
Notwithstanding the foregoing, the Trustee shall have the authority to
invest any cash held in the First Security Stock Fund in investments other
than Employer Stock if Employer Stock is not currently available or the
Trustee determines in its sole discretion that the purchase of Employer
Stock will distort the market for the Employer Stock at a particular time.
The Trustee shall also have the authority and discretion to maintain cash
reserves or other liquid investments in the First Security Stock Fund in
such amounts as the Trustee determines is necessary or appropriate in view
of the objectives of the Plan. Notwithstanding anything in the foregoing
to the contrary, the Trustee may invest all or any portion of the First
Security Stock Fund in Employer Stock.
15.19 EMPLOYER SECURITIES - AUTHORITY TO HOLD AND ACQUIRE CERTAIN EMPLOYER
RELATED INVESTMENTS
The term "Employer Securities" shall mean a security issued by the
Corporation or by an "affiliate" of the Corporation, (as defined in
subparagraph (d) below) which is either:
(a) Stock (including without limitation common stock, preferred stock,
convertible preferred stock, or other stock); or
(b) A "marketable obligation" within the meaning of subparagraph (c)
below.
(c) The term "marketable obligation" means a bond, debenture, note or
certificate, or other evidence of indebtedness (hereinafter in this
subsection referred to as "obligation") if:
(1) such obligation is acquired:
(A) on the market, either (i) at the price of the obligation
prevailing on a national securities exchange which is
registered with the Securities and Exchange Commission,
or (ii) if the obligation is
74
not traded on such a national securities exchange, at a
price not less favorable to the Plan than the offering
price for the obligation as established by current bid
and asked prices quoted by persons independent of the
issuer;
(B) from an underwriter, at a price (i) not in excess of the
public offering price for the obligation as set forth in
a prospectus or offering circular filed with the
Securities and Exchange Commission, and (ii) at which a
substantial portion of the same issue is acquired by
persons independent of the issuer; or
(C) directly from the issuer, at a price not less favorable
to the Plan than the price paid currently for a
substantial portion of the same issue by persons
independent of the issuer;
(2) immediately following acquisition of such obligation:
(A) not more than twenty-five percent (25%) of the aggregate
amount of obligations issued in such issue and
outstanding at the time of acquisition is held by the
Plan, and
(B) at least fifty percent (50%) of the aggregate amount
referred to in (A) is held by persons independent of the
issuer; and
(3) immediately following acquisition of the obligation, not more
than twenty-five percent (25%) of the assets of the Plan is
invested in obligations of the Corporation or an affiliate of
the Corporation.
(c) A corporation is an "affiliate" of the Corporation if it is a member
of any controlled group of corporations (as defined in Section
1563(a) of the Code, except that "applicable percentage" shall be
substituted for "80 percent" wherever the latter percentage appears
in such section) of which the Corporation who maintains the Plan is
a member. For purposes of the preceding sentence, the term
"applicable percentage" means fifty percent (50%), or such lower
percentage as the Secretary of Labor may prescribe by regulation.
With regard to the proper construction of the term "Employer
Securities" as set forth hereinabove, the Trustee, in order to
further the general purposes of ERISA and the general purposes of
this Plan, shall have discretion to consider and shall be entitled
to rely on any liberalizing administrative interpretations placed
upon said term by appropriate governmental authorities, or any
exemption granted by such authorities pertaining to permissible
acquisitions or holdings of Employer Securities.
75
The Trustee shall have authority to acquire and hold Employer
Securities as set forth and defined in this Section 15.19 in the
First Security Stock Fund. Pursuant to the authority herein, all
(100 percent), or any portion of Plan assets may be invested in
Employer Securities in the First Security Stock Fund. This provision
is intended to comply with the provisions for eligible individual
account plans under Section 401(d)(3) of ERISA, and other provisions
of Section 407 of ERISA and with the Code, and this paragraph shall
be construed to effectuate this purpose.
The provisions of this paragraph are intended to specifically authorize
the acquisition and retention of Employer Securities and as such, shall
not be deemed a limitation on the investment authority of the Trustee.
IN WITNESS WHEREOF, the Trustee has executed this Plan and Trust in SALT LAKE
CITY, UTAH, this ______ day of _____________________________, 1999.
FIRST SECURITY BANK, N.A. FIRST SECURITY CORPORATION
By: By:
------------------------- -------------------------
Title: Title:
---------------------- ----------------------
"TRUSTEE" "CORPORATION"
76
APPENDIX A
EMPLOYEE STOCK OWNERSHIP PLAN PROVISIONS
This Appendix A to the First Security Incentive Savings Plan and Trust Agreement
(Plan) designates a portion of the Plan as an "employee stock ownership plan"
("ESOP"), within the meaning of section 4975(e)(7) of the Code, and governs the
operation of the ESOP portion, with respect to which its provisions supersede
any contrary provisions of the Plan. The ESOP designation is not intended to
create a separate Plan, and assets attributable to the ESOP portion will
continue to be held as part of the assets of the Plan and will be available for
the payment of all benefits under the Plan.
A1.1 DEFINITIONS
The definitions below shall apply to the following terms related to the
ESOP. All other capitalized terms in this Appendix A shall have the
meanings defined elsewhere in the Plan.
(a) "ESOP ACCOUNT" means a Participant's Matching ESOP Account,
Profit-Sharing ESOP Account, PAYSOP Account or any of those
Accounts.
(b) "ESOP EFFECTIVE DATE" means January 1, 1996.
(c) "MATCHING ESOP ACCOUNT" means an Account established in accordance
with Section A1.2(a) of this Appendix.
(d) "NON-ESOP ACCOUNT" means an Account that is not an ESOP Account.
(e) "PROFIT-SHARING ESOP ACCOUNT" means an Account established in
accordance with Section A1.2(b) of this Appendix.
A1.2 DESIGNATION XX XXXX XXXXXXX XXX XXXXXXXXXXXXX XX XXXX ACCOUNTS
As of the ESOP Effective Date, the portion of the First Security Stock
Fund which consists of the sum of the ESOP Accounts is designated as an
"employee stock ownership plan" that will invest primarily in stock of the
Corporation which meets the definition of an Employer security under
Section 15.19 of the Plan and Code section 409(1). Thereafter, the Trustee
will establish as of the ESOP Effective Date and maintain for each
Participant:
(a) A Matching ESOP Account, initially consisting of that portion of the
Participant's Matching Account that is invested in the First
Security Stock Fund and any earnings or losses attributable thereto,
and
77
(b) A Profit-Sharing ESOP Account, consisting of that portion of the
Participant's Profit-Sharing Account that is invested in the First
Security Stock Fund and any earnings or losses attributable thereto.
(c) PAYSOP Account, consisting of funds received from the trustee of the
First Security Employee Stock Ownership Plan.
These Accounts are established for bookkeeping purposes only and need not
be segregated from other assets of the Plan.
A1.3. ALLOCATION OF PARTICIPATING EMPLOYER CONTRIBUTIONS BETWEEN ESOP AND
NON-ESOP ACCOUNTS
On and after the ESOP Effective Date, Participating Employer contributions
will be allocated to Participants' Accounts in accordance with Section 6.1
of the Plan, provided that, subject to Section A1.7, fifty percent (50%)
of the Matching Contributions that the Participating Employer makes on
behalf of a Participant will be made in the form of cash or Employer Stock
and allocated to the Matching ESOP Account of a Participant and held and
invested as a part of the First Security Stock Fund and one hundred
percent (100%) of the Profit Sharing Contributions that the Participating
Employer makes on behalf of a Participant will be made in the form of cash
or Employer Stock and allocated to the Profit Sharing ESOP Account of a
Participant and held and invested as a part of the First Security Stock
Fund.
A1.4 TRANSFERS BETWEEN ESOP AND NON-ESOP ACCOUNTS
Except as provided in Section A1.7 of this Appendix, a Participant may not
elect to have any portion of an ESOP Account invested in assets other than
the First Security Stock Fund. If, in accordance with the provisions of
Section A1.7, a Participant elects to have any portion of an ESOP Account
invested in assets other than the First Security Participating Employer
Stock Fund, that portion will continue to form part of his ESOP Account.
A1.5 DISTRIBUTION RULES FOR ESOP ACCOUNTS
Distributions from ESOP Accounts are made in accordance with Article X of
the Plan, except that the distributee may elect to receive shares of
Participating Employer stock, plus cash in lieu of fractional shares,
equal in value to the amounts of the distributions to which he is
entitled. This Section A1.5 does not apply to distributions of dividends
made in accordance with Section A1.6 of this Appendix.
78
A1.6 PASS-THROUGH OF DIVIDENDS PAID ON PARTICIPATING EMPLOYER STOCK HELD IN
ESOP ACCOUNTS
The Trustee will, as soon as practicable after each date on which
dividends are paid on Employer Stock, either distribute to Participants
all dividends attributable to the interests in Employer Stock held by
their ESOP Accounts or arrange to have such dividends distributed directly
to Participants by the Participating Employer or the Participating
Employer's dividend disbursement agent. A Participant may elect, in
accordance with rules established by the Committee and subject to all
limitations on deferral contributions set forth in the Plan, to have
deferral contributions made by the Participating Employer on his behalf
equal to the dividends passed through to him. Each Plan year, the
Committee may limit or restrict such elections by Highly-Compensated
Employees. For the purpose of determining Matching Contributions to be
made in accordance with Section 4.3 of the Plan, deferral contributions
under this Section are disregarded.
A1.7 EFFECTIVE DIVERSIFICATION OF INVESTMENTS
A Participant who satisfies the requirements of Section A1.7(a) may elect
to have all or a portion of his ESOP Accounts invested in assets other
than Employer Stock. Any portion of an ESOP Account that is so invested
remains part of that Account.
(a) ELIGIBILITY TO ELECT DIVERSIFICATION. A Participant may elect to
diversify the investment of his interest in his ESOP Accounts in
accordance with this Section if he has attained age 53.
(b) TIME OF ELECTION. An election with respect to a Plan Year may be
made under this Section at any time after the Employee has attained
age 53.
(c) EFFECT OF ELECTION. A Participant who has attained age 53 may make
one of the following elections with respect to his ESOP Accounts:
(1) 50% Election: Pursuant to this election, 50 % of the ESOP
Accounts shall remain invested in Employer Stock in the ESOP
Accounts. The remaining 50% of the ESOP Accounts shall be
apportioned among one or more of the Investment Funds the
Participant may specify according to the procedures prescribed
by the Committee. After such election, 50% of all subsequent
Matching Contributions and Profit Sharing Contributions shall
be invested in the First Security Stock Fund and the remainder
of such contributions shall be apportioned among one or more
of the Investment Funds the Participant may specify according
to the procedures prescribed by the Committee. The 50%
election may only be opted by the Participant once.
(2) 100% Election: Pursuant to this election, 100% of the ESOP
Accounts and 100% of all subsequent Matching Contributions and
Profit Sharing Contributions shall be apportioned among one or
more of the Investment
79
Funds the Participant may specify according to the procedures
prescribed by the Committee .
In accordance with a Participant's election under this
section, the portion of his ESOP Accounts' interest in the
First Security Stock Fund for which an election is made will
be liquidated and invested in assets other than Employer
Stock, as he directs. The Trustee must provide at least three
investment options for this purpose, each of which must be
consistent with any requirements promulgated by the Secretary
of the Treasury under Section 401(a)(28) of the Code, and must
carry out the Participant's election no later than ninety (90)
days after it is made.
A1.8 PASS-THROUGH OF VOTING RIGHTS WITH RESPECT TO EMPLOYER STOCK
The Trustee exercises all voting rights with respect to Employer Stock
held by the Plan but must exercise those rights in accordance with the
instructions of Plan Participants to the extent of their ESOP Accounts'
interests in the First Security Stock Fund. The Trustee will establish
procedures for distributing proxy material to, and soliciting voting
instructions from, Participants on all corporate matters that are subject
to vote of the holders of Employer Stock. The Trustee must vote the Plan's
stock in accordance with the Participant's instructions. Any shares with
respect to which no instructions are received must be voted in the same
proportion as shares with respect to which the Trustee does receive
instructions.
A1.9 SECTION 401(m) NONDISCRIMINATION TESTING
The provisions of Appendix A will be applied separately to Matching
Contributions that are invested in the First Security Stock Fund, as if
those contributions are made under a separate plan, except that, for the
purpose of applying the multiple use limitation described in Section 5.2,
all Matching Contributions under the ESOP and Non-ESOP portions of the
Plan will be aggregated.
80
IN WITNESS WHEREOF, the Trustee has executed this Appendix A to the First
Security Incentive Savings Plan and Trust Agreement in SALT LAKE CITY, UTAH,
this ______ day of _____________________________, 1999.
FIRST SECURITY BANK, N.A. FIRST SECURITY CORPORATION
By: By:
-------------------------- --------------------------
Title: Title:
----------------------- -----------------------
"TRUSTEE" "CORPORATION"
00
XXXXXXXX X
PREACQUISITION SERVICE
Acquisitions by FS Date of
(company) Acquisition ISP Elig
------------------------------
ISP Elig. ISP Vest.
--------------------------------------------------------------------------------------------------------------
1st Nat'l Bank 1/24/1992 Pred Hire Pred Hire
(FNB of North Idaho)
AM BANK of NEVADA 7/1/1997 Pred Hire Pred Hire
AMERICAN BANK OF COMMERCE -IDAHO 7/16/1994 Pred Hire Pred Hire
BANK OF AMERICA ARIZONA 7/27/1993 Merger Date Merger Date
BANK OF WILLAMETTE VALLEY 4/1/1992 Pred Hire Pred Hire
XXXXXX COUNTY BANK 5/1/1993 Pred Hire Pred Hire
BUTTE COUNTY BANK 11/4/1983 Pred Hire Pred Hire
CALIFORNIA STATE BANK 5/30/1998 Pred Hire Pred Hire
CKC INSURANCE 6/8/1995 Pred Hire Pred Hire
COMM. WEST AGENCIES 1/1/1998 Pred Hire Pred Hire
COMMUNITY 1ST BANK 5/20/1994 Pred Hire Pred Hire
XXXXXXXX eff. 1/1/2000 6/1/1999 Pred Hire Pred Hire
CONTININTAL BANK 11/19/1993 Pred Hire Pred Hire
COTTONWOOD 12/6/1991 Merger Date Merger Date
XXXXXXXXX 4/30/1994 Pred Hire Pred Hire
XXXXXX COUNTY BANK 5/18/1984 Pred Hire Merger Date
XXXXX BANK 9/23/1989 Pred Hire Merger Date
DESERET BANK 11/10/1990 Pred Hire Merger Date
DIVERSIFIED INSURANCE 8/1/1991 Pred Hire Merger Date
XXXXX STATE BANK 4/1/1993 Pred Hire Merger Date
EQUALITY ST 2/18/1994 Merger Date Merger Date
XXXXXX INSURANCE 3/1/1993 Merger Date Merger Date
FIRST INTERSTATE BANK 10/1/1992 Merger Date Merger Date
FNB NEW MEXICO 11/19/1993 Pred Hire Pred Hire
XXXXXXX INSURANCE 2/1/1995 Pred Hire Pred Hire
GREEN RIVER 10/29/1993 Pred Hire Merger Date
XXXXXXXX INSURANCE 7/6/1992 Pred Hire Merger Date
HARBOURTON 4/1/1997 Pred Hire Pred Hire
XXXXX INSURANCE 1/1/1996 Pred Hire Pred Hire
INSURE NEW MEXICO 2/11/1999 Pred Hire Pred Hire
NORTHWEST INSURANCE 12/18/1998 Pred Hire Pred Hire
MARINE NATIONAL BANK eff. 1/1/2000 12/20/1998 Later of 4/1/1987 Later of 4/1/1987
or Pred Hire or Pred Hire
MOUNTAIN WEST 4/8/1991 Merger Date Merger Date
NEVADA BANKING COMPANY 12/29/1998 Pred Hire Pred Hire
eff. 1/1/2000
NEVADA COMMUNITY BANK 10/12/1992 Merger Date Merger Date
PACIFIC FIRST 12/17/1990 Pred Hire 1/1/1991
RIO GRANDE BANKSHARES 2/2/1998 Pred Hire Pred Hire
STAR VALLEY STATE BANK 8/23/1994 Pred Hire Pred Hire
TWIN FALLS BANK AND TRUST 1/12/1990 Pred Hire Pred Hire
UB&T 12/27/1991 Pred Hire Merger Date
UNITED SAVINGS 3/2/1990 Pred Hire Pred Hire
XXX XXXXXX 2/12/1999 Pred Hire Pred Hire
WILLIAMSBURG 9/14/1990 Pred Hire Merger Date
Date of Acquisition equals the effective date of
acquisition into FSC.
"Predecessor Hire" means that eligibility,
vesting, and accrual is counted from the
individuals original company hire date. While
"Merger Date" means that eligibility, vesting, and
accrual is counted from date of acquisition.
82
APPENDIX C
ANNUITY DISTRIBUTIONS
This Appendix C to the First Security Incentive Savings Plan describes the
limited instances in which annuity distributions are permitted pursuant to
Article X.
C1.1 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES.
The joint and survivor annuity requirements do not apply to this Plan. The
Plan does not provide any annuity distributions to Participants nor to
surviving spouses; provided, however, if this Plan is a direct or indirect
transferee from a plan subject to the provisions of Code Section 417 the
following provisions shall apply to such transfer accounts, unless the
transfer is an elective transfer described in Section C1.4.
(a) JOINT AND SURVIVOR ANNUITY. The Committee must direct the Trustee to
distribute a Participant's benefit in the form of a qualified joint
and survivor annuity, unless the Participant makes a valid waiver
election (described in Section C1.2) within the 90-day period ending
on the annuity starting date. If, as of the annuity starting date, the
Participant is married, a qualified joint and survivor annuity is an
immediate annuity which is purchasable with the Participant's benefit
and which provides a life annuity for the Participant and a survivor
annuity payable for the remaining life of the Participant's surviving
spouse equal to 50% of the amount of the annuity payable during the
life of the Participant. If, as of the annuity starting date, the
Participant is not married, a qualified joint and survivor annuity is
an immediate life annuity for the Participant which is purchasable
with the Participant's benefit. On or before the annuity starting
date, the Committee, without Participant or spousal consent, must
direct the Trustee to pay the Participant's benefit in a lump sum, in
lieu of a qualified joint and survivor annuity, in accordance with
Section 10.1 of the Plan if the Participant's benefit is not greater
than $5,000.
(b) PRERETIREMENT SURVIVOR ANNUITY. If a married Participant dies prior to
his annuity starting date, the Committee will direct the Trustee to
distribute a portion of the Participant's benefit to the Participant's
surviving spouse in the form of a preretirement survivor annuity,
unless the Participant has a valid waiver election (as described in
Section C1.3) in effect, or unless the Participant and his spouse were
not married throughout the one year period ending on the date of his
death. A preretirement survivor annuity is an annuity which is
purchasable with 50% (100% for United Savings Bank Participants) of
the Participant's benefit (determined as of the date of the
Participant's death) and which is payable for the life of the
Participant's surviving spouse. The value of the preretirement
survivor annuity is attributable to Employer contributions and to
Employee contributions in the same proportion as the Participant's
benefit not payable under this
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paragraph is payable to the Participant's Beneficiary, in accordance
with the other provisions of Section 10.1 of the Plan. If the present
value of the preretirement survivor annuity does not exceed $5,000,
the Committee, on or before the annuity starting date, must direct the
Trustee to make a lump sum distribution to the Participant's surviving
spouse, in lieu of a preretirement survivor annuity.
(c) SURVIVING SPOUSE ELECTIONS. If the present value of the preretirement
survivor annuity exceeds $5,000, the Participant's surviving spouse
may elect to have the Trustee commence payment of the preretirement
survivor annuity at any time following the date of the Participant's
death, but not later than the mandatory distribution periods described
in Section 10.1(j), and may elect any of the forms of payment
described in Section 10.1(c), in lieu of the preretirement survivor
annuity. In the absence of an election by the surviving spouse, the
Committee must direct the Trustee to distribute the preretirement
survivor annuity on the first distribution date following the close of
the Plan Year in which the latest of the following events occurs: (i)
the Participant's death; (ii) the date the Committee receives
notification of or otherwise confirms the Participant's death; (iii)
the date the Participant would have attained Normal Retirement Age; or
(iv) the date the Participant would have attained age 62.
(d) SPECIAL RULES. If the Participant has in effect a valid waiver
election regarding the qualified joint and survivor annuity or the
preretirement survivor annuity, the Committee must direct the trustee
to distribute the Participant's benefit in accordance with Section
10.1. The Committee will reduce the Participant's benefit by any
security interest pursuant to any offset rights authorized by Section
9.5 held by the Plan by reason of a Participant loan to determine the
value of the Participant's benefit distributable in the form of a
qualified joint and survivor annuity or preretirement survivor
annuity, provided any post-August 18, 1985, loan satisfied the spousal
consent requirement described in Section 9.5 of the Plan. For purposes
of applying this Section C1.1, the Committee treats a former spouse as
the Participant's spouse or surviving spouse to the extent provided
under a qualified domestic relation order described in Section 10.6.
The provisions of this Section C1.1, and of Sections C1.2 and C1.3,
apply separately to the portion of the Participant's benefit subject
to the qualified domestic relations order and to the portion of the
Participant's benefit not subject to that order.
(e) LIMITED APPLICATION OF SECTION C1.1. The preceding provisions of this
Section C1.1 apply only to: (1) a Participant as respects whom the
Plan is a direct or indirect transferee from a plan subject to the
Code 417 requirements and the Plan received the transfer after
December 31, 1984, unless the transfer is an elective transfer
described in Section C1.4; (2) a Participant who elects a life annuity
distribution (if the Plan requires the Plan to provide a life annuity
distribution option); and (3) a Participant whose benefits under a
defined benefit plan maintained by the Employer are offset by benefits
provided under this Plan. Sections C1.2 and C1.3 only apply to
Participants to whom the preceding provisions of this Section C1.1
apply.
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C1.2 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY.
Not earlier than 90 days, but not later than 30 days, before the
Participant's annuity starting date, the Committee must provide the
Participant a written explanation of the terms and conditions of the
qualified joint and survivor annuity, the Participant's right to make, and
the effect of, an election to waive the joint and survivor form of benefit,
the rights of the Participant's spouse regarding the waiver election and
the Participant's right to make, and the effect of, a revocation of a
waiver election. The Plan does not limit the number of times the
Participant may revoke a waiver of the qualified joint and survivor annuity
or make a new waiver during the election period.
A married Participant's waiver election is not valid unless (a) the
Participant's spouse to whom the survivor annuity is payable under the
qualified joint and survivor annuity), after the Participant has received
the written explanation described in this Section C1.2, has consented in
writing to the waiver election, the spouse's consent acknowledges the
effect of the election, and a notary public or the Plan Administrator (or
his representative) witnesses the spouse's consent, (b) the spouse consents
to the alternate form of payment designated by the Participant or to any
change in that designated form of payment, and (c) unless the spouse is the
Participant's sole primary Beneficiary, the spouse consents to the
Participant's Beneficiary designation or to any change in the Participant's
beneficiary designation. The spouse's consent to a waiver of the qualified
joint and survivor annuity is irrevocable, unless the Participant revokes
the waiver election. The spouse may execute a blanket consent to any form
of payment designation or to any beneficiary designation made by the
Participant, if the spouse acknowledges the right to limit that consent to
a specific designation but, in writing, waives that right. The consent
requirements of this Section C1.2 apply to a former spouse of the
Participant, to the extent required under a qualified domestic relations
order described in Section 10.6.
The Committee will accept as a valid waiver election which does not satisfy
the spousal consent requirements if the Committee establishes the
Participant does not have a spouse, the Committee is not able to locate the
Participant's spouse, the Participant is legally separated or has been
abandoned (within the meaning of State law) and the Participant has a court
order to that effect, or other circumstances exist under which the
Secretary of the Treasury will excuse the consent requirement. If the
Participant's spouse is legally incompetent to give consent, the spouse's
legal guardian (even if the guardian is the Participant) may give consent.
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C1.3 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY.
The Committee must provide a written explanation of the preretirement
survivor annuity to each married Participant, within the following period
which ends last: (1) the period beginning on the first day of the Plan Year
in which the Participant attains age 32 and ending on the last day of the
Plan year in which the Participant attains age 34; (2) a reasonable period
after an Employee becomes a participant; (3) a reasonable period after the
joint and survivor rules become applicable to the Participant; or (4) a
reasonable period after a fully subsidized preretirement survivor annuity
no longer satisfies the requirements for a fully subsidized benefit. A
reasonable period described in clauses (2), (3) and (4) is the period
beginning one year before and ending one year after the applicable event.
If the Participant separates from Service before attaining age 35, clauses
(1), (2), (3) and (4) do not apply and the Committee must provide the
written explanation within the period beginning one year before and ending
one year after the separation from service. The written explanation must
describe, in a manner consistent with Treasury regulations, the terms and
conditions of the preretirement survivor annuity comparable to the
explanation of the qualified joint and survivor annuity required under
Section C1.2. The Plan does not limit the number of times the Participant
may revoke a waiver of the preretirement survivor annuity or make a new
waiver during the election period.
A participant's waiver election of the preretirement survivor annuity is
not valid unless (a) the Participant makes the waiver election no earlier
than the first day of the Plan Year in which he attains age 35 and (b) the
Participant's spouse (to whom the preretirement survivor annuity is
payable) satisfies the consent requirements described in Section C1.2
except the spouse need not consent to the form of benefit payable to the
designated Beneficiary. The spouse's consent to the waiver of the
preretirement survivor annuity is irrevocable, unless the Participant
revokes the waiver election. Irrespective of the time of election
requirement described in clause (a), if the Participant separates from
Service prior to the first day of the Plan Year in which he attains age 35,
the Committee will accept a waiver election as respects the Participant's
Accrued Benefit attributable to his Service prior to his separation from
service. Furthermore, if a Participant who has not separated from Service
makes a valid waiver election, except for the timing requirement of clause
(a), the Committee will accept that election as valid, but only until the
first day of the Plan year in which the Participant attains age 35. A
waiver election described in this paragraph is not valid unless made after
the Participant has received the written explanation described in this
Section C1.3.
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C1.4 MERGER / DIRECT TRANSFER.
The Trustee may not consent to, or be a party to, any merger or
consolidation with another plan, or to a transfer of assets or liabilities
to another plan, unless immediately after the merger, consolidation or
transfer, the surviving Plan provides each Participant a benefit equal to
or greater than the benefit each Participant would have received had the
Plan terminated immediately before the merger or consolidation or transfer.
The Trustee possesses the specific authority to enter into merger
agreements or direct transfer of assets agreements with the trustees of
other retirement plans described in Code 401(a), including an elective
transfer, and to accept the direct transfer of plan assets, or to transfer
plan assets, as party to any such agreement.
The Trustee may accept a direct transfer of plan assets on behalf of an
Employee prior to the date the Employee satisfies the Plan's eligibility
conditions. If the Trustee accepts a direct transfer of plan assets, the
Committee and Trustee must treat the Employee as a Participant for all
purposes of the Plan except the Employee is not a participant for purposes
of sharing in Employer contributions or Participant forfeitures under the
Plan until he actually becomes a Participant in the Plan.
(a) ELECTIVE TRANSFERS. The Trustee, after August 9, 1988, may not consent
to, or be a party to a merger, consolidation or transfer of assets
with a defined benefit plan, except with respect to an elective
transfer, or unless the transferred benefits are in the form of
paid-up individual annuity contracts guaranteeing the payment of the
transferred benefits in accordance with the terms of the transferor
plan and in a manner consistent with the Code and with ERISA. The
Trustee will hold, administer and distribute the transferred assets as
a part of the Trust Fund and the Trustee must maintain a separate
Employer contribution Account for the benefit of the Employee on whose
behalf the Trustee accepted the transfer in order to reflect the value
of the transferred assets. Unless a transfer of assets to this Plan is
an elective transfer, the Plan will preserve all Code 411(d)(6)
protected benefits with respect to those transferred assets. A
transfer is an elective transfer if: (1) the transfer satisfies the
first paragraph of this Section C1.4; (2) the transfer is voluntary,
under a fully informed election by the Participant; (3) the
Participant has an alternative that retains his Code Sections
411(d)(6) protected benefits (including an option to leave his benefit
in the transferor plan, if that plan is not terminating); (4) the
transfer satisfies the applicable spousal consent requirements of the
Code; (5) the transferor plan satisfies the joint and survivor notice
requirements; (6) the Participant has a right to immediate
distribution from the transferor plan, in lieu of the elective
transfer; (7) the transferred benefit is at least the greater of the
single sum distribution provided by the transferor plan for which the
Participant is eligible or the present value of the Participant's
accrued benefit under the transferor plan payable at the plan's normal
retirement age; (8) the Participant has a 100% Nonforfeitable interest
in the transferred benefit; and (9) the transfer otherwise satisfies
applicable Treasury regulations. An elective transfer may occur
between qualified plans of any type.
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(b) DISTRIBUTION RESTRICTION UNDER SECTION 401(k). If the Plan receives a
direct transfer (by merger or otherwise) of elective contributions (or
amounts treated as elective contributions) under a Plan with a Section
401(k) arrangement, the distribution restrictions of Sections
401(k)(2) and (10) continue to apply to those transferred elective
contributions.
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