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EXHIBIT 99.1
REPUBLIC BANCORP, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
AND
TRUST AGREEMENT
January 1, 1999
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REPUBLIC BANCORP, INC.
PROFIT SHARING PLAN AND TRUST AGREEMENT
Table of Contents
PAGE
SECTION 1. - Definitions.............................................................................1
SECTION 2. - Participation...........................................................................7
2.01 Participation ...........................................................................7
2.02 Bound by Plan ..........................................................................8
SECTION 3. - Contributions and Accounts..............................................................8
3.01 Accounts...............................................................................8
3.02 Company Contributions..................................................................8
SECTION 4. - Accounts................................................................................8
4.01 Adjustment of Accounts.................................................................8
4.02 Allocation of Cash Contributions.......................................................9
4.03 Allocation of Forfeitures and Company Stock Contributions.............................10
4.04 Participating Companies...............................................................10
SECTION 5. - Eligibility for Benefits...............................................................12
5.01 Retirement............................................................................12
5.02 Disability............................................................................12
5.03 Death.................................................................................13
5.04 Termination of Employment Prior to Normal Retirement Age..............................13
5.05 Vesting Schedule......................................................................13
5.06 Restoration of Forfeited Accrued Benefit..............................................14
5.07 Calculation of Years of Service.......................................................14
5.08 Forfeiture............................................................................15
5.09 Beneficiary...........................................................................15
5.10 Uniformed Services Rights.............................................................16
SECTION 6. - Payment of Benefits....................................................................16
6.01 Commencement of Benefits..............................................................16
6.02 Distributions.........................................................................17
6.03 Pre-Retirement Distribution Rights....................................................17
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6.04 Minimum Distribution Requirements.....................................................18
6.05 Eligible Rollover Distributions.......................................................20
6.06 In-Service Withdrawals................................................................21
SECTION 7. - Claims Procedure.......................................................................21
7.01 Claim for Benefit.....................................................................21
7.02 Decision on Claim.....................................................................21
7.03 Review Procedure......................................................................21
7.04 Time Periods..........................................................................22
SECTION 8. - Administration........................................................................22
8.01 Administrative Committee..............................................................22
8.02 Powers and Duties.....................................................................23
8.03 Officers and Agents...................................................................23
8.04 Reliance Upon Reports.................................................................23
SECTION 9. - Trust Fund and Trustee.................................................................24
9.01 Trust Fund............................................................................24
9.02 Management of Fund....................................................................25
9.03 Distributions.........................................................................27
9.04 Accounting by Trustee.................................................................27
9.05 Expenses and Compensation.............................................................27
9.06 Resignation or Removal of Trustee.....................................................28
9.07 Notification to Trustee...............................................................28
9.08 Indemnity of Trustee..................................................................29
9.09 Procedure.............................................................................29
9.10 Appointment of Trustee................................................................29
9.11 Investment in Collective Trust Fund...................................................29
9.12 Acquisition Loans.....................................................................29
SECTION 10. - Top Heavy Rules.......................................................................31
10.01 Definitions...........................................................................31
10.02 Determination of Top Heavy Status.....................................................32
10.03 Minimum Employer Contribution.........................................................33
10.04 Vesting Table.........................................................................33
10.05 Amendment to Vesting Schedule.........................................................34
10.06 Adjustment to Code Section 415 Limitations............................................34
SECTION 11. - Miscellaneous.........................................................................35
11.01 Nondiversion..........................................................................35
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11.02 Return of Company Contributions.......................................................35
11.03 Nonassignability......................................................................36
11.04 Certificates Concerning Board Action..................................................36
11.05 Construction..........................................................................36
11.06 Indemnity of Employees................................................................37
11.07 Merger................................................................................37
11.08 Internal Revenue Code.................................................................37
11.09 Annual Additions......................................................................37
11.10 Status of Participants................................................................41
11.11 Incapacitated Recipient...............................................................41
11.12 Discretionary Acts....................................................................41
11.13 Notices to Administrator..............................................................41
11.14 Unclaimed Account Procedure...........................................................41
SECTION 12. - Fiduciary Responsibilities............................................................42
12.01 Named Fiduciaries.....................................................................42
12.02 Powers and Responsibilities...........................................................42
12.03 Allocation of Responsibilities........................................................43
12.04 Employees.............................................................................43
12.05 Funding Policy........................................................................43
SECTION 13. - Company Stock.........................................................................44
13.01 Voting of Company Stock...............................................................44
13.02 Dividends on Company Stock............................................................44
13.03 Put Option............................................................................45
13.04 Payment of Purchase Price.............................................................45
SECTION 14. - Amendment and Termination.............................................................46
14.01 Amendment.............................................................................46
14.02 Termination...........................................................................47
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REPUBLIC BANCORP, INC.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST AGREEMENT
January 1, 1999
This is (1) an employee stock ownership plan, which is also stock bonus
plan, adopted as of January 1, 1999; and (2) a Trust Agreement dated as of
January 1, 1999 between (a) Republic Bancorp, Inc. (b) Republic Bank & Trust
Company, Trustee.
SECTION 1.
DEFINITIONS
1.01 "Account" means collectively the "Company Stock Account" and the
"Other Investments Account" of a Participant.
1.02 "Accrued Benefit" means, with respect to a Participant, the
Nonforfeitable balance of his Account as of any date.
1.03 "Acquisition Loan" means a loan made to this Plan by a disqualified
person (as defined in Code Section 4975(e)(2)), or a loan to this Plan
which a disqualified person guarantees, provided the loan satisfies the
requirements of Treas. Reg. Section 54.4975-7(b).
1.04 "Active Participant" means as of an Anniversary Date, a Participant who
(a) has completed a Year of Service within the Plan Year ending on that
Anniversary Date and is employed by the Company on that Anniversary
Date, or (b) has ceased to be employed by the Company during the Plan
Year ending on that Anniversary Date on account of death, Total and
Permanent Disability or retirement after his Normal Retirement Age. An
Employee on an FMLA Leave, shall not be treated as having ceased to be
employed by the Company.
1.05 "Administrator" shall have the meaning set forth in Section 8.01.
1.06 "Anniversary Date" means each December 31.
1.07 "Break in Service" means a Plan Year during which a Participant has not
completed more than 500 Hours of Service. A Break in Service shall not
occur until the last day of the Plan Year.
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1.08 "Cashout" means a lump sum distribution of the present value of a
Participant's Accrued Benefit.
1.09 "Code" means the Internal Revenue Code of 1986, as amended.
1.10 "Company" means Republic Bancorp, Inc., and its successors and assigns
and any Employer or successor that adopts the Plan and becomes a party
to the Trust Agreement.
1.11 "Company Stock" means common stock issued by the Company or any
Employer which constitutes "employer securities" under Code section
409(l) and Treas. Reg. ss. 54.4975-12.
1.12 "Company Stock Account" means a separate account to be set up and
maintained pursuant to Section 3.01 for each Participant which reflects
his share of contributions to the Plan made in Company Stock, his share
of released Financed Shares, his share of Company Stock Forfeitures and
any Company Stock attributable to earnings or cash contributions.
1.13 "Compensation" shall have the meaning set forth in subsection (a),
subject to subsection (b):
(a) Wages actually paid or made available during a Plan Year for
personal services rendered in the course of employment by the
Company as defined in Section 3401 of the Code for purposes of
income tax withholding at the source, subject to the
following: (1) Compensation shall include any elective
deferral (as defined in Code section 402(g)(3)), and any
amount which is contributed or deferred by the Company at the
election of the Participant and which is not includible in the
gross income of the Participant by reason of Code section 125
or 457; (2) Compensation shall not include any amounts paid
before the Employee became a Participant, and (3) Compensation
shall be determined without regard to any rules that limits
the remuneration included in wages based on the nature or
location of the employment or the services performed (such as
the exception for agricultural labor in Code section
3401(a)(2)).
(b) The Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any Plan
Year shall not exceed $150,000, as adjusted for increases in
the cost-of-living in accordance with Code section
401(a)(17)(B). The cost-of-living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months,
over which Compensation is determined (determination period)
beginning in such calendar year. If a determination period
consists of fewer than 12 months, the annual compensation
limit is an amount equal to the otherwise applicable annual
compensation limit multiplied by a fraction, the numerator of
which is the number of months in the short determination
period, and the denomina tor of which is 12. If compensation
for any prior determination period is taken into account in
determining a Participant's allocations for the current Plan
Year, the
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Compensation for such prior determination period is subject to
the applicable annual compensation limit in effect for that
prior determination period.
1.14 "Employee" means, subject to (a) and (b), any individual who
is classified by the Employer as an employee for Federal income tax
purposes, excluding leased employees.
(a) If it determined that an individual who has not been
classified as an employee by the Employer (for example, an
individual classified as an independent contractor by the
Employer) should be reclassified as an employee of the
Employer, such reclassifica tion shall be effective for all
purposes under the Plan prospectively from the date of the
final determination, even though the reclassification
otherwise has an earlier effective date. The purpose of this
provision is to exclude from participation in the Plan all
individuals who may actually be common law employees of the
Employer, but who are not paid as though they were common law
employees, regardless of the reasons they are excluded from
the payroll and regardless of whether that exclusion is
correct. Moreover, any individual who signs an agreement with
the Employer stating that they are not eligible to participate
in the Plan shall not be eligible to participate during the
term provided in the agreement, whether they are common law
employees or not.
(b) "Leased employee" means any person (other than an employee of
the recipient) who pursuant to an agreement between the
recipient and any other person ("leasing organization") has
performed services for the recipient (or for the recipient and
related persons determined in accordance with Section
414(n)(6) of the Code) on a substantially full time basis for
a period of at least one year, and such services are performed
under primary direction or control of the recipient.
Contributions or benefits provided a leased employee by the
leasing organization which are attributable to services
performed for the recipient employer shall be treated as
provided by the recipient employer. A leased employee shall
not be considered an employee of the recipient if: (i) such
employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of
at least 10 percent of compensation (as defined in Section
415(c)(3) of the Code), but including amounts contributed
pursuant to a salary reduction agreement which are excludable
from the employee's gross income under Section 125, 401(a)(8),
402(h) or 403(b) of the Code, (2) immediate participation, and
(3) full and immediate vesting; and (ii) leased employees do
not constitute more than 20 percent of the recipient's
nonhighly compensated work force.
1.15 "Employer" means (i) all corporations that are members of a controlled
group of corporations (as defined in Section 414(b) of the Code and any
regulations adopted thereunder) of which the Company is a member, (ii)
all trades or businesses (whether or not incorporated) which are under
common control (as defined in Section 414(c) of the Code and any
regulations adopted thereunder) and which include the Company, and
(iii) all employers that are
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members of an affiliated service group (as defined in Section 414(m) of
the Code and any regulations adopted thereunder) of which the Company
is a member or a similar organization described in Section 414(o) of
the Code.
1.16 "Entry Date" means January 1, 1999 and July 1, 1999 and January 1 and
July 1 of each year thereafter.
1.17 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.18 "Financed Shares" means Company Stock acquired by the Trust with the
proceeds of an Acquisition Loan and which satisfy the definition of
"qualifying employer securities" under Code Section 4975(e)(8).
1.19 "FMLA Leave" means any unpaid leave of absence that is protected under
the Family and Medical Leave Act of 1993, as amended from time to time,
and any regulations thereunder.
1.20 "Forfeiture" means the amount forfeited, if any, in accordance with
Section 5.08.
1.21 "Forfeiture Break in Service" means the occurrence of both (i)
termination of employment (even if rehired) and (ii) five consecutive
Breaks in Service (or one Break in Service for any Plan Year beginning
before January 1, 1985)
1.22 "Fund" means all assets held by the Trustee under the Plan, including
all property delivered from time to time to the Trustee, and all
proceeds and reinvestments thereof and all accumulations thereon, but
excluding (i) all payments which at the time of reference shall have
been made from the Fund by the Trustee, and (ii) all amounts which have
been segregated into a separate fund. Each separate fund shall remain a
part of the Trust.
1.23 "Highly Compensated Employee" means any employee who: (1) was a
5-percent owner at any time during the determination year or the
look-back year, or (2) for the look-back year, had compensation from
the Employer in excess of $80,000. The $80,000 amount is adjusted at
the same time and in the same manner as under section 415(d), except
that the base period is the calendar quarter ending September 30, 1996.
For the purpose of this subsection the applicable Plan Year of the Plan
for which a determination is being made is called a determination year
and the preceding 12-month period is called a look-back year. A highly
compensated former employee is based on the rules applicable to
determining highly compensated employee status as in effect for that
determination year, in accordance with section 1.414(q)-1T, A-4 of the
temporary Income Tax Regulations and Notice 97-75. In determining
whether an Employee is a Highly Compensated Employee for years
beginning in 1997, the amendments to section 414(q) stated above are
treated as having been in effect for years beginning in 1996.
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1.24 "Hour of Service" means each hour determined as follows:
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These
hours will be credited to the Employee for the Plan Year in
which the duties are performed.
(b) Each hour for which an employee is paid, or entitled to
payment, by the Employer on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence. No more than 501
Hours of Service shall be credited under this subsection (b)
for any single continuous period (whether or not such period
occurs in a single Plan Year). Hours under this subsection
shall be calculated and credited pursuant to section
2530.200b-2 of the Department of Labor Regulations which is
incorporated herein by this reference.
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. These
hours shall be credited to the Employee for the Plan Year or
Plan Years to which the award or agreement pertains rather
than the Plan Year in which the award, agreement or payment is
made.
(d) No Hour of Service shall be credited under more than one
subsection of this section. The Employer shall credit
Employees with Hours of Service on the basis of the "actual"
method, which is the determination of Hours of Service from
records of hours worked and hours for which the Employer makes
payment or for which payment is due from the Employer. When
records are not available, an Employee shall be deemed to work
45 hours for each calendar week in which the Employee is
credited with at least one Hour of Service.
(e) Solely for purposes of determining whether a Break in Service
for participation and vesting purposes has occurred in a
computation period, an individual who is absent from work due
to a statutory leave shall receive credit for the Hours of
Service which would otherwise have been credited to such
individual, or in any case in which such hours cannot be
determined, 8 Hours of Service per day of such absence. For
purposes of this subsection, an absence from work due to a
statutory leave means an absence (i) by reason of the
pregnancy of the individual, (ii) by reason of a birth of a
child of the individual, (iii) by reason of the placement of a
child with the individual in connection with the adoption of
such child by such individual, (iv) for purposes of caring for
such child for a period beginning immediately following such
birth or placement, or (v) that is an FMLA Leave. The Hours of
Service credited under this subsection shall be credited
either (A) in the computation period in which the absence
begins if the crediting is necessary to prevent a one-year
Break in Service in that period, or (B) in all other cases, in
the following computation period.
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(f) Hours of Service shall be credited for any individual
considered an Employee for purposes of this Plan under Code
Sections 414(n) and 414(o).
1.25 "Investment Committee" means the committee described in Section
9.01(b).
1.26 "Notforfeitable" means a Participant's or Beneficiary's right, legally
enforceable against the Plan, to the Participant's Account, subject
only to Section 5.08.
1.27 "Non-Highly Compensated Employee" means any Employee who is not a
Highly Compensated Employee or a Family Member.
1.28 "Normal Retirement Age" means the date a Participant attains age 65.
1.29 "Other Investments Account" means a separate account to be set up and
maintained pursuant to Section 3.01 for each Participant which reflects
his interest in the Plan attributable to that portion of the Fund other
than Company Stock.
1.30 "Participant" means any Employee or former Employee who has qualified
for participation in the Plan and whose Accrued Benefit has not been
distributed.
1.31 "Plan" means the plan, including the trust, embodied in this instrument
as amended from time to time.
1.32 "Plan Year" means a 12 consecutive month period ending on an
Anniversary Date.
1.33 "Total and Permanent Disability" means total disability arising from
occupational or non-occupational medically determinable physical or
mental impairment which prevents a Participant from engaging in any
substantial gainful activity and which is determined by the Claims
Examiner or the Administrator (subject to Section 7) to be permanent
and continuous for the remainder of the Participant's life. Total and
Permanent Disability for purposes of the Plan shall not include any
disability arising before a Participant's original date of employ ment
for the Employer. The Administrator may make rules and regulations of
uniform application concerning a minimal level of earnings in a
restricted activity which shall not disqualify a Participant from
being considered to have incurred Total and Permanent Disability.
Total and Permanent Disability shall be determined solely and finally
by the Claims Examiner or the Administrator in accordance with Section
7 after consideration of such evidence as the Claims Examiner or the
Administrator may require, including reports of such physician or
physicians as the Claims Examiner or the Administrator may designate.
The provisions of this Section shall be uniformly and consistently
applied to all Participants.
1.34 "Trust" means the trust created hereunder, which may be known as the
"Republic Bancorp, Inc. Employee Stock Ownership Trust."
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1.35 "Trustee" means Republic Bank & Trust Company and any successor trustee
or trustees.
1.36 "Valuation Date" means each Anniversary Date and any other date the
Administrator determines shall be a Valuation Date.
1.37 "Year of Service" means a Plan Year during which an Employee has
completed at least 1,000 Hours of Service.
SECTION 2.
PARTICIPATION
2.01 PARTICIPATION.
(a) Any Employee who is not already a Participant, who has
completed 1,000 Hours of Service within that Employee's
initial Employment Year, shall automatically become a
Participant on the Entry Date (if employed by the Company on
that date) coinciding with or next following the end of that
Employee's initial Employment Year. After an Employee's
initial Employment Year, (1) the eligibility computation
period for that Employee shall be the Plan Year which includes
the first anniversary of the Employee's initial Employment
Year, and where additional eligibility computation periods are
necessary, succeeding Plan Years , and (2) that Employee shall
automatically become a Participant on the Entry Date
coinciding with or next following (if employed by the Company
on that date) the end of the Plan Year during which that
employee completes 1,000 Hours of Service. As used in this
Section 2.01(a), the following terms shall have the following
meanings: (i) "Employment Date" means the date on which the
Employee is first credited with an Hour of Service for the
Employer; and (ii) "Employment Year" means a computation
period that consists of a twelve consecutive month period
beginning on an Employment Date. For the purpose of
determining Hours of Service under this Section 2.01,
references in Section 1.24 to the "Plan Year" shall be deemed
references to the appropriate twelve month period determined
under this Section 2.01.
(b) If a Participant ceases to be employed by the Company and then
resumes employment by the Company, he shall upon such
reemployment, resume participation. If an Employee who has
satisfied the service requirements of subsection (a) above is
separated from service on the applicable Entry Date, and if he
returns to service after that Entry Date, he shall commence
participation immediately upon his return. Any
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other Employee who separates from service and who subsequently
returns shall become a Participant in accordance with
subsection (a) above.
2.02 BOUND BY PLAN. Upon becoming a Participant, a Participant shall be
bound then and thereafter by the terms of this Plan, including all
amendments to the Plan. No Participant shall have any rights to revoke,
modify or discontinue his participation during the term of his
employment or upon any reemployment.
SECTION 3.
CONTRIBUTIONS AND ACCOUNTS
3.01 ACCOUNTS. The Administrator shall maintain or cause to be maintained in
the name of each Participant a separate Company Stock Account and any
Other Investments Account. However, a separate Account need not be
maintained if no Plan assets would be allocable to that Account.
Amounts shall be credited or debited to the Accounts as provided in the
Plan. Although the Accounts will be maintained separately, the amounts
in the Accounts may be commingled in the Fund and invested by the
Trustee as a single investment fund. If a portion of a Participant's
Account has been forfeited, but the Account has not been distributed,
then the undistributed Accrued Benefit shall be held in a separate
Account which shall be Nonforfeitable at all times, and an additional
Account shall be maintained for that Participant, subject to Section 5,
with respect to any additional contributions or Forfeitures to be
allocated for the benefit of that Participant.
3.02 COMPANY CONTRIBUTIONS. The Company will contribute in cash or Company
Stock to the Fund from time to time such amounts, or nothing, as the
Company may determine from time to time.
SECTION 4.
ACCOUNTS
4.01 ADJUSTMENT OF ACCOUNTS. As of each Valuation Date the Administrator
shall
(a) First charge to the appropriate Account of each Participant
all distributions and payments made to him, or on his Account,
since the last preceding Valuation Date that have not been
charged previously;
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(b) Next, credit to each Participant's Company Stock Account the
shares of Company Stock, if any, that have been purchased with
amounts from his Other Investments Account since the last
preceding Valuation Date, and adjust such accounts in
accordance with Sections 4.02 and 4.03; and
(c) Next allocate and credit to each Participant's Other
Investments Account the Company contributions made in cash and
cash Forfeitures that are allocated and credited as of that
date in accordance with Sections 4.02 and 4.03 and allocate
and credit to each Participant's Company Stock Account the
shares of Company Stock and Company Stock Forfeitures that are
to be allocated and credited as of that date in accordance
with Section 4.03.
(d) Finally, the Administrator shall make any remaining
allocations and adjustments described in Sections 4.02 and
4.03.
(e) Any securities received by the Trustee as a stock split or
dividend or as a result of a reorganization or other
recapitalization of the Company shall be allocated as of the
next Valuation Date in the same manner as the stock to which
it is attributable is then allocated. In the event any
rights, warrants, or options are issued on common shares or
other securities of the Company held in the Trust, they shall
be exercised for the acquisition of additional Common Stock
or other securities of the Company to the extent cash is then
available. Any Common Stock or other securities of the
Company acquired in this manner shall be treated as Common
Stock or other securities of the Company bought by the
Trustee for the net price paid. Any rights, warrants, or
options on Common Stock or other securities of the Company
which cannot be exercised for lack of cash may be sold by the
Trustee and the proceeds treated as a current cash dividend
received on Common Stock or other securities of the Company.
4.02 ALLOCATION OF CASH CONTRIBUTIONS. For each Plan Year, Company
contributions (other than contributions used to repay an Acquisition
Loan in that Plan Year) that are made in cash for that year, and cash
Forfeitures arising under the Plan during a Plan Year shall be
allocated, as of each Anniversary Date for that Plan Year, to the Other
Investments Account of each Active Participant in the same manner as
Company Stock contributed would be allocated under Section 4.03. Upon
the purchase of Company Stock or the repayment of an Acquisition Loan
with such cash, an appropriate number of shares of Company Stock shall
be credited to the Company Stock Account of such Participant and the
Participant's Other Investments Account shall be charged by the amount
of the cash used to buy such Company Stock or repay an Acquisition
Loan, as applicable. Subject to Section 13.02, the Trustee shall also
credit to the Other Investments Account of each Participant any cash
dividends paid to the Trustee on shares of Company Stock held in that
Participant's Company Stock Account as of the record date. Such cash
dividends credited to a Participant's Other Investments Account shall
be applied at the direction of the Administrator to purchase shares
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of Company Stock or to the repayment of an Acquisition Loan.
Thereafter, an appropriate number of shares of Company Stock shall be
credited to the Company Stock Account of such Participant and the
Participant's Other Investments Account shall then be charged by the
amount of cash used to purchase such Company Stock for his Company
Stock Account or to repay an Acquisition Loan, as applicable. As of
each Valuation Date, before the allocation of any Company
contributions, as of such date, any net appreciation, depreciation,
income, gains or losses in the fair market value of the Trust Fund
(exclusive of Company Stock) shall be allocated among and credited to
the Other Investments Accounts of Participants, pro rata, according to
the balance of each Other Investments Account as of the next preceding
Valuation Date, reduced in each case by the amount of any charge to
such Other Investments Account since the next preceding Valuation Date.
4.03 ALLOCATION OF FORFEITURES AND COMPANY STOCK CONTRIBUTIONS. As of each
Anniversary Date there shall be determined the sum of (1) all shares of
Company Stock contributed by the Company under Section 3.02 to the
Trustee for the Plan Year then ended, (2) the number of Financed Shares
released from the Suspense Account for allocation to Participants'
Company Stock Accounts under Section 9.12 (except as provided under
Section 13.02) and (3) Company Stock Forfeitures arising for the Plan
Year then ended. That sum shall then be allocated on a non-monetary
basis among the Company Stock Accounts of the persons who were Active
Participants on the Anniversary Date as of which the allocation is
made. In the allocation there shall be allocated to each such Active
Participant's Company Stock Account that proportion of the total sum to
be allocated that each such Active Participant's Compensation received
during the Plan Year then ended is of all Compensation received by all
such Active Participants during the Plan Year then ended.
4.04 PARTICIPATING COMPANIES.
(a) Any Employer that, with the Administrator's consent, adopts
this Plan and becomes a party to the Trust Agreement shall be
a "Participating Company." Each Participat ing Company shall
be subject to the terms and conditions of this Plan as in
effect at the effective date of adoption by the Participating
Company and as subsequently amended from time to time by the
Sponsoring Company, subject to such modifica tions as are set
forth in the document evidencing the Participating Company's
adoption on the Plan. As used in this Section 4.04, the term
"Sponsoring Company" means Republic Bancorp, Inc. Unless the
context of the Plan clearly indicates to the contrary, the
terms "Company" and "Employer" mean each Participating Company
as relates to its adoption of the Plan.
(b) This Plan shall be deemed to be a single plan of all Employers
that have adopted this Plan. Employer contributions shall not
be accounted for separately, and all Plan assets shall be
available to pay benefits to all Participants and their
Beneficiaries. Employees may be transferred among
Participating Companies or employed simultaneously by more
than one Participating Company, and no such transfer or
simulta-
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neous employment shall effect a termination of employment, be
deemed retirement or be the cause of a Forfeiture or a loss of
Years of Service under this Plan. For purposes of determining
Years of Service and the payment of benefits upon death or
other termination of employment, all Participating Companies
shall be deemed one Employer. Any Participant employed by a
Participating Company during a Plan Year who receives any
Compensation from a Participating Company during that Plan
Year shall receive allocations for the Plan Year in accordance
with Sections 4.02 and 4.03 based on his Compensation during
that Plan Year (such Participant shall receive an allocation
under Sections 4.02 and 4.03 only if he is an Active
Participant).
(c) Each Participating Company shall be deemed to have designated
irrevocably the Sponsoring Company as its sole agent (1) for
all purposes under Section 8 (including fixing the number of
members of, and the appointment and removal of, the
Administrative Committee); (2) for purposes of fixing the
number of members of, and the appointment and removal of, the
Investment Committee; (3) with respect to all its relations
with the Trustee (including the Trustee's appointment and
removal, and fixing the number of Trustees); and (4) for the
purpose of amending this Plan. A copy of each amendment shall
be delivered to each Participating Company. The Administrator
shall make any and all rules and regulations which it shall
deem necessary or appropriate to effectuate the purpose of
this Section 4.04, and such rules and regulations shall be
binding upon the Sponsoring Company, the Participating
Companies, the Participants and Beneficiaries.
(d) Any Participating Company may withdraw its participation in
the Plan by giving written notice to the Administrator stating
that it has adopted a separate plan. The notice shall be given
at least six months prior to a designated Valuation Date,
unless the Administrator shall accept a shorter period of
notification. Promptly after the designated Valuation Date the
Administrator, based on values fixed by the Trustee, shall
establish the withdrawing Participating Company's interest in
the Fund, after a reduction for fees and other expenses
related to the Participating Company's withdrawal. The Trustee
shall then, in accordance with the Administrator's
instructions, transfer the withdrawing Participating Company's
interest in the Fund to the trustee or other funding agent of
the Participating Company's separate plan. Neither the Trustee
nor the Administrator shall be obligated to transfer or direct
the transfer of assets under this Section until they are
satisfied as to all matters pertaining to the transfer,
including, but not limited to, the tax qualification of the
plan into which the transfer will be made. The Administrator
and the Trustee may rely fully on the representations and
instructions of the withdrawing Participating Company and
shall be fully protected and discharged with respect to any
transfer made in accordance with such representations or
instructions. Any transfer of assets in accordance with this
Section shall constitute a complete discharge of
responsibility of the Sponsoring Company, the remaining
Participating Companies, their Boards of Directors and
officers, and the Trustee without any responsibility on their
part collectively or
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individually to see to the application thereof The
Administrator in its sole discretion shall have the right to
transfer the withdrawing Participating Company's interest in
the Fund to the new plan in the form of installments, in cash,
or in cash and kind and over a period of time not to exceed
one year following the designated Valuation Date of the
Participating Company's withdrawal. Any assets which are
invested in accordance with an investment contract or
agreement which by its terms precludes the realization upon
and distribution of such assets for a stated period of time
shall continue to be held by the Trustee under the terms and
conditions of this Plan until the expiration of such period,
subject to the Administrator's instructions.
(e) The Board of Directors of a Participating Company may at any
time terminate this Plan with respect to its Employees by
adopting a resolution to that effect and delivering a
certified copy to the Administrator. Section 14.02 shall apply
to a Participating Company's termination, but the continuation
of the Plan by the Sponsoring Company and other Participating
Companies shall not be affected. The termination of the Plan
with respect to a Participating Company's Employees shall not
effect a termination with respect to an Employee of the
Sponsoring Company or another Participating Company if such
Employee was not employed by the terminating Participating
Company on the effective date of the termination, even though
he may have been employed by the terminating Participating
Company at an earlier date. Any fees and other expenses
related to a Participating Company's termination shall be
charged against the Accounts of the affected Participants.
Upon termination of the Plan by any Participating Company, the
Administrator may in its sole discretion direct the Trustee to
segregate the Accounts of all affected Participants into a
separate fund, and the Administrator may in its sole
discretion direct the Trustee to invest the separate fund only
in Cash Equivalent Investments. If the Administrator does not
direct the investment of the separate fund, it shall be
invested by the Trustee in the Trustee's sole discretion.
SECTION 5.
ELIGIBILITY FOR BENEFITS
5.01 RETIREMENT. Upon termination of a Participant's employment by the
Employer for any reason on or after his Normal Retirement Age, the
Administrator shall direct the Trustee to begin payment of the
Participant's Accrued Benefit to him in accordance with Section 6,
within a reasonable time after the Valuation Date coinciding with or
next following the Participant's termination of employment.
5.02 DISABILITY. If a Participant ceases to be employed by the Employer
because of Total and Permanent Disability, the Administrator shall
direct the Trustee to begin payment of the
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Participant's Accrued Benefit to him in accordance with Section 6,
within a reasonable time after the Valuation Date coinciding with or
next following the date determination of Total and Permanent Disability
is made.
5.03 DEATH. If a Participant dies before he receives his Accrued Benefit,
the Administrator shall direct the Trustee to pay the Participant's
Accrued Benefit to his Beneficiary in accordance with Section 6.02,
subject to Sections 6.03 and 6.04.
5.04 TERMINATION OF EMPLOYMENT PRIOR TO NORMAL RETIREMENT AGE. The following
provisions shall apply, subject to Section 6, with respect to a
Participant who ceases to be employed by the Employer for any reason
other than death, Total and Permanent Disability or retirement on or
after his Normal Retirement Age:
(a) PAYMENT. Subject to subsection (b) below, the Administrator
shall direct the Trustee to pay the Participant's Accrued
Benefit to him within a reasonable time after the second
Anniversary Date following the Anniversary Date that coincides
with or next follows the date of the Participant's termination
of employment.
(b) CONSENT. Any distribution to a Participant under this Plan
shall be subject to this subsection (b). The Administrator
shall obtain the Participant's written consent to any
distribution to a Participant, including the form of the
distribution, if (1) the present value of the Participant's
Accrued Benefit exceeds (or at the time of any prior
distribution exceeded) $5,000 and (2) the Administrator
directs the Trustee to make the distribution to the
Participant prior to his attaining the later of Normal
Retirement Age or age 62. If a Participant who is eligible for
a distribution does not file his written consent (if required)
with the Administrator within the period of time fixed by the
Administrator, the Participant's Accrued Benefit shall be
distributed within a reasonable time after the close of the
Plan Year in which such consent is received, but no later than
a reasonable time after the close of the Plan Year in which
the Participant has terminated employment and attained his
Normal Retirement Age (or in which he dies, if earlier).
(c) DISTRIBUTION PRIOR TO FORFEITURE BREAK IN SERVICE. If the
Participant's Accrued Benefit attributable to Company
contributions is zero, the Participant shall be deemed to have
received a Cashout on the Anniversary Date of the Plan Year in
which the Participant terminated employment.
5.05 VESTING SCHEDULE. A Participant's Account derived from Company
contributions shall be 100 percent Nonforfeitable upon and after his
attaining Normal Retirement Age (if employed by the Employer on or
after that date), or if his employment terminates as a result of death
or Total and Permanent Disability. If a Participant's employment
terminates prior to his Normal Retirement Age for any reason other than
death or Total and Permanent Disability,
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then the Nonforfeitable percentage of his Account (the "Accrued
Benefit") derived from Company contributions shall be calculated as
follows:
YEARS OF SERVICE NONFORFEITABLE PERCENTAGE
Fewer than 5 0
5 or more 100
5.06 RESTORATION OF FORFEITED ACCRUED BENEFIT.
(a) If the Employer rehires a Participant who had a Nonforfeitable
Accrued Benefit of zero at termination of employment, the
Administrator shall restore his Account to the same dollar
amount as the dollar amount of such Account on the Valuation
Date coinciding with or next preceding the date of the
Cashout, unadjusted for any gains or losses occurring
subsequent to that Valuation Date. Notwithstanding the
preceding sentence, the Administrator shall not restore a
reemployed Participant's Account if the Participant incurred a
Forfeiture Break in Service before or as of the Anniversary
Date coinciding with or next following the Participant's date
of rehire.
(b) If the Participant has not incurred a Break in Service, the
Administrator shall restore the Participant's Account as of
the Anniversary Date coinciding with or next following the
Participant's date of rehire. To restore the Participant's
Company Contribution Account, the Administrator, to the extent
necessary, shall allocate to the Account: (1) First, the
amount, if any, of Participant Forfeitures the Administrator
would otherwise allocate; (2) Second, the Employer
contribution for the Plan Year to the extent made under a
discretionary formula. To the extent the amounts available for
restoration for a particular Plan Year are insufficient to
enable the Administrator to make the required restoration, the
Company shall contribute, without regard to any limitations in
this Plan, such additional amount as is necessary to enable
the Administrator to make the required restoration. Even if
amounts are available for restoration, the Company may
contribute such amount as it may in its sole discretion
determine to enable the Administrator to make all or any
portion of the required restoration. If, for a particular Plan
Year, the Administrator must restore the Account of more than
one reemployed Participant, then the Administrator shall make
the restoration allocation to each such Participant's Account
in the same proportion that a Participant's restored amount
for the Plan Year bears to the restored amount for the Plan
Year of all reemployed participants. The Administrator shall
not take into account the allocation(s) under this Section in
applying the limitation on allocations under Section 11.09.
5.07 CALCULATION OF YEARS OF SERVICE. Subject to the following rules, all
of an Employee's Years of Service shall be counted for vesting
purposes:
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(a) Any Year of Service completed after a Forfeiture Break in
Service shall not count for the purpose of determining a
Participant's Nonforfeitable percentage of his Account derived
from Employer contributions made for his benefit prior to the
Forfeiture Break in Service.
(b) Any Year of Service completed before a Break in Service shall
not be counted if the number of consecutive Breaks in Service
equals or exceeds the greater of (i) five or (ii) the
aggregate number of Years of Service prior to the Break in
Service. For Plan Years beginning before January 1, 1985, the
Administrator shall apply the next preceding sentence by
disregarding the requirement for a minimum of five consecutive
Breaks in Service. This subsection shall only apply if the
Participant's right to his Account derived from Company
contributions is one hundred percent forfeitable at the time
he has a Break in Service. The aggregate number of Years of
Service before a Break in Service shall not include any Years
of Service not required to be taken into account under this
subsection by reason of any prior Break in Service.
5.08 FORFEITURE. A Participant's Forfeiture, if any, of his Account derived
from Company contributions shall occur under the Plan:
(a) As of the Anniversary Date of the Plan Year in which the
Participant first incurs a Forfeiture Break in Service; or, if
earlier and if applicable,
(b) As of the date on which the Participant receives a Cashout of
his Accrued Benefit. The Administrator shall determine the
percentage of a Participant's Forfeiture, if any, under this
Section solely by reference to the vesting schedule of Section
5.05. A Participant shall not forfeit any portion of his
Account for any other reason or cause except as expressly
provided by this Section or as provided under Section 11.02 or
Section 11.14. Any Company Stock acquired with the proceeds of
an Acquisition Loan may be forfeited only after other assets
comprising the Participant's Account have been forfeited.
5.09 BENEFICIARY. A designation of a Beneficiary shall be effective only if
it is set forth in a written instrument delivered to the Administrator
in such form as the Administrator may prescribe. In the absence of an
effective designation, the Beneficiary shall be
(a) The Participant's spouse, if known and living; or if there is
no known surviving spouse or the spouse disclaims the Accrued
Benefit, then
(b) The Participant's estate.
A married Participant's Beneficiary designation shall not be valid even
if executed prior to marriage, unless the Participant's spouse consents
to the specific Beneficiary designation or
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gives a general consent, and acknowledges the effect of such consent,
or unless the Participant is not married on the date of his death. The
spouse's consent must be in writing and a notary public or the
Administrator (or his representative) must witness the consent. A
married Participant's Beneficiary designation does not require spousal
consent if the Participant's spouse is the Participant's designated
Beneficiary. If the Participant establishes to the satisfaction of the
Administrator that such written consent cannot be obtained because
there is no spouse or because the spouse cannot be located, the
Participant's designation of a non-spouse Beneficiary shall be
acceptable. The consent must be in such form as the Administrator may
prescribe. Upon the filing with the Administrator of an effective
designation of Beneficiary, any and all prior designations filed by
that Participant shall be deemed revoked.
5.10 UNIFORMED SERVICES RIGHTS. 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). At any time when this Plan allows loans to
Participants, loan repayments will be suspended under this Plan as
permitted under Code section 414(u)(4).
SECTION 6.
PAYMENT OF BENEFITS
6.01 COMMENCEMENT OF BENEFITS.
(a) Subject to Section 6.01(b), payment of benefits under the Plan
shall in no event begin later than 60 days after the close of
the Plan Year in which the latest of the following events
occurs: (1) The date the Participant attains age 65 (or his
Normal Retirement Age, if earlier); (2) The tenth anniversary
of the year in which the Participant commenced participation
in the Plan; or (3) The Participant's date of termination of
service with the Employer.
(b) In no event shall any distribution under this Plan commence
later than the Required Beginning Date. The Required Beginning
Date of a Participant is the later of the April 1 of the
calendar year following the calendar year in which the
Participant attains age 70 1/2 or retires, except that benefit
distributions to a 5-percent owner must commence by the April
1 of the calendar year following the calendar year in which
the Participant attains age 70 1/2. A Participant is treated
as a 5-percent owner for purposes of this Section is such
Participant is a 5 percent owner as defined in section 416 of
the Code at any time during the Plan Year ending with or
within the calendar year in which such owner attains age 70
1/2. Once distributions have begun to a 5-percent owner under
this Section, they must continue to be distributed, even if
the Participant ceases to be a 5-percent owner in a subsequent
year.
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6.02 DISTRIBUTIONS.
(a) The Accrued Benefit payable to a former Participant or a
Beneficiary shall be distributed in accordance with the
following rules:
(1) All distributions of benefits under the Plan shall
be by lump sum payment.
(2) The Trustee shall, at the Participant's or
Beneficiary's election, distribute the Participant's
Company Stock Account either in whole shares of
Company Stock or in cash. The Trustee shall at the
Participant's or Beneficiary's election either apply
the Participant's Other Investments Account to
provide whole shares of Company Stock for
distribution or distribute cash in an amount equal
to the value of the Other Investments Account. Any
fractional share shall be distributed in cash.
(b) Notwithstanding Section 6.02, the Trustee, if directed in
writing by the Administra tor, shall pay, in cash, any cash
dividends on Company Stock allocated or allocable to
Participants' Company Stock Accounts, irrespective of whether
a Participant is fully vested in his Company Stock Account.
The Administrator's direction shall state whether the Trustee
is to pay the cash dividends currently, or within the 90 day
period following the close of the Plan Year in which the
Employer pays the dividends to the Trust. The Administrator
may request the Employer to pay dividends on Company Stock
directly to Participants.
(c) Upon the Participant's death, the Administrator shall direct
the Trustee to pay the Participant's Accrued Benefit in
accordance with subsection (a) and this subsection. The
Administrator shall direct the Trustee to pay the
Participant's Accrued Benefit to the Beneficiary in a lump sum
within a reasonable time after the Valuation Date coinciding
with or next following the Participant's death. If a
Beneficiary is living at the Participant's death, but such
Beneficiary dies before receiving the entire amount payable to
him, the remaining portion of the benefit shall be paid in a
single sum to the estate of such deceased Beneficiary.
6.03 PRE-RETIREMENT DISTRIBUTION RIGHTS.
(a) Subject to subsections (b) and (d) below each Qualified
Participant may elect to direct the Administrator to transfer
any portion of the Participant's Transferable Shares,
determined as of the Anniversary Date next preceding the
election, to another qualified defined contribution plan of
the Company, provided that such plan then offers at least
three distinct investment options and satisfies the
requirements of Code Section 401(a)(28)(B). The Participant
must elect, in written notice to the Administrator, to direct
such a transfer within 90 days after the end of each of the
six
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Plan Years during the Qualified Election Period, and the
transfer shall be made within 90 days after each such
election.
(b) If the fair market value of the Company Stock allocated to a
Qualified Participant's Company Stock Account is $500 or less
as of any Anniversary Date during the Qualified Election
Period, then the Qualified Participant shall not be entitled
to make an investment election under this Section 6.03 with
respect to the Plan Year ending on that Anniversary Date.
(c) For purposes of this Section 6.03, the following terms shall
have the following meanings:
(1) "Transferable Shares" means the number of shares of
Common Stock transferable to another qualified
defined contribution plan of the Company with respect
to the Qualified Election Period. The Transferable
Shares of a Qualified Participant are determined by
multiplying the number of shares of Company Stock
credited to the Participant's Company Stock Account
(including the Company Stock previously transferred
pursuant to this Section) by 25 percent or, with
respect to the last Plan Year in the Qualified
Election Period, by 50 percent, reduced by any prior
transfers or distributions received by such
Participant pursuant to this Section 6.03.
(2) "Qualified Election Period" means the 6 Plan Years
beginning with the Plan Year in which a Participant
first becomes a Qualified Participant.
(3) "Qualified Participant" means a Participant who has
attained age 55 and who has completed at least 10
years of participation in the Plan. A "year of
participation" means a Plan Year in which the
Participant was eligible for an allocation of Company
contributions, irrespective of whether the Company
actually contributed to the Plan for that year.
6.04 MINIMUM DISTRIBUTION REQUIREMENTS.
(a) The Administrator may not direct the Trustee to distribute the
Participant's Accrued Benefit, nor may the Participant elect
to have the Trustee distribute his Accrued Benefit, under a
method of payment which, as of the Required Beginning Date,(as
determined under Section 6.01) does not satisfy the minimum
distribution requirements under Code Section 401(a)(9) and the
applicable Treasury regulations. The minimum distribution for
a calendar year equals the Participant's Accrued Benefit as of
the latest Valuation Date preceding the beginning of the
calendar year divided by the Participant's life expectancy or,
if applicable, the joint and last survivor expectancy of the
Participant and his designated Beneficiary (as determined
under Section 5.09, subject to the Code Section 401(a)(9)
regulations). The Administrator
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shall increase the Participant's Accrued Benefit, as
determined on the relevant Valuation Date, for contributions
or Forfeitures allocated after the Valuation Date and by
December 31 of the valuation calendar year, and shall decrease
the valuation by distributions made after the Valuation Date
and by December 31 of the valuation calendar year. For
purposes of this valuation, the Administrator shall treat any
portion of the minimum distribution for the first distribution
calendar year made after the close of that year as a
distribution occurring in that first distribution calendar
year. In computing a minimum distribution, the Administrator
shall use the unisex life expectancy multiples under Treas.
Reg. Section 1.72-9. The Administrator Shall, unless the
Participant requests no redetermination, compute the minimum
distribu tion for a calendar year subsequent to the first
calendar year for which the Plan requires a minimum
distribution by redetermining the applicable life expectancy.
However, the Administrator may not redetermine the joint life
and last survivor expectancy of the Participant and a
nonspouse designated Beneficiary in a manner which takes into
account any adjustment to a life expectancy other than the
Participant's life expectancy.
(b) If the Participant's spouse is not his designated Beneficiary,
a method of payment to the Participant (whether by Participant
election or by Administrator direction) may not provide more
than incidental benefits to the Beneficiary. The Plan must
satisfy the minimum distribution incidental benefit ("MDIB")
requirement in the Treasury regulations issued under Code
Section 401(a)(9) for distributions made on or after the
Participant's Required Beginning Date and before the
Participant's death. To satisfy the MDIB requirement, the
Administrator shall compute the minimum distribution required
by this Section 6.03 by substituting the applicable MDIB
divisor for the applicable life expectancy factor, if the MDIB
divisor is a lesser number. Following the Participant's death,
the Administrator shall compute the minimum distribution
required by this Section 6.04 solely on the basis of the
applicable life expectancy factor and shall disregard the MDIB
factor. For Plan Years beginning prior to January 1, 1989, the
Plan satisfies the incidental benefits requirement if the
distributions to the Participant satisfied the MDIB
requirement or if the present value of the retirement benefits
payable solely to the Participant is greater than 50% of the
present value of the total benefits payable to the Participant
and his Beneficiaries. The Administrator shall determine
whether benefits to the Beneficiary are incidental as of the
date the Trustee is to commence payment of the retirement
benefits to the Participant, or as of any date the Trustee
redetermines the payment period to the Participant.
(c) The minimum distribution for the first distribution calendar
year is due by the Participant's Required Beginning Date. The
minimum distribution for each subsequent distribution calendar
year, including the calendar year in which the Participant's
Required Beginning Date falls, is due by December 31 of that
year.
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(d) The method of distribution to the Participant's Beneficiary
must satisfy Code Section 401(a)(9) and the applicable
Treasury regulations. If the Participant's death occurs after
his Required Beginning Date, the method of payment to the
Beneficiary shall provide for completion of payment over a
period which does not exceed the payment period which had
commenced for the Participant. If the Participant's death
occurs prior to his Required Beginning Date, the method of
payment to the Beneficiary shall provide for completion of
payment to the Beneficiary over a period not exceeding 5 years
after the date of the Participant's death.
6.05 ELIGIBLE ROLLOVER DISTRIBUTIONS.
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Section, a
distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.
(a) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent
such distribution is required under section 401(a)(9) of the
Code; and the portion of any distribution that is not
includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of
the Code, an individual retirement annuity described in
section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust described in
section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account
or individual retirement annuity.
(c) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section
414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(d) Direct rollover: A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.
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6.06 IN-SERVICE WITHDRAWALS. Any Participant who has attained age 59 1/2 and
who has at least five Years of Service may, upon 30 days advance
written notice to the Administrator, withdraw all or a portion of his
Accrued Benefit at its value as of the Valuation Date coinciding with
or next following delivery of the notice.
SECTION 7.
CLAIMS PROCEDURE
7.01 CLAIM FOR BENEFIT. Every Participant or Beneficiary who may be entitled
to payment of a benefit under this Plan and who has not already been
advised by the Administrator of his right to receive such benefit may
submit a written claim to the Administrator on such a form provided for
that purpose.
7.02 DECISION ON CLAIM. One member of the Administrator shall be designated
by the Administra tor as "Claims Examiner" to consider all claims. The
Claims Examiner may require from a Participant or Beneficiary who
submits a claim (a "Claimant") such other information as the Claims
Examiner deems pertinent to the determination and payment of Plan
benefits. If a claim is denied, in whole or in part, the Claims
Examiner shall notify the Claimant in writing of the denial. The
written notice shall contain, in a manner calculated to be understood
by the Claimant:
(a) The specific reason or reasons for the denial;
(b) Specific reference to the provisions of the Plan on which the
denial is based;
(c) A description of any additional material or information
necessary for the Claimant to perfect the claim and an
explanation of why such material or information is necessary;
and
(d) An explanation of how the denial may be appealed.
7.03 REVIEW PROCEDURE. A Claimant may appeal a decision of the Claimant
Examiner to the Administrator. The request for a review must be made in
writing and must be delivered to the Administrator. In connection with
such an appeal a Claimant may review pertinent Plan documents and
submit issues and comments in writing to the Administrator. The
Administrator shall review all relevant material, may in its sole
discretion hold a hearing, and
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shall render a decision regarding the claim. The Administrator's
decision shall be in writing; shall state specific reasons for its
decision, and shall include specific references to the pertinent Plan
provisions on which the decision is based.
7.04 TIME PERIODS. The Administrator may establish reasonable time periods
within which actions must be taken under the claims procedure set forth
in this Section 7. The claims procedure set forth in this Section 7
(including any time periods that are established) shall be administered
in accordance with applicable regulations adopted and issued by the
Department of Labor.
SECTION 8.
ADMINISTRATION
8.01 ADMINISTRATIVE COMMITTEE. The Company may appoint a committee, which
shall be known as the "Administrative Committee" to carry out the
Administrator's responsibilities under this Plan document, and the term
"Administrator" as used in this Plan means the Administrative
Committee. If the Company does not appoint an Administrative Committee,
the Company shall be the Administrator for all purposes. Unless the
Administrative Committee and the Company agree otherwise, the Company
shall act as the plan administrator for the purpose of satisfying any
requirement now or subsequently imposed by Federal or state legislation
to report or disclose to any Federal or state department or agency any
information concerning the Plan, and any cost or expense incurred in
satisfying such reporting or disclosure requirements shall be deemed a
reasonable expense of administering the Plan and may be paid from the
Fund. The Administrative Committee shall consist of the number of
persons as may be fixed by the Company from time to time. These persons
may but need not be Participants. The members of the Administrative
Committee may be removed by the Company at any time, with or without
cause. Any member of the Administrative Committee may resign at any
time by delivering a written resignation to the President or the
Secretary of the Company. Any vacancy in the membership of the
Administrative Committee, however arising, shall be filled by the
Company. The Administrative Committee may act only by the unanimous
vote of its members at a meeting or by a writing signed by each of its
members without a meeting. The Administrative Committee may authorize
one or more of its members to execute on its behalf any notices,
directions, certificates, consents or other documents. The Trustee, and
any other person or organization, upon written notice of such
authorization, shall accept and rely upon such authorization until
given a written notice that the authorization has been revoked or
changed by the Administrative Committee. A member of the Administrative
Committee who is also a Participant shall not vote or act upon any
matter affecting solely any of his benefits under the Plan. The
Administrative Committee may adopt and amend from time to time rules
and regulations for the conduct of its affairs.
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The members of the Administrative Committee shall serve without
compensation for their services as such members.
8.02 POWERS AND DUTIES. Subject to Section 9.01(b), the Administrator shall
have complete control of the administration of the Plan, with all
powers necessary to enable it properly to carry out its duties in this
respect. Without limiting the generality of the foregoing, the
Administrator shall have discretionary power to
(a) Conclusively and finally determine, but only in accordance
with the Plan, the eligibility of Employees to participate in
the Plan and the eligibility of Participants and Beneficiaries
to receive benefits under the Plan;
(b) Adopt and amend from time to time policies, rules and
regulations for the administration of the Plan;
(c) Interpret and construe the Plan and Trust Agreement, and the
Administrator's interpretation and construction thereof in
good faith shall be conclusive, except that its interpretation
and construction shall not be conclusive as to the Trustee if
its interpretation and construction places upon the Trustee
liabilities and duties more onerous than those that would be
placed upon the Trustee under the interpretation and
construction contended for by the Trustee;
(d) Correct any defect or supply any omission or reconcile any
inconsistency in the Plan in such manner and to such extent as
the Administrator shall in its sole discretion deem desirable
to carry the same into effect; and
(e) Establish the acceptable forms of beneficiary designation for
death benefits and of any consent, election, notice or waiver
to be given by a Participant, spouse or Beneficiary.
(f) Direct the Trustee with respect to the voting of Company Stock
as provided in Section 13.01.
8.03 OFFICERS AND AGENTS. The Administrator may appoint such officers,
consultants, accountants, attorneys and representatives as it may deem
advisable. Unless paid by the Company, the Administrator shall direct
the Trustee to pay from the Fund (including segregated Accounts) the
fees and expenses of such consultants, accountants, attorneys and
representatives and any other expenses incurred by the Administrator in
the administration of the Plan.
8.04 RELIANCE UPON REPORTS. The Administrator and its officers, directors
and members, if any, shall be entitled to rely upon (a) all
valuations, certificates and reports made by any consultant or
accountant selected by the Administrator, (b) all opinions given by
any legal
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counsel selected by the Administrator, (c) all reports furnished by the
Trustee, and (d) all information furnished by any Employer.
SECTION 9.
TRUST FUND AND TRUSTEE
9.01 TRUST FUND.
(a) The Fund shall, subject to this Section 9.01 and to Sections
9.12 and 13.01, be held, administered, controlled and invested
by the Trustee, and the Trustee, upon written direction by the
Investment Committee, shall invest and reinvest up to 100
percent of the Fund primarily (or exclusively) in Company
Stock. However, at such time as Company Stock is not available
for purchase, or in the absence of instructions from the
Investment Committee, the Fund may be invested by the Trustee
in accordance with Section 9.02. The Trustee shall have no
responsibility whatsoever either for the control, management,
administration or amendment of the Plan or for the Company
contributions, except to receive, hold, invest, reinvest and
distribute the same, together with earnings thereon, in
accordance with the provisions of this Agreement.
(b) The Company may appoint a committee, which shall be known as
the "Investment Committee" for purposes of instructing the
Trustee regarding the purchase of Company Stock and
Acquisition Loans. The Investment Committee shall consist of
the number of persons as may be fixed by the Company from time
to time. These persons may but need not be Participants. The
members of the Investment Committee may be removed by the
Company at any time, with or without cause. Any member of the
Investment Committee may resign at any time by delivering a
written resignation to the President or the Secretary of the
Company. Any vacancy in the membership of the Investment
Committee, however arising, shall be filled by the Company.
The Investment Committee may act only by the unanimous vote of
its members at a meeting or by a writing signed by each of its
members without a meeting. The Investment Committee may
authorize one or more of its members to execute on its behalf
any notices, directions, certificates, consents or other
documents. The Trustee, and any other person or organization,
upon written notice of such authorization, shall accept and
rely upon such authorization until given a written notice that
the authorization has been revoked or changed by the
Investment Committee. A member of the Investment Committee who
is also a Participant shall not vote or act upon any matter
affecting solely any of his benefits under the Plan. The
Investment Committee may adopt and amend from time to time
rules and regulations for the conduct of its affairs. The
members of the Investment Committee
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shall serve without compensation from the Plan for their
services as such members. The Investment Committee shall have
the power to direct the Trustee concerning the purchasing,
holding and selling of Company Stock as set forth in Section
9.02(l) and concerning entering into Acquisition Loans as set
forth in Section 9.12.
9.02 MANAGEMENT OF FUND. Subject to Sections 9.02(l) and 9.12, the Trustee
shall have the power to do all things and execute such instruments as
it may deem necessary or proper, including the following powers, all of
which may be exercised without order of, or report to, any court:
(a) INVESTMENTS. To invest and reinvest the Fund in any other
property of any nature whatsoever, whether real or personal
and wheresoever located (but any real estate shall be situated
in the United States), and including any mutual fund,
debentures, commercial paper, limited partnerships, insurance
contracts, group or individual annuity contracts and bonds,
but in thus investing and reinvesting the Fund the Trustee
shall use the degree of judgment and care that a prudent man
would use if he were the owner of the trust assets. If the
Trustee is a bank, it may invest in any common or collective
trust fund of the bank, and its affiliates, and it may invest
in deposits of the bank, and its affiliates.
(b) SALE. To sell publicly or privately, for cash or on credit,
without any order of court, upon such terms and conditions as
to the Trustee shall seem best, any property included in the
Fund including stock options; to make all proper deliveries,
assignments and conveyances incident to such sales, and no
purchaser from the Trustee shall be responsible for the proper
application of any consideration which the Trustee is
authorized to receive, and no right or title acquired from the
Trustee for such consideration shall be invalid because of a
misapplication by the Trustee.
(c) VOTING. Subject to Section 13.01, to vote shares of stock
included in the Fund in person or by special or general proxy,
with or without power of substitution, as to the Trustee shall
seem best; but the Trustee shall be liable for any loss
resulting from a failure to use reasonable care in deciding
how to vote the stock and in voting it.
(d) REORGANIZATION, ETC. If (1) any corporation whose stocks or
securities constitute a part of the Fund shall be reorganized
or recapitalized or consolidated with or merged into any other
corporation, or (2) opportunity shall be afforded to exchange
any of said stocks or securities for other stocks or
securities issued or to be issued by any such corporation or
by any other corporation, or (3) subscription rights shall be
issued upon any of said stocks or securities, then the Trustee
shall have full power and authority, in its discretion, in
such manner and upon such terms and conditions as it may deem
advisable to exchange any such stocks or securities so held
for the stocks or other securities of any such reorganized,
recapitalized, consolidated or merged corporation, or for
other stocks or securities of such corporation or any other
corporation, or to exercise such subscription rights.
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(e) BORROWING. Subject to Section 9.12, to borrow money at any
time and from time to time for the benefit of this trust and
to secure the loan or loans by a pledge or mortgage of the
assets of this trust and from time to time to renew such loans
and give additional security.
(f) NOMINEES. To hold any and all securities in bearer form, in
its own name, or in the name of a duly appointed nominee, with
or without indication of trusteeship; but the Trustee shall be
liable for the wrongful act of any such nominee or of the
Trustee with respect to any property, the title to which is so
held.
(g) ATTORNEYS AND AGENTS. To employ such attorneys, accountants
and other agents as the Trustee may deem necessary and to pay
their reasonable compensation and expenses from the Fund.
(h) OPTIONS. To write and sell call options under which the holder
of the option has the right to purchase shares of stock held
by the Trustee under the Trust. In addition, the Trustee shall
have the power to purchase call options for the purchase of
shares of stock covered by such options in transactions the
effect of which is to reduce or eliminate the Trustee's
obligations with respect to a stock option contract or
contracts it has previously written and sold.
(i) APPOINTMENT OF INVESTMENT MANAGER. The Company or the
Administrator may appoint an investment manager to manage,
acquire or dispose of any or all assets of the Trust other
than Company Stock. Any investment manager appointed pursuant
to this paragraph shall acknowledge in writing that it is a
fiduciary with respect to the Plan and shall be (a) registered
as an investment adviser under the Investment Advisers Act of
1940, (b) a bank, as defined in that Act, or (c) an insurance
company qualified to manage, acquire or dispose of any asset
of a plan under the laws of more than one State. Neither the
Trustee nor the Company nor the Administrator nor the
Investment Committee shall be liable for the acts or omissions
of any investment manager appointed pursuant to this
paragraph, nor shall the Trustee, the Administra tor, the
Investment Committee or Company be under any obligation to
invest or otherwise manage any asset of the Plan which is
subject to the management of such investment manager. The
Company or the Administrator and the investment manager and
the Investment Committee may execute an agreement delineating
the duties, responsibilities and liabilities of the investment
manager with respect to any part of the Fund subject to the
management of that investment manager, and that investment
manager shall have all the powers granted to the Trustee under
the Trust with respect to such assets.
(j) ASSET TRANSFERS. An amount equal to all or any portion of the
value of any Participant's Account may in the Administrator's
discretion be transferred to any
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other qualified plan maintained by any corporation, firm,
business organization or employer.
(k) COMMON, COLLECTIVE OR GROUP TRUST FUND. To invest all, or any
part, of the assets of the Fund in any (1) common or
collective trust fund maintained under Code Section 584, or
(2) group trust maintained under Revenue Ruling 81-100, 1981-1
C.B. 326, exclusively for the investment of assets of tax
exempt pension and profit sharing plans, the provisions of
which upon such investment shall automatically be adopted and
made a part of this Trust Agreement for the period such
investment is made in such group trust.
(l) PURCHASE OF COMPANY STOCK. The Trustee is authorized to use up
to 100 percent of the Fund, in accordance with the Investment
Committee's instructions, to acquire and hold Company Stock.
The Trustee is authorized to sell, in accordance with the
Investment Committee's instructions, all or any portion of the
Company Stock held by it. The Investment Committee's
instructions to the Trustee shall include the terms and
conditions of any purchase or sale.
9.03 DISTRIBUTIONS. Upon written direction (which may be a continuing
direction) from the Administrator as to the name of any person to whom
money is to be paid and the amount thereof, the Trustee shall draw
checks in the name of the person designated by the Administrator and
deliver such checks in such manner and in such amounts and at such time
as the Administrator shall timely direct. The Trustee shall make
distributions under the Plan in cash or Company Stock as directed by
the Administrator. If the Trustee shall deem it necessary to withhold
any distribution pending compliance with any legal requirements,
including the probate of a will, the appointment of a personal
representative, the payment of, or provision for, estate or inheritance
taxes, or for death duties or otherwise, the Trustee shall notify the
Administrator and shall thereafter take no action pending the delivery
of (a) the Administrator's instructions to distribute notwithstanding
such requirements and (b) the Company's agreement in a form
satisfactory to the Trustee which protects the Trustee from any
liability arising out of noncompliance with such requirements.
9.04 ACCOUNTING BY TRUSTEE. Within 60 days after the close of each Plan
Year, the Trustee shall file with the Company and the Administrator a
written report setting forth all investments, receipts and
disbursements and other transactions during such Plan Year. Each
Valuation date the trustee shall determine the fair market value of the
Trust assets and the net earnings and gains or losses. If the Company
Stock is or becomes not readily tradable on an established securities
market, any determination of fair market value required under this Plan
shall be by an independent appraiser who meets requirements similar to
those prescribed by Treasury regulations under Code Section 170(a)(1).
9.05 EXPENSES AND COMPENSATION. No person performing any duties for the Plan
who already receives full-tie pay from the Employer or from an employee
organization whose members
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are participants in the Plan shall receive compensation from the Plan,
except reimbursement of expenses properly and actually incurred. A
Trustee that does not receive full-time pay from the Employer or from
any organization whose members are participants in the Plan shall be
entitled to receive from the Plan reimbursement of expenses properly
and actually incurred and such reasonable compensation as may be agreed
on from time to tie with the Administrator. Unless paid by the Company,
all reasonable expenses of the Trust (including the Trustee's
compensation) and any taxes that may be levied or assessed against the
Trustee (including any taxes that may be levied or assessed upon the
Fund or income of the Fund) on account of the Trust shall be paid from
the Fund (including segregated accounts). The Company may from time to
time pay on behalf of the Trust such expenses and compensation as the
Company may in its discretion determine.
9.06 RESIGNATION OR REMOVAL OF TRUSTEE. Any Trustee may resign at any time
by instrument in writing delivered to the Company and, in such event,
the Company will, within thirty days after receipt of such resignation,
appoint a successor trustee by instrument in writing delivered to any
Trustee and to such successor trustee. The Company also at any time may
remove a Trustee upon 30 days' prior written notice to the Trustee and
appoint a successor trustee or trustees by instrument in writing
delivered to the Trustee and to such successor trustee. In either
event, on the appointment of such successor and delivery of the
successor's written acceptance of the appointment to the Company and
the retiring Trustee, the retiring Trustee shall promptly turn over to
such successor all Fund assets held by the Trustee and shall make a
final accounting to the Company and the Administrator; provided, any
assets which are invested in accordance with an investment contract or
agreement which by its terms precludes the realization upon and
distribution of such assets for a stated period of time shall continue
to be held by the Trustee under the terms and conditions of this
Agreement until the expiration of such period. The successor trustee
shall have no responsibility except to receive such money and property
from the retiring Trustee and to hold and administer the same
thereafter in accordance with this Agreement and shall not be
responsible for any act or omission of the retiring Trustee, and shall
not be required to make any claim or demand against the retiring
Trustee unless the Administrator shall in writing request the successor
trustee to make a claim of damage against such retiring Trustee within
the time limit prescribed after the filing of the Trustee's final
report. Any such successor trustee shall have and may exercise all the
rights, powers and duties of the Trustee as fully and to the same
extent as if it had originally been named Trustee herein.
9.07 NOTIFICATION TO TRUSTEE. Any notice, direction, order, request,
certification or instruction of the Administrator or the Investment
Committee to the Trustee shall be in writing and shall be signed on
behalf of the Administrator or the Investment Committee. Any notice,
direction, order, request or instruction of a Participant to the
Trustee shall be in writing and shall be signed by the Participant. The
Trustee and every other person shall be entitled to rely conclusively
upon any and all such notices, directions, orders, requests,
certifications and instructions received from the Administrator, the
Investment Committee or a Participant and reasonably believed to be
properly executed.
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9.08 INDEMNITY OF TRUSTEE. The Trustee shall not be required to undertake or
defend any litigation arising in connection with the Plan, the Trust
Agreement or the Fund unless the Trustee is first indemnified by the
Company or by the Fund against the Trustee's anticipated costs,
expenses, damages and liabilities in connection therewith, except where
the litigation is occasioned by, or involves a question of, default,
neglect or breach of a fiduciary duty of the Trustee. If any litigation
arises in connection with which the Trustee is entitled to indemnity
under this Section, the Trustee shall give the Company prompt written
notice of the litigation or pending litigation. The Company shall then
take charge of the disposition of the litigation, including compromise
or the conduct of the litigation, at the Company's expense, including
counsel fees. The Trustee at the Trustee's own expense may retain its
own counsel and share in the conduct of any such litigation, but any
failure by the Trustee to do so shall not adversely affect the
Trustee's right to indemnity under this Section.
9.09 PROCEDURE. If there is more than one Trustee, the Trustee may act by
the vote of a majority at a meeting or by a writing signed by a
majority without a meeting. During any period when the office of one of
the Trustees is vacant or during any period when a Trustee is unable to
serve for any reason, any remaining Trustee or Trustees shall act as
the sole Trustee or Trustees of the Trust. The Trustees may authorize
one or more of them to execute documents and act on their behalf. Any
person, persons, partnership or corporation may act, and shall be fully
protected in acting, in accordance with any representative or
instruction of any one of the Trustees.
9.10 APPOINTMENT OF TRUSTEE. The Trustee (or Trustees) named in Section 1 is
a party to this instrument, and it hereby accepts its appointment as
Trustee. Hereafter the number of Trustees may be fixed by the Company
from time to time. A Trustee need not be a Participant and may be an
individual, corporation or banking institution.
9.11 INVESTMENT IN COLLECTIVE 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 plan
the Employer maintains. However, separate records shall be maintained
for each trust in order to reflect properly each Participant's Account
under the plan or plans in which he is a Participant.
9.12 ACQUISITION LOANS. This Section specifically authorizes the Trustee, as
directed by the Investment Committee, to enter into Acquisition Loan
transactions. The Investment Committee's instructions to the Trustee
shall include the terms and conditions of the Acquisition Loan. The
following terms and conditions apply to any Acquisition Loan:
(a) The Trustee shall use the proceeds of the Acquisition Loan
within a reasonable time after receipt only for any or all of
the following purposes: (1) to acquire Company Stock, (2) to
repay such loan, or (3) to repay a prior Acquisition Loan.
Except as provided under Section 13, no Company Stock acquired
with the proceeds of an Acquisition Loan may be subject to a
put, call or other option, or buy-sell or similar
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arrangement while held by and distributed from this Plan,
whether or not this Plan is then an employee stock ownership
plan.
(b) The interest rate of the Acquisition Loan shall not be more
than a reasonable rate of interest.
(c) Any collateral the Trustee pledges to the creditor must
consist only of the assets purchased by the borrowed funds and
those assets, if any, the Trust used as collateral on the
prior Acquisition Loan repaid with the proceeds of any current
Acquisition Loan.
(d) The creditor shall have no recourse against the Trust under
the Acquisition Loan except with respect to such collateral
given for the Acquisition Loan, contributions (other than
contributions of Company Stock) that the Employer makes to the
Trust to meet its obligations under the Acquisition Loan, and
earnings attributable to such collateral and the investment of
such contributions. The payment made with respect to an
Acquisition Loan by the Plan during a Plan Year must not
exceed an amount equal to the sum of such contributions and
earnings received during or prior to the year less such
payments in prior years. The Administrator shall account
separately for such contributions and earnings in the books of
account of the Plan until the Trust repays the Acquisition
Loan.
(e) In the event of default upon the Acquisition Loan, the value
of Plan assets transferred in satisfaction of the Acquisition
Loan shall not exceed the amount of the default, and if the
lender is a Disqualified Person, the Acquisition Loan shall
provide for transfer of Plan assets upon default only upon and
to the extent of the failure of the Plan to meet the payment
schedule of the Acquisition Loan.
(f) The Administrator shall initially credit all assets acquired
with the proceeds of an Acquisition Loan to a suspense
account. In withdrawing assets from the suspense account, the
Administrator shall apply the provisions of Treas. Reg.
Sections 54.4975-7 (b)(8) and (15) as if all securities in the
suspense account were encum bered. Upon the payment of any
portion of the loan, the number of securities to be released
from encumbrance shall be determined solely with reference to
principal payments and the following rules shall apply: (1)
The loan shall provide for annual payments of principal and
interest at a cumulative rate that is not less rapid at any
time than level annual payments of such amounts for 10 years.
(2) Interest included in any payment shall be disregarded only
to the extent that it would be determined to be interest under
standard loan amortization tables. (3) The loan shall not be
renewed, extended or refinanced in such a manner that the sum
of the expired duration of the exempt loan, the renewal
period, the extension period and the duration of a new exempt
loan exceeds 10 years. Alternatively, the number of securities
to be released from encumbrance by the Administrator shall be
based on
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the number of securities held immediately before release for
the current Plan Year multiplied by the ratio that the
payments of principal and interest on the Acquisition Loan for
the Plan Year bears to the payments of principal and interest
on the Acquisition Loan for the Plan Year plus the total
remaining payments of principal and interest projected on the
Acquisition Loan over the duration of the Acquisition Loan
repayment period. The Administrator shall allocate assets
released from the suspense account to the Accounts of Active
Participants in accordance with Section 4.03.
(g) The loan shall be for a specified term and shall not be
payable on demand except in the case of default.
SECTION 10.
TOP HEAVY RULES
10.01 DEFINITIONS. For purposes of applying the provisions of Section 10:
(a) "Key Employee" means, as of any Determination Date, any
Employee or former Employee and the beneficiaries of such
Employee who, at any time during the Plan Year which includes
the Determination Date or during the preceding four Plan
Years, is (i) an officer of the Employer and such individual's
Compensation exceeds 50 percent of the dollar limitation under
section 415(b)(1)(A) of the Code, (ii) one of the Employees
owning the ten largest interests in the Employer who has
Compensation exceeding 100 percent of the dollar limitation
under section 415(c)(l)(A) of the Code, (iii) a more than five
percent owner of the Employer, or (iv) a more than one percent
owner of the Employer who has Compensation during the Plan
Year of more than $150,000. The constructive ownership rules
of section 318 of the Code (or the principles of that section,
in the case of any unincorporated Employer), will apply to
determine ownership in the Employer. The determination of who
is a Key Employee shall be made in accordance with section
416(i) of the Code and the regulations under that Code
section.
(b) "Non-Key Employee" is an Employee who does not meet the
definition of Key Employee.
(c) "Compensation" for purposes of this Section 10 means
Compensation as defined in section1.07(a) and as limited by
section 401(a)(17) of the Code, except that any exclusion
described in section 1.07(a) shall not apply.
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(d) "Required Aggregation Group" means: (1) Each qualified plan of
the Employer (whether or not terminated) in which at least one
Key Employee participates at any time during the five Plan
Year period ending on the Determination Date; and (2) Any
other qualified plan of the Employer which enables a plan
described in (1) to meet the requirements of section 401(a)(4)
of the Code or section 410 of the Code.
(e) "Permissive Aggregation Group" is the Required Aggregation
Group plus any other qualified plans maintained by the
Employer, but only if such group would satisfy in the
aggregate the requirements of Code section 401(a)(4) and Code
section 410. The Administrator shall determine which plan to
take into account in determining the Permissive Aggregation
Group.
(f) "Employer" means all the members of a controlled group of
corporations (as defined in Code section 414(b)), of a
commonly controlled group of trades or businesses (whether or
not incorporated) (as defined in Code section 414(c)), or an
affiliated service group (as defined in Code section 414(m)),
of which the Company is a part.
(g) "Determination Date" for any Plan Year is the Anniversary Date
of the preceding Plan Year or, in the case of the first Plan
Year of the Plan, the Anniversary Date of that Plan Year.
10.02 DETERMINATION OF TOP HEAVY STATUS.
(a) The Plan is top heavy for a Plan Year if the top heavy ratio
as of the Determination Date exceeds 60 percent. The top heavy
ratio is a fraction, the numerator of which is the Sum of the
Account balances of all Key Employees as of the Determination
Date, the contributions due as of the Determination Date, and
distributions made within the five Plan Year period ending on
the Determination Date, and the denominator of which is a
similar sum determined for all Employees. The Administrator
shall calculate the top heavy ratio without regard to the
Account balances attributable to deductible voluntary Employee
contributions, and without regard to the Account balance of
any Non-Key Employee who was formerly a Key Employee. The
Administrator shall calculate the top heavy ratio by
disregarding the Account balance (including distributions, if
any, of the Account) of an individual who has not received
credit for at least one Hour of Service during the five Plan
Year period ending on the Determination Date. The
Administrator shall calculate the top heavy ratio, including
the extent to which it must take into account distributions,
rollovers and transfers, in accordance with Code Section 416
and the regulations under that Code Section.
(b) If the Employer maintains other qualified plans (including a
simplified employee pension plan) this Plan is top heavy only
if it is part of the Required Aggregation Group, and the top
heavy ratio for both the Required Aggregation Group and the
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Permissive Aggregation Group exceeds 60 percent. The
Administrator shall calculate the top heavy ratio in the same
manner as required by the subsection (a) of this Section
10.02, taking into account all plans within the aggregation
group. The Administrator shall calculate the present value of
accrued benefits and the other amounts the Administrator must
take into account under simplified employee pension plans
included within the group in accordance with the terms of
those plans, Code Section 416 and the regulations under that
Code section. The Administrator shall calculate the top heavy
ratio with reference to the Determination Dates that fall
within the same calendar year.
10.03 MINIMUM EMPLOYER CONTRIBUTION. If this Plan is top heavy in any Plan
Year, the Company guarantees a minimum contribution of the lesser of
(i) three percent of Compensation for the Plan Year for each Non-Key
Employee who is a Participant employed by the Employer on the
Anniversary Date of the Plan Year, without regard to Hours of Service
completed, or (ii) if the contribution rate for the Key Employee with
the highest contribution rate is less than three percent, the
guaranteed minimum contribution for Non-Key Employees shall equal the
highest contribution rate received by a Key Employee. Such minimum
contribution shall take priority over the allocation provisions of
Section 4.03. The Plan satisfies the guaranteed minimum contribution
for the Non-Key Employee if the Non-Key Employee's contribution rate is
at least equal to the minimum contribution. For purposes of this
Section, a Non-Key Employee Participant includes any Employee otherwise
eligible to participate in the Plan but who is not a Participant
because his Compensation does not exceed a specific level. The
contribution rate is the sum of Employer contributions (not including
Employer contributions to Social Security) and Forfeitures, if any,
allocated to the Participant's Account for the Plan Year divided by his
Compensation for the Plan Year. To determine the contribution rate, the
Administrator shall consider all qualified defined contribution plans
maintained by the Employer as a single plan. Subject to the next
sentence, if the Employer also contributes under and maintains a money
purchase pension plan, the Company shall make any additional
contribution required under this Section pursuant to the money purchase
pension plan formula. Notwithstanding the preceding sentence, if a
Participant participates both in this Plan and a defined benefit plan
sponsored by the Employer, then that Participant shall receive the
minimum benefit under the defined benefit plan rather than under this
Section 10.03. Elective contributions under a Code Section 401(k)
arrangement and employer matching contributions allocated on the basis
of those elective contributions shall not be counted in the calculation
of a Non-Key Employee's contribution rate, but shall be counted in the
calculation of a Key Employee's contribution rate.
10.04 VESTING TABLE. For any Plan Year for which the Plan is top heavy, the
Administrator shall calculate the Nonforfeitable percentage of a
Participant's Account derived from Employer contributions under the
following table rather than in accordance with Section 5.05:
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YEARS OF SERVICE NONFORFEITABLE PERCENTAGE
Fewer than 3 0
3 or more 100
The above table shall not apply to the Account of any Participant who
does not have an Hour of Service after the Plan becomes top heavy. A
shift to the above table shall be effective on the first day of the
Plan Year for which the Plan becomes top heavy. If in any Plan Year
after the Plan becomes top heavy, the Plan ceases to be top heavy, the
Administrator may, in its sole discretion, elect to (a) continue to
apply the table in this Section 10.04, or (b) revert to the table in
Section 5.05. Any shift between the above table and the table in
Section 5.05 (whether shifting to the above table or reverting to the
table in Section 5.05) Shall be deemed an amendment to the vesting
schedule, and Section 10.05 shall apply. This Section 10.04 shall not
be applicable if vesting under the table in Section 5.05 is at least as
rapid as under the table in this Section 10.04.
10.05 AMENDMENT TO VESTING SCHEDULE. Although the Company reserves the right
to amend the above table for the calculation of the Nonforfeitable
percentage of Participant's Account at any time, the Administrator
shall not apply any amended table to reduce the Nonforfeitable
percentage of any Participant's Account (determined as of the later of
the date the Company adopts the amendment or the amendment becomes
effective) to a percentage less than the Nonforfeitable percentage
computed under the Plan with regard to the amendment. If the table for
the calculation of the Nonforfeitable percentage of the Account is
amended in any way that directly or indirectly affects the computation
of a Participant's Nonforfeitable percentage or if this Section 10.5
applies pursuant to Section 10.04, then each Participant with at least
three Years of Service may elect to have the Nonforfeitable percentage
of his Account computed under the Plan without regard to the amendment.
The Participant must file his written election with the Administrator
within 60 days of the latest of (a) the Company's adoption of the
amendment; (b) the effective date of the amendment; or (c) the
Participant's receipt of a copy of the amendment.
10.06 ADJUSTMENT TO CODE SECTION 415 LIMITATIONS. If a Participant is, or
was, covered under a Defined Benefit Plan and a Defined Contribution
Plan maintained by the Employer, and if the top-heavy ratio is more
than 0.90, then the overall limits on combined plan contributions and
benefits under Code section 415 and Section 11.09 of this Plan shall be
reduced so that 1.0 shall be substituted for 1.25 in the definitions of
Defined Contribution Fraction and Defined Benefit Fraction. If the
top-heavy ratio is less than 0.90, but is more than 0.60, then either
(i) the overall limits on combined plan contributions and benefits
under Code section 415 and Section 11.09 of this Plan shall be reduced
so that 1.0 shall be substituted for 1.25 in the definitions of Defined
Contribution Fraction and Defined Benefit Fraction, or (ii) the minimum
benefit accrual for the Defined Benefit Plan under Section 10.03 shall
be increased to 3% under Code section 416(h)(2). If, in any year, the
sum of the Defined Benefit Fraction and Defined Contribution Fraction
exceeds the reduced fractional limits above, the rate of
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benefit accruals under the Defined Benefit Plan shall be reduced so
that the sum of the fractions equals the applicable limit.
SECTION 11.
MISCELLANEOUS
11.01 NONDIVERSION. Except as provided in Section 11.02 it shall be
impossible, at any time, for any part of the Trust to revert to the
Employer or to be used for, or diverted to, purposes other than for the
exclusive benefit of Employees and Beneficiaries.
11.02 RETURN OF COMPANY CONTRIBUTIONS. Contributions shall be returned to the
Company only in accordance with Section 11.09 or subsections (a), (b)
or (c) below:
(a) If a contribution is made by the Company by a mistake of fact,
the contribution shall, at the Company's request, be returned
to the Company within one year after payment of the
contribution.
(b) The Company's contributions are conditioned upon the initial
qualification of the Plan and if the Plan receives an adverse
determination with respect to its initial determination, then
such contributions shall, at the Company's request, be
returned to the Company within one year after the date of
denial of qualification of the Plan, provided that the
application for qualification is made by the time prescribed
by law for filing the Employer's return for the taxable year
in which the Plan is adopted, or such later date as the
Secretary of the Treasury may prescribe.
(c) The Company's contributions are conditioned upon the
deductibility of the contributions under section 404 of the
Code, and to the extent the deduction is disallowed, such
contributions (to the extent disallowed) shall, at the
Company's request, be returned to the Company within one year
after the disallowance of the deduction.
(d) The maximum that may be returned to the Company under
subsection (a) or (c) is the excess of (1) the amount
contributed, over, as relevant, (2) (i) the amount that would
have been contributed had no mistake of fact occurred, or (ii)
the amount that would have been contributed had the
contribution been limited to the amount that is deductible
after any disallowance. Earnings attributable to the excess
may not be returned to the Company, but losses attributable
thereto must reduce the amount to be so returned. Furthermore,
if the withdrawal of the amount attributable to the mistaken
or nondeductible contribution would cause the balance of the
individual Account of any Participant to be reduced to less
than the balance which would have
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been in the Account had mistaken or nondeductible amount not
been contributed, then the amount to be returned to the
Company shall be limited so as to avoid such reduction. In the
case of a reversion due to initial disqualification of the
Plan, the entire assets of the Plan attributable to Company
contributions shall be returned to the Company. A reversion
authorized under this Section 11.02 shall be paid even if a
resulting adjustment is made to the Account of a Participant
that is partly or entirely Nonforfeitable.
11.03 NONASSIGNABILITY.
(a) The benefit or interest under the Plan and Trust of any person
shall not be assignable or alienable by that person and shall
not be subject to alienation by operation of law or legal
process. The preceding sentence shall apply to the creation,
assignment or recognition of any right to any benefit payable
with respect to a Participant pursuant to a domestic relations
order, unless such order is determined to be a qualified
domestic relations order, as defined in section 414(p) of the
Code. A domestic relations order entered before January 1,
1985, shall be treated as a qualified domestic relations order
if payment of benefits pursuant to the order has commenced as
of such date, and may be treated as a qualified domestic
relations order if payment of benefits is not commenced as of
such date, even though the order does not satisfy the
requirements of Section 414(p) of the Code.
(b) This plan specifically permits a distribution to an alternate
payee under a qualified domestic relations order at any time,
irrespective of whether the Participant has attained his
earliest retirement age (as defined under Code section 414(p))
under the Plan. 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 11.03 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 permitted under the Plan.
11.04 CERTIFICATES CONCERNING BOARD ACTION. Any action by the Company's Board
of Directors may be evidenced by a resolution of the Board of
Directors, certified to the Administrator or to the Trustee by the
Secretary of the Company. The Administrator and the Trustee shall act,
and shall be fully protected in acting, in accordance with documents
certified in the manner set forth above.
11.05 CONSTRUCTION. The validity, interpretation, construction and
administration of the Plan shall be governed by the laws of Kentucky
except to the extent preempted by Federal law. The
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masculine gender, wherever used in this Plan, shall include the
feminine. The singular shall include the plural, and the plural the
singular, wherever appropriate for the proper interpretation of this
Plan. The headings in this Plan appear solely for ease of reference and
shall not be considered in the interpretation or construction of this
Plan. The Company intends that this Plan shall be qualified under Code
section 401(a), that the Plan shall be an employee stock ownership plan
under Code Section 4975(e)(7) and ERISA Section 407(d)(6), and that the
related trust shall be exempt under Code section 501(a); and the Plan
and related trust shall be interpreted in accordance with the
applicable requirements of the Code, ERISA and the regulations
thereunder.
11.06 INDEMNITY OF EMPLOYEES. Either directly or through insurance coverage
or through some combination of these methods the Company shall
indemnify and hold harmless its employees, officers and directors and
the members of the Administrative Committee and the Investment
Committee against all claims, damages and liabilities, in respect of
any claim or liability which may be asserted against any of them
because of any act or omission in the administration of the Plan or the
Trust or in their capacity as Trustees, except in case of any fraud or
willful wrongdoing by the person seeking to be indemnified and held
harmless. If any liability is asserted against an indemnitee with
respect to which the indemnitee is entitled to indemnity under this
section, the indemnitee shall give the Company prompt written notice of
the assertion of the liability. The Company shall then take charge of
the disposition of the asserted liability, including compromise or the
conduct of litigation, at the Company's expense, including counsel
fees. The indemnitee may at the indemnitee's own expense retain his own
counsel and share in the conduct of any such litigation, but any
failure by the indemnitee to do so shall not adversely affect the
indemnitee's right to indemnity under this Section.
11.07 MERGER. If this Plan is merged or consolidated with any other employee
benefit plan or if the assets or liabilities under this Plan are
transferred to any other employee benefit plan, each Participant under
the Plan must receive a benefit after such merger, consolidation or
transfer which is equal to or greater than the benefit such Participant
would have been entitled to receive immediately before such merger,
consolidation or transfer, the amount of such benefits before and after
such merger, consolidation or transfer to be determined as if the Plan
and such other employee benefit plan were then terminated.
11.08 INTERNAL REVENUE CODE. Any reference in this Plan to any provision of
the Internal Revenue Code of 1986, as amended, shall also be read as a
reference to the corresponding provision, if any, of any subsequent
Federal legislation.
11.09 ANNUAL ADDITIONS. Annual Additions to a Participant's Account shall be
limited in accordance with the following provisions.
(a) The maximum Annual Addition that may be contributed or
allocated to a Partici pant's account under the Plan for any
Plan Year shall not exceed the lesser of (i) the
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Defined Contribution Dollar Limitation, or (ii) 25 percent of
the Participant's compensation, within the meaning of section
415(c)(3) of the Code, for the Limitation Year, provided that
the compensation limitation shall not apply to any
contribution for medical benefits (within the meaning of Code
sections 401(h) and 419A(f)(2) which is otherwise treated as
an Annual Addition.
(b) If there is any Excess Amount, any nondeductible voluntary
contributions shall be returned to the Participant to the
extent such return would reduce the Excess Amount. Any
remaining Excess Amount shall be disposed of as follows:
(1) If the Participant is employed by the Employer at the
end of the Limitation Year, then the Excess Amount
shall be used to reduce future contributions
(including any allocation of Forfeitures) under the
Plan for the next Limitation Year (and for each
succeeding Limitation Year as is necessary) for the
Participant. If the Participant is not employed by
the Employer at the end of the Limitation Year or any
succeeding Limitation Year before the Excess Amount
is allocated, the Excess Amount shall be held
unallocated in a suspense account. The suspense
account shall be applied to reduce future Employer
contributions (including the allocation of any
Forfeitures) for all remaining Participants in the
next Limitation Year, and each succeeding Limitation
Year if necessary in accordance with subsection (2)
below.
(2) If a suspense account is in existence at any time
pursuant to this subsection (b), it shall not
participate in any allocation of the Fund's
investment gains and losses. If the Plan is
terminated, any such suspense account shall revert to
the Employer to the extent it may not then be
allocated to any Participant's Account.
(c) If a Participant is, or was, covered under a defined benefit
plan and a defined contribution plan maintained by the
Employer, the sum of the Participant's Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction may not exceed
1.0 in any Limitation Year. If, in any Limitation Year, the
sum of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction will exceed 1.0, the rate of
benefit accruals under the defined benefit plan will be
reduced so that the sum of the fractions equals 1.0.
(d) For purposes of this Section 11.09, the following terms shall
have the following meanings:
(1) "Defined Contribution Dollar Limitation" means
$30,000 as adjusted under Code section 415(d).
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(2) (A) Subject to subparagraph (B), "Annual
Addition" means the amount allocated to a
Participant's Account during the Plan Year
that constitute (i) the lesser of Employer
contributions or the fair market value of
the Financed Shares released as a result of
the contributions`, (ii) forfeitures, (iii)
participant and elective contributions, and
(iv) amounts allocated to an individual
medical account, as defined in section
415(1)(2) of the Code, which is part of a
pension or annuity plan maintained by the
Employer, or amounts derived from
distributions which are attributable to
post-retirement medical benefits, allocated
to the separate account of a key employee,
as defined in Code section 419(A)(d)(3),
under a welfare benefit fund, as defined
in Code section 419(e), maintained by the
Employer, both only with respect to Annual
Additions for a defined contribution plan.
(B) The term "Annual Addition" shall not include
any Company contributions applied to pay
interest on an Acquisition Loan, or any
Financed Shares which are allocated as
Forfeitures; provided however, this sentence
shall not apply in a Limitation Year for
which more than one-third of the Company
contributions, which are deductible under
Code section 404(a)(9), are allocated to the
Accounts of Highly Compensated Employees.
(3) "Maximum Permissible Amount" means the minimum Annual
Addition allowed under Section 11.09(a) above.
(4) "Excess Amount" means, with respect to a Participant,
the excess of his Annual Additions for the Limitation
Year over the Maximum Permissible Amount, which
occurs due to an allocation of Forfeitures, an error
in estimating a Participant's Compensation, or any
other fact or circumstance recognized by the
Secretary of the Treasury or his delegate as
reasonable.
(5) "Limitation Year" means a 12 consecutive month period
ending on the Anniversary Date.
(6) "Defined Benefit Plan Fraction" is a fraction, the
numerator of which is the sum of the Participant's
projected annual benefits under all defined benefit
plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser
of (i) 1.25 times the dollar limitation of section
415(b)(1)(A) of the Code in effect for the Limitation
Year, or (ii) 1.4 times the Participant's average
compensation for the three consecutive years that
produces the highest average. Notwithstanding the
above, if the Participant was a Participant as of the
first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined
benefit plans
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maintained by the Employer which were in existence on
May 6, 1986, the denominator of this fraction will
not be less than 125% of the sum of the annual
benefits under such plans which the Participant had
accrued as of the close of the last Limitation Year
beginning before January 1, 1987, disregard ing any
changes in the terms and conditions of the plan after
May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the
aggregate satisfied the requirements of Section 415
of the Code for all Limitation Years beginning before
January 1, 1987.
(7) "Defined Contribution Plan Fraction" is a fraction,
the numerator of which is the sum of the Annual
Additions to the Participant's Account under all
defined contribution plans maintained by the Employer
(whether or not terminated), for the current and all
prior Limitation Years, and the denomina tor of which
is the sum of the lesser of the following amounts
determined for such year and for each prior year of
service with the Employer (i) 1.25 times the dollar
limitation in effect under section 415(c)(l)(A) of
the Code for such year, or (ii) 1.4 times the amount
which may be taken into account under section
415(c)(1)(B) of the Code. Notwithstanding the above,
if the Employee was a Participant as of the end of
the first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which
were in existence on May 6, 1986, the numerator of
this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Plan Fraction would
otherwise exceed 1.0 under the terms of the this
Plan. Under the adjustment, an amount equal to the
product of (i) the excess of the sum of the fractions
over 1.0 times (ii) the denominator of the Defined
Contribution Plan Fraction will be permanently
subtracted from the numerator of the Defined
Contribution Fraction. The adjustment is calculated
using the fractions as they would be computed as of
the end of the last limitation Year beginning before
January 1, 1987, and disregarding any changes in the
terms and conditions of the plan made after May 6,
1986, but using the Section 415 of the Code
limitation applicable to the first Limitation Year
beginning on or after January 1, 1987. The Annual
Addition for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all
employee contributions as Annual Additions.
(8) "Compensation" means Compensation as defined in
section 1.13(a) except that any exclusion described
in section 1.13(a) shall not apply. Notwithstand ing
any provision in Section 1.13(a) to the contrary,
Compensation shall include all amounts actually paid
or made available during the Limitation Year.
(9) Projected Annual Benefit Income" means the annual
benefit to which the Participant would be entitled
under the terms of the Plan, if the Participant
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continued employment until Normal Retirement Age (or
current age, if later) and the Participant's
compensation for the Limitation Year and all other
relevant factors used to determine such benefit
remain constant until Normal Retirement Age (or
current age, if later).
(e) If the Company or any Employer contributes any amount on
behalf of a Participant in this Plan, to any other defined
contribution plan, welfare benefit fund as defined in Code
section 419(e), or individual medical account as defined in
Code section 415(l)(2), maintained by any Employer, then the
limitation on annual additions provided in Section 11.09(a)
shall apply in the aggregate to this Plan and such other
plans. Reductions of annual additions, where required, shall
be accomplished first in the manner set forth in the Company's
401(k) Profit Sharing Plan, and then by allocating any
remaining excess to this Plan and accomplishing the reductions
in the manner set forth in this Section 11.09. For the purpose
of applying the term "Employer" in this Section 11.09, the
references in Section 1.15 to Code Sections 414(b) and 414(c)
shall be modified as provided in Code Section 415(h).
11.10 STATUS OF PARTICIPANTS. Neither the establishment or any amendment of
the Plan, nor the payment of any benefits, shall be construed as giving
to any Participant or other person any legal or equitable right against
the Employer, the Administrator or the Trustee except as expressly
provided herein, and in no event shall the terms of employment of any
Employee or Participant be modified or in any way be affected hereby
except as expressly provided herein.
11.11 INCAPACITATED RECIPIENT. If the Administrator finds that any
Participant or any Beneficiary entitled to receive a payment under this
Plan is unable to care for his affairs because of illness, injury or
minority, any such payment may, at the Administrator's direction, be
made for his benefit to the spouse, child, brothers, sisters, parents
or the person having custody of such Participant or such Beneficiary,
unless a prior claim shall have been made by a duly appointed guardian
or other legal representative.
11.12 DISCRETIONARY ACTS. Any discretionary acts to be taken, or policies to
be adopted, under the terms and provisions of this Plan and Trust
Agreement by the Administrator or the Trustee shall be uniform in their
nature and application to all those similarly situated.
11.13 NOTICES TO ADMINISTRATOR. The Company shall notify the Administrator of
the occurrence of any event of which the Company has knowledge that
would make any Participant or any Beneficiary eligible for any benefit
under the Plan.
11.14 UNCLAIMED ACCOUNT PROCEDURE.
(a) The Plan does not require either the Trustee or the
Administrator to search for, or ascertain the whereabouts of,
any Participant or Beneficiary. The Administrator, by
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certified mail addressed to his last known address of record
with the Administrator or the Employer, shall notify any
Participant, or Beneficiary, that he is entitled to a
distribution under this Plan. If the Participant, or
Beneficiary, fails to claim his distributive share or make his
whereabouts known in writing to the Administrator within six
months from the date of mailing of the notice, the
Administrator shall thereafter treat the Participant's or
Beneficiary's unclaimed payable Accrued Benefit as a
Forfeiture, which shall be reallocated in accordance with
Section 4.03 for the Plan Year in which the Forfeiture occurs.
A Forfeiture under this Section shall occur when the
Administrator determines that the Participant or Beneficiary
cannot be located.
(b) If a Participant or Beneficiary who has incurred a Forfeiture
of his Accrued Benefit under this Section makes a claim, at
any time, for his forfeited Accrued Benefit, the Administrator
shall restore the Participant's or Beneficiary's forfeited
Accrued Benefit to the same dollar amount as the dollar amount
of the Accrued Benefit forfeited, unadjusted for any gains or
losses occurring subsequent to the date of the forfeiture. The
Administrator shall make the restoration during the Plan Year
in which the Participant or Beneficiary makes the claim, first
from the amount, if any, of forfeitures the Administrator
otherwise would allocate for the Plan Year, and then from the
amount or additional amount, the Employer shall contribute to
enable the Administrator to make the required restoration. The
Administrator shall direct the Trustee to distribute the
Participant's or Beneficiary's restored Accrued Benefit to him
not later than sixty days after the close of the Plan Year in
which the Administra tor restores the forfeited Accrued
Benefit. The forfeiture provisions of this Section shall apply
solely to the Participant's or to the Beneficiary's Accrued
Benefit derived from Employer contributions.
SECTION 12.
FIDUCIARY RESPONSIBILITIES
12.01 NAMED FIDUCIARIES. The control, management and administration of the
Plan and the control, management and disposition of the Fund shall be
controlled by the following fiduciaries (individually a "Named
Fiduciary" and collectively the "Named Fiduciaries"): The Company, the
Administrator, the Administrative Committee, the Investment Committee,
and the Trustee.
12.02 POWERS AND RESPONSIBILITIES. Each Named Fiduciary shall have only such
powers and responsibilities as are expressed in the Plan. Any power or
responsibility for the control, management or administration of the
Plan or Fund which is not expressly allocated to a Named Fiduciary
shall be deemed allocated to the Administrator. Each Named Fiduciary
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shall have no responsibility to inquire into the accounts and omissions
of any other Named Fiduciary in the exercise of powers or the discharge
of responsibilities assigned to such other Named Fiduciary by the Plan.
This provision is intended to allocate to each Named Fiduciary the
individual responsibility for the prudent execution of the functions
assigned to that Named Fiduciary, and none of such responsibilities or
any other responsibility shall be shared by two or more Named
Fiduciaries unless such sharing shall be provided for by a specific
provision of the Plan or the Trust. If one Named Fiduciary is required
by the Plan to follow the directions of another Named Fiduciary, the
two Named Fiduciaries shall not be deemed to have been assigned a
shared responsibility, but the responsibility of the Named Fiduciary
giving the directions shall be deemed his sole responsibility.
12.03 ALLOCATION OF RESPONSIBILITIES. Any Named Fiduciaries may by agreement
among themselves allocate to one or more other Named Fiduciaries any
responsibility or duty assigned to a Named Fiduciary by the Plan;
provided, however, that any agreement respecting such allocation shall
be in writing and shall be filed by the Administrator with the records
of the Plan. No such agreement shall be effective as to any Named
Fiduciary which is not a party to the agreement until such Named
Fiduciary has received written notice of the agreement from the Named
Fiduciaries who are parties to the agreement. Any Named Fiduciary may,
by written instrument filed by the Administrator with the records of
the Plan, designate a person who is not a Named Fiduciary to carry out
any of the Named Fiduciary's responsibilities under the Plan; provided,
however, that no such designation shall be effective as to any other
Named Fiduciary until such other Named Fiduciary has received notice of
that designation.
12.04 EMPLOYEES. Any Named Fiduciary or a person designated by a Named
Fiduciary to perform any responsibility of the Named Fiduciary pursuant
to the procedure described in Section 12.03 may employ one or more
persons to render advice with respect to any responsibility such Named
Fiduciary has under the Plan or such person has because of such
designation.
12.05 FUNDING POLICY. The Administrative Committee annually shall determine
anticipated liquidity requirements to meet projected benefit payments
for the following Plan Year and, if any adjustment from previous annual
liquidity requirements is appropriate, notice of the adjusted
requirement shall be communicated as soon as possible to the Trustee in
writing so that Fund investment policies may be appropriately
coordinated with Plan needs. If no notice is delivered to the Trustee
by the first day of any Plan Year, the Trustee may assume without
further inquiry that the liquidity requirements for such Plan Year
remain the same as requirements for the preceding Year.
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SECTION 13.
COMPANY STOCK
13.01 VOTING OF COMPANY STOCK. Except as provided in subsections (a) and (b),
all Company Stock held in the Trust shall be voted by the Trustee as
directed by the Administrative Committee.
(a) With respect to the voting of Company Stock which is not a
registration type class of securities, a Participant (or
Beneficiary) shall have the right to direct the Trustee
regarding the voting of such Company Stock allocated to his
Company Stock Account with respect to any corporate matter
which involves the approval or disap proval of any corporate
merger or consolidation, recapitalization, reclassification,
liquidation, dissolution, sale of substantially ail assets of
a trade or business, or such similar transaction as the
Treasury may prescribe in regulations.
(b) Each Participant (or Beneficiary) shall have the right to
direct the Trustee as to the exercise of any and all voting
rights attributable to shares of Company Stock then allocated
to his Company Stock Account, but only if the shares are a
registration type class of securities.
(c) The term "registration type class of securities" means (1) a
class of securities required to be registered under Section 12
of the Securities Exchange Act of 1934, and (2) a class of
securities which would be required to be so registered except
for the exemption from registration provided in subsection
(g)(2)(H) of such Section 12.
13.02 DIVIDENDS ON COMPANY STOCK.
(a) Any cash dividends paid with respect to Company Stock
(including Company Stock held in a suspense account) shall be
allocated to the Other Investments Account of a Participant in
the same ratio, determined as of the dividend declaration
date, that Company Stock allocated to a Participant's Company
Stock Account bears to the Company Stock allocated to all
Company Stock Accounts. However, cash dividends shall not be
allocated to Other Investment Accounts to the extent the
Administrator directs the Trustee (1) to apply the dividends
to the payment of an Acquisition Loan in accordance with
subsection (b), or (2) to apply the dividends to purchase
additional shares of Company Stock as provided in Section
4.02.
(b) Any cash dividends paid with respect to Company Stock
allocated to a Participant's Company Stock Account or held in
a suspense account may (as required by the applicable
Acquisition Loan documentation or, if not so required, as
determined in the sole discretion of the Administrator) be
used to repay the principal balance of an outstanding
Acquisition Loan or interest thereon in whole or in part, or
to purchase
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additional shares of Company Stock as provided in Section
4.02. Financed Shares released from the suspense account by
reason of dividends paid with respect to Company Stock shall
be allocated to Participants' Company Stock Accounts as
follows:
(1) First, Financed Shares with a Fair Market Value at
least equal to the dividends paid with respect to the
Company Stock allocated to the Partici pants' Company
Stock Accounts shall be allocated among and credited
to the Company Stock Accounts of such Participants,
pro rata, according to the number of shares of
Company Stock held in such accounts on the dividend
declaration date.
(2) Then, any remaining Financed Shares released shall be
allocated among and credited to the Company Stock
Accounts of all Participants, pro rata, according to
each Participant's Compensation.
13.03 PUT OPTION. If the Company Stock is or becomes not readily tradeable on
an established securities market, then, at the time of distribution,
the Employer shall issue a "put option" with respect to Company Stock.
The put option shall permit the Participant to sell the Company Stock
to the Employer, at any time during two option periods, at the current
fair market value. The first put option period shall run for a period
of 60 days commencing on the date of distribution of the Company Stock
to the Participant, and if not exercised within that period the put
option shall temporarily lapse. The fair market value of the Company
Stock shall be re-calculated as of the close of the Plan Year in which
the first put option period commenced, and the Administrator shall
notify each distributee, who did not exercise the put option during the
first period, of the revised value of the Company Stock. The second put
option period shall commence on the date such notice is given and shall
permanently lapse 60 days thereafter. If a Participant or Beneficiary
exercises his put option, the Employer shall purchase the Company Stock
at fair market value upon the terms provided under Section 13.04. The
Employer may grant the Trust an option to assume the Employer's rights
and obligations under Sections 13.03 and 13.04. Sections 13.03 and
13.04 shall continue to apply to any the shares of Company Stock
acquired with the proceeds of an Acquisition Loan even if the Plan
ceases to be an employee stock ownership plan within the meaning of
Code Section 4975(e)(7).
13.04 PAYMENT OF PURCHASE PRICE. If the Company (or the Trustee at the
Administrator's direction) exercises an option to purchase Company
Stock pursuant to the exercise of a put option under Section 13.03, the
payment shall be made under (a) or (b) below at the election of the
Employer or Trustee.
(1) If the Company Stock was distributed as part of a
total distribution, payment may be made in
substantially equal installments over a period not
exceeding 5 years, subject to a Participant's
election for a longer period. The first
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installment shall be paid no later than 30 days after
the Participant or Beneficiary exercises the put
option. The balance of the purchase price shall be
evidenced by a promissory note delivered to the
selling Participant or Beneficiary on the closing
date. The note shall bear a reasonable rate of
interest, determined as of the closing date, and the
purchaser shall provide adequate security for payment
of the note. The note shall provide for equal annual
installments with interest payable on each
installment, the first installment being due and
payable one year after the closing date. The note
shall also provide for acceleration upon 30 days'
default of the payment on interest or principal and
shall grant to the maker of the note the right to
prepay the note in whole or in part at any time or
times without penalty
(a) If the distribution was not part of a total distribution, the
payment shall be in a lump sum. If the distribution was part
of a total distribution, the purchaser may elect to make
payment in a lump sum. If the payment is by lump sum, the
purchaser shall pay the Participant or Beneficiary the fair
market value of the Company Stock being purchased no later
than 30 days after the date the Participant or Beneficiary
exercises the put option.
(b) The following terms shall have the meanings indicated below:
(1) "Closing date" means the date and time on which the
selling Participant or Beneficiary and the purchaser
may agree for purposes of effecting a sale and
purchase under Section 13.03, provided the closing
date shall occur not later than 30 days after the
Participant or Beneficiary exercises a put option.
(2) "Fair market value" means the value of the Company
Stock determined in accordance with Section 9.04 (A)
as of the date of the exercise of an option if the
exercise is by a disqualified person, or (B) in all
other cases, as of the most recent Valuation Date.
(3) "Total distribution" means a distribution to a
Participant or Beneficiary, within one taxable year
of the recipient, of the entire balance to the
recipient's credit under the Plan.
SECTION 14.
AMENDMENT AND TERMINATION
14.01 AMENDMENT. The Company reserves the right in its sole and final
discretion to amend or modify the Plan and the Trust in any respect at
any time and from time to time to any extent
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which it may deem desirable, and any amendment may be effective as of
any date (including a date that precedes the date of adoption);
provided, however, that
(a) Without the written consent of the Trustee no amendment shall
be made which will increase the duties or responsibilities of
the Trustee;
(b) Except for amendments required by the Internal Revenue Service
as a condition of its approval of the Plan and Trust as
qualifying under Section 401(a) and Section 501(a) of the
Code, and subject to Sections 11.02 and 11.14 of this Plan,
(1) no amendment shall divest any Participant or Beneficiary
of any interest vested in that Participant or Beneficiary and
(2) no amendment shall permit any part of the Fund to be used
for, or diverted to, purposes other than for the exclusive
benefit of Employees and Beneficiaries;
(c) No amendment shall decrease the balance of a Participant's
Account or eliminate an optional form of distribution with
respect to any Account balance at the date of the amendment,
except to the extent permitted under Sections 412(c)(8) or
411(d)(6) of the Code; and
(d) Any amendment shall be by action of the Company's Board of
Directors.
14.02 TERMINATION. The Company may in its sole and absolute discretion
terminate (including by permanent discontinuance of contributions), or
partially terminate, the Plan at any time. Any termination of the Plan
shall be by action of the Company's Board of Directors. If the Company
terminates or partially terminates this Plan, then for all purposes of
this instrument each affected Participant's Account shall be 100
percent Nonforfeitable. The Account shall, notwithstanding Section
5.04(b), be distributed in a lump sum as soon as administratively
practicable after the termination, if the Employer does not maintain
any other defined contribution plan. As of the date of distribution of
Accounts in connection with the termination, the Administrator shall
allocate the net income, gain or loss occurring since the last
Valuation Date to the Accounts pro rata in an equitable and
nondiscriminatory manner. The net income, gain or loss shall be
determined after such reduction for fees and other administrative
expenses relating to the termination as the Administrator may
determine.
IN WITNESS WHEREOF, the Company and the Trustee have executed
this Plan and Trust Agreement as of January 1, 1999, but actually on
January 29, 1999.
REPUBLIC BANCORP, INC.
By /S/ XXXX X. XXXX
Title: SVP
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REPUBLIC BANK & TRUST COMPANY
By /S/ E. XXXXXXX XXXXXX
Title: Executive Vice President
REPUBLIC FINANCIAL SERVICES
CORPORATION
By /S/ E. XXXXXXX XXXXXX
Title:
REPUBLIC BANK & TRUST COMPANY, Trustee
By /S/ E. XXXXXXX XXXXXX
Title: Executive Vice President
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