Exhibit 10(4)
RIVER VALLEY BANCORP
EMPLOYEE STOCK OWNERSHIP PLAN AND
TRUST AGREEMENT
(EFFECTIVE JANUARY 1, 1996)
RIVER VALLEY BANCORP
EMPLOYEE STOCK OWNERSHIP PLAN AND
TRUST AGREEMENT
(EFFECTIVE JANUARY 1, 1996)
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.................................................1
Section 1.1. Accrued Company Contributions
Benefit............................................1
Section 1.2. Act..................................................1
Section 1.3. Anniversary Date.....................................1
Section 1.4. Annual Addition......................................1
Section 1.5. Beneficiary..........................................2
Section 1.6. Code.................................................2
Section 1.7. Committee............................................2
Section 1.8. Company..............................................2
Section 1.9. Company Contributions Account........................2
Section 1.10. Compensation.........................................3
Section 1.11. Date of Employment...................................3
Section 1.12. Date of Separation...................................3
Section 1.13. Deferred Retirement..................................3
Section 1.14. Deferred Retirement Date.............................3
Section 1.15. Defined Benefit Fraction.............................3
Section 1.16. Defined Contribution Fraction........................4
Section 1.17. Effective Date.......................................4
Section 1.18. Employee.............................................4
Section 1.19. Exempt Loan..........................................5
Section 1.20. Fund.................................................5
Section 1.21. Highly Compensated Employee..........................5
Section 1.22. Holding Company......................................6
Section 1.23. Hour of Service......................................6
Section 1.24. Leave of Absence.....................................7
Section 1.25. Normal Retirement....................................7
Section 1.26. Normal Retirement Date...............................7
Section 1.27. One Year Service Break...............................8
Section 1.28. Participant..........................................8
Section 1.29. Period of Separation.................................8
Section 1.30. Period of Service....................................8
Section 1.31. Period of Severance..................................9
Section 1.32. Plan.................................................9
Section 1.33. Plan Year............................................9
Section 1.34. Reemployed Individual................................9
Section 1.35. Section 415 Compensation............................10
Section 1.36. Stock...............................................11
Section 1.37. Top Paid Group......................................11
Section 1.38. Total Disability....................................12
Section 1.39. Trust...............................................12
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Section 1.40. Trustee.............................................12
Section 1.41. Valuation Date......................................12
ARTICLE II ELIGIBILITY AND PARTICIPATION..............................12
Section 2.1. Eligibility.........................................12
Section 2.2. Entry Dates.........................................12
Section 2.3. Certification by Company............................13
Section 2.4. Deferred Retirement.................................13
ARTICLE III COMPANY CONTRIBUTIONS......................................13
Section 3.1. Company Contributions...............................13
Section 3.2. Form of Contributions...............................13
Section 3.3. Holding by Trustee..................................14
Section 3.4. Expenses............................................14
Section 3.5. No Company Liability for Benefits...................14
Section 3.6. No Rollover Contributions...........................14
ARTICLE IV ALLOCATION TO PARTICIPANTS' ACCOUNTS.......................14
Section 4.1. Company Contributions Accounts......................14
Section 4.2. Allocation of Company
Contributions.....................................14
Section 4.3. Limitations on Annual Additions.....................15
Clause (a). Basic Limitations............................15
Clause (b). Participation in Other Plans.................16
Section 4.4. Effective Date of Allocations.......................16
Section 4.5. Cash Dividends......................................16
Section 4.6. Allocation of Forfeitures...........................17
Section 4.7. Special Allocation Rules............................17
ARTICLE V VALUATIONS AND ADJUSTMENTS.................................19
Section 5.1. Valuation of Fund...................................19
Clause (a). Valuations...................................19
Clause (b). Frequency....................................19
Clause (c). Records......................................19
Section 5.2. Adjustments.........................................20
Section 5.3. Amount of Adjustments...............................20
Section 5.4. Effective Date of Adjustments.......................20
Section 5.5. Notice to Participants..............................20
ARTICLE VI BENEFITS...................................................20
Part A. Retirement Benefits..............................................20
Section 6.1. Retirement..........................................20
Part B. Termination Benefits.............................................21
Section 6.2. Effect of Termination...............................21
Section 6.3. Vesting.............................................21
Section 6.4. Payment.............................................22
Part C. Death Benefits...................................................22
Section 6.5. Benefits upon Death.................................22
Section 6.6. Beneficiaries.......................................23
Section 6.7. Lack of Beneficiaries...............................23
Section 6.8. Termination or Retirement prior to
Death.............................................23
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Part D. General..........................................................23
Section 6.9. Date of Distribution................................23
Section 6.10. Form of Distribution................................24
Section 6.11. Liability...........................................24
Section 6.12. Put Options.........................................25
Section 6.13. Eligible Rollover Distributions.....................26
ARTICLE VII ADMINISTRATIVE COMMITTEE...................................27
Section 7.1. Establishment.......................................27
Section 7.2. Duties..............................................27
Section 7.3. Actions.............................................27
Section 7.4. Disqualification....................................27
Section 7.5. Powers..............................................28
Section 7.6. Discrimination Prohibited...........................28
Section 7.7. Statements and Forms................................28
Section 7.8. Liability...........................................28
Section 7.9. Determination of Right to Benefits..................29
Section 7.10. Investment Directions...............................29
Section 7.11. Voting Power........................................29
ARTICLE VIII THE TRUSTEE................................................29
Section 8.1. Assets Held in Trust................................29
Section 8.2. Investments.........................................29
Section 8.3. Directions of Committee.............................30
Section 8.4. Receipt of Additional Shares........................30
Section 8.5. Delivery of Materials to Committee..................30
Section 8.6. Powers..............................................31
Section 8.7. Loans to the Trust..................................32
Clause (a). Interest.....................................32
Clause (b). Use of Proceeds..............................32
Clause (c). Terms of Exempt Loan.........................32
Clause (d). Collateral...................................32
Clause (e). Limited Recourse.............................33
Clause (f). Repayment....................................33
Clause (g). Agreement by Companies.......................33
Clause (h). Release of Collateral........................33
Clause (i). Default......................................34
Clause (j). Termination of Plan..........................34
Section 8.8. Annual Accounting...................................34
Section 8.9. Audit...............................................34
Section 8.10. Uncertainty Concerning Payment of
Benefits..........................................35
Section 8.11. Compensation........................................35
Section 8.12. Standard of Care....................................35
Section 8.13. Request for Instructions............................35
Section 8.14. Resignation of Trustee..............................36
Section 8.15. Vacancies in Trusteeship............................36
Section 8.16. Information to Be Furnished.........................36
Section 8.17. Voting Rights of Participants.......................36
Section 8.18. Delegation of Authority.............................37
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Section 8.19. Diversification of Company
Contributions Account.............................37
Section 8.20. Tender Offer........................................38
ARTICLE IX AMENDMENT, TERMINATION AND MERGER..........................38
Section 9.1. Amendment...........................................38
Section 9.2. Termination or Complete
Discontinuance of Contributions...................39
Section 9.3. Determination by Internal Revenue
Service...........................................40
Section 9.4. Nonreversion........................................40
Section 9.5. Merger..............................................41
ARTICLE X MISCELLANEOUS.............................................41
Section 10.1. Creation of Plan Voluntary..........................41
Section 10.2. No Employment Contract..............................41
Section 10.3. Limitation on Rights Created........................41
Section 10.4. Waiver of Claims....................................41
Section 10.5. Spendthrift Provision...............................42
Section 10.6. Payment of Benefits to Others.......................42
Section 10.7. Payments to Missing Persons.........................42
Section 10.8. Severability........................................43
Section 10.9. Captions............................................43
Section 10.10. Construction........................................43
Section 10.11. Counterparts........................................43
Section 10.12. Indemnification.....................................43
Section 10.13. Standards of Interpretation and
Administration....................................43
Section 10.14. Governing Law.......................................44
Section 10.15. Successors and Assigns..............................44
Section 10.16. Adoption of Plan....................................44
Section 10.17. Withdrawal from Plan................................44
ARTICLE XI TEFRA TOP-HEAVY RULES.....................................44
Section 11.1. Application.........................................44
Section 11.2. Determination.......................................44
Section 11.3. Accrued Benefits....................................46
Section 11.4. Vesting Provisions..................................46
Section 11.5. Minimum Contribution................................47
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RIVER VALLEY BANCORP
EMPLOYEE STOCK OWNERSHIP PLAN AND
TRUST AGREEMENT
(EFFECTIVE JANUARY 1, 1996)
ARTICLE I
DEFINITIONS
Section 1.1. "Accrued Company Contributions Benefit" shall mean the balance
of a Participant's Company Contributions Account as of the last preceding
Valuation Date.
Section 1.2. "Act" shall mean the Employee Retirement Income Security Act
of 1974, as now in effect or hereafter amended, and shall also include all
regulations promulgated thereunder.
Section 1.3. "Anniversary Date" shall mean the last calendar day of any
Plan Year.
Section 1.4. "Annual Addition" shall mean, with respect to any Participant
for any Plan Year and with respect to this Plan and to all other qualified
defined contribution plans maintained by a Company, the sum of:
(a) Company contributions credited to his Company Contributions
Account for that Plan Year under this Plan;
(b) that Participant's non-deductible contributions;
(c) forfeitures; and
(d) 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 a Company shall be treated as Annual
Additions to a qualified defined contribution plan, and amounts
derived from Company contributions paid or accrued in taxable
years ending after such date which are attributable to
post-retirement medical benefits allocated to the separate
account of a key employee as defined in Section 416 of the Code
under a welfare benefit fund as defined in Section 419(e) of the
Code maintained by a Company shall also be treated as Annual
Additions to a qualified defined contribution plan.
To the extent Company contributions and forfeitures are used in a Plan Year to
repay an Exempt Loan and shares of Stock are released from a suspense account,
the fair market value of the shares of Stock released and allocated to a
Participant's Company Contributions Account, rather than the amount of Company
contributions and forfeitures applied towards the Exempt Loan, shall be treated
as an Annual Addition in such Plan Year but only if it would result in lesser
Annual Additions in such Plan Year.
Annual Additions shall not include any amounts allocated as income to a
Participant's Company Contributions Account in accordance with Section 8.7(j).
Section 1.5. "Beneficiary" shall mean the person(s) entitled under the
provisions of Section 6.5 to receive benefits after the death of a Participant.
Section 1.6. "Code" shall mean the Internal Revenue Code of 1986, as
now in effect or hereafter amended, and shall also include all regulations
promulgated thereunder.
Section 1.7. "Committee" shall mean the administrative committee
appointed and acting in accordance with the provisions of Article VII. The
Committee shall be deemed to be the Plan Administrator for purposes of the Act.
Section 1.8. "Company" shall mean the Holding Company, Madison First
Federal Savings and Loan Association, any Company which becomes a participating
employer pursuant to Section 10.16, and any successors thereto. The term
"Company" shall also include the Citizens National Bank of Madison if it becomes
a subsidiary of the Holding Company before January 1, 1997. Solely for the
purpose of:
(a) computing an Employee's Hours of Service and Period of Service to
determine his eligibility to participate in and the vesting of
his benefits under this Plan;
(b) applying the limitations contained in Section 4.3;
(c) determining whether this Plan is a Top Heavy Plan under Section
11.2 and, thus, subject to the provisions of Article XI; and
(d) determining whether an Employee terminated his employment with
the Companies,
"Company" shall also include any entity which, together with a participating
Company, constitutes a member of a controlled group of corporations, a member of
a commonly controlled group of trades or businesses or a member of an affiliated
service group within the meaning of Section 414(b), Section 414(c) or Section
414(m) of the Code or any entity which is required to be aggregated with a
participating Company under Section 414(o) of the Code.
Section 1.9. "Company Contributions Account" shall mean the account
maintained for each Participant to which contributions made by the Companies
shall be allocated.
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Section 1.10. "Compensation" shall mean the total of all amounts paid
or payable in cash by the Companies by reason of services performed by an
Employee during any period, including bonuses, overtime, any other cash payments
included on an Employee's W-2, amounts deferred by the Employee under any cash
or deferred arrangement maintained by a Company under Section 401(k) of the Code
and any salary reductions elected by the Employee pursuant to a salary reduction
plan maintained by a Company under Section 125 of the Code but excluding, with
respect to any Employee, any other amounts contributed by a Company for or on
account of that Employee under this Plan or under any other employee benefit
plan; provided, however, that Compensation in a Plan Year in excess of one
hundred and fifty thousand ($150,000), as adjusted pursuant to Section
401(a)(17) of the Code, shall be disregarded; provided, further, that to the
extent provided by Section 1.21(g) the Compensation limit shall be allocated
among family members.
Section 1.11. "Date of Employment" means any date on which an
Employee first completes an Hour of Service.
Section 1.12. "Date of Separation" means the earlier of:
(a) the date an Employee's employment with the Companies
terminates by reason of a quit, discharge, retirement
(including disability retirement) or death; or
(b) the first anniversary of the first date of a period in which
the Employee remains absent from active employment with the
Companies for some reason other than a quit, discharge,
retirement, death, approved leave of absence or military
service.
Section 1.13. "Deferred Retirement" shall mean retirement after a
Participant's Normal Retirement Date in accordance with Section 2.4.
Section 1.14. "Deferred Retirement Date" shall mean the first (1st)
calendar day of the month after a Participant's Normal Retirement Date as of
which he retires or his employment with the Companies is terminated for any
reason other than his death.
Section 1.15. "Defined Benefit Fraction" shall mean for a
given Plan Year a fraction:
(a) the numerator of which is the projected annual benefit of a
Participant under all qualified defined benefit plans
maintained by a Company (determined as of the Anniversary Date
of that Plan Year), and
(b) the denominator of which is the lesser of:
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(i) the product of one and twenty-five one hundredths
(1.25) multiplied by ninety thousand dollars
($90,000), as adjusted pursuant to Section 415(b)(1)
(A) and (d)(1) of the Code, or
(ii) the product of one and four tenths (1.4) multiplied
by one hundred percent (100%) of that Participant's
average Section 415 Compensation for his three (3)
consecutive highest paid Period of Service with the
Companies.
Section 1.16. "Defined Contribution Fraction" shall mean for a given
Plan Year a fraction:
(a) the numerator of which is the sum of the Annual Additions to a
Participant's accounts under all qualified defined
contribution plans maintained by a Company as of the
Anniversary Date of that Plan Year, and
(b) the denominator of which is the sum of the lesser of the
following amounts determined for that Plan Year and for each
prior year of service with the Companies:
(i) the product of one and twenty-five one hundredths
(1.25) multiplied by the dollar limit in effect for
that Plan Year pursuant to Section 415(c)(1)(A) of
the Code, or
(ii) the product of one and four tenths (1.4) multiplied
by twenty-five percent (25%) of that Participant's
Section 415 Compensation for that Plan Year.
Section 1.17. "Effective Date" shall mean January 1, 1996; provided,
however, that if prior to December 31, 1996, Madison First Federal Savings and
Loan Association shall not have completed its conversion from mutual to stock
form, this Plan shall be null and void and any shares of Stock and other assets
held hereunder shall be returned to the Companies.
Section 1.18. "Employee" shall mean any person employed by a Company,
and shall also include any individual deemed to be a leased employee (as defined
below) of the Companies but only to the extent required by the Code. For
purposes of this Plan, the term "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 (1) year, and such services are of a type historically
performed by employees in the business field of the recipient employer;
provided, however, that a leased employee shall not be considered
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an employee of the recipient if (a) such employee is covered by a money purchase
pension plan providing a nonintegrated employer contribution rate of at least
ten percent (10%) of Compensation, immediate participation and full and
immediate vesting and (b) leased employees do not constitute more than twenty
percent (20%) of the recipient's non-highly compensated workforce. A leased
employee within the meaning of Section 414(n)(2) of the Code shall become a
Participant in the Plan based on service as a leased employee only as provided
in provisions of the Plan other than this Section. 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.
Section 1.19. "Exempt Loan" shall mean a loan made to this Plan by a
party in interest or disqualified person or a loan to this Plan which is
guaranteed by a party in interest or disqualified person, including a direct
loan of cash, a purchase-money transaction and an assumption of any obligation
of this Plan. For purposes of this definition, a guarantee shall include an
unsecured guarantee and the use of assets of a party in interest or disqualified
person as collateral for a loan even though the use of assets may not constitute
a guarantee under any applicable State laws.
Section 1.20. "Fund" shall mean all cash, investments and
other properties held by the Trustee hereunder.
Section 1.21. "Highly Compensated Employee" shall include for a Plan
Year any Employee who during such Plan Year or in the immediately preceding Plan
Year:
(a) is at any time a five percent (5%) or more owner (as defined
in Section 416(i)(1) of the Code) of a Company;
(b) receives more than seventy-five thousand dollars ($75,000), as
adjusted pursuant to Section 415(b)(1)(A) and (d)(1) of the
Code, of Section 415 Compensation from the Companies;
(c) receives more than fifty thousand dollars ($50,000), as
adjusted pursuant to Section 415(b)(1)(A) and (d)(1) of the
Code, of Section 415 Compensation from the Companies and is in
the Top Paid Group in the same Plan Year; or
(d) is at any time in either Plan Year an officer of a Company and
whose Section 415 Compensation in the same Plan Year during
which he is an officer is greater than fifty percent (50%) of
the maximum dollar limitation under Section 415(b)(1)(A) of
the Code currently in effect; provided, however, that no more
than fifty (50) Employees or, if lesser, the greater of three
(3) or ten
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percent (10%) of a Company's Employees are to be treated as
officers; provided, further, that if no officer has Section
415 Compensation greater than fifty percent (50%) of the
maximum dollar limitation under Section 415(b)(1)(A) of the
Code currently in effect, only the highest paid officer of
that Company shall be deemed highly compensated pursuant to
this Subsection (d).
For purposes of determining whether an Employee is a Highly Compensated Employee
and notwithstanding anything else contained in this Section 1.21, the following
rules shall apply:
(e) An Employee who has met the requirements contained in
Subsections (b), (c) or (d) above for the Plan Year for which
the determination of Highly Compensated Employees is being
made but has not met such requirements for the immediately
preceding Plan Year shall not be deemed to be a Highly
Compensated Employee unless such Employee is among the one
hundred (100) Employees who have received the greatest Section
415 Compensation from the Companies in such Plan Year.
(f) A former Employee shall be treated as a Highly Compensated
Employee if he was a Highly Compensated Employee in the Plan
Year during which his employment with the Companies terminated
or in any Plan Year during which occurs or commencing after
his fifty-fifth (55th) birthday.
(g) Any Employee who is one (1) of the ten (10) Employees
receiving the greatest Section 415 Compensation from the
Companies or who is a five percent (5%) owner of a Company as
described in Subsection (a) above shall be deemed to have been
paid the Section 415 Compensation which is paid to his spouse
or to his lineal descendants who have yet attained age
nineteen (19); provided, however, that any individual whose
Section 415 Compensation is deemed to be paid to a family
member of such individual shall not be considered a separate
Employee for purposes of this Section 1.21.
(h) For purposes of this Section, Section 415 Compensation shall
include amounts deferred or redirected by an Employee pursuant
to Sections 401(k) and 125 of the Code.
(i) An Employee shall only be deemed to be a Highly Compensated
Employee to the extent required by the Code.
Section 1.22. "Holding Company" shall mean River Valley Bancorp.
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Section 1.23. "Hour of Service" shall mean:
(a) each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for a Company; these
hours shall be credited to the Employee for the computation
period or periods in which the duties are performed; and
(b) each hour for which an Employee is paid, or entitled to
payment, by a Company 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 but
excluding payments made because of Total Disability under
Section 6.3), layoff, jury duty, military duty or leave of
absence; no more than five hundred and one (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 computation period); hours under this Subsection (b)
shall be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations which
are incorporated herein by this reference; and
(c) each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by a Company; the same
Hours of Service shall not be credited both under Subsection
1.23(a) or Subsection 1.23(b), as the case may be, and under
this Subsection 1.23(c); these hours shall be credited to the
Employee for the computation period or periods to which the
award or agreement pertains, rather than to the computation
period in which the award, agreement or payment is made.
To the extent required under the Family and Medical Leave Act of 1993
("FMLA") and solely for purposes of determining whether a One Year Service Break
for participation and vesting purposes has occurred in any computation period,
an individual who is absent from work on unpaid leave under the FMLA on or after
August 5, 1993 shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such absence or, in any
case in which such Hours of Service cannot be determined, eight (8) Hours of
Service per each regularly scheduled work day of such absence.
Hours of Service shall be determined in accordance with any method or
methods permitted by the Act; provided, however, that such method or methods
shall be used consistently, uniformly and in a non-discriminatory manner.
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Any ambiguity arising in the interpretation of the above provisions
shall be resolved in favor of crediting an Employee with Hours of Service.
Section 1.24. "Leave of Absence" shall mean a leave granted by a
Company, in accordance with rules uniformly applied to all Employees in a
non-discriminatory manner, for reasons of health, public service or other
satisfactory reasons.
Section 1.25. "Normal Retirement" shall mean retirement on a
Participant's Normal Retirement Date.
Section 1.26. "Normal Retirement Date" shall mean the first (1st)
calendar day of the month immediately following a Participant's sixty-fifth
(65th) birthday. A Participant's benefits under this Plan shall be fully vested
and non-forfeitable on and after the date he attains age sixty-five (65), which
is deemed to be the normal retirement age under this Plan, regardless of his
Period of Service and regardless of the vesting schedules in Section 6.3 and in
Section 11.4.
Section 1.27. "One Year Service Break" shall mean a consecutive twelve
(12) month Period of Severance.
Section 1.28. "Participant" shall mean any Employee who has commenced
participation in this Plan pursuant to Section 2.2. Participation in this Plan
shall continue until such time as the Participant has received all of the
benefits to which he is entitled under the terms of this Plan.
Section 1.29. "Period of Separation" means, for an Employee, the period
of time commencing with the date such Employee separates from service with the
Companies and ending with the date such Employee resumes his employment with the
Companies.
Section 1.30. "Period of Service" means, for an Employee, the period
commencing on the later of the following dates:
(a) such Employee's Date of Employment; or
(b) the date on which such Employee's Employer is required to be
aggregated with the Company under Code Section 414(b), (c),
(m) or (o), whichever is applicable,
and ending on the date a Period of Severance begins, including any Period of
Separation of less than twelve (12) consecutive months; provided, however, that
in the case of any person who terminates his employment with the Employers but
later resumes his employment with the Companies, the Period of Service before
such resumption of employment shall be aggregated only if that person is a
Re-employed Individual.
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Section 1.31. "Period of Severance" means, for an Employee, the period
of time commencing with the earlier of:
(a) the date on which such Employee terminates his employment with
the Companies by reason of quitting, retirement, death or
discharge, or
(b) the date twelve (12) consecutive months after the date a
person remains absent from service with the Companies (with or
without pay) for any reason other than quitting, retirement,
death or discharge,
and ending, in the case of an Employee who terminates his employment with the
Companies by reason other than death, with the date such Employee resumes his
employment with the Companies. Solely for purposes of determining whether a One
Year Service Break has occurred for participation and vesting purposes has
occurred, an Employee who is absent from work for maternity or paternity reasons
shall receive credit at least one (1) year. For purposes of this Section 1.31,
an absence from work for maternity and paternity reasons means an absence:
(d) by reason of the pregnancy of the Employee,
(e) by reason of the birth of a child of the Employee,
(f) by reason of the placement of a child with the Employee in
connection with the adoption of that child by the Employee, or
(g) for purposes of caring for such a child for the period
beginning immediately following such birth or placement.
Section 1.32. "Plan" shall mean the employee stock ownership plan and
trust established pursuant to the provisions of this Agreement, as amended from
time to time, which shall be known as the "River Valley Bancorp Employee Stock
Ownership Plan." This Plan is intended to be an employee stock ownership plan
under Section 4975(e)(7) of the Code and under Section 407(d)(6) of the Act.
Section 1.33. "Plan Year" shall mean the calendar year. The Plan Year
shall also be the limitation year for purposes of Section 415 of the Code for
this Plan and for all other qualified retirement plans maintained by a Company.
Section 1.34. "Re-employed Individual" shall mean a person who, after
having terminated his employment with the Companies, resumes his employment with
the Companies:
(a) with any vested interest in his Company Contributions Account
as provided in Section 6.3 or 11.4, or
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(b) with no such vested interest but who resumes his employment
with the Companies either:
(i) before a One Year Service Break,
(ii) after a One Year Service Break but before his latest
Period of Severance equals or exceeds his Period of
Service, or
(iii) after a One Year Service Break but before the number
of his consecutive One Year Service Breaks equals or
exceeds the greater of five (5) or his Period of
Service.
Section 1.35. "Section 415 Compensation" shall mean with
respect to any Plan Year and shall:
(a) include amounts accrued to a Participant (regardless of
whether he was a Participant during the entire Plan Year and
regardless of whether in cash):
(i) as wages, salaries, fees for professional services
and other amounts received for personal services
actually rendered in the course of his employment
with the Companies including but not limited to
commissions, compensation for services on the basis
of a percentage of profits and bonuses;
(ii) for purposes of Subsection (a)(i) above, earned
income from sources outside the United States (as
defined in Section 911(b) of the Code), whether or
not excludible from gross income under Section 911 of
the Code or deductible under Section 913 of the Code;
(iii) amounts described in Sections 104(a)(3), 105(a) and
115(h) of the Code but only to the extent that these
amounts are includible in the gross income of that
Participant; and
(iv) amounts paid or reimbursed by the Companies for
moving expenses incurred by that Participant, but
only to the extent that these amounts are not
deductible by that Participant under Section 217 of
the Code;
(b) not include:
(i) notwithstanding Subsection (a) (i) above, there shall
be excluded from S ection 415 Compensation amounts
contributed to a plan as contributions to a
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qualified cash or deferred plan under Section 401(k)
of the Code;
(ii) other contributions made by a Company to any plan of
deferred compensation to the extent that, before the
application of the Section 415 of the Code
limitations to that plan, the contributions are not
includible in the gross income of that Participant
for the taxable year in which contributed; in
addition, Company contributions made on behalf of
that P articipant to a simplified employee pension
plan described in Section 408(k) of the Code shall
not be considered as Section 415 Compensation for the
Plan Year in which contributed; additionally, any
distributions from a plan of deferred compensation
shall not be considered as Section 415 Compensation,
regardless of whether such amounts are includible in
the gross income of that Participant when
distributed; however, any amounts received by that
Participant pursuant to an unfunded nonqualified plan
shall be considered as Section 415 Compensation in
the Plan Year in which such amounts are includible in
the gross income of that Participant; and
(iii) other amounts which receive special federal income
tax benefits, such as premiums for group term life
insurance (but only to the extent that the premiums
are not includible in the gross income of that
Participant).
Section 1.36. "Stock" shall mean any duly-issued shares of common stock
of the Holding Company which shares constitute employer securities under Section
409(1) and Section 4975(e)(8) of the Code.
Section 1.37. "Top Paid Group" shall mean in a Plan Year and include
the Employees who are in the top twenty percent (20%) of a Company's Employees
in terms of Section 415 Compensation for such Plan Year; provided, however, that
for purposes of determining the number of Employees to be included in the Top
Paid Group, the following Employees shall be excluded:
(a) Employees who have not completed six (6) months of service
with the Companies;
(b) Employees who normally work less than seventeen and one-half
(17 1/2) hours per week or less than six (6) months during a
Plan Year;
(c) Employees who have not attained age twenty-one (21);
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(d) except as provided by regulations promulgated under the Code,
Employees who are covered by a collectively bargained
agreement; and
(e) Employees who are non-resident aliens and who receive no
earned income (within the meaning of Section 911(d)(2) of the
Code) from the Companies which constitutes income from sources
in the United States (within the meaning of Section 861(a)(3)
of the Code).
Section 1.38. "Total Disability" shall mean a mental or physical
condition which, in the judgment of the Committee based upon medical reports and
other evidence satisfactory to the Committee, presumably permanently prevents a
Participant from satisfactorily performing his usual duties for his employing
Company or the duties of such other position or job which his employing Company
makes available to that Participant and for which that Participant is qualified
by reason of training, education or experience.
Section 1.39. "Trust" shall mean the employee stock ownership trust
established pursuant to the provisions of this Agreement, as amended from time
to time, which shall be known as the "River Valley Bancorp Employee Stock
Ownership Trust."
Section 1.40. "Trustee" shall mean __________________________, and any
successors thereto.
Section 1.41. "Valuation Date" shall mean each December 31 and each
other date as of which the Committee shall cause the Trustee to determine the
value of the Trust assets as prescribed in Section 5.1.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
Section 2.1. Eligibility. Each Employee in the employ of a Company
shall become eligible to participate in this Plan on the date on which his
Period of Service is at least six (6) months.
Section 2.2. Entry Dates. Each Employee who was eligible to participate
under Section 2.1 on the Effective Date automatically became a Participant in
this Plan as of the Effective Date. Each other Employee shall become a
Participant in this Plan on the first day of January or July coincident with or
next following the first (1st) date on which he meets the eligibility
requirements of Section 2.1. A re-employed Employee whose Period of Service is
at least six (6) months shall become (or, if formerly a Participant, be
reinstated as) a Participant in this Plan on his re-employment date.
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Section 2.3. Certification by Company. Not later than thirty (30)
calendar days after an Employee shall become a Participant in this Plan, his
employing Company shall certify such fact in writing to the Committee, together
with such additional facts regarding such Participant as the Committee may
request. Except as otherwise provided by the Act, each such certification shall
be final and conclusive and the Committee shall be entitled to rely thereon
without any investigation, but it may correct any errors discovered in any such
certificate.
Section 2.4. Deferred Retirement. A Participant who continues in the
employment of a Company after his Normal Retirement Date shall continue to
participate in this Plan, and contributions shall be allocated to his Company
Contributions Account as otherwise provided in this Plan. Any such Participant
who elects Deferred Retirement shall be entitled to benefits under this Plan
payable at his Deferred Retirement Date in the same manner as if he had retired
on his Normal Retirement Date; provided, however, that the deferral of benefit
payments after a Participant's Normal Retirement Date shall be permitted only to
the extent authorized by and in compliance with all requirements imposed under
Section 2530.203-3 of the Department of Labor Regulations which are incorporated
herein by reference.
ARTICLE III
COMPANY CONTRIBUTIONS
Section 3.1. Company Contributions. For the initial Plan Year and for
each Plan Year thereafter, the Companies shall make contributions to the Trust
in one (1) or more installments in such amounts as the Board of Directors of the
Holding Company may determine.
If Company contributions are paid to the Trust by reason of a mistake
in fact made in good faith or a mistake made in good faith in determining the
deductibility of such Company contributions for federal income tax purposes
under Section 404 of the Code, such Company contributions may, except as
otherwise provided in Section 8.7, be returned to the Companies by the Trustee
(upon the written direction of the Committee) within one (1) year after the
payment to the Trust or after the date the federal income tax deduction is
denied, whichever is applicable.
Section 3.2. Form of Contributions. The Companies' contributions, if
any, for each Plan Year shall be paid to the Trustee either in cash or in Stock
valued at the fair market value thereof as of the date of the contribution (as
determined consistent with Section 5.1(a)) and within such period as is provided
for in Section 404 of the Code or any other statute of similar import or any
rule or regulations thereunder.
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Section 3.3. Holding by Trustee. All contributions made by the
Companies under Section 3.1 shall be a part of the Fund and shall be held in
trust by the Trustee until distributed as provided in this Plan.
Section 3.4. Expenses. In addition to the contributions to be made
under Section 3.1, the Companies shall pay all reasonable expenses incident to
the operation of this Plan; in the event of any failure by the Companies to make
such payment, the same shall be a charge against and paid from the Fund but only
to the extent permitted under the Code and under the Act.
Section 3.5. No Company Liability for Benefits. The benefits under this
Plan shall be only such as can be provided by the Fund, and there shall be no
liability or obligation on the part of the Company to make any further
contributions or payments. Except as otherwise provided by the Act, no liability
for the payment of benefits under this Plan shall be imposed upon the Companies
or upon the officers, directors or shareholders of the Companies.
Section 3.6. No Rollover Contributions. Rollover contributions
(within the meaning of Section 402(a)(5) of the Code) shall not be permitted nor
accepted.
ARTICLE IV
ALLOCATION TO PARTICIPANTS' ACCOUNTS
Section 4.1. Company Contributions Accounts. F or purposes of
allocating the Company contributions, the Committee shall establish and maintain
a separate Company Contributions Account in the name of each Participant.
Section 4.2. Allocation of Company Contributions. Except as provided in
Section 4.7, the Company contributions for each Plan Year shall be allocated
among the Company Contributions Accounts of all Employees who are still actively
employed by a Company on the Anniversary Date of that Plan Year or whose
employment with the Companies terminated during that Plan Year because of death,
Total Disability, Deferred or Normal Retirement or after reaching age forty-five
(45) with a Period of Service of at least five (5) years proportionately in the
ratio that the Compensation (disregarding Compensation in excess of fifty
thousand dollars ($50,000), as adjusted in the manner described below) paid to
such Participant, if any, for that Plan Year or since becoming a Participant in
this Plan if he became a Participant within that Plan Year bears to the
aggregate Compensation (disregarding Compensation paid to any Participant in
excess of fifty thousand dollars ($50,000), as adjusted in the manner described
below) paid to all Participants for that Plan Year or since becoming
Participants in this Plan if they became Participants within that Plan Year. The
fifty thousand dollar ($50,000) limit described above shall be adjusted as of
the
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first (1st) day of each Plan Year beginning on January 1, 1997. The adjusted
limit shall be determined by multiplying fifty thousand dollars ($50,000) by a
fraction the numerator of which shall be the Bureau of Labor Statistics Wage
Earners Index for the month of December preceding such January 1 adjustment date
and the denominator of which shall be the Bureau of Labor Statistics Wage
Earners Index for December, 1995, and rounding up or down to the nearest
thousand dollar increment. To the extent cash dividends on allocated shares of
Stock are applied to pay of an Exempt Loan under Section 4.5 and notwithstanding
anything contained herein to the contrary, Company contributions shall first be
applied towards crediting the Participant's Company Contributions Account to
which the cash dividends would have been allocated before they are allocated
under the preceding provisions of this Section.
Section 4.3. Limitations on Annual Additions.
Clause (a). Basic Limitations. Notwithstanding any other
provision of this Plan, the maximum Annual Addition during any Plan Year for any
Participant under this Plan and under any other qualified defined contribution
plans maintained by the Companies shall in no event exceed the lesser of:
(i) twenty-five percent (25%) of that Participant's Section 415
Compensation for that Plan Year, or
(ii) thirty thousand dollars ($30,000), as adjusted from the total
in accordance with Section 415 of the Code; provided, however,
that such adjustments shall only apply to the Plan Years
ending on or after the date in which the adjustment was made.
Any Company contributions which are applied by the Trustee (not later
than the due date, including extensions, for filing a Company's federal income
tax return for that Plan Year) to pay interest on an Exempt Loan shall not be
included as Annual Additions under this Section 4.3; provided, however, that the
provisions of this Section shall be applicable only in Plan Years for which not
more than one-third (1/3) of the Company contributions applied to pay principal
and interest on an Exempt Loan are allocated among Highly Compensated Employees.
The Committee may reallocate Company contributions in order to satisfy this
special limitation.
If due to a reasonable error in estimation of a Participant's
Compensation or due to the allocation of forfeitures these maximum Annual
Additions would be exceeded as to any Participant, any excess amount shall be
used to reduce Company Contributions for that Participant in the next, and
succeeding, Plan Years. If that Participant was not covered by this Plan at the
Anniversary Date of that Plan Year, such excess shall be reallocated among the
Company Contributions Accounts of the other Participants under Section 4.2
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to the fullest extent possible without exceeding the limitations with respect to
any other Participant for that Plan Year. Any excess amount which cannot be so
allocated to any Participant's Company Contributions Account by reason of these
limitations shall be allocated under this Section 4.3(a) for the next succeeding
Plan Years (prior to the allocation of Company Contributions for such succeeding
Plan Years). Notwithstanding anything contained herein to the contrary,
contributions made to the other defined contribution plans shall be reduced
before contributions to this Plan are reduced, unless such other plan or plans
provide otherwise.
Clause (b). Participation in Other Plans. In any case in which
an Employee is a participant in one (1) or more qualified defined contribution
plans and in one (1) or more qualified defined benefit plans (as these terms are
defined in Section 415(k) of the Code) maintained by a Company, the sum of the
Defined Benefit Fraction and of the Defined Contribution Fraction, computed as
of the Anniversary Date of that Plan Year, shall not exceed one (1.0). To the
extent the fraction would exceed one (1.0), the benefit accrual under the
defined benefit plan shall be reduced first.
Section 4.4. Effective Date of Allocations. For all purposes of this
Plan, allocations to the Participants' Company Contributions Accounts under this
Article shall be deemed to have been made on the Anniversary Date to which they
relate although they may actually be determined at some later date. The fact
that such allocations are made, however, shall not vest in any Participant or in
his spouse or other Beneficiary any right, title or interest in or to any part
of the Fund except at the times, to the extent and on the terms and conditions
specified in this Plan.
Section 4.5. Cash Dividends. Any cash dividends or other cash
distributions received by the Trustee on Stock allocated to the Company
Contributions Accounts of Participants shall be credited to the applicable
Participants' Company Contributions Accounts unless the Holding Company, in its
sole discretion, elects to pay the cash dividends directly to the applicable
Participants or directs the Trustee to pay the cash dividends to the
Participants (or, if applicable, their Beneficiaries) within ninety (90)
calendar days of the close of the Plan Year in which the cash dividends were
paid by the Holding Company to the Fund. Notwithstanding anything contained in
this Section to the contrary, the Holding Company may direct cash dividends,
including dividends on non-allocated shares, be applied to repay an Exempt Loan,
but only to the extent shares of Stock with an aggregate fair market value equal
to the amount of dividends so applied are allocated to the Company Contributions
Accounts of the applicable Participants and to the extent the cash dividends are
deductible under Section 404(k) of the Code. To the extent cash dividends on
allocated shares are applied to repay an Exempt Loan, shares released from
encumbrance equal to the amount of the dividends which, but for the
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repayment of the Exempt Loan, would have been allocated to Participants' Company
Contributions Accounts shall be allocated to the Company Contributions Accounts
of the affected Participants, and the remaining shares to be allocated shall be
allocated among the Participants on the basis of Compensation.
Section 4.6. Allocation of Forfeitures. The Trustee, shall, as soon as
practicable following the Anniversary Date marking the close of each Plan Year,
allocate the forfeitures which have occurred in that Plan Year first to
reinstate any forfeitures of any reemployed Participant under Section 6.2 and
second, if any forfeitures are remaining after the reinstatements described
above are completed, among the Company Contributions Accounts of all Employees
who were or became Participants on the Anniversary Date of that Plan Year or
whose Period of Service terminated during that Plan Year because of death, Total
Disability or Deferred or Normal Retirement. The forfeitures shall be allocated
among such Accounts in the same manner provided for under Section 4.2.
Section 4.7. Special Allocation Rules. Notwithstanding any other
provision in this Plan to the contrary, no Stock acquired by this Plan in a sale
to which Section 1042 of the Code applies may be allocated directly or
indirectly under this Plan:
(a) during the non-allocation period (as such term is defined
below), for the benefit of:
(i) any Participant who makes an election under Section
1042(a) of the Code with respect to Stock sold to
this Plan, or
(ii) any Participant who is related to the Participant
making the election under Section 1042(a) of the Code
or to the deceased Participant (within the meaning of
Section 267(b) of the Code); provided, however, that
this Subsection (a) (ii) shall not apply to any
Participant who is a lineal descendent of a
Participant as long as the aggregate amount allocated
to the benefit of all such lineal descendants during
the non-allocation period (as such term is defined
below) does not exceed more than five percent (5%) of
the Stock (or amounts allocated in lieu thereof) held
by this Plan which are attributable to the sale to
this Plan by any person related to such descendants
(within the meaning of Section 267(c) (4)) in a
transaction to which Section 1042 of the Code
applies,
or
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(b) for the benefit of any Participant who owns (after the
application of the attribution rules contained in Section
318(a) of the Code, but disregarding Section 318(a)(2)(B)(i)
of the Code) more than twenty-five
percent (25%) of:
(i) any class of the outstanding stock of the Holding
Company or of any other corporation which is a member
of a controlled group of corporations (within the
meaning of Section 409(1)(4) of the Code) which
includes the Holding Company, or
(ii) the total value of any class of outstanding stock of
the Holding Company or of any other corporation which
is a member of the controlled group of corporations
(within the meaning of Section 409(1)(4) of the Code)
which includes the Holding Company.
For purposes of this Section 4.7, the "non-allocation period" shall mean a
period beginning on the date of the sale of the stock to the Plan and ending on
the later of:
(c) the date which is ten (10) years after the sale of the Stock
to this Plan to which Section 1042 of the Code applies, or
(d) the date of the Plan allocation of Stock attributable to the
final payment of any acquisition indebtedness incurred in
connection with a sale of such Stock to this Plan to which
Section 1042 of the Code applies.
For purposes of this Section 4.7 a Participant shall be deemed to be a
twenty-five percent (25%) or greater shareholder if such Participant owns more
than twenty-five percent (25%) of the shares at any time during a one (1) year
period ending:
(e) on the date of a sale of the Stock to this Plan to which
Section 1042 of the Code applies, or
(f) on the date as of which the Stock sold to this Plan through a
sale to which Section 1042 of the Code applies is allocated to
Participants.
The provisions contained in this Section 4.7 shall be interpreted consistent
with and in accordance with Section 409(n) of the Code.
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ARTICLE V
VALUATIONS AND ADJUSTMENTS
Section 5.1. Valuation of Fund.
Clause (a). Valuations. The Committee shall provide the
Trustee with a written valuation showing the fair market value of the Stock,
upon which valuation the Trustee may fully rely. For all purposes of this Plan,
fair market value shall be determined by an independent appraiser (as such term
is defined in Treasury Regulations promulgated under Section 170(a)(1) of the
Code) unless the Stock is readily tradeable on an established securities market
at the date of valuation. The Committee shall also direct the Trustee to
determine the fair market value of all other assets of the Fund on each
Valuation Date.
Clause (b). Frequency. The Fund shall be valued as soon as
practical after the Anniversary Date of each Plan Year and as soon as practical
after the removal or resignation of the Trustee on the basis of fair market
values determined as of the Anniversary Date of the Plan Year or as of the
effective date of the resignation or removal of the Trustee, respectively. The
Committee may require valuation of the Fund on such other dates as it may
prescribe.
Clause (c). Records. Records of valuation of the Fund shall be
prepared by the Trustee in such manner and within such time after each Valuation
Date as may be prescribed in this Section 5.1, and such records shall be filed
with the Committee, including a written statement reflecting the value of the
assets and liabilities of the Fund and the receipts and disbursements of the
Fund since the last previous statement filed with the Committee. As to the fair
market value of Stock, the Trustee shall rely solely upon the most recent
valuation furnished by the Committee as provided in Section 5.1(a). If
information necessary to ascertain the fair market value of the Fund assets
other than Stock is not readily available to the Trustee or if the Trustee is
unable in its sole discretion fairly to determine the fair market value of the
other Fund assets, the Trustee may request the Committee in writing to instruct
the Trustee as to such values to be used for all purposes under this Plan; in
such event, the values as determined by the Committee shall be binding and
conclusive, except as otherwise provided by the Act. If the Committee shall fail
or refuse to instruct the Trustee as to such values within a reasonable time
after receipt of the Trustee's written request therefor, the Trustee may take
such action as it deems necessary or advisable to ascertain such values. Except
for the Trustee's negligence, willful misconduct or lack of good faith, upon the
expiration of ninety (90) calendar days from the filing of such records and
except as otherwise provided by the Act, the Trustee shall be forever released
and discharged from all liability and accountability to anyone with respect to
the propriety of its acts
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or transactions as set forth in such records unless written objection is filed
with the Trustee within the said ninety (90) calendar day period by the
Committee or by the Holding Company.
Section 5.2. Adjustments. As of each Valuation Date the Committee shall
cause the Trustee to allocate to each Participant's Company Contributions
Account, by credit thereto or deduction therefrom as the case may be, a
proportion of the increase or decrease in the fair market value of the Fund
since the last preceding Effective Date or Valuation Date. Such allocation shall
be made in the proportion that each Participant's Company Contributions Account
on such date bears to the total of all such Company Contributions Accounts on
such date.
Section 5.3. Amount of Adjustments. The increase or decrease in the
Fund to be allocated shall be the difference between:
(a) the fair market value of the Fund on the last preceding
Effective Date or Valuation Date (excluding any amounts
withdrawn from the Fund as of such Date for the payment of
benefits hereunder), and
(b) the fair market value of the Fund on the current Valuation
Date (including any amounts to be withdrawn from the Fund as
of such Date for the payment of benefits hereunder).
Section 5.4. Effective Date of Adjustments. For all purposes of this
Plan, allocations to the Participants' Company Contributions Accounts under this
Article shall be deemed to have been made on the Effective Date or Valuation
Date to which they relate although they may actually be determined at some later
date. The fact that such allocations are made, however, shall not vest in any
Participant or in his spouse or other Beneficiary any right, title or interest
in or to any part of the Fund except at the times, to the extent and on the
terms and conditions specified in this Plan.
Section 5.5. Notice to Participants. Promptly after the allocations
herein described shall be completed, the Committee shall advise each Participant
in writing of the fair market value of the Stock and other Fund assets then
credited to his Company Contributions Account.
ARTICLE VI
BENEFITS
Part A. Retirement Benefits.
Section 6.1. Retirement. Each Participant who retires on his Normal
Retirement Date or Deferred Retirement Date shall be
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entitled to receive the entire balance credited to his Company Contributions
Account as of the Valuation Date coincidental with or immediately following such
Retirement Date plus any Company contributions to which he is entitled pursuant
to Section 4.2 for the Plan Year in which his Normal Retirement or Deferred
Retirement occurs. Payment of such benefits shall be made in accordance with the
provisions of Section 6.10.
Part B. Termination Benefits.
Section 6.2. Effect of Termination. If a Participant's employment with
the Companies is terminated before his Normal Retirement Date for any reason
other than his death, that Participant shall cease to be a Participant in this
Plan and shall not be entitled to any benefits under this Plan except as
expressly provided in this Part B.
Section 6.3. Vesting. Any Participant whose employment with the
Companies is terminated as set forth in Section 6.2 shall be entitled to a
percentage (as determined below) of the entire balance credited to his Company
Contributions Account as of the Valuation Date coincidental with or immediately
following the date of termination of his employment. The percentage of his
Company Contributions Account to which a terminated Participant is entitled
shall be determined on the basis of his Period of Service on such date of
termination of employment, as follows:
Period of Service Vested Percentage
----------------- -----------------
Less than three (3) years 0
Three (3) years or more 100%
Any portion of the terminated Participant's Company Contributions Account which
is not vested shall be treated as a forfeiture; provided, however, that such
forfeiture shall not be allocated to the other Plan Participants until the first
(1st) to occur of the following:
(a) that Participant's consecutive One Year Service Breaks are at
least five (5);
(b) that Participant's death; or
(c) the date on which the Participant receives or is deemed to
receive his Company Contribution Account;
provided, further, that if that Participant is reemployed prior to his
completion of five (5) consecutive One Year Service Breaks, the forfeited amount
shall be reinstated as the beginning balance of that Participant's Company
Contribution Account. A Participant whose vested percentage of his Company
Contributions Account is
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zero (0) at the date of his termination of employment shall be deemed to have
received a distribution upon his termination of employment.
In the case of any Participant whose consecutive One Year Service
Breaks is at least five (5) years, that Participant's pre-break service shall
count in vesting of his post-break Company Contributions Account balance only if
either:
(a) that Participant has any nonforfeitable interest in his
Company Contributions Account balance at the time of his
separation from service with the Companies; or
(b) upon returning to service with a Company his consecutive One
Year Service Breaks are less than five (5) or, if greater,
less than his Period of Service completed prior to his first
One Year Service Break.
In the case of any Participant whose consecutive One Year Service
Breaks are at least five (5) years, all service after such One Year Service
Breaks shall be disregarded for the purpose of vesting the Company Contributions
Account balance that accrued before such One Year Service Breaks.
Separate sub-accounts shall be maintained for that Participant's
pre-break and post-break Company Contributions Account. Both sub-accounts shall
share in the earnings and losses of the Fund.
Any Participant whose employment with the Companies is terminated
because of his Total Disability shall be entitled to his entire Company
Contributions Account balance and shall also be entitled to receive any Company
contributions to which he is entitled pursuant to Section 4.2 for the Plan Year
in which his employment is so terminated.
Section 6.4. Payment. All benefits payable under Part B shall be paid
in accordance with the provisions of Section 6.10.
Part C. Death Benefits.
Section 6.5. Benefits upon Death. If the death of any Employee occurs
while he is still a Participant in this Plan and prior to his actual retirement
or other termination of employment with the Companies, the entire balance
credited to his Company Contributions Account as of the Valuation Date
coincidental with or immediately preceding the date of his death plus any
Company contributions to which he is entitled pursuant to Section 4.2 for the
Plan Year in which his death occurs shall be paid to the Beneficiary of that
deceased Participant in accordance with the provisions of Section 6.10.
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Section 6.6. Beneficiaries. Each Participant shall notify the Committee
in writing of one (1) or more primary and contingent Beneficiaries to receive on
his death any benefits payable under this Part C. Each such Beneficiary
designation may be revoked, amended or changed by a Participant by like notice
in writing delivered to the Committee prior to his death. The Beneficiary
designation of any Participant who is married at the date such a designation is
made or changed shall be signed by that Participant's spouse and witnessed by
the Committee or by a Notary Public if it results in a designation of a
Beneficiary other than that Participant's spouse. Notwithstanding anything
contained in this Section to the contrary, the Beneficiary of a married
Participant shall be his spouse unless his spouse consents to the designation of
a non-spouse Beneficiary in a writing witnessed by the Committee or by a Notary
Public.
Section 6.7. Lack of Beneficiaries. Any portion of the amounts payable
under Section 6.5 which is undisposed of because all or some of the designated
Beneficiaries have predeceased a Participant or because of a Participant's
failure to designate a Beneficiary in writing prior to his death shall be paid
to the deceased Participant's surviving spouse, if any, and, if none, to the
deceased Participant's estate.
Section 6.8. Termination or Retirement prior to Death. On and after the
actual retirement of a Participant from the employ of the Companies or other
termination of his employment, the rights of such Participant and his spouse or
other Beneficiary to any benefits under this Part C shall cease and the benefits
payable to such Participant or to any person claiming through or under him shall
be limited to the benefits provided in Parts A or B of this Article.
Part D. General.
Section 6.9. Date of Distribution. Unless the Participant or, if
deceased, his Beneficiary, surviving spouse or estate, as the case may be,
otherwise elects, the payment of benefits to which any such person is entitled
shall begin not later than sixty (60) calendar days after the latest of the
Anniversary Date of the Plan Year in which:
(a) the Participant attains age sixty-five (65),
(b) occurs the tenth (10th) anniversary of the date on which the
Participant initially became eligible to participate in this
Plan, or
(c) the Participant terminates his employment with the Companies;
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provided, however, that the distribution of benefits to a Participant shall
commence not later than April 1 of the calendar year following that
Participant's taxable year in which that Participant attains age seventy and
one-half (70 1/2).
Section 6.10. Form of Distribution. The distributions provided under
this Article VI shall be made by the Trustee, as directed by the Participant or,
if deceased, his Beneficiary, in a single lump sum distribution of the amount to
be paid to the Participant or, if deceased, to his Beneficiary; provided,
however, that except as otherwise provided in Section 6.9, payment shall be made
as soon as practicable after the Plan Year during which the employment of the
Participant from the Companies terminated; provided, further, that in no event
shall payments to a deceased Participant's estate or to any Beneficiary other
than the surviving spouse of a deceased Participant extend more than five (5)
years after the date of the Participant's death. Notwithstanding the above, a
Participant whose Company Contributions Account at the initial distribution date
or at any subsequent distribution date (when aggregated with other
distributions) is greater than three thousand and five hundred dollars ($3,500),
may elect to defer the commencement of the distribution of his Company
Contributions Account to the date on which he attains age sixty-five (65).
Distributions under this Section 6.10 shall be distributed in Stock with
fractional share interests distributed in cash. If shares of Stock are
distributed and the shares of Stock available for distribution consist of more
than one (1) class of security, a distributee shall receive substantially the
same proportion of each such class.
If the Trust purchases shares of Stock from a Company shareholder who
is eligible to elect and so elects nonrecognition of gain under Section 1042 of
the Code in connection with such purchase and notwithstanding anything contained
herein to the contrary, no distribution that would be made within three (3)
years after the date of such purchase shall be made to a Participant before he
incurs a One Year Service Break, unless his employment with the Companies
terminates as a result of his Normal Retirement, Total Disability or death or
unless the distribution is made pursuant to Section 8.19.
Section 6.11. Liability. Any payment to a Participant or to that
Participant's legal representative, Beneficiary, surviving spouse or estate, in
accordance with the provisions of this Plan, shall to the extent thereof be in
full satisfaction of all claims hereunder against the Trustee, the Committee and
the Companies, any of whom may require such Participant, legal representative,
Beneficiary, surviving spouse or estate, as a condition precedent to such
payment, to execute a receipt and release therefor in such form as shall be
determined by the Trustee, the Committee or the Companies. The Companies do not
guarantee the Trust, the Participants or, if deceased, their Beneficiaries,
surviving
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spouses or estates, as the case may be, against the loss of or depreciation in
value of any right or benefit that any of them may acquire under the terms of
this Plan.
Section 6.12. Put Options. The Holding Company shall issue a put option
to any Participant, Beneficiary, surviving spouse or estate of a deceased
Participant, or any other person (including distributees of an estate) to whom
shares of Stock distributed under this Plan may pass by reason of a
Participant's death (herein collectively referred to as the "Recipient"). This
put option shall permit the Recipient to sell such Stock to the Holding Company,
at any time during two (2) option periods, at the then fair market value. The
first put option period shall be a period of at least sixty (60) calendar days
beginning on the actual date of distribution of such Stock to the Recipient. The
second put option period shall be a period of at least sixty (60) calendar days
beginning after the determination of the fair market value of such Stock is made
by the Committee (and notice of same is given in writing to the Recipient) for
the next succeeding Plan Year. Such Recipient shall be deemed to have a put
option as herein provided with respect to the shares of Stock and may exercise
this put option by delivering to the Holding Company a written notice of his
election to sell such shares of Stock, or any portion thereof, together with the
certificates representing the shares of Stock to be sold duly endorsed for
transfer. The Holding Company shall be obligated to purchase the shares of
Stock, or the designated portion thereof, at their fair market value at the date
the put option is exercised; provided, however, that the Holding Company may
grant the Trustee an option to assume on behalf of this Plan and Trust the
Holding Company's rights and obligations with respect to the put option at the
date the put option is actually exercised by the Recipient. Except as
hereinafter provided, the Holding Company (or the Trustee, if it assumes the
Holding Company's obligation) shall pay for the shares of Stock so sold to it by
check within thirty (30) calendar days following the date of sale.
Notwithstanding anything contained herein to the contrary, the Holding Company
(or, if applicable, the Trustee) may pay the purchase price in substantially
equal periodic payments (not less frequently than annually) over a period
beginning not later than thirty (30) calendar days after the exercise of the put
option and not exceeding five (5) years as long as reasonable interest is paid
on the unpaid amounts and adequate security is provided to the Recipient. If the
Stock is readily tradeable on an established market on the date of distribution,
the put option granted by this Section 6.13 shall not exist; provided, however,
that if the Stock ceases to be publicly traded within either of the sixty (60)
day calendar periods as provided herein, the Holding Company shall notify the
Recipient in writing within a reasonable time after the Stock ceases to be so
publicly traded that the Stock shall be subject to the put option for the
remainder of the applicable sixty (60) day calendar period. If the date of
actual written notice to the Recipient by the Holding Company is later than ten
(10)
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calendar days after the Stock ceases to be so publicly traded, the put option
shall automatically be extended to the extent that the date on which written
notice is actually given to the Recipient is more than ten (10) calendar days
later.
Section 6.13. 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 Committee, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover. For purposes of this Section, the following
terms shall have the meanings set forth below:
(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: (1)
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 (10) years or more; (2) any distribution to the extent
such distribution is required under Section 401(a)(9) of the Code; and (3) the
portion of any distribution that is not includible in gross income.
(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 an 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.
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ARTICLE VII
ADMINISTRATIVE COMMITTEE
Section 7.1. Establishment. The Committee shall consist of at least
three (3) members to be appointed by the Board of Directors of the Holding
Company, and the members shall hold office at the pleasure of such Board of
Directors. The members of the Committee shall be individuals and may, but need
not, be officers, shareholders or Directors of the Holding Company, Participants
or Beneficiaries. The Holding Company may, at its sole discretion, designate to
serve as the Committee its Board of Directors as duly-constituted from time to
time.
Section 7.2. Duties. The Committee shall discharge its duties and
powers in conformance with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims. It shall have complete control of the
administration of this Plan and shall have all powers necessary or convenient to
enable it to exercise such control. In connection therewith, it may provide
rules and regulations, not inconsistent with the provisions hereof or with
requirements imposed under the Code or under the Act, for the administration of
this Plan and may from time to time amend or rescind such rules and regulations.
In addition, it may employ or appoint a secretary and such advisors, agents or
representatives as it may deem desirable and may consult with and employ counsel
(who may, but need not, be counsel to a Company or to the Trustee) or actuaries
with regard to any questions arising in connection with this Plan. All
reasonable expenses incurred by the Committee in connection with this Plan shall
be paid as provided in Section 3.4.
Section 7.3. Actions. The Committee may decide any questions hereunder
and may take or authorize or direct the taking of any action hereunder with the
approval of a majority of the members of the Committee. The approval of such
members, expressed from time to time by a vote at a meeting or in writing
without a meeting, shall constitute the action of the Committee and shall be
valid and effective for all purposes of this Plan. The fact that any member of
the Committee shall be a Participant, former Participant or Beneficiary shall
not disqualify or debar him from participating in any action or decision
affecting any class of Participants, former Participants or Beneficiaries, but
he shall not participate in any action or decision affecting his own separate
interest as a Participant, former Participant or Beneficiary.
Section 7.4. Disqualification. The fact that any member of the
Committee is a Director, shareholder or officer of a Company or a Participant or
Beneficiary shall not disqualify him from doing any act or thing which this Plan
authorizes or requires him to do as a member of the Committee (except as
otherwise provided in
-27-
Section 7.3) or render him accountable for any allowance or distribution or
other pecuniary or material profit or advantage received by him.
Section 7.5. Powers. The Committee shall have the power to construe
this Plan and to determine all questions of fact or law arising under it. It may
correct any defect, supply any omission or reconcile any inconsistency in this
Plan in such manner and to such extent as it may deem expedient and, except as
otherwise provided by the Act, it shall be the sole and final judge of such
expediency. Except as otherwise provided in Section 7.9, all acts and
determinations of the Committee made in good faith within the scope of its
authority shall be final and conclusive on all the parties hereto and on all
Employees, Participants and their Beneficiaries, surviving spouses or estates
hereunder and shall not be subject to appeal or review.
Section 7.6. Discrimination Prohibited. The Committee shall not take
any action or direct the Trustee to take any action with respect to any of the
benefits provided hereunder or otherwise in pursuance of the powers conferred
herein upon the Committee which would be discriminatory in favor of Employees
who are officers, Directors, shareholders, persons whose principal duties
consist of supervising the work of other Employees or Highly Compensated
Employees or which would result in benefiting one (1) Participant or group of
Participants at the expense of another or in discrimination as between
Participants similarly situated or in the application of different rules to
substantially-similar sets of facts.
Section 7.7. Statements and Forms. The Committee shall be authorized to
require of a Company and of any person claiming any rights hereunder a written
statement of any information or the execution of any forms or instruments it may
deem necessary or desirable for the administration of this Plan.
Section 7.8. Liability. Except as otherwise provided by the Act, no
member of the Committee shall be directly or indirectly responsible or under any
liability by reason of any action or default by him as a member of the Committee
or the exercise of or failure to exercise any power or discretion as such member
except for his own fraud or bad faith shown in the exercise of or failure to
exercise such power or discretion, and no member of the Committee shall be
liable in any way for the acts or defaults of any other member. The Committee
may consult with counsel (who may, but need not, be counsel to a Company or to
the Trustee) or accountants selected by it and, except as otherwise provided by
the Act, the opinion of such counsel or the recommendations of such accountants
shall be full and complete authority and protection for any action or conduct
pursued by the Committee in good faith and in accordance with such opinion or
recommendations.
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Section 7.9. Determination of Right to Benefits. The Committee shall
make all determinations as to the right of any person to a benefit under the
provisions of this Plan. Any denial by the Committee of a claim for benefits
under this Plan by an Employee or, if deceased, by such Employee's spouse or
other Beneficiary, shall be stated in writing by the Committee and delivered or
mailed to the Employee, spouse or other Beneficiary, as the case may be, within
ninety (90) calendar days after receipt of such benefit claim by the Committee.
Such notice shall set forth the specific reasons for the denial and such
additional information as is required under Section 503 of the Act, written to
the best of the Committee's ability in a manner that may be understood without
legal or actuarial counsel. In addition, the Committee shall afford a reasonable
opportunity to any Employee, spouse or other Beneficiary, as the case may be,
whose claim for benefits has been denied, for a review of the decision denying
the claim in accordance with Section 503 of the Act.
Section 7.10. Investment Directions. The Committee may direct the
investment of the Fund, by written directions to the Trustee, but such direction
shall not be inconsistent with the provisions of this Plan, of the Act or of the
Code.
Section 7.11. Voting Power. Except as otherwise provided in Section
8.17, the Committee shall be authorized to vote, either in person or by proxy,
the Stock or other securities which are held by the Trustee as part of the Fund.
ARTICLE VIII
THE TRUSTEE
Section 8.1. Assets Held in Trust. The Trustee shall hold the Fund and
shall accept and hold all contributions thereto and all investments and
reinvestments thereof in trust for the persons ultimately entitled thereto under
the terms of this Plan.
Section 8.2. Investments. This Plan is designed to invest primarily in
shares of Stock. Except as otherwise provided in this Plan, the Trustee shall
invest the cash contributed or accruing to the Fund in Stock and shall not make
any other investment for the Fund. There shall be no limit on the permissible
investment in shares of Stock. The Trustee may purchase such shares of Stock
from the Holding Company or from any other source, and such shares of Stock may
be outstanding, newly-issued or treasury shares. All such purchases shall be
made at fair market value (as determined consistent with Section 5.1(a)). If no
shares of Stock are available for purchase, the Trustee may retain cash
uninvested or may invest all or any part thereof in any other investment if such
retention or investment is prudent under all the facts and circumstances then
prevailing. The Trustee shall have the power at any time to enter into
legally-binding agreements to purchase
-29-
shares of Stock from any person or entity, whether or not such person or entity
shall own such shares of Stock at the date such purchase agreement is entered
into, including but not limited to Participants in and Beneficiaries of this
Plan, except as otherwise provided in the Act and in Treasury Regulations ss.
54.4975-11(a)(7). Except as otherwise required by Section 6.12, the purchase
price set forth in any such purchase agreement shall be determined by the fair
market value of such shares of Stock at the date of purchase (as determined
consistent with Section 5.1(a)).
Section 8.3. Directions of Committee. The powers granted to the Trustee
under this Plan shall be exercised by the Trustee in its sole discretion. Except
as provided in Section 8.20, the Committee may at any time and from time to time
by written direction to the Trustee require the Trustee to invest in, to retain
or to dispose of any security or other form of investment as may be specified in
such direction, limited, however, to investments permitted under this Plan,
under the Act and under the Code. Neither the Trustee nor any other person shall
be under any duty to question any such written direction of the Committee, and
the Trustee shall as promptly as possible comply with any such written
direction. Any such direction may be of a continuing nature or otherwise and may
be revoked in writing by the Committee at any time. The Trustee shall not be
liable in any manner or for any reason for the making, retention or disposition
of any investment pursuant to the lawful written direction of the Committee.
Section 8.4. Receipt of Additional Shares. Any securities received by
the Trustee as a stock split or a stock dividend or as a result of a
reorganization or other recapitalization shall be allocated as of each Valuation
Date in the same manner as the Stock to which it is attributable is then
allocated. If any rights, warrants or options are issued on common shares or
other securities held in the Fund, the Trustee shall exercise them for the
acquisition of additional common shares or other securities to the extent that
cash is then available. Any common shares or other securities acquired in this
fashion shall be treated as common shares or other securities bought by the
Trustee for the net price paid. Any rights, warrants or options on common shares
or other securities which cannot be exercised for lack of cash may be sold by
the Trustee with the proceeds thereof treated as a current cash dividend
received on such common shares or other securities.
Section 8.5. Delivery of Materials to Committee. Except as otherwise
provided in Section 8.17 and Section 8.20, the Trustee shall deliver or cause to
be delivered to the Committee copies of all notices, prospectuses and financial
statements relating to investments held in the Fund.
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Section 8.6. Powers. The Trustee shall have power with
regard to all property in the Fund at any time and from time to
time:
(a) to sell, convey, transfer, mortgage, pledge, lease, exchange
or otherwise dispose of the same, without the necessity of
approval of any court therefor or notice to any person,
natural or legal, thereof and without obligation on the part
of any person dealing with the Trustee to see to the
application of any money or property delivered to it;
(b) except as otherwise provided in Section 7.11, Section 8.17 and
Section 8.20, to exercise any and all rights or options
pertaining to any share of Stock held as part of the assets of
the Fund and to enter into agreements and consent to or oppose
the reorganization, consolidation, merger, readjustment of
financial structure or sale of assets of any corporation or
organization, the securities of which are held in the Fund;
(c) except as otherwise provided in Section 4.5, to collect the
principal and income of such property as the same shall become
due and payable and to give binding receipt therefor;
(d) to take such action, whether by legal proceedings, compromise,
abandonment or otherwise, as the Trustee, in its sole
discretion, shall deem to be in the best interest of the Fund,
but the Trustee shall be under no obligation to take any legal
action unless it shall have been first indemnified by the
Companies with respect to any expenses or losses to which it
may be subjected through taking such action;
(e) to register any securities and to hold any other property in
the Fund in its own name or in the name of a nominee with or
without the addition of words indicating that such securities
or other property are held in a fiduciary capacity;
(f) pending the selection or the purchase of suitable investments
or the payment of expenses or the making of any other payment
required or permitted under this Plan, to retain in or to
convert to cash, without liability for interest or any other
return thereon, such portion of the Fund as it shall deem
reasonable under the circumstances, including, but not by way
of limitation, the power to retain sufficient cash to permit
the acquisition of large blocks of shares of Stock as the same
may from time to time become available for purchase;
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(g) to borrow from banks or similar lending institutions
reasonable sums of money for the purchase of shares of Stock
for the Company Contributions Accounts of Participants in
accordance with the provisions of Section 8.7; provided,
however, that the Trustee may not borrow from itself or from
an affiliated institution even if the Trustee is a bank or
similar lending institution except to the extent specifically
permitted by the Act and by the Code; and
(h) to do all other acts in its judgment necessary or desirable
for the proper administration of the Trust and permissible
under the Act and under the Code although the power to do such
acts is not specifically set forth herein.
Section 8.7. Loans to the Trust. The following conditions shall be met
with respect to any Exempt Loan to the Trust:
Clause (a). Interest. The rate of interest on any Exempt Loan
shall not be in excess of a reasonable rate of interest. At the date an Exempt
Loan is made, the interest rate for the Exempt Loan and the price of any shares
of Stock to be purchased with the Exempt Loan proceeds shall not be such that
the Plan assets might be drained off.
Clause (b). Use of Proceeds. The proceeds of an Exempt Loan
shall be used within a reasonable time after receipt by the Trustee for any or
all of the following purposes:
(i) to acquire Stock;
(ii) to repay that Exempt Loan; or
(iii) to repay a prior Exempt Loan.
Except as otherwise provided in Section 6.12 and Section 6.13, no Stock acquired
with Exempt Loan proceeds shall be subject to a put, call or other option or a
buy-sell or similar arrangement while held by the Trustee and when distributed
from this Plan.
Clause (c). Terms of Exempt Loan. The terms of each Exempt
Loan shall be, at the time that Exempt Loan is made, as favorable to this Plan
as the terms of a comparable loan resulting from arm's-length negotiations
between independent parties. Each Exempt Loan shall be for a specific term and
shall not be payable at the demand of any person, except in the case of default.
Clause (d). Collateral. Any collateral pledged to the lender
by the Trustee shall consist only of Stock purchased with the borrowed funds or
Stock that was used as collateral for a prior Exempt Loan repaid with the
proceeds of the current Exempt Loan;
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provided, however, that in addition to such collateral, the Companies may
guarantee the repayment of an Exempt Loan.
Clause (e). Limited Recourse. Under the terms of each Exempt
Loan, the lender shall not have any recourse against the Fund or the Trust
except with respect to the collateral.
Clause (f). Repayment. No person entitled to payment under
any Exempt Loan shall have any right to assets of the Fund or the Trust other
than:
(i) collateral given for that Exempt Loan;
(ii) contributions (other than contributions of Stock)
that are made by the Companies under this Plan to
meet this Plan's obligations under that Exempt Loan;
(iii) earnings attributable to such collateral and the
investment of such contributions; and
(iv) to the extent directed by the Holding Company under
Section 4.5, cash dividends on allocated shares of
Stock.
Payments made with respect to an Exempt Loan by the Trustee during any Plan Year
shall not exceed an amount equal to the sum of such contributions and earnings
received during or prior to that Plan Year less such payments in prior Plan
Years. Such contributions and earnings shall be accounted for separately in the
books of account of this Plan and Trust until that Exempt Loan is repaid.
Clause (g). Agreement by Companies. The Companies shall agree
in writing with the Trustee to contribute to the Fund amounts sufficient to
enable the Trustee to pay each installment of principal and interest on each
Exempt Loan on or before the date such installment is due, even if no tax
benefit to the Companies results from such contribution.
Clause (h). Release of Collateral. All assets of the Fund
acquired by this Plan and Trust with Exempt Loan proceeds and all collateral
pledged to secure an Exempt Loan shall be held in a suspense account and
considered encumbered by the Exempt Loan. For each Plan Year during the duration
of an Exempt Loan, the number of assets to be released from encumbrance and
withdrawn from the suspense account shall be based upon the ratio that the
payment of principal and interest on that Exempt Loan for that Plan Year bears
to the total projected payments of principal and interest over the duration of
the Exempt Loan period. Assets released from encumbrance and withdrawn from the
suspense account shall be allocated to the various Company Contributions
Accounts in the Plan Year during which such portion is paid off and in the same
manner
-33-
as if the assets had been obtained by the Trustee when no Exempt Loan was
involved. Income with respect to shares of Stock acquired with Exempt Loan
proceeds and held in the suspense account shall be allocated to Company
Contributions Accounts along with other income earned by the Fund, except to the
extent that such income is to be used to repay an Exempt Loan.
Clause (i). Default. In the event of any default upon an
Exempt Loan, the value of Trust assets transferred in satisfaction of that
Exempt Loan shall not exceed the amount of the default. If the lender is a
disqualified person within the meaning of Section 4975(e)(2) of the Code, the
Exempt Loan shall provide for a transfer of Trust assets upon default only upon
and to the extent of the failure of the Trustee to meet the payment schedule of
that Exempt Loan; provided, however, that the making of a guarantee shall not
make a person a lender within the meaning of this Clause (i).
Clause (j). Termination of Plan. Upon a complete termination
of the Plan but only to the extent permitted by the Code and the Act, any
unallocated Stock shall be sold to the Corporation at a price no less than fair
market value or on the open market. To the extent permitted by Code and the Act,
the proceeds of such sale shall be used to satisfy any outstanding Exempt Loan
and the balance of any funds remaining shall be allocated as income to each
Participant's Company Contributions Account based on the proportion that the
Participant's Company Contributions Account balance as of the immediately
preceding Valuation Date bears to the aggregate Company Contributions Account
balances of all Participants as of the immediately preceding Valuation Date.
Section 8.8. Annual Accounting. At least annually the Trustee shall
render to the Committee a written account of its administration of the Fund
during the period since the establishment of this Plan or the last accounting
thereafter. Pursuant to this requirement, Stock acquired by the Trustee shall be
accounted for as provided in Treasury Regulations ss. 1.402(a)-1(b)(2)(ii).
Unless written notice of disapproval is furnished to the Trustee by the
Committee within ninety (90) calendar days after receipt of such account, such
account shall be deemed to have been approved.
Section 8.9. Audit. In the case of any disapproval as provided in
Section 8.8 and unless a satisfactory corrected written account is furnished to
the Committee, an audit of the Trustee's account shall be made by a certified
public accountant selected jointly by the Holding Company and the Trustee, but
at the expense of the Companies. Upon completion of any such audit, the
inaccuracies in the Trustee's account, if any, shall be corrected to conform to
such audit and a corrected written account shall be delivered to the Committee
by the Trustee. Except as otherwise
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provided by the Act, an approved account or an account corrected pursuant to
such an audit shall be final and binding upon the Companies and upon all other
persons who shall then or thereafter have any interest under this Plan.
Section 8.10. Uncertainty Concerning Payment of Benefits. In the event
of any dispute or uncertainty as to the person to whom payment of any funds or
other property shall be made under this Plan, the Trustee may, in its sole
discretion, withhold such payment or delivery until such dispute or uncertainty
shall have been determined or resolved by a court of competent jurisdiction or
otherwise settled by the parties concerned.
Section 8.11. Compensation. The Trustee shall be entitled to receive
fair and reasonable compensation for its services hereunder, taking into account
the amount and nature of its services and the responsibilities involved, and
shall also be entitled to be reimbursed for all reasonable out-of-pocket
expenses, including, but not by way of limitation, legal, actuarial and
accounting expenses and all costs and expenses incurred in prosecuting or
defending any action concerning this Plan or the Trust or the rights or
responsibilities of any person hereunder, brought by or against the Trustee.
Such reasonable compensation and expenses shall be paid by the Companies as
provided in Section 3.4.
Section 8.12. Standard of Care. The Trustee shall use its best judgment
in exercising any duties or powers or in taking any action hereunder and shall
be bound at all times to act in good faith and in accordance with all
requirements imposed under the Act and under the Code. Except as otherwise
provided by the Act, the Trustee shall not incur any liability by reason of any
error of judgment, mistake of law or fact or any act or omission hereunder of
itself or of any agent, proxy or attorney so long as it has acted in good faith.
The Trustee may act on any paper or document believed by it to be genuine and to
have been signed and presented by the proper person. The Trustee may consult
with counsel (who may, but need not, be counsel to a Company), accountants or
actuaries selected by it and, except as otherwise provided by the Act, the
written opinion of such counsel or the written recommendations of such
accountants or actuaries shall be full and complete authority and protection for
any action or conduct pursued by the Trustee in good faith and in accordance
with such written opinion or recommendations. Except as otherwise provided by
the Act, the Trustee shall not be liable for any action taken by it pursuant to
the written direction of the Committee.
Section 8.13. Request for Instructions. In addition to written
instructions relating to valuation and except as otherwise provided in Section
8.20, at any time the Trustee may, by written request, seek written instructions
from the Committee on any matter and may await such written instructions from
the Committee without
-35-
incurring any liability whatsoever. If at any time the Committee should fail to
give written directions to the Trustee, the Trustee may act, and shall be
protected in acting, without such written directions, in such manner as in its
sole discretion seems appropriate and advisable under the circumstances for
carrying out the purposes of the Trust.
Section 8.14. Resignation of Trustee. The Trustee may resign at any
time by giving sixty (60) calendar days' prior written notice to the Holding
Company, and the Trustee may be removed, with or without cause, by the Holding
Company on sixty (60) calendar days' prior written notice to the Trustee. Such
prior written notice may be waived by the party entitled to receive it. Upon any
such resignation or removal becoming effective, the Trustee shall render to the
Committee a written account of its administration of the Fund for the period
since the last written accounting and shall do all necessary acts to transfer
the assets of the Fund to the successor Trustee or Trustees.
Section 8.15. Vacancies in Trusteeship. In the event of any vacancy in
the trusteeship of the Trust hereby created, the Holding Company may designate
and appoint a qualified successor Trustee or Trustees. Any such successor
Trustee or Trustees shall have all the powers herein conferred upon the original
Trustee.
Section 8.16. Information to Be Furnished. The Companies shall furnish
to the Trustee, and the Trustee shall furnish to the Companies, such information
relevant to this Plan and Trust as may be required under the Code and under the
Act. The Trustee shall keep such records, make such identification and file with
the Internal Revenue Service and with the U.S. Department of Labor such returns
and other information concerning this Plan and Trust as may be required of it
under the Code and under the Act. The Companies shall fulfill any reporting and
disclosure obligations imposed on it by the Act, and each Participant shall be
given any reports required by the Act. To the extent that the Trustee assumes
any such Company obligations, it may charge a reasonable fee for its services
apart from its normal fee and its expenses as provided in Section 8.11.
Section 8.17. Voting Rights of Participants. Each Participant (or, if
applicable, his Beneficiary) shall have the right to direct the Trustee as to
the manner in which voting rights of shares of Stock which are allocated to his
Company Contributions Account are to be exercised with respect to any corporate
matter which involves the voting of such shares with respect to the approval or
disapproval of any corporate merger or consolidation, recapitalization,
reclassification, liquidation, dissolution, sale of substantially all assets of
a trade or business, or such similar transactions which may be prescribed by the
Secretary of Treasury in regulations. Each Participant (or, if applicable, his
Beneficiary) shall also have the right to direct the Trustee as to
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the manner in which voting rights of shares of Stock which are allocated to his
Company Contributions Account are to be exercised at any time the Holding
Company has a class of securities that are required to be registered under
Section 12 of the Securities Exchange Act of 1934 or that would be required to
be so registered except for the exemption from registration provided by Section
12(g)(2)(H) of the Securities Exchange Act of 1934. In all other cases, the
Committee shall be authorized to vote the Stock held by the Trustee as part of
the Fund as provided in Section 7.11. Not less than thirty (30) calendar days
prior to each annual or special meeting of shareholders of the Holding Company
at which one (1) or more Participants are entitled to vote shares of Stock
allocated to their Company Contributions Accounts under this Section 8.17, the
Trustee shall cause to be prepared and delivered to each such Participant who
has a Company Contributions Account as of the record date established by the
Holding Company a copy of the notice of the meeting and form of proxy directing
the Trustee as to how it shall vote at such meeting or at any adjournment
thereof with respect to each issue. Upon receipt of such proxies, the Trustee
shall vote or may grant the Committee a proxy to vote the shares of Stock in
accordance with the proxies received by the Participants. The shares of Stock
for which no direction is received by the Participant (or, if applicable, his
Beneficiary) or held by the Trustee in any unallocated account shall be voted in
proportion to the voting directions received by the Trustee with respect to the
allocated shares of Stock. The Trustee shall take steps to keep a Participant's
voting directions confidential and shall not provide them to the Companies.
Section 8.18. Delegation of Authority. The Trustee may delegate any of
its ministerial powers or duties under this Plan, including the signing of any
checks drawn on the Fund, to any of its agents or employees.
Section 8.19. Diversification of Company Contributions Account.
Notwithstanding anything contained in Article VI to the contrary, a Participant
who has attained age fifty-five (55) and who has completed at least ten (10)
years of participation in this Plan shall be permitted to elect that during a
six (6) year period beginning with the Plan Year during which he had obtained
age fifty-five (55) or, if later, during which he completed his tenth (10th)
year of participation in this Plan a portion of his vested Company Contribution
Account be distributed. In the first (1st) Plan Year for which the Participant
has an election under this Section 8.19, the Participant may elect a
distribution of up to twenty-five percent (25%) of his vested Company
Contribution Account as of the end of such Plan Year. In the second (2nd), third
(3rd), fourth (4th) and fifth (5th) Plan Year for which the Participant has an
election under this Section 8.19, the Participant may elect a distribution
which, when aggregated to any earlier distributions made by reason of this
Section 8.19, does not exceed twenty-five percent (25%) of the vested balance
held in his
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Company Contribution Account as of the end of the Plan Year for which the
election is made. In the final Plan Year for which a Participant has an election
under this Section 8.19, the Participant may elect a distribution of an amount
which, when aggregated with any other distribution made by reason of this
Section 8.19, does not exceed fifty percent (50%) of his vested Company
Contribution Account balance as of the end of such Plan Year. The Trustee shall
provide Participants eligible for an election under this Section 8.19 with
information relating to the election before the end of the first (1st) Plan Year
for which the election relates. A Participant electing a distribution under this
Section 8.19 shall have until the ninetieth (90th) calendar day immediately
following the end of the Plan Year for which the election is made to make his
election. Any distribution made by reason of this Section 8.19 shall be in cash
and shall be made within one hundred and eighty (180) calendar days after the
end of the Plan Year for which the election is made. In lieu of the cash
distributions provided for in this Section, the Company may instead offer to
eligible Participants three (3) investment options under this Plan that meet the
requirements set forth in Code Section 401(a)(28) and regulations promulgated
thereunder to which the amounts subject to the diversification election could be
transferred.
Section 8.20. Tender Offer. Each Participant (or, if applicable, his
Beneficiary) shall have the right to direct the Trustee as to whether the shares
of Stock which are allocated to his Company Contributions Account are to be
tendered pursuant to any tender offer made for the Stock of the Holding Company.
The Trustee shall as soon as practical (and in no event later than five (5)
calendar days) after its receipt of the tender offer documents shall cause to be
prepared and delivered to each Participant (and, if applicable, his Beneficiary)
who has a Company Contributions Account as of the date of the tender offer a
copy of all relevant information as to the tender offer and a written election
form which will direct the Trustee as to whether it should tender the shares of
Stock held in such Participant's Company Contributions Account. The shares of
Stock for which no direction is received by the Participant (or, if applicable,
his Beneficiary) or held by the Trustee in any unallocated account shall be
tendered in proportion to the tendering directions received by the Trustee with
respect to the allocated shares of Stock. The Trustee shall take steps to keep a
Participant's decision whether or not to tender shares of Stock confidential and
shall not provide the information to the Companies.
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ARTICLE IX
AMENDMENT, TERMINATION AND MERGER
Section 9.1. Amendment. Except for such amendments as are permitted under
this Section 9.1 and as otherwise provided in Section 1.17 and Section 9.3, the
Trust is irrevocable. The Holding Company reserves the right to amend this Plan,
at any time and from time to time, in whole or in part, including without
limitation, retroactive amendments necessary or advisable to qualify this Plan
and the Trust under the provisions of Sections 401(a) and 501(a) of the Code or
the corresponding provisions of any similar statute hereafter enacted. However,
the Holding Company's right to amend this Plan shall remain at all times subject
to the provisions of Section 9.4. Further, no amendment of this Plan shall:
(a) alter, change or modify the duties, powers, or liabilities of
the Trustee hereunder without their written consent;
(b) permit any part of the Fund to be used to pay premiums or
contributions of the Companies under any other employee
benefit plan maintained by the Companies for the benefit of
its Employees;
(c) effect any discrimination among the Participants;
(d) change the vesting schedule in Section 6.3 or, if applicable,
in Section 11.4 unless each Participant whose Period of
Service is three (3) or more years as of the effective date of
the amendment is permitted to elect, within sixty (60)
calendar days after he is notified by the Committee of his
rights under this Subsection (d), to have his vested interest
determined without regard to such amendment;
(e) decrease the accrued benefit of any Participant unless the
amendment is approved by the Department of Labor because of
substantial business hardship; or
(f) decrease a Participant's Company Contributions Account balance
or eliminate an optional form of distribution for the accrued
benefits of a Participant determined as of the date of the
amendment.
Section 9.2. Termination or Complete Discontinuance of Contributions.
The Companies are not and shall not be under any obligation or liability
whatsoever to continue their contributions pursuant to this Plan or to maintain
this Plan for any given length of time, except as otherwise provided in Section
8.7. A Company may, in its sole discretion, discontinue Company contributions to
this Plan completely, except as otherwise provided in Section 8.7, with or
without notice, or partially or totally terminate this Plan in accordance with
its provisions at any time without any liability whatsoever for such
discontinuance or termination. If this Plan shall be partially or totally
terminated or if contributions of a Company shall be completely discontinued,
the rights of all
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Participants directly affected by the partial or total termination or the
complete discontinuance of contributions in their Company Contributions Accounts
shall thereupon become fully vested and non-forfeitable notwithstanding any
other provisions of this Plan. However, the Trust shall continue until all
Participants' Company Contributions Accounts have been completely distributed
to, or for the benefit of, the Participants in accordance with this Plan.
Section 9.3. Determination by Internal Revenue Service. Notwithstanding
any other provisions of this Plan, if the Internal Revenue Service shall fail or
refuse to issue a favorable written determination or ruling with respect to the
initial qualification of this Plan and the initial exemption of the Trust from
tax under Sections 401(a) and 501(a) of the Code, the Trustee shall, within a
reasonable time after receiving a written direction from the Committee to do so,
return to the Companies the current value of all Company contributions
theretofore made. As a condition to such repayment, the Companies shall execute,
acknowledge and deliver to the Trustee its written undertaking, in form
satisfactory to the Trustee, to indemnify, defend and hold the Trustee harmless
from all claims, actions, demands, or liabilities arising in connection with
such repayment. If for any reason the Key District Director of the Internal
Revenue Service should at any time after initial qualification fail to approve
any of the terms, conditions or amendments contained in or implied from this
Plan and Trust for continuing qualification and tax exemption under Sections
401(a) and 501(a) of the Code, then the Holding Company shall make such
modifications, alterations and amendments of this Plan as are necessary to
retain such approval and such modifications, alterations and amendments shall be
effective retroactively to the Effective Date or to such later date as is
required to retain such approval.
Section 9.4. Nonreversion. Except as otherwise provided in Section
3.1 and Section 9.3:
(a) The Holding Company shall have no power to amend or to
terminate this Plan in such a manner which would cause or
permit any part of the Fund to be diverted to purposes other
than for the exclusive benefit of Participants or, if
deceased, of their spouse or other Beneficiaries or as would
cause or permit any portion of the Fund to revert to or to
become the property of the Companies, and
(b) The Holding Company shall have no right to modify or to amend
this Plan retroactively in such a manner as to deprive any
Participants, or if deceased, their spouses or other
Beneficiaries of any benefits to which they are entitled under
this Plan by reason of contributions made by the Companies
prior to the modification or amendment, unless such
modification or amendment is necessary to
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meet the qualification requirements of Sections 401(a) and
501(a) of the Code.
Section 9.5. Merger. The Holding Company shall have the right, by
action of its Board of Directors, to merge or to consolidate this Plan with, or
to transfer the assets or liabilities of the Fund to, any other qualified
retirement plan and trust at any time, except that no such merger, consolidation
or transfer shall be authorized unless each Participant in this Plan would
receive a benefit immediately after the merger, consolidation or transfer (if
the merged, consolidated or transferred plan and trust then terminated) equal to
or greater than the benefit to which he would have been entitled immediately
before the merger, consolidation or transfer (if this Plan then terminated).
ARTICLE X
MISCELLANEOUS
Section 10.1. Creation of Plan Voluntary. The Plan hereby created is
purely voluntary on the part of the Companies and, except as otherwise provided
in Section 8.7, any Company may suspend or discontinue payments hereunder at any
time or from time to time as it may decide in accordance with Section 10.17, but
no suspension or discontinuance shall operate retroactively with respect to the
rights of any Participant hereunder or his spouse or other Beneficiary.
Section 10.2. No Employment Contract. Except as may be required by the
Act, no contributions or other payments under this Plan shall constitute any
contract on the part of the Company to continue such contributions or other
payments hereunder. Participation hereunder shall not give any Participant the
right to be retained in the service of the Companies or any right or claim to
any benefits hereunder unless the right to such benefits has accrued under this
Plan. All Participants shall remain subject to assignment, reassignment,
promotion, transfer, layoff, reduction, suspension and discharge by the
Companies to the same extent as if this Plan had never been established.
Section 10.3. Limitation on Rights Created. Nothing contained in this
Plan or any modification of the same or act done in pursuance hereof shall be
construed as giving any person whomsoever any legal or equitable right against
the Companies, the Committee, the Trustee or the Fund, unless specifically
provided herein or granted by the Act.
Section 10.4. Waiver of Claims. Except as otherwise provided by the
Act, no liability whatsoever shall attach to or be incurred by any shareholder,
officer or Director, as such, of the Companies under or by reason of any
provision of this Plan or any act with reference to this Plan, and any and all
rights and claims thereof,
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as such, whether arising at common law or in equity or created by statute,
constitution or otherwise, are hereby expressly waived and released to the
fullest extent permitted by law by every Participant and by his spouse or other
Beneficiary as a condition of and as part of the consideration for the payments
by the Companies under this Plan and for the receipt of benefits hereunder.
Section 10.5. Spendthrift Provision. To the fullest extent permitted by
law, none of the benefits, payments, accounts, funds or proceeds of any contract
held hereunder shall be subject, voluntarily or involuntarily, to any claim of
any creditor of any Participant or of his spouse or other Beneficiary, nor shall
the same be subject to attachment, garnishment or other legal or equitable
process by any creditor of a Participant or of his spouse or other Beneficiary,
nor shall any Participant or his spouse or other Beneficiary have any right to
alienate, anticipate, commute, pledge, encumber or assign any such benefits,
payments, accounts, funds or proceeds of any such contract. The preceding
sentence shall also apply to the creation, assignment or recognition of a 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. It is the intention of
the Companies that benefit payments hereunder shall be made only at the times,
in the amounts and to the distributees as specified in this Plan regardless of
any marital dissolution, bankruptcy or other legal proceedings to which such
distributees may be a party to the fullest extent permitted by law.
Section 10.6. Payment of Benefits to Others. If any person to whom
benefit payments are due or payable under this Plan shall be unable to care for
his affairs because of illness or accident, any such payment may be made (unless
prior claim thereto shall have been made by a duly-qualified guardian or other
legal representative) to the spouse, parent, brother, sister or other person
deemed by the Committee, in its sole discretion, to have incurred expense for
such person and on such terms as the Committee, in its sole discretion, may
impose. Any such payment and any payment to a Participant or to his legal
representative or, if deceased, to his spouse or other Beneficiary made pursuant
to the provisions of this Plan shall to the extent thereof be in full
satisfaction of all claims arising hereunder against this Plan, the Fund, the
Committee, the Trustee and the Companies.
Section 10.7. Payments to Missing Persons. If the Trustee is unable to
effect delivery of any amounts payable under this Plan to the person entitled
thereto or, upon such person's death, to such person's personal representative,
they shall so advise the Committee in writing, and the Committee shall give
written notice by certified mail to said person at the last known address of
such person as shown in the Companies' records. If such person or the
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personal representative thereof shall not have responded to the Committee within
three (3) years from the date of mailing such certified notice, the Committee
shall direct the Trustee to distribute such amount, including any amount
thereafter becoming due to such person or the personal representative thereof,
in the manner provided in Section 6.7 with respect to the death of a Participant
when there is no valid designation of Beneficiary on file.
Section 10.8. Severability. If any provisions of this Plan shall be
held illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining part of this Plan and it shall be construed and enforced as
if such illegal or invalid provisions had never been inserted herein.
Section 10.9. Captions. Titles of Articles, Sections and Clauses
herein are for general information only and shall be ignored in any construction
of the provisions hereof.
Section 10.10. Construction. Words in the masculine gender shall be
construed to include the feminine gender in all cases where appropriate, and
words in the singular or plural shall be construed as being in the plural or
singular where appropriate.
Section 10.11. Counterparts. This Plan may be executed in any number
of counterparts, each of which shall be deemed to be an original. All the
counterparts shall constitute but one (1) and the same instrument and may be
sufficiently evidenced by any one (1) counterpart.
Section 10.12. Indemnification. The Companies shall indemnify and hold
harmless each member of the Committee and any individual Trustee who is also an
Employee of the Company from any and all claims, loss, damage, expense and
liability arising from any act or omission of such member or Trustee, as the
case may be, except when the same is judicially determined to be due to the
fraud or bad faith of such member or Trustee, as the case may be, if possible.
Section 10.13. Standards of Interpretation and Administration. This
Plan and the Fund held hereunder shall be for the exclusive benefit of Employees
of the Companies and their spouses or other Beneficiaries and defraying
reasonable costs of administration. This Plan shall be interpreted and
administered in a manner consistent with the requirements of the Code relating
to qualified stock bonus plans and trusts and the requirements imposed by the
Act. Wherever in this Plan discretionary powers are given to any party or
wherever any interpretation may be necessary, such powers shall be exercised and
such interpretation shall be made in a non-discriminatory manner and in
conformity with the fiduciary duties imposed under Section 404 of the Act.
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Section 10.14. Governing Law. Except as otherwise provided by the
Act, this Plan shall be administered and construed and its validity determined
under the laws of the State of Indiana.
Section 10.15. Successors and Assigns. This Plan shall be binding
upon the successors and assigns of the Companies and of the Trustee.
Section 10.16. Adoption of Plan. Any corporation, who together with the
Holding Company, constitutes a member of a controlled group of corporations
under Section 414(b) of the Code, with the approval of the Board of Directors of
the Holding Company may adopt this Plan and participate as a Company in this
Plan by the execution of an instrument of adoption of this Plan which shall
specify the Effective Date as to such party. A listing of the subsidiaries and
affiliates who have adopted this Plan is shown as Appendix A.
Section 10.17. Withdrawal from Plan. Any Company in this Plan may, by
resolution of its Board of Directors or other governing body, withdraw from
participation as a Company in this Plan.
ARTICLE XI
TEFRA TOP-HEAVY RULES
Section 11.1. Application. The rules set forth in this Article XI shall
be applicable with respect to any Plan Year beginning on or after the Effective
Date in which this Plan is determined to be a Top-Heavy Plan. The provisions of
this Article XI shall be applied only to the extent necessary to comply with
Section 416 of the Code and in a manner consistent with all requirements imposed
under Section 416 of the Code.
Section 11.2. Determination. This Plan shall be considered a Top-Heavy
Plan with respect to any Plan Year if as of the Anniversary Date of the
immediately preceding Plan Year or, if the determination is to be made for this
Plan's first (1st) Plan Year, the last calendar day of the first (1st) Plan Year
(the "determination date"):
(a) the present value of the Accrued Benefits (as such term is
defined in Section 11.3) of Key Employees (as such term is
defined below) exceeds sixty percent (60%) of the present
value of the Accrued Benefits of all Employees and former
Employees (other than former Key Employees (as such term is
defined below)); provided, however, that the Accrued Benefits
of any Participant who has not completed an Hour of Service
for the C ompany during a five (5) year period ending on the
determination date (as such term is defined above) shall be
disregarded, or
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(b) this Plan is part of a required aggregation group (as such
term is defined below) and the required aggregation group is
top-heavy;
provided, however, that this Plan shall not be considered a Top-Heavy Plan with
respect to any Plan Year in which this Plan is part of a required or permissive
aggregation group (as such terms are defined below) which is not top-heavy. For
purposes of this Article XI, the term "Key Employee" shall include for any Plan
Year any Employee or former Employee who at any time during that Plan Year or
any of the four (4) preceding Plan Years is:
(c) an officer of a Company whose Section 415 Compensation from
the Companies is greater than fifty percent (50%) of the
maximum dollar limitation under Section 415(b)(1)(A) of the
Code in effect for the calendar year in which the
determination date (as such term is defined above) falls,
(d) one (1) of the ten (10) Employees owning (or considered as
owning within the meaning of Section 318 of the Code) the
largest interest in a Company whose ownership interest in that
Company is at least one-half of one percent (0.5%) and whose
Section 415 Compensation from the Companies is equal to or
greater than the maximum dollar limitation under Section
415(c)(1)(A) of the Code in effect for the calendar year in
which the determination date (as such term is defined above)
falls; provided, however, that if two (2) Employees have the
same interest in a Company, the Employee whose annual
Section 415 Compensation from the Companies is greater
shall be treated as having a larger interest in the Company,
(e) a five percent (5%) owner (determined without regard to
Sections 414(b),(c) and (n) of the Code) of a Company,
(f) a one percent (1%) owner (determined without regard to
Sections 414(b),(c) and (n) of the Code) of a Company whose
Section 415 Compensation from the Companies is in excess of
one hundred and fifty thousand dollars ($150,000);
provided, however, that the Beneficiary of any deceased Employee or of any
deceased former Employee who was included as a Key Employee by reason of this
Section 11.2 shall also be included as a Key Employee; provided, further, that
an individual shall only be included as a Key Employee to the extent required by
Section 416(i) of the Code. For purposes of this Article XI, "Non-Key Employee"
is any Employee or former Employee who is not a Key Employee. For purposes of
determining who is a key employee, Section 415 Compensation shall include
amounts deferred or redirected by an Employee pursuant to Sections 401(k) and
125 of the Code. For
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purposes of this Section 11.2, the term "required aggregation group" shall
include:
(g) all qualified retirement plans maintained by a Company in
which a Key Employee (as such term is defined above) is a
participant; provided, however, that the term "required
aggregation group" shall also include all qualified retirement
plans previously maintained by a Company but terminated within
the five (5) year period ending on the determination date (as
such term is defined above) in which a key employee (as such
term is defined above) was a participant; and
(h) any other qualified retirement plans maintained by a Company
which enable any qualified retirement plan described in
Subsection (g) above to meet the requirements of Section
401(a)(4) or of Section 410 of the Code.
For purposes of this Section 11.2, the term "permissive aggregation group" shall
include all qualified retirement plans that are part of a required aggregation
group (as such term is defined above) and any other qualified retirement plans
maintained by a Company if such group will continue to meet the requirements of
Section 401(a)(4) and of Section 410 of the Code.
Section 11.3. Accrued Benefits. For purposes of this Article XI,
Accrued Benefits with respect to any Plan Year shall be determined as of the
determination date (as such term is defined in Section 11.2) for that Plan Year
based on the Company Contributions Account balances as of the most recent
Valuation Date within a consecutive twelve (12) month period ending on such
determination date; provided, however, that such Company Contributions Account
balances shall be adjusted to the extent required by Section 416 of the Code to
increase the Company Contributions Accounts balances by the amount of any
Company Contributions made and allocated after the Valuation Date but on or
before such determination date and by any distributions made to Participants
prior to the Valuation Date during any of the five (5) consecutive Plan Years
immediately preceding the Plan Year for which the determination as to whether
this Plan is a Top-Heavy Plan is being made (including distributions from a
terminated plan which if not terminated would have been part of a required
aggregation group (as such term is defined in Section 11.7)) and to reduce the
Company Contributions Account balances by any rollovers or plan to plan
transfers made to this Plan before the Valuation Date which are initiated by a
Participant from any qualified retirement plan maintained by an unrelated
employer and by any deductible employee contributions.
Section 11.4. Vesting Provisions. Notwithstanding the provisions of
Section 6.3, with respect to any Plan Year in which this Plan is determined to
be a Top-Heavy Plan, a Participant's
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Accrued Benefit which is derived from Company Contributions shall vest in
accordance with the following vesting schedule if it would result in a larger
vested percentage than the percentage determined under Section 6.3:
Period of Service Vested Percentage
----------------- -----------------
Less than three (3) years 0
Three (3) years or more 100%
provided, however, that if this Plan becomes a Top-Heavy Plan and subsequently
ceases to be such:
(a) the vesting schedule shown above shall continue to apply but
only with respect to Participants whose Period of Service is
as least three (3) years as of the Anniversary Date of the
final Top-Heavy Plan Year,
(b) the vesting schedule shown above shall continue to apply but
only with respect to the Accrued Benefits of all other
Participants as of the Anniversary Date of the final Top-Heavy
Plan Year, and
(c) the vesting schedule in Section 6.3 shall apply to any
additional Accrued Benefits of the Participants described in
Subsection (b) above which accrue after the Anniversary Date
of the final Top-Heavy Plan Year.
Section 11.5. Minimum Contribution. Notwithstanding the provisions of
Section 4.2, with respect to any Plan Year in which this Plan is a Top-Heavy
Plan, the Company contributions for such Plan Year shall be allocated in the
following order of priority:
(a) first, among the Company Contributions Accounts of all
eligible Participants who had not separated from service with
the Companies as of the Anniversary Date of that Plan Year
regardless of the number of Hours of Service completed by each
such Participant during that Plan Year according to the ratio
that each Participant's Compensation for that Plan Year bears
to the total Compensation of all eligible Participants;
provided, however, that the portion of the Company
contributions to be allocated pursuant to this Subsection (a)
shall not exceed three percent (3%) of the total Compensation
of all eligible Participants for that Plan Year;
(b) next, the remaining portion, if any, of the Company
contributions for such Plan Year shall be allocated in
accordance with Section 4.2;
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provided, however, that if a Participant also participates in a top-heavy
defined benefit plan, he shall receive the minimum benefit for such Plan Year
under the defined benefit plan.
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This Plan has been adopted by the Holding Company, Madison First
Federal Savings and Loan Association and the Trustee on this ___________________
day of __________________, 1996, but is to be effective as of January 1, 1996.
RIVER VALLEY BANCORP
By:
-------------------------------
Its:
-------------------------------
Attest:
By:
-------------------------------
Its:
-------------------------------
MADISON FIRST FEDERAL SAVINGS
AND LOAN ASSOCIATION
By:
-------------------------------
Its:
-------------------------------
Attest:
By:
-------------------------------
Its:
-------------------------------
[INSERT NAME OF TRUSTEE]
By:
-------------------------------
Its:
-------------------------------
Attest:
By:
-------------------------------
Its:
-------------------------------
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