WesBanco, Inc. KSOP Employee Stock Ownership Plan As Amended and Restated

Exhibit 10.16

WesBanco, Inc. KSOP

Employee Stock Ownership Plan

As Amended and Restated

Effective January 1, 2006

Table of Contents

 

 

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WesBanco, Inc. KSOP

WHEREAS, WesBanco, Inc., a corporation organized under the laws of the State of West Virginia, (the “Employer”), established the WesBanco, Inc. Employee Stock Ownership Plan (the “Plan”) effective as of December 31, 1986, such Plan intended to qualify as an employee stock ownership plan, as defined in Code Section 4975(e)(7) and as a stock bonus plan under Code Section 401(a); and

WHEREAS, the Plan was amended and restated effective January 1, 1989; and

WHEREAS, the Plan was further amended and restated effective January 1, 1996 to include a cash or deferred arrangement under Code Section 401(k) and employer matching contributions under Code Section 401(m), and the name of the Plan was changed to the WesBanco, Inc. KSOP; and

WHEREAS, the Employer subsequently amended and restated the Plan, also effective January 1, 1996 solely for the purpose of clarifying the terms of the Plan; and

WHEREAS, the Plan has been amended a number of times since it was last amended and restated and, as a result, the Employer desires to again amend and restate the Plan in order to reorganize the Plan document and bring it up-to-date;

NOW, THEREFORE, the Plan is amended and restated in accordance with the terms and conditions described hereinafter:

Article 1

Preface

Section 1.1. Effective Date . Except as otherwise provided herein, the effective date of the Plan, as amended and restated, is January 1, 2006.

Section 1.2. Purpose of Plan . The purpose of the Plan is, in the manner set forth hereinafter, to promote the future economic welfare of the Employees of each adopting Employer, develop in those Employees an increased interest in each adopting Employer’s successful operation and encourage Employee savings. The intention of each adopting Employer is that the contributions made by it and

 

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Employee deferrals, together with the income thereon, shall be accumulated and made available to its Employees upon their retirement, all as set forth hereinafter. It is intended that the Plan qualify as an employee stock ownership plan under Code Section 4975(e)(7) with respect to Employer discretionary contributions and as a profit sharing plan under Code Section 401(a).

Section 1.3 . Legal Effect . As of January 1, 2006, the terms and conditions of the Plan shall amend and supersede prospectively the terms and conditions of the WesBanco, Inc. Employee Stock Ownership Plan originally effective December 31, 1986, and all subsequent amendments thereto, including the WesBanco, Inc. KSOP effective January 1, 1996; provided, that the provisions of such prior Plan shall continue to govern the rights of all Employees who retired or otherwise ceased to work for the Employer prior to the execution date hereof, except as otherwise expressly stated herein.

If the provisions of the Plan and the Trust Agreement that is part of the Plan are found to be contradictory, then the provisions of the Plan document shall apply.

Section 1.4 . Form of Plan . The Plan shall be a single plan of a controlled group or affiliated service group, as defined in Code Sections 414(b), 414(c) and 414(m). The total assets of the Plan shall be available to provide benefits for any Participant.

Section 1.5 . Governing Law . The Plan shall be regulated, construed and administered under the laws of the State of West Virginia, except when preempted by federal law.

Section 1.6 . Headings . The headings and subheadings in the Plan have been inserted for convenience and reference only and are to be ignored in any construction of the provisions hereof.

Section 1.7 . Gender and Number . The masculine gender shall be deemed to include the feminine, the feminine gender shall be deemed to include the masculine, and the singular shall include the plural, unless otherwise clearly required by the context.

 

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Article 2

Definitions

The following words and phrases, when used herein, shall have the meanings set forth below unless otherwise clearly required by the context:

Section 2.1 . Act . The Employee Retirement Income Security Act of 1974, as amended, or as it may be amended from time to time.

Section 2.2 . Adjustment Date . Each day that securities are traded on a national stock exchange.

Section 2.3 . Beneficiary . The person or persons designated by a Participant or Inactive Participant to receive the balance of his account, if any, after his death.

Section 2.4 . Board . The Board of Directors of WesBanco, Inc.

Section 2.5 . Break in Service . The failure of a former Employee to complete more than 500 Hours of Service during a Plan Year. Such break shall be effective as of the last day of the Plan Year in which such event occurs. A Break in Service shall not result from a Leave of Absence; provided, that the Employee returns to employment at the end of such Leave of Absence.

Section 2.6 . Cash Subaccount . The balance posted to the record of each Participant, Inactive Participant or Beneficiary consisting of any Employer contributions, Employee deferrals and rollover contributions made in cash, cash dividends which have been paid with respect to Employer Stock allocated to his accounts, and earnings on short term investments deposited in his Cash Subaccount pending investment in Employer Stock.

Section 2.7 . Code . The Internal Revenue Code of 1986, as amended, or as it may be amended from time to time.

Section 2.8 . Committee . The Administrative Committee as described in Article 11.

Section 2.9 . Compensation . Except as provided in Section 10.7 of the Plan, Compensation shall mean the total salary and wages paid to a Participant by an Employer during a Plan Year, including

 

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commissions, bonuses, overtime, elective deferrals under Code Sections 125 and 401(k), severance pay, pay in lieu of notice, accrued vacation pay, nonqualified stock options, sick pay benefits, insurance premiums, long-term disability and taxable medical reimbursement, but excluding mileage and expense allowances, deductible moving expenses, cash fringe benefits and contributions to the Plan or any other deferred compensation plan of the Employer.

In addition to other applicable limitations set forth in the Plan, and notwithstanding any other provision of the Plan to the contrary, the annual Compensation of each Participant taken into account in determining allocations for any Plan Year shall not exceed $200,000, as adjusted for cost-of-living increases in accordance with Code Section 401(a)(17)(B). Annual Compensation means compensation during the Plan Year or such other 12-month period over which Compensation is otherwise determined under the Plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual Compensation for the determination period that begins with or within such calendar year. If a determination period consists of fewer than 12 months, the annual compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12.

Solely for purposes of Section 4.3, Compensation for the first Plan Year during which an Employee participates shall include Compensation paid during the entire Plan Year. For all other purposes under Article 4, Compensation for the first year an Employee participates shall include Compensation paid after his Entry Date.

Section 2.10 . Cost Subaccount . The balance posted to the record of each Participant, Inactive Participant or Beneficiary consisting of the average cost of shares of Employer Stock purchased and allocated to his accounts.

Section 2.11 . Date of Employment . The first date on which an Employee completes an Hour of Service.

Section 2.12 . Date of Reemployment . The date on which an Employee completes an Hour of Service following a termination or Break in Service.

Section 2.13 . Employee . Any person who is a common law employee of the Employer.

Section 2.14 . Employee Deferral Account . The balance posted to the record of each Participant, Inactive Participant or Beneficiary consisting of elective deferrals of the Participant’s Compensation and

 

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adjustments as of each Adjustment Date, less any payments therefrom. Each Employee Deferral Account shall include, where appropriate, subaccounts that reflect Employee-directed investments if permitted in Section 9.2.

Section 2.15 . Employee Rollover Contribution Account . The balance posted to the record of each Participant, Inactive Participant or Beneficiary consisting of the Participant’s rollovers, pursuant to Section 4.4, and adjustments as of each Adjustment Date. Each Employee Rollover Contribution Account shall include, where appropriate, subaccounts that reflect Employee-directed investments if permitted in Section 9.2.

Section 2.16 . Employer . WesBanco, Inc. and adopting Related Employers.

Section 2.17 . Employer Discretionary Contribution Account . The balance posted to the record of each Participant, Inactive Participant or Beneficiary consisting of his allocated share of Employer discretionary contributions and adjustments as of each Adjustment Date, less any distributions therefrom. An Employer Discretionary Account will include a Number of Shares Subaccount and a Cash Subaccount, as applicable.

Section 2.18 . Employer Matching Contribution Account . The balance posted to the record of each Participant, Inactive Participant or Beneficiary consisting of his allocated share of Employer matching contributions and adjustments as of each Adjustment Date, less any distributions therefrom. Each Employer Matching Contribution Account shall include, where appropriate, subaccounts that reflect Employee-directed investments if permitted in Section 9.2.

Section 2.19 . Employer Stock . Common stock of WesBanco, Inc.

Section 2.20 . Entry Date . The first day of each calendar month.

Section 2.21 . Fund . One of the funds allowed as an investment election under Section 9.2.

Section 2.22 . Highly Compensated Employee . The term Highly Compensated Employee includes highly compensated active Employees and highly compensated former Employees.

A highly compensated active Employee includes any Employee who performs service for the Employer or a Related Employer and who: (1) was a 5-percent owner (within the meaning of Code Section 416(i)) at any time during the Determination Year or the Look-Back Year, or (2) for the Look-Back Year had compensation from the Employer or a Related Employer in excess of $80,000 and was in the Top-Paid Group. The $80,000 amount is adjusted at the same time and in the same manner as under Code Section 415(d), except that the base period is the calendar quarter ending September 30, 1996.

 

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For purposes of this Section, the Determination Year is the Plan Year for which the determination is being made, and the Look-Back Year is the 12 month period immediately preceding the Determination Year.

A highly compensated former Employee is determined based on the rules applicable to determining highly compensated employee status as in effect for that Determination Year, in accordance with Section 1.414(q)-lt, A-4 of the temporary income tax regulations and Notice 97-75.

The determination of who is a Highly Compensated Employee, including the number and identity of Employees in the top-paid group and the compensation that is considered, will be made in accordance with Code Section 414(q) and the regulations thereunder.

Section 2.23 . Hour of Service .

 

(a)

Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Employer and any Related Employer. These hours shall be credited to the Employee for the computation period in which the duties are performed.

 

(b)

Each hour for which an Employee is paid, or entitled to payment, by the Employer and any Related Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence.

Notwithstanding the preceding sentence:

 

(1)

No more than 501 hours are required to be credited under this paragraph to an Employee on account of any single continuous period during which the Employee performs no duties (whether or not such period occurs in a single computation period);

 

(2)

An hour for which an Employee is directly or indirectly paid, or entitled to payment, on account of a period during which no duties are performed is not required to be credited to the Employee if such payment is made or due under a plan maintained solely for the purpose of complying with applicable workers’ compensation, or unemployment compensation or disability insurance laws; and

 

(3)

Hours are not required to be credited for a payment which solely reimburses an Employee for medical or medically related expenses incurred by the Employee.

 

(c)

Each hour for which back pay, irrespective of mitigation or damages, is either awarded or agreed to by the Employer. The same hours shall not be credited both under paragraph (a) or paragraph (b), as the case may be, and under this paragraph (c). Hours for which back pay is awarded or agreed to shall be credited to the Employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement or payment is made.

 

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(d)

Where the Employer maintains the plan of a predecessor employer, service for such predecessor employer shall be treated as service with the Employer.

 

(e)

A salaried Employee who is not paid on an hourly basis shall be credited with 45 Hours of Service for each week during which the Employee would be credited with at least one Hour of Service.

 

(f)

Hours under this Section shall be calculated and credited pursuant to Department of Labor Regulation Section 2530.200b-2, which is incorporated herein by reference.

 

(g)

Solely for purposes of determining whether a Break in Service has occurred, an Employee or former Employee who is absent from work for maternity or paternity leave shall receive credit either for the Hours of Service, as described in paragraphs (a) through (f) above, which otherwise would have been credited to such Employee or former Employee but for such absence, or in any case in which such Hours of Service cannot be determined, eight Hours of Service per day of absence. The total number of Hours of Service credited under this paragraph (g) shall not exceed 501. Hours of Service pursuant to this paragraph shall be credited in the computation period during which the absence begins if doing so would prevent an Employee from incurring a one-year Break in Service in that computation period. In any other case, these hours shall be credited in the following computation period. For purposes of this paragraph, an absence from work for maternity or paternity leave means an absence (1) by reason of pregnancy of the Employee or former Employee, (2) by reason of the birth of a child of the Employee or former Employee, (3) by reason of placement of a child with the Employee or former Employee in connection with the adoption of such child by such Employee or former Employee, or (4) for purposes of caring for such child for a period beginning immediately following such birth or placement. Notwithstanding the above, no credit shall be given for Hours of Service pursuant to this paragraph (g) unless the Employee or former Employee furnishes sufficient information to the Plan Administrator or the Committee to establish that the absence is due to maternity or paternity leave and the number of days of such absence.

 

(h)

Solely for the purpose of determining whether a Break in Service for participation and vesting purposes has occurred, an Employee or former Employee who is absent from work due to a Leave or Absence or service in the uniformed services shall receive credit for 40 Hours of Service per week or eight Hours of Service per working day; provided, that the Employee returns to employment with the Employer at the end of the Leave of Absence or within the time period prescribed by law for return from service in the uniformed services.

Section 2.24 . Inactive Participant . Any person who terminates employment or otherwise ceases to be a Participant but whose interest in the Trust Fund has not been wholly distributed.

Section 2.25 . Leave of Absence . Any absence authorized by the Employer under its standard personnel practices as applied in a uniform and nondiscriminatory manner to all persons similarly situated. Notwithstanding any provision of the Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Code Section 414(u).

 

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Section 2.26 . Limitation Year . The Plan Year.

Section 2.27 . Non-highly Compensated Employee . Any Employee who is not a Highly Compensated Employee.

Section 2.28 . Normal Retirement Age . The 65th birthday of a Participant.

Section 2.29 . Normal Retirement Date . The first day of the month coincident with or next following the date a Participant attains Normal Retirement Age.

Section 2.30 . Number of Shares Subaccount . The balance posted to the record of each Participant, Inactive Participant or Beneficiary consisting of the number of whole and fractional shares of Employer Stock purchased by or allocated to his accounts.

Section 2.31 . Participant . Every Employee who has met the requirements of Article 3 and who is not an Inactive Participant.

Section 2.32 . Plan . The WesBanco, Inc. KSOP as herein set out or as duly amended.

Section 2.33 . Plan Administrator . The Employer.

Section 2.34 . Plan Year . The 12-month period ending on December 31 of each year.

Section 2.35 . Qualified Employee . Any Employee, excluding any individual who is a “leased employee,” as defined in Code Section 414(n)(2), any temporary Employee, and any Employee covered by a collective bargaining agreement between employee representatives and the Employer if retirement benefits were the subject of good faith bargaining between such employee representatives and the Employer.

Section 2.36 . Qualified Matching Contributions . Employer matching contributions that are subject to the distribution and nonforfeitability requirements of Code Section 401(k) when made.

Section 2.37 . Qualified Matching Contribution Account . The balance posted to the record of each Participant, Inactive Participant or Beneficiary consisting of his allocated share of Qualified Matching Contributions and adjustments as of each Adjustment Date, less any distributions therefrom. Each Qualified Matching Contribution Account shall include, where appropriate, subaccounts that reflect Employee-directed investments if permitted in Section 9.2.

 

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Section 2.38 . Related Employer . A corporation which is a member of a controlled group of corporations (within the meaning of Code Section 1563(a)(1), (a)(2) and (a)(3)) of which the Employer is also a member, any trade or business, whether or not incorporated, that is under common control (within the meaning of Code Section 414(c)) with the Employer, any member of an affiliated service group (within the meaning of Code Section 414(m)) that includes the Employer, and any other entity required to be aggregated with the Employer pursuant to regulations prescribed by the Secretary of the Treasury under Code Section 414(o). For purposes of Sections 9.4 and 9.5, however, the phrase “more than 50 percent” shall be substituted for the phrase “at least 80 percent” each place it appears in Code Section 1563(a)(1).

Section 2.39 . Trust or Trust Fund . The total of the contributions made pursuant to the Plan by the Employer and Participants and held by the Trustee in a separate Trust, increased by any profits or income thereto, and decreased by any loss or expense incurred in the administration of the Trust and payments therefrom under the Plan.

Section 2.40 . Trustee . The bank, trust company, other financial institution or individual or individuals holding and managing the Fund according to the terms of the WesBanco Bank, Inc. KSOP Trust Agreement.

 

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Article 3

Eligibility and Participation

Section 3.1 . Eligibility . All Qualified Employees who were Participants in the Plan on December 31, 2005 shall continue to participate in the Plan as of January 1, 2006. Any other Qualified Employee who has completed 60 days of service after attaining age 21, shall become a Participant at the time specified in Section 3.2.

Section 3.2 . Participation . Any Qualified Employee who has satisfied the requirements of Section 3.1 shall be eligible to become a Participant on the Entry Date next following the date on which such requirements are met unless such Employee separated from service and did not return to employment before his Entry Date.

Once a Qualified Employee becomes a Participant, he shall remain a Participant until he terminates employment with an Employer, regardless of the number of Hours of Service he completes in a Plan Year.

A Qualified Employee who terminates employment after meeting the requirements of Section 3.1 and is rehired shall be eligible to become a Participant on the later of his Date of Reemployment or his original Entry Date.

Section 3.3 . Transfer to or from Eligible Class of Employees . If a Participant is no longer a Qualified Employee and becomes ineligible to participate but has not incurred a Break in Service, such Employee will be eligible to participate again immediately upon becoming a Qualified Employee.

If an Employee who is not a Qualified Employee becomes a Qualified Employee, such Employee will be eligible to participate on the later of the date he becomes a Qualified Employee, if such Employee otherwise previously would have become a Participant, and his original Entry Date.

Section 3.4 . Service with a Related Employer . A Participant who transfers employment to a Related Employer not adopting the Plan shall remain covered by the Plan but shall become an Inactive Participant and share in Employer contributions only until the end of the Plan Year in which such transfer occurs. Such contributions shall be determined by taking into account only Compensation received while a Participant. If an Inactive Participant is transferred again to the Employer, he shall be eligible to participate in the Plan on his date of transfer. If an Inactive Participant remains in the employ of a Related Employer not adopting the Plan until his termination of employment, his benefits shall be calculated based on the provisions of Articles 5 and 7.

 

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Section 3.5 . Service as a Leased Employee . Each “leased employee,” within the meaning of Code Section 414(n)(2), shall be considered an Employee or an employee of a Related Employer, as appropriate, for purposes of determining whether the Plan satisfies the minimum coverage requirements of Code Section 410(b). Notwithstanding the foregoing, a leased employee shall not be so considered if the leased employee is covered by a money purchase pension plan providing for a nonintegrated employer contribution of at least ten percent of compensation, full and immediate vesting, and immediate participation, and leased employees do not constitute more than 20 percent of the Employer’s nonhighly compensated work force.

If a leased employee is subsequently hired as an Employee, service while a leased employee shall be considered when determining such Employee’s Years of Service.

Section 3.6 . Qualified Military Service . Notwithstanding any provisions of this Plan to the contrary, effective December 12, 1994, the Plan will provide contributions, benefits, and service credit with respect to qualified military service in accordance with Code Section 414(u).

 

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Article 4

Contributions

Section 4.1 . Employee Deferrals . Prior to becoming a Participant, an Employee who has met the requirements of Section 3.1 may elect to defer whole percentages between one percent and 50 percent of his Compensation (or such larger or smaller percentage as may, from time to time, be set by the Committee) during the Plan Year for which the election is being made. If such election is not made prior to the first Entry Date following eligibility, then he shall be eligible to make a deferral election in accordance with procedures established by the Committee, such election to be effective as soon as administratively feasible after such deferral election is made. The election shall specify the percentage to be deferred and contributed to the Trust.

Notwithstanding the preceding paragraph, any Qualified Employee hired on or after January 2, 1999, shall be deemed to have elected to defer one percent of his Compensation into the Plan effective as of the first Entry Date following completion of the eligibility requirements under Section 3.1 unless the Qualified Employee makes an affirmative election not to make a deferral contribution or elects a different deferral amount.

Except as otherwise provided in the next paragraph, in no event shall a Participant’s deferrals to this Plan or any other qualified plan maintained by the Employer during any calendar year exceed the dollar limit contained in Code Section 402(g) in effect for such calendar year.

Notwithstanding anything in this Plan to the contrary, Participants who will attain age 50 or older before the end of the Plan year shall be eligible to make catch-up contributions in accordance with, and subject to the limitations of Code Section 414(v). Such catch-up contributions shall not be taken into account for purposes of the provisions of the Plan implementing the required limitations of Code Sections 402(g) and 415. The Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Code Sections 401(k)(3), 401(k)(11), 401(k)12, 410(b), or 416, as applicable, by reason of the making of such catch-up contributions.

A Participant may change his deferral percentage in accordance with procedures established by the Committee, effective as soon as administratively feasible after such change is made.

 

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For purposes of this Section 4.1, Compensation used for determining the amount of any deferral shall be Compensation for the Plan Year for which such election is made, including any increases in Compensation during the Plan Year.

Deferrals made pursuant to this Section shall be paid to the Trustee and credited to the Participant’s Employee Deferral Account. Any amounts not elected to be deferred shall be paid to the Participant as current Compensation.

Notwithstanding the above, a Participant who has received a hardship distribution described in Section 8.2 shall not be eligible to make deferrals during the 6 consecutive month period beginning on the date of the distribution.

A Participant may assign to the Plan any deferrals made during a taxable year that exceed the $15,000 (as adjusted) limitation (“excess deferrals”) by notifying the Plan Administrator in writing on or before April 1 of the year following the year in which the deferrals were made of the amount of such excess deferrals to be assigned to the Plan. A Participant shall be deemed to have notified the Plan Administrator of excess deferrals to the extent the Participant has excess deferrals for a taxable year determined by taking into account only elective deferrals under the Plan and other qualified plans maintained by the Employer.

Notwithstanding any other provision of the Plan, the excess deferrals assigned to the Plan, plus any income and minus any loss allocable thereto, shall be distributed no later than April 15 to any Participant who assigned such excess deferrals to the Plan for the preceding year.

The income or loss allocable to excess deferrals shall be calculated under the same method used in Section 9.3 to allocate income or loss to Participants’ accounts. Alternatively, the income or loss allocable to excess deferrals shall be calculated by multiplying the income or loss allocable to the Participant’s Employee Deferral Account for the Participant’s taxable year (or up to the date of distribution, as designated by the Committee) by a fraction, the numerator of which is the Participant’s excess deferrals for the year and the denominator of which is the balance of the Participant’s Employee Deferral Account at the beginning of the taxable year plus the Participant’s deferrals for the taxable year (or up to the date of distribution, as designated by the Committee). Notwithstanding the preceding sentence, if the date of distribution is after the end of the Participant’s taxable year, the Committee may elect to calculate the income or loss attributable to the period between the end of the taxable year and the date of distribution by using the method described in the preceding sentence to calculate the income or loss to the end of the Participant’s taxable year and then multiplying ten percent of the result of that calculation by the number of

 

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calendar months that have elapsed since the end of the taxable year. For purposes of calculating the number of calendar months that have elapsed since the end of the taxable year, a corrective distribution made on or before the 15th day of the month is treated as made on the last day of the preceding month. A distribution made after the 15th day of the month is treated as made on the first day of the next month. The same method of calculating income or loss on excess deferrals must be used consistently for all Participants and all corrective distributions under the Plan for the Plan Year.

Section 4.2 . Employer Matching Contributions . The Employer shall contribute to the Trust on behalf of each Participant matching contributions equal to 100 percent of the first 3 percent and 50 percent of the next 2 percent of Compensation deferred by the Participant during the Plan Year. The matching contributions shall apply to the Plan Year as a whole, but shall be made and allocated as of the last Adjustment Date in each calendar quarter to the Participants who made deferrals of Compensation during that calendar quarter and/or, if applicable, during a prior calendar quarter of the Plan Year.

Section 4.3 . Employer Discretionary Contributions . In addition to Employer matching contributions, the Employer may contribute to the Trust for each Plan Year such amount as the Board shall determine for such Plan Year; provided, that the total contributions for any such Plan Year shall not exceed the maximum amount deductible by the Employer for such Plan Year for federal income tax purposes, including any credit carry-over from one or more prior Plan Years. Employer discretionary contributions may be paid to the Trust in cash or shares of Employer Stock, as determined by the Board.

If an Employee does not receive an allocation due to clerical error or other reasonable cause, the Employer may contribute to the Trust such amount as the Committee shall determine, as approved by the Board.

As of the December 31 Adjustment Date, the Employer discretionary contributions and any forfeitures under Article 7 shall be allocated among Participants employed on the last day of the Plan Year who completed a Year of Service, or who were on Leave of Absence during the Plan Year, in the same proportion that each such Participant’s Compensation bears to the total Compensation of all such Participants for such Plan Year. Employer discretionary contributions and forfeitures shall be allocated to a Participant’s Employer Discretionary Contribution Account.

Section 4.4 . Rollover Contributions . With the consent of the Committee, an Employee who has been a participant in a qualified retirement plan; Code Section 403(b) annuity contract; an eligible plan under Code Section 457(b) that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state; or an individual retirement account or annuity

 

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described in Code Section 408(a) or (b) may transfer assets (other than after-tax contributions) by rollover from such plan to the Trust. Such transferred assets will be fully vested at all times. Any such transferred assets shall be held in a separate Employee Rollover Contribution Account in the name of the Participant and shall reflect the net earnings or net losses of the trust fund. However, such assets may be commingled for investment purposes and invested in the same manner as other trust assets. Notwithstanding the foregoing, no amount may be transferred to the Plan from another plan if, as a result of such transfer, the Plan would be required to comply with Code Section 401(a)(11) as a transferee plan.

In addition, at the request of an Inactive Participant, the assets held on his behalf may be transferred to the plan of a successor employer (with the consent of the successor employer) or to an individual retirement account. Notwithstanding any provision of the Plan to the contrary, 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. A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee.

An “eligible rollover distribution” is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee’s designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code Section 401(a)(9); any hardship distribution described in Code Section 410(k)(2)(B)(i)(IV); and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities).

An Eligible Retirement Plan is an individual retirement account described in Code Section 408(a); an individual retirement annuity described in Code Section 408(b); an annuity plan described in Code Section 403(a); a qualified trust described in Code Section 401(a); an annuity contract described in Code Section 403(b); and an eligible plan under Code Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state, that accept the distributee’s eligible rollover distribution and agree to separately account for amounts transferred into such plan from this Plan. A “distributee” includes an Employee or former Employee. In addition, the Employee’s or former Employee’s surviving spouse and the Employee’s or former Employee’s spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), are distributees with regard to the interest of the spouse or former spouse.

 

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Section 4.5 . Return of Employee Deferrals . Each Participant shall at all times be fully vested in the amount in his Employee Deferral Account, but a Participant or his Beneficiary shall be entitled to payment of the amount credited to such account only upon the occurrence of an event described in; and in accordance with, this Article 4 or Articles 5, 6 or 7.

 

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Article 5

Benefits

Section 5.1 . Normal Retirement and Delayed Retirement Date . A Participant shall be eligible to retire and receive a retirement benefit effective as of his Normal Retirement Date. If the Participant remains in the employ of the Employer after his Normal Retirement Date, he shall continue to be a Participant in the Plan until his actual retirement. The Participant’s benefit shall be available for distribution as soon as administratively feasible after the Adjustment Date coincident with or next succeeding such retirement.

Section 5.2 . Early Retirement . A Participant or Inactive Participant who has not attained his Normal Retirement Date shall be eligible to retire and receive a retirement benefit effective as of the earlier of (a) the first day of the month following the later of (1) attainment of age 60 and completion of 15 Years of Service, or (2) the tenth anniversary of the date the Participant or Inactive Participant commenced participation in the Plan, and (b) the date on which the Participant retires pursuant to an early retirement incentive window offered by the Employer. Subject to the provisions of Section 5.6, the Participant’s benefit shall be payable to him pursuant to Section 5.4 hereof.

Section 5.3 . Disability Retirement . A Participant who has not attained his Normal Retirement Date shall be eligible to retire and receive a retirement benefit effective as of the first day of the month following the date of the Participant’s termination of service with the Employer or a Related Employer as a result of permanent disability. For this purpose, “permanent disability” shall mean disability due to injury, disease or mental condition that has continued for at least six months; prevents the Participant from engaging in substantial gainful activity for which he is qualified or reasonably may become qualified; can be expected to result in death or continue for an indefinite period, as determined by the Committee based on a certificate from a physician approved by the Committee; and for which the Participant is eligible for and receiving Social Security disability benefits. Subject to the provisions of Section 5.6, the Participant’s benefit shall be payable to him pursuant to Section 5.4 hereof.

Section 5.4 . Method of Settlement . Each Participant or Inactive Participant may elect to have his vested account balance distributed in a single lump sum, in approximately equal annual installments, or a combination thereof. If distribution is made in installments, the total amount credited to the accounts of the Inactive Participant shall remain in the Fund and shall be adjusted as of each Adjustment Date as provided in the Plan, and the installments shall be modified annually to reflect such adjustments. If the Participant dies prior to the exhaustion of his accounts, the payments shall continue to his Beneficiary in the manner chosen by the Participant, subject to the provisions of Article 6.

 

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In no event shall payments under the installment method extend beyond the later of the lifetime of the Participant, the lifetime of the Participant and the Participant’s Beneficiary, the life expectancy of the Participant or the joint life expectancies of the Participant and his Beneficiary.

The value of any account balance for purposes of any distribution made under this Plan shall be determined as of the Adjustment Date on which such distribution is processed.

Section 5.5 . Commencement of Benefits .

 

(a)

Unless a Participant elects otherwise, benefits under the Plan must begin no later than the 60th day after the close of the Plan Year in which the latest of the following events occurs:

 

(1)

the Participant attains Normal Retirement Age,

 

(2)

the Participant terminates his service with the Employer, or

 

(3)

the tenth anniversary of the year in which the Participant commences participation in the Plan.

A Participant may elect to defer payment until his Required Beginning Date, as defined below.

 

(b)

Benefits for a Participant or Inactive Participant must begin no later than the earlier of the time specified in Section 5.5(a) or the Participant’s or Inactive Participant’s Required Beginning Date, as defined in (c) below.

 

(c)

The Required Beginning Date of a Participant or Inactive Participant is the later of April 1 of the calendar year following the calendar year in which the Participant attains age 70  1 / 2 or retires, except that benefit distributions to a 5-percent owner must commence by April 1 of the calendar year following the calendar year in which the Participant attains age 70  1 / 2 .

Notwithstanding the preceding paragraph, any Participant (other than a 5-percent owner) attaining age 70  ¹ / 2 in calendar years after 1995 and before 1999 may elect by April 1 of the calendar year following the calendar year in which the Participant attained age 70  ¹ / 2 (or by December 31, 1997 in the case of a Participant attaining age 70  ¹ / 2 in 1996) to defer distributions until the calendar year following the calendar year in which the Participants retires. If no such election is made, the Participant will begin receiving distributions by the April 1 of the calendar year following the calendar year in which the Participant attained age 70  ¹ / 2 (or by December 31, 1997, in the case of a Participant attaining age 70  ¹ / 2 in 1996).

For purposes of this Section, a Participant or Inactive Participant is considered a five-percent owner if such Participant or Inactive Participant is a five-percent owner as defined in Section 10.3(c) without regard to whether the Plan is top-heavy, in any Plan Year beginning with the Plan Year in which the Participant attains age 66  ¹ / 2 .

 

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(d)

Once distributions have begun to a five-percent owner under this Section, they must continue to be distributed, even if the Participant or Inactive Participant ceases to be a five-percent owner in a subsequent year.

Section 5.6 . Consent Requirement . Notwithstanding anything in this Plan to the contrary, no distribution shall commence to a Participant or Inactive Participant prior to age 65 without the written consent of the Participant or Inactive Participant, unless his or her vested account balance does not exceed $5,000. The consent of the Participant shall be obtained in writing within the 90-day period ending on the “annuity starting date”. The “annuity starting date” is the first day of the first period for which an amount is paid as an annuity or in any other form. The Committee shall notify the Participant of the right to defer any distribution until the Participant attains age 65. Such notification shall include a general description of the material features, and an explanation of the relative values of, the optional forms of benefit available under the Plan in a manner that would satisfy the notice requirements of Code Section 417(a)(3) and shall be provided no less than 30 days and no more than 90 days prior to the annuity starting date. However, distribution may commence less than 30 days after the notice described in the preceding sentence is given if the Committee clearly informs the Participant that he has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option), and the Participant, after receiving the notice, affirmatively elects a distribution.

The value of a Participant’s or Inactive Participant’s vested account balance for purposes of determining whether such value exceeds $5,000, shall be calculated without regard to the portion of his or her vested account balance attributable to his or her Employee Rollover Contribution Account.

Notwithstanding the above, effective March 28, 2005, if a Participant’s or Inactive Participant’s vested account balance exceeds $1,000 but does not exceed $5,000, and a distribution is required to be made to the Participant or Inactive Participant pursuant to Section 5.2, 5.3, or 8.1 prior to attaining age 65, then if the Participant or Inactive Participant does not elect to have such distribution paid directly to an eligible retirement plan specified by the Participant or Inactive Participant in a direct rollover or to receive the distribution directly, the Plan Administrator will pay the distribution in a direct rollover to an individual retirement plan designated by the Plan Administrator.

 

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Article 6

Death Benefits

Section 6.1 . Amount and Payment of Death Benefits . Following the death of a Participant or Inactive Participant, his Beneficiary shall be entitled to receive the nonforfeitable balance of the Participant’s accounts, if any. Such amount shall be paid to the Beneficiary in the manner selected by the Beneficiary, subject to Sections 5.4 and 6.3. If no election is made by the Beneficiary, such amount shall be paid in a lump sum.

Section 6.2 . Designation of Beneficiary . Each Participant or Inactive Participant may name a Beneficiary on a form provided by the Plan Administrator and delivered to the Plan Administrator. Such designation may include more than one person with one or more secondary or contingent Beneficiaries and shall be subject to change upon written request of such Participant or Inactive Participant in the same manner as the original designation. If a married Participant or Inactive Participant fails to designate a Beneficiary, he will be deemed to have designated his spouse as his Beneficiary. If a single Participant or Inactive Participant fails to name a Beneficiary, payment will be made to his estate. If a Beneficiary receiving or entitled to receive payment from the Plan dies before receiving all of the payments due him, payment shall be made to the contingent Beneficiary, if any, in a lump sum, and if there is no contingent Beneficiary, payment shall be made to the estate of the Beneficiary in a lump sum. If a contingent Beneficiary receiving or entitled to receive payment from the Plan dies, payment shall be made to the estate of the contingent Beneficiary in a lump sum.

Notwithstanding the above, a married Participant or Inactive Participant shall be deemed to have designated his spouse as his Beneficiary unless the spouse of such Participant or Inactive Participant consents in writing to another named Beneficiary. The spouse’s consent must be witnessed by a Plan representative or a notary public and must acknowledge the effect of another Beneficiary designation. Such consent shall not be required if it is established to the satisfaction of the Plan Administrator that the consent cannot be obtained because there is no spouse, the spouse cannot be located or such other circumstances exist as the Secretary of the Treasury may prescribe by regulations.

Section 6.3 . Payment of Death Benefits . Notwithstanding any provision of the Plan to the contrary, any interest to which a designated Beneficiary is entitled will be paid (1) over a period not exceeding the later of the lifetime or life expectancy of the Beneficiary, provided such payment commences within one year after the Participant’s death, or (2) in its entirety within five years after the Participant’s death.

 

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Notwithstanding the above, if the spouse of the Participant or Inactive Participant is the designated Beneficiary, the date on which the distribution must take place shall not be earlier than the date on which the deceased Participant or Inactive Participant would have attained age 70  ¹ / 2 ; provided, that if the surviving spouse dies before the distribution occurs, this Section shall apply as if the spouse were the Participant. The spouse may elect to have the distribution occur within the 90-day period following the date of the Participant’s death.

If the Participant’s designated Beneficiary or spouse, if any, does not survive, or if a single Participant fails to name a Beneficiary, distribution will be made to the Participant’s estate within five years after the Participant’s death.

Section 6.4 . Qualified Domestic Relations Order . For purposes of this Article 6, a former spouse will be treated as the spouse to the extent provided under a qualified domestic relations order as described in Code Section 414(p) and Section 13.1 of the Plan.

 

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Article 7

Vesting

Section 7.1 . Vesting . Each Participant shall have a fully vested interest in his Employee Deferral Contribution Account, Employer Matching Contribution Account and Employee Rollover Contribution Account at all times. Each Participant shall be fully vested in his Employer Discretionary Contribution Account upon completion of five Years of Service, attainment of Normal Retirement Age, disability retirement or death, and the Participant shall not be fully vested in such account before any such event.

Section 7.2 . Amendment of Vesting Schedule . No amendment to the Plan shall have the effect of decreasing a Participant’s vested percentage, or eliminating an optional form of distribution, as of the later of the date the amendment is adopted or the date it becomes effective. If the vesting schedule is amended, each Participant with at least three Years of Service may elect to have his vested percentage determined under the Plan prior to amendment during the 60-day period beginning on the latest of (a) the date the amendment is adopted, (b) the date the amendment becomes effective, or (c) the date the Participant receives notice of the amendment from the Plan Administrator.

Section 7.3 . Forfeitures . If a Participant’s Employer Discretionary Contribution Account is not vested it will be forfeited as of the December 31 Adjustment Date of the Plan Year in which the Participant’s first Break in Service occurs. The amount of any such forfeiture shall be deducted first from the Participant’s Cash Subaccount, and then from his Number of Shares Subaccount. All forfeitures shall be reallocated to the Employer Discretionary Contribution Accounts of the remaining Participants as of such Adjustment Date as provided in Section 4.3. If the Participant returns to employment with the Employer before incurring five consecutive Breaks in Service, his forfeited account shall be restored.

Section 7.4 . Vesting Upon Reemployment . If a Participant, who at the time of a Break in Service had any vested interest under the Plan, is reemployed, such Participant’s Years of Service shall include all Years of Service before and after the Break in Service. If a Participant, who at the time of a Break in Service had no vested interest under the Plan, is reemployed, such Participant’s Years of Service before the Break in Service shall be excluded if the Participant’s number of consecutive Breaks in Service equals or exceeds five.

 

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Article 8

Distributions

Section 8.1 . Termination of Employment before Retirement . If a Participant terminates employment before he is eligible for a retirement benefit, and his vested interest in all his accounts exceeds $5,000, then his interest shall be held in the Trust until the earlier of the date the Inactive Participant elects an early retirement benefit according to Section 5.2 of this Plan or reaches his Normal Retirement Date, unless he elects an earlier distribution as provided below. At that time, benefits will be paid as provided in Article 5. Subject to Section 5.6, if such Participant’s vested interest in all his accounts does not exceed) $5,000, then his interest shall be paid to him as soon as administratively feasible after he terminates employment.

If a terminated Participant’s vested interest exceeds $5,000, he may request a distribution to be paid as soon as administratively feasible after he terminates employment in accordance with Section 5.4.

The value of a Participant’s or Inactive Participant’s vested account balance for purposes of determining whether such value exceeds $5,000, shall be calculated without regard to the portion of his or her vested account balance attributable to his or her Employee Rollover Contribution Account.

Section 8.2 . Hardship Distributions . In case of hardship, a Participant may apply to the Committee for distribution of all or a portion of his deferral contributions to his Employee Deferral Account. As used in this Section, a “hardship” will be deemed to exist if the distribution is necessary in light of immediate and heavy financial needs of the Participant and funds to alleviate such financial needs are not reasonably available from other resources of the Participant.

A distribution will be deemed to be made on account of an immediate and h