EXHIBIT 10.16
THE PNC FINANCIAL SERVICES GROUP, INC.
INCENTIVE SAVINGS PLAN
(AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 2001)
THE PNC FINANCIAL SERVICES GROUP, INC.
INCENTIVE SAVINGS PLAN
TABLE OF CONTENTS
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INTRODUCTORY STATEMENT.......................................................................1
ARTICLE I DEFINITIONS...................................................................2
1.1 Account.......................................................................2
1.2 Account Balance...............................................................2
1.3 Administrative Committee......................................................2
1.4 Beneficiary...................................................................2
1.5 BlackRock Stock...............................................................2
1.6 Board.........................................................................2
1.7 Code..........................................................................2
1.8 Compensation..................................................................2
1.9 Corporation...................................................................4
1.10 Corporation Stock.............................................................4
1.11 Deposit Account...............................................................4
1.12 Effective Date................................................................4
1.13 Elective Contribution.........................................................4
1.14 Elective Contribution Account.................................................4
1.15 Elective Contribution Agreement...............................................4
1.16 Elective Deferrals............................................................4
1.17 Eligible Employee.............................................................4
1.18 Employee......................................................................5
1.19 Employer......................................................................5
1.20 Employer Contribution.........................................................5
1.21 Employer Contribution Account.................................................5
1.22 Entry Date....................................................................5
1.23 ERISA.........................................................................5
1.24 Highly Compensated Employee...................................................5
1.25 Hourly Employee...............................................................6
1.26 Hour of Service...............................................................6
1.27 Investment Fund...............................................................6
1.28 Matching Contribution.........................................................7
1.29 Matching Contribution Account.................................................7
1.30 Non-highly Compensated Employee...............................................7
1.31 Participant...................................................................7
1.32 Participating Employer........................................................7
1.33 Plan..........................................................................7
1.34 Plan Administrator............................................................7
1.35 Plan Manager..................................................................7
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1.36 Plan Year.....................................................................7
1.37 Prior Plan....................................................................7
1.38 Related Entity................................................................8
1.39 Rollover Account..............................................................8
1.40 Rollover Amount...............................................................8
1.41 Salaried Employee.............................................................8
1.42 Spouse........................................................................8
1.43 Total Disability..............................................................8
1.44 Trust........................................................................ 8
1.45 Trust Agreement...............................................................9
1.46 Trust Fund....................................................................9
1.47 Trustee.......................................................................9
1.48 Valuation Date................................................................9
1.49 Year of Eligibility Service...................................................9
ARTICLE II PARTICIPATION IN THE PLAN....................................................10
2.1 Eligibility to Participate...................................................10
2.2 Participation upon Reemployment..............................................12
2.3 Designation of Beneficiaries.................................................12
ARTICLE III CONTRIBUTIONS................................................................14
3.1 Elective Contributions.......................................................14
3.2 Employer Contributions.......................................................15
3.3 Matching Contributions.......................................................16
3.4 Rollover Contributions.......................................................16
ARTICLE IV PARTICIPANT ACCOUNTS.........................................................18
4.1 Maintenance of Accounts for Each Participant.................................18
ARTICLE V VESTING......................................................................19
5.1 Vesting......................................................................19
ARTICLE VI INVESTMENT OPTIONS...........................................................20
6.1 Participant Investment Elections.............................................20
6.2 Other Restrictions on Availability of Investment Funds.......................21
6.3 Transfer of Assets...........................................................21
6.4 Records......................................................................22
6.5 Participant Interest in Trust Fund...........................................22
6.6 Valuation of Investment Funds................................................22
6.7 Allocation of Expenses.......................................................23
6.8 Allocation of Earnings and Losses............................................23
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ARTICLE VII LIMITATIONS ON CONTRIBUTIONS.................................................24
7.1 Maximum Amount of Elective Contributions.....................................24
7.2 Deductibility................................................................25
7.3 Limitation on Annual Additions...............................................25
7.4 Actual Deferral Percentage Test..............................................27
7.5 Actual Contribution Percentage Test..........................................30
7.6 Multiple Use Test............................................................31
ARTICLE VIII DISTRIBUTION OF BENEFITS.....................................................32
8.1 Time of Distribution.........................................................32
8.2 Minimum Distributions........................................................33
8.3 Latest Commencement of Benefits..............................................34
8.4 Method of Payment............................................................34
8.5 Medium of Distribution.......................................................35
8.6 Payment to Minors and Incompetents...........................................35
8.7 Direct Rollover Provisions...................................................36
ARTICLE IX IN-SERVICE WITHDRAWALS DURING EMPLOYMENT.....................................38
9.1 Regular Withdrawals..........................................................38
9.2 Hardship Withdrawals.........................................................38
9.3 Funding of Withdrawals.......................................................40
9.4 Withdrawals Permitted under Certain Prior Plans..............................40
ARTICLE X LOANS TO PARTICIPANTS........................................................41
10.1 Authorization of Loans.......................................................41
10.2 Minimum Requirements for Loans...............................................41
10.3 Disclosure of Terms of Loan Program to Participants..........................44
ARTICLE XI ALLOCATION OF FIDUCIARY RESPONSIBILITIES AND DUTIES..........................45
11.1 Corporation..................................................................45
11.2 Administrative Committee.....................................................45
11.3 Trustee......................................................................45
11.4 Investment Managers..........................................................46
11.5 No Joint Fiduciary Responsibilities..........................................47
ARTICLE XII ADMINISTRATION OF PLAN.......................................................48
12.1 Administrative Committee.....................................................48
12.2 Duties and Powers............................................................48
12.3 Plan Manager.................................................................49
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12.4 Standard of Conduct..........................................................49
12.5 Delegation...................................................................49
12.6 Meetings.....................................................................50
12.7 Rules and Decisions..........................................................50
12.8 Compensation and Payment of Expenses.........................................51
12.9 Insurance....................................................................51
12.10 Resignation and Removal......................................................51
12.11 Disqualification.............................................................52
12.12 Claims Procedure.............................................................52
ARTICLE XIII PARTICIPATING EMPLOYERS......................................................54
13.1 Adoption of Plan by Participating Employers..................................54
13.2 Actions by Subsidiaries or Affiliates........................................54
13.3 Corporation Amends on Behalf of All Employers................................54
13.4 Any Employer May Terminate...................................................54
ARTICLE XIV AMENDMENT, MERGER AND TERMINATION............................................55
14.1 Amendment....................................................................55
14.2 Merger and Consolidation of Plan, Transfer of Plan Assets....................55
14.3 Discontinuance of Contributions and Termination of Plan......................56
ARTICLE XV MISCELLANEOUS................................................................57
15.1 Exclusive Benefit of Participants and Beneficiaries..........................57
15.2 Employment Rights............................................................58
15.3 Spendthrift Clause...........................................................59
15.4 Employer's Successor.........................................................59
15.5 Legal Actions................................................................59
15.6 Power to Interplead..........................................................60
15.7 Unclaimed Amounts............................................................60
15.8 Construction of Plan.........................................................60
15.9 USERRA and Code Section 414(u) Compliance....................................61
ARTICLE XVI TOP HEAVY PROVISIONS.........................................................62
16.1 Definitions of Terms Used in This Article XVI................................62
16.2 Determination of Top Heavy and Super Top Heavy Status........................65
16.3 Right to Participate in Allocation of Employer's Contributions...............65
16.4 Minimum Employer Contribution Allocation.....................................66
ARTICLE XVII EMPLOYEE STOCK OWNERSHIP PLAN................................................68
17.1 Definitions of Terms Used in This Article XVII...............................68
17.2 Effective Date of ESOP.......................................................68
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17.3 Participating Employer Contributions.........................................69
17.4 Participant Contributions....................................................70
17.5 Investment of ESOP Assets....................................................70
17.6 Purchases of Corporation Stock...............................................70
17.7 Sales of Corporation Stock...................................................70
17.8 Exempt Loans.................................................................71
17.9 Allocations to Participants' Accounts........................................74
17.10 Allocable Shares.............................................................75
17.11 Accounting for Allocations...................................................76
17.12 Form of Distribution.........................................................77
17.13 Voting Corporation Stock.....................................................77
ANNEX I PAY CODES
ANNEX II PARTICIPATING EMPLOYERS
ANNEX III PRIOR PLANS AND PROTECTED BENEFITS
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THE PNC FINANCIAL SERVICES GROUP, INC.
INCENTIVE SAVINGS PLAN
INTRODUCTORY STATEMENT
The PNC Financial Services Group, Inc. (formerly known as PNC Bank Corp.),
a Pennsylvania corporation (the "Corporation"), sponsors The PNC Financial
Services Group, Inc. Incentive Savings Plan (formerly known as the PNC Bank
Corp. Incentive Savings Plan) (the "Plan").
Effective as of January 1, 2001 (and other effective dates set forth
herein), the Corporation desires to amend and restate the Plan in its entirety
to (i) incorporate previously adopted amendments, (ii) comply with and reflect
certain changes made by applicable legislation and (iii) make certain clarifying
and other changes.
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ARTICLE I
DEFINITIONS
The following words and phrases as used herein shall have the following
meanings, unless a different meaning clearly is required by the context.
1.1 "Account" means the sum of a Participant's Deposit Account, Elective
Contribution Account, Employer Contribution Account, Matching Contribution
Account and Rollover Account.
1.2 "Account Balance" means the entire amount allocated to the Participant's
Account in the Trust Fund.
1.3 "Administrative Committee" means the committee appointed by the Board or
its delegate to administer the Plan.
1.4 "Beneficiary" means the person or persons or trust or estate designated by
a Participant under Section 2.3 of the Plan.
1.5 "BlackRock Stock" means the Class A common stock of BlackRock, Inc.
1.6 "Board" means the board of directors of the Corporation as from time
to time designated, any committee of the Board to which the Board duly delegates
its duties and authority hereunder, or any other authorized delegate of the
Board or any committee thereof.
1.7 "Code" means the Internal Revenue Code of 1986, as amended.
1.8 "Compensation" means the total compensation received by a Participant
from the Employer, including wages, salaries, commissions and fees for
professional services actually rendered in the course of employment with the
Employer. Compensation shall include any salary reductions provided for under
Code Sections 125, 132, 402(a)(8) and 402(h), including,
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but not limited to, Elective Contributions. Compensation shall not include
severance pay, Employer Contributions or Matching Contributions to this Plan
(but shall include Elective Contributions) and employer contributions to any
pension plan or welfare plan sponsored by the Employer.
Compensation shall not include variable pay such as annual bonus amounts in
excess of the greater of (i) $25,000 or (ii) 50 percent of such variable pay,
provided that for a Participant who is not a member of the corporate executive
group, variable pay shall not exceed $250,000. For this purpose, Annex I
contains a list of all pay codes that are treated as Compensation for purposes
of the Plan, including those that are treated as variable pay. For this purpose,
the corporate executive group means the group designated as such by the
Corporation.
Compensation does not include any amounts imputed into a Participant's
gross income for federal income tax purposes by a provision of the Code,
including, but not limited to, (i) any amounts required to be reported as wages
on a Participant's Form W-2 as a result of Employee expense reimbursements (such
as moving expenses), (ii) director's fees, (iii) amounts realized under Code
Section 83 from the transfer of property, except to the extent includible in
income pursuant to the election described in Code Section 83(b), (iv) amounts
realized from the exercise of a nonqualified stock option or when restricted
stock (or property) held by the Participant either becomes freely transferable
or is no longer subject to a substantial risk of forfeiture, (v) payments from a
plan of deferred compensation not qualified under Code Section 401(a), (vi)
amounts realized from the sale, exchange or other disposition of stock acquired
under a qualified stock option and (vii) payments made by an Employer for
group-term life insurance, hospitalization and like benefits, but only to the
extent that the amount are not paid by the Employer on behalf of a Participant
pursuant to the Participant's salary deferral election under a cafeteria plan
described in Code Section 125.
A Participant's Compensation shall not exceed the Code Section 401(a)(17)
limit, as adjusted by the Secretary of the Treasury.
The family aggregation rules of Code Section 401(a)(17) are deleted from
this Plan effective January 1, 1997.
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1.9 "Corporation" means The PNC Financial Services Group, Inc.
1.10 "Corporation Stock" means the common stock of The PNC Financial
Services Group, Inc.
1.11 "Deposit Account" means the account used to record a Participant's
interest in the Plan attributable to certain interests under Prior Plans.
1.12 "Effective Date" means January 1, 2001.
1.13 "Elective Contribution" means the amount contributed by the Employer
under Section 3.1 of the Plan in accordance with an Elective Contribution
Agreement between an Employer and a Participant.
1.14 "Elective Contribution Account" means the account used to record a
Participant's interest in the Plan attributable to Elective Contributions and
certain interests under Prior Plans.
1.15 "Elective Contribution Agreement" means the agreement whereby an
Eligible Employee elects to defer a portion of Compensation under the procedures
set forth in Article III. Such form shall set forth the amount of Compensation
that the Eligible Employee elects to defer and such other information as the
Employer or Administrative Committee may require.
1.16 "Elective Deferrals" means for a taxable year all of a Participant's
(i) elective contributions under a 401(k) plan (including Elective Contributions
under this Plan), (ii) employer contributions to a simplified employee pension
under Code Section 402(h)(1)(B), (iii) employer contributions to a Code section
403(b) annuity contract under a salary reduction agreement and (iv) employee
deductible contributions to a Code section 501(c)(18) trust.
1.17 "Eligible Employee" means any Employee who has satisfied all of the
requirements to become a Participant under Article II, other than execution of
an Elective Contribution
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Agreement. Eligible Employee does not include any Employee who is a leased
employee (as defined in Code Section 414(n)) or a student intern.
1.18 "Employee" means any person who is paid on an hourly basis or salary
basis by an Employer for services rendered for such Employer. Employee does not
include (i) any individual who is covered by a collective bargaining agreement
where retirement benefits were the subject of good faith bargaining shall,
unless the collective bargaining agreement provides for the individual's
inclusion in this Plan, (ii) any person who is receiving only a pension or
severance pay from an Employer, (iii) any individual hired and classified by the
Employer as an independent contractor, or who receives compensation by way of
fee under contract, written or otherwise, even if misclassified by the Employer
as subsequently determined in a judicial or administrative proceeding; and (iv)
a director of an Employer who is not an officer or otherwise an employee of an
Employer without regard to such individual's status for tax or any other
purpose.
1.19 "Employer" means the Corporation, any successors in interest thereto and
any Participating Employer.
1.20 "Employer Contribution" means the amount contributed by the Employer under
Section 3.2 of the Plan.
1.21 "Employer Contribution Account" means the account used to record a
Participant's interest in the Plan attributable to Employer Contributions and
certain interests under Prior Plans.
1.22 "Entry Date" means the first day of each calendar month.
1.23 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.24 "Highly Compensated Employee" means, effective January 1, 1997, any
Employee who (i) performs service for the Employer during the Plan Year or the
immediately preceding Plan Year (the "determination year") and who was, or is, a
five percent owner (as defined in Code
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Section 416(i)(1)) or (ii) for the preceding Plan Year received compensation
from the Employer in excess of $80,000 (as adjusted by the Secretary of the
Treasury) and for such year was a member of the top 20 percent of Employees of
the Employer when ranked on the basis of compensation in accordance with Code
Section 414(q)(4) (the "top-paid group").
A Highly Compensated Employee includes any Employee who separated from
service (or was deemed to have separated) prior to the determination year,
performed no service for the employer during the determination year, and was a
highly compensated active Employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group and
the compensation that is considered, will be made in accordance with Section
414(q) of the Code and the Treasury Regulations thereunder.
1.25 "Hourly Employee" means an Employee who is paid on an hourly basis.
1.26 "Hour of Service" means, in accordance with Department of Labor Regulation
Section 2530.200b-2, each hour for which an Employee is directly or indirectly
paid, or entitled to be paid by an Employer, regardless of whether employment
duties are performed, and each hour for which back pay, irrespective of
mitigation of damages, has been either awarded or agreed to by an Employer.
These hours shall be credited to an Employee for the computation period during
which the Employee's employment duties were performed, but in the event a
payment is made or due for a reason other than the performance of duties, hours
shall be credited for the computation period during which the absence from work
occurred.
1.27 "Investment Fund" means any of the funds in which a Participant may direct
the investment of the Participant's Account under the Trust Fund. The
Administrative Committee shall have complete and exclusive discretion (i) to
designate the type and number of funds
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among which a Participant may choose to invest the Participant's Account and
(ii) to change the type and number of funds available.
1.28 "Matching Contribution" means the amount contributed by the Employer under
Section 3.3 of the Plan.
1.29 "Matching Contribution Account" means the account used to record the
Participant's interest in the Plan attributable to Matching Contributions and
certain interests under Prior Plans.
1.30 "Non-highly Compensated Employee" means an Employee who is not a Highly
Compensated Employee.
1.31 "Participant" means an Eligible Employee who has satisfied the eligibility
requirements set forth in Article II herein and has executed an Elective
Contribution Agreement that has been accepted by the Administrative Committee.
1.32 "Participating Employer" means a Related Entity approved by the Board or
its delegate to have its employees participate in the Plan. Participating
Employers are listed on Annex II.
1.33 "Plan" means The PNC Financial Services Group, Inc. Incentive Savings Plan.
1.34 "Plan Administrator" means the Corporation.
1.35 "Plan Manager" means the individual designated by the Administrative
Committee to manage the operation of the Plan as herein provided or to whom the
Administrative Committee has duly delegated any of its duties or obligations
hereunder.
1.36 "Plan Year" means the calendar year.
1.37 "Prior Plan" means each of the plans listed on Annex III.
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1.38 "Related Entity" shall mean any entity which, with the Corporation or any
Employer, forms (i) a controlled group of corporations within the meaning of
Code Section 414(b), (ii) a group of trades or businesses under common control
within the meaning of Code Section 414(c) or (iii) an affiliated service group
within the meaning of Code Section 414(m). For purposes of Article VII, however,
the adjustments required by Code Section 415(h) shall be made to such
subsections.
1.39 "Rollover Account" means the account used to record a Participant's
interest in the Plan attributable to a Rollover Amount, if any, and certain
interests under Prior Plans.
1.40 "Rollover Amount" means any rollover amount or rollover contribution
defined in Code Sections 402(c)(4), 403(a)(4) or 408(d)(3) or direct
trustee-to-trustee transfer of an amount that, if distributed, would satisfy
such Code Sections.
1.41 "Salaried Employee" means an Employee who is paid on the basis of annual
salary.
1.42 "Spouse" means the person to whom a Participant is legally married as
determined by the Administrative Committee or its designee.
1.43 "Total Disability" means a medically determinable physical or mental
condition of such severity and probable prolonged duration as to entitle a
Participant to receive disability payments under a long-term disability income
plan maintained by an Employer with respect to that Employee. For Employees not
covered by such a plan, Total Disability shall be determined by the
Administrative Committee using the criteria established by the Corporation's
long-term disability insurance carrier or administrator to determine eligibility
of Employees covered thereby to receive long-term disability income payments.
1.44 "Trust" means the trust established as part of this Plan to hold the assets
of the Plan pursuant to the Trust Agreement.
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1.45 "Trust Agreement" means the agreement or agreements of trust and/or
custodial agreements established as part of this Plan between the Trustee and
the Corporation.
1.46 "Trust Fund" means, collectively, all funds received by the Trustee,
together with all income thereon and increments and profits therefrom, as the
same may be held or invested from time to time as provided for in the Trust
Agreement.
1.47 "Trustee" means PNC Bank, N.A., acting through its trust division, or its
successors in trust, or any additional or successor Trustee as named by the
Corporation.
1.48 "Valuation Date" means each day on which the New York Stock Exchange (or
any other national securities exchange) is open to execute purchases or sales of
securities and on which the Trust Fund is valued.
1.49 "Year of Eligibility Service" means an eligibility computation period
during which an Employee is credited with 1,000 or more Hours of Service. The
eligibility computation period shall be an initial period of 12 consecutive
months beginning on the Employee's date of employment. Subsequent to the initial
12-month period, the eligibility computation period shall be the Plan Year,
beginning with the Plan Year in which the first anniversary of the Employee's
date of employment occurs.
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ARTICLE II
PARTICIPATION IN THE PLAN
2.1 Eligibility to Participate
(a) General Rule
Except as provided below, an Eligible Employee shall become a Participant
on the Entry Date coincident with or next following the date the Participant has
(i) attained the age of 21, (ii) in the case of a Salaried Employee, completed
six consecutive months of service on an elapsed time basis, or, in the case of
an Hourly Employee, completed one Year of Eligibility Service and (iii) executed
an Elective Contribution Agreement.
(b) Transfer to Participating Employer from Nonparticipating Related Entity
or Nonparticipating Collective Bargaining Unit
Each Eligible Employee who transfers to a Participating Employer from a
Related Entity that is not a Participating Employer shall become a Participant
on the Entry Date coincident with or next following the date the Participant
first performs an Hour of Service with the Participating Employer, provided the
Participant has (i) attained the age of 21, (ii) in the case of a Salaried
Employee, completed six consecutive months of service with the Related Entity on
an elapsed time basis, or, in the case of an Hourly Employee, completed one Year
of Eligibility Service with the Related Entity and (iii) executed an Elective
Contribution Agreement.
If an Employee either ceases to be a member of a nonparticipating
collective bargaining unit or is re-employed by a Participating Employer, the
Participant shall be eligible to participate in the Plan on the Entry Date
coincident with or next following the later of (i) the date upon which the
Participant satisfies the eligibility requirements of Section 2.1(a) or (ii) the
date upon which the change in status occurs.
(c) Becoming Employed By Participating Employer Because Related Entity
Elects to Participate or Because of Corporate Transaction
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If an Eligible Employee becomes employed by a Participating Employer in
connection with either a Related Entity electing to be a Participating Employer
or a Participating Employer's merger with another company, acquisition of
another company, or acquisition of any portion of another company as a result of
either an asset or stock purchase or similar transaction then the Eligible
Employee shall become a Participant after executing an Elective Contribution
Agreement on the Entry Date (or other date) coincident with or next following
the earlier of (i) the date set forth in Section 2.1(a) or (ii) the date, if
any, set forth in the Board resolution or in the agreement of merger, sale or
acquisition upon which acquired employees shall commence participation in the
Plan.
(d) Transfer of Participant to Nonparticipating Related Entity or
Nonparticipating Collective Bargaining Unit
If an individual who is a Participant does not terminate employment but is
transferred to a Related Entity that is not a Participating Employer or becomes
a member of a collective bargaining unit that does not participate in the Plan,
then unless the applicable collective bargaining agreement provides otherwise,
during the period that such individual is employed by such Related Entity or is
a member of such collective bargaining unit, the Administrative Committee shall
limit such individual's sharing in the allocation of Employer Contributions, if
any, under the Plan to the extent of the individual's Compensation paid by the
Employer for services rendered while such individual was not employed by such
nonparticipating Related Entity or a member of a collective bargaining unit.
However, during such period, the individual's Account shall continue to share
fully in Trust Fund allocations under Section 6.8.
(e) Certain Hourly Employees
Certain Hourly Employees hired prior to January 1, 1994 and not otherwise
eligible under subsections (a) through (d) above became Participants because
they were deemed to have accumulated more than 1,000 Hours of Service with a
Participating Employer during the period from January 1, 1993 to December 31,
1995 because of changes to administrative and
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recordkeeping processes. No other Hourly Employees are eligible to participate
in the Plan under this subsection (e).
2.2 Participation upon Reemployment
A former Employee who participated in the Plan prior to the Employee's
termination of employment with the Employer shall resume participation in the
Plan effective as of the Employee's date of reemployment; provided that the
Employee's Elective Contributions shall not be resumed, or begin, as the case
may be, until the Entry Date next following the Employee's date of reemployment.
2.3 Designation of Beneficiaries
(a) Procedures for Designating
Each Participant shall have the right to designate a Beneficiary (including
contingent Beneficiaries if the Participant so desires) to receive the interest
of such Participant in the Trust Fund upon the death of such Participant. A
Beneficiary designation must be made in accordance with procedures established
by the Administrative Committee and is not effective unless received by the
Administrative Committee or its designee. A Participant who wishes to designate,
or who previous to marriage has designated, a primary Beneficiary other than the
Participant's Spouse shall furnish to the Administrative Committee the written
consent of the Participant's Spouse, witnessed by a notary public, to such
Beneficiary designation. Unless otherwise specified by law or regulation, the
designation of a nonspousal Beneficiary shall be ineffective absent such
notarized spousal consent.
(b) Change of Beneficiary
Subject to the required spousal consent, a Participant shall have the right
to change or revoke any Beneficiary designation, at any time and from time to
time, by filing a new designation or notice of revocation with the
Administrative Committee. A Spouse's consent
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applies only to the signatory Spouse and does not bind any future Spouse. In the
event the Participant remarries, the new Spouse will be deemed to be the
Beneficiary, unless the procedures set forth above to designate another
Beneficiary are followed with respect to the new Spouse.
(c) Death of Participant with No Beneficiary
If a person designated as a Beneficiary by a Participant fails to survive
the Participant, such designation of that person as Beneficiary shall not be
effective. If a Participant dies without having an effective designation of a
Beneficiary in effect, any payments becoming payable under this Plan by reason
of the Participant's death shall be made, on direction of the Administrative
Committee, in equal shares to and among the person or persons who shall be
shown, to the reasonable satisfaction of the Administrative Committee, to be
within the first of the following five classes of potential Beneficiaries which
shall contain one or more members surviving at the death of the Participant: (i)
the Participant's Spouse, (ii) the Participant's issue, per stirpes, (iii) the
Participant's parents, (iv) the Participant's brothers and sisters or (v) the
Participant's executors or administrators.
(d) Death of Beneficiary while Receiving Payments
If a Beneficiary dies at any time when any amount remains to be paid to the
Beneficiary under this Plan, and if the Participant has not named a successor or
contingent Beneficiary, the remaining benefits shall be paid, on direction of
the Administrative Committee, in equal shares to and among the person or persons
who shall be shown, to the reasonable satisfaction of the Administrative
Committee, to be within the first of the following five classes of potential
Beneficiaries which shall contain one or more members surviving at the death of
the Beneficiary: (i) the Participant's Spouse, (ii) the Participant's issue, per
stirpes, (iii) the Participant's parents, (iv) the Participant's brothers and
sisters or (v) the Participant's executors or administrators.
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ARTICLE III
CONTRIBUTIONS
3.1 Elective Contributions
(a) Amount of Elective Contributions
During the month preceding a Participant's Entry Date into the Plan, an
Eligible Employee may elect, in accordance with the procedures established by
the Administrative Committee or Plan Manager, by entering into an Elective
Contribution Agreement, to cause an Elective Contribution to be made to the Plan
on the Participant's behalf with respect to the Participant's Compensation in an
amount equal to any whole number percentage between one percent and 15 percent,
and effective January 1, 2002, between one percent and 20 percent, of the
Eligible Employee's Compensation.
(b) Payroll Deductions
Elective Contributions made on behalf of Participants shall be collected by
the Employer through deductions from the Participant's Compensation in
accordance with the uniform rules that may be adopted by the Administrative
Committee from time to time. All such contributions shall be paid to the Trustee
by the Employer and shall be credited to the Participant's Elective Contribution
Account.
(c) Change in or Discontinuance of Elective Contributions
Any Participant who has filed an Elective Contribution Agreement may elect
to change the percentage of future Compensation to be contributed to the Plan
for any future payroll period or to discontinue future Elective Contributions.
The Participant must make such election to the designated agent for the
Administrative Committee at such time and in the manner designated in accordance
with guidelines established by the Administrative Committee. Elections shall be
effective on the next pay date, provided the election is made at least nine days
before the pay
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date. A Participant who discontinues Elective Contributions may resume Elective
Contributions by completing and filing a new Elective Contribution Agreement.
3.2 Employer Contributions
(a) Amount of Employer Contributions
Each Employer shall contribute with respect to Participants who are its
Employees such amount as the Board, in its sole discretion, may determine prior
to the end of the Plan Year for which such contribution is made.
(b) Time of Payment of Employer Contributions
Each Employer shall make its Employer Contributions, if any, prior to the
last date for filing (including extensions) such Employer's federal income tax
return for the fiscal year with respect to which such contributions are made.
(c) Profits Not Required under Plan
Employer Contributions may be made to the Plan without regard to its
current or accumulated earnings and profits for the taxable year or years ending
with or within such Plan Year. Notwithstanding the foregoing, the Plan is hereby
designated as a profit sharing plan for purposes of Sections 401(a), 402, 412
and 417 of the Code.
(d) Allocation of Employer Contributions
Employer Contributions shall be allocated to a Participant's Employer
Contribution Account according to the ratio that each such Participant's
Compensation for such Plan Year bears to the aggregate Compensation of all
Participants for the Plan Year.
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3.3 Matching Contributions
(a) Amount of Matching Contributions
Each Employer with respect to each Participant that is its Employee shall
contribute an amount equal to 100 percent of the Participant's Elective
Contributions up to six percent of the Participant's Compensation on each pay
date.
(b) Time of Payment of Matching Contributions
Each Employer shall contribute Matching Contributions with respect to a
Participant to the Plan in accordance with applicable law.
3.4 Rollover Contributions
(a) Written Request
The Plan Manager, pursuant to a written request, may permit either a
Participant or an Employee who has not met the age and service requirements in
Article II of the Plan to contribute a Rollover Amount to the Trust. The written
request shall set forth the amount of such Rollover Amount and contain a
statement, satisfactory to the Plan Manager, that such contribution constitutes
a Rollover Amount.
(b) Status of Rollover Amount Contributed by Non-Participant
In the case of a Rollover Amount contributed by an Employee who is not yet
a Participant, such Employee will not become a Participant until the
requirements of Article II are satisfied. Until such Employee becomes a
Participant, the Employee is not entitled to make or receive contributions under
the Plan or to take loans or withdrawals from the Rollover Account.
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(c) Expenses Incurred in Connection with Rollover
Unless the Plan Manager, in its sole discretion, determines otherwise, any
expenses incurred incident to the transfer or rollover of such property to the
Plan shall be paid by the Participant.
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ARTICLE IV
PARTICIPANT ACCOUNTS
4.1 Maintenance of Accounts for Each Participant
Separate accounts shall be maintained by the Employer in the name of each
Participant for Employer Contributions, Elective Contributions, Matching
Contributions, Rollover Amounts and Deposit Accounts. The maintenance of the
individual accounts is for accounting purposes only, and a segregation of assets
and liabilities of the Trust Fund is not intended.
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ARTICLE V
VESTING
5.1 Vesting
A Participant's interest in the Participant's Account shall be fully vested
at all times, except as provided in Annex III for amounts transferred from
certain Prior Plans. If a Participant's account in a plan maintained by a
Related Entity that has not adopted this Plan is transferred to this Plan on or
after January 1, 1991, the Participant shall become fully vested in any unvested
portion of the amounts transferred from the plan maintained by the Related
Entity.
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ARTICLE VI
INVESTMENT OPTIONS
6.1 Participant Investment Elections
(a) Investment of Deposit Account, Elective Contributions, Employer
Contributions and Rollover Account
Deposit Accounts, Elective Contributions, Employer Contributions and
Rollover Accounts shall be invested at the direction of the Participant in any
or all of the Investment Funds. Each Participant shall designate in accordance
with procedures or mechanisms implemented by the Plan Manager from time to time,
the percentage, in multiples of one percent of Employer Contributions, Elective
Contributions, Rollover Amounts or Deposit Accounts that are to be invested in
each of the available Investment Funds. In the event that a Participant does not
make such designation, the Participant shall be deemed to have elected such
Investment Fund as the Administrative Committee or the Plan Manager may
designate from time to time. Such elections shall remain in effect and apply to
all subsequent Elective Contributions, Employer Contributions and Rollover
Amounts made with respect to such Participant until the election is changed as
provided herein.
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(b) Investment of Matching Contributions
All Matching Contributions shall be invested in Corporation Stock, except
that effective January 1, 2001, in the case of a Participant employed at the
time the Matching Contribution is made by any Participating Employer that is a
subsidiary of BlackRock, Inc., the Matching Contribution shall be invested in
BlackRock Stock. Notwithstanding any other provision of this Plan, a Participant
who has attained the age of 50 may make an election in accordance with
procedures established by the Plan Manager to transfer all or part of the
Matching Contributions made on the Participant's behalf from Corporation Stock
or BlackRock Stock to any other Investment Funds and/or to have future Matching
Contributions invested in the other Investment Funds.
(c) Restrictions on Investment Elections
Investment elections relating to the Corporation Stock and BlackRock Stock
are subject to Corporation's and BlackRock, Inc.'s policies regarding trading of
employer securities, including insider trading policies.
6.2 Other Restrictions on Availability of Investment Funds
In connection with a merger of another plan into this Plan, the transfer of
assets from another plan to this Plan or the transfer of assets from this Plan
to another plan, the Administrative Committee may impose such restrictions on
such elections or the availability of Investment Funds as may be necessary,
appropriate or convenient in order to facilitate such merger or transfer.
6.3 Transfer of Assets
The Administrative Committee shall direct the Trustee to transfer moneys or
other property from the appropriate Investment Fund to another Investment Fund
as may be necessary to carry out the aggregate transfer transactions after the
Administrative Committee has caused
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the necessary entries to be made in the Participants' Accounts in the Investment
Funds and has reconciled offsetting transfer elections, in accordance with
uniform rules established by the Administrative Committee.
6.4 Records
The records of the Plan shall be maintained by the Administrative Committee
and shall accurately disclose the status of each Account. Each Participant shall
be advised generally as of each calendar quarter, but at least once during each
Plan Year, as to the value of the Participant's Account.
6.5 Participant Interest in Trust Fund
Each Participant shall have an undivided proportionate interest in the
Trust Fund. Such interest shall be measured by the proportion that the market
value of the Participant's Account in each Investment Fund bears to the total
market value of all Accounts invested in such Trust Fund as of the date that
interest is being determined.
6.6 Valuation of Investment Funds
The current value of the assets held in each of the Investment Funds and
any other assets held in the Trust shall be determined by the Trustee as of each
Valuation Date. Interests in each Investment Fund shall be valued at their last
public sale price upon the New York Stock Exchange on the Valuation Date, or
upon any other recognized exchange or exchanges, or if no such sale shall have
been reported, and in the case of "over-the-counter" quotations, the last bid
price at the close of business on the Valuation Date. The value of any security
which is not listed or dealt in on any exchange shall be determined as nearly as
may be in the same manner, except that there may be used for the purpose of
obtaining the sale price or the bid price any published quotations in common use
which may be available, or, in the discretion of the Trustee, quotations by a
reputable broker dealing in such securities. Investments that are not currently
quoted shall be appraised at their fair market value in the opinion of the
Trustee.
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6.7 Allocation of Expenses
As of each Valuation Date, the Trustee shall determine the fair market
value of the Trust Fund after first deducting any expenses that have not been
paid by the Employer. Unless paid by the Employer, and subject to such
limitations as may be imposed by ERISA or other applicable law, all costs and
expenses incurred in connection with the general administration of the Plan and
the Trust shall be chargeable to the Trust Fund.
6.8 Allocation of Earnings and Losses
As of each Valuation Date, the Administrative Committee, with the
assistance of the Trustee, shall allocate the net earnings and gains or losses
of each Investment Fund of the Trust Fund in accordance with procedures adopted
by the Administrative Committee.
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ARTICLE VII
LIMITATIONS ON CONTRIBUTIONS
7.1 Maximum Amount of Elective Contributions
(a) Elective Deferral Limit
A Participant's Elective Deferrals for a calendar year under the Plan and
all other plans, contracts or arrangements of the Employer and any Related
Entity may not in the aggregate exceed the limitation in effect for such
calendar year under Code Section 402(g)(1).
(b) Mandatory Distribution of Excess Deferrals
If, for a calendar year, a Participant's Elective Deferrals exceed the
limit above, excess deferrals (and income allocable thereto) will be distributed
to the Participant on or before April 15 of the following calendar year. The
income allocable to the excess deferrals will be determined in accordance with
Section 7.1(d).
(c) Elective Distribution of Excess Deferrals
If, for a calendar year, a Participant's Elective Deferrals do not exceed
the limit above, but would exceed such limit if elective deferrals under plans,
contracts or arrangements or unrelated entities were considered, then the
Participant may request that a portion of the Participant's Elective
Contributions under this Plan be treated as excess deferrals and distributed
pursuant to Section 7.1(b) above. In no event may such amount exceed the lesser
of (i) the amount by which the Participant's total Elective Deferrals exceed the
Code Section 401(g) limit for the calendar year or (ii) the Participant's
Elective Contributions under the Plan for the calendar year.
A Participant's request for distribution of excess deferrals under this
Section must be made in accordance with the procedures established by the
Administrative Committee or Plan
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Manager and filed with the Administrative Committee on or before March 1 of the
calendar year following the calendar year for which the excess deferrals were
made. The request must specify the amount of the Participant's excess deferrals
and be accompanied by a statement that if such amounts are not distributed, the
Participant's Elective Deferrals for the calendar year will exceed the Code
Section 402(g) limit.
(d) Income Allocable to Excess Deferrals
The income allocable to excess deferrals for a calendar year is equal to
allocable gain or loss for the calendar year which is determined by multiplying
the net income (or loss) for the calendar year allocable to Elective
Contributions by a fraction, the numerator of which is the excess deferrals by
the Employee for the taxable year and the denominator of which is the sum of (i)
the Account Balance of the Employee attributable to Elective Contributions as of
the beginning of the calendar year, and (ii) the Employee's Elective
Contributions for the calendar year.
7.2 Deductibility
Elective Contributions, Employer Contributions and Matching Contributions
collectively shall not be in excess of the maximum amount allowable as a
deduction for federal income tax purposes under Section 404 of the Code. For
purposes of determining the maximum deductible contribution, Employer
Contributions shall not include any amount that may be credited to the Plan and
allocated to Participants' Accounts in respect of fees received by the Employer
from any mutual fund it services.
7.3 Limitation on Annual Additions
(a) Amount of Limitation
Notwithstanding any other provision of this Plan, the total annual
additions (as defined in Code Section 415) to the Account of any Participant
under this Plan and any other defined
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contribution plan or plans maintained by the Employer or any Related Entity for
any Plan Year shall not exceed the lesser of (i) 25 percent of the Participant's
compensation (as defined in Code Section 415, which for Plan Years beginning on
or after January 1, 1998, shall include (A) any elective deferral (as defined in
Code Section 402(g)(3)) and (B) any amount that is contributed or deferred by
the Employer at the election of the Employee and that is not includible in the
Employee's gross income by reason of Code Sections 125, 132(f)(4) or 457) or
(ii) $35,000, as adjusted by the Secretary of the Treasury (or, effective for
Plan Years ending on or before December 31, 1994, if greater, one-quarter of the
defined benefit dollar limit in effect for such year under Section 415(b)(1)(A)
of the Code).
(b) Return of Excess Contributions
In the event that Elective Contributions, with respect to any Participant,
exceed the limitations imposed by this Section 7.3, then the excess shall be
paid to such Participant in cash. In the event Employer Contributions and
Matching Contributions exceed the limitations imposed by this Section 7.3 with
respect to any Participant, then the excess first shall be used to reduce
Matching Contributions and the balance shall be carried over to subsequent years
and used to reduce Matching Contributions for such subsequent year or years.
Amounts carried over shall be held in a suspense account (as described in
Article XVII), and shall be invested in any manner the Trustee deems
appropriate.
(c) Combined Defined Benefit and Defined Contribution Plan Limit
For Plan Years ending before December 31, 1999, if an Employee was a
Participant in one or more defined benefit plans and one or more defined
contributions plans maintained by the Employer, the sum of the "defined benefit
plan fraction" and the "defined contribution plan fraction" for any year may not
exceed 1.0.
The defined benefit plan fraction for any year is a fraction (i) the
numerator of which is the Participant's projected annual benefit under all
defined benefit plans maintained by the Employer (determined as of the close of
the Plan Year) and (ii) the denominator of which is the
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lesser of (A) the product of 1.25 multiplied by the dollar limitation in effect
under Code Sections 415(b) and 415(d) for such year or (B) 140 percent of the
Participant's highest average compensation, including any adjustments under Code
Section 415(b) for such year.
The defined contribution plan fraction for any year is a fraction (i) the
numerator of which is the sum of the annual additions to the Participant's
Account as of the close of the Plan Year and (ii) the denominator of which is
the sum of the lesser of the following amounts determined for such year and each
prior year of service with the Employer: (A) the product of 1.25 multiplied by
the dollar limitation determined under Code Sections 415(d) and (b) in effect
for such year (determined without regard to Code Section 415(c)(6)) or (B) 35
percent of the Participant's compensation for such year.
7.4 Actual Deferral Percentage Test
Effective for Plan Years beginning on and after January 1, 2000, the Plan
is intended to satisfy the actual deferral percentage test of Code Section
401(k)(3)(A)(ii) by utilizing the Code's design-based safe harbor. However, for
any Plan Year in which the Plan is not a safe harbor plan, the provisions below
will apply.
(a) Definition of Actual Deferral Percentage
"Actual Deferral Percentage" means the average of the percentages
(calculated separately for each Participant who is eligible to make Elective
Contributions to the Plan) determined by dividing (i) by (ii) where (i) is the
total of the Elective Contributions made for the Plan Year on behalf of each
such Participant and (ii) is such Participant's total W-2 compensation paid by
the Employer for such Plan Year.
If the Plan and any other plan that includes a cash or deferred arrangement
are considered as one plan for purposes of Code Sections 401(a)(4) or 410(b),
the cash or deferred arrangements in such plans shall be treated as one plan for
purposes of calculating the Actual Deferral Percentage.
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If any Highly Compensated Employee who is a Participant in this Plan also
participates in any other cash or deferred arrangement of the Employer, for
purposes of determining the Actual Deferral Percentage for such Employee, all
such cash or deferred arrangements shall be treated as one cash or deferred
arrangement.
(b) Maximum Deferral Percentage
For any Plan Year, the Actual Deferral Percentage for the group of Highly
Compensated Employees for the Plan Year may not exceed the greater of (i) 125
percent of the Actual Deferral Percentage of the group of Non-highly Compensated
Employees for the Plan Year or (ii) 200 percent of the Actual Deferral
Percentage for the group of Non-highly Compensated Employees for the Plan Year,
provided that the Actual Deferral Percentage for the group of Highly Compensated
Employees for the Plan Year may not exceed the Actual Deferral Percentage for
the group of Non-highly Compensated Employees by more than two percentage
points.
This Actual Deferral Percentage test will be performed in accordance with
Code Section 401(k)(3) and Treasury Regulation Section 1.401(k)-l(b).
(c) Correction of Actual Deferral Percentage Test
If the Actual Deferral Percentage test is projected or determined to be
failed for any Plan Year, the Plan Administrator shall correct such failure no
later than 12 months after the end of the Plan Year. The Plan Administrator may
correct any such failure by using any one or combination of correction
procedures described in (1) and (2) below. The decision to use one or more
correction procedures shall be made in the sole discretion of the Plan
Administrator.
(1) Distribution of Excess Contributions
The Plan Administrator may correct a failure of the Actual Deferral
Percentage test for a Plan Year by distributing excess contributions and income
allocated thereto to Highly
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Compensated Employee. Effective January 1, 1997, in the event that there exists
an excess deferral percentage, then the amount of such excess shall be
eliminated by a leveling process under which the Actual Deferral Percentage of
the Highly Compensated Employee with the highest actual deferral ratio is
reduced to the extent required to cause such Highly Compensated Employee's
Actual Deferral Percentage to equal the Actual Deferral Percentage of the Highly
Compensated Employee with the next highest Actual Deferral Percentage. This
process shall be repeated until the excess deferral percentage is completely
eliminated. Once the dollar amount of the excess contributions has been
determined, it must be allocated to the appropriate highly compensated
employees. In order to make this allocation, the following steps are to be
taken:
(A) The elective contributions of the Highly Compensated Employee with
the highest dollar amount of elective contributions are reduced by the amount
required to cause that Highly Compensated Employee's elective contributions to
equal the dollar amount of the elective contributions of the Highly Compensated
Employee with the next highest dollar amount of elective contributions. This
amount is then distributed to the Highly Compensated Employee with the highest
dollar amount. However, if a lesser reduction would equal the total excess
contributions, the lesser reduction amount is distributed.
(B) If the total amount distributed is less than the total excess
contributions, step (A) is repeated.
(2) Qualified Matching Contributions and Qualified Nonelective
Contributions
The Plan Administrator may correct a failure of the Actual Deferral
Percentage test for a Plan Year by (i) designating some or all of the Matching
Contributions for the Plan Year, if any, as qualified matching contributions
and/or (ii) designating some or all of the Employer Contributions for the Plan
Year, if any, as qualified nonelective contributions.
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7.5 Actual Contribution Percentage Test
Effective for Plan Years beginning on and after January 1, 2000, the Plan
is intended to satisfy the actual contribution percentage test of Code Section
401(m)(2)(A) by utilizing the Code's design-based safe harbor. However, for any
Plan Year in which the Plan is not a safe harbor plan, the provisions below will
apply.
(a) Definition of Actual Contribution Percentage
"Actual Contribution Percentage" means the average of the percentages
(calculated separately for each Participant who is eligible to make Elective
Contributions to the Plan determined by dividing (i) by (ii) where (i) is the
total of the Matching Contributions made for the Plan Year on behalf of each
such Participant and (ii) is such Participant's total W-2 compensation paid by
the Employer for such Plan Year.
At the election of the Company, the Actual Contribution Percentage shall be
calculated after taking into account any Elective Contributions made on behalf
of a Participant for the Plan Year, provided that (i) Elective Contributions,
including those treated as Matching Contributions pursuant to this paragraph, do
not exceed the maximum deferral percentage (ii) Elective Contributions,
excluding those treated as Matching Contributions pursuant to this paragraph, do
not exceed the maximum deferral percentage and (iii) except as provided in (i)
above, the Elective Contributions treated as Matching Contributions pursuant to
this subparagraph are not taken into account in determining whether Elective
Contributions exceed the maximum deferral percentage for the Plan Year.
(b) Maximum Contribution Percentage
For any Plan Year, the Actual Contribution Percentage for the group of
Highly Compensated Employees for the Plan Year may not exceed the greater of (i)
1.25 percent of the Actual Contribution Percentage for the group of Non-highly
Compensated Employees for the Plan Year or (ii) 200 percent of the Actual
Contribution Percentage for the group of Non-highly Compensated Employees for
the Plan Year, provided that the Actual Contribution Percentage for the group of
Highly Compensated Employees for the Plan Year may not exceed the Actual
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Contribution Percentage for the group of Non-highly Compensated Employees for
the Plan Year by more than two percentage points.
(c) Elimination of the Excess Aggregate Contributions
Effective for Plan Years beginning on and after January 1, 1997, if the
Actual Contribution Percentage for the group of Highly Compensated Employees
exceeds the maximum contribution percentage described above for a particular
Plan Year, the amount of such excess aggregate contributions shall be eliminated
in the same manner as described in Section 7.4(c) above.
The income allocable to excess aggregate contributions for a calendar year
is equal to allocable gain or loss for the calendar year which is determined by
multiplying the net income (of loss) for the calendar year allocable to Matching
Contributions by a fraction, the numerator of which is the excess aggregate
contributions for the taxable year, and the denominator of which is the Account
Balance of the Employee attributable to Matching Contributions as of the end of
the Plan Year, without regard to any income or loss during such Plan Year.
7.6 Multiple Use Test
To the extent applicable, Code Section 401(m)(9) and Treasury Regulations
thereunder will apply to determine whether a multiple use of the alternative
limitation has occurred.
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ARTICLE VIII
DISTRIBUTION OF BENEFITS
8.1 Time of Distribution
(a) General Rule
Upon a Participant's termination of employment, including because of death
or Total Disability, the Participant will be entitled to a distribution of the
Participant's Account Balance as soon as may be administratively practicable
after receipt by the Administrative Committee of a valid benefit election form
in accordance with the procedures established by the Plan Manager or the
Administrative Committee.
The Administrative Committee shall determine, in accordance with Code
Section 401(k)(10), whether a Participant has terminated employment. A
Participant will not be treated as having terminated employment merely because
the Participant is transferred from a Participating Employer to a
nonparticipating Related Entity or to an entity that is not a Related Entity but
which is ten percent or more owned (directly or indirectly) by the Employer.
Any Employer Contributions and Matching Contributions to which a terminated
Participant is entitled as of the last Valuation Date of the year of
termination, shall be added to the Participant's existing Account, or if the
Participant's Account has already been distributed to the Participant, shall be
distributed as soon as practicable after the date such contributions are made to
the Trust.
(b) Involuntary Cashout
Notwithstanding the above, if a Participant's Account Balance is $3,500 or
less, and effective January 1, 1998, $5,000 or less, the Participant's Account
Balance will be paid to the Participant as soon as administratively practicable
after the Participant's termination of employment.
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Effective for distributions occurring prior to March 22, 1999, a lump sum
cashout could not be made if the Participant's Account Balance exceeded the
cashout limit as of the time of any prior distribution. Effective for
distributions occurring on or after March 22, 1999, notwithstanding the above,
if Participant has begun to receive distributions pursuant to an optional form
of benefit under which at least one scheduled distribution has not yet been
made, and if the Participant's Account Balance at the time of the first
distribution under that optional form of benefit exceeded the cashout limit
currently in effect, then the Participant's Account Balance is deemed to
continue to exceed the cashout limit.
8.2 Minimum Distributions
Notwithstanding the foregoing, effective January 1, 1997, a Participant who
is not a five percent owner (as defined in Code Section 416(i)(1)) and whose
account balance exceeds, effective January 1, 1998, $5,000 as of the
Participant's termination date may elect to defer payment until later than April
1 of the calendar year following the calendar year in which the Participant
attains age 70 1/2. A Participant who is a five percent owner must commence
distributions no later than April 1 of the calendar year following the calendar
year in which the Participant attains age 70 1/2 in accordance with the minimum
distribution rules of Code Section 401(a)(9).
With respect to distributions under the Plan made in calendar years
beginning on or after January 1, 2001, the Plan shall apply the minimum
distribution requirements of Section 401(a)(9) of the Code in accordance with
the regulations under Section 401(a)(9) that were proposed in January 2001,
notwithstanding any provision of the Plan to the contrary. This provision shall
continue in effect until the end of the last calendar year beginning before the
effective date of final regulations under Section 401(a)(9) or such other date
specified in guidance published by the Internal Revenue Service.
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8.3 Latest Commencement of Benefits
Notwithstanding any other provision in this Plan to the contrary, unless a
Participant elects otherwise, distribution of a Participant's Account must
commence no later than 60 days after the close of the Plan Year in which occurs
the later of (i) the date the Participant attains age 65, (ii) the tenth
anniversary of the year in which the Participant commenced participating in the
Plan or (iii) the date on which the Participant terminates employment.
8.4 Method of Payment
(a) Lump Sum or Installments
If a Participant's employment terminates for any reason other than death
and the Participant's Account Balance exceeds the involuntary cashout limit
described in Section 8.1(b), the Participant's Account Balance shall be paid, at
the Participant's election, either in a single lump sum or in periodic
installments over a period not to exceed the lesser of 15 years or the life
expectancy of the Participant (or the joint life expectancy of the Participant
and the Participant's Spouse, if married).
If a Participant's employment terminates by reason of death or if the
Participant's Account Balance does not exceed the involuntary cashout limit
described in Section 8.1(b), the Participant's Account Balance will be paid in a
single lump sum.
(b) Additional Rules Applicable to Installments
In the case of installments, the amount of each payment shall be determined
by dividing the Participant's then Account Balance by the number of installments
remaining unpaid. The Participant shall be permitted to invest the remaining
Account Balance pursuant to the terms of the Plan.
In the case of a Participant who receives a distribution of the
Participant's Account Balance because of Total Disability, who elected to have
the Participant's benefits paid in installments and who then recovers from the
Total Disability and returns to service with an
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Employer, any remaining installment payments will cease and the remainder of the
Participant's Account Balance will be distributed in accordance with this
Article VIII.
(c) Elimination of Optional Forms of Distribution Preserved from Prior
Plans
Participants who formerly were covered by certain Prior Plans were
permitted to receive the portion of the Participant's Account transferred from
the Prior Plan in certain optional forms preserved from the Prior Plans. These
optional forms are eliminated in accordance with Internal Revenue Service
guidance. However, the amendment eliminating the optional forms shall not apply
to a Participant with respect to any distribution with an annuity starting date
that is earlier than 90 days from the date a summary of material modification
describing the amendment is furnished to affected Participants.
8.5 Medium of Distribution
Any amount invested in Corporation Stock or BlackRock Stock on the date of
distribution may be distributed in cash or, at a Participant's election, in
kind. If a Participant does not have an election form on file with the
Administrative Committee regarding the medium of distribution, the portion of
the Participant's Account invested in Corporation Stock or BlackRock Stock will
be distributed in cash.
8.6 Payment to Minors and Incompetents
In the event any payment due under the terms of the Plan is to be made to a
minor or incompetent person, such payment may be made for the person's benefit
or in any of the following ways as the Administrative Committee shall determine
in its sole discretion: (i) directly to such minor or incompetent person, (ii)
to the legally appointed guardian of such minor or incompetent person or (iii)
to any person or institution maintaining such minor or incompetent person.
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8.7 Direct Rollover Provisions
(a) Definition of Terms Used in This Section 8.7
The following words or phrases as used herein shall have the following
meanings, unless a different meaning clearly is required by the context.
Otherwise, capitalized terms used in this Section 8.7 have the meanings assigned
to them in Article I.
(1) "Distributee" means (i) an Employee, (ii) former Employee,
(iii) an Employee's or former Employee's surviving Spouse and (iv) an Employee's
or former Employees' Spouse or former Spouse who is the alternate payee under a
"qualified domestic relations order," as defined in Code Section 414(p) and
ERISA Section 206(d)(3)(B), are Distributees with regard to the interest of the
Spouse or former Spouse.
(2) "Eligible Retirement Plan" means any of the following that accepts
the Distributee's Eligible Rollover Distribution: (i) an individual retirement
account described in Section 408(a) of the Code, (ii) an individual retirement
annuity described in Section 408(b) of the Code, (iii) an annuity plan described
in Section 403(a) of the Code or (iv) a qualified trust described in Section
401(a) of the Code. 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.
(3) "Eligible Rollover Distribution" means 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 (i) 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, (ii) any
distribution to the extent such distribution is required under Section 401(a)(9)
of the Code or (iii) 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).
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(b) Distributee's Election
Notwithstanding any other provision of the Plan, a Distributee may elect to
have, at the time and in the manner prescribed by the Administrative Committee,
any portion of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Distributee in a direct rollover. The
Administrative Committee may, however, in its discretion, limit a Distributee to
a single direct rollover for each Eligible Rollover Distribution. Furthermore,
the Administrative Committee may prescribe additional procedures for a
Distributee to elect a direct rollover of an Eligible Rollover Distribution.
(c) Timing of Direct Rollover
If a distribution is one to which Code Sections 401(a)(11) and 417 do not
apply, such distribution may commence less than 30 days after the notice
required under Treasury Regulation Section 1.411(a)-11(c), provided that (i) the
Administrative Committee clearly informs the Participant that the Participant
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 a particular
distribution option and (ii) the Participant after receiving the notice,
affirmatively elects a distribution.
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ARTICLE IX
IN-SERVICE WITHDRAWALS DURING EMPLOYMENT
9.1 Regular Withdrawals
A Participant may request a withdrawal from the Participant's Deposit
Account and/or Employer Contribution Account. To be eligible for such a
withdrawal, the funds must have been in the Plan for two complete Plan Years,
unless such funds are attributable to Employee after-tax contributions to a
Prior Plan that were not matched by an Employer. Requests for withdrawal must be
made in accordance with procedures established by the Plan Manager. Such
withdrawals may be made only once in any 12-month period. Any amount so
withdrawn may not be repaid or recontributed.
9.2 Hardship Withdrawals
(a) Procedures and Funds Available
Upon the application of a Participant in accordance with the procedures
established by the Plan Manager, the Plan Manager may authorize the Trustee to
make a hardship withdrawal to a Participant if the Participant has an immediate
and heavy financial need that cannot be reasonably satisfied from other
resources of the Participant. To ensure that the Plan operates in a uniform and
nondiscriminatory manner, a hardship withdrawal will only be granted if
described in Sections 9.2(b) and (c). Withdrawals under this Section 9.2 shall
be limited to the amount credited to the Participant's Elective Contribution
Account, Matching Contribution Account or Rollover Account and to the amount
credited to a Participant's Deposit Account and Employer Contribution Account
that could not be withdrawn under Section 9.2(a) above.
(b) Events That Are Deemed To Constitute Immediate and Heavy Financial
Need
For purposes of this Section, the following events will be deemed to
constitute an immediate and heavy financial need:
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(1) expenses for medical care (as that term is defined in Code Section
213(d)) previously incurred by the Participant, Participant's Spouse or
dependent of the Participant or necessary for these persons to obtain medical
care as described in Section 213(d) of the Code;
(2) payment of tuition, related educational fees, and room and board
expenses for the next 12 months of post-secondary education of a Participant,
Participant's Spouse or dependent;
(3) costs directly related to the purchase of a Participant's
principal residence (excluding mortgage payments); or
(4) payments necessary to prevent the Participant from being either
evicted from the Participant's principal residence or having the mortgage on it
foreclosed.
(c) Circumstances That Are Deemed To Illustrate a Lack of Alternative
Resources
For purposes of this section, a Participant will be deemed to lack
alternative resources if the Participant represents, on a form to be supplied by
the Plan Manager, that:
(1) the hardship withdrawal does not exceed the amount reasonably
required to meet the financial need created by the hardship (including any
amounts necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution);
(2) the Participant has exhausted all other in-service distributions
from the Plan, and is precluded from receiving any further loans from the Plan
because of the limits set forth in Code Section 72(p); and
(3) the need cannot be reasonably satisfied (i) through reimbursement
or compensation by insurance or otherwise, (ii) by liquidation of the employee's
assets, (iii) by
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cessation of Elective Contributions or employee's contributions under the Plan
or (iv) by other distributions or nontaxable loans from plans maintained by the
Employer or by any other Employer or by borrowing from commercial sources on
reasonable terms.
(d) Cessation of Contributions
Any Participant who receives a hardship withdrawal shall be suspended from
making and receiving contributions in the Plan and any other deferred
compensation plan of the Corporation (whether qualified or nonqualified and
whether sponsored by the Corporation or a Related Entity) and in any stock
option, stock purchase or similar plan sponsored by the Employer (or a Related
Entity) for a period of 12 months from the effective date of the hardship
distribution, and effective January 1, 2002, for a period of six months from the
effective date of the hardship distribution. Such suspension shall prohibit the
Participant from making Elective Contributions to the Plan and from receiving
Employer Contributions and Matching Contributions. In addition, the Participant
may not make Elective Contributions for the taxable year immediately following
the taxable year of the hardship withdrawal in excess of the limit under Code
Section 402(g) for such next taxable year less the amount of such Participant's
Elective Contributions for the taxable year of the hardship withdrawal.
9.3 Funding of Withdrawals
In the event a withdrawal is less than the total amount credited to a
Participant's Account, and if such Account is invested under more than one
Investment Fund, then the amount withdrawn from such Account shall be charged to
each Investment Fund in the same proportion that the net credit balance in the
Account then the subject of withdrawal bears to the combined credit balance in
all Investment Funds in which such Account is invested.
9.4 Withdrawals Permitted under Certain Prior Plans
Annex III describes additional withdrawal provisions applicable to amounts
transferred from certain Prior Plans.
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ARTICLE X
LOANS TO PARTICIPANTS
10.1 Authorization of Loans
Upon the application of a Participant who is currently employed by the
Employer in accordance with the procedures established by the Plan Manager, the
Plan Manager may authorize the Trustee to make a loan to the Participant. The
Administrative Committee shall establish uniform and nondiscriminatory rules,
which it shall apply in a consistent manner, to determine whether a loan shall
be approved. Loan applications must be on a form authorized and furnished by the
Plan Manager and will be approved only if the loan (i) meets the requirements
contained in Section 10.2 of this Plan, (ii) is a loan that is available on a
reasonably equivalent basis to all Participants who are "parties in interest" as
defined under ERISA Section 3(14), (iii) bears a reasonable rate of interest and
(iv) is adequately secured.
10.2 Minimum Requirements for Loans
To the extent the Plan Manager authorizes loans to Participants, all such
loans shall meet the following requirements and such other terms as the
Administrative Committee may establish from time to time.
(a) Principal Amount
The principal amount of a loan to a Participant shall not exceed the lesser
of (i) $50,000, reduced by the excess, if any, of the highest outstanding loan
balance owed by the Participant during the one-year period ending on the date
before the date the loan was made, over the outstanding balance of any loan from
the Plan to the Participant on the date on which such loan was made or (ii) 50
percent of such Participant's Account.
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(b) Minimum Amount
No loan shall be for less than $500.
(c) Maximum Term
The term of repayment of any loan shall be determined by the Administrative
Committee, but in no event may it exceed five years unless such loan principal
is used to acquire any dwelling unit which is used or within a reasonable period
of time is to be used (determined at the time the loan is made) as the principal
residence of the Participant, in which case the term of repayment of the loan
may be extended for as much as 15 years.
(d) Number of Loans
A Participant may not have more than two outstanding loans at any time. All
loans shall be made effective as of the last day of any quarter or such other
date as may be determined by the Plan Manager to be administratively
practicable.
(e) Funding of Loans
Unless otherwise specified by a borrowing Participant, loans shall be
funded by a pro rata liquidation of the borrowing Participant's interest in each
of the Investment Funds.
(f) Interest Rate
The rate of interest charged on a loan will be the prime rate of interest
as announced by PNC Bank, N.A., on the last business date of the month preceding
the date the Participant submits the loan application.
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(g) Repayment
The loan shall be repaid by payroll withholding over its term in level
installment payments in each payroll period. As a condition precedent to
approval of the loan, the Participant shall be required to authorize irrevocably
payroll withholding in the amount of each installment. Notwithstanding anything
herein to the contrary, no loan amount shall be permitted if the Plan Manager
determines pursuant to uniform standards adopted from time to time that the
borrowing Participant does not have the financial capability to repay such loan
(through payroll withholding or otherwise).
(h) Repayment Allocations
Loan repayments shall be deposited in accordance with the borrowing
Participant's current investment election with respect to current contributions,
including any investment election required by this Plan with respect to Matching
Contributions.
(i) Default
If a Participant shall fail to make any installment payment on the loan
under this Section within 60 days after the due date, the Plan Manager shall
have the discretion to accelerate repayment of said loan and demand immediate
repayment of the principal and interest on said loan then due. If the
Participant fails to comply with such demand within 30 days of receipt thereof,
the Plan Manager shall have the discretion to reduce the vested amounts in the
Participant's Account by the amount of the unpaid principal and interest to the
extent permitted by law. The Plan Manager may also execute on any additional
security posted by such Participant, to the extent permitted by law.
(j) Collateral
The loan shall be secured by 50 percent of a Participant's nonforfeitable
Account Balance. To the extent that any additional security is required, the
security posted must be
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something in addition to and supporting the Participant's promise to pay, which
is pledged to the Plan in such a manner that it may be sold, foreclosed upon or
otherwise disposed of upon default as defined in Section 10.2(i), the value and
liquidity of which additional security is such that it may reasonably be
anticipated that loss of principal and interest will not result from the loan.
The adequacy of such additional security will be determined in light of the type
and amount of security which would be required in the case of an otherwise
identical transaction in a normal commercial setting between unrelated parties
on arm's length terms.
(k) Termination of Employment
The outstanding balance of any loan granted to a Participant who terminates
employment with the Employer for any reason shall be immediately repayable to
the Plan together with interest then due. If not repaid, the outstanding balance
of the loan plus interest will be deducted from the payment of a Participant's
Account prior to distribution.
10.3 Disclosure of Terms of Loan Program to Participants
The Administrative Committee or its designee shall communicate to
Participants, as soon as may be reasonably practicable through the summary plan
description or such other written medium as the Administrative Committee shall,
in its sole discretion, deem advisable, the following information: (i) the
identity of the person and positions authorized to administer the Participant
loan program, (ii) the procedure for applying for loans, (iii) the basis on
which loans will be provided or denied, (iv) the limitations contained in
Section 10.2 on the types and amount of loans offered, (v) the procedure under
the program for determining a reasonable rate of interest, (vii) the types of
collateral which may secure a Participant's loan and (vii) the events
constituting default and the steps that will be taken to preserve Plan assets in
the event of such default.
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ARTICLE XI
ALLOCATION OF FIDUCIARY RESPONSIBILITIES AND DUTIES
11.1 Corporation
The Corporation shall be the Plan Administrator with the sole
responsibility for administration of the Plan. With respect to administrative
matters, the Corporation shall act through the Administrative Committee.
11.2 Administrative Committee
The Administrative Committee is designated as the agent of the Employer and
shall have the exclusive authority to control and manage the operations and
administration of the Plan and to direct the Trustee to make disbursements from
the Trust Fund as more fully set forth in Articles VIII and IX. The
Administrative Committee shall provide the Trustee with such information as is
necessary for the Trustee to carry out its fiduciary responsibilities under
ERISA with respect to the investment and administration of the Trust Fund. The
Trustee shall have no responsibility or duties for the administration of the
Plan, other than as provided herein or delegated to it by the Administrative
Committee and accepted by it in writing.
11.3 Trustee
The Trustee shall have the authority and discretion to manage and control
the Trust Fund to the extent provided in the Trust Agreement, but does not
guarantee the Trust Fund in any manner against investment loss or depreciation
in asset value, or guarantee the adequacy of the Trust Fund to meet and
discharge all or any liabilities of the Plan. The Trustee shall have no right or
duty to require payment of any contribution, or to inquire into the amount or
method of determining the amount of any contribution, and shall be accountable
only for funds and property actually received by it. The Trustee shall not be
liable for the making, retention or sale of any investment or reinvestment made
by it, as herein provided, or for any loss to, or diminution of the Trust Fund
or for any other loss or damage which may result from the
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discharge of its duties hereunder except to the extent it is judicially
determined that the Trustee has failed to exercise 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 like aims.
The duties and obligations of the Trustee with respect to the Trust Fund
shall be limited to those expressly imposed upon it in this Plan and the Trust
Agreement.
11.4 Investment Managers
The Administrative Committee, by means of a written direction executed by
any member acting on behalf of a majority of the members and delivered to the
Trustee, shall have the authority to direct the Trustee that a specified amount
or portion of the Trust shall not be subject to the investment management of the
Trustee, but shall instead be administered by an investment manager in
accordance with the written investment directions of such designated investment
manager or the Administrative Committee. The Administrative Committee may
appoint as an investment manager any entity described in ERISA Section 3(38).
To the extent that investments are so directed, the entity giving such
directions shall be a named fiduciary acting in the capacity of an investment
manager within the meaning of Sections 402(c)(3) and 403(a) of ERISA, and the
Trustee shall have no greater liability or responsibility with respect to such
investments than it would have if the entity giving such directions were an
investment manager. Upon receipt of a written direction from an entity
authorized to give such a direction, the Trustee shall follow the instruction
for the acquisition or disposition of the investment assets specified therein,
or the segregation and management or investment delegation of the portion of the
Trust specified therein, but such instructions shall not have the effect of
requiring the Trustee to violate any law or regulation governing the acquisition
or disposition of such investment assets or the segregation and management or
investment delegation relating to such portion of the Trust. Securities or other
investment assets may be purchased or sold by orders placed directly with
brokers by any entity designated by the Administrative Committee as
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having such authority, and all such purchases or sales shall be executed as
though made by the Trustee pursuant to instructions from such entity.
With regard to any investments which are so directed, the Trustee shall
have no right or duty to: (i) question any instructions received from any entity
authorized to give such directions, (ii) review any investments held in the
Trust at the direction of such an entity, nor (iii) make any recommendations
whatsoever to the Administrative Committee or any such other entity regarding
retention or sale or any other matter relating to such investments. The Trustee
shall not be liable to any person for any action resulting from compliance with
the instructions of the Administrative Committee or of any entity designated by
the Administrative Committee to give such instructions, and the Trustee shall be
indemnified and saved harmless by the Employers from and against any and all
liability to which the Trustee may be subjected by reason of any such act or
failure of the Administrative Committee or any such other entity to act,
including all expenses reasonably incurred in its defense.
11.5 No Joint Fiduciary Responsibilities
The Plan and the Trust Agreement are intended to allocate to each named
fiduciary the individual responsibility for the prudent execution of the
functions assigned to the fiduciary, and none of such responsibilities or any
other responsibility shall be shared by two or more of such named fiduciaries
unless such sharing shall be provided by a specific provision of the Plan or
Trust Agreement. Whenever one named fiduciary is required by the Plan or Trust
Agreement to follow the directions of another named fiduciary, the two named
fiduciaries shall not be deemed to have been assigned a shared responsibility,
but the responsibility of the named fiduciary giving the directions shall be
deemed that fiduciary's sole responsibility, and the responsibility of the named
fiduciary receiving those directions shall be to follow them insofar as such
instructions are on their face proper under applicable law.
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ARTICLE XII
ADMINISTRATION OF PLAN
12.1 Administrative Committee
The general administration of the Plan and the responsibility for carrying
out the provisions of the Plan shall be placed with the Administrative
Committee. The Administrative Committee shall consist of no less than three
persons appointed by the Board or its delegate. Vacancies thereon shall be
filled in the same manner as appointments. Each person appointed as a member of
the Administrative Committee shall signify the person's acceptance by filing a
written acceptance with the secretary of the Administrative Committee. The
Administrative Committee as a whole or any of its members may serve in more than
one fiduciary capacity with respect to the Plan.
12.2 Duties and Powers
The Administrative Committee, or its delegate, shall keep such records as
are necessary for the efficient operation of the Plan or as may be required by
law and shall provide for the preparation and filing of such forms or reports as
may be required to be filed with any governmental agency or department and with
the Participants or Beneficiaries. The Administrative Committee shall have all
powers necessary to carry out the provisions of the Plan and to satisfy the
requirements of any applicable law. The powers shall include, by way of
illustration and not limitation, discretionary authority to (i) construe and
interpret the Plan in accordance with uniform rules and regulations, (ii)
determine questions of fact, law and mixed questions of fact and law, (iii)
determine the eligibility of any person to participate in the Plan, the right of
any person to benefits and the amount, manner and time of payment of any
benefit, in accordance with the provisions of the Plan, (iv) prescribe
procedures to be followed by Participants in filing applications for benefits,
making elections and designating Beneficiaries, (v) issue directions to the
Trustee in connection with all matters within its discretion and in accordance
with the terms of the Plan, (vi) prepare and furnish to Employees, Participants,
Beneficiaries and governmental agencies, all descriptions, reports, forms or
other documents
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required to be furnished or filed under ERISA, the Code or regulations
promulgated thereunder, (vii) appoint and retain individuals to assist in the
administration of the Plan, including such legal, clerical, accounting and
actuarial service as it may require or as may be required by any applicable law
or laws and (viii) require from Employees, Employers, Participants and
Beneficiaries such information as shall be necessary for the proper
administration of the Plan.
12.3 Plan Manager
The Administrative Committee may designate a person or persons, who may or
may not be members of the Administrative Committee, to be the Plan Manager. The
Plan Manager shall be responsible for the day-to-day administration of the Plan
and for such other duties and responsibilities as are delegated by the
Administrative Committee. In addition to the duties specified elsewhere in this
document, the Plan Manager shall (i) be responsible for establishing and
communicating to the Participants and Beneficiaries the procedures for filing
claims for benefits, (ii) maintain and update from time to time the annexes to
the Plan and (iii) determine and record, in the case of plans merged into this
Plan, the Accounts in which a Participant's prior plan accounts are merged.
12.4 Standard of Conduct
The Administrative Committee and its delegates shall discharge their duties
with respect to the Plan solely in the interest of the Participants and
Beneficiaries and shall do so 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 like
character and with like aims. The Administrative Committee shall at all times
act in accordance with the Plan documents and any applicable law.
12.5 Delegation
The Administrative Committee shall elect a chair from among its members and
a secretary who may, but need not, be a member. Among their other duties, the
chair shall cause
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to be kept and the secretary shall keep a written record of all meetings and
actions taken by the Administrative Committee. The Administrative Committee may
appoint such subcommittees with such powers as it shall determine and may
authorize one or more of its members or any agent to execute and/or deliver any
instrument or make any payment on its behalf.
12.6 Meetings
The Administrative Committee shall hold meetings upon such notice, at such
place and at such times as it may decide, provided that a meeting shall be held
at least once each Plan Year. A meeting may be held in any manner as may be
determined by the Administrative Committee, but in any event, where not all
members are physically present, the actions of the Administrative Committee
shall be reduced to writing and sent to all members within ten days of the date
of the meeting. A majority of the Administrative Committee shall constitute at
least one-half of the appointed members of the Administrative Committee, and any
action that the Plan authorizes or requires the Administrative Committee to take
shall require the written approval or affirmative vote of a majority of its then
members, but not less than two, unless authority to take such action has been
delegated or allocated as provided herein. A dissenting member must register
dissent with the member's reasons for dissenting in writing delivered to the
other members and the Employer within seven days after the member has knowledge
of any action or failure to act by the majority or a delegate shall not be
responsible for any such action or failure to act.
12.7 Rules and Decisions
The Administrative Committee shall endeavor to act by general rules so as
not to discriminate in favor of any person and may from time to time adopt such
rules and regulations for the administration of the Plan and the transaction of
its business as the Administrative Committee shall determine to be necessary to
fulfill its duties and obligations or as may be required by law. Subject to the
provisions of this Plan relating to appeal procedure, the decisions and records
of the Administrative Committee shall be conclusive and binding upon the
Employer, Participants and Beneficiaries.
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12.8 Compensation and Payment of Expenses
Unless otherwise determined by the Corporation, the members of the
Administrative Committee shall serve without compensation for services as such
but all administrative costs and expenses of the Plan, including the expenses of
the Administrative Committee, shall be paid by the Trust to the extent not paid
by the Corporation or may be reimbursed to the Corporation to the extent so paid
by the Corporation. Such expenses shall include any expenses incident to the
functioning of the Administrative Committee, including, but not limited to, fees
of accountants, counsel and other specialists, and other costs of administering
the Plan.
12.9 Insurance
The Employer shall indemnify or provide and maintain appropriate insurance
coverage for the Employer and the Administrative Committee, its members, and its
delegates and appointees (other than persons who are independent of the Employer
and are rendering services to the Plan for a fee) from any claim, loss, damage,
liability and expense (including reasonable attorneys' fees) arising by reason
of their acts or failure to act concerning this Plan, except where such acts or
failure to act involves any willful misconduct or gross negligence.
12.10 Resignation and Removal
Any member of the Administrative Committee may resign by giving 30 days
written notice to the Chief Executive Officer of the Corporation and secretary
of the Administrative Committee. Any member of the Administrative Committee may
be removed by the Chief Executive Officer and such removal shall be effective at
such time as is provided in the written notice from the Chief Executive Officer.
Vacancies in the Administrative Committee arising by resignation, removal, death
or otherwise will be filled by the Chief Executive Officer. The Administrative
Committee shall remain fully operative pending the filling of any vacancy, and
the remaining members of the Administrative Committee shall retain the authority
necessary to carry out their duties under the Plan.
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12.11 Disqualification
Neither the Plan Manager nor any member of the Administrative Committee
shall participate in the consideration of any matter or question under the Plan
that specifically relates to the Plan Manager or Administrative Committee member
or to any other persons entitled to benefit payments because of such Plan
Manager's or Administrative Committee member's participation under the Plan.
12.12 Claims Procedure
(a) Claim for Benefits
Any claim for benefits under the Plan shall be filed with the chair of the
Administrative Committee. If a claim is wholly or partially denied by the chair,
written notice of such denial shall be sent to the claimant within 90 days (or
180 days if unusual circumstances exist) after the receipt of the claim. Such
notice shall contain (i) the specific reason or reasons for the denial, (ii)
specific reference to pertinent Plan provisions on which the denial was based,
(iii) a description of any additional material or information needed for the
claimant to perfect the claim and an explanation of why such material or
information is necessary and (iv) an explanation of the Plan's claim review
procedure.
(b) Review Procedures
Within 60 days after receipt of a written notice of denial, the claimant
may file with the chairman of the Administrative Committee a written request for
review of the chair's decision. At the time a review is filed, the claimant or
the claimant's duly authorized representative may submit issues and comments in
writing and may review any pertinent documents. Within 60 days (or 120 days if
unusual circumstances exist) after receipt of a request for review, the entire
Administrative Committee shall render a written decision to the claimant, in
language calculated to be understood by the claimant, containing the reasons for
the decision and specific references to the pertinent Plan provision on which
the decision was based.
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(c) Exhaustion of Remedies
No legal action with respect to a claim for benefits under the Plan shall
be instituted unless the claimant shall have first exhausted the claims
procedure set forth in this Section 12.12. Notwithstanding the preceding, if a
Participant or Beneficiary fails to file a claim or request for review in the
manner specified herein, such claim or request shall be waived, and the
Participant or Beneficiary will be barred from reasserting such claim.
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ARTICLE XIII
PARTICIPATING EMPLOYERS
13.1 Adoption of Plan by Participating Employers
The Corporation may from time to time consent to the participation in this
Plan and in the Trust by any of its subsidiaries or affiliates. The Corporation
may require, as a condition of the joining of the Plan by any such entity, that
such entity take such action as is necessary to consolidate with the Trust Fund
the funds applicable to any tax-qualified defined contribution plan which such
entity maintains, and to that end may adopt a supplement or supplements to this
Plan setting forth special rules as to the interests of persons covered by such
other plan.
13.2 Actions by Subsidiaries or Affiliates
Any such subsidiary or affiliate so participating hereunder shall become a
party to the Plan and to the Trust and become a Participating Employer hereunder
when the Board approves such participation. Any such Participating Employer
shall contribute its allocable share to the cost of maintaining and
administering the Plan so long as it remains a party to the Plan and Trust.
13.3 Corporation Amends on Behalf of All Employers
The Corporation shall have the right to amend the Plan and Trust on behalf
of all Employers.
13.4 Any Employer May Terminate
The right is reserved by each Employer to terminate the Plan with respect
to Participants who are employed by it. In the event the Plan should terminate
with respect to one Employer hereunder, the Administrative Committee shall cause
an accounting to be made as to the portion of the Trust Fund applicable to
Participants who are employed by the Employer terminating its participation. The
portion so determined shall be allocated to such Participants of the terminating
Employer and those deriving benefits through such Participants.
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ARTICLE XIV
AMENDMENT, MERGER AND TERMINATION
14.1 Amendment
The Corporation, acting through its Board or a delegate of the Board,
reserves the right at any time and from time to time, to modify or amend in
whole or in part, any or all of the provisions of the Plan, and to give such
amendment retroactive or prospective effect, including amendments adjusting
Participants' Accounts to comply with subsequent changes in the applicable law
and regulations in order to retain the approval of this Plan by the Internal
Revenue Service as a qualified profit sharing plan. Such amendments or
modifications may and shall be retroactive to such date as may be necessary to
accomplish their intended purpose. Also, no modification or amendment shall make
it possible for any part of the corpus or income of the Trust Fund (other than
such part as is required to pay taxes and administration expenses) to be used
for, or diverted to, purposes other than for the exclusive benefit of
Participants or their Beneficiaries. No amendment which affects the rights,
duties, or responsibilities of the Trustee may be made without the Trustee's
written consent. No amendment to the Plan shall decrease a Participant's accrued
benefit.
14.2 Merger and Consolidation of Plan, Transfer of Plan Assets
In the event of any merger or consolidation with or transfer of assets and
liabilities to any other Plan, provision shall be made so that the benefit
payable to each Participant in the Plan as if the Plan were terminated
immediately after such action, would be equal to, or greater than, the benefit
that the Participant would have been entitled to receive if the Plan had been
terminated immediately prior to such action. In the event of a corporate
transaction which results in the merger of all or a portion of the Plan assets,
the Administrative Committee may, in its sole discretion, establish such rules
and procedures it deems necessary to effectuate such merger or transfer. This
may include but is not limited to giving the Participant the option of
liquidating into cash all or a portion of the Corporation Stock or BlackRock
Stock in the Participant's Account prior to such merger or transfer.
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14.3 Discontinuance of Contributions and Termination of Plan
Any Employer shall have the right at any time to discontinue its
contributions hereunder, and withdraw from further participation in the Plan.
The Corporation acting through the Board shall have the right at any time to
completely discontinue further contributions hereunder and to terminate the Plan
by delivering to the Trustee and the Administrative Committee written notice of
such discontinuance or termination. Any such suspension of contributions shall
not constitute a discontinuance of the Plan. If, however, the Internal Revenue
Service determines that any prolonged suspension has ripened into a
discontinuance of contributions, the discontinuance shall be effective no later
than the closing day of the fiscal year following the last year a substantial
contribution was made.
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ARTICLE XV
MISCELLANEOUS
15.1 Exclusive Benefit of Participants and Beneficiaries
(a) General Rule
All assets of the Trust shall be retained for the exclusive benefit of
Participants, former Participants, and their Beneficiaries, and shall be used
only to pay benefits to such persons or to pay the fees and expenses of the
Trust. The assets of the Trust shall not revert to the benefit of the Employer,
except as otherwise specifically provided in Section 15.1(b).
(b) Conditions on Contributions
To the extent permitted or required by ERISA and the Code, contributions to
the Trust under this Plan are subject to the following conditions:
(1) If a contribution or any part thereof is made to the Trust by the
Employer under a mistake of fact, such contribution or part thereof may be
returned to the Employer within one year after the date the contribution was
made.
(2) Contributions to the Trust are specifically conditioned on the
original and continuing qualification of the Plan under Section 401 of the Code,
and in the event the Plan is determined not to meet the qualification
requirements of Section 401 of the Code, contributions made in respect of any
period for which such requirements are not met shall be returned to the
Employer, provided the Employer requests the return within one year after the
Plan is determined not to meet such requirements.
(3) Contributions to the Trust are specifically conditioned on their
deductibility under Section 404 of the Code, and to the extent a deduction is
disallowed for any such contribution, the amount determined pursuant to the
following paragraph may be returned
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to the Employer, provided the Employer requests the return within one year after
the date of the disallowance of the deduction.
(4) The return of a contribution to an Employer pursuant to
subparagraphs (1) or (3) of Section 15.1(b) above must satisfy each of the
following conditions:
(A) The amount of such contribution which may be so returned
shall not be greater than the excess of the amount contributed over the amount
that would have been contributed had there been no mistake in determining the
deduction or had there been no mistake of fact, as the case may be.
(B) The amount of such contribution which may be so returned
shall not be increased by earnings attributable to the investment or
reinvestment of such contribution in the Trust, but shall be reduced by losses
attributable to the investment or reinvestment of such contribution in the
Trust.
(C) The return of such contribution shall not reduce the balance
in any Participant's Account to less than the balance which would have been in
that Account if the returned contribution had not been contributed.
15.2 Employment Rights
Neither the establishment of the Plan and the Trust hereby created nor any
modification thereof, nor the creation of any fund or account, nor the payment
of any benefits shall be construed as giving any Participant or Beneficiary any
legal or equitable right against any Employer or the Trustee except as expressly
herein provided, or as may be conferred upon the Participant or Beneficiary
expressly by statute; nor, similarly, shall such establishment be deemed to give
any Participant any right to inspect any of the books, Accounts, records or
balance sheets of any Employer or all of them. In no event shall the terms of
this Plan be interpreted as giving any Employee the right to be retained in the
service of the Employer, and
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all Employees shall remain subject to discharge to the same extent as if this
Plan had never been executed.
15.3 Spendthrift Clause
Except as otherwise provided in Article X regarding Plan loans, the
interests of Participants and their Beneficiaries under the Plan are not in any
way subject to their debts or other obligations and may not be voluntarily or
involuntarily sold, transferred, alienated or assigned, except to the extent
permitted by law.
Notwithstanding the preceding sentence, the Plan will recognize any
qualified domestic relations order as defined in Section 414(p) of the Code and
Section 206(d)(3)(B) of ERISA. The Administrative Committee will follow the
procedures set forth in those Sections for determining the qualified status of a
domestic relations order and will establish such other practices and procedures
as may be administratively necessary to comply with such order. The
Administrative Committee may authorize an immediate distribution to an alternate
payee under a qualified domestic relations order even if the Participant could
not have been entitled to such an immediate distribution.
15.4 Employer's Successor
In the event of the merger or consolidation of the Employer or other
circumstances whereby a successor entity shall continue to carry on all or a
substantial part of its business, and such successor shall elect to carry on the
provisions of the Plan as herein provided, such successor shall be substituted
upon the filing in writing of its election to do so with the Trustee and
approval of such election by the Board.
15.5 Legal Actions
In any action or proceeding involving any assets constituting part or all
of the Trust, or the administration thereof, the Corporation, the Administrative
Committee, and the Trustee shall
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be the only necessary parties and no Participants or Beneficiaries or any other
persons having or claiming to have an interest in the Trust Fund or under the
Plan shall be entitled to any notice of process.
15.6 Power to Interplead
In any action either at law or equity involving a Participant and the
Participant's interest under the Plan or its operation, but in which the Trustee
or the Employer are not directly a party litigant or necessary party, upon court
approval or order, the Employer may direct the Trustee to pay over to any court
or those persons designated by the court all sums or property subject to such
litigation. Upon such payment neither the Trustee nor the Employer shall be
liable or accountable for such payment.
15.7 Unclaimed Amounts
It shall be the sole duty and responsibility of a retired or terminated
Participant or a Beneficiary to keep the Trustee and the Employer apprised of
that person's whereabouts and current address. If any benefit to be paid under
this Plan cannot be distributed because of the Employer's and Trustee's
inability, after a reasonable search, to locate a particular Participant or
Beneficiary legally entitled to such benefit, it shall be held by the Trustee in
a special account which shall be invested in such Investment Fund as the
Administrative Committee or the Plan Manager may designate from time to time. If
such amount shall remain unclaimed at the time the Plan is finally terminated
and the Trust liquidated, the unclaimed amount shall then escheat to the
Commonwealth of Pennsylvania, or shall be subject to such other distribution as
may be required or permitted by law.
15.8 Construction of Plan
This Plan shall be construed and administered according to the laws of the
Commonwealth of Pennsylvania, to the extent not preempted by federal law.
Whenever any words are used herein in the masculine gender, they shall be
construed as though they were also
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used in the feminine gender in all cases where they would so apply, and whenever
any words are used herein in the singular form, they shall be construed as
though they were also used in the plural form in all cases where they would so
apply. Headings of Articles and Sections of this instrument are inserted for
convenience of reference. They constitute no part of the Plan and are not to be
considered in the construction hereof.
15.9 USERRA and Code Section 414(u) Compliance
Effective December 12, 1994, notwithstanding any provision of this Plan to
the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Code Section
414(u). In addition, loan repayments will be suspended under this Plan as
permitted under Code Section 414(u).
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ARTICLE XVI
TOP HEAVY PROVISIONS
16.1 Definitions of Terms Used in This Article XVI
The following word or phrases as used herein shall have the following
meanings, unless a different meaning clearly is required by the context.
Otherwise, capitalized terms used in this Article XVI have the meanings assigned
them in Article I.
(a) "Aggregation Group" means the Mandatory Aggregation Group unless the
Permissive Aggregation Group is elected by the Corporation, in which case it
shall mean the Permissive Aggregation Group.
(b) "Determination Date" means the last day of the Plan Year.
(c) "Key Employee" means an employee who, at any time during the Plan Year
or any of the four preceding Plan Years is:
(1) an officer of the Corporation or a Related Entity having annual
compensation greater than 50 percent of the amount sin effect under Code Section
415(b)(1)(A) for such Plan Year. The number and identity of persons to be
considered officers in any Plan Year shall be determined by the Administrative
Committee pursuant to the provisions of Code Section 416(i) and the Treasury
Regulations thereunder;
(2) one of the ten employees having annual compensation of more than
the limitation in effect under Code Section 415(c)(1)(A) for such Plan Year and
owning (or considered as owning within the meaning of Code Section 318) the
largest interests in the Corporation and all Related Entities (aggregated);
(3) a five percent owner of the Corporation; or
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(4) a one percent owner of the Corporation having annual compensation
of more than $150,000.
(d) "Key Employee Ratio" means the ratio for any Plan Year calculated as of
the Determination Date with respect to such Plan Year, determined by dividing
the amount described in subparagraph (1) of this Section by the amount described
in subparagraph (2) of this Section.
(1) The amount described in this subparagraph (1) is the excess of the
sum of subparagraphs (A) through (C) over subparagraph (D).
(A) The aggregate of the present value of all accrued benefits of
Key Employees under all qualified defined benefit plans included in the
Aggregation Group.
(B) The aggregate of the balances in all of the accounts standing
to the credit of Key Employees under all qualified defined contribution plans
included in the Aggregation Group.
(C) The aggregate amount distributed from all qualified plans in
such Aggregation Group to or on behalf of any Key Employee during the period of
five Plan Years ending on the Determination Date.
(D) Any rollover contributions (or similar transfers) to the Plan
initiated by any Key Employee and made after December 31, 1983.
(2) The amount described in this subparagraph (2) is the excess of the
sum of subparagraphs (A) through (C) over subparagraph (D).
(A) The aggregate of the present value of all accrued benefits of
all Participants under all qualified defined benefit plans included in the
Aggregation Group.
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(B) The aggregate of the balances in all of the accounts standing
to the credit of all Participants under all qualified defined contribution plans
included in the Aggregation Group.
(C) The aggregate amount distributed from all plans in such
Aggregation Group to or on behalf of any Participant during the period of five
Plan Years ending on the Determination Date.
(D) All rollover contributions (or similar transfers) to a plan
initiated by any Participant and made after December 31, 1983, and any amount on
account of a person who is a Non-key Employee for a Plan Year but for a prior
Plan Year was a Key Employee of the Employer.
(e) "Mandatory Aggregation Group" means the group of qualified plans
sponsored by the Corporation or by a Related Entity formed by including in such
group (i) all such plans in which a Key Employee is a Participant and (ii) all
such plans which enable any plan described in clause (i) to meet the
requirements of Code Sections 401(a)(4) and 410.
(f) "Non-key Employee" means any person who is employed by the Corporation
or a Related Entity, but who is not a Key Employee as to that Plan Year.
(g) "Permissive Aggregation Group" means the group of qualified plans
sponsored by the Corporation or by a Related Entity formed by including in such
group (i) all plans in the Mandatory Aggregation Group and (ii) such other
qualified plans sponsored by the Corporation or a Related Entity as the
Corporation elects to include in such group, as long as the group, including
those plans electively included, continues to meet the requirements of Code
Sections 401(a)(4) and 410.
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16.2 Determination of Top Heavy and Super Top Heavy Status
This Plan shall be deemed "top heavy" as to any Plan Year if, as of the
last day of the preceding Plan Year, any of the following conditions are met:
(a) The Plan is not part of an Aggregation Group and the Key Employee Ratio
under the Plan exceeds 60 percent.
(b) The Plan is part of an Aggregation Group, there is no Permissive
Aggregation Group of which the Plan is a part, and the Key Employee Ratio of the
Mandatory Aggregation Group of which the Plan is a part exceeds 60 percent.
(c) The Plan is part of an Aggregation Group, there is a Permissive
Aggregation Group of which the Plan is a part, and the Key Employee Ratio of the
Permissive Aggregation Group of which the Plan is a part exceeds 60 percent.
This Plan shall be deemed "super top heavy" as to any Plan Year if, as of
the last day of the preceding Plan Year, any of the conditions above are met,
substituting "90 percent" for "60 percent" at each place where "60 percent"
appears.
16.3 Right to Participate in Allocation of Employer's Contributions
(a) General Rule
Notwithstanding any provision of this Plan to the contrary, any person who
was eligible to be a Participant at any time during a Plan Year in which this
Plan was top heavy shall share in the allocation provided for in Article III of
this Plan for such Plan Year if that person remained in the employ of the
Corporation or a Related Entity through the end of the Plan Year with respect to
which such allocation applies.
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(b) Exceptions to the General Rule
The provisions of Section 16.3(a) above shall not apply to any Participant
for a Plan Year if, with respect to that Plan Year:
(1) such Participant was an active participant in a qualified defined
benefit pension plan sponsored by the Corporation or by a Related Entity under
which plan the Participant's accrued benefit is not less than the minimum
accrued pension benefit that would be required under Section 416(c)(1) of the
Code, treating such defined benefit pension plan as a top heavy and treating all
such defined benefit pension plans as top heavy and treating all such defined
benefit pension plans as constitute an Aggregation Group as a single plan; or
(2) such Participant was an active participant in a qualified defined
contribution plan sponsored by the Corporation or by a Related Entity under
which plan the amount of the Employer's contribution allocable to the Account of
the Participant for the accrual computation period of such plan ending with or
within the Plan Year, exclusive of amounts by which the Participant's
compensation was reduced pursuant to a salary reduction agreement or similar
arrangement, is not less than the contribution allocation that would be required
under Code Section 416(c)(2) under this Plan.
16.4 Minimum Employer Contribution Allocation
The allocation made under Article III of this Plan to the Account of each
Participant who is a Non-key Employee for any Plan Year including a Plan Year in
which this Plan is top heavy Plan or a super top heavy Plan shall be not less
than the lesser of (i) three percent of the annual compensation of each such
Participant for such Plan Year or (ii) the percentage of annual compensation so
allocated under Article III (together with amounts so allocated as a result of a
cash or deferred election) to the Account of the Key Employee for whom such
percentage is the highest for such Plan Year.
If any person who is a Participant in the Plan is a participant under any
top heavy defined benefit pension plan qualified under Section 401(a) of the
Code sponsored by the Corporation or
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a Related Entity, there shall be substituted "five percent" for "three percent"
in this Section 16.4 of Article XVI.
For the purposes of determining whether or not the provisions of this
Section 16.4 have been satisfied, (i) contributions or benefits under Chapter 2
of the Code (relating to tax on self-employment income), Chapter 21 of the Code
(relating to Federal Insurance Contributions Act), Title II of the Social
Security Act, or any other federal or state law are disregarded, (ii) all
defined contribution plans in the Aggregation Group shall be treated as a single
plan and (iii) contributions allocable to the Account of the Participant under
any other qualified defined contribution plan that is part of the Aggregation
Group shall be deemed to be contributions made under this Plan, and, to the
extent thereof, no duplication of such contributions shall be required hereunder
solely by reason of this Section 16.4.
This Section 16.4 shall not apply in any Plan Year in which the Plan is
part of an Aggregation Group containing a defined benefit pension plan (or a
combination of such defined benefit pension plans) if the Plan enables a defined
benefit pension plan required to be included in such Aggregation Group to
satisfy the requirements of either Section 401(a)(4) or 410 of the Code.
For any Plan Year in which the Plan is top heavy, 1.0 shall be substituted
for 1.25 for purposes of determining the denominator of the separate defined
benefit and defined contribution plan fractions described in Section 7.3(c).
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ARTICLE XVII
EMPLOYEE STOCK OWNERSHIP PLAN
17.1 Definitions of Terms Used in This Article XVII
The following word or phrases as used herein shall have the following
meanings, unless a different meaning clearly is required by the context.
Otherwise, capitalized terms used in this Article XVI have the meanings assigned
to them in Article I.
(a) "ESOP" shall mean the employee stock ownership plan through which
Matching Contributions in Corporation Stock shall be made to the Plan. Effective
January 1, 2002, ESOP shall mean and be designated as any part of the Plan
invested at any time in Corporation Stock.
(b) "Loan" shall mean any loan to the Trustee made or guaranteed by a
disqualified person (within the meaning of Section 4975(e)(2) of the Code) for
the purpose of permitting the Trustee to finance or refinance the purchase of
Corporation Stock, including, but not limited to, a direct loan or cash, a
purchase-money transaction, an assumption of an obligation of the Trustee, an
unsecured guarantee or the use of assets of a disqualified person (within the
meaning of Section 4975(e)(2) of the Code) as collateral for a loan.
(c) "Participating Employer Contribution" shall mean a contribution of
Corporation Stock or cash by a Participating Employer to the ESOP.
17.2 Effective Date of ESOP
Except to the extent provided otherwise in this Article XVII, the effective
date of the ESOP created by this Article XVII and all provisions in this
Article, shall be September 15, 1989.
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17.3 Participating Employer Contributions
(a) Timing of Participating Employer Contributions
Each Participating Employer may make discretionary Participating Employer
Contributions to the ESOP in cash or Corporation Stock at such times and in such
amounts as the board of directors of each Participating Employer shall
determine.
In the event that a Loan is made to the Trustee, each Participating
Employer shall make Participating Employer Contributions to the ESOP in cash in
such amounts and at such times as will enable the Trustee to pay principal
and/or interest on any such Loans as they are due, but only to the extent the
principal and interest on any such Loan is not paid by means of a dividend on
Corporation Stock held as collateral for such Loan.
(b) Deductibility
All Participating Employer Contributions to the Trust are conditioned on
the deductibility of such contributions, and no Participating Employer
Contribution shall be made in excess of the maximum amount allowable as a
deduction for federal income tax purposes.
(c) Participating Employer Loan to ESOP
In the event that deductible Participating Employer Contributions are
insufficient to enable the Trustee to pay principal and interest on such Loan as
it is due and not paid by means of a dividend on Corporation Stock held as
collateral for such Loan, then upon the Trustee's request the Participating
Employer shall make a Loan to the ESOP, as described in Treasury Regulation
Section 54.4975-7(b)(4)(iii), in sufficient amounts to meet such principal and
interest payments. The new Loan shall also meet all requirements of an "exempt
loan" within the meaning of Treasury Regulation Section 54.4975-7(b)(1)(iii).
Corporation Stock released from the pledge of the prior Loan as a result of the
payment of principal and interest with the proceeds of a new Loan shall be
pledged as collateral to secure the new Loan. Such Corporation Stock
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will be released from this new pledge and allocated to the Accounts of the
Participants in accordance with applicable provisions of the ESOP.
17.4 Participant Contributions
No Participant shall be required or permitted to make contributions to the
ESOP.
17.5 Investment of ESOP Assets
Assets held under the ESOP will be invested in Corporation Stock, subject
to the special election for Participants attaining age 50 contained in Section
6.1(b) of the Plan. Participating Employer Contributions, and all other ESOP
assets, including cash dividends paid on Corporation Stock, may be used (i) to
acquire shares of Corporation Stock directly from Company shareholders
(including former Participants) or from the Corporation or (ii) to pay principal
and interest on a Loan.
17.6 Purchases of Corporation Stock
All purchases of Corporation Stock by the Trustee will be made at a price
that does not exceed the fair market value of such Corporation Stock. The
determination of fair market value of Corporation Stock for all purposes under
the Plan shall be made by the Trustee based upon the last public sale price on
the New York Stock Exchange on the date of purchase; except that for purchases
of Corporation Stock by the Trustee after September 14, 1989, the fair market
value of Corporation Stock shall be based upon (i) the public sale price on the
New York Stock Exchange at the time of purchase or (ii) if the purchase occurs
at a time when the New York Stock Exchange is closed, the closing price on the
New York Stock Exchange on the prior trading day.
17.7 Sales of Corporation Stock
The Trustee may sell or resell shares of Corporation Stock to any person,
including the Corporation, provided that such sales will be made at not less
than the fair market value as
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determined under Section 17.6, and no commission will be charged. Any such sale
shall be made in conformance with Section 408(e) of ERISA. All sales proceeds of
allocated Corporation Stock will be credited to the Matching Contribution
Accounts of the Participants on whose behalf such sales were made and shall be
distributed in accordance with this Plan.
17.8 Exempt Loans
(a) Terms of Loans
Any Loan obtained by the Trustee shall meet all requirements necessary to
constitute an "exempt loan" within the meaning of Treasury Regulation Section
54.4975-7(b)(7) and shall be used primarily for the benefit of the Participants
and their Beneficiaries. The proceeds of any Loan shall be used, within a
reasonable time after the Loan is obtained, only to purchase Corporation Stock,
repay the Loan and/or repay any prior Loan. The number of years to maturity
under the Loan must be definitely ascertainable at all times. Any Loan shall
provide for no more than a reasonable rate of interest, as determined under
Treasury Regulation Section 54.4975-7(b)(7). Any Loan must be without recourse
against the ESOP assets other than Corporation Stock acquired with the proceeds
of the Loan and shares of Corporation Stock that were used as collateral on a
prior Loan repaid with the proceeds of the current Loan.
(b) Release of Pledged Stock from Suspense Account
The Corporation Stock pledged under Section 17.8(a) above, shall be placed
in a suspense account. Any pledge of Corporation Stock must provide for the
release of shares so pledged at least as rapidly as under either the general
rule or special rule below.
Notwithstanding the foregoing, effective September 15, 1989, shares so
pledged may be released monthly in advance of actual payment on the Loan;
provided, however, that in no event will the release of shares for a Plan Year
be (i) less than the amount provided under the general rule or special rule
below, as the case may be, or (ii) in an amount in excess of the Participating
Employers' Matching Contributions.
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Except as provided in subparagraph (3) of this Section 17.8(b), once the
Administrative Committee has selected either the general rule or special rule,
that rule shall be used exclusively for the release of pledged shares of
Corporation Stock acquired with the proceeds of that particular Loan.
(1) General Rule
For each Plan Year during the duration of the Loan, the Administrative
Committee shall withdraw from the suspense account a number of shares of
Corporation Stock equal to the total number of shares held in the suspense
account immediately prior to the withdrawal multiplied by a fraction (i) the
numerator of which is the amount of principal and interest paid for the Plan
Year and (ii) the denominator of which is the sum of the numerator plus the
principal and interest to be paid for all future years.
(2) Special Rule
(A) For each Plan Year, the Administrative Committee shall
withdraw from the suspense account a number of shares of Corporation Stock equal
to the total number of such shares held in the suspense account immediately
prior to the withdrawal multiplied by a fraction (i) the numerator of which is
the amount of principal paid for the Plan Year and (ii) the denominator of which
is the sum of the numerator plus the principal to be paid for all future Plan
Years.
(B) The Administrative Committee may select the special rule only
if (I) the Loan provides for annual payments of principal and interest at a
cumulative rate that is not less rapid at any time than level annual payments of
such amounts for ten years, (II) the interest included in any payment is
disregarded only to the extent that it would be determined to be interest under
standard loan amortization tables and (III) by reason of a renewal, extension or
refinancing, the sum of the expired duration of the original Loan, any renewal
period, any extension period and the duration of any new Loan does not exceed
ten years.
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(3) In determining the number of shares to be released for any Plan
Year under either the general rule or special rule:
(A) the number of future years under the Loan must be definitely
ascertainable and must be determined without taking into account any possible
extensions or renewal periods;
(B) if the Loan provides for a variable interest rate, the
interest to be paid for all future Plan Years must be computed by using the
interest rate applicable as of the end of the Plan Year for which the
determination is being made; and
(C) if the Corporation Stock allocated to the suspense account
includes more than one class of shares, the number of shares of each class to be
withdrawn for a Plan Year from the suspense account must be determined by
applying the applicable fraction provided for above to each such class.
(b) Payments of Principal and Interest
Payments of principal and interest on any such Loan during a Plan Year
shall be made by the Trustee only from (i) any dividends attributable to
Corporation Stock given as collateral for a Loan, (ii) Participating Employer
Contributions and earnings from such Participating Employer Contributions made
to the ESOP to meet the Plan's obligation under a Loan and (iii) the proceeds of
a subsequent Loan made to repay a prior Loan. Such Participating Employer
Contributions and earnings must be accounted for separately by the Plan until
the Loan is repaid.
(c) Restriction on ESOP Shares
Notwithstanding any amendment to or termination of the ESOP which causes it
to cease to qualify as a leveraged employee stock ownership plan within the
meaning of Section 4975(e)(7) of the Code, no share of Corporation Stock
acquired with the proceeds of a Loan obtained by the Trust to purchase
Corporation Stock may be subject to a put, call, or other
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option, or buy-sell or similar arrangement while such shares are held by and
when distributed from the ESOP.
17.9 Allocations to Participants' Accounts
(a) Corporation Stock
The Matching Contribution Account maintained for each Participant will be
credited with the Participant's allocated share as determined under Section
17.10 of Corporation Stock (including fractional shares) purchased and paid for
by the ESOP or contributed in kind to the ESOP and with any dividends on
Corporation Stock allocated to the Participant's Matching Contribution Account.
Corporation Stock acquired by the Trustee with the proceeds of a Loan shall be
allocated in accordance with Section 17.10 to the Matching Contribution Accounts
of Participants as the Corporation Stock is released from suspense accounts as
provided in Section 17.8(b); provided, however, that no portion of the ESOP
assets attributable to (or allocable in lieu of) Corporation Stock acquired in a
sale to which Code Sections 1042 or 2057 apply may be allocated to the Accounts
of any Participant who owns (after application of Code Section 318(a) without
regard to the employee trust exception contained in Code Section
318(a)(2)(B)(i)) more than 25 percent of the voting control or value of any
class of stock of any Related Entity at any time during the one-year period
ending on the date of such sale or on the date when the allocation of such
Corporation Stock otherwise would occur.
In addition, during the "nonallocation period," no portion of the ESOP
assets attributable to (or allocable in lieu of) Corporation Stock so acquired
may be allocated to the Accounts of (i) the selling shareholder or (ii) any
individual who is "related" (within the meaning of Code section 267(b)) to the
selling shareholder. The "nonallocation period" is the ten year period beginning
on the later of (a) the date of such sale or (b) the date of the allocation of
Corporation Stock so acquired attributable to the final payment of a Loan, the
proceeds of which were used to purchase such Corporation Stock.
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(b) Dividends
If dividends paid on shares of Corporation Stock are used to make a Loan
payment, shares released from the suspense account as provided in Section
17.8(b) shall be allocated to Participants' Matching Contribution Accounts in
accordance with the provisions of Section 17.10(b). Dividends paid on shares of
Corporation Stock which are not used to make a Loan payment shall be allocated
to Participants' Matching Contribution Accounts in the same manner as
Participating Employer Contributions are allocated under provisions of Section
17.10(a).
17.10 Allocable Shares
(a) Corporation Stock
Participating Employer Contributions which are not used to pay principal
and interest on a Loan first shall be allocated to a Participant's Matching
Contribution Account to the extent necessary to fund the Matching Contribution
required pursuant to Section 3.3 of the Plan. To the extent that any additional
Participating Employer Contributions remain unallocated in excess of the amount
necessary to fund the Matching Contribution required pursuant to Section 3.3 of
the Plan, the Matching Contribution shall be increased in increments of .01 a
percentage point until the Participating Employer Contribution is completely
allocated among Participants' Matching Contribution Accounts.
Corporation Stock acquired with the proceeds of a Loan and released from
the suspense account as a result of a Participating Employer Contribution used
to pay principal or interest on such Loan shall be allocated to a Participant's
Matching Contribution Account based on the amount of Matching Contribution to be
made under Section 3.3 of the Plan.
(b) Dividends
For purposes of subsection 17.9(b), if dividends paid on shares of
Corporation Stock which have not been allocated to a Participant's Account are
used to make a Loan payment, shares released from the suspense account as
provided in Subsection 17.8(b) shall be allocated to
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a Participant's Matching Contribution Account in the same manner as
Participating Employer Contributions as set forth in subsection 17.10(a) above.
For purposes of subsection 17.9(b), if dividends paid on shares of Corporation
Stock which have been allocated to a Participant's Account are used to make a
Loan payment, shares released from the suspense account as provided in
subsection 17.8(b) shall be treated as earnings on the Participant's Matching
Contributions and shall be allocated to a Participant's Matching Contribution
Account in the same manner as any other earnings on the Participant's Matching
Contributions.
Notwithstanding any provision to the contrary, the fair market value of the
Corporation Stock allocated to a Participant's Matching Contribution Account
with respect to dividends paid on Corporation Stock allocated to such Account
may not be less than the amount of dividends which otherwise would have been
allocated.
17.11 Accounting for Allocations
The Administrative Committee shall adopt accounting procedures for the
purpose of making the allocations, valuations, and adjustments to Participants'
Matching Contribution Accounts provided for in this Article. Except as provided
in Treasury Regulation Section 54.4975-11, Corporation Stock acquired by the
Plan shall be accounted for as provided under Treasury Regulation Section
1.402(a)-1(b)(2)(ii), allocations of Corporation Stock shall be made separately,
and the Administrative Committee shall maintain adequate records of the cost
basis of all shares of Corporation Stock allocated to each Participant's
Matching Contribution Account and furnish such information to the Trustee
regarding the same as may be necessary to allow the Trustee to perform its
duties under this Section 17.11 upon the written request of the Trustee. From
time to time, the Administrative Committee may modify the accounting procedures
for the purpose of achieving equitable and nondiscriminatory allocations among
the Matching Contribution Accounts of Participants in accordance with the
general concepts of the Plan and the provisions of this Section.
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17.12 Form of Distribution
The distribution in kind of a Participant's Matching Contribution Account
as provided in Section 8.4 is conditioned upon the availability of ESOP assets
that are sufficiently liquid to effectuate such distribution without
jeopardizing the financial position of the ESOP and taking into account debt
service requirements of any Loan then outstanding.
17.13 Voting Corporation Stock
The Trustees shall vote any full and partial shares of Corporation Stock
credited to a Participant's Account in accordance with the direction of such
Participant. Such direction must be made in the manner prescribed by the Plan
Manager or Administrative Committee. Any shares for which the Trustees do not
receive instruction (including unallocated shares) shall be voted by the
Trustees in the exercise of their sole discretion. When Participants or
Beneficiaries are entitled to direct the manner in which voting rights of
allocated Corporation Stock are to be exercised, the Corporation shall furnish
the Trustee and the Participant or Beneficiary with a notice or information
statement which complies with applicable law and the Corporation's charter and
by-laws as applicable to security holders in general.
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IN WITNESS WHEREOF, this amended and restated Plan is executed and adopted
by The PNC Financial Services Group, Inc., by its duly authorized officer, this
20th day of December, 2001.
/s/ William E. Rosner
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William E. Rosner
Senior Vice President
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