ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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UTAH
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87-0227400
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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One South Main, 15
th
Floor
Salt Lake City, Utah
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84133
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Common Stock, without par value, outstanding at July 31, 2018
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194,402,811 shares
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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PART I.
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FINANCIAL INFORMATION
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ITEM 2.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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•
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statements with respect to the beliefs, plans, objectives, goals, targets, commitments, designs, guidelines, expectations, anticipations, and future financial condition, results of operations and performance of Zions Bancorporation (“the Parent”) and its subsidiaries (collectively “the Company,” “Zions,” “we,” “our,” “us”); and
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•
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statements preceded by, followed by, or that include the words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “target,” “commit,” “design,” “plan,” “projects,” and the negative thereof and similar words and expressions.
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•
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the Company’s ability to successfully execute its business plans, manage its risks, and achieve its objectives, including its operating leverage goals and its capital plan;
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•
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risks and uncertainties related to the ability to obtain shareholder and regulatory approvals, or the possibility that such approvals may be delayed;
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•
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the ability of Zions Bancorporation to achieve anticipated benefits from the restructuring and from regulatory approvals;
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•
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legislative, regulatory and economic developments that may diminish or eliminate the anticipated benefits of the restructuring;
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•
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changes in local, national and international political and economic conditions, including without limitation the political and economic effects of the economic and fiscal imbalance in the United States (“U.S.”) and other countries, potential or actual downgrades in ratings of sovereign debt issued by the United States and other countries, and other major developments, including wars, military actions, and terrorist attacks;
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•
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changes in financial and commodity market prices and conditions, either internationally, nationally or locally in areas in which the Company conducts its operations, including without limitation rates of business formation and growth, commercial and residential real estate development, real estate prices, and oil and gas-related commodity prices;
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•
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changes in markets for equity, fixed income, commercial paper and other securities, commodities, including availability, market liquidity levels, and pricing;
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•
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any impairment of our goodwill or other intangibles, or any adjustment of valuation allowances on our deferred tax assets due to adverse changes in the economic environment, declining operations of the reporting unit, or a
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•
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changes in interest rates, the quality and composition of the loan and securities portfolios, demand for loan products, deposit flows and competition;
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•
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the impact of acquisitions, dispositions, and corporate restructurings;
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•
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increases in the levels of losses, customer bankruptcies, bank failures, claims, and assessments;
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•
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changes in fiscal, monetary, regulatory, trade and tax policies and laws, and regulatory assessments and fees, including policies of the United States Department of Treasury, the Office of the Comptroller of the Currency (“OCC”), the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (“FDIC”), the Securities and Exchange Commission, and the Consumer Financial Protection Bureau (“CFPB”);
|
•
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the impact of executive compensation rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) and banking regulations, which may impact the ability of the Company and other American financial institutions to retain and recruit executives and other personnel necessary for their businesses and competitiveness;
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•
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the impact of the Dodd-Frank Act and Basel III, and rules and regulations thereunder, on our required regulatory capital and liquidity levels, governmental assessments on us (including, but not limited to, the Federal Reserve reviews of our annual capital plan), the scope of business activities in which we may engage, the manner in which we engage in such activities, the fees we may charge for certain products and services, and other matters affected by the Dodd-Frank Act and these international standards;
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•
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continuing consolidation in the financial services industry;
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•
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new legal claims against the Company, including litigation, arbitration and proceedings brought by governmental or self-regulatory agencies, or changes in existing legal matters;
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•
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success in gaining regulatory approvals, when required;
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•
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changes in consumer spending and savings habits;
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•
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increased competitive challenges and expanding product and pricing pressures among financial institutions;
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•
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inflation and deflation;
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•
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technological changes and the Company’s implementation of new technologies;
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•
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the Company’s ability to develop and maintain secure and reliable information technology systems;
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•
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legislation or regulatory changes which adversely affect the Company’s operations or business;
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•
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the Company’s ability to comply with applicable laws and regulations;
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•
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changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies; and
|
•
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costs of deposit insurance and changes with respect to FDIC insurance coverage levels.
|
ACL
|
Allowance for Credit Losses
|
BHC
|
Bank Holding Company
|
AFS
|
Available-for-Sale
|
bps
|
basis points
|
ALCO
|
Asset/Liability Committee
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CB&T
|
California Bank & Trust, a division of ZB, N.A.
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ALLL
|
Allowance for Loan and Lease Losses
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CCAR
|
Comprehensive Capital Analysis and Review
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Amegy
|
Amegy Bank, a division of ZB, N.A.
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CFPB
|
Consumer Financial Protection Bureau
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AOCI
|
Accumulated Other Comprehensive Income
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CLTV
|
Combined Loan-to-Value Ratio
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ASC
|
Accounting Standards Codification
|
CRE
|
Commercial Real Estate
|
ASU
|
Accounting Standards Update
|
DFAST
|
Dodd-Frank Act Stress Test
|
ATM
|
Automated Teller Machine
|
Dodd-Frank Act
|
Dodd-Frank Wall Street Reform and Consumer Protection Act
|
DTA
|
Deferred Tax Asset
|
OCI
|
Other Comprehensive Income
|
EaR
|
Earnings at Risk
|
OREO
|
Other Real Estate Owned
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ERM
|
Enterprise Risk Management
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OTTI
|
Other-Than-Temporary Impairment
|
EVE
|
Economic Value of Equity at Risk
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PAGA
|
Private Attorney General Act
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FAMC
|
Federal Agricultural Mortgage Corporation, or “Farmer Mac”
|
Parent
|
Zions Bancorporation
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FDIC
|
Federal Deposit Insurance Corporation
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PEI
|
Private Equity Investment
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FTP
|
Funds Transfer Pricing
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PPNR
|
Pre-provision Net Revenue
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FHLB
|
Federal Home Loan Bank
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ROC
|
Risk Oversight Committee
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FRB
|
Federal Reserve Board
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RULC
|
Reserve for Unfunded Lending Commitments
|
GAAP
|
Generally Accepted Accounting Principles
|
S&P
|
Standard and Poor's
|
HECL
|
Home Equity Credit Line
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SBA
|
Small Business Administration
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HTM
|
Held-to-Maturity
|
SBIC
|
Small Business Investment Company
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IMG
|
International Manufacturing Group
|
TCBW
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The Commerce Bank of Washington, a division of ZB, N.A.
|
LCR
|
Liquidity Coverage Ratio
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TDR
|
Troubled Debt Restructuring
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LIBOR
|
London Interbank Offered Rate
|
Tier 1
|
Common Equity Tier 1 (Basel III)
|
Municipalities
|
State and Local Governments
|
Topic 606
|
ASC Topic 606, “Revenue from Contracts with Customers”
|
NBAZ
|
National Bank of Arizona, a division of ZB, N.A.
|
U.S.
|
United States
|
NIM
|
Net Interest Margin
|
Vectra
|
Vectra Bank Colorado, a division of ZB, N.A.
|
NM
|
Not Meaningful
|
ZB, N.A.
|
ZB, National Association
|
NSB
|
Nevada State Bank, a division of ZB, N.A.
|
Zions Bank
|
Zions Bank, a division of ZB, N.A.
|
OCC
|
Office of the Comptroller of the Currency
|
|
|
|
|
Three Months Ended
|
||||||||||||||
(Dollar amounts in millions)
|
|
June 30,
2018 |
|
March 31,
2018 |
|
December 31,
2017 |
|
June 30,
2017 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net earnings applicable to common shareholders (GAAP)
|
|
$
|
187
|
|
|
$
|
231
|
|
|
$
|
114
|
|
|
$
|
154
|
|
Adjustment, net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Amortization of core deposit and other intangibles
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Net earnings applicable to common shareholders, excluding the effects of the adjustment, net of tax (non-GAAP)
|
(a)
|
$
|
187
|
|
|
$
|
231
|
|
|
$
|
115
|
|
|
$
|
155
|
|
Average common equity (GAAP)
|
|
$
|
7,072
|
|
|
$
|
7,061
|
|
|
$
|
7,220
|
|
|
$
|
7,143
|
|
Average goodwill and intangibles
|
|
(1,016
|
)
|
|
(1,016
|
)
|
|
(1,017
|
)
|
|
(1,020
|
)
|
||||
Average tangible common equity (non-GAAP)
|
(b)
|
$
|
6,056
|
|
|
$
|
6,045
|
|
|
$
|
6,203
|
|
|
$
|
6,123
|
|
Number of days in quarter
|
(c)
|
91
|
|
|
90
|
|
|
92
|
|
|
91
|
|
||||
Number of days in year
|
(d)
|
365
|
|
|
365
|
|
|
365
|
|
|
365
|
|
||||
Return on average tangible common equity (non-GAAP)
|
(a/b/c)*d
|
12.4
|
%
|
|
15.5
|
%
|
|
7.4
|
%
|
|
10.2
|
%
|
(Dollar amounts in millions, except per share amounts)
|
|
June 30,
2018 |
|
March 31,
2018 |
|
December 31,
2017 |
|
June 30,
2017 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Total shareholders’ equity (GAAP)
|
|
$
|
7,621
|
|
|
$
|
7,644
|
|
|
$
|
7,679
|
|
|
$
|
7,749
|
|
Goodwill and intangible
|
|
(1,015
|
)
|
|
(1,016
|
)
|
|
(1,016
|
)
|
|
(1,019
|
)
|
||||
Tangible equity (non-GAAP)
|
(a)
|
6,606
|
|
|
6,628
|
|
|
6,663
|
|
|
6,730
|
|
||||
Preferred stock
|
|
(566
|
)
|
|
(566
|
)
|
|
(566
|
)
|
|
(566
|
)
|
||||
Tangible common equity (non-GAAP)
|
(b)
|
$
|
6,040
|
|
|
$
|
6,062
|
|
|
$
|
6,097
|
|
|
$
|
6,164
|
|
Total assets (GAAP)
|
|
$
|
66,457
|
|
|
$
|
66,481
|
|
|
$
|
66,288
|
|
|
$
|
65,446
|
|
Goodwill and intangible
|
|
(1,015
|
)
|
|
(1,016
|
)
|
|
(1,016
|
)
|
|
(1,019
|
)
|
||||
Tangible assets (non-GAAP)
|
(c)
|
$
|
65,442
|
|
|
$
|
65,465
|
|
|
$
|
65,272
|
|
|
$
|
64,427
|
|
Common shares outstanding (thousands)
|
(d)
|
195,392
|
|
|
197,050
|
|
|
197,532
|
|
|
202,131
|
|
||||
Tangible equity ratio (non-GAAP)
|
(a/c)
|
10.09
|
%
|
|
10.12
|
%
|
|
10.21
|
%
|
|
10.45
|
%
|
||||
Tangible common equity ratio (non-GAAP)
|
(b/c)
|
9.23
|
%
|
|
9.26
|
%
|
|
9.34
|
%
|
|
9.57
|
%
|
||||
Tangible book value per common share (non-GAAP)
|
(b/d)
|
$
|
30.91
|
|
|
$
|
30.76
|
|
|
$
|
30.87
|
|
|
$
|
30.50
|
|
(Dollar amounts in millions)
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||||||||||
|
June 30,
2018 |
|
March 31,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
|
December 31,
2017 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Noninterest expense (GAAP)
|
(a)
|
$
|
428
|
|
|
$
|
412
|
|
|
$
|
405
|
|
|
$
|
840
|
|
|
$
|
819
|
|
|
$
|
1,649
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance costs
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
5
|
|
|
7
|
|
||||||
Other real estate expense, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
||||||
Provision for unfunded lending commitments
|
|
7
|
|
|
(7
|
)
|
|
3
|
|
|
—
|
|
|
(2
|
)
|
|
(7
|
)
|
||||||
Amortization of core deposit and other intangibles
|
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
|
3
|
|
|
6
|
|
||||||
Restructuring costs
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
4
|
|
||||||
Total adjustments
|
(b)
|
8
|
|
|
(7
|
)
|
|
6
|
|
|
1
|
|
|
8
|
|
|
9
|
|
||||||
Adjusted noninterest expense (non-GAAP)
|
(a-b)=
(c)
|
$
|
420
|
|
|
$
|
419
|
|
|
$
|
399
|
|
|
$
|
839
|
|
|
$
|
811
|
|
|
$
|
1,640
|
|
Net interest income (GAAP)
|
(d)
|
$
|
548
|
|
|
$
|
542
|
|
|
$
|
528
|
|
|
$
|
1,090
|
|
|
$
|
1,017
|
|
|
$
|
2,065
|
|
Fully taxable-equivalent adjustments
|
|
5
|
|
|
5
|
|
|
9
|
|
|
10
|
|
|
17
|
|
|
35
|
|
||||||
Taxable-equivalent net interest income (non-GAAP)
1
|
(d+e)=f
|
553
|
|
|
547
|
|
|
537
|
|
|
1,100
|
|
|
1,034
|
|
|
2,100
|
|
||||||
Noninterest income (GAAP)
|
g
|
138
|
|
|
138
|
|
|
132
|
|
|
276
|
|
|
264
|
|
|
544
|
|
||||||
Combined income
(non-GAAP)
|
(f+g)=
(h)
|
691
|
|
|
685
|
|
|
669
|
|
|
1,376
|
|
|
1,298
|
|
|
2,644
|
|
||||||
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value and nonhedge derivative income (loss)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
(1
|
)
|
|
(2
|
)
|
||||||
Securities gains, net
|
|
1
|
|
|
—
|
|
|
2
|
|
|
1
|
|
|
7
|
|
|
14
|
|
||||||
Total adjustments
|
(i)
|
1
|
|
|
1
|
|
|
2
|
|
|
3
|
|
|
6
|
|
|
12
|
|
||||||
Adjusted taxable-equivalent revenue (non-GAAP)
|
(h-i)=
(j)
|
$
|
690
|
|
|
$
|
684
|
|
|
$
|
667
|
|
|
$
|
1,373
|
|
|
$
|
1,292
|
|
|
$
|
2,632
|
|
Pre-provision net revenue
|
(h)-(a)
|
$
|
263
|
|
|
$
|
273
|
|
|
$
|
264
|
|
|
$
|
536
|
|
|
$
|
479
|
|
|
$
|
995
|
|
Adjusted PPNR (non-GAAP)
|
(j-c)
|
270
|
|
|
265
|
|
|
268
|
|
|
534
|
|
|
481
|
|
|
992
|
|
||||||
Efficiency ratio (non-GAAP)
|
(c/j)
|
60.9
|
%
|
|
61.3
|
%
|
|
59.8
|
%
|
|
61.1
|
%
|
|
62.8
|
%
|
|
62.3
|
%
|
|
Three Months Ended
June 30, 2018 |
|
Three Months Ended
June 30, 2017 |
||||||||||||||||||
(Dollar amounts in millions)
|
Average
balance
|
|
Amount of
interest
1
|
|
Average
yield/rate
|
|
Average
balance
|
|
Amount of
interest
1
|
|
Average
yield/rate
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market investments
|
$
|
1,317
|
|
|
$
|
7
|
|
|
2.02
|
%
|
|
$
|
1,572
|
|
|
$
|
5
|
|
|
1.20
|
%
|
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Held-to-maturity
|
780
|
|
|
7
|
|
|
3.60
|
|
|
788
|
|
|
8
|
|
|
3.97
|
|
||||
Available-for-sale
|
14,745
|
|
|
78
|
|
|
2.14
|
|
|
15,386
|
|
|
81
|
|
|
2.11
|
|
||||
Trading account
|
179
|
|
|
2
|
|
|
4.06
|
|
|
79
|
|
|
—
|
|
|
3.43
|
|
||||
Total securities
2
|
15,704
|
|
|
87
|
|
|
2.23
|
|
|
16,253
|
|
|
89
|
|
|
2.20
|
|
||||
Loans held for sale
|
72
|
|
|
1
|
|
|
4.18
|
|
|
100
|
|
|
1
|
|
|
3.24
|
|
||||
Loans and leases
3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
23,275
|
|
|
272
|
|
|
4.68
|
|
|
21,885
|
|
|
242
|
|
|
4.44
|
|
||||
Commercial real estate
|
11,075
|
|
|
136
|
|
|
4.94
|
|
|
11,236
|
|
|
133
|
|
|
4.74
|
|
||||
Consumer
|
10,892
|
|
|
108
|
|
|
3.98
|
|
|
10,122
|
|
|
97
|
|
|
3.83
|
|
||||
Total loans and leases
|
45,242
|
|
|
516
|
|
|
4.57
|
|
|
43,243
|
|
|
472
|
|
|
4.38
|
|
||||
Total interest-earning assets
|
62,335
|
|
|
611
|
|
|
3.93
|
|
|
61,168
|
|
|
567
|
|
|
3.72
|
|
||||
Cash and due from banks
|
546
|
|
|
|
|
|
|
795
|
|
|
|
|
|
||||||||
Allowance for loan losses
|
(480
|
)
|
|
|
|
|
|
(546
|
)
|
|
|
|
|
||||||||
Goodwill and intangibles
|
1,016
|
|
|
|
|
|
|
1,020
|
|
|
|
|
|
||||||||
Other assets
|
3,088
|
|
|
|
|
|
|
2,974
|
|
|
|
|
|
||||||||
Total assets
|
$
|
66,505
|
|
|
|
|
|
|
$
|
65,411
|
|
|
|
|
|
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Savings and money market
|
$
|
25,479
|
|
|
17
|
|
|
0.26
|
%
|
|
$
|
25,467
|
|
|
9
|
|
|
0.14
|
%
|
||
Time
|
3,807
|
|
|
12
|
|
|
1.27
|
|
|
3,048
|
|
|
5
|
|
|
0.66
|
|
||||
Total interest-bearing deposits
|
29,286
|
|
|
29
|
|
|
0.39
|
|
|
28,515
|
|
|
14
|
|
|
0.20
|
|
||||
Borrowed funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal funds purchased and other short-term borrowings
|
4,927
|
|
|
24
|
|
|
1.92
|
|
|
4,302
|
|
|
10
|
|
|
0.94
|
|
||||
Long-term debt
|
383
|
|
|
5
|
|
|
5.77
|
|
|
383
|
|
|
6
|
|
|
5.77
|
|
||||
Total borrowed funds
|
5,310
|
|
|
29
|
|
|
2.19
|
|
|
4,685
|
|
|
16
|
|
|
1.34
|
|
||||
Total interest-bearing liabilities
|
34,596
|
|
|
58
|
|
|
0.67
|
|
|
33,200
|
|
|
30
|
|
|
0.36
|
|
||||
Noninterest-bearing deposits
|
23,610
|
|
|
|
|
|
|
23,819
|
|
|
|
|
|
||||||||
Total deposits and interest-bearing liabilities
|
58,206
|
|
|
58
|
|
|
0.40
|
|
|
57,019
|
|
|
30
|
|
|
0.21
|
|
||||
Other liabilities
|
661
|
|
|
|
|
|
|
565
|
|
|
|
|
|
||||||||
Total liabilities
|
58,867
|
|
|
|
|
|
|
57,584
|
|
|
|
|
|
||||||||
Shareholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred equity
|
566
|
|
|
|
|
|
|
684
|
|
|
|
|
|
||||||||
Common equity
|
7,072
|
|
|
|
|
|
|
7,143
|
|
|
|
|
|
||||||||
Total shareholders’ equity
|
7,638
|
|
|
|
|
|
|
7,827
|
|
|
|
|
|
||||||||
Total liabilities and shareholders’ equity
|
$
|
66,505
|
|
|
|
|
|
|
$
|
65,411
|
|
|
|
|
|
||||||
Spread on average interest-bearing funds
|
|
|
|
|
3.26
|
%
|
|
|
|
|
|
3.36
|
%
|
||||||||
Taxable-equivalent net interest income and net yield on interest-earning assets
|
|
|
$
|
553
|
|
|
3.56
|
%
|
|
|
|
$
|
537
|
|
|
3.52
|
%
|
1
|
Rates are calculated using amounts in thousands and taxable-equivalent rates used where applicable. The taxable-equivalent rates used are the rates that were applicable at the time of each respective reporting period.
|
2
|
Quarter-to-date interest on total securities includes
$36 million
and
$35 million
of premium amortization, as of
June 30, 2018
and
June 30, 2017
, respectively.
|
3
|
Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.
|
|
Six Months Ended
June 30, 2018 |
|
Six Months Ended
June 30, 2017 |
||||||||||||||||||
(Dollar amounts in millions)
|
Average
balance
|
|
Amount of
interest
1
|
|
Average
yield/rate
|
|
Average
balance
|
|
Amount of
interest
1
|
|
Average
yield/rate
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market investments
|
$
|
1,406
|
|
|
$
|
13
|
|
|
1.85
|
%
|
|
$
|
1,777
|
|
|
$
|
9
|
|
|
1.05
|
%
|
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Held-to-maturity
|
784
|
|
|
14
|
|
|
3.57
|
|
|
817
|
|
|
16
|
|
|
3.93
|
|
||||
Available-for-sale
|
14,846
|
|
|
159
|
|
|
2.16
|
|
|
14,709
|
|
|
155
|
|
|
2.12
|
|
||||
Trading account
|
141
|
|
|
3
|
|
|
4.03
|
|
|
70
|
|
|
1
|
|
|
3.57
|
|
||||
Total securities
2
|
15,771
|
|
|
176
|
|
|
2.24
|
|
|
15,596
|
|
|
172
|
|
|
2.22
|
|
||||
Loans held for sale
|
62
|
|
|
1
|
|
|
4.08
|
|
|
116
|
|
|
2
|
|
|
3.23
|
|
||||
Loans and leases
3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
23,158
|
|
|
538
|
|
|
4.69
|
|
|
21,747
|
|
|
467
|
|
|
4.33
|
|
||||
Commercial real estate
|
11,070
|
|
|
264
|
|
|
4.81
|
|
|
11,238
|
|
|
251
|
|
|
4.50
|
|
||||
Consumer
|
10,826
|
|
|
212
|
|
|
3.96
|
|
|
9,921
|
|
|
189
|
|
|
3.83
|
|
||||
Total loans and leases
|
45,054
|
|
|
1,014
|
|
|
4.54
|
|
|
42,906
|
|
|
907
|
|
|
4.26
|
|
||||
Total interest-earning assets
|
62,293
|
|
|
1,204
|
|
|
3.90
|
|
|
60,395
|
|
|
1,090
|
|
|
3.64
|
|
||||
Cash and due from banks
|
569
|
|
|
|
|
|
|
884
|
|
|
|
|
|
||||||||
Allowance for loan losses
|
(501
|
)
|
|
|
|
|
|
(556
|
)
|
|
|
|
|
||||||||
Goodwill and intangibles
|
1,016
|
|
|
|
|
|
|
1,021
|
|
|
|
|
|
||||||||
Other assets
|
3,059
|
|
|
|
|
|
|
2,963
|
|
|
|
|
|
||||||||
Total assets
|
$
|
66,436
|
|
|
|
|
|
|
$
|
64,707
|
|
|
|
|
|
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Savings and money market
|
$
|
25,388
|
|
|
28
|
|
|
0.22
|
%
|
|
$
|
25,680
|
|
|
19
|
|
|
0.14
|
%
|
||
Time
|
3,545
|
|
|
20
|
|
|
1.15
|
|
|
2,953
|
|
|
9
|
|
|
0.63
|
|
||||
Total interest-bearing deposits
|
28,933
|
|
|
48
|
|
|
0.34
|
|
|
28,633
|
|
|
28
|
|
|
0.19
|
|
||||
Borrowed funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal funds purchased and other short-term borrowings
|
5,315
|
|
|
45
|
|
|
1.71
|
|
|
3,617
|
|
|
15
|
|
|
0.85
|
|
||||
Long-term debt
|
383
|
|
|
11
|
|
|
5.80
|
|
|
451
|
|
|
13
|
|
|
5.85
|
|
||||
Total borrowed funds
|
5,698
|
|
|
56
|
|
|
1.99
|
|
|
4,068
|
|
|
28
|
|
|
1.40
|
|
||||
Total interest-bearing liabilities
|
34,631
|
|
|
104
|
|
|
0.61
|
|
|
32,701
|
|
|
56
|
|
|
0.34
|
|
||||
Noninterest-bearing deposits
|
23,514
|
|
|
|
|
|
|
23,641
|
|
|
|
|
|
||||||||
Total deposits and interest-bearing liabilities
|
58,145
|
|
|
104
|
|
|
0.36
|
|
|
56,342
|
|
|
56
|
|
|
0.19
|
|
||||
Other liabilities
|
658
|
|
|
|
|
|
|
598
|
|
|
|
|
|
||||||||
Total liabilities
|
58,803
|
|
|
|
|
|
|
56,940
|
|
|
|
|
|
||||||||
Shareholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred equity
|
566
|
|
|
|
|
|
|
697
|
|
|
|
|
|
||||||||
Common equity
|
7,067
|
|
|
|
|
|
|
7,070
|
|
|
|
|
|
||||||||
Total shareholders’ equity
|
7,633
|
|
|
|
|
|
|
7,767
|
|
|
|
|
|
||||||||
Total liabilities and shareholders’ equity
|
$
|
66,436
|
|
|
|
|
|
|
$
|
64,707
|
|
|
|
|
|
||||||
Spread on average interest-bearing funds
|
|
|
|
|
3.29
|
%
|
|
|
|
|
|
3.30
|
%
|
||||||||
Taxable-equivalent net interest income and net yield on interest-earning assets
|
|
|
$
|
1,100
|
|
|
3.56
|
%
|
|
|
|
$
|
1,034
|
|
|
3.45
|
%
|
1
|
Rates are calculated using amounts in thousands and taxable-equivalent rates used where applicable. The taxable-equivalent rates used are the rates that were applicable at the time of each respective reporting period.
|
2
|
Quarter-to-date interest on total securities includes
$68 million
and
$66 million
of premium amortization, as of
June 30, 2018
and
June 30, 2017
, respectively.
|
3
|
Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.
|
|
Three Months Ended
June 30, |
|
Amount
change
|
Percent
change
|
|
Six Months Ended
June 30, |
|
Amount
change
|
Percent
change
|
||||||||||||||||||
(Dollar amounts in millions)
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Service charges and fees on deposit accounts
|
$
|
42
|
|
|
$
|
43
|
|
|
$
|
(1
|
)
|
(2
|
)%
|
|
$
|
84
|
|
|
$
|
85
|
|
|
$
|
(1
|
)
|
(1
|
)%
|
Other service charges, commissions and fees
|
55
|
|
|
56
|
|
|
(1
|
)
|
(2
|
)
|
|
110
|
|
|
105
|
|
|
5
|
|
5
|
|
||||||
Wealth management and trust income
|
14
|
|
|
10
|
|
|
4
|
|
40
|
|
|
25
|
|
|
20
|
|
|
5
|
|
25
|
|
||||||
Loan sales and servicing income
|
7
|
|
|
6
|
|
|
1
|
|
17
|
|
|
13
|
|
|
13
|
|
|
—
|
|
—
|
|
||||||
Capital markets and foreign exchange
|
7
|
|
|
6
|
|
|
1
|
|
17
|
|
|
15
|
|
|
13
|
|
|
2
|
|
15
|
|
||||||
Customer-related fees
|
125
|
|
|
121
|
|
|
4
|
|
3
|
|
|
247
|
|
|
236
|
|
|
11
|
|
5
|
|
||||||
Dividends and other investment income
|
11
|
|
|
10
|
|
|
1
|
|
10
|
|
|
22
|
|
|
22
|
|
|
—
|
|
—
|
|
||||||
Securities gains, net
|
1
|
|
|
2
|
|
|
(1
|
)
|
(50
|
)
|
|
1
|
|
|
7
|
|
|
(6
|
)
|
(86
|
)
|
||||||
Other
|
1
|
|
|
(1
|
)
|
|
2
|
|
NM
|
|
|
6
|
|
|
(1
|
)
|
|
7
|
|
NM
|
|
||||||
Total noninterest income
|
$
|
138
|
|
|
$
|
132
|
|
|
$
|
6
|
|
5
|
|
|
$
|
276
|
|
|
$
|
264
|
|
|
$
|
12
|
|
5
|
|
|
Three Months Ended
June 30, |
|
Amount
change
|
Percent
change
|
|
Six Months Ended
June 30, |
|
Amount
change
|
Percent
change
|
||||||||||||||||||
(Dollar amounts in millions)
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Salaries and employee benefits
|
$
|
266
|
|
|
$
|
240
|
|
|
$
|
26
|
|
11
|
%
|
|
$
|
535
|
|
|
$
|
502
|
|
|
$
|
33
|
|
7
|
%
|
Occupancy, net
|
32
|
|
|
32
|
|
|
—
|
|
—
|
|
|
63
|
|
|
66
|
|
|
(3
|
)
|
(5
|
)
|
||||||
Furniture, equipment and software, net
|
32
|
|
|
32
|
|
|
—
|
|
—
|
|
|
65
|
|
|
64
|
|
|
1
|
|
2
|
|
||||||
Other real estate expense, net
|
—
|
|
|
—
|
|
|
—
|
|
NM
|
|
|
1
|
|
|
—
|
|
|
1
|
|
NM
|
|
||||||
Credit-related expense
|
7
|
|
|
8
|
|
|
(1
|
)
|
(13
|
)
|
|
13
|
|
|
15
|
|
|
(2
|
)
|
(13
|
)
|
||||||
Provision for unfunded lending commitments
|
7
|
|
|
3
|
|
|
4
|
|
(133
|
)
|
|
—
|
|
|
(2
|
)
|
|
2
|
|
100
|
|
||||||
Professional and legal services
|
14
|
|
|
14
|
|
|
—
|
|
—
|
|
|
26
|
|
|
28
|
|
|
(2
|
)
|
(7
|
)
|
||||||
Advertising
|
7
|
|
|
6
|
|
|
1
|
|
17
|
|
|
13
|
|
|
11
|
|
|
2
|
|
18
|
|
||||||
FDIC premiums
|
14
|
|
|
13
|
|
|
1
|
|
8
|
|
|
26
|
|
|
25
|
|
|
1
|
|
4
|
|
||||||
Other
|
49
|
|
|
57
|
|
|
(8
|
)
|
(14
|
)
|
|
98
|
|
|
110
|
|
|
(12
|
)
|
(11
|
)
|
||||||
Total noninterest expense
|
$
|
428
|
|
|
$
|
405
|
|
|
$
|
23
|
|
6
|
|
|
$
|
840
|
|
|
$
|
819
|
|
|
$
|
21
|
|
3
|
|
Adjusted noninterest expense
1
|
$
|
420
|
|
|
$
|
399
|
|
|
$
|
21
|
|
5
|
|
|
$
|
839
|
|
|
$
|
811
|
|
|
$
|
28
|
|
3
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(In millions)
|
Par value
|
|
Amortized
cost
|
|
Estimated
fair
value
|
|
Par value
|
|
Amortized
cost
|
|
Estimated
fair
value
|
||||||||||||
Held-to-maturity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Municipal securities
|
$
|
878
|
|
|
$
|
878
|
|
|
$
|
866
|
|
|
$
|
771
|
|
|
$
|
770
|
|
|
$
|
762
|
|
Available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
25
|
|
|
25
|
|
|
25
|
|
|
25
|
|
|
25
|
|
|
25
|
|
||||||
U.S. Government agencies and corporations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency securities
|
1,683
|
|
|
1,683
|
|
|
1,657
|
|
|
1,830
|
|
|
1,830
|
|
|
1,818
|
|
||||||
Agency guaranteed mortgage-backed securities
|
9,667
|
|
|
9,831
|
|
|
9,538
|
|
|
9,605
|
|
|
9,798
|
|
|
9,666
|
|
||||||
Small Business Administration loan-backed securities
|
1,919
|
|
|
2,115
|
|
|
2,071
|
|
|
2,007
|
|
|
2,227
|
|
|
2,222
|
|
||||||
Municipal securities
|
1,197
|
|
|
1,333
|
|
|
1,312
|
|
|
1,193
|
|
|
1,336
|
|
|
1,334
|
|
||||||
Other debt securities
|
25
|
|
|
25
|
|
|
24
|
|
|
25
|
|
|
25
|
|
|
24
|
|
||||||
Total available-for-sale debt securities
|
14,516
|
|
|
15,012
|
|
|
14,627
|
|
|
14,685
|
|
|
15,241
|
|
|
15,089
|
|
||||||
Money market mutual funds and other
|
—
|
|
|
—
|
|
|
—
|
|
|
72
|
|
|
72
|
|
|
72
|
|
||||||
Total available-for-sale
|
14,516
|
|
|
15,012
|
|
|
14,627
|
|
|
14,757
|
|
|
15,313
|
|
|
15,161
|
|
||||||
Total
|
$
|
15,394
|
|
|
$
|
15,890
|
|
|
$
|
15,493
|
|
|
$
|
15,528
|
|
|
$
|
16,083
|
|
|
$
|
15,923
|
|
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
||||
Loans and leases
|
$
|
1,388
|
|
|
$
|
1,271
|
|
Held-to-maturity – municipal securities
|
878
|
|
|
770
|
|
||
Available-for-sale – municipal securities
|
1,312
|
|
|
1,334
|
|
||
Trading account – municipal securities
|
108
|
|
|
146
|
|
||
Unfunded lending commitments
|
153
|
|
|
152
|
|
||
Total direct exposure to municipalities
|
$
|
3,839
|
|
|
$
|
3,673
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||
(Dollar amounts in millions)
|
Amount
|
|
% of
total loans
|
|
Amount
|
|
% of
total loans
|
||||||
Commercial:
|
|
|
|
|
|
|
|
||||||
Commercial and industrial
|
$
|
14,134
|
|
|
31
|
%
|
|
$
|
14,003
|
|
|
31
|
%
|
Leasing
|
358
|
|
|
1
|
|
|
364
|
|
|
1
|
|
||
Owner-occupied
|
7,365
|
|
|
16
|
|
|
7,288
|
|
|
16
|
|
||
Municipal
|
1,388
|
|
|
3
|
|
|
1,271
|
|
|
3
|
|
||
Total commercial
|
23,245
|
|
|
51
|
|
|
22,926
|
|
|
51
|
|
||
Commercial real estate:
|
|
|
|
|
|
|
|
||||||
Construction and land development
|
2,202
|
|
|
5
|
|
|
2,021
|
|
|
5
|
|
||
Term
|
8,771
|
|
|
20
|
|
|
9,103
|
|
|
20
|
|
||
Total commercial real estate
|
10,973
|
|
|
25
|
|
|
11,124
|
|
|
25
|
|
||
Consumer:
|
|
|
|
|
|
|
|
||||||
Home equity credit line
|
2,825
|
|
|
6
|
|
|
2,777
|
|
|
6
|
|
||
1-4 family residential
|
6,861
|
|
|
15
|
|
|
6,662
|
|
|
15
|
|
||
Construction and other consumer real estate
|
661
|
|
|
2
|
|
|
597
|
|
|
1
|
|
||
Bankcard and other revolving plans
|
490
|
|
|
1
|
|
|
509
|
|
|
1
|
|
||
Other
|
175
|
|
|
—
|
|
|
185
|
|
|
1
|
|
||
Total consumer
|
11,012
|
|
|
24
|
|
|
10,730
|
|
|
24
|
|
||
Total net loans
|
$
|
45,230
|
|
|
100
|
%
|
|
$
|
44,780
|
|
|
100
|
%
|
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
||||
Bank-owned life insurance
|
$
|
513
|
|
|
$
|
506
|
|
Federal Home Loan Bank stock
|
185
|
|
|
154
|
|
||
Federal Reserve stock
|
156
|
|
|
184
|
|
||
Farmer Mac stock
|
50
|
|
|
43
|
|
||
SBIC investments
|
136
|
|
|
127
|
|
||
Non-SBIC investment funds
|
11
|
|
|
12
|
|
||
Other
|
3
|
|
|
3
|
|
||
Total other noninterest-bearing investments
|
$
|
1,054
|
|
|
$
|
1,029
|
|
(Dollar amounts in millions)
|
June 30,
2018 |
|
Percent
guaranteed |
|
December 31, 2017
|
|
Percent
guaranteed |
||||||
|
|
|
|
|
|
|
|
||||||
Commercial
|
$
|
547
|
|
|
76
|
%
|
|
$
|
507
|
|
|
75
|
%
|
Commercial real estate
|
14
|
|
|
79
|
|
|
14
|
|
|
75
|
|
||
Consumer
|
9
|
|
|
100
|
|
|
16
|
|
|
92
|
|
||
Total loans
|
$
|
570
|
|
|
76
|
|
|
$
|
537
|
|
|
76
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||
(Dollar amounts in millions)
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
||||||
|
|
|
|
|
|
|
|
||||||
Real estate, rental and leasing
|
$
|
2,637
|
|
|
11
|
%
|
|
$
|
2,807
|
|
|
12
|
%
|
Retail trade
1
|
2,376
|
|
|
10
|
|
|
2,257
|
|
|
10
|
|
||
Manufacturing
|
2,217
|
|
|
9
|
|
|
2,116
|
|
|
9
|
|
||
Finance and insurance
|
1,848
|
|
|
8
|
|
|
2,026
|
|
|
9
|
|
||
Wholesale trade
|
1,630
|
|
|
7
|
|
|
1,543
|
|
|
7
|
|
||
Healthcare and social assistance
|
1,581
|
|
|
7
|
|
|
1,556
|
|
|
7
|
|
||
Transportation and warehousing
|
1,308
|
|
|
6
|
|
|
1,343
|
|
|
6
|
|
||
Construction
|
1,201
|
|
|
5
|
|
|
1,094
|
|
|
5
|
|
||
Mining, quarrying, and oil and gas extraction
|
1,105
|
|
|
5
|
|
|
1,010
|
|
|
4
|
|
||
Hospitality and food services
|
947
|
|
|
4
|
|
|
932
|
|
|
4
|
|
||
Utilities
2
|
938
|
|
|
4
|
|
|
905
|
|
|
4
|
|
||
Professional, scientific, and technical services
|
882
|
|
|
4
|
|
|
879
|
|
|
4
|
|
||
Other Services (except Public Administration)
|
881
|
|
|
4
|
|
|
896
|
|
|
4
|
|
||
Other
3
|
3,694
|
|
|
16
|
|
|
3,562
|
|
|
15
|
|
||
Total
|
$
|
23,245
|
|
|
100
|
%
|
|
$
|
22,926
|
|
|
100
|
%
|
1
|
At
June 30, 2018
, 83% of retail trade consist of motor vehicle and parts dealers, gas stations, grocery stores, building material suppliers, and direct-to-consumer retailers.
|
2
|
Includes primarily utilities, power, and renewable energy.
|
3
|
No other industry group exceeds 3.5%.
|
(Dollar amounts in millions)
|
|
Collateral Location
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Loan type
|
|
As of
date
|
|
Arizona
|
|
California
|
|
Colorado
|
|
Nevada
|
|
Texas
|
|
Utah/
Idaho
|
|
Wash-ington
|
|
Other
1
|
|
Total
|
|
% of
total
CRE
|
|||||||||||||||||||
Commercial term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance outstanding
|
|
6/30/2018
|
|
$
|
1,072
|
|
|
$
|
2,811
|
|
|
$
|
508
|
|
|
$
|
542
|
|
|
$
|
1,483
|
|
|
$
|
1,388
|
|
|
$
|
444
|
|
|
$
|
523
|
|
|
$
|
8,771
|
|
|
79.9
|
%
|
% of loan type
|
|
|
|
12.2
|
%
|
|
32.0
|
%
|
|
5.8
|
%
|
|
6.2
|
%
|
|
16.9
|
%
|
|
15.8
|
%
|
|
5.1
|
%
|
|
6.0
|
%
|
|
100.0
|
%
|
|
|
||||||||||
Delinquency rates
2
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
30-89 days
|
|
6/30/2018
|
|
2.4
|
%
|
|
0.1
|
%
|
|
0.2
|
%
|
|
—
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
0.2
|
%
|
|
0.4
|
%
|
|
0.4
|
%
|
|
|
||||||||||
|
|
12/31/2017
|
|
0.2
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
0.2
|
%
|
|
—
|
%
|
|
0.2
|
%
|
|
—
|
%
|
|
0.8
|
%
|
|
0.1
|
%
|
|
|
||||||||||
≥ 90 days
|
|
6/30/2018
|
|
—
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
|
|
||||||||||
|
|
12/31/2017
|
|
0.2
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
0.7
|
%
|
|
0.1
|
%
|
|
|
||||||||||
Accruing loans past due 90 days or more
|
|
6/30/2018
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
|
|
|
|
12/31/2017
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
|
||||||||||
Nonaccrual loans
|
|
6/30/2018
|
|
$
|
3
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
20
|
|
|
$
|
53
|
|
|
|
|
|
|
12/31/2017
|
|
4
|
|
|
7
|
|
|
1
|
|
|
2
|
|
|
17
|
|
|
1
|
|
|
4
|
|
|
—
|
|
|
36
|
|
|
|
||||||||||
Residential construction and land development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance outstanding
|
|
6/30/2018
|
|
$
|
44
|
|
|
$
|
293
|
|
|
$
|
54
|
|
|
$
|
3
|
|
|
$
|
200
|
|
|
$
|
34
|
|
|
$
|
2
|
|
|
$
|
7
|
|
|
$
|
637
|
|
|
5.8
|
%
|
% of loan type
|
|
|
|
6.9
|
%
|
|
46.0
|
%
|
|
8.5
|
%
|
|
0.5
|
%
|
|
31.4
|
%
|
|
5.3
|
%
|
|
0.3
|
%
|
|
1.1
|
%
|
|
100.0
|
%
|
|
|
||||||||||
Delinquency rates
2
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
30-89 days
|
|
6/30/2018
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
||||||||||
|
|
12/31/2017
|
|
—
|
%
|
|
—
|
%
|
|
0.2
|
%
|
|
—
|
%
|
|
0.7
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.2
|
%
|
|
|
||||||||||
≥ 90 days
|
|
6/30/2018
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
||||||||||
|
|
12/31/2017
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
||||||||||
Accruing loans past due 90 days or more
|
|
6/30/2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
12/31/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||||||||||
Nonaccrual loans
|
|
6/30/2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
12/31/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||||||||||
Commercial construction and land development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance outstanding
|
|
6/30/2018
|
|
$
|
176
|
|
|
$
|
324
|
|
|
$
|
46
|
|
|
$
|
89
|
|
|
$
|
427
|
|
|
$
|
336
|
|
|
$
|
121
|
|
|
$
|
46
|
|
|
$
|
1,565
|
|
|
14.3
|
%
|
% of loan type
|
|
|
|
11.3
|
%
|
|
20.7
|
%
|
|
2.9
|
%
|
|
5.7
|
%
|
|
27.3
|
%
|
|
21.5
|
%
|
|
7.7
|
%
|
|
2.9
|
%
|
|
100.0
|
%
|
|
|
||||||||||
Delinquency rates
2
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
30-89 days
|
|
6/30/2018
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.2
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.1
|
%
|
|
|
||||||||||
|
|
12/31/2017
|
|
0.1
|
%
|
|
0.2
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.1
|
%
|
|
|
||||||||||
≥ 90 days
|
|
6/30/2018
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.2
|
%
|
|
1.2
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.3
|
%
|
|
|
||||||||||
|
|
12/31/2017
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
1.3
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.3
|
%
|
|
|
||||||||||
Accruing loans past due 90 days or more
|
|
6/30/2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
12/31/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||||||||||
Nonaccrual loans
|
|
6/30/2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
|
|
|
|
12/31/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
|
||||||||||
Total construction and land development
|
|
6/30/2018
|
|
$
|
220
|
|
|
$
|
617
|
|
|
$
|
100
|
|
|
$
|
92
|
|
|
$
|
627
|
|
|
$
|
370
|
|
|
$
|
123
|
|
|
$
|
53
|
|
|
$
|
2,202
|
|
|
|
|
Total commercial real estate
|
|
6/30/2018
|
|
$
|
1,292
|
|
|
$
|
3,428
|
|
|
$
|
608
|
|
|
$
|
634
|
|
|
$
|
2,110
|
|
|
$
|
1,758
|
|
|
$
|
567
|
|
|
$
|
576
|
|
|
$
|
10,973
|
|
|
100.0
|
%
|
1
|
No other geography exceeds
$90 million
for all three loan types.
|
2
|
Delinquency rates include nonaccrual loans.
|
(In millions)
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
||||
Secured by first deeds of trust
|
$
|
1,429
|
|
|
$
|
1,406
|
|
Secured by second (or junior) liens
|
1,396
|
|
|
1,371
|
|
||
Total
|
$
|
2,825
|
|
|
$
|
2,777
|
|
(Dollar amounts in millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
||||
Nonaccrual loans
1
|
$
|
342
|
|
|
$
|
414
|
|
Other real estate owned
|
5
|
|
|
4
|
|
||
Total nonperforming assets
|
$
|
347
|
|
|
$
|
418
|
|
Ratio of nonperforming assets to net loans and leases
1
and other real estate owned
|
0.77
|
%
|
|
0.93
|
%
|
||
Accruing loans past due 90 days or more
|
$
|
5
|
|
|
$
|
22
|
|
Ratio of accruing loans past due 90 days or more to loans and leases
1
|
0.01
|
%
|
|
0.05
|
%
|
||
Nonaccrual loans and accruing loans past due 90 days or more
|
$
|
347
|
|
|
$
|
436
|
|
Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans and leases
1
|
0.77
|
%
|
|
0.97
|
%
|
||
Accruing loans past due 30-89 days
|
$
|
119
|
|
|
$
|
120
|
|
Nonaccrual loans
1
current as to principal and interest payments
|
63.8
|
%
|
|
65.9
|
%
|
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
||||
Restructured loans – accruing
|
$
|
104
|
|
|
$
|
139
|
|
Restructured loans – nonaccruing
|
77
|
|
|
87
|
|
||
Total
|
$
|
181
|
|
|
$
|
226
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
229
|
|
|
$
|
298
|
|
|
$
|
226
|
|
|
$
|
251
|
|
New identified TDRs and principal increases
|
18
|
|
|
70
|
|
|
69
|
|
|
156
|
|
||||
Payments and payoffs
|
(54
|
)
|
|
(49
|
)
|
|
(88
|
)
|
|
(72
|
)
|
||||
Charge-offs
|
(2
|
)
|
|
(10
|
)
|
|
(3
|
)
|
|
(13
|
)
|
||||
No longer reported as TDRs
|
(7
|
)
|
|
(3
|
)
|
|
(18
|
)
|
|
(4
|
)
|
||||
Sales and other
|
(3
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
(14
|
)
|
||||
Balance at end of period
|
$
|
181
|
|
|
$
|
304
|
|
|
$
|
181
|
|
|
$
|
304
|
|
(Dollar amounts in millions)
|
Six Months Ended June 30, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Six Months Ended June 30, 2017
|
||||||
|
|
|
|
|
|
||||||
Loans and leases outstanding (net of unearned income)
|
$
|
45,230
|
|
|
$
|
44,780
|
|
|
$
|
43,683
|
|
Average loans and leases outstanding (net of unearned income)
|
$
|
45,054
|
|
|
$
|
43,501
|
|
|
$
|
42,906
|
|
Allowance for loan losses:
|
|
|
|
|
|
||||||
Balance at beginning of period
|
$
|
518
|
|
|
$
|
567
|
|
|
$
|
567
|
|
Provision for loan losses
|
(35
|
)
|
|
24
|
|
|
30
|
|
|||
Charge-offs:
|
|
|
|
|
|
||||||
Commercial
|
30
|
|
|
118
|
|
|
82
|
|
|||
Commercial real estate
|
—
|
|
|
9
|
|
|
2
|
|
|||
Consumer
|
9
|
|
|
17
|
|
|
7
|
|
|||
Total
|
39
|
|
|
144
|
|
|
91
|
|
|||
Recoveries:
|
|
|
|
|
|
||||||
Commercial
|
38
|
|
|
46
|
|
|
23
|
|
|||
Commercial real estate
|
5
|
|
|
14
|
|
|
11
|
|
|||
Consumer
|
3
|
|
|
11
|
|
|
4
|
|
|||
Total
|
46
|
|
|
71
|
|
|
38
|
|
|||
Net loan and lease charge-offs (recoveries)
|
(7
|
)
|
|
73
|
|
|
53
|
|
|||
Balance at end of period
|
$
|
490
|
|
|
$
|
518
|
|
|
$
|
544
|
|
Ratio of annualized net charge-offs to average loans and leases
|
(0.03
|
)%
|
|
0.17
|
%
|
|
0.25
|
%
|
|||
Ratio of allowance for loan losses to net loans and leases, at period end
|
1.08
|
%
|
|
1.16
|
%
|
|
1.25
|
%
|
|||
Ratio of allowance for loan losses to nonaccrual loans, at period end
|
143
|
%
|
|
129
|
%
|
|
115
|
%
|
|||
Ratio of allowance for loan losses to nonaccrual loans and accruing loans past due 90 days or more, at period end
|
141
|
%
|
|
122
|
%
|
|
110
|
%
|
|
|
June 30, 2018
|
||||
Product
|
|
Effective duration (unchanged)
|
|
Effective duration (+200 bps)
|
||
|
|
|
|
|
||
Demand deposits
|
|
3.0
|
%
|
|
3.0
|
%
|
Money market
|
|
1.4
|
%
|
|
1.2
|
%
|
Savings and interest-on-checking
|
|
2.6
|
%
|
|
2.3
|
%
|
|
|
June 30, 2018
|
|||||||||||||
|
|
Parallel shift in rates (in bps)
1
|
|||||||||||||
Repricing scenario
|
|
-100
|
|
0
|
|
+100
|
|
+200
|
|
+300
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Earnings at Risk
|
|
(3.2
|
)%
|
|
—
|
%
|
|
3.0
|
%
|
|
5.8
|
%
|
|
8.6
|
%
|
1
|
Assumes rates cannot go below zero in the negative rate shift.
|
|
|
December 31, 2017
|
|||||||||||||
|
|
Parallel shift in rates (in bps)
1
|
|||||||||||||
Repricing scenario
|
|
-100
|
|
0
|
|
+100
|
|
+200
|
|
+300
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Earnings at Risk
|
|
(2.7
|
)%
|
|
—
|
%
|
|
2.8
|
%
|
|
5.4
|
%
|
|
7.8
|
%
|
1
|
Assumes rates cannot go below zero in the negative rate shift.
|
|
|
June 30, 2018
|
|||||||||||||
|
|
Parallel shift in rates (in bps)
1
|
|||||||||||||
Repricing scenario
|
|
-100
|
|
0
|
|
+100
|
|
+200
|
|
+300
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Economic Value of Equity
|
|
0.8
|
%
|
|
—
|
%
|
|
(2.2
|
)%
|
|
(3.9
|
)%
|
|
(5.5
|
)%
|
1
|
Assumes rates cannot go below zero in the negative rate shift.
|
|
|
December 31, 2017
|
|||||||||||||
|
|
Parallel shift in rates (in bps)
1
|
|||||||||||||
Repricing scenario
|
|
-100 bps
|
|
0 bps
|
|
+100 bps
|
|
+200 bps
|
|
+300 bps
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Economic Value of Equity
|
|
0.2
|
%
|
|
—
|
%
|
|
0.5
|
%
|
|
0.3
|
%
|
|
0.2
|
%
|
1
|
Assumes rates cannot go below zero in the negative rate shift.
|
|
|
Company
|
ZB, N.A.
|
|
Company
|
ZB, N.A.
|
|
Company
|
|
ZB, N.A.
|
Rating agency
|
|
Outlook
|
|
Long-term issuer/senior
debt rating
|
|
Subordinated debt rating
|
|
Short-term debt rating
|
||
|
|
|
|
|
|
|
|
|
|
|
S&P
|
|
Stable
|
Stable
|
|
BBB
|
BBB+
|
|
BBB-
|
|
A-2
|
Moody’s
|
|
Stable
|
Stable
|
|
Baa3
|
Baa3
|
|
|
|
P-2
|
Kroll
|
|
Stable
|
Stable
|
|
BBB+
|
A-
|
|
BBB
|
|
K2
|
PARENT ONLY CONDENSED BALANCE SHEETS
|
|||||||||||
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
|
June 30,
2017 |
||||||
ASSETS
|
|
|
|
|
|
||||||
Cash and due from banks
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest-bearing deposits
|
322
|
|
|
332
|
|
|
351
|
|
|||
Investment securities:
|
|
|
|
|
|
||||||
Available-for-sale, at fair value
|
28
|
|
|
30
|
|
|
37
|
|
|||
Other noninterest-bearing investments
|
42
|
|
|
36
|
|
|
34
|
|
|||
Investments in subsidiaries:
|
|
|
|
|
|
||||||
Commercial bank
|
7,551
|
|
|
7,620
|
|
|
7,688
|
|
|||
Other subsidiaries
|
41
|
|
|
41
|
|
|
6
|
|
|||
Other assets
|
50
|
|
|
32
|
|
|
73
|
|
|||
Total assets
|
$
|
8,034
|
|
|
$
|
8,091
|
|
|
$
|
8,189
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
||||||
Other liabilities
|
$
|
30
|
|
|
$
|
30
|
|
|
$
|
58
|
|
Long-term debt:
|
|
|
|
|
|
||||||
Due to others
|
383
|
|
|
382
|
|
|
382
|
|
|||
Total liabilities
|
413
|
|
|
412
|
|
|
440
|
|
|||
Shareholders’ equity:
|
|
|
|
|
|
||||||
Preferred stock
|
566
|
|
|
566
|
|
|
566
|
|
|||
Common stock
|
4,231
|
|
|
4,445
|
|
|
4,660
|
|
|||
Retained earnings
|
3,139
|
|
|
2,807
|
|
|
2,572
|
|
|||
Accumulated other comprehensive income (loss)
|
(315
|
)
|
|
(139
|
)
|
|
(49
|
)
|
|||
Total shareholders’ equity
|
7,621
|
|
|
7,679
|
|
|
7,749
|
|
|||
Total liabilities and shareholders’ equity
|
$
|
8,034
|
|
|
$
|
8,091
|
|
|
$
|
8,189
|
|
Assumed Zions Bancorporation Common Stock Market Price
|
|
Diluted Shares (000s)
|
|||
|
|
|
|||
$
|
35.00
|
|
|
0
|
|
40.00
|
|
|
4,900
|
||
45.00
|
|
|
8,014
|
|
|
50.00
|
|
|
10,506
|
||
55.00
|
|
|
12,545
|
|
|
60.00
|
|
|
14,244
|
|
|
65.00
|
|
|
15,682
|
|
|
June 30,
2018 |
|
December 31,
2017 |
|
June 30,
2017 |
|||
|
|
|
|
|
|
|||
Tangible common equity ratio
1
|
9.2
|
%
|
|
9.3
|
%
|
|
9.6
|
%
|
Tangible equity ratio
1
|
10.1
|
%
|
|
10.2
|
%
|
|
10.4
|
%
|
Average equity to average assets (three months ended)
|
11.5
|
%
|
|
11.9
|
%
|
|
12.0
|
%
|
Basel III risk-based capital ratios
2
:
|
|
|
|
|
|
|||
Common equity tier 1 capital
|
12.2
|
%
|
|
12.1
|
%
|
|
12.3
|
%
|
Tier 1 leverage
|
10.5
|
%
|
|
10.5
|
%
|
|
10.5
|
%
|
Tier 1 risk-based
|
13.3
|
%
|
|
13.2
|
%
|
|
13.4
|
%
|
Total risk-based
|
14.8
|
%
|
|
14.8
|
%
|
|
15.1
|
%
|
Return on average common equity (three months ended)
|
10.6
|
%
|
|
6.3
|
%
|
|
8.6
|
%
|
Return on average tangible common equity (three months ended)
1
|
12.4
|
%
|
|
7.4
|
%
|
|
10.2
|
%
|
1
|
See “GAAP to Non-GAAP Reconciliations” on page
5
for more information regarding these ratios.
|
2
|
Based on the applicable phase-in periods.
|
ITEM 1.
|
FINANCIAL STATEMENTS
(Unaudited)
|
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
|||||||
(In millions, shares in thousands)
|
June 30,
2018 |
|
December 31,
2017 |
||||
(Unaudited)
|
|
|
|||||
ASSETS
|
|
|
|
||||
Cash and due from banks
|
$
|
468
|
|
|
$
|
548
|
|
Money market investments:
|
|
|
|
||||
Interest-bearing deposits
|
698
|
|
|
782
|
|
||
Federal funds sold and security resell agreements
|
558
|
|
|
514
|
|
||
Investment securities:
|
|
|
|
||||
Held-to-maturity, at amortized cost (approximate fair value $866 and $762)
|
878
|
|
|
770
|
|
||
Available-for-sale, at fair value
|
14,627
|
|
|
15,161
|
|
||
Trading account, at fair value
|
207
|
|
|
148
|
|
||
Total investment securities
|
15,712
|
|
|
16,079
|
|
||
Loans held for sale
|
84
|
|
|
44
|
|
||
Loans and leases, net of unearned income and fees
|
45,230
|
|
|
44,780
|
|
||
Less allowance for loan losses
|
490
|
|
|
518
|
|
||
Loans held for investment, net of allowance
|
44,740
|
|
|
44,262
|
|
||
Other noninterest-bearing investments
|
1,054
|
|
|
1,029
|
|
||
Premises, equipment and software, net
|
1,099
|
|
|
1,094
|
|
||
Goodwill and intangibles
|
1,015
|
|
|
1,016
|
|
||
Other real estate owned
|
5
|
|
|
4
|
|
||
Other assets
|
1,024
|
|
|
916
|
|
||
Total Assets
|
$
|
66,457
|
|
|
$
|
66,288
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Deposits:
|
|
|
|
||||
Noninterest-bearing demand
|
$
|
24,007
|
|
|
$
|
23,886
|
|
Interest-bearing:
|
|
|
|
||||
Savings and money market
|
25,562
|
|
|
25,620
|
|
||
Time
|
4,011
|
|
|
3,115
|
|
||
Total deposits
|
53,580
|
|
|
52,621
|
|
||
Federal funds purchased and other short-term borrowings
|
4,158
|
|
|
4,976
|
|
||
Long-term debt
|
383
|
|
|
383
|
|
||
Reserve for unfunded lending commitments
|
58
|
|
|
58
|
|
||
Other liabilities
|
657
|
|
|
571
|
|
||
Total liabilities
|
58,836
|
|
|
58,609
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, without par value; authorized 4,400 shares
|
566
|
|
|
566
|
|
||
Common stock, without par value; authorized 350,000 shares; issued and outstanding 195,392 and 197,532 shares
|
4,231
|
|
|
4,445
|
|
||
Retained earnings
|
3,139
|
|
|
2,807
|
|
||
Accumulated other comprehensive income (loss)
|
(315
|
)
|
|
(139
|
)
|
||
Total shareholders’ equity
|
7,621
|
|
|
7,679
|
|
||
Total liabilities and shareholders’ equity
|
$
|
66,457
|
|
|
$
|
66,288
|
|
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
|||||||||||||||
(In millions, except shares and per share amounts)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
Interest income:
|
|
|
|
|
|
|
|
||||||||
Interest and fees on loans
|
$
|
514
|
|
|
$
|
469
|
|
|
$
|
1,011
|
|
|
$
|
902
|
|
Interest on money market investments
|
7
|
|
|
5
|
|
|
13
|
|
|
9
|
|
||||
Interest on securities
|
85
|
|
|
84
|
|
|
170
|
|
|
162
|
|
||||
Total interest income
|
606
|
|
|
558
|
|
|
1,194
|
|
|
1,073
|
|
||||
Interest expense:
|
|
|
|
|
|
|
|
||||||||
Interest on deposits
|
29
|
|
|
14
|
|
|
48
|
|
|
28
|
|
||||
Interest on short- and long-term borrowings
|
29
|
|
|
16
|
|
|
56
|
|
|
28
|
|
||||
Total interest expense
|
58
|
|
|
30
|
|
|
104
|
|
|
56
|
|
||||
Net interest income
|
548
|
|
|
528
|
|
|
1,090
|
|
|
1,017
|
|
||||
Provision for loan losses
|
5
|
|
|
7
|
|
|
(35
|
)
|
|
30
|
|
||||
Net interest income after provision for loan losses
|
543
|
|
|
521
|
|
|
1,125
|
|
|
987
|
|
||||
Noninterest income:
|
|
|
|
|
|
|
|
||||||||
Service charges and fees on deposit accounts
|
42
|
|
|
43
|
|
|
84
|
|
|
85
|
|
||||
Other service charges, commissions and fees
|
55
|
|
|
56
|
|
|
110
|
|
|
105
|
|
||||
Wealth management and trust income
|
14
|
|
|
10
|
|
|
25
|
|
|
20
|
|
||||
Loan sales and servicing income
|
7
|
|
|
6
|
|
|
13
|
|
|
13
|
|
||||
Capital markets and foreign exchange
|
7
|
|
|
6
|
|
|
15
|
|
|
13
|
|
||||
Customer-related fees
|
125
|
|
|
121
|
|
|
247
|
|
|
236
|
|
||||
Dividends and other investment income
|
11
|
|
|
10
|
|
|
22
|
|
|
22
|
|
||||
Securities gains, net
|
1
|
|
|
2
|
|
|
1
|
|
|
7
|
|
||||
Other
|
1
|
|
|
(1
|
)
|
|
6
|
|
|
(1
|
)
|
||||
Total noninterest income
|
138
|
|
|
132
|
|
|
276
|
|
|
264
|
|
||||
Noninterest expense:
|
|
|
|
|
|
|
|
||||||||
Salaries and employee benefits
|
266
|
|
|
240
|
|
|
535
|
|
|
502
|
|
||||
Occupancy, net
|
32
|
|
|
32
|
|
|
63
|
|
|
66
|
|
||||
Furniture, equipment and software, net
|
32
|
|
|
32
|
|
|
65
|
|
|
64
|
|
||||
Other real estate expense, net
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Credit-related expense
|
7
|
|
|
8
|
|
|
13
|
|
|
15
|
|
||||
Provision for unfunded lending commitments
|
7
|
|
|
3
|
|
|
—
|
|
|
(2
|
)
|
||||
Professional and legal services
|
14
|
|
|
14
|
|
|
26
|
|
|
28
|
|
||||
Advertising
|
7
|
|
|
6
|
|
|
13
|
|
|
11
|
|
||||
FDIC premiums
|
14
|
|
|
13
|
|
|
26
|
|
|
25
|
|
||||
Other
|
49
|
|
|
57
|
|
|
98
|
|
|
110
|
|
||||
Total noninterest expense
|
428
|
|
|
405
|
|
|
840
|
|
|
819
|
|
||||
Income before income taxes
|
253
|
|
|
248
|
|
|
561
|
|
|
432
|
|
||||
Income taxes
|
56
|
|
|
80
|
|
|
126
|
|
|
124
|
|
||||
Net income
|
197
|
|
|
168
|
|
|
435
|
|
|
308
|
|
||||
Preferred stock dividends
|
(10
|
)
|
|
(12
|
)
|
|
(17
|
)
|
|
(23
|
)
|
||||
Preferred stock redemption
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Net earnings applicable to common shareholders
|
$
|
187
|
|
|
$
|
154
|
|
|
$
|
418
|
|
|
$
|
283
|
|
Weighted average common shares outstanding during the period:
|
|
|
|
|
|
|
|
||||||||
Basic shares (in thousands)
|
195,583
|
|
|
201,822
|
|
|
196,149
|
|
|
202,083
|
|
||||
Diluted shares (in thousands)
|
209,247
|
|
|
208,183
|
|
|
209,859
|
|
|
209,353
|
|
||||
Net earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.95
|
|
|
$
|
0.76
|
|
|
$
|
2.11
|
|
|
$
|
1.39
|
|
Diluted
|
0.89
|
|
|
0.73
|
|
|
1.97
|
|
|
1.34
|
|
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
|
|||||||||||||||
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income for the period
|
$
|
197
|
|
|
$
|
168
|
|
|
$
|
435
|
|
|
$
|
308
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Net unrealized holding gains (losses) on investment securities
|
(50
|
)
|
|
61
|
|
|
(175
|
)
|
|
73
|
|
||||
Net unrealized gains on other noninterest-bearing investments
|
2
|
|
|
1
|
|
|
3
|
|
|
2
|
|
||||
Net unrealized holding gains (losses) on derivative instruments
|
—
|
|
|
1
|
|
|
(3
|
)
|
|
—
|
|
||||
Reclassification adjustment for increase in interest income recognized in earnings on derivative instruments
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||
Other comprehensive income (loss)
|
(49
|
)
|
|
62
|
|
|
(176
|
)
|
|
73
|
|
||||
Comprehensive income
|
$
|
148
|
|
|
$
|
230
|
|
|
$
|
259
|
|
|
$
|
381
|
|
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSO
LIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
|
||||||||||||||||||||||||
(In millions, except shares
and per share amounts)
|
Preferred
stock
|
|
Common stock
|
|
Retained earnings
|
|
Accumulated other
comprehensive income (loss)
|
|
Total
shareholders’ equity
|
|||||||||||||||
Shares
(in thousands)
|
|
Amount
|
|
|
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 31, 2017
|
$
|
566
|
|
|
197,532
|
|
|
$
|
4,445
|
|
|
$
|
2,807
|
|
|
|
$
|
(139
|
)
|
|
|
$
|
7,679
|
|
Net income for the period
|
|
|
|
|
|
|
435
|
|
|
|
|
|
|
435
|
|
|||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
(176
|
)
|
|
|
(176
|
)
|
|||||||||
Cumulative effect adjustment, adoption of ASU 2014-09, Revenue from Contracts with Customers
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
1
|
|
|||||||
Company common stock repurchased
|
|
|
(4,301
|
)
|
|
(235
|
)
|
|
|
|
|
|
|
|
(235
|
)
|
||||||||
Net shares issued from stock warrant exercises
|
|
|
1,095
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||
Net activity under employee plans and related tax benefits
|
|
|
1,066
|
|
|
21
|
|
|
|
|
|
|
|
|
21
|
|
||||||||
Dividends on preferred stock
|
|
|
|
|
|
|
|
(17
|
)
|
|
|
|
|
|
(17
|
)
|
||||||||
Dividends on common stock, $0.44 per share
|
|
|
|
|
|
|
(87
|
)
|
|
|
|
|
|
(87
|
)
|
|||||||||
Balance at June 30, 2018
|
$
|
566
|
|
|
195,392
|
|
|
$
|
4,231
|
|
|
$
|
3,139
|
|
|
|
$
|
(315
|
)
|
|
|
$
|
7,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 31, 2016
|
$
|
710
|
|
|
203,085
|
|
|
$
|
4,725
|
|
|
$
|
2,321
|
|
|
|
$
|
(122
|
)
|
|
|
$
|
7,634
|
|
Net income for the period
|
|
|
|
|
|
|
308
|
|
|
|
|
|
|
308
|
|
|||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
73
|
|
|
|
73
|
|
|||||||||
Preferred stock redemption
|
(144
|
)
|
|
|
|
2
|
|
|
(2
|
)
|
|
|
|
|
|
(144
|
)
|
|||||||
Company common stock repurchased
|
|
|
|
(2,158
|
)
|
|
(90
|
)
|
|
|
|
|
|
|
|
(90
|
)
|
|||||||
Net activity under employee plans and related tax benefits
|
|
|
1,204
|
|
|
23
|
|
|
|
|
|
|
|
|
23
|
|
||||||||
Dividends on preferred stock
|
|
|
|
|
|
|
|
(23
|
)
|
|
|
|
|
|
(23
|
)
|
||||||||
Dividends on common stock, $0.16 per share
|
|
|
|
|
|
|
(32
|
)
|
|
|
|
|
|
(32
|
)
|
|||||||||
Balance at June 30, 2017
|
$
|
566
|
|
|
202,131
|
|
|
$
|
4,660
|
|
|
$
|
2,572
|
|
|
|
$
|
(49
|
)
|
|
|
$
|
7,749
|
|
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|||||||||||||||
(In millions)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Net income for the period
|
$
|
197
|
|
|
$
|
168
|
|
|
$
|
435
|
|
|
$
|
308
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Provision for credit losses
|
12
|
|
|
10
|
|
|
(35
|
)
|
|
28
|
|
||||
Depreciation and amortization
|
49
|
|
|
47
|
|
|
92
|
|
|
84
|
|
||||
Share-based compensation
|
5
|
|
|
5
|
|
|
18
|
|
|
17
|
|
||||
Deferred income tax expense (benefit)
|
(11
|
)
|
|
(5
|
)
|
|
2
|
|
|
8
|
|
||||
Net decrease (increase) in trading securities
|
(63
|
)
|
|
(22
|
)
|
|
(59
|
)
|
|
54
|
|
||||
Net decrease (increase) in loans held for sale
|
(1
|
)
|
|
53
|
|
|
(34
|
)
|
|
89
|
|
||||
Change in other liabilities
|
81
|
|
|
(63
|
)
|
|
85
|
|
|
(21
|
)
|
||||
Change in other assets
|
(100
|
)
|
|
12
|
|
|
(52
|
)
|
|
33
|
|
||||
Other, net
|
(6
|
)
|
|
(10
|
)
|
|
(14
|
)
|
|
(24
|
)
|
||||
Net cash provided by operating activities
|
163
|
|
|
195
|
|
|
438
|
|
|
576
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Net decrease in money market investments
|
157
|
|
|
530
|
|
|
40
|
|
|
385
|
|
||||
Proceeds from maturities and paydowns of investment securities held-to-maturity
|
55
|
|
|
75
|
|
|
114
|
|
|
166
|
|
||||
Purchases of investment securities held-to-maturity
|
(165
|
)
|
|
(66
|
)
|
|
(222
|
)
|
|
(73
|
)
|
||||
Proceeds from sales, maturities, and paydowns of investment securities available-for-sale
|
735
|
|
|
630
|
|
|
1,404
|
|
|
1,160
|
|
||||
Purchases of investment securities available-for-sale
|
(564
|
)
|
|
(353
|
)
|
|
(1,176
|
)
|
|
(3,466
|
)
|
||||
Net change in loans and leases
|
(120
|
)
|
|
(919
|
)
|
|
(431
|
)
|
|
(1,036
|
)
|
||||
Net change in other noninterest-bearing investments
|
27
|
|
|
(29
|
)
|
|
(4
|
)
|
|
(103
|
)
|
||||
Purchases of premises and equipment
|
(26
|
)
|
|
(44
|
)
|
|
(54
|
)
|
|
(94
|
)
|
||||
Other, net
|
1
|
|
|
3
|
|
|
—
|
|
|
8
|
|
||||
Net cash provided by (used in) investing activities
|
100
|
|
|
(173
|
)
|
|
(329
|
)
|
|
(3,053
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
||||||||
Net increase (decrease) in deposits
|
618
|
|
|
(1,099
|
)
|
|
965
|
|
|
(858
|
)
|
||||
Net change in short-term funds borrowed
|
(709
|
)
|
|
205
|
|
|
1,181
|
|
|
2,015
|
|
||||
Proceeds from debt over 90 days and up to one year
|
—
|
|
|
1,250
|
|
|
—
|
|
|
1,750
|
|
||||
Repayments of debt over 90 days and up to one year
|
—
|
|
|
(250
|
)
|
|
(2,000
|
)
|
|
(250
|
)
|
||||
Cash paid for preferred stock redemption
|
—
|
|
|
(144
|
)
|
|
—
|
|
|
(144
|
)
|
||||
Repayment of long-term debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(153
|
)
|
||||
Proceeds from the issuance of common stock
|
7
|
|
|
9
|
|
|
17
|
|
|
18
|
|
||||
Dividends paid on common and preferred stock
|
(55
|
)
|
|
(26
|
)
|
|
(104
|
)
|
|
(55
|
)
|
||||
Company common stock repurchased
|
(126
|
)
|
|
(52
|
)
|
|
(248
|
)
|
|
(102
|
)
|
||||
Net cash provided by (used in) financing activities
|
(265
|
)
|
|
(107
|
)
|
|
(189
|
)
|
|
2,221
|
|
||||
Net decrease in cash and due from banks
|
(2
|
)
|
|
(85
|
)
|
|
(80
|
)
|
|
(256
|
)
|
||||
Cash and due from banks at beginning of period
|
470
|
|
|
566
|
|
|
548
|
|
|
737
|
|
||||
Cash and due from banks at end of period
|
$
|
468
|
|
|
$
|
481
|
|
|
$
|
468
|
|
|
$
|
481
|
|
Cash paid for interest
|
$
|
55
|
|
|
$
|
30
|
|
|
$
|
100
|
|
|
$
|
52
|
|
Net cash paid for income taxes
|
90
|
|
|
128
|
|
|
91
|
|
|
122
|
|
||||
Noncash activities are summarized as follows:
|
|
|
|
|
|
|
|
||||||||
Loans held for investment transferred to other real estate owned
|
3
|
|
|
2
|
|
|
6
|
|
|
4
|
|
||||
Loans held for investment reclassified to loans held for sale, net
|
24
|
|
|
(12
|
)
|
|
39
|
|
|
11
|
|
1.
|
BASIS OF PRESENTATION
|
2.
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
Standard
|
|
Description
|
|
Date of adoption
|
|
Effect on the financial statements or other significant matters
|
|
|
|
|
|
|
|
Standards not yet adopted by the Company
|
||||||
|
|
|
|
|
|
|
ASU 2016-02,
Leases (Topic 842) and subsequent related ASUs
|
|
The standard requires that a lessee recognize assets and liabilities for leases on the balance sheet. For leases with a term of 12 months or less, however, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend primarily on its classification as a finance or operating lease. The standard also requires disclosures to better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements.
|
|
January 1, 2019
|
|
Upon adoption of the standard, we currently estimate the right-of-use asset to be between $200-$250 million. This estimate may change depending on the Company’s lease activity. The implementation team is working on gathering all key lease data elements to meet the requirements of the new guidance. Additionally, we are implementing new lease software that will accommodate the new accounting requirements.
|
|
|
|
|
|
|
|
ASU 2017-08,
Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities
|
|
The amendments in this ASU shorten the amortization period for certain callable debt securities held at a premium. The standard requires the premium to be amortized to the earliest call date. The update does not change the accounting for securities held at a discount.
|
|
January 1, 2019
|
|
Our analysis suggests this guidance will not have a material impact on the Company’s financial statements, but we will continue to monitor its impact as we move closer to implementation.
|
|
|
|
|
|
|
|
ASU 2016-13,
Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
|
The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard replaces today’s “incurred loss” approach with an “expected loss” model for instruments such as loans and held-to-maturity (“HTM”) securities that are measured at amortized cost. The standard requires credit losses relating to available-for-sale (“AFS”) debt securities to be recorded through an allowance for credit loss (“ACL”) rather than a reduction of the carrying amount. It also changes the accounting for purchased credit-impaired debt securities and loans. The standard retains many of the current disclosure requirements in US GAAP and expands certain disclosure requirements. Early adoption of the guidance is permitted as of January 1, 2019.
|
|
January 1, 2020
|
|
We have formed an implementation team led jointly by Credit, Treasury, and the Corporate Controller’s group, that also includes other lines of business and functions within the Company. The implementation team is developing models that can meet the requirements of the new guidance. While this standard may potentially have a material impact on the Company’s financial statements, we are still in process of conducting our evaluation.
|
|
|
|
|
|
|
|
ASU 2017-04,
Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
|
|
The standard eliminates the requirement to calculate the implied fair value of goodwill (i.e. Step 2 of the current goodwill impairment test) to measure a goodwill impairment charge. Instead, entities would record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on Step 1 of the current guidance). The standard does not change the guidance on completing Step 1 of the goodwill impairment test. The standard also continues to allow entities to perform the optional qualitative goodwill impairment assessment before determining whether to proceed to Step 1. The standard is effective for the Company as of January 1, 2020. Early adoption is allowed for any goodwill impairment test performed after January 1, 2017.
|
|
January 1, 2020
|
|
We do not currently expect this guidance will have a material impact on the Company’s financial statements since the fair values of our reporting units were not lower than their respective carrying amounts at the time of our goodwill impairment analysis for 2017.
|
|
|
|
|
|
|
|
Standard
|
|
Description
|
|
Date of adoption
|
|
Effect on the financial statements or other significant matters
|
|
|
|
|
|
|
|
Standards adopted by the Company
|
||||||
|
|
|
|
|
|
|
ASU 2014-09,
Revenue from Contracts with Customers (Topic 606) and subsequent related ASUs
|
|
The core principle of the new guidance is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The banking industry does not expect significant changes because major sources of revenue are from financial instruments that have been excluded from the scope of the new standard, (including loans, derivatives, debt and equity securities, etc.). However, these new standards affect other fees charged by banks, such as asset management fees, credit card interchange fees, deposit account fees, etc. Adoption may be made on a full retrospective basis with practical expedients, or on a modified retrospective basis with a cumulative effect adjustment. Additionally, the new guidance significantly increases the disclosures related to revenue recognition practices.
|
|
January 1, 2018
|
|
We adopted this guidance using the modified retrospective transition method. There was no material impact at adoption to the Company’s consolidated financial statements. New disclosures are found in Footnote 10.
|
|
|
|
|
|
|
|
ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities
|
|
The standard provides revised accounting guidance related to the accounting for and reporting of financial instruments. Some of the main provisions include:
– Equity investments that do not result in consolidation and are not accounted for under the equity method would be measured at fair value through net income. – Changes in instrument-specific credit risk for financial liabilities that are measured under the fair value option would be recognized in other comprehensive income (“OCI”). – Elimination of the requirement to disclose the methods and significant assumptions used to estimate the fair value of financial instruments carried at amortized cost. However, it will require the use of exit price when measuring the fair value of financial instruments measured at amortized cost for disclosure purposes. |
|
January 1, 2018
|
|
The transition adjustment upon adoption of this guidance was not material. We refined our valuation models to better account for an exit price, which does not impact our financial statements, but does have an impact on our disclosures, as provided in Footnote 3.
|
|
|
|
|
|
|
|
ASU 2017-12,
Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities
|
|
The purpose of this standard is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The standard is effective for public business entities for fiscal years beginning after December 15, 2018, with early adoption, including adoption in an interim period, permitted. The standard requires a modified retrospective transition method that requires recognition of the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption.
|
|
January 1, 2018
|
|
We early adopted this guidance in the first quarter. The adoption of this guidance did not have a material impact on our consolidated financial statements at transition.
|
3.
|
FAIR VALUE
|
(In millions)
|
June 30, 2018
|
||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Investment securities:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale:
1
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury, agencies and corporations
|
$
|
25
|
|
|
$
|
13,266
|
|
|
$
|
—
|
|
|
$
|
13,291
|
|
Municipal securities
|
|
|
1,312
|
|
|
|
|
|
1,312
|
|
|||||
Other debt securities
|
|
|
24
|
|
|
|
|
24
|
|
||||||
Total Available-for-sale
|
25
|
|
|
14,602
|
|
|
—
|
|
|
14,627
|
|
||||
Trading account
|
89
|
|
|
118
|
|
|
|
|
207
|
|
|||||
Other noninterest-bearing investments:
|
|
|
|
|
|
|
|
||||||||
Bank-owned life insurance
|
|
|
513
|
|
|
|
|
513
|
|
||||||
Private equity investments
|
|
|
|
|
|
102
|
|
|
102
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
||||||||
Agriculture loan servicing and interest-only strips
|
|
|
|
|
|
18
|
|
|
18
|
|
|||||
Deferred compensation plan assets
|
108
|
|
|
|
|
|
|
|
|
108
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps and forwards
|
|
|
1
|
|
|
|
|
1
|
|
||||||
Interest rate swaps for customers
|
|
|
22
|
|
|
|
|
22
|
|
||||||
Foreign currency exchange contracts
|
6
|
|
|
|
|
|
|
6
|
|
||||||
Total Assets
|
$
|
228
|
|
|
$
|
15,256
|
|
|
$
|
120
|
|
|
$
|
15,604
|
|
LIABILITIES
|
|
|
|
|
|
|
|
||||||||
Securities sold, not yet purchased
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44
|
|
Other liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan obligations
|
108
|
|
|
|
|
|
|
108
|
|
||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps for customers
|
|
|
65
|
|
|
|
|
65
|
|
||||||
Foreign currency exchange contracts
|
5
|
|
|
|
|
|
|
5
|
|
||||||
Total Liabilities
|
$
|
157
|
|
|
$
|
65
|
|
|
$
|
—
|
|
|
$
|
222
|
|
(In millions)
|
December 31, 2017
|
||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Investment securities:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale:
1
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury, agencies and corporations
|
$
|
25
|
|
|
$
|
13,706
|
|
|
$
|
—
|
|
|
$
|
13,731
|
|
Municipal securities
|
|
|
1,334
|
|
|
|
|
|
1,334
|
|
|||||
Other debt securities
|
|
|
24
|
|
|
|
|
|
24
|
|
|||||
Money market mutual funds and other
|
71
|
|
|
1
|
|
|
|
|
72
|
|
|||||
Total Available-for-sale
|
96
|
|
|
15,065
|
|
|
—
|
|
|
15,161
|
|
||||
Trading account
|
|
|
148
|
|
|
|
|
148
|
|
||||||
Other noninterest-bearing investments:
|
|
|
|
|
|
|
|
||||||||
Bank-owned life insurance
|
|
|
507
|
|
|
|
|
507
|
|
||||||
Private equity investments
|
|
|
|
|
|
95
|
|
|
95
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
||||||||
Agriculture loan servicing and interest-only strips
|
|
|
|
|
|
18
|
|
|
18
|
|
|||||
Deferred compensation plan assets
|
102
|
|
|
|
|
|
|
|
|
102
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps and forwards
|
|
|
1
|
|
|
|
|
1
|
|
||||||
Interest rate swaps for customers
|
|
|
28
|
|
|
|
|
28
|
|
||||||
Foreign currency exchange contracts
|
9
|
|
|
|
|
|
|
9
|
|
||||||
Total Assets
|
$
|
207
|
|
|
$
|
15,749
|
|
|
$
|
113
|
|
|
$
|
16,069
|
|
LIABILITIES
|
|
|
|
|
|
|
|
||||||||
Securities sold, not yet purchased
|
$
|
95
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
95
|
|
Other liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan obligations
|
102
|
|
|
|
|
|
|
102
|
|
||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps for customers
|
|
|
33
|
|
|
|
|
33
|
|
||||||
Foreign currency exchange contracts
|
7
|
|
|
|
|
|
|
7
|
|
||||||
Total Liabilities
|
$
|
204
|
|
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
237
|
|
|
Level 3 Instruments
|
||||||||||||||||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||||
|
June 30, 2018
|
|
June 30, 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
||||||||||||||||||||||||
(In millions)
|
Private
equity investments |
|
Ag loan svcg and int-only strips
|
|
Private
equity investments |
|
Ag loan svcg and int-only strips
|
|
Private
equity investments |
|
Ag loan svcg and int-only strips
|
|
Private
equity investments |
|
Ag loan svcg and int-only strips
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at beginning of period
|
$
|
100
|
|
|
$
|
18
|
|
|
$
|
78
|
|
|
$
|
20
|
|
|
$
|
95
|
|
|
$
|
18
|
|
|
$
|
73
|
|
|
$
|
20
|
|
Securities gains (losses), net
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||||
Other noninterest income
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||||
Purchases
|
1
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||||||
Redemptions and paydowns
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
||||||||
Balance at end of period
|
$
|
102
|
|
|
$
|
18
|
|
|
$
|
82
|
|
|
$
|
19
|
|
|
$
|
102
|
|
|
$
|
18
|
|
|
$
|
82
|
|
|
$
|
19
|
|
(In millions)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|||||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
|
|
|
|
|
|
|
|
||||||||
Securities gains (losses), net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
3
|
|
(In millions)
|
Fair value at June 30, 2018
|
|
Fair value at December 31, 2017
|
||||||||||||||||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Private equity investments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Impaired loans
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||||
Other real estate owned
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
10
|
|
|
Gains (losses) from fair value changes
|
||||||||||||||
(In millions)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Private equity investments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Impaired loans
|
(1
|
)
|
|
(6
|
)
|
|
(5
|
)
|
|
(7
|
)
|
||||
Other real estate owned
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Total
|
$
|
(1
|
)
|
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
|
$
|
(8
|
)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||
(In millions)
|
Carrying
value
|
|
Estimated
fair value
|
|
Level
|
|
Carrying
value
|
|
Estimated
fair value
|
|
Level
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
HTM investment securities
|
$
|
878
|
|
|
$
|
866
|
|
|
2
|
|
$
|
770
|
|
|
$
|
762
|
|
|
2
|
Loans and leases (including loans held for sale), net of allowance
|
44,824
|
|
|
43,715
|
|
|
3
|
|
44,306
|
|
|
44,226
|
|
|
3
|
||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Time deposits
|
4,011
|
|
|
3,985
|
|
|
2
|
|
3,115
|
|
|
3,099
|
|
|
2
|
||||
Other short-term borrowings
|
3,650
|
|
|
3,650
|
|
|
2
|
|
3,600
|
|
|
3,600
|
|
|
2
|
||||
Long-term debt
|
383
|
|
|
390
|
|
|
2
|
|
383
|
|
|
402
|
|
|
2
|
4.
|
OFFSETTING ASSETS AND LIABILITIES
|
|
|
June 30, 2018
|
||||||||||||||||||||||
(In millions)
|
|
|
|
|
|
|
|
Gross amounts not offset in the balance sheet
|
|
|
||||||||||||||
Description
|
|
Gross amounts recognized
|
|
Gross amounts offset in the balance sheet
|
|
Net amounts presented in the balance sheet
|
|
Financial instruments
|
|
Cash collateral received/pledged
|
|
Net amount
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Federal funds sold and security resell agreements
|
|
$
|
607
|
|
|
$
|
(49
|
)
|
|
$
|
558
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
558
|
|
Derivatives (included in other assets)
|
|
29
|
|
|
—
|
|
|
29
|
|
|
(4
|
)
|
|
(9
|
)
|
|
16
|
|
||||||
Total assets
|
|
$
|
636
|
|
|
$
|
(49
|
)
|
|
$
|
587
|
|
|
$
|
(4
|
)
|
|
$
|
(9
|
)
|
|
$
|
574
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Federal funds and other short-term borrowings
|
|
$
|
4,207
|
|
|
$
|
(49
|
)
|
|
$
|
4,158
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,158
|
|
Derivatives (included in other liabilities)
|
|
70
|
|
|
—
|
|
|
70
|
|
|
(4
|
)
|
|
(1
|
)
|
|
65
|
|
||||||
Total Liabilities
|
|
$
|
4,277
|
|
|
$
|
(49
|
)
|
|
$
|
4,228
|
|
|
$
|
(4
|
)
|
|
$
|
(1
|
)
|
|
$
|
4,223
|
|
|
|
December 31, 2017
|
||||||||||||||||||||||
(In millions)
|
|
|
|
|
|
|
|
Gross amounts not offset in the balance sheet
|
|
|
||||||||||||||
Description
|
|
Gross amounts recognized
|
|
Gross amounts offset in the balance sheet
|
|
Net amounts presented in the balance sheet
|
|
Financial instruments
|
|
Cash collateral received/pledged
|
|
Net amount
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Federal funds sold and security resell agreements
|
|
$
|
809
|
|
|
$
|
(295
|
)
|
|
$
|
514
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
514
|
|
Derivatives (included in other assets)
|
|
38
|
|
|
—
|
|
|
38
|
|
|
(9
|
)
|
|
(1
|
)
|
|
28
|
|
||||||
Total assets
|
|
$
|
847
|
|
|
$
|
(295
|
)
|
|
$
|
552
|
|
|
$
|
(9
|
)
|
|
$
|
(1
|
)
|
|
$
|
542
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Federal funds and other short-term borrowings
|
|
$
|
5,271
|
|
|
$
|
(295
|
)
|
|
$
|
4,976
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,976
|
|
Derivatives (included in other liabilities)
|
|
40
|
|
|
—
|
|
|
40
|
|
|
(9
|
)
|
|
(6
|
)
|
|
25
|
|
||||||
Total Liabilities
|
|
$
|
5,311
|
|
|
$
|
(295
|
)
|
|
$
|
5,016
|
|
|
$
|
(9
|
)
|
|
$
|
(6
|
)
|
|
$
|
5,001
|
|
5.
|
INVESTMENTS
|
|
June 30, 2018
|
||||||||||||||
(In millions)
|
Amortized
cost
|
|
Gross unrealized gains
|
|
Gross unrealized losses
|
|
Estimated
fair value
|
||||||||
Held-to-maturity
|
|
|
|
|
|
|
|
||||||||
Municipal securities
|
$
|
878
|
|
|
$
|
4
|
|
|
$
|
16
|
|
|
$
|
866
|
|
Available-for-sale
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
||||
U.S. Government agencies and corporations:
|
|
|
|
|
|
|
|
||||||||
Agency securities
|
1,683
|
|
|
—
|
|
|
26
|
|
|
1,657
|
|
||||
Agency guaranteed mortgage-backed securities
|
9,831
|
|
|
8
|
|
|
301
|
|
|
9,538
|
|
||||
Small Business Administration loan-backed securities
|
2,115
|
|
|
1
|
|
|
45
|
|
|
2,071
|
|
||||
Municipal securities
|
1,333
|
|
|
2
|
|
|
23
|
|
|
1,312
|
|
||||
Other debt securities
|
25
|
|
|
—
|
|
|
1
|
|
|
24
|
|
||||
Total available-for-sale
|
15,012
|
|
|
11
|
|
|
396
|
|
|
14,627
|
|
||||
Total investment securities
|
$
|
15,890
|
|
|
$
|
15
|
|
|
$
|
412
|
|
|
$
|
15,493
|
|
|
December 31, 2017
|
||||||||||||||
(In millions)
|
Amortized
cost |
|
Gross unrealized gains
|
|
Gross unrealized losses
|
|
Estimated
fair value |
||||||||
Held-to-maturity
|
|
|
|
|
|
|
|
||||||||
Municipal securities
|
$
|
770
|
|
|
$
|
5
|
|
|
$
|
13
|
|
|
$
|
762
|
|
Available-for-sale
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
||||
U.S. Government agencies and corporations:
|
|
|
|
|
|
|
|
||||||||
Agency securities
|
1,830
|
|
|
1
|
|
|
13
|
|
|
1,818
|
|
||||
Agency guaranteed mortgage-backed securities
|
9,798
|
|
|
9
|
|
|
141
|
|
|
9,666
|
|
||||
Small Business Administration loan-backed securities
|
2,227
|
|
|
10
|
|
|
15
|
|
|
2,222
|
|
||||
Municipal securities
|
1,336
|
|
|
9
|
|
|
11
|
|
|
1,334
|
|
||||
Other debt securities
|
25
|
|
|
—
|
|
|
1
|
|
|
24
|
|
||||
Total available-for-sale debt securities
|
15,241
|
|
|
29
|
|
|
181
|
|
|
15,089
|
|
||||
Money market mutual funds and other
|
72
|
|
|
—
|
|
|
—
|
|
|
72
|
|
||||
Total available-for-sale
|
15,313
|
|
|
29
|
|
|
181
|
|
|
15,161
|
|
||||
Total investment securities
|
$
|
16,083
|
|
|
$
|
34
|
|
|
$
|
194
|
|
|
$
|
15,923
|
|
|
June 30, 2018
|
||||||||||||||
|
Held-to-maturity
|
|
Available-for-sale
|
||||||||||||
(In millions)
|
Amortized
cost
|
|
Estimated
fair value
|
|
Amortized
cost
|
|
Estimated
fair value
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Due in one year or less
|
$
|
295
|
|
|
$
|
294
|
|
|
$
|
1,773
|
|
|
$
|
1,738
|
|
Due after one year through five years
|
380
|
|
|
376
|
|
|
4,444
|
|
|
4,330
|
|
||||
Due after five years through ten years
|
147
|
|
|
143
|
|
|
4,565
|
|
|
4,445
|
|
||||
Due after ten years
|
56
|
|
|
53
|
|
|
4,230
|
|
|
4,114
|
|
||||
Total
|
$
|
878
|
|
|
$
|
866
|
|
|
$
|
15,012
|
|
|
$
|
14,627
|
|
|
June 30, 2018
|
||||||||||||||||||||||
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
||||||||||||||||||
(In millions)
|
Gross
unrealized
losses
|
|
Estimated
fair
value
|
|
Gross
unrealized
losses
|
|
Estimated
fair
value
|
|
Gross
unrealized
losses
|
|
Estimated
fair
value
|
||||||||||||
Held-to-maturity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Municipal securities
|
$
|
4
|
|
|
$
|
259
|
|
|
$
|
12
|
|
|
$
|
306
|
|
|
$
|
16
|
|
|
$
|
565
|
|
Available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government agencies and corporations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency securities
|
16
|
|
|
899
|
|
|
10
|
|
|
655
|
|
|
26
|
|
|
1,554
|
|
||||||
Agency guaranteed mortgage-backed securities
|
118
|
|
|
4,531
|
|
|
183
|
|
|
4,175
|
|
|
301
|
|
|
8,706
|
|
||||||
Small Business Administration loan-backed securities
|
21
|
|
|
1,427
|
|
|
24
|
|
|
585
|
|
|
45
|
|
|
2,012
|
|
||||||
Municipal securities
|
14
|
|
|
860
|
|
|
9
|
|
|
216
|
|
|
23
|
|
|
1,076
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
1
|
|
|
13
|
|
|
1
|
|
|
13
|
|
||||||
Total available-for-sale
|
169
|
|
|
7,717
|
|
|
227
|
|
|
5,644
|
|
|
396
|
|
|
13,361
|
|
||||||
Total
|
$
|
173
|
|
|
$
|
7,976
|
|
|
$
|
239
|
|
|
$
|
5,950
|
|
|
$
|
412
|
|
|
$
|
13,926
|
|
|
December 31, 2017
|
||||||||||||||||||||||
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
||||||||||||||||||
(In millions)
|
Gross
unrealized
losses
|
|
Estimated
fair
value
|
|
Gross
unrealized
losses
|
|
Estimated
fair
value
|
|
Gross
unrealized
losses
|
|
Estimated
fair
value
|
||||||||||||
Held-to-maturity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Municipal securities
|
$
|
3
|
|
|
$
|
263
|
|
|
$
|
10
|
|
|
$
|
292
|
|
|
$
|
13
|
|
|
$
|
555
|
|
Available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government agencies and corporations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency securities
|
6
|
|
|
808
|
|
|
7
|
|
|
808
|
|
|
13
|
|
|
1,616
|
|
||||||
Agency guaranteed mortgage-backed securities
|
29
|
|
|
3,609
|
|
|
112
|
|
|
4,721
|
|
|
141
|
|
|
8,330
|
|
||||||
Small Business Administration loan-backed securities
|
3
|
|
|
408
|
|
|
12
|
|
|
649
|
|
|
15
|
|
|
1,057
|
|
||||||
Municipal securities
|
6
|
|
|
554
|
|
|
5
|
|
|
230
|
|
|
11
|
|
|
784
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
1
|
|
|
14
|
|
|
1
|
|
|
14
|
|
||||||
Total available-for-sale
|
44
|
|
|
5,379
|
|
|
137
|
|
|
6,422
|
|
|
181
|
|
|
11,801
|
|
||||||
Total
|
$
|
47
|
|
|
$
|
5,642
|
|
|
$
|
147
|
|
|
$
|
6,714
|
|
|
$
|
194
|
|
|
$
|
12,356
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||||||||||||||||||
(In millions)
|
Gross gains
|
|
Gross losses
|
|
Gross gains
|
|
Gross losses
|
|
Gross gains
|
|
Gross losses
|
|
Gross gains
|
|
Gross losses
|
|||||||||||||||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Other noninterest-bearing investments
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
14
|
|
|
$
|
7
|
|
|
Net gains
1
|
|
|
$
|
1
|
|
|
|
|
$
|
2
|
|
|
|
|
$
|
1
|
|
|
|
|
$
|
7
|
|
|
Three Months Ended June 30,
|
||||||||||||||||||||||
(In millions)
|
2018
|
|
2017
|
||||||||||||||||||||
|
Taxable
|
|
Nontaxable
|
|
Total
|
|
Taxable
|
|
Nontaxable
|
|
Total
|
||||||||||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Held-to-maturity
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
6
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
5
|
|
Available-for-sale
|
70
|
|
|
7
|
|
|
77
|
|
|
71
|
|
|
7
|
|
|
78
|
|
||||||
Trading
|
2
|
|
|
—
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Total
|
$
|
75
|
|
|
$
|
10
|
|
|
$
|
85
|
|
|
$
|
74
|
|
|
$
|
10
|
|
|
$
|
84
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||
(In millions)
|
2018
|
|
2017
|
||||||||||||||||||||
|
Taxable
|
|
Nontaxable
|
|
Total
|
|
Taxable
|
|
Nontaxable
|
|
Total
|
||||||||||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Held-to-maturity
|
$
|
5
|
|
|
$
|
7
|
|
|
$
|
12
|
|
|
$
|
5
|
|
|
$
|
7
|
|
|
$
|
12
|
|
Available-for-sale
|
142
|
|
|
13
|
|
|
155
|
|
|
137
|
|
|
12
|
|
|
149
|
|
||||||
Trading
|
3
|
|
|
—
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Total
|
$
|
150
|
|
|
$
|
20
|
|
|
$
|
170
|
|
|
$
|
143
|
|
|
$
|
19
|
|
|
$
|
162
|
|
6.
|
LOANS AND ALLOWANCE FOR CREDIT LOSSES
|
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
||||
Loans held for sale
|
$
|
84
|
|
|
$
|
44
|
|
Commercial:
|
|
|
|
||||
Commercial and industrial
|
$
|
14,134
|
|
|
$
|
14,003
|
|
Leasing
|
358
|
|
|
364
|
|
||
Owner-occupied
|
7,365
|
|
|
7,288
|
|
||
Municipal
|
1,388
|
|
|
1,271
|
|
||
Total commercial
|
23,245
|
|
|
22,926
|
|
||
Commercial real estate:
|
|
|
|
||||
Construction and land development
|
2,202
|
|
|
2,021
|
|
||
Term
|
8,771
|
|
|
9,103
|
|
||
Total commercial real estate
|
10,973
|
|
|
11,124
|
|
||
Consumer:
|
|
|
|
||||
Home equity credit line
|
2,825
|
|
|
2,777
|
|
||
1-4 family residential
|
6,861
|
|
|
6,662
|
|
||
Construction and other consumer real estate
|
661
|
|
|
597
|
|
||
Bankcard and other revolving plans
|
490
|
|
|
509
|
|
||
Other
|
175
|
|
|
185
|
|
||
Total consumer
|
11,012
|
|
|
10,730
|
|
||
Total loans
|
$
|
45,230
|
|
|
$
|
44,780
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||
(In millions)
|
Commercial
|
|
Commercial
real estate
|
|
Consumer
|
|
Total
|
||||||||
Allowance for loan losses
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
371
|
|
|
$
|
103
|
|
|
$
|
44
|
|
|
$
|
518
|
|
Provision for loan losses
|
(58
|
)
|
|
14
|
|
|
9
|
|
|
(35
|
)
|
||||
Gross loan and lease charge-offs
|
30
|
|
|
—
|
|
|
9
|
|
|
39
|
|
||||
Recoveries
|
38
|
|
|
5
|
|
|
3
|
|
|
46
|
|
||||
Net loan and lease charge-offs (recoveries)
|
(8
|
)
|
|
(5
|
)
|
|
6
|
|
|
(7
|
)
|
||||
Balance at end of period
|
$
|
321
|
|
|
$
|
122
|
|
|
$
|
47
|
|
|
$
|
490
|
|
Reserve for unfunded lending commitments
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
48
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
58
|
|
Provision for unfunded lending commitments
|
(5
|
)
|
|
5
|
|
|
—
|
|
|
—
|
|
||||
Balance at end of period
|
$
|
43
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
58
|
|
Total allowance for credit losses at end of period
|
|
|
|
|
|
|
|
||||||||
Allowance for loan losses
|
$
|
321
|
|
|
$
|
122
|
|
|
$
|
47
|
|
|
$
|
490
|
|
Reserve for unfunded lending commitments
|
43
|
|
|
15
|
|
|
—
|
|
|
58
|
|
||||
Total allowance for credit losses
|
$
|
364
|
|
|
$
|
137
|
|
|
$
|
47
|
|
|
$
|
548
|
|
|
Three Months Ended June 30, 2017
|
||||||||||||||
(In millions)
|
Commercial
|
|
Commercial
real estate
|
|
Consumer
|
|
Total
|
||||||||
Allowance for loan losses
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
397
|
|
|
$
|
114
|
|
|
$
|
33
|
|
|
$
|
544
|
|
Provision for loan losses
|
9
|
|
|
(5
|
)
|
|
3
|
|
|
7
|
|
||||
Gross loan and lease charge-offs
|
31
|
|
|
1
|
|
|
3
|
|
|
35
|
|
||||
Recoveries
|
18
|
|
|
8
|
|
|
2
|
|
|
28
|
|
||||
Net loan and lease charge-offs (recoveries)
|
13
|
|
|
(7
|
)
|
|
1
|
|
|
7
|
|
||||
Balance at end of period
|
$
|
393
|
|
|
$
|
116
|
|
|
$
|
35
|
|
|
$
|
544
|
|
Reserve for unfunded lending commitments
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
51
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
60
|
|
Provision for unfunded lending commitments
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Balance at end of period
|
$
|
54
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
63
|
|
Total allowance for credit losses at end of period
|
|
|
|
|
|
|
|
||||||||
Allowance for loan losses
|
$
|
393
|
|
|
$
|
116
|
|
|
$
|
35
|
|
|
$
|
544
|
|
Reserve for unfunded lending commitments
|
54
|
|
|
9
|
|
|
—
|
|
|
63
|
|
||||
Total allowance for credit losses
|
$
|
447
|
|
|
$
|
125
|
|
|
$
|
35
|
|
|
$
|
607
|
|
|
Six Months Ended June 30, 2017
|
||||||||||||||
(In millions)
|
Commercial
|
|
Commercial
real estate
|
|
Consumer
|
|
Total
|
||||||||
Allowance for loan losses
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
420
|
|
|
$
|
116
|
|
|
$
|
31
|
|
|
$
|
567
|
|
Provision for loan losses
|
32
|
|
|
(9
|
)
|
|
7
|
|
|
30
|
|
||||
Gross loan and lease charge-offs
|
82
|
|
|
2
|
|
|
8
|
|
|
92
|
|
||||
Recoveries
|
23
|
|
|
11
|
|
|
5
|
|
|
39
|
|
||||
Net loan and lease charge-offs (recoveries)
|
59
|
|
|
(9
|
)
|
|
3
|
|
|
53
|
|
||||
Balance at end of period
|
$
|
393
|
|
|
$
|
116
|
|
|
$
|
35
|
|
|
$
|
544
|
|
Reserve for unfunded lending commitments
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
54
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
65
|
|
Provision for unfunded lending commitments
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Balance at end of period
|
$
|
54
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
63
|
|
Total allowance for credit losses at end of period
|
|
|
|
|
|
|
|
||||||||
Allowance for loan losses
|
$
|
393
|
|
|
$
|
116
|
|
|
$
|
35
|
|
|
$
|
544
|
|
Reserve for unfunded lending commitments
|
54
|
|
|
9
|
|
|
—
|
|
|
63
|
|
||||
Total allowance for credit losses
|
$
|
447
|
|
|
$
|
125
|
|
|
$
|
35
|
|
|
$
|
607
|
|
|
December 31, 2017
|
||||||||||||||
(In millions)
|
Commercial
|
|
Commercial
real estate
|
|
Consumer
|
|
Total
|
||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
26
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
31
|
|
Collectively evaluated for impairment
|
345
|
|
|
102
|
|
|
40
|
|
|
487
|
|
||||
Purchased loans with evidence of credit deterioration
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
371
|
|
|
$
|
103
|
|
|
$
|
44
|
|
|
$
|
518
|
|
Outstanding loan balances:
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
314
|
|
|
$
|
69
|
|
|
$
|
76
|
|
|
$
|
459
|
|
Collectively evaluated for impairment
|
22,598
|
|
|
11,048
|
|
|
10,648
|
|
|
44,294
|
|
||||
Purchased loans with evidence of credit deterioration
|
14
|
|
|
7
|
|
|
6
|
|
|
27
|
|
||||
Total
|
$
|
22,926
|
|
|
$
|
11,124
|
|
|
$
|
10,730
|
|
|
$
|
44,780
|
|
Nonaccrual loans are summarized as follows:
|
|||||||
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
||||
Loans held for sale
|
$
|
—
|
|
|
$
|
12
|
|
Commercial:
|
|
|
|
||||
Commercial and industrial
|
$
|
142
|
|
|
$
|
195
|
|
Leasing
|
7
|
|
|
8
|
|
||
Owner-occupied
|
63
|
|
|
90
|
|
||
Municipal
|
1
|
|
|
1
|
|
||
Total commercial
|
213
|
|
|
294
|
|
||
Commercial real estate:
|
|
|
|
||||
Construction and land development
|
5
|
|
|
4
|
|
||
Term
|
53
|
|
|
36
|
|
||
Total commercial real estate
|
58
|
|
|
40
|
|
||
Consumer:
|
|
|
|
||||
Home equity credit line
|
14
|
|
|
13
|
|
||
1-4 family residential
|
56
|
|
|
55
|
|
||
Construction and other consumer real estate
|
1
|
|
|
—
|
|
||
Bankcard and other revolving plans
|
—
|
|
|
—
|
|
||
Other
|
—
|
|
|
—
|
|
||
Total consumer loans
|
71
|
|
|
68
|
|
||
Total
|
$
|
342
|
|
|
$
|
402
|
|
Past due loans (accruing and nonaccruing) are summarized as follows:
|
|||||||||||||||||||||||||||
|
June 30, 2018
|
||||||||||||||||||||||||||
(In millions)
|
Current
|
|
30-89 days
past due
|
|
90+ days
past due
|
|
Total
past due
|
|
Total
loans
|
|
Accruing
loans
90+ days
past due
|
|
Nonaccrual
loans
that are
current
1
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans held for sale
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and industrial
|
$
|
14,030
|
|
|
$
|
59
|
|
|
$
|
45
|
|
|
$
|
104
|
|
|
$
|
14,134
|
|
|
$
|
3
|
|
|
$
|
93
|
|
Leasing
|
356
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
358
|
|
|
—
|
|
|
7
|
|
|||||||
Owner-occupied
|
7,324
|
|
|
19
|
|
|
22
|
|
|
41
|
|
|
7,365
|
|
|
—
|
|
|
36
|
|
|||||||
Municipal
|
1,388
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,388
|
|
|
—
|
|
|
1
|
|
|||||||
Total commercial
|
23,098
|
|
|
79
|
|
|
68
|
|
|
147
|
|
|
23,245
|
|
|
3
|
|
|
137
|
|
|||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Construction and land development
|
2,196
|
|
|
1
|
|
|
5
|
|
|
6
|
|
|
2,202
|
|
|
—
|
|
|
—
|
|
|||||||
Term
|
8,726
|
|
|
36
|
|
|
9
|
|
|
45
|
|
|
8,771
|
|
|
1
|
|
|
43
|
|
|||||||
Total commercial real estate
|
10,922
|
|
|
37
|
|
|
14
|
|
|
51
|
|
|
10,973
|
|
|
1
|
|
|
43
|
|
|||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity credit line
|
2,814
|
|
|
4
|
|
|
7
|
|
|
11
|
|
|
2,825
|
|
|
—
|
|
|
5
|
|
|||||||
1-4 family residential
|
6,830
|
|
|
11
|
|
|
20
|
|
|
31
|
|
|
6,861
|
|
|
—
|
|
|
32
|
|
|||||||
Construction and other consumer real estate
|
657
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
661
|
|
|
—
|
|
|
1
|
|
|||||||
Bankcard and other revolving plans
|
486
|
|
|
3
|
|
|
1
|
|
|
4
|
|
|
490
|
|
|
1
|
|
|
—
|
|
|||||||
Other
|
174
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
175
|
|
|
—
|
|
|
—
|
|
|||||||
Total consumer loans
|
10,961
|
|
|
23
|
|
|
28
|
|
|
51
|
|
|
11,012
|
|
|
1
|
|
|
38
|
|
|||||||
Total
|
$
|
44,981
|
|
|
$
|
139
|
|
|
$
|
110
|
|
|
$
|
249
|
|
|
$
|
45,230
|
|
|
$
|
5
|
|
|
$
|
218
|
|
|
December 31, 2017
|
||||||||||||||||||||||||||
(In millions)
|
Current
|
|
30-89 days
past due
|
|
90+ days
past due
|
|
Total
past due
|
|
Total
loans
|
|
Accruing
loans
90+ days
past due
|
|
Nonaccrual
loans
that are
current
1
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans held for sale
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
12
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and industrial
|
$
|
13,887
|
|
|
$
|
60
|
|
|
$
|
56
|
|
|
$
|
116
|
|
|
$
|
14,003
|
|
|
$
|
13
|
|
|
$
|
146
|
|
Leasing
|
363
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
364
|
|
|
—
|
|
|
8
|
|
|||||||
Owner-occupied
|
7,219
|
|
|
29
|
|
|
40
|
|
|
69
|
|
|
7,288
|
|
|
4
|
|
|
49
|
|
|||||||
Municipal
|
1,271
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,271
|
|
|
—
|
|
|
1
|
|
|||||||
Total commercial
|
22,740
|
|
|
90
|
|
|
96
|
|
|
186
|
|
|
22,926
|
|
|
17
|
|
|
204
|
|
|||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Construction and land development
|
2,014
|
|
|
3
|
|
|
4
|
|
|
7
|
|
|
2,021
|
|
|
—
|
|
|
—
|
|
|||||||
Term
|
9,079
|
|
|
13
|
|
|
11
|
|
|
24
|
|
|
9,103
|
|
|
2
|
|
|
25
|
|
|||||||
Total commercial real estate
|
11,093
|
|
|
16
|
|
|
15
|
|
|
31
|
|
|
11,124
|
|
|
2
|
|
|
25
|
|
|||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity credit line
|
2,763
|
|
|
9
|
|
|
5
|
|
|
14
|
|
|
2,777
|
|
|
—
|
|
|
5
|
|
|||||||
1-4 family residential
|
6,621
|
|
|
16
|
|
|
25
|
|
|
41
|
|
|
6,662
|
|
|
1
|
|
|
27
|
|
|||||||
Construction and other consumer real estate
|
590
|
|
|
6
|
|
|
1
|
|
|
7
|
|
|
597
|
|
|
1
|
|
|
—
|
|
|||||||
Bankcard and other revolving plans
|
506
|
|
|
2
|
|
|
1
|
|
|
3
|
|
|
509
|
|
|
1
|
|
|
—
|
|
|||||||
Other
|
184
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
185
|
|
|
—
|
|
|
—
|
|
|||||||
Total consumer loans
|
10,664
|
|
|
34
|
|
|
32
|
|
|
66
|
|
|
10,730
|
|
|
3
|
|
|
32
|
|
|||||||
Total
|
$
|
44,497
|
|
|
$
|
140
|
|
|
$
|
143
|
|
|
$
|
283
|
|
|
$
|
44,780
|
|
|
$
|
22
|
|
|
$
|
261
|
|
1
|
Represents nonaccrual loans that are not past due more than 30 days; however, full payment of principal and interest is still not expected.
|
|
June 30, 2018
|
||||||||||||||||||||||
(In millions)
|
Pass
|
|
Special
Mention
|
|
Sub-
standard
|
|
Doubtful
|
|
Total
loans
|
|
Total
allowance
|
||||||||||||
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial and industrial
|
$
|
13,361
|
|
|
$
|
288
|
|
|
$
|
484
|
|
|
$
|
1
|
|
|
$
|
14,134
|
|
|
|
||
Leasing
|
339
|
|
|
5
|
|
|
14
|
|
|
—
|
|
|
358
|
|
|
|
|||||||
Owner-occupied
|
7,077
|
|
|
59
|
|
|
229
|
|
|
—
|
|
|
7,365
|
|
|
|
|||||||
Municipal
|
1,367
|
|
|
2
|
|
|
19
|
|
|
—
|
|
|
1,388
|
|
|
|
|||||||
Total commercial
|
22,144
|
|
|
354
|
|
|
746
|
|
|
1
|
|
|
23,245
|
|
|
$
|
321
|
|
|||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction and land development
|
2,190
|
|
|
7
|
|
|
5
|
|
|
—
|
|
|
2,202
|
|
|
|
|||||||
Term
|
8,551
|
|
|
110
|
|
|
110
|
|
|
—
|
|
|
8,771
|
|
|
|
|||||||
Total commercial real estate
|
10,741
|
|
|
117
|
|
|
115
|
|
|
—
|
|
|
10,973
|
|
|
122
|
|
||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Home equity credit line
|
2,807
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
2,825
|
|
|
|
|||||||
1-4 family residential
|
6,799
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
6,861
|
|
|
|
|||||||
Construction and other consumer real estate
|
659
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
661
|
|
|
|
|||||||
Bankcard and other revolving plans
|
488
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
490
|
|
|
|
|||||||
Other
|
174
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
175
|
|
|
|
|||||||
Total consumer loans
|
10,927
|
|
|
—
|
|
|
85
|
|
|
—
|
|
|
11,012
|
|
|
47
|
|
||||||
Total
|
$
|
43,812
|
|
|
$
|
471
|
|
|
$
|
946
|
|
|
$
|
1
|
|
|
$
|
45,230
|
|
|
$
|
490
|
|
|
December 31, 2017
|
||||||||||||||||||||||
(In millions)
|
Pass
|
|
Special
Mention
|
|
Sub-
standard
|
|
Doubtful
|
|
Total
loans
|
|
Total
allowance
|
||||||||||||
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial and industrial
|
$
|
13,001
|
|
|
$
|
395
|
|
|
$
|
606
|
|
|
$
|
1
|
|
|
$
|
14,003
|
|
|
|
||
Leasing
|
342
|
|
|
6
|
|
|
16
|
|
|
—
|
|
|
364
|
|
|
|
|||||||
Owner-occupied
|
6,920
|
|
|
93
|
|
|
275
|
|
|
—
|
|
|
7,288
|
|
|
|
|||||||
Municipal
|
1,257
|
|
|
13
|
|
|
1
|
|
|
—
|
|
|
1,271
|
|
|
|
|||||||
Total commercial
|
21,520
|
|
|
507
|
|
|
898
|
|
|
1
|
|
|
22,926
|
|
|
$
|
371
|
|
|||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Construction and land development
|
2,002
|
|
|
15
|
|
|
4
|
|
|
—
|
|
|
2,021
|
|
|
|
|||||||
Term
|
8,816
|
|
|
138
|
|
|
149
|
|
|
—
|
|
|
9,103
|
|
|
|
|||||||
Total commercial real estate
|
10,818
|
|
|
153
|
|
|
153
|
|
|
—
|
|
|
11,124
|
|
|
103
|
|
||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Home equity credit line
|
2,759
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
2,777
|
|
|
|
|||||||
1-4 family residential
|
6,602
|
|
|
—
|
|
|
60
|
|
|
—
|
|
|
6,662
|
|
|
|
|||||||
Construction and other consumer real estate
|
596
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
597
|
|
|
|
|||||||
Bankcard and other revolving plans
|
507
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
509
|
|
|
|
|||||||
Other
|
185
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
185
|
|
|
|
|||||||
Total consumer loans
|
10,649
|
|
|
—
|
|
|
81
|
|
|
—
|
|
|
10,730
|
|
|
44
|
|
||||||
Total
|
$
|
42,987
|
|
|
$
|
660
|
|
|
$
|
1,132
|
|
|
$
|
1
|
|
|
$
|
44,780
|
|
|
$
|
518
|
|
|
June 30, 2018
|
||||||||||||||||||
(In millions)
|
Unpaid
principal
balance
|
|
Recorded investment
|
|
Total
recorded
investment
|
|
Related
allowance
|
||||||||||||
with no
allowance
|
|
with
allowance
|
|
||||||||||||||||
Commercial:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
189
|
|
|
$
|
84
|
|
|
$
|
53
|
|
|
$
|
137
|
|
|
$
|
8
|
|
Owner-occupied
|
64
|
|
|
39
|
|
|
18
|
|
|
57
|
|
|
1
|
|
|||||
Municipal
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||
Total commercial
|
254
|
|
|
124
|
|
|
71
|
|
|
195
|
|
|
9
|
|
|||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Construction and land development
|
7
|
|
|
4
|
|
|
1
|
|
|
5
|
|
|
—
|
|
|||||
Term
|
63
|
|
|
33
|
|
|
24
|
|
|
57
|
|
|
4
|
|
|||||
Total commercial real estate
|
70
|
|
|
37
|
|
|
25
|
|
|
62
|
|
|
4
|
|
|||||
Consumer:
|
|
|
|
|
|
|
|
|
|
||||||||||
Home equity credit line
|
18
|
|
|
13
|
|
|
2
|
|
|
15
|
|
|
—
|
|
|||||
1-4 family residential
|
70
|
|
|
27
|
|
|
32
|
|
|
59
|
|
|
3
|
|
|||||
Construction and other consumer real estate
|
2
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
—
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total consumer loans
|
90
|
|
|
41
|
|
|
35
|
|
|
76
|
|
|
3
|
|
|||||
Total
|
$
|
414
|
|
|
$
|
202
|
|
|
$
|
131
|
|
|
$
|
333
|
|
|
$
|
16
|
|
|
December 31, 2017
|
||||||||||||||||||
(In millions)
|
Unpaid
principal
balance
|
|
Recorded investment
|
|
Total
recorded
investment
|
|
Related
allowance
|
||||||||||||
with no
allowance
|
|
with
allowance
|
|
||||||||||||||||
Commercial:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
$
|
293
|
|
|
$
|
80
|
|
|
$
|
142
|
|
|
$
|
222
|
|
|
$
|
24
|
|
Owner-occupied
|
120
|
|
|
79
|
|
|
23
|
|
|
102
|
|
|
2
|
|
|||||
Municipal
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||
Total commercial
|
414
|
|
|
160
|
|
|
165
|
|
|
325
|
|
|
26
|
|
|||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Construction and land development
|
8
|
|
|
4
|
|
|
2
|
|
|
6
|
|
|
—
|
|
|||||
Term
|
56
|
|
|
36
|
|
|
12
|
|
|
48
|
|
|
—
|
|
|||||
Total commercial real estate
|
64
|
|
|
40
|
|
|
14
|
|
|
54
|
|
|
—
|
|
|||||
Consumer:
|
|
|
|
|
|
|
|
|
|
||||||||||
Home equity credit line
|
25
|
|
|
13
|
|
|
9
|
|
|
22
|
|
|
—
|
|
|||||
1-4 family residential
|
67
|
|
|
28
|
|
|
29
|
|
|
57
|
|
|
4
|
|
|||||
Construction and other consumer real estate
|
2
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
—
|
|
|||||
Other
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||
Total consumer loans
|
95
|
|
|
43
|
|
|
39
|
|
|
82
|
|
|
4
|
|
|||||
Total
|
$
|
573
|
|
|
$
|
243
|
|
|
$
|
218
|
|
|
$
|
461
|
|
|
$
|
30
|
|
|
Three Months Ended
June 30, 2018 |
|
Six Months Ended
June 30, 2018 |
||||||||||||
(In millions)
|
Average
recorded
investment
|
|
Interest
income
recognized
|
|
Average
recorded
investment
|
|
Interest
income
recognized
|
||||||||
Commercial:
|
|
|
|
|
|
|
|
||||||||
Commercial and industrial
|
$
|
138
|
|
|
$
|
—
|
|
|
$
|
126
|
|
|
$
|
—
|
|
Owner-occupied
|
54
|
|
|
—
|
|
|
55
|
|
|
8
|
|
||||
Municipal
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total commercial
|
193
|
|
|
—
|
|
|
182
|
|
|
8
|
|
||||
Commercial real estate:
|
|
|
|
|
|
|
|
||||||||
Construction and land development
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Term
|
58
|
|
|
—
|
|
|
53
|
|
|
—
|
|
||||
Total commercial real estate
|
63
|
|
|
—
|
|
|
58
|
|
|
—
|
|
||||
Consumer:
|
|
|
|
|
|
|
|
||||||||
Home equity credit line
|
15
|
|
|
—
|
|
|
14
|
|
|
—
|
|
||||
1-4 family residential
|
57
|
|
|
—
|
|
|
55
|
|
|
—
|
|
||||
Construction and other consumer real estate
|
2
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total consumer loans
|
74
|
|
|
—
|
|
|
70
|
|
|
—
|
|
||||
Total
|
$
|
330
|
|
|
$
|
—
|
|
|
$
|
310
|
|
|
$
|
8
|
|
|
Three Months Ended
June 30, 2017 |
|
Six Months Ended
June 30, 2017 |
||||||||||||
(In millions)
|
Average
recorded
investment
|
|
Interest
income
recognized
|
|
Average
recorded
investment
|
|
Interest
income
recognized
|
||||||||
Commercial:
|
|
|
|
|
|
|
|
||||||||
Commercial and industrial
|
$
|
398
|
|
|
$
|
4
|
|
|
$
|
356
|
|
|
$
|
4
|
|
Owner-occupied
|
109
|
|
|
1
|
|
|
102
|
|
|
4
|
|
||||
Municipal
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total commercial
|
508
|
|
|
5
|
|
|
459
|
|
|
8
|
|
||||
Commercial real estate:
|
|
|
|
|
|
|
|
||||||||
Construction and land development
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
||||
Term
|
59
|
|
|
7
|
|
|
60
|
|
|
9
|
|
||||
Total commercial real estate
|
70
|
|
|
7
|
|
|
71
|
|
|
9
|
|
||||
Consumer:
|
|
|
|
|
|
|
|
||||||||
Home equity credit line
|
21
|
|
|
—
|
|
|
21
|
|
|
—
|
|
||||
1-4 family residential
|
58
|
|
|
1
|
|
|
56
|
|
|
1
|
|
||||
Construction and other consumer real estate
|
2
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Other
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total consumer loans
|
82
|
|
|
1
|
|
|
81
|
|
|
1
|
|
||||
Total
|
$
|
660
|
|
|
$
|
13
|
|
|
$
|
611
|
|
|
$
|
18
|
|
|
June 30, 2018
|
||||||||||||||||||||||||||
|
Recorded investment resulting from the following modification types:
|
|
|
||||||||||||||||||||||||
(In millions)
|
Interest
rate below
market
|
|
Maturity
or term
extension
|
|
Principal
forgiveness
|
|
Payment
deferral
|
|
Other
1
|
|
Multiple
modification
types
2
|
|
Total
|
||||||||||||||
Accruing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and industrial
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
6
|
|
|
$
|
14
|
|
Owner-occupied
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
9
|
|
|
21
|
|
|||||||
Municipal
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|||||||
Total commercial
|
2
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
17
|
|
|
37
|
|
|||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Construction and land development
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||||
Term
|
4
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
6
|
|
|
13
|
|
|||||||
Total commercial real estate
|
4
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
7
|
|
|
14
|
|
|||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity credit line
|
—
|
|
|
2
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
12
|
|
|||||||
1-4 family residential
|
1
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
1
|
|
|
30
|
|
|
39
|
|
|||||||
Construction and other consumer real estate
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|||||||
Total consumer loans
|
1
|
|
|
3
|
|
|
14
|
|
|
—
|
|
|
1
|
|
|
34
|
|
|
53
|
|
|||||||
Total accruing
|
7
|
|
|
9
|
|
|
14
|
|
|
1
|
|
|
15
|
|
|
58
|
|
|
104
|
|
|||||||
Nonaccruing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and industrial
|
—
|
|
|
6
|
|
|
1
|
|
|
1
|
|
|
10
|
|
|
29
|
|
|
47
|
|
|||||||
Owner-occupied
|
1
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
5
|
|
|
10
|
|
|||||||
Municipal
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Total commercial
|
1
|
|
|
9
|
|
|
1
|
|
|
2
|
|
|
11
|
|
|
34
|
|
|
58
|
|
|||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Term
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
6
|
|
|||||||
Total commercial real estate
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
6
|
|
|||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity credit line
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
1-4 family residential
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
8
|
|
|
11
|
|
|||||||
Total consumer loans
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
2
|
|
|
8
|
|
|
13
|
|
|||||||
Total nonaccruing
|
4
|
|
|
9
|
|
|
4
|
|
|
2
|
|
|
13
|
|
|
45
|
|
|
77
|
|
|||||||
Total
|
$
|
11
|
|
|
$
|
18
|
|
|
$
|
18
|
|
|
$
|
3
|
|
|
$
|
28
|
|
|
$
|
103
|
|
|
$
|
181
|
|
2
|
Includes TDRs that resulted from a combination of any of the previous modification types.
|
|
December 31, 2017
|
||||||||||||||||||||||||||
|
Recorded investment resulting from the following modification types:
|
|
|
||||||||||||||||||||||||
(In millions)
|
Interest
rate below
market
|
|
Maturity
or term
extension
|
|
Principal
forgiveness
|
|
Payment
deferral
|
|
Other
1
|
|
Multiple
modification
types
2
|
|
Total
|
||||||||||||||
Accruing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and industrial
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
33
|
|
|
$
|
47
|
|
Owner-occupied
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
14
|
|
|
23
|
|
|||||||
Total commercial
|
1
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
47
|
|
|
70
|
|
|||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Construction and land development
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|||||||
Term
|
6
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
7
|
|
|
14
|
|
|||||||
Total commercial real estate
|
6
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
9
|
|
|
16
|
|
|||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity credit line
|
—
|
|
|
2
|
|
|
9
|
|
|
—
|
|
|
1
|
|
|
3
|
|
|
15
|
|
|||||||
1-4 family residential
|
1
|
|
|
—
|
|
|
6
|
|
|
1
|
|
|
2
|
|
|
26
|
|
|
36
|
|
|||||||
Construction and other consumer real estate
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|||||||
Total consumer loans
|
1
|
|
|
3
|
|
|
15
|
|
|
1
|
|
|
3
|
|
|
30
|
|
|
53
|
|
|||||||
Total accruing
|
8
|
|
|
6
|
|
|
15
|
|
|
2
|
|
|
22
|
|
|
86
|
|
|
139
|
|
|||||||
Nonaccruing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and industrial
|
—
|
|
|
3
|
|
|
5
|
|
|
2
|
|
|
28
|
|
|
24
|
|
|
62
|
|
|||||||
Owner-occupied
|
1
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
5
|
|
|
10
|
|
|||||||
Municipal
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Total commercial
|
1
|
|
|
6
|
|
|
5
|
|
|
3
|
|
|
29
|
|
|
29
|
|
|
73
|
|
|||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Term
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
5
|
|
|||||||
Total commercial real estate
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
5
|
|
|||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity credit line
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
1-4 family residential
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
5
|
|
|
8
|
|
|||||||
Total consumer loans
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
1
|
|
|
5
|
|
|
9
|
|
|||||||
Total nonaccruing
|
3
|
|
|
6
|
|
|
8
|
|
|
3
|
|
|
30
|
|
|
37
|
|
|
87
|
|
|||||||
Total
|
$
|
11
|
|
|
$
|
12
|
|
|
$
|
23
|
|
|
$
|
5
|
|
|
$
|
52
|
|
|
$
|
123
|
|
|
$
|
226
|
|
1
|
Includes TDRs that resulted from other modification types including, but not limited to, a legal judgment awarded on different terms, a bankruptcy plan confirmed on different terms, a settlement that includes the delivery of collateral in exchange for debt reduction, etc.
|
2
|
Includes TDRs that resulted from a combination of any of the previous modification types.
|
|
Three Months Ended
June 30, 2018 |
|
Six Months Ended
June 30, 2018 |
|||||||||||||||||||||
(In millions)
|
Accruing
|
|
Nonaccruing
|
|
Total
|
|
Accruing
|
|
Nonaccruing
|
|
Total
|
|||||||||||||
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Commercial and industrial
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
1,291
|
|
$
|
5
|
|
Owner-occupied
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
5,405
|
|
1
|
|
||||||
Total commercial
|
—
|
|
|
5
|
|
|
5
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Term
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|||||||
Total commercial real estate
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
1-4 family residential
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||||
Total consumer loans
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||||
Total
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
9
|
|
|
Three Months Ended
June 30, 2017 |
|
Six Months Ended
June 30, 2017 |
|||||||||||||||||||||
(In millions)
|
Accruing
|
|
Nonaccruing
|
|
Total
|
|
Accruing
|
|
Nonaccruing
|
|
Total
|
|||||||||||||
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Commercial and industrial
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
1,291
|
|
$
|
—
|
|
Owner-occupied
|
—
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
3
|
|
5,405
|
|
3
|
|
||||||
Total commercial
|
—
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|||||||
Total
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
3
|
|
7.
|
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Notional
amount
|
|
Fair value
|
|
Notional
amount
|
|
Fair value
|
||||||||||||||||
(In millions)
|
Other
assets
|
|
Other
liabilities
|
|
Other
assets
|
|
Other
liabilities
|
||||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
$
|
1,038
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,138
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total derivatives designated as hedging instruments
|
1,038
|
|
|
—
|
|
|
—
|
|
|
1,138
|
|
|
—
|
|
|
—
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps and forwards
|
243
|
|
|
1
|
|
|
—
|
|
|
223
|
|
|
1
|
|
|
—
|
|
||||||
Interest rate swaps for customers
1
|
5,302
|
|
|
22
|
|
|
65
|
|
|
4,550
|
|
|
28
|
|
|
33
|
|
||||||
Foreign exchange
|
354
|
|
|
6
|
|
|
5
|
|
|
913
|
|
|
9
|
|
|
7
|
|
||||||
Total derivatives not designated as hedging instruments
|
5,899
|
|
|
29
|
|
|
70
|
|
|
5,686
|
|
|
38
|
|
|
40
|
|
||||||
Total derivatives
|
$
|
6,937
|
|
|
$
|
29
|
|
|
$
|
70
|
|
|
$
|
6,824
|
|
|
$
|
38
|
|
|
$
|
40
|
|
|
Amount of derivative gain (loss) recognized/reclassified
|
||||||||||||||||||||||||||||||
|
Three Months Ended June 30, 2018
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||||||||||||
(In millions)
|
OCI
|
|
Reclassified from AOCI to interest income
|
|
Noninterest income (expense)
|
|
Offset to interest expense
|
|
OCI
|
|
Reclassified
from AOCI
to interest
income
|
|
Noninterest
income (expense) |
|
Offset to
interest expense |
||||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash flow hedges
1
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
|
|
|
|
$
|
(7
|
)
|
|
$
|
(2
|
)
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps for customers
|
|
|
|
|
$
|
4
|
|
|
|
|
|
|
|
|
$
|
9
|
|
|
|
||||||||||||
Foreign exchange
|
|
|
|
|
5
|
|
|
|
|
|
|
|
|
10
|
|
|
|
||||||||||||||
Total derivatives
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
(2
|
)
|
|
$
|
19
|
|
|
$
|
—
|
|
|
Amount of derivative gain (loss) recognized/reclassified
|
||||||||||||||||||||||||||||||
|
Three Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2017
|
||||||||||||||||||||||||||||
(In millions)
|
OCI
|
|
Reclassified from AOCI to interest income
|
|
Noninterest income (expense)
|
|
Offset to interest expense
|
|
OCI
|
|
Reclassified
from AOCI
to interest
income
|
|
Noninterest
income (expense) |
|
Offset to
interest expense |
||||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash flow hedges
1
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
$
|
2
|
|
|
$
|
1
|
|
|
|
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps for customers
|
|
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
$
|
4
|
|
|
|
||||||||||||
Foreign exchange
|
|
|
|
|
4
|
|
|
|
|
|
|
|
|
7
|
|
|
|
||||||||||||||
Total derivatives
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
11
|
|
|
$
|
—
|
|
1
|
Amounts recognized in OCI and reclassified from AOCI represent the effective portion of the derivative gain (loss). For the 12 months following
June 30, 2018
, we estimate that
$(7) million
will be reclassified from AOCI into interest income.
|
8.
|
LONG-TERM DEBT AND SHAREHOLDERS’ EQUITY
|
(In millions)
|
June 30,
2018 |
|
December 31, 2017
|
||||
|
|
|
|
||||
Subordinated notes
|
$
|
247
|
|
|
$
|
247
|
|
Senior notes
|
135
|
|
|
135
|
|
||
Capital lease obligations
|
1
|
|
|
1
|
|
||
Total
|
$
|
383
|
|
|
$
|
383
|
|
(In millions)
|
Net unrealized gains (losses) on investment securities
|
|
Net unrealized gains (losses) on derivatives and other
|
|
Pension and post-retirement
|
|
Total
|
||||||||
Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2017
|
$
|
(114
|
)
|
|
$
|
(2
|
)
|
|
$
|
(23
|
)
|
|
$
|
(139
|
)
|
OCI (loss) before reclassifications, net of tax
|
(175
|
)
|
|
—
|
|
|
—
|
|
|
(175
|
)
|
||||
Amounts reclassified from AOCI, net of tax
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
OCI (loss)
|
(175
|
)
|
|
(1
|
)
|
|
—
|
|
|
(176
|
)
|
||||
Balance at June 30, 2018
|
$
|
(289
|
)
|
|
$
|
(3
|
)
|
|
$
|
(23
|
)
|
|
$
|
(315
|
)
|
Income tax benefit included in OCI (loss)
|
$
|
(58
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(58
|
)
|
Six Months Ended June 30, 2017
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2016
|
$
|
(93
|
)
|
|
$
|
2
|
|
|
$
|
(31
|
)
|
|
$
|
(122
|
)
|
OCI before reclassifications, net of tax
|
73
|
|
|
2
|
|
|
—
|
|
|
75
|
|
||||
Amounts reclassified from AOCI, net of tax
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
OCI
|
73
|
|
|
—
|
|
|
—
|
|
|
73
|
|
||||
Balance at June 30, 2017
|
$
|
(20
|
)
|
|
$
|
2
|
|
|
$
|
(31
|
)
|
|
$
|
(49
|
)
|
Income tax expense included in OCI
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45
|
|
|
|
Amounts reclassified
from AOCI
1
|
|
Amounts reclassified
from AOCI
1
|
|
Statement of income (SI)
Balance sheet (BS)
|
|
|
||||||||||||
(In millions)
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
|
|
|||||||||||||
Details about AOCI components
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
Affected line item
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net unrealized gains on derivative instruments
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
SI
|
|
Interest and fees on loans
|
Income tax expense
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
|
|
|
||||
Amounts Reclassified from AOCI
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
|
|
|
1
|
Positive reclassification amounts indicate increases to earnings in the statement of income and decreases to balance sheet assets.
|
9.
|
COMMITMENTS, GUARANTEES AND CONTINGENT LIABILITIES
|
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
||||
Net unfunded commitments to extend credit
1
|
$
|
20,312
|
|
|
$
|
19,583
|
|
Standby letters of credit:
|
|
|
|
||||
Financial
|
699
|
|
|
721
|
|
||
Performance
|
183
|
|
|
196
|
|
||
Commercial letters of credit
|
15
|
|
|
31
|
|
||
Total unfunded lending commitments
|
$
|
21,209
|
|
|
$
|
20,531
|
|
1
|
Net of participations
|
•
|
a civil suit,
Shou-En Wang v. CB&T,
brought against us in the Superior Court for Los Angeles County, Central District in April 2016. The case relates to our depositor relationships with customers who were promoters of an investment program that allegedly misappropriated investors’ funds. This case is in an early phase, with initial motion practice having been completed and discovery being underway.
|
•
|
a civil suit,
McFarland as Trustee for International Manufacturing Group v. CB&T, et. al.
, brought against us in the United States Bankruptcy Court for the Eastern District of California in May 2016. The Trustee seeks to recover loan payments previously repaid to us by our customer, International Manufacturing Group (“IMG”), alleging that IMG, along with its principal, obtained loans and made loan repayments in furtherance of an alleged Ponzi scheme. Initial motion practice has been completed and discovery is underway.
|
•
|
a civil suit,
JTS Communities, Inc. et. al v. CB&T, Jun Enkoji and Dawn Satow
, brought against us in the Superior Court for Sacramento County, California in June 2017. In this case four investors in IMG seek to hold us liable for losses arising from their investments in that company, alleging that we conspired with and knowingly assisted IMG and its principal in furtherance of an alleged Ponzi scheme. This case is in an early phase with initial motion practice having been completed but discovery not having been commenced.
|
•
|
a civil class action lawsuit,
Evans v. CB&T
, brought against us in the United States District Court for the Eastern District of California in May 2017. This case was filed on behalf of a class of up to 50 investors in IMG and seeks to hold us liable for losses of class members arising from their investments in IMG, alleging that we conspired with and knowingly assisted IMG and its principal in furtherance of an alleged Ponzi scheme. In December 2017, the District Court dismissed all claims against the Company. In January 2018, the plaintiff filed an appeal with the Court of Appeals for the Ninth Circuit. The appellate briefing process is underway and is scheduled to be completed in the third quarter of 2018.
|
•
|
a Private Attorney General Act (“PAGA”) claim under California law,
Lawson v. CB&T
, brought against us in the Superior Court for the County of San Diego, California, in February 2016. In this case, the plaintiff alleges, on behalf of herself and other current or former employees of the Company who worked in California on a non-exempt basis, violations by the Company of California wage and hour laws. The case remains in the early stages of motion practice, to date mainly involving questions of venue and scope of employees covered by the PAGA
|
•
|
a civil case,
Lifescan Inc. and Johnson & Johnson Health Care Services v. Jeffrey Smith, et al.
, brought against us in the United States District Court for the District of New Jersey in December 2017. In this case, certain manufacturers and distributors of medical products seek to hold us liable for allegedly fraudulent practices of a borrower of the Company which filed for bankruptcy protection in 2017. The case is in early phase, with initial motion practice underway.
|
•
|
The Company recognizes the incremental cost of obtaining a contract as an expense, when incurred, if the amortization period of the asset that the Company would have recognized is one year or less.
|
•
|
For performance obligations satisfied over time, if the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date, the Company will generally recognize revenue in the amount to which the Company has a right to invoice.
|
•
|
The Company does not generally disclose information about its remaining performance obligations for those performance obligations that have an original expected duration of one year or less, or where the Company recognizes revenue in the amount to which the Company has a right to invoice.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Card Fee Income
|
$
|
34
|
|
|
$
|
33
|
|
|
$
|
67
|
|
|
$
|
67
|
|
ATM Fees
|
3
|
|
|
3
|
|
|
5
|
|
|
5
|
|
||||
Other service charges
|
4
|
|
|
4
|
|
|
7
|
|
|
7
|
|
||||
Other Commissions and fees
|
5
|
|
|
4
|
|
|
10
|
|
|
7
|
|
||||
Ending balance
|
$
|
46
|
|
|
$
|
44
|
|
|
$
|
89
|
|
|
$
|
86
|
|
|
Zions Bank
|
|
Amegy
|
|
CB&T
|
||||||||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service charges and fees on deposit accounts
|
$
|
15
|
|
|
$
|
16
|
|
|
$
|
11
|
|
|
$
|
11
|
|
|
$
|
7
|
|
|
$
|
7
|
|
Other service charges, commissions, and fees
|
18
|
|
|
18
|
|
|
9
|
|
|
9
|
|
|
6
|
|
|
6
|
|
||||||
Wealth management and trust income
|
4
|
|
|
4
|
|
|
3
|
|
|
2
|
|
|
1
|
|
|
1
|
|
||||||
Capital markets and foreign exchange
|
1
|
|
|
1
|
|
|
(1
|
)
|
|
(1
|
)
|
|
1
|
|
|
1
|
|
||||||
Total noninterest income from contracts with customers (ASC 606)
|
38
|
|
|
39
|
|
|
22
|
|
|
21
|
|
|
15
|
|
|
15
|
|
||||||
Other noninterest income (Non-ASC 606 customer related)
|
—
|
|
|
(1
|
)
|
|
9
|
|
|
10
|
|
|
4
|
|
|
5
|
|
||||||
Total customer-related fees
|
38
|
|
|
38
|
|
|
31
|
|
|
31
|
|
|
19
|
|
|
20
|
|
||||||
Other noninterest income (non-customer related)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total non-interest income
|
38
|
|
|
38
|
|
|
31
|
|
|
31
|
|
|
19
|
|
|
20
|
|
||||||
Net interest income
|
170
|
|
|
165
|
|
|
126
|
|
|
122
|
|
|
129
|
|
|
122
|
|
||||||
Total income less interest expense
|
$
|
208
|
|
|
$
|
203
|
|
|
$
|
157
|
|
|
$
|
153
|
|
|
$
|
148
|
|
|
$
|
142
|
|
|
NBAZ
|
|
NSB
|
|
Vectra
|
||||||||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service charges and fees on deposit accounts
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Other service charges, commissions, and fees
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
2
|
|
|
2
|
|
||||||
Wealth management and trust income
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
Capital markets and foreign exchange
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total noninterest income from contracts with customers (ASC 606)
|
6
|
|
|
6
|
|
|
8
|
|
|
8
|
|
|
4
|
|
|
4
|
|
||||||
Other noninterest income (Non-ASC 606 customer related)
|
3
|
|
|
4
|
|
|
2
|
|
|
3
|
|
|
2
|
|
|
3
|
|
||||||
Total customer-related fees
|
9
|
|
|
10
|
|
|
10
|
|
|
11
|
|
|
6
|
|
|
7
|
|
||||||
Other noninterest income (non-customer related)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total non-interest income
|
9
|
|
|
10
|
|
|
10
|
|
|
11
|
|
|
6
|
|
|
7
|
|
||||||
Net interest income
|
57
|
|
|
50
|
|
|
38
|
|
|
33
|
|
|
34
|
|
|
31
|
|
||||||
Total income less interest expense
|
$
|
66
|
|
|
$
|
60
|
|
|
$
|
48
|
|
|
$
|
44
|
|
|
$
|
40
|
|
|
$
|
38
|
|
|
TCBW
|
|
Other
|
|
Consolidated
Company
|
||||||||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service charges and fees on deposit accounts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
42
|
|
|
$
|
43
|
|
Other service charges, commissions, and fees
|
1
|
|
|
1
|
|
|
4
|
|
|
2
|
|
|
46
|
|
|
44
|
|
||||||
Wealth management and trust income
|
—
|
|
|
—
|
|
|
4
|
|
|
2
|
|
|
13
|
|
|
10
|
|
||||||
Capital markets and foreign exchange
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
|
3
|
|
|
2
|
|
||||||
Total noninterest income from contracts with customers (ASC 606)
|
1
|
|
|
1
|
|
|
10
|
|
|
5
|
|
|
104
|
|
|
99
|
|
||||||
Other noninterest income (Non-ASC 606 customer related)
|
—
|
|
|
—
|
|
|
1
|
|
|
(2
|
)
|
|
21
|
|
|
22
|
|
||||||
Total customer-related fees
|
1
|
|
|
1
|
|
|
11
|
|
|
3
|
|
|
125
|
|
|
121
|
|
||||||
Other noninterest income (non-customer related)
|
—
|
|
|
—
|
|
|
13
|
|
|
11
|
|
|
13
|
|
|
11
|
|
||||||
Total non-interest income
|
1
|
|
|
1
|
|
|
24
|
|
|
14
|
|
|
138
|
|
|
132
|
|
||||||
Net interest income
|
13
|
|
|
11
|
|
|
(19
|
)
|
|
(6
|
)
|
|
548
|
|
|
528
|
|
||||||
Total income less interest expense
|
$
|
14
|
|
|
$
|
12
|
|
|
$
|
5
|
|
|
$
|
8
|
|
|
$
|
686
|
|
|
$
|
660
|
|
|
Zions Bank
|
|
Amegy
|
|
CB&T
|
||||||||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service charges and fees on deposit accounts
|
$
|
29
|
|
|
$
|
30
|
|
|
$
|
22
|
|
|
$
|
22
|
|
|
$
|
14
|
|
|
$
|
14
|
|
Other service charges, commissions, and fees
|
35
|
|
|
34
|
|
|
18
|
|
|
19
|
|
|
12
|
|
|
12
|
|
||||||
Wealth management and trust income
|
7
|
|
|
7
|
|
|
5
|
|
|
4
|
|
|
2
|
|
|
1
|
|
||||||
Capital markets and foreign exchange
|
3
|
|
|
2
|
|
|
(3
|
)
|
|
(3
|
)
|
|
2
|
|
|
2
|
|
||||||
Other non-interest income from contracts with customers
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total noninterest income from contracts with customers (ASC 606)
|
74
|
|
|
73
|
|
|
42
|
|
|
42
|
|
|
30
|
|
|
29
|
|
||||||
Other noninterest income (Non-ASC 606 customer related)
|
(2
|
)
|
|
(2
|
)
|
|
21
|
|
|
17
|
|
|
9
|
|
|
7
|
|
||||||
Total customer-related fees
|
72
|
|
|
71
|
|
|
63
|
|
|
59
|
|
|
39
|
|
|
36
|
|
||||||
Other noninterest income (non-customer related)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Total non-interest income
|
72
|
|
|
71
|
|
|
63
|
|
|
59
|
|
|
40
|
|
|
37
|
|
||||||
Other real estate owned income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net interest income
|
337
|
|
|
318
|
|
|
253
|
|
|
235
|
|
|
260
|
|
|
231
|
|
||||||
Total income less interest expense
|
$
|
409
|
|
|
$
|
389
|
|
|
$
|
316
|
|
|
$
|
294
|
|
|
$
|
300
|
|
|
$
|
268
|
|
|
NBAZ
|
|
NSB
|
|
Vectra
|
||||||||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service charges and fees on deposit accounts
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Other service charges, commissions, and fees
|
6
|
|
|
6
|
|
|
6
|
|
|
6
|
|
|
3
|
|
|
3
|
|
||||||
Wealth management and trust income
|
1
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||||
Capital markets and foreign exchange
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other non-interest income from contracts with customers
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total noninterest income from contracts with customers (ASC 606)
|
13
|
|
|
13
|
|
|
15
|
|
|
14
|
|
|
8
|
|
|
8
|
|
||||||
Other noninterest income (Non-ASC 606 customer related)
|
6
|
|
|
6
|
|
|
4
|
|
|
5
|
|
|
3
|
|
|
4
|
|
||||||
Total customer-related fees
|
19
|
|
|
19
|
|
|
19
|
|
|
19
|
|
|
11
|
|
|
12
|
|
||||||
Other noninterest income (non-customer related)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total non-interest income
|
19
|
|
|
19
|
|
|
19
|
|
|
19
|
|
|
11
|
|
|
12
|
|
||||||
Other real estate owned income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net interest income
|
111
|
|
|
100
|
|
|
74
|
|
|
64
|
|
|
66
|
|
|
61
|
|
||||||
Total income less interest expense
|
$
|
130
|
|
|
$
|
119
|
|
|
$
|
93
|
|
|
$
|
83
|
|
|
$
|
77
|
|
|
$
|
73
|
|
|
TCBW
|
|
Other
|
|
Consolidated
Company
|
||||||||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service charges and fees on deposit accounts
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
84
|
|
|
$
|
85
|
|
Other service charges, commissions, and fees
|
1
|
|
|
1
|
|
|
8
|
|
|
5
|
|
|
89
|
|
|
86
|
|
||||||
Wealth management and trust income
|
—
|
|
|
—
|
|
|
6
|
|
|
4
|
|
|
24
|
|
|
19
|
|
||||||
Capital markets and foreign exchange
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
5
|
|
|
4
|
|
||||||
Other non-interest income from contracts with customers
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Total noninterest income from contracts with customers (ASC 606)
|
2
|
|
|
2
|
|
|
18
|
|
|
14
|
|
|
202
|
|
|
195
|
|
||||||
Other noninterest income (Non-ASC 606 customer related)
|
1
|
|
|
—
|
|
|
3
|
|
|
4
|
|
|
45
|
|
|
41
|
|
||||||
Total customer-related fees
|
3
|
|
|
2
|
|
|
21
|
|
|
18
|
|
|
247
|
|
|
236
|
|
||||||
Other noninterest income (non-customer related)
|
—
|
|
|
—
|
|
|
28
|
|
|
27
|
|
|
29
|
|
|
28
|
|
||||||
Total non-interest income
|
3
|
|
|
2
|
|
|
49
|
|
|
45
|
|
|
276
|
|
|
264
|
|
||||||
Other real estate owned income
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||||
Net interest income
|
25
|
|
|
22
|
|
|
(36
|
)
|
|
(14
|
)
|
|
1,090
|
|
|
1,017
|
|
||||||
Total income less interest expense
|
$
|
28
|
|
|
$
|
24
|
|
|
$
|
12
|
|
|
$
|
31
|
|
|
$
|
1,365
|
|
|
$
|
1,281
|
|
11.
|
RETIREMENT PLANS
|
(In millions)
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
|
|
|
|
|
|
|
|
||||||||
Interest cost
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
4
|
|
Expected return on plan assets
|
(3
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|
(6
|
)
|
||||
Partial settlement loss
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Amortization of net actuarial loss
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
||||
Net periodic benefit cost (benefit)
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
12.
|
INCOME TAXES
|
13.
|
NET EARNINGS PER COMMON SHARE
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In millions, except shares and per share amounts)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
197
|
|
|
$
|
168
|
|
|
$
|
435
|
|
|
$
|
308
|
|
Less common and preferred dividends
|
57
|
|
|
30
|
|
|
104
|
|
|
57
|
|
||||
Undistributed earnings
|
140
|
|
|
138
|
|
|
331
|
|
|
251
|
|
||||
Less undistributed earnings applicable to nonvested shares
|
1
|
|
|
1
|
|
|
3
|
|
|
3
|
|
||||
Undistributed earnings applicable to common shares
|
139
|
|
|
137
|
|
|
328
|
|
|
248
|
|
||||
Distributed earnings applicable to common shares
|
47
|
|
|
16
|
|
|
86
|
|
|
32
|
|
||||
Total earnings applicable to common shares
|
$
|
186
|
|
|
$
|
153
|
|
|
$
|
414
|
|
|
$
|
280
|
|
Weighted average common shares outstanding (in thousands)
|
195,583
|
|
|
201,822
|
|
|
196,149
|
|
|
202,083
|
|
||||
Net earnings per common share
|
$
|
0.95
|
|
|
$
|
0.76
|
|
|
$
|
2.11
|
|
|
$
|
1.39
|
|
Diluted:
|
|
|
|
|
|
|
|
||||||||
Total earnings applicable to common shares
|
$
|
186
|
|
|
$
|
153
|
|
|
$
|
414
|
|
|
$
|
280
|
|
Weighted average common shares outstanding (in thousands)
|
195,583
|
|
|
201,822
|
|
|
196,149
|
|
|
202,083
|
|
||||
Dilutive effect of common stock warrants (in thousands)
|
12,640
|
|
|
5,351
|
|
|
12,627
|
|
|
6,159
|
|
||||
Dilutive effect of stock options (in thousands)
|
1,024
|
|
|
1,010
|
|
|
1,083
|
|
|
1,111
|
|
||||
Weighted average diluted common shares outstanding (in thousands)
|
209,247
|
|
|
208,183
|
|
|
209,859
|
|
|
209,353
|
|
||||
Net earnings per common share
|
$
|
0.89
|
|
|
$
|
0.73
|
|
|
$
|
1.97
|
|
|
$
|
1.34
|
|
14.
|
OPERATING SEGMENT INFORMATION
|
(In millions)
|
Zions Bank
|
|
Amegy
|
|
CB&T
|
|
NBAZ
|
|
NSB
|
||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||||||
SELECTED INCOME STATEMENT DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Net interest income
|
$
|
170
|
|
|
$
|
165
|
|
|
$
|
126
|
|
|
$
|
122
|
|
|
$
|
129
|
|
|
$
|
122
|
|
|
$
|
57
|
|
|
$
|
50
|
|
|
$
|
38
|
|
|
$
|
33
|
|
Provision for loan losses
|
4
|
|
|
(2
|
)
|
|
(11
|
)
|
|
7
|
|
|
2
|
|
|
(1
|
)
|
|
7
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||||||||
Net interest income after provision for loan losses
|
166
|
|
|
167
|
|
|
137
|
|
|
115
|
|
|
127
|
|
|
123
|
|
|
50
|
|
|
51
|
|
|
38
|
|
|
33
|
|
||||||||||
Noninterest income
|
38
|
|
|
37
|
|
|
31
|
|
|
30
|
|
|
19
|
|
|
19
|
|
|
10
|
|
|
10
|
|
|
10
|
|
|
10
|
|
||||||||||
Noninterest expense
|
118
|
|
|
109
|
|
|
91
|
|
|
89
|
|
|
77
|
|
|
76
|
|
|
38
|
|
|
36
|
|
|
36
|
|
|
35
|
|
||||||||||
Income (loss) before income taxes
|
$
|
86
|
|
|
$
|
95
|
|
|
$
|
77
|
|
|
$
|
56
|
|
|
$
|
69
|
|
|
$
|
66
|
|
|
$
|
22
|
|
|
$
|
25
|
|
|
$
|
12
|
|
|
$
|
8
|
|
SELECTED AVERAGE BALANCE SHEET DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total average loans
|
$
|
12,633
|
|
|
$
|
12,483
|
|
|
$
|
11,387
|
|
|
$
|
10,856
|
|
|
$
|
9,908
|
|
|
$
|
9,476
|
|
|
$
|
4,640
|
|
|
$
|
4,246
|
|
|
$
|
2,349
|
|
|
$
|
2,372
|
|
Total average deposits
|
15,983
|
|
|
15,982
|
|
|
11,060
|
|
|
11,218
|
|
|
11,181
|
|
|
10,917
|
|
|
4,942
|
|
|
4,762
|
|
|
4,314
|
|
|
4,233
|
|
||||||||||
(In millions)
|
Vectra
|
|
TCBW
|
|
Other
|
|
Consolidated
Company
|
|
|
|
|
||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
||||||||||||||||||||
SELECTED INCOME STATEMENT DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Net interest income
|
$
|
34
|
|
|
$
|
31
|
|
|
$
|
13
|
|
|
$
|
11
|
|
|
$
|
(19
|
)
|
|
$
|
(6
|
)
|
|
$
|
548
|
|
|
$
|
528
|
|
|
|
|
|
||||
Provision for loan losses
|
2
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
5
|
|
|
7
|
|
|
|
|
|
||||||||||||
Net interest income after provision for loan losses
|
32
|
|
|
28
|
|
|
12
|
|
|
11
|
|
|
(19
|
)
|
|
(7
|
)
|
|
543
|
|
|
521
|
|
|
|
|
|
||||||||||||
Noninterest income
|
6
|
|
|
7
|
|
|
1
|
|
|
1
|
|
|
23
|
|
|
18
|
|
|
138
|
|
|
132
|
|
|
|
|
|
||||||||||||
Noninterest expense
|
26
|
|
|
25
|
|
|
5
|
|
|
5
|
|
|
37
|
|
|
30
|
|
|
428
|
|
|
405
|
|
|
|
|
|
||||||||||||
Income (loss) before income taxes
|
$
|
12
|
|
|
$
|
10
|
|
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
(33
|
)
|
|
$
|
(19
|
)
|
|
$
|
253
|
|
|
$
|
248
|
|
|
|
|
|
||||
SELECTED AVERAGE BALANCE SHEET DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total average loans
|
$
|
2,881
|
|
|
$
|
2,603
|
|
|
$
|
1,117
|
|
|
$
|
911
|
|
|
$
|
363
|
|
|
$
|
296
|
|
|
$
|
45,278
|
|
|
$
|
43,243
|
|
|
|
|
|
||||
Total average deposits
|
2,784
|
|
|
2,728
|
|
|
1,048
|
|
|
1,094
|
|
|
1,584
|
|
|
1,400
|
|
|
52,896
|
|
|
52,334
|
|
|
|
|
|
(In millions)
|
Zions Bank
|
|
Amegy
|
|
CB&T
|
|
NBAZ
|
|
NSB
|
||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||||||
SELECTED INCOME STATEMENT DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Net interest income
|
$
|
337
|
|
|
$
|
318
|
|
|
$
|
253
|
|
|
$
|
235
|
|
|
$
|
260
|
|
|
$
|
231
|
|
|
$
|
111
|
|
|
$
|
100
|
|
|
$
|
74
|
|
|
$
|
64
|
|
Provision for loan losses
|
2
|
|
|
33
|
|
|
(56
|
)
|
|
8
|
|
|
4
|
|
|
(6
|
)
|
|
9
|
|
|
1
|
|
|
—
|
|
|
(5
|
)
|
||||||||||
Net interest income after provision for loan losses
|
335
|
|
|
285
|
|
|
309
|
|
|
227
|
|
|
256
|
|
|
237
|
|
|
102
|
|
|
99
|
|
|
74
|
|
|
69
|
|
||||||||||
Noninterest income
|
73
|
|
|
72
|
|
|
64
|
|
|
59
|
|
|
40
|
|
|
36
|
|
|
19
|
|
|
20
|
|
|
20
|
|
|
20
|
|
||||||||||
Noninterest expense
|
232
|
|
|
221
|
|
|
170
|
|
|
173
|
|
|
154
|
|
|
151
|
|
|
76
|
|
|
73
|
|
|
73
|
|
|
70
|
|
||||||||||
Income (loss) before income taxes
|
$
|
176
|
|
|
$
|
136
|
|
|
$
|
203
|
|
|
$
|
113
|
|
|
$
|
142
|
|
|
$
|
122
|
|
|
$
|
45
|
|
|
$
|
46
|
|
|
$
|
21
|
|
|
$
|
19
|
|
SELECTED AVERAGE BALANCE SHEET DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total average loans
|
$
|
12,543
|
|
|
$
|
12,486
|
|
|
$
|
11,379
|
|
|
$
|
10,747
|
|
|
$
|
9,919
|
|
|
$
|
9,391
|
|
|
$
|
4,591
|
|
|
$
|
4,254
|
|
|
$
|
2,349
|
|
|
$
|
2,355
|
|
Total average deposits
|
15,848
|
|
|
16,117
|
|
|
10,938
|
|
|
11,268
|
|
|
11,150
|
|
|
10,919
|
|
|
4,863
|
|
|
4,712
|
|
|
4,269
|
|
|
4,222
|
|
||||||||||
(In millions)
|
Vectra
|
|
TCBW
|
|
Other
|
|
Consolidated
Company
|
|
|
|
|
||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
||||||||||||||||||||
SELECTED INCOME STATEMENT DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Net interest income
|
$
|
66
|
|
|
$
|
61
|
|
|
$
|
25
|
|
|
$
|
22
|
|
|
$
|
(36
|
)
|
|
$
|
(14
|
)
|
|
$
|
1,090
|
|
|
$
|
1,017
|
|
|
|
|
|
||||
Provision for loan losses
|
5
|
|
|
—
|
|
|
2
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(35
|
)
|
|
30
|
|
|
|
|
|
||||||||||||
Net interest income after provision for loan losses
|
61
|
|
|
61
|
|
|
23
|
|
|
23
|
|
|
(35
|
)
|
|
(14
|
)
|
|
1,125
|
|
|
987
|
|
|
|
|
|
||||||||||||
Noninterest income
|
12
|
|
|
12
|
|
|
3
|
|
|
2
|
|
|
45
|
|
|
43
|
|
|
276
|
|
|
264
|
|
|
|
|
|
||||||||||||
Noninterest expense
|
53
|
|
|
50
|
|
|
11
|
|
|
10
|
|
|
71
|
|
|
71
|
|
|
840
|
|
|
819
|
|
|
|
|
|
||||||||||||
Income (loss) before income taxes
|
$
|
20
|
|
|
$
|
23
|
|
|
$
|
15
|
|
|
$
|
15
|
|
|
$
|
(61
|
)
|
|
$
|
(42
|
)
|
|
$
|
561
|
|
|
$
|
432
|
|
|
|
|
|
||||
SELECTED AVERAGE BALANCE SHEET DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total average loans
|
$
|
2,837
|
|
|
$
|
2,569
|
|
|
$
|
1,101
|
|
|
$
|
894
|
|
|
$
|
370
|
|
|
$
|
210
|
|
|
$
|
45,089
|
|
|
$
|
42,906
|
|
|
|
|
|
||||
Total average deposits
|
2,748
|
|
|
2,759
|
|
|
1,060
|
|
|
1,097
|
|
|
1,571
|
|
|
1,180
|
|
|
52,447
|
|
|
52,274
|
|
|
|
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
PART II.
|
OTHER INFORMATION
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
|
Total number
of shares
repurchased
1
|
|
Average
price paid
per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
|
|
Approximate dollar value of shares that may yet be
purchased under the plan
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
April
|
|
|
224,844
|
|
|
|
$
|
55.47
|
|
|
|
216,093
|
|
|
|
|
$
|
108,000,798
|
|
|
May
|
|
|
2,029,125
|
|
|
|
55.92
|
|
|
|
1,933,714
|
|
|
|
|
811
|
|
|
||
June
|
|
|
10,976
|
|
|
|
56.49
|
|
|
|
—
|
|
|
|
|
811
|
|
|
||
Second quarter
|
|
|
2,264,945
|
|
|
|
55.88
|
|
|
|
2,149,807
|
|
|
|
|
|
|
1
|
Represents common shares acquired from employees in connection with our stock compensation plan in addition to shares acquired under previously reported share repurchase plans. Shares were acquired from employees to pay for their payroll taxes and stock option exercise cost upon the vesting of restricted stock and restricted stock units, and the exercise of stock options, under provisions of an employee share-based compensation plan.
|
ITEM 6.
|
EXHIBITS
|
Exhibit
Number
|
|
Description
|
|
|
|
|
|
|
Restated Articles of Incorporation of Zions Bancorporation dated July 8, 2014, incorporated by reference to Exhibit 3.1 of Form 8-K/A filed on July 18, 2014.
|
*
|
|
|
|
|
|
|
Restated Bylaws of Zions Bancorporation dated February 27, 2015, incorporated by reference to Exhibit 3.2 of Form 10-Q for the quarter ended March 31, 2015.
|
*
|
|
|
|
|
|
|
Zions Bancorporation 2018-2020 Value Sharing Plan (filed herewith).
|
|
|
|
|
|
|
|
Zions Bancorporation Restated Pension Plan effective January 1, 2009, including amendments adopted through December 31, 2013 (filed herewith).
|
|
|
|
|
|
|
|
Zions Bancorporation Payshelter 401(k) and Employee Stock Ownership Plan, Restated and Amended effective January 31, 2007 (filed herewith).
|
|
|
|
|
|
|
|
Certification by Chief Executive Officer required by Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934 (filed herewith).
|
|
|
|
|
|
|
|
Certification by Chief Financial Officer required by Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934 (filed herewith).
|
|
|
|
|
|
|
|
Certification by Chief Executive Officer and Chief Financial Officer required by Sections 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 (15 U.S.C. 78m) and 18 U.S.C. Section 1350 (furnished herewith).
|
|
|
|
|
|
|
101
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017, (ii) the Consolidated Statements of Income for the three months ended June 30, 2018 and June 30, 2017 and the six months ended June 30, 2018 and June 30, 2017, (iii) the Consolidated Statements of Comprehensive Income for the three months ended June 30, 2018 and June 30, 2017 and the six months ended June 30, 2018 and June 30, 2017, (iv) the Consolidated Statements of Changes in Shareholders’ Equity for the six months ended June 30, 2018 and June 30, 2017, (v) the Consolidated Statements of Cash Flows for the three months ended June 30, 2018 and June 30, 2017 and the six months ended June 30, 2018 and June 30, 2017 and (vi) the Notes to Consolidated Financial Statements (filed herewith).
|
|
|
ZIONS BANCORPORATION
|
|
/s/ Harris H. Simmons
|
Harris H. Simmons, Chairman and
Chief Executive Officer
|
|
/s/ Paul E. Burdiss
|
Paul E. Burdiss, Executive Vice President and Chief Financial Officer
|
1)
|
Establishment of Award Fund
|
1.)
|
Zions Bancorporation’s Adjusted Pre-tax Pre-Provision Net Revenue (“PPNR”) compared to Plan;
|
2.)
|
Zions Bancorporation’s Return on Tangible Assets (relative to Zions Bancorporation peer companies); and,
|
3.)
|
Zions Bancorporation’s Earnings Per Share growth (relative to Zions Bancorporation peer companies);
|
4.)
|
Compensation Committee Discretion based on qualitative assessment of performance.
|
2)
|
Participation Units
|
3)
|
Value Determination:
|
4)
|
Final Cash Settlement of Value:
|
5)
|
Definitions of Factors:
|
•
|
any adjustment deemed necessary by the Committee as a result of unusual and extraordinary changes in internal cost or income allocations during the Performance Period resulting from reclassifications or changes in allocation methodologies which produce material changes in costs or income which are not offset by a corresponding change in income or costs within the Company;
|
•
|
any other adjustments, which, in the sole discretion of the Committee, are required to equitably reflect operating performance during the Performance Period.
|
6)
|
Other Administrative Provisions
|
1.
|
This is a discretionary Plan governed and interpreted by the Committee, whose decisions shall be final
. The intent of the Plan is to fairly reward Participants for increasing shareholder value. If any adjustments need to be made to allow this Plan to accomplish its purpose, the Committee in its sole discretion can make those adjustments.
|
2.
|
The Committee may, at its sole discretion, alter the terms of the Plan at any time during an Award Period.
|
3.
|
Participants will not vest in any benefits available under the Plan until any payments hereunder are made after the conclusion of the Award Period.
|
4.
|
A Participant must be employed by the Company or one of its affiliates at the time payment is made in order to receive a payout of Participant’s Unit award and if Participant ceases to be so employed at any time Participant’s Unit award shall automatically be forfeited and cancelled without consideration and without further action by Participant; provided, however, that
|
(i)
|
In the event of Participant’s termination by the Company or an affiliate or normal or early retirement, management or, if Participant is a member of the Executive Management Committee (or “EMC”), the Committee shall have the discretion to make a “Pro Rata Adjustment” to Participant’s Unit award, provided further that notwithstanding the foregoing any such adjusted Unit award shall automatically be forfeited and cancelled without consideration and without further action by Participant immediately upon (x) Participant’s commencement of, or agreement to commence, employment with or provision of services (whether as a director, consultant or otherwise) to another company that is in the financial services industry unless such employment or provision of services is specifically approved by management or the Committee, as the case may be, (y) Participant making any derogatory or damaging statements (verbally, in writing or otherwise) about the Company or any of its affiliates, the management or the board of directors of the Company or any affiliate, the products, services or business condition of the Company or any affiliate in any public way to anyone who could make those statements public or to customers of, vendors to or counterparties of the Company or any affiliate, or (z) Participant violating any duty of confidentiality owed to the Company or its affiliates under the policies or procedures of the Company and its affiliates, including the Company’s employee handbook, code of conduct and similar materials, or under federal or state law, or Participant misappropriating or misusing any proprietary information or assets of the Company and its affiliates, including intellectual property rights; and
|
(ii)
|
In the event of Participant’s “Termination of Employment” by reason of Participant’s death or “Disability”, a Pro Rata Adjustment shall be made to Participant’s unit award.
|
5.
|
The Company shall retain the right to withhold payment of incentives otherwise earned under this Plan to any individual Participant or to all Participants as a group in the event of a significant deterioration in the Company’s or the Bank’s financial condition, if so required by regulatory authorities, or for any other reason considered valid by the Board in its sole discretion including but not limited to those set out in the Company’s Incentive Compensation Clawback Policy as in effect at any time during or subsequent to the Award Period.
|
6.
|
The terms of this plan are subject to and limited by applicable law, including, without limitation, the Sarbanes Oxley Act of 2002, the Dodd-Frank Act, and regulations or guidance issued by the Board of Governors of the Federal Reserve System or other regulatory agencies.
|
7.
|
Designation as a Participant in the Plan does not create a contract of employment for any specified time, nor shall such act to alter or amend the Company’s “at-will” policy of employment.
|
8.
|
In the event a Participant transfers within Zions Bancorporation during the Award Period, management or, if Participant is a member of the EMC, the Committee shall have the discretion to maintain such Participant’s full Unit award under this plan, to divide and allocate such full award between Zions entities with which Participant has been employed during the Award Period or to transfer and allocate such award to a single other Zions entity with which Participant has been employed during the Award Period (and to make corresponding adjustments to Award Funds).
|
9.
|
In the event of a change in control of the Company (as defined in the Company’s Change in Control Agreements), the Plan will be terminated and payments shall be made in accordance with the provisions of section 3 (b) of the Change in Control Agreements, provided that the reference in Section 3(b) to “average annual growth in Earnings per Share and the average Tangible Return on Equity” shall be deemed to refer to the award determination methodology set forth in this plan.
|
10.
|
This document is intended to provide a guideline for the creation and distribution of incentive compensation. Nothing herein creates a contractual obligation binding on the Board or the Committee, and no Participant shall have any legal rights with respect to an Award until such Award is distributed.
|
Adjusted Return on Tangible Assets
|
Metric Weight
|
|
Rank v. Peers
|
Payouts ($/unit)
|
20%
|
Max - 100th %ile
|
$1.20
|
|
80th %ile
|
$0.96
|
|
60th %ile
|
$0.73
|
|
50th %ile
|
$0.60
|
|
40th %ile
|
$0.375
|
|
30th %ile
|
$0.15
|
|
Below Threshold
|
$0.00
|
EPS Growth
|
Metric Weight
|
|
Rank v. Peers
|
Payouts ($/unit)
|
20%
|
Max - 100th %ile
|
$1.20
|
|
80th %ile
|
$0.96
|
|
60th %ile
|
$0.73
|
|
50th %ile
|
$0.60
|
|
40th %ile
|
$0.375
|
|
30th %ile
|
$0.15
|
|
Below Threshold
|
$0.00
|
Adjusted PPNR
|
Metric Weight
|
|
Rank v. Peers
|
Payouts ($/unit)
|
40%
|
Max - 100th %ile
|
$1.20
|
|
80th %ile
|
$0.96
|
|
60th %ile
|
$0.73
|
|
50th %ile
|
$0.60
|
|
40th %ile
|
$0.48
|
|
30th %ile
|
$0.24
|
|
Below Threshold
|
$0.00
|
1.1
|
"Accrued Benefit" 3
|
1.2
|
"Accrued Benefit Attributable to the Old Plan Account" 3
|
1.3
|
"Accrued Benefit Attributable to Company Contributions" 3
|
1.4
|
"Actuarial Equivalence" 3
|
1.5
|
"Affiliate" or "Subsidiary Affiliate" or "Subsidiary" 3
|
1.6
|
"Authorized Period of Absence" 4
|
1.7
|
Beneficiary 4
|
1.8
|
"Break in Service" 5
|
1.9
|
"Cash Balance Account" 5
|
1.10
|
"Code" 5
|
1.11
|
"Commerce Participant" 5
|
1.12
|
"Commerce Plan" 5
|
1.13
|
"Committee or Retirement Committee" 5
|
1.14
|
"Company 5
|
1.15
|
"Compensation" 5
|
1.16
|
"Disability Retirement Date" 6
|
1.17
|
"Early Retirement Date" 6
|
1.18
|
Earnings 6
|
1.20
|
"Eligible Spouse" 8
|
1.21
|
"Eligibility Computation Period" 9
|
1.22
|
"Employee" 9
|
1.23
|
"Employer" 9
|
1.24
|
"Employment Date" 9
|
1.25
|
"ERISA 9
|
1.26
|
"Grossmont Participant" 9
|
1.27
|
"Grossmont Plan" 9
|
1.28
|
"Hour of Service" 9
|
1.29
|
"Investment Manager" 11
|
1.30
|
"Late Retirement Date 11
|
1.31
|
"Nonvested Former Participant" 11
|
1.32
|
"Normal Retirement Age" 11
|
1.33
|
"Normal Retirement Date" 11
|
1.34
|
"Old Plan Account" 11
|
1.35
|
"Participant" 11
|
1.36
|
"Participation Date" 12
|
1.38
|
"Plan Year" 12
|
1.39
|
"Qualified Domestic Relations Order" 12
|
1.40
|
"Qualified Service" 12
|
1.41
|
"Retirement Date" 12
|
1.42
|
"Single Life Annuity" 13
|
1.43
|
"Sumitomo Participant" 13
|
1.44
|
"Sumitomo Plan" 13
|
1.45
|
"Termination of Employment" 13
|
1.46
|
"Trust Agreement" 13
|
1.47
|
"Trust Fund" 13
|
1.48
|
"Trustee" 13
|
1.49
|
"Year of Vesting Service" 13
|
1.50
|
"Zions" 15
|
2.1
|
Participation Date 16
|
2.2
|
Reinstatement of Active Participation 17
|
3.1
|
Initial Establishment of Cash Balance 18
|
3.2
|
Earnings Credits 19
|
3.3
|
Interest Credits. 21
|
3.4
|
Maintenance of Account after Termination of Employment until Benefit Commencement
22
|
4.1
|
Accrued Benefit 24
|
4.2
|
Cash Balance Accrued Benefit 24
|
4.3
|
Minimum Accrued Benefit 24
|
4.4
|
Grandfathered Minimum Accrued Benefit 25
|
4.5
|
Accrued Benefit Attributable to the Old Plan Account 25
|
4.6
|
Accrued Benefit Attributable to Company Contributions 25
|
4.7
|
Old Plan Account 25
|
5.1
|
Monthly Retirement Income 27
|
5.2
|
Normal Retirement Income 27
|
5.3
|
Early Retirement Income 27
|
5.4
|
Late Retirement Income. 28
|
5.5
|
Disability Retirement Income is described in Section 7.4 28
|
5.6
|
Application for Retirement Income 28
|
5.7
|
Forms of Retirement Income 30
|
5.8
|
Payment of Small Benefits 34
|
5.9
|
Eligible Rollover Distribution. 34
|
5.10
|
Re-employment After Retirement 35
|
5.11
|
Commencement of Benefits. 35
|
5.12
|
Delay of Payment Due to Administrative Error. 36
|
5.13
|
Suspension of Benefits for Active Participants at Normal Retirement Date
.
37
|
5.14
|
Benefits Under a Qualified Domestic Relations Order (QDRO) 38
|
5.15
|
Death or Disability While Performing Qualified Military Service 38
|
5.16
|
Non-spouse Beneficiary Rollover 39
|
6.1
|
Vesting. 40
|
6.2
|
Termination Benefit 40
|
6.3
|
Re-employment After Termination of Employment. 41
|
6.4
|
Termination Benefits and Re-employment for Commerce Participants. 41
|
6.5
|
Special Termination Benefit for Sumitomo Participants 42
|
7.1
|
Determination of Disability 43
|
7.2
|
Eligibility for Disability Benefits 43
|
7.3
|
Disability Retirement Date 43
|
7.4
|
Disability Retirement Income 43
|
8.1
|
Death after Commencement of Benefits 44
|
8.2
|
Death Prior to Commencement of Benefits 44
|
8.3
|
Effect of Old Plan Account 45
|
8.4
|
Return of Old Plan Account 45
|
9.1
|
Company Contributions 46
|
9.2
|
Return of Company Contributions 46
|
10.1
|
Termination of Plan 47
|
10.2
|
Procedures Upon Termination of Plan 47
|
11.1
|
Earnings Limitation under Code Section 401(a)(17) 48
|
11.2
|
Maximum Retirement Benefit under Code Section 415 48
|
11.3
|
Additional Benefit Limits for Highly Compensated Employees. 54
|
11.4
|
Top-Heavy Provisions. 56
|
11.5
|
Benefit Restrictions Due to Application of Code §436 59
|
11.6
|
Limitations Applicable to the Plan 64
|
12.1
|
Administration 71
|
12.2
|
Records 71
|
12.3
|
Payment of Expenses 72
|
12.4
|
Delegation of Authority 72
|
12.5
|
Information Available 72
|
12.6
|
Claims and Appeals Procedure. 72
|
12.7
|
Fiduciary Capacity 73
|
12.8
|
Committee Liability 73
|
12.9
|
Limitations of Actions on Claims 73
|
13.1
|
Amendment of Plan 74
|
13.2
|
Employment Status 74
|
13.3
|
Mergers or Consolidations 74
|
13.4
|
Provision Against Anticipation 74
|
13.5
|
Facility of Payment 74
|
13.6
|
Construction 75
|
13.7
|
Legal Actions 75
|
1.1
|
"Accrued Benefit"
means the monthly amount of benefit credited to a Participant in accordance with Article 4 on the basis of an annuity payable for life beginning on his or her Normal Retirement Date, or the current date, if later.
|
1.2
|
"Accrued Benefit Attributable to the Old Plan Account"
is defined in Section 4.5.
|
1.3
|
"Accrued Benefit Attributable to Company Contributions"
is defined in Section 4.6.
|
1.4
|
"Actuarial Equivalence" or "Actuarial Equivalent"
means equality in value of the aggregate amounts expected to be received under different forms of payment computed on the following bases:
|
(a)
|
For purposes of determining (i) the monthly annuity benefits under Sections 4.2, 4.5, 5.3(b) and 8.2, and (ii) the value of lump sum payments under Sections 5.7(d), 5.8 and 5.12(b), Actuarial Equivalence will be calculated in accordance with Appendix II. Unless specifically provided otherwise in this Plan, the value of a benefit payable in any other non-annuity form shall be determined by applying the Actuarial Equivalence factors specified for lump sums in (ii) above.
|
(b)
|
For purposes of determining the maximum retirement benefit in Section 11.2, Actuarial Equivalence will be calculated using the following bases:
|
(1)
|
The mortality assumption is the "Applicable Mortality Table" as defined in sub section (a) of Appendix II.
|
(2)
|
Except as otherwise specified in Section 11.2, effective on or after January 1, 1995, for a benefit in the form of an annuity, the interest assumption (to adjust for age and for the form of the benefit) shall be 5%.
|
(c)
|
For the purposes of determining the maximum retirement benefit in Section 11.2 for a Grossmont Participant who retires between January 1, 1998 and December 31, 1998, Actuarial Equivalence will never be less than the amount the Grossmont Participant would have received under the Grossmont Plan.
|
(d)
|
Except as otherwise specified in the Plan, for all other purposes actuarial equivalency will be calculated using the following basis:
|
(1)
|
The mortality assumption will be the 1984 Unisex Pensioners Mortality Table.
|
(2)
|
The interest assumption will be 6%.
|
1.5
|
"Affiliate" or "Subsidiary Affiliate" or "Subsidiary"
means Zions Bancorporation and each member of a controlled group of corporations (as defined in Code Section 1563(a), deter mined without regard to Code Sections 1563(a)(4) and (e)(3)(C)), a group of trades or businesses (whether incorporated or not) that are under common control within the meaning of Code Section 414(c), or an affiliated service group (as defined in Code Sections 414(m) or 414(0)), of which Zions Bancorporation is a part. With respect to the Maximum Retirement Benefit defined in Section 11.2, in determining whether a corporation is a member of a controlled group of corporations the phrase "more than 50%" will be substituted for the phrase "at least 80%" each place it appears in Code Section 1563(a)(l ).
|
1.6
|
"Authorized Period of Absence"
means an absence authorized by the Company for one or more of the following reasons:
|
(a)
|
Approved leave of absence;
|
(b)
|
Pregnancy;
|
(c)
|
Jury duty;
|
(d)
|
Qualified Military Service; or
|
(e)
|
Illness or injury, including disability, and including a period of absence legally authorized to be taken, under the facts and circumstances applicable to the Participant, in accordance with the terms of the Family and Medical Leave Act.
|
1.7
|
Beneficiary
|
(a)
|
Beneficiary of Retirement Income of a Married Participant For purposes of a post retirement survivor benefit for a Participant who is married to an Eligible Spouse on the date of commencing his or her Retirement income, the Beneficiary shall be the Eligible Spouse, except to the extent that either: (a) the benefit is payable pursuant to the mandatory lump sum provisions of Section 5.8 (in which case there shall be no Beneficiary), (b) the Participant, with the written and notarized consent of the Eligible Spouse, elects to receive a benefit in the form of a Single Life Annuity (with or without a Level Income Option) or a lump sum (in which case there shall be no Beneficiary), or (c) is eligible for and elects a form of benefit under subsection (e)(I), (e)(2) or (f)(l) of Section 5.7 with a designated Beneficiary other than the Eligible Spouse (in which case the Beneficiary shall be the person (or persons, under Section 5.7(e)(l) or (e)(2) designated by the Participant with the consent of the Eligible Spouse at the time of commencing the Retirement Income).
|
(b)
|
Beneficiary of Retirement Income of an Unmarried Participant For purposes of a Retirement Income benefit for a Participant who has no Eligible Spouse on the date of commencing his or her Retirement Income, the Beneficiary means either (a) the living person designated by the Participant at the time of commencing his or her Retirement Income, if the Participant is eligible for and elects a form of benefit pursuant to Section 5.7(e)(l), (e)(2) or (f)(l) (in which case the Beneficiary shall be the person (or persons, under Section 5.7 (e)(l) or (e)(2) designated by the Participant, or (b) there shall be no Beneficiary if either the benefit is payable pursuant to the mandatory lump-sum provisions of Section 5.8 or the Participant elects to receive a benefit in the form of a Single Life Annuity or lump sum.
|
(c)
|
Beneficiary of a Pre-Retirement Survivor's Death Benefit For purposes of any pre retirement death benefit that may be payable under Section 8.2 of the Plan, Beneficiary means the Eligible Spouse (if any, as of the date of the Participant's death prior to receiving Retirement Income under this Plan), or, if no Eligible Spouse survives the Participant, then the benefit under Section 8.2 shall be paid in a lump sum to the Participant's estate.
|
(d)
|
Beneficiary of Unpaid Balance of Old Plan Account In the case of any death benefit that may be applicable under the terms of Section 8.4, Beneficiary means the person or persons designated by a Participant for such purpose, or, if no Beneficiary is designated (or if any and all designated Beneficiaries fail to survive the Participant and the Eligible Spouse, if any), any death benefit payable under Section 8.4 shall be payable to the estate of the last to die of the Participant or Eligible Spouse (if any).
|
1.8
|
"Break in Service"
means an interruption in service due to a person's failure to complete at least 501 Hours of Service during a calendar year or during an Eligibility Computation Period. A Break in Service will not occur during an Authorized Period of Absence unless the Employee fails to return to work for at least 30 days with the Company or any member of the Employer after the expiration of the Authorized Period of Absence (or, in the case of an absence due to Qualified Military Service, unless the Employee fails to return to work within the applicable period of time allowed pursuant to Code Section 414(u)).
|
1.9
|
"Cash Balance Account"
means the separate bookkeeping account established and maintained for each Participant as provided in Article 3.
|
1.10
|
"Code"
means the Internal Revenue Code of 1986, as amended.
|
1.11
|
"Commerce Participant"
means a Participant in the Commerce Plan who became a Participant in this Plan on January 1, 1999 as the result of the December 31, 1998 merger of the Commerce Plan into this Plan. Based upon his or her status in the Commerce Plan on December 31, 1998, and based upon whether or not he or she became an Eligible Employee on January 1, 1999, a Commerce Participant described in this Section shall be deemed an Active Participant, an Inactive Participant, a Terminated Vested Participant, a Disabled Participant or a Retired Participant in this Plan, as defined in Section 1.36, on January 1, 1999.
|
1.12
|
"Commerce Plan"
means the Commerce Bancorporation Defined Benefit Plan as in effect immediately prior to January 1, 1999.
|
1.13
|
"Committee or Retirement Committee"
means the Committee that will administer the plan as described in Article 12.
|
1.14
|
"Company"
means Zions Bancorporation and any Affiliate or Subsidiary that adopts this Plan with the consent of the Board of Directors of Zions Bancorporation. The Affiliates and Subsidiaries listed on Appendix V, as it may be revised from time to time, have adopted this Plan and are, as of the date or dates stated on Appendix V, a participating Company in the Plan.
|
1.15
|
"Compensation"
for any tax year has the meaning set forth in Treasury Regulations Section 1.415-2(d) (Treasury Regulations Section 1.415(c)-2, for Plan Years commencing after July 1, 2007). Effective January 1, 1998, Compensation shall also include any elective deferrals as defined in Code Section 402(g)(3) made by the Participant during a Plan Year and any pre-tax Employee contributions made by the Employer on behalf of the Employee for the Plan Year, pursuant to Code Section 125 and/or Code Section 132(f)(4).
|
1.16
|
"Disability Retirement Date"
is defined in Section 7.3.
|
1.17
|
"Early Retirement Date"
shall have the meaning stated in subsections (a) through (d) below, whichever is applicable to a particular Participant. "Earliest Retirement Date" means the earliest date that would satisfy all of the conditions of the definition of Early Retirement Date that is applicable to the Participant.
|
(a)
|
Except as otherwise provided in subsections (b), (c) and (d), a Participant may retire prior to his or her Normal Retirement Date on an Early Retirement Date which, subject to his or her election, may be the first day of any month coincident with or following the latest of:
|
(1)
|
the Participant's 55th birthday,
|
(2)
|
the date on which the Participant completes 10 Years of Vesting Service, or
|
(3)
|
the date of the Participant's Termination of Employment.
|
(b)
|
A Grossmont Participant may retire prior to his or her Normal Retirement Date on an Early Retirement Date that, subject to his or her election, may be the first day of any month coincident with or following the date of his or her Termination of Employment on or after reaching age 55 and completing three Years of Vesting Service.
|
(c)
|
A Sumitomo Participant may retire prior to his or her Normal Retirement Date on an Early Retirement Date which, subject to his or her election, may be the first day of any month coincident with or following the date of his or her Termination of Employment on or after reaching age 55 and completing five Years of Vesting Service.
|
(d)
|
A Commerce Participant may retire prior to his or her Normal Retirement Date and receive his or her entire Accrued Benefit on an Early Retirement Date which, subject to his or her election, may be the first day of any month coincident with or following the date of his or her Termination of Employment on or after reaching age 55 and completing three Years of Vesting Service.
|
1.18
|
Earnings
|
(a)
|
Earnings for a Participant for a Plan Year includes the sum of:
|
(1)
|
the Participant's wages, salaries, fees for professional service and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Company to the extent that the amounts are includible in gross income (including, but not limited to, commissions paid salesmen, compensation for services on insurance premiums, tips, and bonuses);
|
(2)
|
the Participant's "elective deferrals" (as defined in Code Section 402(g)) to a plan with a Code Section 401 (k) cash or deferral arrangement maintained by an Affiliate or Subsidiary;
|
(3)
|
the Participant's pre-tax contributions to any health or welfare benefit program under Code Section 125 or any qualified public transit and parking program under Code Section 132(f)(4);
|
(4)
|
effective on and after January 1, 2001, compensation that the Participant elects to defer to a nonqualified deferred compensation plan maintained by an Affiliate or Subsidiary, but under no circumstances shall the amount of Earnings that is recognized under this paragraph (a)(4) cause the Participant's overall Earnings for the Plan Year to increase by more than 15% of the amount of Earnings determined without reference to this paragraph (a)(4), nor shall it cause overall Earnings to exceed the applicable limitation under subsection (c) below; and
|
(5)
|
for each month in which a Participant is entitled to credit for Qualified Military Service, the Participant will be considered, for purposes of determining the Accrued Benefit under this Plan, to have Earnings equal to the Participant's average monthly Earnings during the 12 months (or, if less, the number of months of prior employment with the Employer) immediately preceding his or her period of Qualified Military Service.
|
(b)
|
The term "Earnings" does not include the types of remuneration described in the following paragraphs.
|
(1)
|
except to the extent included in Earnings under clause (a)(2) or (a)(4) above,
|
(2)
|
amounts realized from the exercise of a nonqualified stock option, or income realized when restricted stock (or property) held by the Participant either be comes freely transferable or is no longer subject to a substantial risk of forfeiture;
|
(3)
|
amounts realized by the Participant from the sale, exchange or other disposition of stock acquired under a qualified stock option;
|
(4)
|
except to the extent included
in
Earnings pursuant to Code Section 125 or 132(f){4) in accordance with clause (a)(3) above,
|
(A)
|
other amounts that receive special tax benefits, such as premiums for group term life insurance (without regard to whether the premiums are includible in the gross income of the Participant); and
|
(B)
|
reimbursements or other expense allowances, fringe benefits (cash and non-cash), moving expenses, welfare benefits, and any lump sum amounts paid at Termination of Employment (on account of such Termination), such as severance pay, vacation and sick leave cash-outs; and
|
(5)
|
fees for service as a member of a board of directors, if any, paid to "Highly Compensated Employees" (as defined in Section 1 1.3 (a)(3)).
|
(c)
|
Limitations on Earnings under Code Section 401 (a)(17). For each Plan Year, the amount of annual Earnings that shall be taken into account for purposes of determining benefit accruals under the Plan shall not exceed the limit that is in effect for that Plan Year under Code Section 401 (a)(17), after taking into account any amendment of that Code Section that is enacted into law and any adjustment to that limit that is authorized by the Secretary of the Treasury for the calendar year that coincides with that Plan Year (for example, the limit shall be $170,000 for Plan Year 2001 and $200,000 for Plan Year 2002).
|
1.19
|
"Eligible Employee."
Subject to the exclusions stated in the following paragraph, Eligible Employee means an Employee of the Company.
|
(a)
|
an Employee of an Affiliate or Subsidiary that is not a Company that has adopted the Plan and is participating in the Plan;
|
(b)
|
an Employee who is covered under a collective bargaining agreement where retirement benefits were the subject of good faith bargaining that does not provide for retirement benefits under this Plan;
|
(c)
|
a person who performs services for a Company but is compensated for such services by means of the payroll of a third party employee leasing organization;
|
(d)
|
any "leased employee" within the meaning of Code Section 414(n)(2), or
|
(e)
|
a person who is not treated by the Participating Company as an employee for payroll tax purposes, whether or not such person is subsequently determined by a government agency, by the conclusion or settlement of threatened or pending litigation, or otherwise to be (or to have been) a common law employee of the Company.
|
1.20
|
"Eligible Spouse"
means the legal spouse of the Participant at the time the Participant commences his or her Retirement Income under the Plan (or the Participant's date of death, if earlier), or, if applicable, a former spouse who is designated as the alternate payee with the right to be treated as the spouse Beneficiary of a Participant according to the terms of a Qualified Domestic Relations Order.
|
1.21
|
"Eligibility Computation Period"
for purposes of determining under Section 2.l(b) whether an Employee has accrued 1,000 Hours of Service during such a period in order to become eligible to participate in the Plan, means the period of 12 consecutive months commencing on the Employment Date and ending on the first anniversary of such date, or, if 1,000 Hours of Service are not accrued during that 12-month period, the Eligibility Computation Period shall be the 12-month period commencing on the first day of each Plan Year that occurs after the Employment Date.
|
1.22
|
"Employee"
means any person who is employed as a common law employee by any Affiliate or Subsidiary, and any "leased employee" within the meaning of Code Section 414(n)(2); provided, however, if leased employees constitute 20% or less of the Employer's non-highly compensated work force, the term "Employee" shall not include a leased employee who is covered by a plan maintained by the leasing organization which meets the requirements of Code Section 414(n)(5).
|
1.23
|
"Employer"
means, collectively, any and all companies that satisfy the definition of an "Affiliate or Subsidiary" (as defined in Section 1.5). All Employees of the Employer will be treated as employed by a single employing company for purposes of applying the requirements for qualification of the Plan under Code Section 401(a).
|
1.24
|
"Employment Date"
means the date on which an Employee first performs an Hour of Service for any member of the Employer.
|
1.25
|
"ERISA"
means the Employee Retirement Income Security Act of 1974, as amended.
|
1.26
|
"Grossmont Participant"
means a participant in the Grossmont Plan who became a Participant in this Plan effective January 1, 1998 as a result of the merger of the Grossmont Plan into this Plan.
|
1.27
|
"Grossmont Plan"
means the Grossmont Bank Restated Defined Benefit Pension Plan and Trust, restated effective January 1, 1996, according to the terms and conditions of that plan which existed as of the close of business on December 31, 1997 when assets and benefits for Grossmont Participants were transferred to and merged into this Plan.
|
1.28
|
"Hour of Service"
means:
|
(a)
|
each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Company;
|
(b)
|
each hour for which an Employee is paid, or entitled to payment, by the Company on account of a period of time during which no duties are performed (whether or not the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence; provided, however, that an Employee will not be credited with more than 501 Hours of Service under this sentence for any continuous period during which he or she performs no duties for the Company. Notwithstanding the preceding provisions of this paragraph, no credit will be given:
|
(1)
|
for an Hour of Service for which the individual is directly or indirectly paid, or entitled to payment, on account of a period during which no duties are per formed if such payment is made or due under a plan maintained solely for the purpose of complying with applicable workers' compensation, unemployment compensation or disability insurance laws (except as specifically provided for in Article 7); or
|
(2)
|
for an Hour of Service for which a payment is made which solely reimburses the individual for medical or medically related expenses incurred;
|
(c)
|
each hour not otherwise credited under the Plan for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Company.
|
(d)
|
Effective December 12, 1994, Qualified Military Service shall be credited for purposes of eligibility under Section 2. (b) and for Years of Vesting Service. For a Participant returning from Qualified Military Service on or after January 1, 2001, for purposes of satisfying the 1,000 Hours of Service requirement of Section 2. (b) during an Eligibility Computation Period, and for purposes of determining Years of Vesting Service, a Participant will receive 190 Hours of Service for each full or partial month during which the Participant is engaged in Qualified Military Service.
|
(e)
|
Hours of Service will be credited for employment as an Employee of any Affiliate or Subsidiary.
|
(f)
|
Solely for purposes of determining whether a Break in Service has occurred, an individual who is absent from work will receive credit for the Hours of Service which would have been credited to the individual but for such absence if the absence is (1) because of the pregnancy of the individual, (2) because of the birth of a child of the individual,
|
(g)
|
The foregoing notwithstanding, Participants whose pay is solely on a commission basis will be credited with Hours of Service as follows:
|
(1)
|
If the Participant's Earnings for a Plan Year are at least 750 multiplied by the lowest hourly rate of compensation payable to employees in the same job classification as the Participant, then the Participant will be credited with 1,000 Hours of Service for that Plan Year.
|
(2)
|
If the Participant's Earnings for a Plan Year are less than 750 multiplied by the lowest hourly rate of compensation payable to employees in the same job classification as the Participant, then the Participant will not be credited with any Hours of Service for that Plan Year.
|
(h)
|
The crediting of Hours of Service under this Plan will be performed in accordance with applicable provisions of the Department of Labor Regulations 2530.200b-2 and 2530.200b-3 (including, by way of example, the equivalency rules which may be
applied in the event that a Participant's actual Hours of Service cannot be deter mined), and such regulations are incorporated by reference herein.
|
1.29
|
"Investment Manager"
shall have the meaning stated in Section 3(38) of ERISA.
|
1.30
|
"Late Retirement Date"
- If a Participant continues in the service of the Company or any Affiliate or Subsidiary beyond his or her Normal Retirement Date, then his or her Late Retirement Date will be the first day of any month coincident with or following the date of the Participant's Termination of Employment. A Participant's Late Retirement Date will not be later than the required beginning date described in Section 5.l (c) even if his or her employment continues after such date.
|
1.31
|
"Nonvested Former Participant"
means a prior Participant who has incurred a Termination of Employment and who does not have a vested interest in his or her Accrued Benefit in accordance with Section 6 .1.
|
1.32
|
"Normal Retirement Age"
-If the Participant's Participation Date is on or after July 1, 1994, his or her "Normal Retirement Age" is the later of:
|
(a)
|
his or her 65th birthday, or
|
(b)
|
the earlier of
:
|
(1)
|
the date the Participant completes five Years of Vesting Service, or
|
(2)
|
the fifth anniversary of his or her Participation Date provided the Participant is an Employee on or after the later of such date or his or her 65th birthday and earns at least one Year of Vesting Service after any Break in Service. If the Participant first participated in the Plan before July 1, 1994, the Participant's Normal Retirement Age is 65.
|
1.33
|
"Normal Retirement Date"
- A Participant's Normal Retirement Date will be the first day of the month coincident with or next following the date of attaining his or her Normal Retirement Age.
|
1.34
|
"Old Plan Account"
is defined in Section 4.7.
|
1.35
|
"Participant"
means an Active Participant, Inactive Participant, Terminated Vested Participant, Disabled Participant, or Retired Participant, as defined below:
|
(a)
|
"Active Participant" means an Eligible Employee who has met the requirements for participation described in Article 2.
|
(b)
|
"Inactive Participant" means a prior Active Participant who is on an Authorized Period of Absence, or who is employed by an Affiliate or Subsidiary other than a Company that is then a participating Company in the Plan, or who is employed by the Company but is not an Eligible Employee.
|
(c)
|
"Terminated Vested Participant" means a former Eligible Employee who has incurred a Termination of Employment, who retains a vested interest in accordance with Section 6.1, and who is not currently receiving benefit payments under the Plan.
|
(d)
|
"Disabled Participant" means a former Active Participant who has a total and permanent disability as determined under Article 7.
|
(e)
|
"Retired Participant" means a former Eligible Employee who is receiving benefit payments under the Plan.
|
1.36
|
"Participation Date"
means the date as of which an Eligible Employee becomes a Participant in the Plan, in accordance with the terms stated in Article 2.
|
1.37
|
"Plan"
means the Zions Bancorporation Pension Plan.
|
1.38
|
"Plan Year"
means a calendar year.
|
1.39
|
"Qualified Domestic Relations Order" or "QDRO"
means a judgment, decree or order of a court with authority under state law for domestic relations matters, which is issued for the benefit of a named "alternate payee" in connection with divorce, marital property rights or alimony, and which complies with all requirements of Code Section 414(P). As further described in Section 5.13, a QDRO may expressly provide either for (a) a division of a Participant's Accrued Benefit between the Participant and an alternate payee, (b) a distribution to an alternate payee, (c) the right of an alternate payee to elect to receive one or more distributions on or after a specified date or occurrence of a specified event, or (d) the designation of an alternate payee as beneficiary for some or all of the Participant's benefit upon the Participant's death. A QDRO shall identify (i) the name and last known mailing address of the Participant and of each alternate payee (who shall be either a Participant's spouse, former spouse, child or other dependent); (ii) the amount or percentage of the Participant's benefit to be paid by the Plan to each alternate payee, or the manner in which such percentage is to be determined; (iii) the number of payments or period to which such order applies; and (iv) the name of each benefit plan of the Employer to which it applies. A domestic relations order shall not be treated as an enforceable QDRO under this Plan unless and until the Administrative Committee (or a person or administrator designated by that Committee) has determined that the domestic relations order conforms to the requirements of Code Section 414(P), describes benefits that are consistent with the terms of this Plan, and satisfies the requirements of any QDRO guidelines maintained by the Administrative Committee or its designee.
|
1.40
|
"Qualified Service"
shall have the meaning stated in Code Section 414(u)(S), and shall refer to an individual's service in the uniformed services of the United States to the extent the individual, on or after December 12, 1994, is entitled to re-employment rights (sometimes referred to as "USERRA" rights) and returns to employment in a timely manner following such service according to chapter 43 of title 38 of the United Stated Code.
|
1.41
|
"Retirement Date"
means the date the Participant's benefits commence. Benefits may begin at the Participant's Early, Normal, Late or Disability Retirement Date. Whenever restrictions
on benefits are imposed under Section 11.5, the Participant has a Termination of Employment prior to the date on which benefit restrictions are imposed and the Participant has elected a benefit payable in a form other than as an annuity, the Retirement Date shall be the date the Participant would have received his or her benefit had the Participant elected distribution in the form of an annuity, regardless of when actually paid.
|
1.42
|
"Single Life Annuity"
means an annuity providing level monthly payments over the life of the annuitant.
|
1.43
|
"Sumitomo Participant"
means
:
|
(a)
|
A Participant in the Sumitomo Plan who became a Participant in this Plan on October 1, 1998 in connection with the October 31, 1998 merger of the Sumitomo Plan into this Plan, or
|
(b)
|
(b) An employee of Sumitomo Bank of California on September 30, 1998 who be- comes eligible to participate in this Plan on or before December 31, 1999.
|
1.44
|
"Sumitomo Plan"
means the Sumitomo Bank of California Pension Plan as in effect immediately prior to November 1, 1998.
|
1.45
|
"Termination of Employment"
means cessation of employment with the Company or any member of the Employer due to:
|
(a)
|
voluntary or involuntary termination or separation of employment, or
|
(b)
|
failure to return to work for at least 30 days upon the expiration of any Authorized Period of Absence from the Company or any member of the Employer, in which event cessation of active work will be deemed to have occurred at the time such Authorized Period of Absence expired.
|
1.46
|
"Trust Agreement"
means the agreement between the Company and the Trustee.
|
1.47
|
"Trust Fund"
means all money or property held by the Trustee pursuant to the Trust Agreement.
|
1.48
|
"Trustee"
means the trustee appointed by the Board of Directors of the Company and named as such in the Trust Agreement.
|
1.49
|
"Year of Vesting Service"
means a calendar year after December 31, 1988 during which an Employee completes 1,000 or more Hours of Service except as follows:
|
(a)
|
For Plan Years from December 31,1994 to December 31, 1997, an Employee shall be credited with a partial Year of Vesting Service (measured in calendar months) in a Plan Year in which the Employee completes less than 1,000 Hours of Service but in which the Employee has a Benefit Service Date or in which the Employee retires, dies, or incurs a Termination of Employment if the Employee completes 83.33 Hours of
Service multiplied by the number of calendar months during such Plan Year in which the Employee completes at least one Hour of Service. The Employee will be credited with months of Service equal to the number of calendar months during the Plan Year in which the Employee completes at least one Hour of Service. Twelve months of Service will equal a Year of Vesting Service.
|
(b)
|
Year of Vesting Service also include Years of Vesting Service earned before January 1, 1989 under the terms of the Plan in effect as of December 31, 1988.
|
(c)
|
A Participant shall be credited in the 1989 calendar year with 190 Hours of Service for each month in which the Participant earned at least one Hour of Service in his or her partial Year of Vesting Service (if any) ending on December 31, 1988.
|
(d)
|
The foregoing notwithstanding, a Participant must be at least age 18 before he or she can earn a Year of Vesting Service.
|
(e)
|
The foregoing notwithstanding, if a Participant who has no vested interest in the Plan incurs a Break in Service, Years of Vesting Service will not include:
|
(1)
|
service prior to a Break in Service which is not followed by a Year of Vesting Service, and
|
(2)
|
service prior to five or more consecutive one year Breaks in Service if the number of consecutive one year Breaks in Service equals or exceeds the number of prior Years of Vesting Service.
|
(f)
|
Years of Vesting Service earned by Grossmont Participants prior to December 31, 1997 shall be calculated as defined under the provisions of the Grossmont Plan.
|
(g)
|
Special Rules Applicable to Sumitomo Participants:
|
(1)
|
Years of Vesting Service earned by a Sumitomo Participant prior to November 1, 1998 shall be calculated as defined under the provisions of the Sumitomo Plan.
|
(2)
|
A Sumitomo Participant who earns 1,000 or more Hours of Service in the Plan Year beginning on January 1, 1998 and ending on December 31, 1998 shall be credited with one Year of Vesting Service.
|
(3)
|
After December 31, 1998, a Sumitomo Participant shall be credited with one Year of Vesting Service for each calendar year in which he or she completes 1,000 or more Hours of Service.
|
(4)
|
In no event will a Sumitomo Participant's Years of Vesting Service be less than what the Sumitomo Participant would have earned under the Sumitomo Plan through his or her anniversary year ending in the calendar year ending on December 31, 2000.
|
(h)
|
Years of Vesting Service earned by Commerce Participants prior to January 1, 1999 shall be credited as determined under the provisions of the Commerce Plan.
|
(i)
|
Effective April 1, 1997, for a former employee of an acquired company listed on Appendix IV who becomes an Eligible Employee as of the Acquisition Effective Date listed in that Appendix, the Eligible Employee's prior service as an employee of the acquired company (or of any affiliate or subsidiary of the acquired company) shall be credited for purposes of determining Years of Vesting Service under this Plan.
|
(j)
|
Effective January 1, 1997, any individual who was a leased employee (as defined in Section 1.19) and who subsequently becomes an Eligible Employee shall be credited with all years of service as a leased employee for purposes of determining Years of Vesting Service.
|
1.50
|
"Zions"
means Zions Bancorporation, which is the sponsor of this Plan and the ultimate parent corporation of the Employer.
|
2.1
|
Participation Date
means the date a Participant first becomes an Active Participant, provided that the Participation Date of a Nonvested Former Participant who is reinstated under Section 2.2 after five or more consecutive one year Breaks in Service shall be the date of reinstatement.
|
(a)
|
An Eligible Employee who was an Active Participant in the Plan on March 31, 1997 will continue to be an Active Participant on April 1, 1997.
|
(b)
|
Except as provided in subsections (c) through (f) below, any other Eligible Employee will become an Active Participant in the Plan on the January 1 or July 1 coinciding with or next following the later of (1) the date on which the Employee completes an Eligibility Computation Period during which he or she completes at least 1,000 Hours of Service, or (2) the Employee's 21st birthday.
|
(c)
|
Effective April 1, 1997, in the case of an Employee who has a period of employment as an Employee or leased employee (as defined in Section 1.19) of an Affiliate or Subsidiary during which he or she is not an Eligible Employee (either because of the individual's employment status or because the employing company is not a participating Company), which is followed (without a Break in Service) by a transition to Eligible Employee status (either because of a change of individual employment status or because the employing company has become a participating Company in this Plan), then the Employee's Hours of Service prior to becoming an Eligible Employee shall be credited toward meeting the eligibility service requirement of 2.1(b) above, and the Eligible Employee will become an Active Participant on the first day of the month coinciding with or next following the later of the dates referred to in clause (1) and (2) of subsection (b) above.
|
(d)
|
An Eligible Employee who was an active participant in the Grossmont Plan on December 31, 1997 shall become a Participant in this Plan on January 1, 1998 (or, if later, the date (if any) on which he or she becomes an Eligible Employee).
|
(e)
|
An Eligible Employee who was an Active Participant in the Sumitomo Plan on September 30, 1998, shall become a Participant in this Plan effective October 1, 1998. Effective on or before December 31, 1999, any other employee of Sumitomo Bank of California on September 30, 1998 shall become a Participant
in
this Plan on the first of the month coinciding with or next following the later of (1) the date on which the Employee completes an Eligibility Computation Period during which he or she completes at least 1,000 Hours of Service, or (2) the Employee's 21st birthday.
|
(f)
|
An Eligible Employee who was an Active Participant in the Commerce Plan on December 31, 1998, shall become a Participant in this Plan effective January 1, 1999.
|
(h)
|
From and after December 31, 2002, no Employee (whether or not an Eligible Employee) who is not already a Participant in the Plan as of December 31, 2002, shall become a Participant in the Plan or be eligible to commence participation in the Plan.
|
2.2
|
Reinstatement of Active Participation
. A Terminated Vested Participant, a Retired Participant, an Inactive Participant, or a Nonvested Former Participant who again becomes an Eligible Employee or who returns from an Authorized Period of Absence will be reinstated as an Active Participant on the day he or she is reinstated as an Eligible Employee or returns from such Authorized Period of Absence.
|
3.1
|
Initial Establishment of Cash Balance Account
.
|
(a)
|
A Cash Balance Account will be established for each Participant on the date he or she first becomes a Participant. The initial balance in the Cash Balance Account will be zero. With respect to each person who is an Active Participant or a Disabled Participant on March 31, 1997, a Cash Balance Account will be established as of January 1, 1997. The initial balance in the Participant's Cash Balance Account will equal the present value of the Active or Disabled Participant's accrued benefit under the Plan as of December 31, 1996, expressed in the form of a Single Life Annuity. The present value will be determined using a 7% interest rate and the Participant's age on December 31, 1996, and the Applicable Mortality Table described in Section 1.4(b)(1) that is in effect as of such date.
|
(b)
|
With respect to each Inactive Participant and Terminated Vested Participant on March 31, 1997 who becomes an Active Participant on or after April 1, 1997 and each Nonvested Former Participant on March 31, 1997 who becomes an Active Participant and does not lose his or her prior vested interest in accordance with Section 1.50(e), a Cash Balance Account will be established on the date he or she again becomes an Active Participant. The initial balance in the Participant's Cash Balance Account will equal the present value of the Participant's accrued benefit under the Plan as of December 31, 1996, expressed in the form of a Single Life Annuity. The present value will be determined using a 7% interest rate, the Participant's age on the date he or she again becomes an Active Participant, and the Applicable Mortality Table described in Section 1.4(b)(1) that is in effect as of such date.
|
(c)
|
A Cash Balance Account will be established for each Grossmont Participant who be comes an Active Participant in this Plan on January 1, 1998. The initial balance in the Grossmont Participant's Cash Balance Account will equal the present value of his or her accrued benefit under the Grossmont Plan as of December 31, 1997, expressed in the form of a Single Life Annuity. The present value will be determined using a 7% interest rate, the Participant's age on December 31, 1997 and the Applicable Mortality Table described in Section 1.4(b)(1) that is in effect as of such date.
|
(d)
|
With respect to each Inactive Participant and Terminated Vested Participant (as defined in Sections 1.26 and 1.35 of this Plan) in the Grossmont Plan on December 31, 1997 who becomes an Active Participant in this Plan or after January 1, 1998 and each Nonvested Former Participant in the Grossmont Plan on December 31, 1997 who becomes an Active Participant in this Plan and does not lose his or her prior vested interest in accordance with Section 1.49, a Cash Balance Account will be established on the date he or she becomes an Active Participant in this Plan. The initial balance in the Grossmont Participant's Cash Balance Account will equal the present value of his or her accrued benefit under the Grossmont Plan as of December 31, 1997, expressed in the form of a Single Life Annuity. The present value will be determined using a 7% interest rate, the Grossmont Participant's age on the date he or she again becomes a Participant, and the Applicable Mortality Table de scribed in Section 1.4(b)(1) that is in effect as of such date.
|
(e)
|
A Cash Balance Account will be established for each Sumitomo Participant who becomes an Active Participant in this Plan on October 1, 1998. The initial balance in the Sumitomo Participant's Cash Balance Account will equal the present value of his or her accrued benefit under the Sumitomo Plan as of September 30, 1998, expressed in the form of a Single Life Annuity. The present value will be determined using a 7% interest rate and the Participant's age on September 30, 1998 and the Applicable Mortality Table described in Section 1.4(b)(l ) that is in effect as of such date.
|
(f)
|
With respect to each inactive participant and terminated vested participant in the Sumitomo Plan on September 30, 1998 who becomes an Active Participant in this Plan after October 1, 1998, and each nonvested former participant in the Sumitomo Plan who becomes an Active Participant in this Plan after October 1, 1998, a Cash Balance Account will be established on the date such Employee becomes an Active Participant in this Plan. The initial balance in the Sumitomo Participant's Cash Balance Account will equal the present value of his or her accrued benefit under the Sumitomo Plan as of September 30, 1998, expressed in the form of a Single Life Annuity. The present value will be determined using a 7% interest rate, the Sumitomo Participant's age on the date he or she again becomes an Active Participant, and the Applicable Mortality Table described in Section 1.4(b)(l) that is in effect as of such date.
|
(g)
|
A Cash Balance Account will be established for each Commerce Participant who be comes an Active Participant in this Plan on January 1, 1999. The initial balance in the Commerce Participant's Cash Balance Account will equal the present value of his or her accrued benefit under the Commerce Plan as of December 31, 1998, expressed in the form of a Single Life Annuity. The present value will be determined using the Participant's age on December 31, 1998, and the interest and mortality basis specified in the Commerce Bancorporation Defined Benefit Plan (as that plan was in effect on December 31, 1998) for terminations occurring during the 1999 plan year.
|
(h)
|
With respect to each inactive participant and terminated vested participant in the Commerce Plan on December 31, 1998 who becomes an Active Participant in this Plan after January 1, 1999, and each nonvested former participant in the Commerce Plan who becomes an Active Participant in this Plan after January 1, 1999, a Cash Balance Account will be established on the date such Employee becomes an Active Participant in this Plan. The initial balance in the Commerce Participant's Cash Balance Account will equal the present value of his or her accrued benefit under the Commerce Plan as of December 31, 1998, expressed in the form of a Single Life Annuity. The present value will be determined using a 7% interest rate, the Commerce Participant's age on the date he or she again becomes an Active Participant, and the Applicable Mortality Table described in Section l.4(b) { ) that is in effect as of such date.
|
3.2
|
Earnings Credits
.
|
(a)
|
General Rule for Earnings Credits. As of the last day of each Plan Year the Cash Balance Account of each Participant who is employed on that date and who has completed at least 1,000 Hours of Service during the Plan Year will be credited with an amount equal to the product obtained by multiplying the Participant's Earnings for the Plan Year by a percentage from the following table, which percentage is based upon the Participant's age as of the last day of the Plan Year:
|
(b)
|
Acquisitions and Reinstatements in a Year of At Least 1,000 Hours. Notwithstanding the foregoing, in the Plan Year containing a Participant's Participation Date (or date of reinstatement as an Active Participant), where the Participation Date (or reinstatement date) is later than January 1 of the Plan Year, but where the Participant accrues 1,000 Hours of Service for the Plan Year, then:
|
(1)
|
If the Participant received Earnings as an Employee for the period from January 1 of such Plan Year to the Participation Date (or reinstatement date), the Earnings Credit for that Plan Year shall be the product of the amount determined under Section 3.2(a) times a fraction, the numerator of which is the number of completed months of Plan participation as an Active Participant during the Plan Year, and the denominator of which is 12 (or, if less, the number of months from January 1 to the date of the Participant's Termination of Employment; and
|
(2)
|
If the Participant did not receive Earnings as an Employee prior to his or her Participation Date (for example, if a Participant has a right to an immediate Participation Date upon an Acquisition Date as described in Section 3.2(c), or a right to an immediate reinstatement of Participation following a Break in Service or Period of Authorized Absence as described in Section 2.2), then the Earnings Credit shall be determined as described in 3.2(a) taking into account the Earnings from the Participation Date through December 31 (or, if earlier, the date of the Participant's Termination of Employment, as described in Section 3.2(c)).
|
(c)
|
Acquisitions in a Year of Fewer Than 1,000 Hours. This subsection shall apply to a Participant who becomes a Participant in this Plan as the result of an acquisition with an "Acquisition Effective Date" (as stated in Appendix N) other than January 1 of a Plan Year, and who fails to complete 1,000 Hours of Service in the Plan Year containing the Acquisition Effective Date. Such a Participant shall be entitled to an Earnings Credit for such Plan Year, if such Participant's Hours of Service earned following the Acquisition Effective Date, when annualized, equal or exceed 1,000. The annualized hours shall be the product of the Participant's actual Hours of Service times a fraction, the numerator of which is 12 and the denominator of which is the number of completed months as an Active Participant during the said Plan Year. The Earnings Credit for such Plan Year shall be as stated in Section 3.2(b)(2). For this purpose, Earnings will not include amounts earned prior to the Acquisition Effective Date.
|
(e)
|
Terminations of Employment in Plan Year 2000. Effective January 1, 2000, in the case of a Participant who had a Termination of Service for any reason between January 1, 2000 and December 31, 2000, the Participant shall be entitled to an Earnings Credit for the 2000 Plan Year if the Hours of Service he or she accrued prior to the Termination of Employment, when annualized, equal or exceed 1,000. The annualized hours shall be the product of the Participant's actual Hours of Service times a fraction, the numerator of which is 12 and the denominator of which is the number of completed months as an Employee during the said Plan Year.
|
(f)
|
Unless otherwise provided by further amendment, from and after December 31, 2002, no Cash Balance Account of any Participant shall accrue any further contribution or earnings credit under this Section 3.2.
|
(g)
|
Earnings Credits for Grandfather Participants. As of the last day of each Plan Year the Cash Balance Account of each Grandfather Participant (as defined in Section 4.8(b)) who is employed on that date and who has completed at least 1,000 Hours of Service during the Plan Year will be credited with an amount equal to the product obtained by multiplying the Grandfather Participant's Earnings for the Plan Year by a percentage from the following table, which percentage is based upon the Grandfather Participant's age as of the last day of the Plan Year:
|
At least 55 years, but fewer than 60 years
|
4.00%
|
(h)
|
From and after June 30, 2013, no Cash Balance Account of any Grandfather or Great Grandfather Participant shall accrue any further contribution or Earnings Credit under this Section 3.2. This subsection shall supercede any provision of Article IV that might otherwise be deemed to provide continuing accrual of benefits to any Grandfather or GreatGrandfather Participant under Section 3.2.
|
3.3
|
Interest Credits
.
|
(a)
|
General Rule for Quarterly Interest Crediting. For calendar quarters commencing on and after April 1, 1997, as of the last day of each calendar quarter, the Cash Balance Account of each Participant who has a Cash Balance Account on that date will be credited with interest on the balance in the account as of the first day of the Plan Year. Interest will be credited at the rate of 25% of the annual rate of interest on 30 year Treasury securities for November of the previous Plan Year. If a Participant's benefit commences prior to the end of a calendar quarter, no interest will be credited for the quarter. Notwithstanding the provisions of Section 3.2(f), Interest Credits shall continue to accrue as provided in Section 3.3 for each Participant who has a Cash Balance Account in the Plan as of January 1, 2003.
|
(b)
|
If An Account Balance Is Established During a Plan Year. Notwithstanding the prior paragraph, the terms of this subsection shall apply to a Participant who, on a date subsequent to April 1, 1997, has a right to have a Cash Balance Account established during the course of a Plan Year with an opening balance greater than zero, either in the case of a reinstatement of Active Participant status as described in Section 3.1(b) or 3.5(a), or in the case of an initial Participation Date of a former employee of an acquired company described in Section 3.1 (d), 3.1(e), 3.1(f) or 3.1(h). In such a
case, the Participant's Cash Balance Account shall be credited with interest during the remainder of such a Plan Year (subject to the terms of Section 3.4, if applicable), as follows.
|
(1)
|
As of the last day of the calendar quarter in which the Cash Balance Account is established, the interest for such initial calendar quarter shall be the product of the opening balance of the Cash Balance Account, times 25% of the annual rate of interest (as stated in 3.3(a) above), times a fraction, the numerator of which is the number of complete calendar months from the effective date of the establishment of the Cash Balance Account to the end of the calendar quarter, and the denominator of which is three.
|
(2)
|
In any subsequent calendar quarter during the same Plan Year, interest shall be credited as stated in Section 3. (a), except that the principal amount shall be the opening balance of the Cash Balance Account rather than the balance as of January 1 of the Plan Year.
|
3.4
|
Maintenance of Account after Termination of Employment until Benefit Commencement
.
|
(a)
|
After Termination of Employment. After Termination of Employment, a Participant's Cash Balance Account will continue to be maintained and credited with interest pursuant to Section 3.3, until the Participant's benefit commences to be paid or is deemed to be paid under Section 6.3(b).
|
(b)
|
If Re-Employed with an Existing Cash Balance Account Prior to Benefit Commencement. This subsection shall apply to a Terminated Vested Participant who (i) is reemployed as an Eligible Employee of the Company, (ii) is reinstated to Active Participant status as of such re-employment date according to Section 2.2, and (iii) has an existing Cash Balance Account. In such a case, on and after the date of reinstatement of Active Participant status, the Cash Balance Account will continue to be credited with interest on a quarterly basis, and the Active Participant shall have a right to receive Earnings Credits to the extent provided in Section 3.2(b).
|
3.5
|
Establishment of New Account if Re-employed After Benefit Commencement
.
|
(a)
|
If a Nonvested Former Participant's Cash Balance Account has ceased to be maintained due to the deemed zero-dollar "cash-out" distribution (under Section 6.3(b)) of his or her entire interest under the Plan, he or she becomes an Active Participant prior to incurring five consecutive Breaks in Service, and he or she completes a Year of Vesting Service following the date of re-employment, then, as of the date of becoming an Active Participant (but contingent upon satisfying the said Year of Service requirement), the Participant's Cash Balance Account will be restored to the balance in the Cash Balance Account as of the previous Termination of Employment date, increased for interest in accordance with Section 3.3 for the period from the Termination of Employment date to the date the Participant again became an Active Participant.
|
(b)
|
If a Retired Participant is re-employed by the Company and again becomes an Active Participant in the Plan after his or her Cash Balance Account has ceased to be maintained pursuant to Section 3.4, a new Cash Balance Account, with an initial balance of zero, will be established as of the last day of the Plan Year in which he or she again becomes an Active Participant. The Cash Balance Account will be credited with earnings and interest as provided in Sections 3.2 and 3.3. Any Retirement Income which is being paid as a monthly benefit to the Retired Participant as of the date of his or her
re-employment shall not be suspended and shall be unaffected by the resumption of employment. The benefit accrued by the Participant from the date of re-employment to the subsequent Termination of Employment shall be subject to an election by the Participant with respect to the form and timing of the benefit which is separate and independent from the election that was applicable to the benefit that commenced on the prior Retirement Date. Moreover, to the extent that a spousal consent is applicable to the benefit that accrued subsequent to the re-employment date, the person with the right to consent shall be the Eligible Spouse (if any) to whom the Participant is legally married at the time of the commencement of the benefit that accrued subsequent to the re-employment date, and not the Eligible Spouse as of the first Retirement Date.
|
3.6
|
Market Rate of Interest
. With respect to any distribution made from a Participant's Cash Balance Account after August 17, 2006, the interest rate used for accumulating a Participant's Cash Balance Account shall not exceed a market rate of return. Regardless of the rate specified in the Plan an interest credit (or equivalent amount) of less than zero shall in no event result in the Cash Balance Account or similar amount being less than the aggregate amount of contributions credited to the Cash Balance Account. Notwithstanding the foregoing, upon termination of the Plan:
|
(a)
|
If the interest credit rate (or an equivalent amount) under the Plan is a variable rate, then the rate of interest used to determine a Participant's Cash Balance Accrued Benefit under the Plan shall be equal to the average of the rates of interest used under the Plan during the five-year period ending on the termination date; and
|
(b)
|
The interest rate and mortality table used to determine the amount of any Cash Balance Accrued Benefit under the Plan payable in the form of an annuity at normal retirement age shall be the rate and table specified under the Plan for such purpose as of the termination date, except that if the interest rate is a variable rate, the interest rate shall be determined under the rules of subsection (a) above.
|
4.1
|
Accrued Benefit
. A Participant's Accrued Benefit is equal to the largest of the benefits described in Sections 4.2, 4.3, or 4.4. Notwithstanding anything to the contrary herein, in no event will the benefit payable to a Participant be less than the following:
|
(a)
|
The Accrued Benefit of a Participant who was a Participant in the Plan on March 31, 1997, shall not be less than the benefit accrued by such Participant under the Plan on March 31, 1997.
|
(b)
|
The Accrued Benefit of a Grossmont Participant shall not be less than the benefit accrued by such Grossmont Participant under the Grossmont Plan on December 31, 1997.
|
(c)
|
The Accrued Benefit of a Sumitomo Participant shall not be less than the benefit accrued by such Sumitomo Participant under the terms of the Sumitomo Plan (as in effect on September 30, 1998) with benefit accruals based on the earlier of the Participant's Termination of Employment or December 31, 1999.
|
(d)
|
The Accrued Benefit of a Commerce Participant shall not be less than the benefit accrued by such Commerce Participant calculated as of December 31, 1998 under the terms of the Commerce Plan.
|
(e)
|
Notwithstanding the provisions of Section 3.2(f), the account balance of a Participant who was a Participant in the Plan on December 31, 2002, and which is used to calculate the Cash Balance Account shall never be smaller than the account balance as of December 31, 2002. If greater than the foregoing, the Accrued Benefit calculated under Section 2.3 of Appendix III for a Participant who is a Great Grandfather Participant (as defined in Section 4.4) shall never be less than the Accrued Benefit deter mined under that Section for the Participant on December 31, 2002.
|
4.2
|
Cash Balance Accrued Benefit
. A Participant's cash balance accrued benefit is a monthly benefit in the form of a Single Life Annuity commencing on his or her Normal Retirement Date, or the current date, if later, which is the Actuarial Equivalent of the balance in the Participant's Cash Balance. Account as of his or her Normal Retirement Date, or the current date, if later. For purposes of determining a Participant's cash balance accrued benefit:
|
(a)
|
The balance in the Participant's Cash Balance Account as of the Participant's Normal Retirement Date, if the Participant has not yet reached that date, will be determined by projecting the balance in the Participant's Cash Balance Account at the determination date to the Participant's Normal Retirement Date. The projection will be accomplished by applying the interest credits specified in Section 3.3 from the determination date (the date on which benefits are being determined) to the Participant's benefit commencement date (the date on which benefits commence) and by applying the interest credit in Section 3.3 during the year of benefit commencement for each year from the benefit commencement date to the Participant's Normal Retirement Date.
|
(b)
|
The monthly benefit in the form of a Single Life Annuity will be determined by using the assumptions for Actuarial Equivalence described in Section 1.4(a) and the age of the Participant as of his or her Normal Retirement Date, or the current date, if later.
|
4.3
|
Minimum Accrued Benefit
. A Participant's minimum accrued benefit is the monthly benefit accrued by such Participant under the Plan on March 31, 1997, as defined in Section 2.2 of Appendix III.
|
4.4
|
Grandfathered Minimum Accrued Benefit
. Any Active Participant or Disabled Participant on March 31, 1997 who, as of December 31, 1997, has attained 55 years of age and has completed 10 Years of Vesting Service is eligible to receive a grandfathered minimum accrued benefit described in Section 2.3 of Appendix III. An Active Participant who satisfies the requirements of the first sentence of this Section 4.4 on December 31, 2002, (a "Great Grandfather Participant") shall, effective January 1, 2003, continue to accrue all benefits that were available to such Great Grandfather Participant under this Plan as of December 31, 2002, and the provisions of Section 3.2(f) shall not apply to such Great Grandfather Participant.
|
4.5
|
Accrued Benefit Attributable to the Old Plan Account
. The Accrued Benefit Attributable to the Old Plan Account as of the Participant's Normal Retirement Date, or current date if later, will be equal to the Participant's Old Plan Account expressed as a monthly benefit under a Single Life Annuity commencing on his or her Normal Retirement Date, or current date if later, using Actuarial Equivalence as provided in Section 1.4(a).
|
4.6
|
Accrued Benefit Attributable to Company Contributions
. The Accrued Benefit Attributable to Company Contributions will be equal to the excess, if any, of the Accrued Benefit over the Accrued Benefit Attributable to the Old Plan Account.
|
4.7
|
Old Plan Account
. A Participant's Old Plan Account is his or her individual account balance under this Plan which resulted from the transfer of funds from a terminated plan formerly sponsored by the Company. The Old Plan Account shall include interest from the transfer date to the earlier of the Participant's Retirement Date or the date on which the Participant's Old Plan Account is otherwise payable pursuant to the provisions of this Plan (the determination date) as follows: The rate of interest shall be compounded annually. For Plan Years beginning before January 1, 1988 and continuing to the determination date, the interest rate shall be 5%. For each Plan Year beginning on or after January 1, 1988 and continuing to the determination date, the
interest
rate shall be 120% of the federal mid-term rate (as defined in Code Section 1274) in effect on the first day of such Plan Year. For purposes of determining the Accrued Benefit Attributable to the Old Plan Account, the Old Plan Account shall also include interest, compounded annually, at the Actuarial Equivalent interest rate (Section 1.4(a)) applicable to the determination date year, for each Plan Year from the determination date to the Participant's Normal Retirement Date. In no event can a Participant's Old Plan Account be withdrawn prior to Termination of Employment, death or retirement. This section is effective January 1, 1995.
|
4.8
|
Continuing Accrual of Benefits for Grandfather Participants
.
|
(a)
|
Notwithstanding the provisions of Section 3.2(f), a Participant who was an Active Participant in the Plan on December 31, 2002, and who satisfies the definition of "Grandfather Participant" in 4.8(b) on that date shall continue to accrue all benefits available to such Grandfather Participant under this Plan as of December 31, 2002, except that Earnings Credits for the Grandfather Participant's Cash Balance Account after December 31, 2002, shall accrue and be determined by reference to Section 3.2(g) and not Section 3.2(a).
|
(b)
|
"Grandfather Participant" shall mean for purposes of Section 4.8(a) an Active Participant on December 31, 2002, who:
|
(1)
|
had attained at least age 55, and
|
(2)
|
was credited with at least 10 Years of Vesting Service.
|
5.1
|
Monthly Retirement Income
. A Participant's monthly retirement income commencing on his or her Normal Retirement Date, Early Retirement Date, Late Retirement Date, or Disability Retirement Date will be equal to his or her benefit described in Section 5.2, 5.3, 5.4, or 5.5.
|
5.2
|
Normal Retirement Income
. The monthly amount of retirement income payable to a participant retiring on his or her Normal Retirement Date will be equal to the Accrued Benefit earned to his or her Normal Retirement Date. This amount is reduced by the Accrued Benefit Attributable to the Old Plan Account if the Participant has previously taken a lump sum payment of the Old Plan Account under Section 5.7(d). This Retirement Income will be subject to adjustment depending on the Form of Retirement Income elected in accordance with Section 5.7.
|
5.3
|
Early Retirement Income
.
|
(a)
|
The Early Retirement Income amounts described in this Section 5.3 will be subject to adjustment depending on the Form of Payment elected in accordance with Section 5.7.
|
(b)
|
The monthly amount of retirement income payable to a Participant retiring on an Early Retirement Date is the greater of:
|
(1)
|
The Actuarial Equivalent value of the Participant's Cash Balance Account as of the Early Retirement Date using the assumptions for Actuarial Equivalence described in Section 1.4(a) and the age of the Participant as of the Early Retirement Date.
|
(2)
|
The Minimum Early Retirement Benefit as described in Article 3 of Appendix III.
|
(c)
|
A Grossmont Participant's minimum early retirement benefit shall be at least equal to the Actuarial Equivalent of his or her Accrued Benefit determined as of December 31, 1997. Actuarial Equivalent shall be calculated using:
|
(1)
|
Interest at a rate of 7% per annum, compounded annually, and
|
(2)
|
Mortality determined in accordance with the Unisex Pension 1984 Mortality Table, set back three years for both males and females.
|
(d)
|
A Sumitomo Participant's minimum early retirement benefit payable on an Early Retirement Date shall be equal to the Sumitomo Participant's Accrued Benefit de scribed in Section 4.1(c) multiplied by an early retirement factor from the table below :
|
55
|
.4912
|
56
|
.5236
|
57
|
.5572
|
58
|
.5956
|
59
|
.6364
|
60
|
.6820
|
61
|
.7336
|
62
|
.7888
|
63
|
.8524
|
64
|
.9220
|
65
|
1.000
|
(e)
|
A Commerce Participant's early retirement benefit shall be at least equal to the Actuarial Equivalent of his or her Accrued Benefit determined as of December 31, 1998 under the terms of the Commerce Plan. For the purpose of this subsection (e) Actuarial Equivalent for a Commerce Participant shall be calculated using the 1984 Uniform Pensioners Mortality Table and an interest rate equal to the lesser of 100% of the Pension Benefit Guaranty Corporation's immediate interest rate in effect on the first day of the Plan Year in which the Commerce Participant retires or 4%.
|
5.4
|
Late Retirement Income
.
|
(a)
|
The monthly amount of Retirement Income payable to a Participant retiring on a Late Retirement Date will be equal to the Participant's Accrued Benefit earned to the Late Retirement Date. The amount determined according to the previous sentence is reduced by the Accrued Benefit Attributable to the Old Plan Account if the Participant has previously taken a lump sum payment of the Old Plan Account under Section 5.7(d). This Retirement Income will be subject to adjustment depending on the Form of Retirement Income elected in accordance with Section 5.7.
|
(b)
|
The minimum late retirement benefit of a Grossmont Participant shall be at least equal to the Actuarial Equivalent of his or her Accrued Benefit determined as of December 31, 1997, and taking into account his or her years of benefit service and final average monthly earnings, as defined in the Grossmont Plan, as of December 31, 1997. Actuarial Equivalent shall be calculated using:
|
(1)
|
Interest at a rate of 7% per annum, compounded annually, and
|
(2)
|
Mortality determined in accordance with the 1984 Unisex Pensioners Mortality Table, set back three years for both males and females.
|
(c)
|
The minimum late retirement benefit of a Sumitomo Participant shall never be less than his or her Accrued Benefit determined under Section 4.1(c).
|
5.5
|
Disability Retirement Income is described in Section 7.4
.
|
5.6
|
Application for Retirement Income
. Each Participant must notify the Committee in writing of his or her intent to retire. Upon receipt of such notification, each Participant will receive a written explanation of the terms and conditions of the various Forms of Retirement Income and the financial effect of electing each Form of Retirement Income. A Participant will have the right to elect or revise a previously elected Form of Retirement Income at any time during his or her Election Period.
|
(a)
|
a written explanation of each form of Retirement Income and the relative financial effect of the payment of Monthly Retirement Income in that form;
|
(b)
|
a statement of the right to consider the benefit election for at least 30 days; and
|
(c)
|
a notification that Retirement Income payments will be made in the 50% Spouse Option form (or the Life Annuity Form if the Participant is not married) unless he or she elects otherwise during the Election Period and his or her spouse consents to such election.
|
5.7
|
Forms of Retirement Income
. A Participant retiring on his or her Normal, Early, Late, or Disability Retirement Date may elect one of the following Forms of Retirement Income payment:
|
(a)
|
A Spouse Option provides for a monthly payment during the Participant's life. After the Participant's death, a percentage of the Participant's Retirement Income will be paid for life to the Participant's Eligible Spouse. The percentage to be paid to the Participant's Eligible Spouse will be 50%, 66%% (for Plan Years after December 31, 2007, 75%) or 100% as elected by the Participant. The monthly payment under the Spouse Option will be equal to the Actuarial Equivalent of the amount payable under the Life Annuity form using the factors from Appendix I.
|
(b)
|
The Life Annuity form provides for a monthly payment during the Participant's life, with the last payment being made for the month in which the Participant's death occurs.
|
(c)
|
Lump Sum Payment Option provides for a single payment equal to the greater of the balance in the Participant's Cash Balance Account as of the Participant's Retirement Date or the Lump Sum value of his or her Accrued Benefit using the Actuarial Equivalent basis for lump sums provided under Section 1.4(a). If a Participant took a lump sum payment of his or her Old Plan Account before retirement, the Lump Sum Payment Option shall be based on the Accrued Benefit Attributable to Company Contributions as described in Section 4.6. If a Participant maintains an Old Plan Account on his or her Retirement date, the lump sum shall not be less than the sum of the Old Plan Account on the Retirement Date and the Lump Sum Payment Option amount using the Accrued Benefit Attributable to Company Contributions as described in Section 4.6.
|
(d)
|
Lump Sum Payment of Old Plan Account Option provides for a lump sum payment of the Participant's Old Plan Account. The Participant's Accrued Benefit Attributable to Company Contributions is paid in a Life Annuity, Spouse Option, or Lump Sum Payment Option form as elected by the Participant. This form of payment is available to a Participant only one time, at the earlier of his or her retirement or Termination of Employment.
|
(e)
|
Options Available Only to Grossmont Participants. In addition to the forms described in subsections (a) through (d) above, the following additional forms of benefit are available only to Grossmont Participants:
|
(1)
|
Ten Year Certain and Life Thereafter Option. The Ten Year Certain and Life Thereafter Option provides a reduced monthly Retirement Income commencing on the Grossmont Participant's Retirement Date and ceasing with the payment for the month in which the Grossmont Participant's death occurs. The Ten Year Certain and Life Thereafter Option shall be the Actuarial Equivalent of a Single Life Annuity Option. If a Grossmont Participant's death should occur before 120 monthly payments have been made, such payment shall continue to his or her Beneficiary(ies) until the earlier of (a) the Beneficiary(ies') death(s), or (b) a total of 120 monthly Retirement Income payments to the Grossmont Participant and his or her Beneficiary(ies) have been made.
|
(2)
|
The Ten Year Certain Option provides a monthly Retirement Income commencing on the Grossmont Participant's Retirement Date and ceasing after 120 monthly payments have been made. The Ten Year Certain Option shall be the Actuarial Equivalent of a Single Life Annuity Option.
|
(3)
|
For the purpose of this subsection (e), Actuarial Equivalent shall be calculated using:
|
(A)
|
Interest at a rate of 7% per annum, compounded annually, and
|
(B)
|
Mortality determined in accordance with the 1984 Unisex Pensioners Mortality Table, set back three years for both males and females.
|
(4)
|
This subsection (e) shall only apply to the portion of a Grossmont Participant's Accrued Benefit earned prior to January 1, 1998. The portion of a Grossmont Participant's Accrued Benefit earned on or after December 31, 1997 shall be paid in one of the forms described in 5.7(a) through (d).
|
(5)
|
A Grossmont Participant's Accrued Benefit payable under any form described in this Section 5.7(e) shall never be less than his or her Accrued Benefit calculated as of December 31, 1997 under the terms of the Grossmont Plan.
|
(f)
|
Options Available to Sumitomo Participants: In addition to the forms described in subsections (a) through (d), the following additional forms of benefit are available only to Sumitomo Participants:
|
(1)
|
Joint and Survivor Annuity. A Sumitomo Participant may elect to have a fraction, either 50% or 100%, of his or her Life Annuity continue after his or her death to the Sumitomo Participant's Beneficiary for life, if the Beneficiary survives the Sumitomo Participant. A Joint and Survivor Annuity payable to a Sumitomo Participant who receives a benefit under Section 4.l(c) shall be the Actuarial Equivalent of the benefit otherwise payable as a Single Life Annuity (taking into account whichever 50% or 100% option is elected), and using the following Actuarial assumptions: (A) 4% interest, and (B) the 1984 Unisex Pension mortality table with a four-year setback for the age of the Participant and no set-back for the age of the Beneficiary, and (C) the respective ages (in completed months as of the benefit commencement date) of the Participant and Beneficiary. The Beneficiary must be irrevocably designated before benefits commence.
|
(2)
|
Level Income Option. A Sumitomo Participant who retires prior to his or her Normal Retirement Date and whose benefit is paid in the form of a Life Annuity may elect to receive his or her benefits in a greater amount during the period before Social Security benefits could first be paid and a correspondingly reduced amount after such benefits first become payable, such that the total income (including the adjusted benefit payable under the Plan and the Social Security benefit to which the Sumitomo Participant is entitled) shall be as nearly uniform as possible both before and after commencement of Social Security benefits. The amount of the adjustment to the Sumitomo Participant's benefit shall be calculated using the factors in Appendix III of the Sumitomo Plan, provided that in no event shall value of the benefit payable under this sub-section ever be less than that determined by applying the Actuarial Equivalence factors for lumps sum payments described in Section 1.4(a)(ii).
|
(3)
|
This subsection (f) shall only apply to the portion of the Sumitomo Participant's Accrued Benefit attributable to Section 4.l(c). The portion of a Sumitomo Participant's Accrued Benefit not attributable to Section 4.1(c) shall be paid in one of the forms described in subsections (a) through (d) of this Section 5.7.
|
(4)
|
A Sumitomo Participant's Accrued Benefit payable in any form under this Section 5.7 shall never be less than his or her Accrued Benefit calculated as of December 31, 1999 under the terms of the Sumitomo Plan.
|
(g)
|
Options Available to Commerce Participants. In addition to the forms described in subsections (a) through (d), the following additional forms of benefit are available only to Commerce Participants:
|
(1)
|
The Post-retirement 75% Spouse Option provides a monthly payment during the Commerce Participant's life. After the Commerce Participant's death 75% of the Commerce Participant's Retirement Income will be paid for life to the Commerce Participant's Eligible Spouse. The initial monthly payment under the 75% Spouse Option will be equal to the Actuarial Equivalent of the amount payable under the Life Annuity form. For the purpose of this paragraph (1), Actuarial Equivalent shall be calculated using the 1984 Uniform Pensioners Mortality Table and an interest rate equal to the greater of 100% of the Pension Benefit Guaranty Corporation immediate interest rate in effect on the first day of the Plan Year in which the Commerce Participant retires or 6.5%.
|
(2)
|
The Pre-retirement Spouse Options provide a "monthly payment during the Commerce Participant's life starting on the first of any month following his or her Termination of Employment, which date shall be considered the Annuity Starting Date for the purpose of this form of benefit, and prior to his or her Early Retirement Date as described in Section 1.17. After the Commerce Participant's death 50%, 75% or 100% of the Commerce Participant's Retirement Income will be paid for life to the Commerce Participant's Eligible Spouse. The initial monthly payment under the Preretirement Spouse Option will be equal to the Actuarial Equivalent of the amount payable under the Life Annuity form. For the purpose of this paragraph, Actuarial Equivalent shall be calculated using the 1984 Uniform Pensioners Mortality Table and an interest rate equal to the greater of 100% of the Pension Benefit Guaranty Corporation immediate interest rate in effect on the first day of the Plan Year in which the Commerce Participant's Annuity Starting Date occurs or 6.5%.
|
(3)
|
Commerce Lump Sum Option. A Commerce Participant may elect to receive the Actuarial Equivalent of his or her Accrued Benefit earned before January 1, 1999 in the form of a single payment effective on the first of any month following Termination of Employment, which date shall be considered the Annuity Starting Date for the purpose of this form of benefit. For the purpose of this paragraph (3) Actuarial Equivalent shall be calculated using the 1984 Uniform Pensioners Mortality Table and an interest rate equal to 100% of the Pension Benefit Guaranty Corporation's (PBGC) interest rates in effect on the first day of the Plan Year in which the Commerce Participant's Annuity Starting Date occurs. If the lump sum value using this basis exceeds $25,000 then Actuarial Equivalent shall be calculated using the 1984 Uniform Pensioners Mortality Table and an interest rate equal to 120% of the PBGC rates. For the period of time prior to the Commerce Participant's Normal Retirement Date, pre-retirement mortality shall not be used.
|
(4)
|
A Commerce Participant's Accrued Benefit payable under any of the forms de scribed in this Section 5.7(g) shall never be less than his or her Accrued Benefit calculated as of December 31, 1998 under the terms of the Commerce Plan.
|
(h)
|
In the event the benefit restrictions of Section 11.5 apply at the time the Participant would otherwise be eligible to elect a lump sum and prevent such an election, then any election period for the lump sum payment shall be suspended and shall commence or recommence on the earliest possible date following the date the benefit restrictions no longer prevent the Participant from electing a lump sum distribution.
|
5.8
|
Payment of Small Benefits
. Effective for payments to Participants first commencing after September 18, 1998, if a Participant has a Termination of Employment or dies and the Actuarial Equivalent value of the benefit payable under the Plan to such Participant or his or her Beneficiary does not exceed $5,000 ($3,500, for payments commencing prior to September 18, 1998), the Committee will pay the Actuarial Equivalent value of such benefit to the Participant or Beneficiary in a lump sum. If a lump sum payment is made, no other benefit under the Plan will be due to the Participant or Beneficiary. However, if the Participant receives less than the Actuarial Equivalent of his or her full Accrued Benefit, such Accrued Benefit and related service shall be reinstated if the Participant repays the distributed lump sum with interest at 120% of the Federal midterm rate as in effect for the first month of the Plan Year. Such repayment must be made prior to the earlier of (1) the fifth anniversary of the Participant's re-employment date, or (2) the date the Participant incurs a five-year Break in Service.
|
5.9
|
Eligible Rollover Distribution
.
|
(a)
|
This Section 5.9 applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the plan to the contrary that would otherwise limit a distributee's election under this Section 5.9, a distributee may elect, at the time and in the manner prescribed by the Committee, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.
|
(b)
|
Definitions.
|
(1)
|
Eligible rollover distribution: An eligible rollover distribution is any distribution of all or any portion of the amount payable by the Plan to a distributee, except that an eligible rollover distribution does not include: (A) 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 often years or more; (B) any distribution to the extent such distribution is required under Code Section 401(a)(9); or (C) the portion of any distribution that is not includible in gross income.
|
(2)
|
Eligible retirement plan: An eligible retirement plan is an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a), or a qualified trust described in Code Section 401 (a) that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution prior to January 1, 2002, that is payable to the surviving Eligible Spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity.
|
(3)
|
Distributee: A distributee includes a Participant or an Eligible Spouse.
|
(4)
|
Direct rollover: A direct rollover is a payment by the plan to the eligible retirement plan specified by the distributee.
|
5.10
|
Re-employment After Retirement
. In order to retire, a Participant must have a Termination of Employment. Effective January 1, 1992, if a Retired Participant is rehired by the Company, his or her Retirement Income, if being paid in a Life Annuity form, will not be suspended. The Retired Participant may earn additional benefits as provided in Article 3. The benefit attributable to service during the Participant's re-employment that is not yet in payment status will be paid, or commence to be paid upon the earlier of the Participant's subsequent retirement or the Participant's required beginning date described in Section 5.11(c). Such benefit may be paid in any form elected by the Participant, which form may be different from the form in which benefits are currently being paid.
|
5.11
|
Commencement of Benefits
.
|
(a)
|
Retirement Income payments will begin on the later of the Retirement Date elected by the Participant or the first day of the month following the date on which the Participant applies for a retirement benefit.
|
(b)
|
Unless a Participant elects otherwise, Retirement Income payments will begin not later than the 60th day after the end of the Plan Year in which:
|
(1)
|
the Participant's Normal Retirement Age, or
|
(2)
|
the Participant's Termination of Employment occurs, whichever is later.
|
(c)
|
The required beginning date described in this Section 5.11{c) will apply regardless of any election made by the Participant.
|
(1)
|
Except as provided by subparagraphs (2), (3) and (4) below, Retirement Income payments will begin not later than April 1 of the calendar year following the calendar year in which the Participant attains age 70½ whether or not such Participant's employment has terminated. Effective for Plan Years commencing on or after January 1, 1999, for a Participant who is not a 5% owner and who attains age 70 ½ on or after January 1, 1999, Retirement Income payments will begin not later than April 1 following the calendar year in which the Participant attains age 70½ or, if later, April 1 following the calendar year in which the Participant incurs a Termination of Employment.
|
(2)
|
A Participant who attained age 70 in 1988, who is not a 5% owner, and who has not retired by January 1, 1989, will be treated as having retired on January 1, 1989. Retirement Income payments will begin not later than April 1, 1990 for such Participants.
|
(3)
|
Retirement Income payments for a Participant who attained age 70 before January 1, 1988, and who is not a 5% owner will begin not later than April of the calendar year following the later of (A) the calendar year in which the Participant attained age 70 ½ or (8) the calendar year in which the Participant retires.
|
(4)
|
Retirement Income payments for a Participant who attained age 70 before January 1, 1988, and who is a 5% owner will begin not later than April 1 of the calendar year following the later of (A) the calendar year in which the Participant attained age 70 ½, or (B) the earlier of (i) the calendar year within which ends the Plan Year in which the Participant becomes a 5% owner, or (ii) the calendar year in which the Participant retires.
|
(5)
|
A Participant is treated as a 5% owner for purposes of this paragraph (c), if such Participant is a 5% owner as defined in Code Section 416(i) at any time during the Plan Year ending within the calendar year in which such owner attains age 66 or any subsequent Plan Year. Once a Participant is described in this subparagraph, distributions will continue to such Participant even if such Participant ceases to own more than 5% of the Company in a subsequent year. Effective January 1, 1999, a Participant is treated as a 5% owner if the Participant is a "5 percent owner" (as defined in Code Section 416(i)(1)(B)(i)) at any time during the calendar year in which the Participant attains age 70 ½.
|
(6)
|
If a Participant receives payments under this paragraph (c), such payments will be determined as if the Participant's Late Retirement Date were the date by which Retirement Income payments must be made under this paragraph (c). If the Participant continues to earn additional Accrued Benefits after this date, his or her Monthly Retirement Income will be redetermined on each January 1 following the date benefit payments commence. This re-determined benefit will be payable under the Form of Retirement Income elected as of the Late Retirement Date in accordance with Section 5.7.
|
(7)
|
Effective January 1, 1999, for a Participant whose continued active employment results in the deferral of Retirement Income to a date later than April 1 following the calendar year the Participant attains age 70-1/2 (the "Base Date"), the Accrued Benefit for such a Participant shall be Actuarially adjusted to reflect the deferral period from the Base Date to the date the Participant commences payment of Retirement Income. The Actuarial adjustment shall be based on the factors stated in Section 1.4(d).
|
5.12
|
Delay of Payment Due to Administrative Error
.
|
(a)
|
Delay in Commencing Annuity Payments. In the event Retirement Income payments to a Participant are delayed for more than 60 days beyond his or her Retirement Date due to an administrative error, or such other event designated by the Committee, the affected Participant shall be entitled to Retirement Income payments retroactive to his or her Retirement Date, plus interest at a rate of 6% per year on the portion of the delayed payment which is more than 60 days late.
|
(b)
|
Delay in Payment of Lump-Sum. Effective on and after November 1, 1998, the provisions of this paragraph shall apply if a Participant or Beneficiary becomes entitled to receive a lump-sum Retirement Income payment pursuant to Section 5.7 or 5.8, and if the payment of such lump-sum is delayed due to an administrative error for more than 60 days. In such a case, if the Participant or Beneficiary has a right to receive a lump-sum based on the balance of his or her Cash Balance Account (or other ac count balance under the Plan which is expressed as a single sum), then the amount payable on the delayed date shall be the balance of such account after crediting of interest applicable to the account through the end of month immediately preceding the delayed payment date. However, if the Participant or Beneficiary has a right to receive a lump-sum based on the Actuarial present value of an Accrued Benefit ex pressed in the form of an annuity, the lump-sum which shall be payable to the Participant or Beneficiary as soon as administratively practical after the administrative error has been detected shall be an amount that is equal to the greater of:
|
(1)
|
the sum of: (A) the Actuarial present value of the Accrued Benefit based on the age, mortality and interest rate factors in effect as of the 60th day following the earliest date on which the benefit could have been paid in accordance with the terms of the Plan, plus (B) interest at 6% per annum for the whole and/or partial years from the said 60th day to the payment date; or
|
(2)
|
a lump-sum based on the Accrued Benefit on the date of Termination (or death, if applicable), but with the Actuarial present value based on the age, mortality and interest rate factors in effect as of the actual payment date.
|
5.13
|
Suspension of Benefits for Active Participants at Normal Retirement Date
.
|
(a)
|
Permissible Suspension. For a Participant who has not previously commenced receiving monthly benefits and who continues in active service as an Employee after attaining his or her Normal Retirement Date, the right to receive payment of benefits shall be suspended so long as such employment continues, but not later than any required beginning date applicable to the Participant under Section 5.11(c), at which time the benefit shall commence. For any period of suspension between the Normal Retirement Date and April 1 following the year the Participant attains age 70112 there shall be no Actuarial adjustment to the Participant's benefit attributable to the suspension of the benefit. For any period of suspension that continues past such date, the terms of Section 5.11(c)(7) shall apply.
|
(b)
|
Notice of Suspension of Benefits. A Participant whose benefit payment rights are suspended as described in the previous paragraph shall be notified in writing of such suspension as soon as administratively practical following the date as of which such payments are withheld. Such notice shall, among other things, advise the Participant of his or her right to request a review of the suspension, in accordance with the procedures in Section 12.6.
|
(c)
|
Participant's Duty to Notify Plan Administrator. Each such Participant shall have the duty to notify the Plan Administrator if and when the Participant modifies his or her regular work schedule to fewer than 40 Hours of Service per month, in which case the suspension shall cease, subject to verification by the Committee.
|
(d)
|
Benefits Paid in Error May Offset Future Benefits. In the event that benefits are mistakenly paid to a Participant during a period for which benefit payments should have been suspended under this Section, the amount mistakenly paid may be offset against benefits which become properly payable in the future, provided that such offset shall not exceed 25% of the benefit payable in each subsequent month.
|
5.14
|
Benefits Under a Qualified Domestic Relations Order (QDRO)
. A domestic relations order, if (but only if) it is determined by the Committee (or the Committee's designated QDRO administrator) to be a Qualified Domestic Relations Order, may provide, as of a stated date (or upon the occurrence of a stated event pertaining to the Participant), either:
|
(a)
|
the division of a Participant's Accrued Benefit between the Participant and a named alternate payee, in portions or amounts stated in the QDRO;
|
(b)
|
the distribution to a named alternate payee of a stated portion (or dollar amount) of the Participant's benefit, in an amount not greater than the value of the Participant's Accrued Benefit that is vested at such time; or
|
(c)
|
a right for a named alternate payee to be treated as Beneficiary for all or a stated portion of a Participant's death benefit.
|
5.15
|
Death or Disability While Performing Qualified Military Service
. The Plan treats a Participant who, on or after January 1, 2007, dies or becomes disabled (as defined under the terms of the Plan) while performing qualified military service (as defined in Code §414(u)) with respect to the Employer as if the Participant had resumed employment in accordance with the Participant's re-employment rights under USERRA, on the day preceding death or disability (as the case may be) and terminated employment on the actual date of death or disability.
|
5.16
|
Non-spouse Beneficiary Rollover
. For distributions first commencing after December 31, 2009, a non-spouse beneficiary who is a "designated beneficiary" under Code §401(a)(9)(E) and the regulations thereunder may roll over by a direct trustee-to-trustee transfer ("direct rollover"), all or any portion of his or her distribution to an Individual Retirement Account (IRA) the beneficiary establishes for purposes of receiving the distribution. In order to be able to roll over the distribution, the distribution must otherwise satisfy the definition of an "eligible rollover distribution" under Code §401(a)(31) and the provisions of Section 5.9 and this Section.
|
(a)
|
If a non-spouse beneficiary receives a distribution from the Plan, the distribution will not be eligible for a 60-day (non-direct) rollover.
|
(b)
|
If the Participant's named beneficiary is a trust, the Plan may make a direct rollover to an IRA on behalf of the trust, provided the trust satisfies the requirements to be a designated beneficiary within the meaning of Code §401(a)(9)(E).
|
(c)
|
A non-spouse beneficiary may not roll over an amount that is a required minimum distribution, as determined under applicable Regulations and other guidance. If the Participant dies before his or her required beginning date and the non-spouse beneficiary rolls over to an IRA the maximum amount eligible for rollover, the beneficiary may elect to use either the five-year rule or the life expectancy rule, pursuant to Treas. Reg. §1.401(a)(9)-3, Q&A-4(c), in determining the required minimum distributions from the IRA that receives the non-spouse beneficiary's distribution.
|
6.1
|
Vesting
.
|
(a)
|
Except as described in subsection (b), a Participant's vested Accrued Benefit will be equal to the sum of (1) and (2) below :
|
(1)
|
The Participant's Accrued Benefit Attributable to the Old Plan Account deter mined in accordance with Section 4.5.
|
(2)
|
Effective January 1, 1989, the Participant's Accrued Benefit Attributable to Company Contributions (determined in accordance with Section 4.6) multiplied by the vested percentage shown in the following table:
|
(b)
|
A Grossmont Participant's, and a Commerce Participant's, Accrued Benefit will be equal to his or her Accrued Benefit Attributable to Company Contributions (determined in accordance with Section 4.1) multiplied by the vested percentage shown in the following table:
|
(c)
|
In addition, a Participant's Accrued Benefit will be 100% vested if and when the Participant attains his or her Normal Retirement Age while an active Employee.
|
(d)
|
Effective December 12, 1994, a Participant will receive vesting credit for any and all years and partial years of Qualified Military Service.
|
(e)
|
The vested percentage of Cash Balance Accrued Benefit for each Participant who has at least one Hour of Service after December 31, 2007, shall be determined according to the following table:
|
6.2
|
Termination Benefit
.
|
(a)
|
A Terminated Vested Participant will have the option of
:
|
(1)
|
withdrawing his or her Old Plan Account, in which event the Participant would be entitled to his or her vested Accrued Benefit Attributable to Company Contributions commencing on his or her Normal or Early Retirement Date, or
|
(2)
|
leaving his or her Old Plan Account in the Plan, in which event the Participant would be entitled to his or her vested Accrued Benefit commencing on his or her Normal or Early Retirement Date.
|
(b)
|
The monthly amount of Retirement Income payable to a Terminated Vested Participant who commences his or her benefit on the Normal Retirement Date will be equal to the vested Accrued Benefit (or, if the Old Plan Account has been withdrawn, the vested Accrued Benefit Attributable to Company Contributions) earned to the date of Termination of Employment. This Retirement Income will be subject to adjustment depending on the Form of Retirement Income elected in accordance with Section 5.7.
|
(c)
|
The monthly amount of Retirement Income payable to a Terminated Vested Participant who commences his or her benefit on an Early Retirement Date is equal to the Early Retirement Income described in Section 5.3.
|
(d)
|
Except as provided in Section 5.8, the Old Plan Account of a Participant will not be distributed pursuant to this Section unless the Participant elects such distribution and the Eligible Spouse of the Participant consents to the distribution not more than 90 days prior to the date of such distribution. The Eligible Spouse's consent must ac knowledge the effect of the election and must be witnessed by a plan representative or notary public. The requirement for consent of the Eligible Spouse will be waived if the Participant establishes to the satisfaction of the Committee that such consent cannot be obtained because there is no Eligible Spouse, the Eligible Spouse cannot be located or because of such other circumstances as the Secretary of the Treasury may by regulations prescribe.
|
6.3
|
Re-employment After Termination of Employment
.
|
(a)
|
If a Terminated Vested Participant is subsequently reinstated as an Active Participant, his or her Retirement Income subsequent to his or her eventual Termination of Employment following the second period of employment will be based on the Participant's Accrued Benefit under the provisions of the Plan in effect as of such subsequent Termination of Employment, except that it may not be less than the Participant's Accrued Benefit as of the date of any prior Termination of Employment.
|
(b)
|
If a Participant's employment with the Company terminates prior to the Participant's becoming partially or fully vested in his or her Accrued Benefit, the Participant will be deemed to have received a distribution of his or her entire vested interest under the Plan. The Participant's unvested Accrued Benefit will be forfeited on the date of his or her Termination of Employment. A Participant whose benefit has been so forfeited will be deemed "cashed out" from the Plan. If the former Participant is re-employed before incurring five consecutive Breaks in Service and after completing a Year of Vesting Service, his or her Cash Balance Account and Accrued Benefit will be restored in accordance with Sections 3.5(a) and 4.1 respectively.
|
6.4
|
Termination Benefits and Re-employment for Commerce Participants
.
|
(a)
|
A Commerce Participant may elect to receive the portion of his or her Accrued Benefit earned prior to January 1, 1999 on the first day of any month coincident with or following his or her Termination of Employment ("Termination Benefit"). The Termination Benefit is the Actuarial Equivalent of the Accrued Benefit earned prior to January 1, 1999. For early retirement reduction, Actuarial Equivalent shall be calculated as described in Section 5.3(e). For benefit form adjustment, Actuarial Equivalent shall be calculated as described in Sections 5.7(g)(2) and 5.7(g)(3). Upon meeting the requirements of Section 1.17(d), a Commerce Participant may receive the remainder of his or her Accrued Benefit earned on or after January 1, 1999.
|
(b)
|
In the event a vested Commerce Participant who terminated after December 31, 1998 and before his or her Early Retirement Date, received a distribution upon Termination of Employment, and becomes re-employed, which means he or she has at least 40 Hours of Service with the Employer during any calendar month, his or her Termination Benefit or Retirement Income shall be determined and paid as described below :
|
(1)
|
In the event a Commerce Participant has commenced annuity payments and is subsequently re-employed, such annuity payments shall continue upon re employment;
|
(2)
|
In the event a Commerce Participant received a lump sum distribution under Section 5.7(g)(3) upon Termination of Employment and becomes re-employed prior to incurring five consecutive one-year Breaks-In-Service, he or she may repay such benefit with interest, at 120% of the Federal mid-term rate as in effect for the first month of the Plan Year, to the Plan within five years after reemployment.
|
(3)
|
The additional benefit earned during re-employment may be paid in any form elected by the Participant pursuant to Sections 5.7(a) to (d).
|
6.5
|
Special Termination Benefit for Sumitomo Participants
. This Section applies to a Sumitomo Participant who (a) had a Termination of Employment for any reason between October 1, 1998 and September 30, 1999, (b) was not a Highly Compensated Employee (as defined in this Plan) for the Plan Year in which the Termination of Employment occurred, and (c) elected to receive severance benefits in connection with his or her separation from the Company under either the Sumitomo Severance Benefit Program, the Executive Retention and Severance Benefit Agreement and/or the Key Contributor Retention and Severance Agreement (which are plans and programs that are not part of this Plan and are not funded by the Trust Fund). In the case of each Sumitomo Participant who met all of the conditions of the previous sentence, the minimum benefit under Section 4.1(c) of this Plan as of his or her Termination of Employment shall be increased by 6.5%.
|
7.1
|
Determination of Disability
. A Participant has a "total and permanent disability" if, while employed by the Company, the Participant ceases to perform the duties assigned to him or her by the Company due to a disability that meets the following eligibility criteria:
|
(a)
|
the Participant is entitled to disability retirement income payments under Title II of the Federal Social Security Act; provided, however, that this criterion in this clause "(a)" shall cease to be applicable to the definition of "total and permanent disability" on or after March 1, 2002, and
|
(b)
|
the Participant is eligible for disability benefits under the Company's long term disability plan.
|
7.2
|
Eligibility for Disability Benefits
. A Disabled Participant or former Disabled Participant may retire on a Disability Retirement Date if the Participant has completed five Years of Vesting Service as of the date first disabled under Section 7.1.
|
7.3
|
Disability Retirement Date
. If the Participant's total and permanent disability continues until the Participant's Normal Retirement Date, the Participant's Disability Retirement Date shall be the Normal Retirement Date (or the first day of the month following Termination of Service, if later). If a Disabled Participant's total and permanent disability ends before the Normal Retirement Date, the Participant may retire on an Early or Normal Retirement Date, whichever applies, and such date will be his or her Disability Retirement Date.
|
7.4
|
Disability Retirement Income
. A Disabled Participant will be entitled to a monthly Disability Retirement Income beginning on his or her Disability Retirement Date. The amount will be equal to the retirement income from Section 5.2,5.3, or 5.4 on the Disability Retirement Date. While a Participant's total and permanent disability continues, until the earliest of the Participant's attaining his or her Normal Retirement Date, death, or the Participant's Disability Retirement Date, Earnings will be credited (in accordance with Section 3.2, as though the Participant were continuing to accrue 1,000 or more Hours of Service per year) in the amount equal to Earnings in the most recent year prior to the year of initial disability in which 1,000 Hours of Service were worked. Disability Retirement Income will be subject to adjustment depending on the Form of Retirement Income elected in accordance with Section 5.7.
|
8.1
|
Death after Commencement of Benefits
. Death Benefits for a Retired Participant will be determined in accordance with the provisions of the applicable Form of Retirement Income elected.
|
8.2
|
Death Prior to Commencement of Benefits
. This Section 8.2 shall be effective April 1, 1997, except as otherwise stated below.
|
(a)
|
If a Participant, whose vested Accrued Benefit is calculated under Section 4.2, dies before his or her Retirement Date, the Participant's Eligible Spouse, if any, will receive a benefit commencing on the first day of the month following the Participant's death. The Eligible Spouse may elect to defer payment until the first day of any month on or before the Participant's Normal Retirement Date. The Eligible Spouse will receive a monthly benefit equal to the Actuarial Equivalent amount, as of the date the benefit commences, of the Participant's Cash Balance Account, based upon the Eligible Spouse's age as of the date the benefit commences. This benefit will continue to the death of the Eligible Spouse. Instead of receiving the benefit in the form of a Life Annuity, the Eligible Spouse may elect to receive the benefit in the Lump Sum Payment Option, described in Section 5.7(c). If the Participant does not have an Eligible Spouse who survives him or her, the Cash Balance Account as of the Participant's death will be paid on the first of the month following death to the Participant's estate.
|
(1)
|
For Participant with a Minimum Accrued Benefit as defined in Section 4.3 or a Grandfathered Minimum Accrued Benefit as defined in Section 4.4, the Cash Balance Annuity shall not be less than the Minimum Death Benefit that would be payable to the Eligible Spouse as described in Article 4 of Appendix ill.
|
(2)
|
Effective January 1, 1998, for a Grossmont Participant who has a minimum benefit described in Section 4.1 (b), the Cash Balance Annuity shall not be less than the monthly amount that would be payable as a 50% pre-retirement survivor annuity to the Eligible Spouse with respect to that minimum benefit, in accordance with the actuarial factors and other terms of the Grossmont Plan that were in effect on December 31, 1997.
|
(3)
|
Effective October 1, 1998, for a Sumitomo Participant who has a minimum benefit described in Section 4.1(c), the Cash Balance Annuity shall not be less than the monthly amount that would be payable as a 50% pre-retirement survivor annuity to his or her Eligible Spouse with respect to that minimum benefit, in accordance with the actuarial factors and other terms of the Sumitomo Plan that were in effect on September 30, 1998.
|
(4)
|
Effective January 1, 1999, for a Commerce Participant who has a minimum benefit described in Section 4.1(d), the Cash Balance Annuity shall not be less than the monthly amount that would be payable as a 50% pre-retirement survivor annuity to the Eligible Spouse with respect to that minimum benefit, in
accordance with the actuarial factors and other terms of the Commerce Plan that were in effect on December 31, 1998.
|
(b)
|
If a Participant, whose vested Accrued Benefit is calculated under Plan provisions in effect prior to April 1, 1997, dies before his or her Retirement Date, the Participant's Eligible Spouse, if any, will receive a death benefit in accordance with the prior provisions.
|
8.3
|
Effect of Old Plan Account
. The Eligible Spouse of a Participant who has an Old Plan Account at death may elect to receive it in a lump sum immediately following death. If the Eligible Spouse elects to receive monthly payments in addition to this lump sum in accordance with Section 8.2(a), the monthly amount payable will equal the monthly amount before consideration of the Old Plan Account reduced by the Accrued Benefit Attributable to the Old Plan Account, as described in Section 4.5. For Participants who die with 10 or more Years of Vesting Service, the Accrued Benefit Attributable to the Old Plan Account commencing prior to the first of the month following what would have been the Participant's earliest Early Retirement Date is the Actuarial Equivalent of the Accrued Benefit Attributable to the Old Plan Account at that earliest Early Retirement Date.
|
8.4
|
Return of Old Plan Account
. Upon the death of the Participant or, if later, the death of the Eligible Spouse entitled to payments under Section 8.1 or 8.2, the Participant's remaining Old Plan Account, if any, will be paid to the Participant's Beneficiary. For purposes of this Section 8.4, the Participant's remaining Old Plan Account will be equal to the excess, if any, of:
|
(a)
|
the Participant's Old Plan Account as of his or her date of death or, if earlier, Retirement Date over
|
(b)
|
the sum of all amounts previously paid from the Trust Fund on such Participant's behalf.
|
9.1
|
Company Contributions
.
|
(a)
|
The Company expects to make the contributions necessary to provide the benefits of the Plan. Such contributions will not be less than the amount necessary to meet the minimum funding standards of ERISA.
|
(b)
|
All contributions will be deposited in the Trust Fund and will be disbursed in accordance with the provisions of the Plan and the Trust Agreement. All benefit payments under the Plan will be paid from the Trust Fund. No person will have any interest in, or right to, any part of the assets of the Plan except as expressly provided in the Plan.
|
(c)
|
Gains arising from experience under the Plan will not serve to increase the benefits otherwise due any Participant, but will be used to reduce future Company contributions.
|
9.2
|
Return of Company Contributions
.
|
(a)
|
Except as provided below and in Section 10.2, the assets of the Plan will never inure to the benefit of the Company and will be held for the exclusive purposes of providing benefits to Participants of the Plan and their Beneficiaries and defraying reasonable expenses of administering the Plan.
|
(b)
|
If a contribution is made by the Company by a mistake of fact, such contribution will be returned to the Company provided this is done within one year after the payment of such contribution. Earnings attributable to the excess contribution may not be returned, but losses attributable thereto shall reduce the amount to be returned.
|
(c)
|
Contributions are conditioned upon their current deductibility under Code Section 404. If a contribution deduction is disallowed, to the extent the deduction is disallowed, such contribution will be returned to the Company within one year after the disallowance.
|
9.3
|
Employee Contributions
. The Company pays the entire cost of the Plan. No employee contributions or rollovers are required or permitted.
|
10.1
|
Termination of Plan
. The Company expects to continue the Plan indefinitely but reserves the right to terminate the Plan in whole or in part.
|
10.2
|
Procedures Upon Termination of Plan
. Upon termination of the Plan, the following provisions will apply:
|
(a)
|
Upon complete termination of the Plan, the Accrued Benefit of each Active or fuactive Participant will become fully vested and nonforfeitable (to the extent funded). No additional Employees will become Participants.
|
(b)
|
The assets of the Plan available to provide benefits will be allocated among Participants and their Beneficiaries in the manner and order prescribed by ERISA Section 4044.
|
(c)
|
Upon termination of the Plan, benefits of missing Participants shall be treated in accordance with ERISA Section 4050.
|
11.1
|
Earnings Limitation under Code Section 401(a)(17)
. A Member's "Earnings," for purposes of determining his or her Accrued Benefit under this Plan, shall be subject to the limitations of Code Section 401(a)(17), as stated in Section 1.18(c) of this Plan.
|
11.2
|
Maximum Retirement Benefit under Code Section 415
.
|
(a)
|
For purposes of this Section 11.2 only, the following definitions will apply:
|
(1)
|
"Annual Benefit" means a retirement benefit payable annually in the form of a straight life annuity. A benefit payable in a form other than a straight life annuity will be adjusted to be the Actuarial Equivalent of a straight life annuity before applying the limitations of this Section 11.2. However, no Actuarial adjustment will be made for the value of a qualified joint and survivor annuity or the value of benefits that are not directly related to retirement benefits.
|
(2)
|
"Annual Benefit Dollar Limit" means the dollar limit for the applicable Plan Year, as stated in paragraph (b)(l) of this Section 11.2, after taking account of any annual adjustment to that limit as stated in that paragraph.
|
(3)
|
"Compensation" has the meaning stated in Section 1.15, except that effective for Limitation Years commencing on or after January 1, 2008, the following additional rules shall apply.
|
(A)
|
The term "Compensation" shall include payments of Post-Severance Compensation made to a Participant by the latest of (i) 2-1/2 months from the date of Termination of Employment, (ii) the end of the Limitation Year for which the Employer is required to furnish the Participants a written statement under Code §§6041(d), 6051(a)(3) and 6052 or (iii) the last day of the Plan Year.
|
(B)
|
The term "Compensation" shall not include any payment to a Participant by the Employer after the Participant's Termination of Employment that is not Post-Severance Compensation as defined in (C) below, even if payment of the amount is made within the time period specified in 11.2(a)(3)(A)(i) above.
|
(C)
|
"Post-Severance Compensation" shall mean any amount received as regular pay after Termination of Employment if:
|
(i)
|
the payment is regular remuneration for services during the Participant's regular working hours, or remuneration for services outside the Participant's regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments; and
|
(ii)
|
the payment would have been paid to the Participant prior to a Termination of Employment if the Participant had continued in employment with the Employer.
|
(D)
|
For Limitation Years beginning after December 31, 2008, Compensation shall not include any differential wage payment, as defined in Code §3401(h)(2).
|
(4)
|
"Limitation Year" means a Plan Year, which coincides with the calendar year.
|
(5)
|
"Social Security Retirement Age" means the age used as the retirement age for a Participant under Section 216(1) of the Social Security Act except that such section shall be applied without regard to the age increase factor, and as if the early retirement age under Section 216(1)(2) of such Act were 62.
|
(b)
|
The Annual Benefit of a Participant who commences his or her benefit on a date within a Limitation Year may not at any time within a Limitation Year exceed the lesser of (1) or (2) below :
|
(1)
|
The dollar limit set forth in Code Section 415(b)(I)(A), as that limit may be modified for the applicable Limitation Year either by amendment of Code Section 415(b)(1) or as a result of an adjustment approved by the Secretary of the Treasury pursuant to Section 415(d) (for example, the limit shall be $140,000 in Plan Year 2001 and $160,000 in Plan Year 2002). Effective each January 1, this limitation will be automatically adjusted to the new dollar limitation prescribed by the Secretary of the Treasury for that calendar year.
|
(2)
|
100% of the annual average of the Participant's Compensation from the Employer for the three consecutive Limitation Years (or all Limitation Years, if fewer than three), during which he or she participated in the Plan and which give the highest average.
|
(c)
|
If the Annual Benefit payable to a Participant under this Plan and all other defined benefit plans of the Company does not exceed $10,000 and the Employer has not maintained a defined contribution plan in which the Participant participated, the maxi mum otherwise imposed by this Section 11.2 will not apply.
|
(d)
|
Service or participation less than ten years
|
(1)
|
If a Participant has completed less than ten years of participation in the Plan, the Annual Benefit Dollar Limit will be multiplied by the ratio of the Participant's years (or part thereof) of participation in the Plan to ten. This ratio will not be fewer than one-tenth.
|
(2)
|
If a Participant has completed fewer than 10 Years of Vesting Service, the limits otherwise imposed by Sections 11.2(b)(2) and 11.2(c) will be multiplied by the ratio of the Participant's Years of Vesting Service (or part thereof) to ten. This ratio will not be less than one-tenth.
|
(3)
|
To the extent required by regulations under Code Section 415, this Section 11.2(d) will be applied separately with respect to each change in the benefit structure of the Plan.
|
(e)
|
The provisions of this subsection (e) shall apply to Participants whose benefit commencement date occurs in any Plan Year beginning prior to January 1, 2002.
|
(1)
|
If the Participant's benefit payments are to commence at or after age 62 and the Participant's Social Security Retirement Age is 65, the Annual Benefit Dollar Limit will be reduced by five-ninths of one percent for each month by which benefits commence before the month in which the Participant attains age 65 or,
|
(2)
|
If the Participant's benefit payments are to commence at or after age 62 and the Participant's Social Security Retirement Age is greater than 65, the Annual Benefit Dollar Limit will be reduced by five-ninths of one percent for each of the first 36 months and five-twelfths of one percent for each of the additional
months (up to 24) by which benefits commence before the month in which the Participant attains Social Security Retirement Age.
|
(3)
|
If the Participant's benefit payments are to commence prior to the month in which the Participant attains age 62, the Annual Benefit Dollar Limit shall be reduced for each month by which benefits commence prior to the date of attaining age 62, as follows. First, the limit at age 62 (the "Age 62 Limit") shall be determined pursuant to paragraph (1) or (2) above (whichever is applicable to the Participant). Second, the Age 62 Limit shall be reduced to the lesser of:
|
(A)
|
the product of (i) the Age 62 Limit, times (ii) the "implied early retirement factor" (as hereafter defined), or
|
(B)
|
the Actuarial Equivalent of the Age 62 Limit, based upon a 5% interest rate and the Applicable Mortality Table.
|
(4)
|
If a Participant's benefit payments are to commence after the Participant's Social Security Retirement Age, the Annual Benefit Dollar Limit will be increased to the Actuarial Equivalent of the limit as of the Participant's Social Security Retirement Age, but the mortality factor of the Actuarial Equivalence calculation shall be ignored.
|
(f)
|
The provisions of this subsection (f) shall apply to Participants whose benefit commencement date occurs in any Plan Year beginning on or after January 1, 2002.
|
(1)
|
If the Participant's benefit commences prior to age 62, the Annual Benefit Dollar Limit shall be reduced to the lower of the following two amounts:
|
(A)
|
the Actuarially Equivalent dollar amount that reflects the number of months by which the benefit commencement date precedes the date of attaining age 62, based on an interest rate equal to 5%; or
|
(B)
|
the dollar amount that reflects the applicable reduction factor that would apply under the terms of the Plan.
|
(2)
|
If a Participant's benefit commencement date occurs between the date of attaining age 62 and 65, the Annual Benefit Dollar Limit shall not be adjusted on account of early commencement.
|
(3)
|
If the Participant's benefit commencement date occurs after attaining age 65 under circumstances resulting in a right to receive an Actuarial adjustment in the benefit payable under the Plan, the Annual Benefit Dollar Limit shall be increased by means of an Actuarial adjustment based on either (A) an interest rate of 5% (applied solely to the period that is subject to Actuarial adjustment under the Plan), or (B) the Actuarial adjustment factor that is applicable to the Participant's benefit under the Plan, whichever produces the lower limitation amount. When calculating the adjustment of the Annual Benefit Dollar Limit according to this paragraph, mortality shall be ignored.
|
(g)
|
If the Accrued Benefit of any Participant as of the close of the last Limitation Year beginning before January 1, 1987 exceeds the benefit limitations under Code Section 415(b) then, for purposes of Code Section 415(b) (and 415(e) for periods prior to January 1,2000) such Participant's defined benefit dollar limitation under Code Section 415(b)(l) will be equal to his or her Accrued Benefit, determined as of such date as if the Participant had separated from service on that date. For purposes of this para graph, any changes in the terms and conditions of the Plan or cost of living adjustments occurring after May 5, 1986 will be disregarded.
|
(h)
|
All defined benefit plans of the Employer, terminated or not, will be considered as one plan for purposes of the limitations specified under this Section 11.2, and all Affiliates and Subsidiaries of the Employer will be considered as one employing company.
|
(i)
|
The terms of this subsection shall not apply to any benefit which commences on or after January 1, 2000. In any case in which a person is a Participant in both a defined benefit plan and a defined contribution plan maintained by any Affiliate or Subsidiary of the Company, the sum of (1) and (2) below for any Limitation Year may not exceed 1.0:
|
(1)
|
The defined benefit plan fraction for such Limitation Year is equal to the quotient of (A) divided by (B) below :
|
(A)
|
The Annual Benefit of the Participant under the Plan and all other defined benefit plans (determined as of the close of such Limitation Year).
|
(B)
|
The lesser of 125% of the Annual Benefit Dollar Limit and 140% of the amount described in Section 11.2(b)(2).
|
(2)
|
The defined contribution plan fraction for such Limitation Year is equal to the quotient of (A) divided by (B) below:
|
(A)
|
The aggregate of the annual additions to the Participant's account under said defined contribution plan as of the close of such Limitation Year.
|
(B)
|
The lesser of 125% of the maximum annual additions to such account for all Years of Vesting Service with the Employer, or 1.4 multiplied by 25% of the Participant's Compensation for all Years of Vesting Service with the Employer.
|
(3)
|
If the sum of (1) and (2) exceeds 1.0, the Annual Benefit under this Plan will be limited to such amount as will reduce such sum to 1.0.
|
(j)
|
Adjustments for Distribution Other than as a Straight Life Annuity
.
|
(1)
|
Effective for Limitation Years commencing after June 30, 2007, a retirement benefit that is payable in any form other than a straight life annuity and that is not subject to Code §417(e)(3) must be adjusted to an actuarially equivalent straight life annuity that equals the greater of the annual amount of the straight life annuity (if any) payable under the Plan at the same Annuity Starting Date, and the annual amount of a straight life annuity commencing at the same Annuity Starting Date that has the same actuarial present value as the Participant's form of benefit computed using an interest rate of 5% and the Applicable Mortality Table.
|
(2)
|
For Limitation Years commencing before July 1, 2007, a retirement benefit that is payable in any form other than a straight life annuity and that is not subject to Code §417(e)(3) must be adjusted to an actuarially equivalent straight life annuity that equals the annual amount of a straight life annuity commencing at the same Annuity Starting Date that has the same actuarial present value as the Participant's form of benefit computed using whichever of the following produces the greater annual amount: (i) the interest rate and mortality table or other tabular factor specified in the Plan for adjusting benefits in the same form; and
|
(3)
|
A retirement benefit that is payable in any form other than a straight life annuity and that is subject to Code §417(e)(3) must be adjusted so as to equal the actuarially equivalent straight life annuity, determined according to the Annuity Starting Date, as provided in the following rules.
|
(A)
|
If the Annuity Starting Date is in a Plan Year beginning after 2005, the annual amount of the straight life annuity commencing at the same Annuity Starting Date that has the same actuarial present value as the Participant's form of benefit using whichever of the following produces the greatest annual amount: (i) the interest rate and the mortality table or other tabular factor specified in the Plan for adjusting benefits in the same form; (ii) a 5.5% interest rate assumption and the Applicable Mortality Table; and (iii) the applicable interest rate under Code §417(e)(3) and the Applicable Mortality Table, divided by 1.05.
|
(B)
|
If the Annuity Starting Date is in a Plan Year beginning in 2004 or 2005, the annual amount of the straight life annuity commencing at the same Annuity Starting Date that has the same actuarial present value as the Participant's form of benefit using whichever of the following produces the greater annual amount: (i) the interest rate and the mortality table or other tabular factor specified in the Plan for adjusting benefits in the same form; and (ii) a 5.5% interest rate assumption and the Applicable Mortality Table.
|
(C)
|
If the Annuity Starting Date is on or after the first day of the first Plan Year beginning in 2004 and before December 31, 2004, and the Plan applies the transition rule in section 101(d)(3) of PFEA '04 in lieu of the
rule in (B) above, the annual amount of the straight life annuity commencing at the same Annuity Starting Date that has the same actuarial present value as the Participant's form of benefit determined in accordance with Notice 2004-78.
|
(k)
|
Adjustments for Distributions Commencing Before Age 62:
|
(1)
|
if the benefit commences prior to the Participant's attainment of age 62 and if the Annuity Starting Date is in a Limitation Year beginning before July 1, 2007, the annual amount of the benefit payable in the form of a straight life annuity commencing at the Participant's Annuity Starting Date that is the actuarial equivalent of the dollar limitation under Code §415(b)(1)(A) (as adjusted under Code §415(d)), with actuarial equivalence computed using which ever of the following produces the smaller annual amount:
|
(A)
|
the interest rate and the mortality table or other tabular factor specified in the Plan for determining actuarial equivalence for early retirement purposes; or
|
(B)
|
a 5% interest rate assumption and the Applicable Mortality Table.
|
(2)
|
if the benefit commences prior to the Participant's attainment of age 62 and if the Annuity Starting Date is in a Limitation Year beginning on or after July 1, 2007, and the Plan does not have an immediately commencing straight life annuity payable at both age 62 and the age of benefit commencement, the annual amount of a benefit payable in the form of a straight life annuity commencing at the Participant's Annuity Starting Date that is the actuarial equivalent of the dollar limitation under Code §415(b)(1)(A) (as adjusted under Code §415(d)), with actuarial equivalence computed using a 5% interest rate assumption and the Applicable Mortality Table and expressing the Participant's age based on completed calendar months as of the annuity starting date.
|
(3)
|
if the benefit commences prior to the Participant's attainment of age 62 and if the Annuity Starting Date is in a Limitation Year beginning on or after July 1, 2007, and the Plan has an immediately commencing straight life annuity payable at both age 62 and the age of benefit commencement, the lesser of
|
(A)
|
the adjusted dollar limitation determined according to (2) above; and
|
(B)
|
the product of the dollar limitation under Code §415(b)(1)(A) (as adjusted under Code §415(d)) multiplied by the ratio of the annual amount of the immediately commencing straight life annuity under the Plan at the Participant's Annuity Starting Date to the annual amount of the immediately commencing straight life annuity under the Plan at age 62, both determined without applying the limitations of Code §415.
|
(I)
|
Adjustment When Benefit Commences After the Social Security Retirement Age.
|
(1)
|
if the benefit commences after the Participant's attainment of age 65 and if the Annuity Starting Date is in a Limitation Year beginning before July 1, 2007, the annual amount of the benefit payable in the form of a straight life annuity commencing at the Participant's Annuity Starting Date that is the actuarial equivalent of the dollar limitation under Code §415(b)(1)(A) (as adjusted under Code §415(d)), with actuarial equivalence computed using which ever of the following produces the smaller annual amount:
|
(A)
|
the interest rate and the mortality table or other tabular factor specified in the Plan for determining actuarial equivalence for delayed retirement purposes; or
|
(B)
|
a 5% interest rate assumption and the Applicable Mortality Table.
|
(2)
|
if the benefit commences after the Participant's attainment of age 65 and if the Annuity Starting Date is in a Limitation Year beginning on or after July 1, 2007, and the Plan does not have an immediately commencing straight life annuity payable at both age 65 and the age of benefit commencement, the annual amount of a benefit payable in the form of a straight life annuity commencing at the Participant's Annuity Starting Date that is the actuarial equivalent of the dollar limitation under Code §415(b)(l)(A) (as adjusted under Code §415(d)), with actuarial equivalence computed using a 5% interest rate assumption and the Applicable Mortality Table and expressing the Participant's age based on completed calendar months as of the annuity starting date.
|
(3)
|
if the benefit commences after the Participant's attainment of age 65 and if the Annuity Starting Date is in a Limitation Year beginning on or after July 1, 2007, and the Plan has an immediately commencing straight life annuity payable at both age 65 and the age of benefit commencement, the lesser of
|
(A)
|
the adjusted dollar limitation determined according to (2) above; and
|
(B)
|
the product of the dollar limitation under Code §415(b)(l)(A) (as adjusted under Code §415(d)) multiplied by the ratio of the annual amount of the immediately commencing straight life annuity under the Plan at the Participant's Annuity Starting Date to the annual amount of the immediately commencing straight life annuity under the Plan at age 65, both deter mined without applying the limitations of §415.
|
(m)
|
For purposes of the foregoing subsections (j), (k) and (I) the following definitions apply :
|
(1)
|
"Applicable Mortality Table" means the table described in Revenue Ruling 2001- 62, or such other table applicable under Code §417(e) as may be published from time to time by the Internal Revenue Service.
|
(2)
|
"Annuity Starting Date" means the first day of the month for which an amount is payable as an annuity. In the case of a benefit not payable in the form of an annuity, the Annuity Starting Date shall be the date on which the benefit is actually paid or begins to be paid.
|
11.3
|
Additional Benefit Limits for Highly Compensated Employees
.
|
(a)
|
For purposes of this Section 11.3 only, the following definitions will apply
:
|
(1)
|
"Benefit" means benefits under the Plan and includes any annual periodic in come, any withdrawal values payable to a living Employee and any death bene fits not provided by insurance on the Employee's life.
|
(2)
|
"Current Liabilities" is defined in Code Section 412(1)(7) provided that the Company may elect to use the value of current liabilities as reported on Schedule B of the Plan
'
s most recent timely filed Form 5500 or Form 5500 CIR. Alternatively, the Company may determine current liabilities as of a later date.
|
(3)
|
Effective January 1, 1997, "Highly Compensated Employee" means:
|
(A)
|
Any Employee who performs services for an Affiliate or Subsidiary of the Employer during the determination year and who received Compensation in excess of the dollar amount stated in Code Section 414(q)(l)(B)(i) (as adjusted by the Secretary or the Treasury) during the look-back year (for example, the said adjusted amount shall be $85,000 for the 2001 look back year and $90,000 for the 2002 look-back year). Provided, however, that, for Plan Years 1998 and thereafter, such an Employee shall not be considered a Highly Compensated Employee unless he or she has Compensation from the Employer during the look-back year that causes him or her to be among the highest paid 20% of the Employees of the Employer for a year in which the 20% limitation is in effect under the defined contribution plans maintained by the Employer.
|
(B)
|
Any Employee who is a 5% owner (as defined in code Section 416(i)(I)(B)(i)) of the Employer at any time during the look-back year or the determination year.
|
(C)
|
For purposes of this Section, the following definitions apply. The determination year is the Plan Year. The look-back year is the 12-month period immediately preceding the determination year.
|
(4)
|
"Highly Compensated Former Employee" means any former Employee who was a Highly Compensated Employee for a separation year (as defined in Treasury Regulation Section 1.414(q)-1T) or for any determination year ending on or after the Employee attains age 55, as provided by Code Section 414(q)(9) and the regulations thereunder.
|
(5)
|
"Restricted Amount" is the excess of the accumulated amount of distributions to a Restricted Employee over the accumulated amount of the payments that would have been paid under:
|
(A)
|
a straight life annuity that is the actuarial equivalent of the Restricted Employee's Benefit (other than a social security supplement), plus
|
(B)
|
the amount of the payments that the Restricted Employee is entitled to receive under a social security supplement.
|
(6)
|
"Restricted Employee" for any Plan Year means one of the 25 Highly Compensated Employees or Highly Compensated Former Employees with the greatest compensation.
|
(b)
|
In the event the Plan is terminated, the Benefit payable to any Highly Compensated Employee and any Highly Compensated Former Employee will be limited to a benefit which is nondiscriminatory under Code Section 401 (a)(4).
|
(c)
|
Prior to Plan termination, the annual payment to a Restricted Employee under the Plan will be limited to an amount equal to the annual payment that would have been paid under a straight life annuity that is the actuarial equivalent to the Restricted Em
ployee's Benefit (not including any social security supplement) plus the amount of any social security supplement payments the Restricted Employee is entitled to receive.
|
(d)
|
Subsection (c) above will not apply if:
|
(1)
|
payment of all Benefits to the Restricted Employee, the value of Plan assets is 110% or more of the value of Current Liabilities,
|
(2)
|
the value of Benefits payable to the Restricted Employee is less than 1% of the value of Current Liabilities, or
|
(3)
|
the present value of the Benefits payable to the Restricted Employee is $5,000 or less, or
|
(4)
|
upon receipt of a distribution from the Plan, the Restricted Employee deposits in escrow property having a fair market value equal to at least 125% of the Restricted Amount or, alternatively, posts a bond or letter of credit in an amount equal to at least 100% of the Restricted Amount.
|
11.4
|
Top-Heavy Provisions
.
|
(a)
|
Top-Heavy Plan. Notwithstanding any other provision of this Plan to the contrary, this Section will apply if the Plan is a Top-Heavy Plan for any Plan Year after December 31, 2001. For Plan Years prior to that date the provisions of the Prior Plan will apply.
|
(b)
|
Definition of Terms. For purposes of this Section 11.4 only, the following terms will have the following meanings:
|
(1)
|
"Aggregation Group" means the Required Aggregation Group or, at the election of the Company, the Permissive Aggregation Group.
|
(2)
|
"Average Compensation" means the Participant's Compensation averaged over the five consecutive Plan Years in which the Participant earned a Year of Vesting Service (if such Year of Vesting Service is not disregarded pursuant to subsection (d) below) and in which the Participant's aggregate Compensation was the greatest. If the Participant received Compensation in fewer than five such Plan Years, his or her Compensation will be averaged over such lesser number of Plan Years.
|
(3)
|
"Compensation" shall be as defined in Section 1.15, subject to the limitations imposed by Code §401(a)(17), as amended by law and as adjusted by the Secretary of the Treasury.
|
(4)
|
"Determination Date" means the last day of the preceding Plan Year. This date will also be the valuation date for determining present values.
|
(5)
|
"Key Employee" means an Employee or former Employee (and, in the case of a deceased former Employee, his or her Beneficiary under the Plan) where the Employee or former Employee, during the Plan Year containing the Determination Date, is either:
|
(A)
|
an officer of the Employer whose annual Compensation from the Employer exceeds $130,000 (adjusted in the manner stated in Code §416(i), pro vided that no more than 50 Employees shall be considered officers;
|
(B)
|
a five-percent owner of the Employer (as defined above); or
|
(C)
|
a one-percent owner of the Employer (as defined above) whose annual Compensation from the Employer exceeds $150,000.
|
(6)
|
"Non-key Employee" means an Employee (and any Beneficiary of an Employee) who is not a Key Employee.
|
(7)
|
"Permissive Aggregation Group" means the Required Aggregation Group of plans plus any other plan or plans of the Company which, when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of Code §§401(a)(4) and 410.
|
(8)
|
"Required Aggregation Group" means:
|
(A)
|
Each stock bonus, pension, or profit sharing plan of the Employer in which a Key Employee participates in the Plan Year containing the Determination Date which is intended to qualify under Code §401(a); and
|
(B)
|
Each other such stock bonus, pension or profit sharing plan of an employer which enables any plan in which a Key Employee participates to meet the requirements of Code §§401(a)(4) or 410.
|
(9)
|
"Top-Heavy Group" means the Aggregation Group if the sum of (A) and (B) below exceeds 60% of a similar sum determined for all Employees (excluding former Key Employees and individuals who have not performed any services for the Employer during the one year period ending on the Determination Date):
|
(A)
|
The present value of the cumulative accrued benefit for Key Employees under all defined benefit plans included in such group.
|
(B)
|
The aggregate of the accounts of Key Employees under all defined contribution plans included in such group.
|
(c)
|
Modification of Vesting Schedule. If the Plan is a Top-Heavy Plan in a Plan Year, a Participant who is credited with an Hour of Service in such Plan Year will have his or her Vested Percentage for Accrued Benefit Attributable to Company Contributions determined in accordance with the following schedule if it produces a higher Vested Percentage than the schedule in Section 6.1.
|
(d)
|
Minimum Benefit. If the Plan is Top-Heavy in a Plan Year, the Accrued Benefit as of the last day of such Plan Year for any Participant who is not a Key Employee, but who is employed or on an Authorized Period of Absence in such Plan Year, will not be less than the Actuarial Equivalent of an annual benefit payable in the form of a straight life annuity beginning on the Participant's Normal Retirement Date equal to the lesser of (i) 2% of the Participant's Average Compensation multiplied by Years of Vesting Service or (ii) 20% of the Participant's Average Compensation. For purposes of this subsection (d), any Years of Vesting Service will be disregarded if:
|
(1)
|
the Plan was not a Top-Heavy Plan for any Plan Year ending during such Years of Vesting Service, or
|
(2)
|
such Year of Vesting Service ended in a Plan Year beginning before January 1, 1984.
|
(3)
|
Collective Bargaining Agreements The provisions of subsections (c) and (d) shall not apply to any Employee included in a group of Employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers, including the Employer, if there is evidence that retirement benefits were the subject of good faith bargaining between such employee representatives and such employer(s).
|
11.5
|
Benefit Restrictions Due to Application of Code §436
. Effective for Plan Years commencing after December 31, 2007, this Section shall take precedence over any contrary Plan provisions.
|
(a)
|
Funding-Based Limitation on Shutdown Benefits and Other Unpredictable Contingent Event Benefits.
|
(1)
|
In general. If a Participant is entitled to an "unpredictable contingent event benefit" payable with respect to any event occurring during any Plan Year, then the benefit may not be provided if the "adjusted funding target attainment percentage" for the Plan Year
|
(A)
|
is less than 60% or
|
(B)
|
would be less than 60% taking into account the occurrence
.
|
(2)
|
Exemption. Paragraph (1) shall cease to apply with respect to any Plan Year, effective as of the first day of the Plan Year, upon payment by the Employer of a contribution (in addition to any minimum required contribution under Code Section 430) equal to:
|
(A)
|
in the case of (b)(l)(A) above, the amount of the increase in the funding target of the Plan (under Code §430) for the Plan Year attributable to the occurrence referred to in paragraph (1), and
|
(B)
|
in the case of (b)(l)(B) above, the amount sufficient to result in an "adjusted funding target attainment percentage" of 60%.
|
(3)
|
Unpredictable contingent event benefit. For purposes of this subsection, the term "unpredictable contingent event benefit" means any benefit payable solely by reason of:
|
(A)
|
a plant shutdown (or similar event, as determined by the Secretary of the Treasury), or
|
(B)
|
an event other than the attainment of any age, performance of any service, receipt or derivation of any compensation, or occurrence of death or disability.
|
(b)
|
Limitations on Plan Amendments Increasing Liability for Benefits
.
|
(1)
|
In general. No amendment that has the effect of increasing liabilities of the Plan by reason of increases in benefits, establishment of new benefits, changing the rate of benefit accrual, or changing the rate at which benefits become nonforfeitable may take effect during any Plan Year if the adjusted funding target attainment percentage for the Plan Year is:
|
(A)
|
less than 80% or
|
(2)
|
Exemption. Paragraph (c)(1) shall cease to apply with respect to any Plan Year, effective as of the first day of the Plan Year (or if later, the effective date of the amendment), upon payment by the Employer of a contribution (in addition to any minimum required contribution under Code §430) equal to:
|
(A)
|
in the case of paragraph (c)(1)(A) above, the amount of the increase in the funding target of the Plan (under Code §430) for the Plan Year attributable to the amendment, and
|
(B)
|
in the case of paragraph (c)(1)(B) above, the amount sufficient to result in an adjusted funding target attainment percentage of 80%.
|
(3)
|
Exception for certain benefit increases. Paragraph (c)(1) shall not apply to any amendment that provides for an increase in benefits under a formula that is not based on a Participant's Compensation, but only if the rate of such increase is not in excess of the contemporaneous rate of increase in average wages of Participants covered by the amendment.
|
(c)
|
Limitations on Accelerated Benefit Distributions.
|
(1)
|
Funding percentage less than 60%. If the Plan's adjusted funding target attainment percentage for a Plan Year is less than 60%, then the Plan may not pay any "prohibited payment" after the valuation date for the Plan Year.
|
(2)
|
Bankruptcy. During any period in which the Employer is a debtor in a case under Title 11 of the United States Code, or similar federal or state law, the Plan may not pay any "prohibited payment." The preceding sentence shall not apply on or after the date on which the enrolled actuary of the Plan certifies that the adjusted funding target attainment percentage of the Plan is not less than 100%.
|
(3)
|
Limited payment if percentage at least 60% but less than 80%
.
|
(A)
|
In general. If the Plan's adjusted funding target attainment percentage for a Plan Year is 60% or greater but less than 80%, then the Plan may not pay any "prohibited payment" after the valuation date for the Plan Year to the extent the amount of the payment exceeds the lesser of:
|
(i)
|
fifty percent (50%) of the amount of the payment that could be made without regard to this subsection, or
|
(ii)
|
the present value (determined under guidance prescribed by the Pension Benefit Guaranty Corporation, using the interest and mortality assumptions under Code §417(e)) of the maximum guarantee with respect to the participant under ERISA §4022.
|
(B)
|
One-time application.
|
(i)
|
In general. Only one "prohibited payment" meeting the requirements of subparagraph (A) may be made with respect to any Participant during any period of consecutive Plan Years to which the limitations under either paragraph (1) or (2) or this paragraph applies.
|
(ii)
|
Treatment of beneficiaries. For purposes of this subparagraph, a Participant and any Beneficiary (including an alternate payee, as defined
|
(4)
|
Exception. This subsection shall not apply for any Plan Year if the terms of the Plan (as in effect for the period beginning on September 1, 2005 and ending with such Plan Year) provide for no benefit accruals with respect to any Participant during such period.
|
(5)
|
"Prohibited payment." For purposes of this subsection, the term "prohibited payment" means:
|
(A)
|
any payment in excess of the monthly amount paid under a single life annuity (plus any Social Security supplements described in the last sentence of Code §411(a)(9)) to a Participant or Beneficiary whose Annuity Starting Date occurs during any period a limitation under paragraph (d)(1) or (2) is in effect,
|
(B)
|
any payment for the purchase of an irrevocable commitment from an insurer to pay benefits, and
|
(d)
|
Limitation on Benefit Accruals for Plans with Severe Funding Shortfalls.
|
(1)
|
In general. If the Plan's adjusted funding target attainment percentage for a Plan Year is less than 60%, benefit accruals under the Plan shall cease as of the valuation date for the Plan Year.
|
(3)
|
Temporary modification of limitation. In the case of the first Plan Year beginning during the period beginning on October 1, 2008, and ending on September 30, 2009, the provisions of (e)(1) above shall be applied by substituting the Plan's adjusted funding target attainment percentage for the preceding Plan Year for the percentage for the Plan Year, but only if the adjusted funding target attainment percentage for the preceding year is greater.
|
(e)
|
Rules Relating to Contributions Required to Avoid Benefit Limitations.
|
(1)
|
Security may be provided:
|
(A)
|
In general. For purposes of this section, the adjusted funding target attainment percentage shall be determined by treating as an asset of the Plan any security provided by the Employer in a form meeting the requirements of subparagraph (B).
|
(B)
|
Form of security. The security required under subparagraph (A) shall consist of:
|
(i)
|
a bond issued by a corporate surety company that is an acceptable surety for purposes of ERISA §412,
|
(ii)
|
cash or United States obligations that mature in three years or fewer, held in escrow by a bank or similar financial institution, or
|
(iii)
|
such other form of security as is satisfactory to the Secretary and the parties involved.
|
(C)
|
Enforcement. Any security provided under subparagraph (A) may be perfected and enforced at any time after the earlier of:
|
(i)
|
the date on which the Plan terminates;
|
(ii)
|
if there is a failure to make a payment of the minimum required contribution for any Plan Year beginning after the security is pro vided, the due date for the payment under Code §430(j); or
|
(iii)
|
if the adjusted funding target attainment percentage is less than 60% for seven consecutive years, the valuation date for the last year in the period.
|
(2)
|
Pre-funding balance or funding standard carryover balance may not be used. No pre-funding balance or funding standard carryover balance under Code §430(f) may be used under subsection (b), (c), or (e) to satisfy any payment an Employer may make under any such subsection to avoid or terminate the application of any limitation under such subsection.
|
(3)
|
Deemed reduction of funding balances:
|
(B)
|
Exception for insufficient funding balances. Subparagraph (A) shall not apply with respect to a benefit limitation for any Plan Year if the application of subparagraph (A) would not result in the benefit limitation not applying for such Plan Year.
|
(f)
|
Presumed Underfunding for Purposes of Benefit Limitations.
|
(1)
|
Presumption of continued underfunding. In any case in which a benefit limitation under subsection (b), (c), (d), or (e) has been applied to a Plan with respect to the Plan Year preceding the current Plan Year, the adjusted funding target attainment percentage of the Plan for the current Plan Year shall be presumed to be equal to the adjusted funding target attainment percentage of the Plan for the preceding Plan Year until the enrolled actuary of the Plan certifies the actual adjusted funding target attainment percentage of the Plan for the current Plan Year.
|
(2)
|
Presumption of underfunding after 10th month. In any case in which no certification of the adjusted funding target attainment percentage for the current Plan Year is made with respect to the Plan before the first day of the 10th month of such year, for purposes of subsections (b), (c), (d), and (e), such first day shall be deemed, for purposes of such subsection, to be the valuation date of the Plan for the current Plan Year and the Plan's adjusted funding target attainment percentage shall be conclusively presumed to be less than 60% as of the first day.
|
(3)
|
Presumption of underfunding after 4th month for nearly underfunded plans. In any case in which:
|
(A)
|
a benefit limitation under subsection (b), (c), (d), or (e) did not apply to a Plan with respect to the Plan Year preceding the current Plan Year, but the adjusted funding target attainment percentage of the Plan for the preceding Plan Year was not more than 10 percentage points greater than the percentage that would have caused the subsection to apply to the Plan with respect to the preceding Plan Year, and
|
(g)
|
Treatment of Plan as of Close of Prohibited or Cessation Period. Payments and accruals will resume effective as of the day following the close of the period for which any limitation of payment or accrual of benefits under subsection (d) or (e) applies. Nothing in this
|
(h)
|
Definitions.
|
(1)
|
"Funding target attainment percentage" shall have the same meaning given that term by Code §430(d)(2), except as otherwise provided herein. However, in the case of Plan Years beginning in 2008, the funding target attainment percentage
for the preceding Plan Year may be determined using such methods of estimation as the Secretary may provide.
|
(2)
|
"Adjusted funding target attainment percentage" means the funding target attainment percentage that is determined under paragraph (1) by increasing each of the amounts under subparagraphs (A) and (B) of Code §430(d)(2) by the aggregate amount of purchases of annuities for employees other than Highly Compensated Employees that were made by the Plan during the preceding two Plan Years.
|
(3)
|
Application to plans that are fully funded without regard to reductions for funding balances.
|
(A)
|
In general. If in any Plan Year the funding target attainment percentage is 100% or more (determined and without regard to the reduction in the value of assets under Code §430(f)(4)), the funding target attainment percentage for purposes of paragraphs (1) and (2) shall be determined without regard to the reduction.
|
(B)
|
Transition rule. Subparagraph (A) shall be applied to Plan Years beginning after 2007 and before 2011 by substituting for 100% the applicable percentage determined in accordance with the following table:
|
(C)
|
Subparagraph (B) shall not apply with respect to any Plan Year beginning after 2008 unless the funding target attainment percentage (determined without regard to the reduction in the value of assets under Code §430(f)(4)) of the Plan for each preceding Plan Year beginning after 2007 was not less than the applicable percentage with respect to such preceding Plan Year determined under subparagraph (B).
|
11.6
|
Limitations Applicable If the Plan's Adjusted Funding Target Attainment Percentage Is Less Than 80 Percent
or If the Plan Sponsor Is In Bankruptcy.
|
(a)
|
Limitations Applicable If the Plan's Adjusted Funding Target Attainment Percentage Is Less Than 80 Percent, But Not Less Than 60 Percent. Notwithstanding any other provisions of the plan, if the plan's adjusted funding target attainment percentage for a plan year is less than 80 percent (or would be less than 80 percent to the extent described in Section 1(b) below) but is not less than 60 percent, then the limitations set forth in this Section apply.
|
(1)
|
50 Percent Limitation on Single Sum Payments, Other Accelerated Forms of Distribution, and Other Prohibited Payments. A participant or beneficiary is not permitted to elect, and the plan shall not pay, a single sum payment or other optional form of benefit that includes a prohibited payment with an annuity starting date on or after the applicable section 436 measurement date, and the
plan shall not make any payment for the purchase
of
an irrevocable commitment from an insurer to pay benefits or any other payment or transfer that is a prohibited payment, unless the present value of the portion of the benefit that is being paid in a prohibited payment does not exceed the lesser of:
|
(A)
|
50 percent
of
the present value
of
the benefit payable in the optional form of benefit that includes the prohibited payment; or
|
(B)
|
100 percent
of
the PBGC maximum benefit guarantee amount (as defined in
|
(2)
|
Plan Amendments Increasing Liability for Benefits. No amendment to the plan that has the effect
of
increasing liabilities of the plan by reason of increases in benefits, establishment of new benefits, changing the rate
of
benefit accrual, or changing the rate at which benefits become nonforfeitable shall take effect in a plan year if the adjusted funding target attainment percentage for the plan year
is:
|
(A)
|
Less than 80 percent; or
|
(B)
|
80 percent or more, but would be less than 80 percent if the benefits attributable to the amendment were taken into account in determining the adjusted funding target attainment percentage.
|
(b)
|
Limitations Applicable If the Plan's Adjusted Funding Target Attainment Percentage Is Less Than 60 Percent. Notwithstanding any other provisions
of
the plan, if the plan's adjusted funding target attainment percentage for a plan year is less than 60 percent (or would be less than 60 percent to the extent described in Section (b)(2) below), then the limitations in this Section (b) apply.
|
(1)
|
Single Sums, Other Accelerated Forms of Distribution, and Other Prohibited Payments Not Permitted. A participant or beneficiary is not permitted to elect, and the plan shall not pay, a single sum payment or other optional form of benefit that includes a prohibited payment with an annuity starting date on or after the applicable section 436 measurement date, and the plan shall not make
any payment for the purchase of an irrevocable commitment from an insurer to pay benefits or any other payment or tra
n
sfer that is a prohibited payment. The limitation set forth in this Section (b)(l) does not apply to any payment of a benefit which under § 411(a)(11) of the Internal Revenue Code may be immediately distributed without the consent of the participant.
|
(2)
|
Shutdown Benefits and Other Unpredictable Contingent Event Benefits Not Permitted to Be Paid. An unpredictable contingent event benefit with respect to an unpredictable contingent event occurring during a plan year shall not be paid if the adjusted funding target attainment percentage for the plan year is:
|
(A)
|
Less than 60 percent; or
|
(B)
|
60 percent or more, but would be less than 60 percent if the adjusted funding target attainment percentage were redetermined applying an actuarial assumption that the likelihood of occurrence of the unpredictable contingent event during the plan year is 100 percent.
|
(3)
|
Benefit Accruals Frozen. Benefit accruals under the plan shall cease as of the applicable section 436 measurement date. In addition, if the plan is required to cease benefit accruals under this Section (b)(3), then the plan is not permitted to be amended in a manner that would increase the liabilities of the plan by reason of an increase in benefits or establishment of new benefits.
|
(c)
|
Limitations Applicable If the Plan Sponsor Is In Bankruptcy. Notwithstanding any other provisions of the plan, a participant or beneficiary is not permitted to elect, and the plan shall not pay, a single sum payment or other optional form of benefit that includes a prohibited payment with an annuity starting date that occurs during any period in which the plan sponsor is a debtor in a case under title 11, United States Code, or similar Federal or State law, except for payments made within a plan year with an annuity starting date that occurs on or after the date on which the plan's enrolled actuary certifies that the plan's adjusted funding target attainment percent age for that plan year is not less than 100 percent. In addition, during such period in which the plan sponsor is a debtor, the plan shall not make any payment for the purchase of an irrevocable commitment from an insurer to pay benefits or any other payment or transfer that is a prohibited payment, except for payments that occur on a date within a plan year that is on or after the date on which the plan's enrolled actuary certifies that the plan's adjusted funding target attainment percentage for that plan year is not less than 100 percent. The limitation set forth in this Section (c) does not apply to any payment of a benefit which under § 411(a)(11) of the Internal Revenue Code may be immediately distributed without the consent of the participant.
|
(d)
|
Provisions Applicable After Limitations Cease to Apply.
|
(1)
|
Resumption of Prohibited Payments. If a limitation on prohibited payments under Section (a)(l), Section (b)(l), or Section (c) applied to the plan as of a section 436 measurement date, but that limit no longer applies to the plan as of a later section 436 measurement date, then that limitation does not apply to benefits with annuity starting dates that are on or after that later section 436 measurement date.
|
(2)
|
Resumption of Benefit Accruals. If a limitation on benefit accruals under Section (b)(3) applied to the plan as of a section 436 measurement date, but that limitation no longer applies to the plan as of a later section 436 measurement date, then benefit accruals shall resume prospectively and that limitation does
not apply to benefit accruals that are based on service on or after that later section 436 measurement date, except as otherwise provided under the plan. The plan shall comply with the rules relating to partial years of participation and the prohibition on double proration under Department of Labor regulation 29 CFR § 2530.2042(c) and (d).
|
(3)
|
Shutdown and Other Unpredictable Contingent Event Benefits. If an unpredictable contingent event benefit with respect to an unpredictable contingent event that occurs during the plan year is not permitted to be paid after the occurrence of the event because of the limitation of Section (b)(2), but is permitted to be paid later in the same plan year (as a result of additional contributions or pursuant to the enrolled actuary's certification of the adjusted funding target attainment percentage for the
|
(d)
|
Treatment of Plan Amendments That Do Not Take Effect. If a plan amendment does not take effect as of the effective date of the amendment because of the limitation of Section (a)(2) or Section (b)(3), but is permitted to take effect later in the same plan year (as a result of additional contributions or pursuant to the enrolled actuary's certification of the adjusted funding target attainment percentage for the plan year that meets the requirements of § 1.436 (g)(S)(ii)(C) of the Treasury Regulations), then the plan amendment must automatically take effect as of the first day of the plan year (or, if later, the original effective date of the amendment). If the plan amendment cannot take effect during the same plan year, then it shall be treated as if it were never adopted, unless the plan amendment provides otherwise.
|
(e)
|
Notice Requirement. See section 101(j) of ERISA for rules requiring the plan administrator of a single employer defined benefit pension plan to provide a written notice to participants and beneficiaries within 30 days after certain specified dates if the plan has become subject to a limitation described in Section (a)(l), Section (b), or Section (c).
|
(f)
|
Methods to Avoid or Terminate Benefit Limitations. See § 436(b)(2), (c)(2), (e)(2), and
|
(g)
|
Special Rules.
|
(1)
|
Rules of Operation for Periods Prior to and After Certification of Plan's Adjusted Funding Target Attainment Percentage.
|
(A)
|
In General. Section 436(h) of the Internal Revenue Code and § 1.436(h
)
of the Treasury Regulations set forth a series of presumptions that apply before the plan's enrolled actuary issues a certification of the plan's adjusted funding target attainment percentage for the plan year and (ii) if the plan's enrolled actuary does not issue a certification of the plan's adjusted funding target attainment percentage for the plan year before the first day of the 10th month of the plan year (or if the plan's enrolled actuary issues a range certification for the plan year pursuant to §1.436l(h)(4)(ii) of the Treasury Regulations but does not issue a certification of the specific adjusted funding target attainment percentage for the plan by the last day of the plan year). For any period during which a presumption under §436(h) of the Internal Revenue Code and §1.436 (h) of the
|
(B)
|
Presumption of Continued Underfunding Beginning First Day of Plan Year. If a limitation under Section (a), (b), or (c) applied to the plan on the last day of the preceding plan year, then, commencing on the first day of the current plan year and continuing until the plan's enrolled actuary issues a certification of the adjusted funding target attainment percentage for the plan for the current plan year, or, if earlier, the date Section (g)(l)(C) or Section (g)(l)(D) applies to the plan:
|
(i)
|
The adjusted funding target attainment percentage of the plan for the current plan year is presumed to be the adjusted funding target attainment percentage in effect on the last day of the preceding plan year; and
|
(ii)
|
The first day of the current plan year is a section 436 measurement date.
|
(C)
|
Presumption of Underfunding Beginning First Day of 4th Month. If the plan's enrolled actuary has not issued a certification of the adjusted funding target attainment percentage for the plan year before the first day of the 4th month of the plan year and the plan's adjusted funding target attainment percentage for the preceding plan year was either at least 60 percent but less than 70 percent or at least 80 percent but less than 90 percent, or is described in §1.436(h)(2)(ii) of the Treasury Regulations, then, commencing on the first day of the 4th month of the current plan year and continuing until the plan's enrolled actuary issues a certification of the adjusted funding target attainment percentage for the plan for the current plan year, or, if earlier, the date Section (g)(l)(D) applies to the plan:
|
(i)
|
The adjusted funding target attainment percentage of the plan for the current plan year is presumed to be the plan's adjusted funding target attainment percentage for the preceding plan year reduced by 10 percentage points; and
|
(ii)
|
The first day of the 4th month of the current plan year is a section 436 measurement date.
|
(D)
|
Presumption of Underfunding On and After First Day of 10th Month. If the plan's enrolled actuary has not issued a certification of the adjusted funding target attainment percentage for the plan year before the first day of the 10th month of the plan year (or if the plan's enrolled actuary has issued a range certification for the plan year pursuant to §1.4361(h)(4)(ii) of the Treasury Regulations but has not issued a certification of the specific adjusted funding target attainment percentage for the plan by the last day of the plan year), then, commencing on the first day of the 10th month of the current plan year and continuing through the end of the plan year:
|
(i)
|
The adjusted funding target attainment percentage of the plan for the current plan year is presumed to be less than 60 percent; and
|
(ii)
|
The first day of the 10th month of the current plan year is a section 436 measurement date.
|
(2)
|
New Plans, Plan Termination, Certain Frozen Plans, and Other Special Rules.
|
(A)
|
First 5 Plan Years. The limitations in Section (a)(2), Section (b)(2), and Section (b)(3) do not apply to a new plan for the first 5 plan years of the plan, determined under the rules of § 436(i) of the Internal Revenue Code and
|
(B)
|
Plan Termination. The limitations on prohibited payments in Section (a)(1), Section (b)(1), and Section (c) do not apply to prohibited payments that are made to carry out the termination of the plan in accordance with applicable law. Any other limitations under this section of the plan do not cease to apply as a result of termination of the plan.
|
(C)
|
Exception to Limitations on Prohibited Payments Under Certain Frozen Plans. The limitations on prohibited payments set forth in Sections (a)(1), (b)(1), and (c) do not apply for a plan year if the terms of the plan, as in effect for the period beginning on September 1, 2005, and continuing through the end of the plan year, provide for no benefit accruals with respect to any participants. This Section (g)(2)(C) shall cease to apply as of the date any benefits accrue under the plan or the date on which a plan amendment that increases benefits takes effect.
|
(D)
|
Special Rules Relating to Unpredictable Contingent Event Benefits and Plan Amendments Increasing Benefit Liability. During any period in which none of the presumptions under Section (a)(1) apply to the plan and the plan's enrolled actuary has not yet issued a certification of the plan's adjusted funding target attainment percentage for the plan year, the limitations under Section (a)(2) and Section (b)(2) shall be based on the inclusive presumed adjusted funding target attainment percentage for the plan, calculated in accordance with the rules of §1.4361(g)(2)(iii) of the Treasury Regulations.
|
(3)
|
Special Rules Under PRA 2010.
|
(A)
|
Payments Under Social Security Leveling Options. For purposes of deter mining whether the limitations under Section (a)(l) or (b)(l) apply to payments under a social security leveling option, within the meaning of §436(j)(3)(C)(i) of the Internal Revenue Code, the adjusted funding target attainment percentage for a plan year shall be determined in accordance with the "Special Rule for Certain Years" under §436(j)(3) of the Internal Revenue Code and any Treasury Regulations or other published guidance thereunder issued by the Internal Revenue Service.
|
(B)
|
Limitation on Benefit Accruals. For purposes of determining whether the accrual limitation under Section (b)(3) applies to the plan, the adjusted funding
|
(4)
|
Interpretation of Provisions. The limitations imposed by this section of the plan shall be interpreted and administered in accordance with §436 of the Internal Revenue Code and §1.4361 of the Treasury Regulations.
|
(h)
|
Definitions. The definitions in the following Treasury Regulations apply for purposes of Sections (a) through g): §1.436l(j)(l) defining adjusted funding target attainment percentage; §1.436(j)(2) defining annuity starting date; §1.436(j)(6) defining prohibited payment; §1.436l(j)(S) defining section 436 measurement date; and §1.436l(j)(9) defining an unpredictable contingent event and an unpredictable contingent event benefit.
|
12.1
|
Administration
.
|
(a)
|
The Retirement Committee ("Committee") will consist of three or more individuals who will be appointed by the Board of Directors of Zions. The Committee will serve as Plan "administrator" (as that term is defined by ERISA). The Committee will have complete control of the administration of the Plan, subject to the provisions hereof, with all powers necessary to enable it to carry out its duties properly in that respect. Not in limitation, but in amplification of the foregoing, it will have the power to interpret the Plan and to determine all questions that may arise hereunder, including all questions relating to the eligibility of Employees to participate in the Plan and the amount of benefit to which any Participant or Beneficiary may become entitled. Its decisions upon all matters within the scope of its authority will be final.
|
(b)
|
The Committee will establish rules and procedures to be followed by Participants and Beneficiaries in filing applications for benefits, in furnishing and verifying proofs necessary to determine age or marital status, and in any other matters required to administer the Plan.
|
(c)
|
The Committee will receive all applications for benefits and will determine all facts necessary to establish the right of the applicant to benefits under the provisions of the Plan and the amount thereof.
|
(d)
|
The Committee will maintain accounts showing the fiscal transactions of the Plan, and will keep data required for the valuation of the assets and liabilities of the Plan. The Committee will also prepare an annual report showing in reasonable detail the assets and liabilities of the Plan and giving a brief account of the operation of the Plan for each year. The Committee will make the annual report available to each Participant as required by law.
|
(e)
|
The Committee will appoint an enrolled actuary to make actuarial valuations of the liabilities of the Plan, to recommend the amount of contributions to be made by the Company and to perform such other services as the Committee will deem necessary or desirable in connection with the administration of the Plan. The Committee may also appoint such accountants, counsel, consultants and other persons the Committee deems necessary or desirable in connection with the administration of the Plan.
|
(f)
|
The Committee will have the power to appoint or remove any Investment Manager or Managers and to manage (including the power to acquire and dispose of) assets of the Plan.
|
(g)
|
The Committee will have the power to appoint or remove the Trustee.
|
(h)
|
The Committee will be entitled to rely upon all tables, valuations, certificates and reports furnished by the accountant, consultant, administrator or actuary appointed by the Committee and upon all opinions given by any counsel selected or approved by it.
|
12.2
|
Records
. All acts and determinations of the Committee and the Company regarding this Plan will be duly recorded and all such records, together with such other documents as may be necessary for the administration of the Plan, will be preserved in the custody of the Committee (or a designee appointed by the Committee).
|
12.3
|
Payment of Expenses
. All expenses that arise in connection with the administration of the Plan, including, but not limited to, the compensation of any enrolled actuary, accountant, legal counsel, consultant or other person who will be employed by the Committee in connection with the administration thereof, may, to the extent that it is lawful to do so under ERISA, be paid from the assets of the Plan.
|
12.4
|
Delegation of Authority
. The administrative duties and responsibilities set forth in Section 12.1 may be delegated by the Committee in whatever manner and extent it chooses to such person or persons as it selects. It will notify Zions and the Trustee of the authority conferred upon such person or persons.
|
12.5
|
Information Available
. Any Participant in the Plan or any Beneficiary receiving benefits under the Plan may examine copies of the summary plan description, latest annual report, any bargaining agreement, the Plan document, the Trust Agreement or any other governing instruments under which the Plan is operated. The Committee will maintain all of these items in its office, or in such other place or places as it may designate from time to time for examination during reasonable business hours. Upon the written request of a Participant or Beneficiary receiving benefits under the Plan, the Committee will furnish a copy of any item listed in this Section. The Committee may make a reasonable charge to the requesting person for the copy furnished.
|
12.6
|
Claims and Appeals Procedure
.
|
(a)
|
The Committee will adopt procedures for the resolving of claims for benefits and for the appeal and review of the denial of such claims by the Committee. Detailed information regarding such procedures may be obtained by writing to the Retirement Committee.
|
(b)
|
Each claim for benefits will be decided by one or more persons, a committee or other claims administrator designated by the Committee (such designated party is referred to in this Section as the "Claims Administrator"). The Claims Administrator will give the claimant written notice of the disposition of a claim within 90 days after the claim has been filed, unless special circumstances require an extension of time for processing, in which case such notice of disposition shall be given within 180 days after the application has been filed. If a claim is denied in whole or in part, the Claims Administrator shall give the claimant a written explanation of the reasons for the denial.
|
(c)
|
A claimant wishing a review of a denied claim may submit an appeal in writing in a manner acceptable to the "Appeals Administrator," which shall be the Committee or a person, committee or other administrator designated by the Committee. The dead line for submitting any such appeal to the Appeals Administrator shall be 60 days after receipt of the written notification of the denial of the claim, as described above.
|
(d)
|
Within 60 days following the receipt of the notice of appeal, the Appeals Administrator will give the claimant either (i) a written notice of the decision of the Appeals Administrator, or (ii) if special circumstances require an extension of time for review, a notice of a 60-day extension of the review period. In the latter case, the notice of the decision of the Appeals Administrator shall be delivered to the claimant within 120 days after the appeal has been delivered by the claimant. Effective January 1,2002, the one or more individuals who act as Appeals Administrator and who decide
the appeal shall not include any person who decided the initial claim, but a person who decided the initial claim may participate in the discussion of the appeal
|
(e)
|
The Plan hereby delegates full and complete discretion to the Claims Administrator and the Appeals Administrator:
|
(1)
|
to make findings of fact pertaining to a claim or appeal;
|
(2)
|
to interpret the Plan as applied to the facts; and
|
(3)
|
to decide all aspects of the claim or appeal.
|
(f)
|
The decision of the Appeals Administrator upon such a review of a denied claim, (or, If the claimant fails to submit a timely appeal to the Appeals Administrator, the decision of the Claims Administrator) will be final, subject to any remedies which may be provided by law.
|
12.7
|
Fiduciary Capacity
. Any person may serve in more than one fiduciary capacity with respect to this Plan.
|
12.8
|
Committee Liability
. The members of the Committee will use ordinary care and diligence in the performance of their duties, but no member will be personally liable by virtue of any contract, agreement, or other instrument made or executed as a member of the Committee, nor for any mistake of judgment made by him or her or by any other member, nor for any loss unless resulting from willful misconduct or failure to exercise good faith. No member of the Committee will be liable for the neglect, omission, or wrongdoing of any other member or of the agents or counsel of the Committee. Zions will indemnify (or cause one or more of the participating Companies to indemnify) each member of the Committee against, and hold him or her harmless from any and all expenses and liabilities arising out of any act or omission to act as a member of the Committee, except such liabilities and expenses as are due to willful misconduct or failure to exercise good faith.
|
12.9
|
Limitations of Actions on Claims
. The delivery to the claimant of the final decision of the Plan Administrator with respect to a claim for benefits under Section 12.6 that has been reviewed and considered under the appeal procedures of that section shall commence the period during which the claimant may bring legal action under ERISA for judicial review of the Appeals Administrator's decision. No civil action with respect to the claim for benefits or the subject matter thereof may be commenced by the claimant, whether such action is pursued through litigation, arbitration or otherwise, prior to the completion of the claims and claims review process set forth in Section 12.6, nor following the expiration of two years from the date of delivery of the final decision of the Appeals Administrator to the claimant.
|
13.1
|
Amendment of Plan
.
|
(a)
|
Zions may amend the Plan at any time. In addition to the authority to amend the Plan in other respects, Zions shall furthermore have the authority to adopt any remedial retroactive changes to comply with the requirements of any law or regulation issued by any governmental agency to which the Plan is subject. No amendment will diminish or adversely affect any accrued interest or benefit of Participants or their Beneficiaries, except as may be required to comply with the requirements of any law or regulation issued by any governmental agency to which the Company is subject.
|
(b)
|
If any amendment to the Plan changes the vesting schedule, each Participant who is an Employee with at least three Years of Vesting Service may elect to remain under the vesting schedule of the Plan prior to such amendment. If the Participant does not make the election within a reasonable time (as may be determined pursuant to governmental regulations from time to time), such Participant will be subject to the vesting schedule under the Plan as amended. In no event will the vesting percentage of the Participant's Accrued Benefit be reduced below the percentage attained by the Participant prior to such amendment.
|
(c)
|
In no event will a Participant who terminates or retires on or after the date any amendment to the Plan is effective receive less than his or her vested percentage multiplied by the Accrued Benefit prior to such date. This amount will be adjusted for the date of retirement and form of payment on the basis in effect prior to such amendment. This paragraph (c) shall not apply to the amendment to the basis for determining the Actuarial Equivalent value for purposes of Section 5.8 effective June 1, 1995.
|
(d)
|
If any amendment to the Plan eliminates an optional form of payment, a Participant may continue to elect such form of payment with respect to any Accrued Benefit earned prior to the effective date of such amendment.
|
13.2
|
Employment Status
. Nothing contained in the Plan will be deemed to give any Employee the right to be retained in the employ of the Employer or to interfere with the rights of the Employer to discharge any Employee at any time.
|
13.3
|
Mergers or Consolidations
. If this Plan merges or consolidates with, or transfers its assets or liabilities to any other qualified plan of deferred compensation, no Participant will, as a result of such merger, consolidation or transfer, be entitled to a benefit on the day following such event which is less than the benefit to which he or she is entitled on the day preceding such event. For purposes of this Section, the benefit to which a Participant is entitled will be calculated based upon the assumption that a Plan termination and distribution of assets occurred on the day as of which the Participant's entitlement is being determined.
|
13.4
|
Provision Against Anticipation
. No benefit under the Plan will be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge or other legal process, and any attempt to do so will be void. The preceding sentence will not apply to a Qualified Domestic Relations Order pursuant to Code Section 414(P).
|
13.5
|
Facility of Payment
. If any Participant or Beneficiary is physically or mentally incapable of giving a valid receipt for any payment due him and no legal representative has been appointed for such Participant or Beneficiary, the Committee may direct the Trustee to make such payment to any person or institution maintaining such Participant or Beneficiary and
the release of such person or institution will be a valid and complete discharge for such payment. Any final payment or distribution to any Participant, the legal representative of the Participant, or to any Beneficiaries of such Participant in accordance with the provisions herein will be in full satisfaction of all claims against the Plan, the Committee, the Trustee and the Company arising under or by virtue of the Plan.
|
13.6
|
Construction
. The validity of the Plan or any of its provisions will be determined under and will be construed according to federal law and, to the extent permissible, according to the laws of the State of Utah. If any provision of the Plan is held illegal or invalid for any reason, such determination will not affect the remaining provisions of the Plan and the Plan will be construed and enforced as if said illegal or invalid provision had never been included.
|
13.7
|
Legal Actions
. The Committee will be the necessary party to any action or proceeding involving the assets held with respect to the Plan or the administration thereof. No Employee, Participant, former Participant or their Beneficiaries, or any other person having or claiming to have an interest in the Plan will be entitled to any notice or process. Any final judgment that may be entered in any such action or proceeding will be binding and conclusive on all persons having or claiming to have any interest in the Plan.
|
|
Joint & Survivor Option
|
||
|
50%
|
75%
|
100%
|
Spouse same age as Employee
|
.880
|
.835
|
.790
|
For each year the Spouse is younger than the Employee sub- tract
|
.005
|
.0065
|
.008
|
For each year the Spouse is older than the Employee add
|
.005
|
.0065
|
.008
|
(a)
|
The mortality assumption is the "Applicable Mortality Table" (as defined below) which is prescribed from time to time by the Secretary of the Treasury under Code Section 417(e)(3).
|
(I)
|
For benefit commencement dates on and after June 1, 1995 and prior to December 31, 2002, the "Applicable Mortality Table" shall mean the applicable mortality table prescribed by the Secretary of the Treasury in Rev. Rul. 95-6, which is the 1983 Group Annuity Mortality Table, weighted 50% male and 50% female (commonly referred to as "GAM 83").
|
(2)
|
For benefit commencement dates on and after December 31, 2002, the "Applicable Mortality Table" shall mean the applicable mortality table prescribed by the Secretary of the Treasury in Rev. Rul. 2001-62.
|
(b)
|
The interest assumption shall be the "Applicable Interest Rate," which shall be the average annual yield on 30-year U.S. Treasury constant maturities, as shown in the Federal Reserve Statistical Release H.15 for the reference month. The reference month shall be the month of November of the calendar year prior to the Plan Year in which the lump sum is paid or the monthly benefit commences.
|
(c)
|
In no event shall such lump sum be less than the present value as of December 31, 1985 of a Participant's Accrued Benefit as of December 31, 1985 on the basis of the following actuarial factors used prior to December 31, 1985 for purposes of valuing a deferred annuity of $1 per year commencing at age 65 and payable in monthly installments:
|
44
|
1.6301
|
61
|
6.4279
|
45
|
1.7632
|
62
|
6.9983
|
46
|
1.9075
|
63
|
7.6261
|
47
|
2.0639
|
64
|
8.3184
|
48
|
2.2337
|
65
|
9.0836
|
(d)
|
The minimum value of a lump sum distribution to a Grossmont Participant who retires between January 1, 1998 and December 31, 1998 shall be determined under subsections (a) and (1) above, except that the annual rate of interest on 30- year Treasury securities described in subsection (1) shall be determined as of December 1997.
|
2.1
|
General Rules.
|
(a)
|
Effective date
. These revised provisions reflect certain provisions of the Pension Funding Equity Act of 2004 (PFEA), as modified by the Pension Protection Act of 2006 and the Worker, Retiree and Employer Recovery Act of 2008. Unless otherwise pro vided herein, all required determinations of actuarial equivalence for forms of benefit other than a straight life annuity shall be made in accordance with these revised provisions effective for distributions in Plan Years beginning after December 31, 2003. Nevertheless, these provisions do not supersede any prior election to apply the transition rule of section 101(d)(3) of PFEA as described in Notice 2004-78.
|
(b)
|
"Applicable Mortality Table"
for purposes of these revised provisions shall mean the applicable mortality table within the meaning of Code §417(e)(3)(B).
|
2.2
|
Benefit Forms Not Subject to the Present Value Rules of Code §417(e)(3)
.
|
(a)
|
Form of benefit
. The straight life annuity that is actuarially equivalent to the Participant's form of benefit shall be determined under this Section 2.2 if the form of the Participant's benefit is either:
|
(1)
|
A non-decreasing annuity (other than a straight life annuity) payable for a period of not less than the life of the Participant (or, in the case of a qualified pre-retirement survivor annuity, the life of the surviving spouse), or
|
(2)
|
An annuity that decreases during the life of the Participant merely because of:
|
(A)
|
The death of the survivor annuitant (but only if the reduction is not below 50% of the benefit payable before the death of the survivor annuitant), or
|
(B)
|
The cessation or reduction of Social Security supplements or qualified disability payments (as defined in Code §401(a)(11)).
|
(b)
|
Limitation Years beginning before July l, 2007
. For Limitation Years beginning before July 1, 2007, the actuarially equivalent straight life annuity is equal to the annual amount of the straight life annuity commencing at the same annuity starting date that has the same actuarial present value as the Participant's form of benefit computed using whichever of the following produces the greater annual amount:
|
(1)
|
the interest rate and the mortality table (or other tabular factor) specified in the Plan for adjusting benefits in the same form; and
|
(2)
|
a 5% interest rate assumption and the "applicable mortality table" defined in the Plan for that annuity starting date.
|
(c)
|
Limitation Years beginning on or after July 1, 2007
. For Limitation Years beginning on or after July 1, 2007, the actuarially equivalent straight life annuity is equal to the greater of:
|
(1)
|
The annual amount of the straight life annuity (if any) payable to the Participant under the Plan commencing at the same annuity starting date as the Participant's form of benefit; and
|
(2)
|
The annual amount of the straight life annuity commencing at the same annuity starting date that has the same actuarial present value as the Participant's form of benefit, computed using a 5% interest rate assumption and the applicable mortality table defined in the Plan for that annuity starting date.
|
2.3
|
Benefit Forms Subject to the Present Value Rules of Code Section 417(e)(3).
|
(a)
|
Form of benefit
. The straight life annuity that is actuarially equivalent to the Participant's form of benefit shall be determined as indicated under this Section 2.3 if the form of the Participant's benefit is other than a benefit form described in Section 2.2(a).
|
(b)
|
Annuity Starting Date in Plan Years Beginning After 2005
.
If the annuity starting date of the Participant's form of benefit is in a Plan Year beginning after December 31, 2005, the actuarially equivalent straight life annuity is equal to the greatest of:
|
(1)
|
The annual amount of the straight life annuity commencing at the same annuity starting date that has the same actuarial present value as the Participant's form of benefit, computed using the interest rate and the mortality table (or other tabular factor) specified in the Plan for adjusting benefits in the same form;
|
(2)
|
The annual amount of the straight life annuity commencing at the same annuity starting date that has the same actuarial present value as the Participant's form of benefit, computed using a 5.5% interest rate assumption and the applicable mortality table for the distribution under Treasury Regulations Section 1.417(e)l(d)(2) (determined in accordance with Article XIV for Plan Years after the effective date of that Article); and
|
(3)
|
The annual amount of the straight life annuity commencing at the same annuity starting date that has the same actuarial present value as the Participant's form of benefit, computed for the distribution under Treasury Regulations Section 1.417(e)- (d)(3) (but determined according to the assumptions in Section 2.4 after the effective date thereof) and the applicable mortality table for the distribution under Treasury Regulations Section 1.41 7(e)-(d)(2) (determined ac cording to the assumptions in Section 2.4 after the effective date thereof), divided by 1.05.
|
(c)
|
Annuity Starting Date in Plan Years Beginning in 2004 or 2005
. If the annuity starting date of the Participant's form of benefit is in a Plan Year beginning in 2004 or 2005, the actuarially equivalent straight life annuity is equal to the annual amount of the straight life annuity commencing at the same annuity starting date that has the same
actuarial present value as the Participant's form of benefit, computed using whichever of the following produces the greater annual amount:
|
(1)
|
The interest rate and the mortality table (or other tabular factor) specified in the Plan for adjusting benefits in the same form; and
|
(2)
|
A 5.5% interest rate assumption and the applicable mortality table for the distribution under Treasury Regulations Section 1.417(e)- (d)(2).
|
2.4
|
Revised Assumptions Effective d
ate. The assumptions in this Section 2.4 shall apply in determining the amount payable to a Participant having an annuity starting date in a Plan Year beginning on or after January 1, 2008, unless otherwise provided by the Pension Benefit Guaranty Corporation (PBGC) and IRS.
|
(a)
|
Applicable interest rate
. For purposes of the Plan's provisions relating to the calculation of the present value of a benefit payment that is subject to Code §417(e), any provision prescribing the use of the annual rate of interest on 30-year U.S. Treasury securities shall be implemented by instead using the rate of interest determined by the applicable interest rate described by Code §417(e) after its amendment by the Pension Protection Act. Specifically, the applicable interest rate shall be the adjusted first, second, and third segment rates applied under the rules similar to the rules of Code §430(h)(2)(C) for the second calendar month (look-back month) before the first day of the Plan Year in which the annuity starting state occurs (stability period). For this purpose, the first, second, and third segment rates are the first, second, and third segment rates which would be determined under Code §430(h)(2)(C) if:
|
(1)
|
Code §430(h)(2)(D) were applied by substituting the average yields for the month described in the preceding paragraph for the average yields for the 24- month period described in such section, and
|
(2)
|
Code §430(h)(2)(G)(i)(II) were applied by substituting "§417(e)(3)(A)(ii)(II) for "§412(b)(5)(B)(ii)(II)," and
|
(3)
|
The applicable percentage under Code §430(h)(2)(G) is treated as being 20% in 2008, 40% in 2009, 60% in 2010, and 80% in 2011.
|
(b)
|
Applicable mortality assumption
. For purposes of the Plan's provisions relating to the calculation of the present value of a benefit payment that is subject to Code §417(e), any provision directly or indirectly prescribing the use of the mortality table described in Revenue Ruling 2001-62 shall be amended to prescribe the use of the applicable annual mortality table within the meaning of Code §417(e)(3)(B), as initially described in Revenue Ruling 2007-67.
|
1.1
|
Covered Compensation. Covered Compensation for a Plan Year means the average of the Social Security Taxable Wage Bases for each year in the 35-year period ending with the last day of the year in which the Participant attains (or will attain) Social Security Retirement Age as determined under the exact tables provided by the Commiss
i
oner of Internal Revenue.
|
1.2
|
Credited Service
.
|
(a)
|
Credited Service shall be measured in calendar years and months. Each month shall be equal to one
-
twelfth of a year of Credited Service. Except as otherwise stated in this Section 1.2, Credited Service for Plan Years beginning after December 31, 1988 means the sum of an Employee's calendar years and months (or parts thereof) as an Eligible Employee during the period beginning on his or her Benefit Service Date. For purposes of this section, Benefit Service Date means the later of:
|
(1)
|
the Participant's employment date,
|
(2)
|
the first day of the month following the Participant's 21st birthday, or
|
(3)
|
in the case of an Employee who is not credited with at least 1,000 Hours of Service in his or her first Eligibility Computation Period, the first day of the first Plan Year in which the Employee is credited with at least 1,000 Hours of Service.
|
(b)
|
No Credited Service will be earned during a Plan Year beginning after December 31, 1988 unless the Employee completes at least 1,000 Hours of Service during that Plan
|
2.1
|
Prior Plan Benefit Formula
.
|
(a)
|
the sum of:
|
(1)
|
the sum of the following (determined by applying the Code Section 401 (a)(l7) limitations, as adjusted, that were in effect in the respective year in which Earnings were received, and not the $150,000 limitation which became effective thereafter) :
|
(A)
|
1.65% of Final Average Earnings determined as of December 31, 1991 multiplied by Credited Service earned as of December 31, 1991, and
|
(B)
|
1.65% of Earnings for each Plan Year beginning after December 31, 1991 and before January 1, 1994 in which the Participant earns a full or partial year of Credited Service.
|
(2)
|
1.65% of Earnings (determined by applying the Code Section 401 (a)(I 7) limitations, as adjusted, that were in effect in the respective year in which Earnings were received) for each Plan Year after December 31, 1993 in which the Participant earns a full or partial year of Credited Service.
|
(b)
|
the sum of the following (determined by applying the Code Section 401(a)(17) limitations, as adjusted, that were in effect in the respective year
in
which Earnings were received, and not the $150,000 limitation which became effective thereafter) :
|
(1)
|
1.15% of Final Average Earnings up to Covered Compensation multiplied by Credited Service up to 35 years.
|
(2)
|
1.65% of Final Average Earnings in excess of Covered Compensation multiplied by Credited Service up to 35 years.
|
(3)
|
1.0% of Final Average Earnings multiplied by Credited Service in excess of 35 years.
|
(c)
|
the annual accrued benefit on December 31, 1988 under the terms of the Plan as then in effect determined without regard to the $200,000 or $150,000 limitations under Section 1.18(c) of the Plan.
|
2.2
|
Minimum Accrued Benefit.
|
2.3
|
Grandfathered Minimum Accrued Benefit. The minimum grandfathered accrued benefit is the amount determined under Section 2.1 of this Appendix; provided, however, that the minimum grandfathered accrued benefit shall take into account any Credited Service and Earning s which may be accrued or earned by an Active Participant until the earlier of the Participant's Termination of Employment or the date of any termination of, or cessation of accruals under, the Plan.
|
4.1
|
Death After Eligibility for Retirement.
|
4.2
|
Death Before Eligibility for Retirement.
|
(a)
|
terminated employment on his or her date of death (if the Participant was an Employee on the date of death),
|
(b)
|
survived to the earliest date on which he or she could retire in accordance with Article 3 of this Appendix (the "Earliest Retirement Date"),
|
(c)
|
elected the 50% Spouse Option and retired on such Earliest Retirement Date, and
|
(d)
|
died immediately after retiring.
|
4.3
|
Alternate Death Benefit For Old Plan Accounts.
|
4.4
|
Other.
|
(a)
|
Benefits under this Article will be paid as soon as practicable after the Participant's death except that the Eligible Spouse may elect to defer commencement of the benefit described in Sections 4.1, 4.2, or 4.3 of this Appendix until any date which is before the Participant's Normal Retirement Date. An Eligible Spouse who makes an election under Section 4.3 of this Appendix may not defer receipt of the Old Plan Account.
|
(b)
|
The benefit under Sections 4.1 or 4.2 of this Appendix will apply to Terminated Vested Participants even if their Termination of Employment occurred prior to the effective date of these paragraphs.
|
1.1.
|
Establishment and Restatement 1
|
1.2.
|
History 1
|
1.3.
|
Intent 1
|
1.4.
|
Transferee Plan 2
|
1.5.
|
Limitation on Applicability 2
|
2.1.
|
“Account” 3
|
2.2.
|
“Accrued Benefit” 4
|
2.3.
|
“Administratively Feasible” 4
|
2.4.
|
“Administrator” or “Plan Administrator” 5
|
2.5.
|
“Affiliated Group” 5
|
2.6.
|
“Age” 5
|
2.7.
|
“Anniversary Date” 5
|
2.8.
|
“Beneficiary” 5
|
2.9.
|
“Board of Directors” 5
|
2.10.
|
“Code” 5
|
2.11.
|
“Compensation” or “Annual Compensation” 5
|
2.12.
|
“Contingent Beneficiary” 6
|
2.13.
|
“Disability” 7
|
2.14.
|
“Disqualified Person” 7
|
2.15.
|
“Distribution Date” 7
|
2.16.
|
“Effective Date” 7
|
2.17.
|
“Elective Deferral” 7
|
2.18.
|
“Eligible Employee” 7
|
2.19.
|
“Employee” 7
|
2.20.
|
“Employer” or “Zions Employer” 7
|
2.21.
|
“Employer Contribution” 7
|
2.22.
|
“Employer Securities” 7
|
2.23.
|
“Entry Date” 8
|
2.24.
|
“ERISA” 8
|
2.25.
|
“Excluded Employee” 8
|
2.26.
|
“Exempt Loan” 9
|
2.27.
|
“Fiduciary” 9
|
2.28.
|
“Highly Compensated Employee” 9
|
2.29.
|
“Inactive Participant” 10
|
2.30.
|
“Investment Fund” 10
|
2.31.
|
“Investment Manager” 10
|
2.32.
|
“K-Test Average Contribution Percentage” 10
|
2.33.
|
“K-Test Contribution Percentage” 10
|
2.34.
|
“K-Test Contributions” 10
|
2.35.
|
“Leased Employee” 11
|
2.36.
|
“Leveraged Employer Securities” 11
|
2.37.
|
“Limitation Year” 11
|
2.38.
|
“M-Test Average Contribution Percentage” 11
|
2.39.
|
“M-Test Contribution Percentage” 11
|
2.40.
|
“M-Test Contributions” 11
|
2.41.
|
“Matching Contribution” 12
|
2.42.
|
“Named Fiduciary” 12
|
2.43.
|
“Net Profit” 12
|
2.44.
|
“Non-Highly Compensated Employee” 12
|
2.45.
|
“Normal Retirement Age” 12
|
2.46.
|
“Normal Retirement Date” 12
|
2.47.
|
“Participant” 12
|
2.48.
|
“Paysop” 12
|
2.49.
|
“Plan” 12
|
2.50.
|
“Plan Sponsor” 12
|
2.51.
|
“Plan Year” 12
|
2.52.
|
“Predecessor Plan” 13
|
2.53.
|
“Prior Plan” 13
|
2.54.
|
“Qualified Matching Contribution” 13
|
2.55.
|
“Qualified Non-Elective Contribution” 13
|
2.56.
|
“Transferred Benefits” 13
|
2.57.
|
“Trust” 13
|
2.58.
|
“Trust Fund” 13
|
2.59.
|
“Trustee” 13
|
2.60.
|
“Valuation Date” 13
|
2.61.
|
“Vested Interest” or “Vested Accrued Benefit” 13
|
2.62.
|
“Voluntary Contributions” 14
|
3.1.
|
“Eligibility Computation Period” 15
|
3.2.
|
“Eligibility Service” 15
|
3.3.
|
“Employment Commencement Date” 15
|
3.4.
|
“Hour of Service” 15
|
3.5.
|
“One Year Break in Service” 17
|
3.6.
|
“Re-employment Commencement Date” 17
|
3.7.
|
“Termination of Employment” 17
|
3.8.
|
“Vesting Computation Period” 17
|
3.9.
|
“Year of Service” 18
|
3.10.
|
“Year of Vesting Service” 18
|
3.11.
|
Special Rules for Crediting Service 18
|
3.12.
|
Qualified Military Service Rules 19
|
3.13.
|
Elapsed Time Method for Determining Years of Vesting Service 21
|
4.1.
|
Age and Service Requirements 23
|
4.2.
|
Eligibility Information 23
|
4.3.
|
Information to be Provided by Employee 23
|
4.4.
|
Reclassification of an Eligible Employee or Excluded Employee 23
|
4.5.
|
Re-employment and Commencement of Participation 24
|
4.6.
|
No Waiver of Participation 24
|
4.7.
|
Effect of Participation 24
|
5.1.
|
Elective Deferrals 25
|
5.2.
|
Payment to Trustee 26
|
5.3.
|
Suspension of Deferrals 26
|
5.4.
|
After-tax Contributions by Participants 26
|
5.4A
|
Roth Elective Deferrals 26
|
5.5.
|
Rollover Contributions by Participants 28
|
5.6.
|
Safe Harbor Employer Matching Contributions 29
|
5.7.
|
Employer Non-Elective Contributions 30
|
5.8.
|
Time and Method of Payment 30
|
5.9.
|
Employer Contribution Accounts 31
|
5.10.
|
Limitations on Contributions 31
|
5.11.
|
Excess Contributions 32
|
5.12.
|
Correction of Excess Contributions 32
|
6.1.
|
Revaluation of Assets 35
|
6.2.
|
Allocation of Contributions and Forfeitures 35
|
6.3.
|
Adjustment of Accounts and Dividends on Employer Securities 36
|
6.4.
|
Eligibility for Allocation of Employer Matching and Non-Elective Contributions 39
|
6.5.
|
Restriction on Certain Allocations 39
|
6.6.
|
Participant Diversification of Investments 40
|
7.1.
|
Special Definitions 43
|
7.2.
|
Coordination With Other Plans 46
|
7.3.
|
Limitations on Allocations and Order of Limitations 47
|
7.4.
|
Aggregation of Plans 47
|
8.1.
|
In-Service Withdrawals, Withdrawals of Rollover Contributions and Withdrawals Due to Attainment of Age 59½, Disability or Hardship 49
|
8.2.
|
Financial Hardship Distribution Rules 50
|
8.3.
|
Determination of Immediate and Heavy Financial Need 50
|
8.4.
|
In Service Withdrawals of Voluntary Contributions 51
|
8.5.
|
Determination of Available Withdrawal Amount 52
|
8.6.
|
Withdrawal of Rollover Contributions 52
|
8.7.
|
Determination of Five Plan Year Period 52
|
9.1.
|
Normal or Late Retirement 54
|
9.2.
|
Disability Retirement 54
|
9.3.
|
Method of Payment 54
|
9.4.
|
Time of Payment 55
|
9.5.
|
Minimum Distribution Requirements 55
|
9.6.
|
No Annuity Benefits 58
|
9.7.
|
Distribution of Employer Securities and Cash 58
|
9.8.
|
Special Distribution Rules 59
|
9.9.
|
Distribution of Transferred Benefits 59
|
10.1.
|
Death Benefits Payable 60
|
10.2.
|
Designation of Beneficiary 60
|
10.3.
|
Death Benefit Payment Procedure 60
|
10.4.
|
Required Distributions Upon Death 61
|
11.1.
|
Vested Amounts 65
|
11.2.
|
Distribution of Vested Interest 66
|
11.3.
|
Distribution of Small Amounts 67
|
11.4.
|
Eligible Rollover Distributions 67
|
11.5.
|
Breaks in Service and Vesting 68
|
11.6.
|
No Increase in Pre-break Vesting 69
|
11.7.
|
Occurrence and Disposition of Forfeitures 69
|
11.8.
|
Distribution to Participants Who Are Less Than 100% Vested in Their Entire Account 70
|
11.9.
|
Repayment of Distribution 71
|
11.10.
|
Restoration of Accounts 71
|
11.11.
|
Amendments to the Vesting Schedule 71
|
12.1.
|
General Fiduciary Duty 73
|
12.2.
|
Allocation of Responsibilities 73
|
12.3.
|
Delegation of Responsibilities 73
|
12.4.
|
Liability for Allocation or Delegation of Responsibilities 73
|
12.5.
|
Liability for Co-Fiduciaries 73
|
12.6.
|
Same Person May Serve in More than One Capacity 74
|
12.7.
|
Indemnification 74
|
13.1.
|
Appointment of Plan Administrator 75
|
13.2.
|
Acceptance by Plan Administrator 75
|
13.3.
|
Signature of Plan Administrator 75
|
13.4.
|
Appointment of an Investment Manager 75
|
13.5.
|
Duties of the Plan Administrator 75
|
13.6.
|
Claims Procedure 76
|
13.7.
|
Claims Review Procedure 76
|
13.8.
|
Limitations of Actions on Claims 77
|
13.9.
|
Compensation and Expenses of Plan Administrator 77
|
13.10.
|
Removal or Resignation 77
|
13.11.
|
Records of Plan Administrator 77
|
13.12.
|
Other Responsibilities 77
|
14.1.
|
Appointment of Trustee 78
|
14.2.
|
Acceptance by Trustee 78
|
14.3.
|
Provisions of Trust Agreement 78
|
14.4.
|
Participant Voting Rights 79
|
14.5.
|
Investment Committee 80
|
14.6.
|
Liability for Plan Expenses 80
|
14.7.
|
Payment From the Trust Fund 80
|
15.1.
|
Notification 81
|
15.2.
|
Record Keeping 81
|
15.3.
|
Bonding 81
|
15.4.
|
Signature of Employer 81
|
15.5.
|
Plan Counsel and Expenses 81
|
15.6.
|
Other Responsibilities 81
|
15.7.
|
Affiliated Groups 81
|
15.8.
|
Employer Contributions 82
|
16.1.
|
Power to Amend 83
|
16.2.
|
Limitations on Amendments 83
|
16.3.
|
Method of Amendment 83
|
16.4.
|
Notice of Amendment 83
|
16.5.
|
Merger or Consolidation 84
|
17.1.
|
Right to Terminate 85
|
17.2.
|
Effect of Termination 85
|
17.3.
|
Manner of Distribution 85
|
17.4.
|
No Reversion 86
|
17.5.
|
Termination of an Employer 86
|
17.6.
|
Partial Termination 86
|
17.7.
|
Effect of Partial Termination 86
|
18.1.
|
Funding Method 87
|
18.2.
|
Investment Policy 87
|
18.3.
|
No Purchase of Life Insurance Contracts 88
|
18.4.
|
General Investments and Dividend Accounts 88
|
18.5.
|
Non-transferability of Annuity Contracts 88
|
18.6.
|
Establishment of Separate Funds 88
|
19.1.
|
Application 91
|
19.2.
|
Special Definitions 91
|
19.3.
|
Top Heavy Status 94
|
19.4.
|
Top-Heavy Minimum Required Allocation 94
|
19.5.
|
Non-forfeitability of Minimum Top Heavy Allocation 96
|
19.6.
|
Minimum Vesting Provision 96
|
19.7.
|
Participant Elective Deferrals 96
|
20.1.
|
Availability of Loans 97
|
20.2.
|
Loan Administration 97
|
20.3.
|
Amount of Loan 97
|
20.4.
|
Collateral Requirements 98
|
20.5.
|
Loan Terms 98
|
20.6.
|
Accounting for Loans 98
|
20.7.
|
Effect of Termination of Employment or Plan 98
|
20.8.
|
No Spousal Consent 98
|
20.9.
|
Anti-Alienation 98
|
20.10.
|
Qualified Domestic Relations Orders 99
|
20.11.
|
QDRO Definitions 99
|
21.1.
|
Adoption by Other Zions Employers 101
|
21.2.
|
Requirements of Participating Zions Employers 101
|
21.3.
|
Designation of Agent 101
|
21.4.
|
Employee Transfers 101
|
21.5.
|
Amendment 102
|
21.6.
|
Discontinuance of Participation 102
|
21.7.
|
Administrator's Authority 102
|
21.8.
|
Participating Employer Contributions 102
|
22.1.
|
No Put option 103
|
22.2.
|
Purchase Price For Employer Securities 103
|
23.1.
|
Participant's Rights 104
|
23.2.
|
Actions Consistent with Terms of Plan 104
|
23.3.
|
Performance of Duties 104
|
23.4.
|
Validity of Plan 104
|
23.5.
|
Legal Action 104
|
23.6.
|
Gender and Number 104
|
23.7.
|
Uniformity 104
|
23.8.
|
Headings 104
|
23.9.
|
Receipt and Release for Payments 104
|
23.10.
|
Payments to Minors, Incompetents 105
|
23.11.
|
Missing Persons 105
|
23.12.
|
Prohibition Against Diversion of Funds 105
|
23.13.
|
Applicability of Plan 106
|
23.14.
|
Misstatement of Age 106
|
23.15.
|
Return of Contributions to the Employer 106
|
23.16.
|
Correction of Incorrect Benefit Payments 106
|
23.17.
|
Counterparts 107
|
(a)
|
“Participant Elective Deferral Account”
shall mean the sub-account that is attributable to the contributions made by the Employer pursuant to an election by the Participant under Section 5.1.
|
(b)
|
“Participant Rollover Account”
shall mean the sub-account that is attributable to contributions received pursuant to Section 5.5. Effective June 1, 2007, any amount in the Participant Rollover Account that is attributable to a rollover from another plan of Roth elective deferrals pursuant to Section 5.4A(e) shall be accounted for separately.
|
(c)
|
“Employer Matching Contribution Account”
shall mean the sub-account that is attributable to matching contributions made by the Employer pursuant to Section 5.6.
|
(d)
|
“Employer Non-Elective Contribution Account”
shall mean the sub-account that is attributable to the Non-Elective Contributions made by the Employer pursuant to Section 5.7.
|
(e)
|
“Participant Voluntary Contribution Account”
shall mean the sub-account that is attributable to Voluntary Contributions made by the Employee prior to the Effective Date. This sub-account shall also reflect the Participant's Voluntary Contributions used previously to acquire Company Stock.
|
(f)
|
“Paysop Account”
shall mean the sub-account that is attributable to all amounts transferred to this Plan from the Paysop pursuant to that certain trust to trust transfer agreement effective December 29, 1988.
|
(g)
|
“Employer Securities Account”
shall mean the sub-account maintained for each Participant to hold the Participant's share of Employer Securities (including fractional shares) held by the Plan, regardless of origin to the Plan or contribution source, including, without limitation, Employer Securities purchased and paid for by the Trust or contributed in kind by the Employer to the Trust, forfeitures of Employer Securities and stock dividends on Employer Securities. To the extent it holds Employer Securities the Dividend Account shall also be treated as part of the Employer Securities Account for all Plan purposes, including diversification under Section 6.6, but excepting vesting under Section 11.1.
|
(h)
|
“General Investments Account”
shall mean the sub-account that is attributable to all contributions made to the Plan for the benefit of the Participant that are not comprised of Employer Securities or used to purchase Employer Securities, together with all forfeitures, earnings and accruals thereon. This sub-account shall hold all non-Employer Securities investments, regardless of origin to the Plan or contribution source.
|
(i)
|
“Dividend Account”
shall mean the sub-account that is maintained for the purpose of receiving and holding cash dividends paid by the Plan Sponsor on Employer Securities held by the Plan until distributed or invested in Employer Securities. Upon investment in Employer Securities, the Dividend Account shall be deemed a part of and treated in the same manner as the Employer Securities Account for all Plan purposes, including diversification under Section 6.6, but excepting vesting under Section 11.1.
|
(j)
|
“Segregated Investment Account”
shall mean the sub-account that is maintained for the benefit of a Participant pursuant to Section 6.6. Effective January 1, 2004, this Account shall be the same as the Participant’s General Investments Account as described in subsection (h).
|
(k)
|
“Predecessor Plan Account”
shall mean the sub-account that is attributable to assets transferred from a Predecessor Plan (“Transferred Benefits”).
|
(l)
|
“Roth Elective Deferral Account”
shall mean the sub-account that is attributable to contributions to the Plan made pursuant to an election by the Participant under Section 5.4A.
|
(m)
|
“In-plan Roth Rollover Account”
shall mean the sub-account that is attributable to an in- plan Roth rollover which is made pursuant to the requirements of Section 5.4A(e).
|
(a)
|
in the case of a corporation, its Board of Directors; or
|
(b)
|
in the case of a partnership or joint venture, its controlling partners.
|
(a)
|
Company contributions to a plan of deferred compensation (other than elective contributions described above) to the extent that, before the application of the Code Section 415 limitations to that plan, the contributions are not includible in the gross income of the Participant for the taxable year in which contributed. Additionally, any distributions from a plan of deferred compensation are not considered as Compensation regardless of whether such amounts are includible in the gross income of the Participant when distributed. However, any amounts received by a Participant pursuant to an unfunded nonqualified plan may be considered as Compensation in the year such amounts are includible in the gross income of the Participant;
|
(b)
|
Amounts realized from the exercise of a nonqualified stock option, or when restricted stock (or property) held by a Participant either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;
|
(c)
|
Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option;
|
(d)
|
Other amounts that receive special tax benefits, such as premiums for group term life insurance (without regard to whether the premiums are includible in the gross income of the Participant);
|
(e)
|
Reimbursements or other expense allowances, fringe benefits (cash and non-cash), moving expenses, parking or public transportation payments not includable in gross income by reason of Code §132(f)(4), welfare benefits, and any lump sum amounts paid at termination of employment (on account of such termination), such as severance pay, vacation and sick leave cash-outs; and
|
(f)
|
Directors fees, if any, paid to Highly Compensated Employees.
|
(a)
|
the security is traded on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f); or
|
(b)
|
the security is traded on a foreign national securities exchange that is officially recognized, sanctioned, or supervised by a governmental authority and the security is deemed by the SEC as having a “ready market” under SEC Rule 15c3-1 (17 CFR 240.15c3-1).
|
(a)
|
Employees whose employment is governed by the terms of a collective bargaining agreement between Employee representatives and the Employer under which retirement benefits were the subject of good faith bargaining between the Employee representatives and the Employer.
|
(b)
|
Employees who are non-resident aliens and who receive no earned income (within the meaning of Code §911(b)) from an Employer that constitutes income from sources within the United States.
|
(c)
|
Employees whose services for the Employer are performed outside of the United States or whose principal base of operations is outside of the United States.
|
(d)
|
Employees who are designated by the Employer to be in either of the following classifications:
|
(1)
|
independent contractor, or
|
(2)
|
temporary employee or Leased Employee,
|
(e)
|
Employees who are employed by an entity that is part of a Affiliated Group with a Zions Employer, but which entity has not adopted and does not participate in this Plan.
|
(a)
|
exercises any discretionary authority or discretionary control respecting management of the Plan or exercises any authority or control respecting management or disposition of its assets;
|
(b)
|
renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of the Plan, or has any authority or responsibility to do so;
|
(c)
|
has any discretionary authority or discretionary responsibility in the administration of the Plan; or
|
(d)
|
is described as a “fiduciary” in Sections 3(14) or (21) of ERISA or is designated to carry out fiduciary responsibilities pursuant to this agreement to the extent permitted by Section 405(c)(1)(B) of ERISA.
|
(a)
|
was at any time during the Plan Year or the Look-back Year a Five Percent Owner (as defined in Section 19.2(b)); or
|
(b)
|
received Compensation from the Employer in the Look-back Year in excess of $85,000 and was in the Top Paid Group for the Look-back Year.
|
(a)
|
has the power to manage, acquire or dispose of any asset of the Plan;
|
(b)
|
is (1) registered as an investment advisor under the Investment Advisors Act of 1940; (2) a bank as defined in that Act; or (3) is an insurance company qualified to perform services described in subsection (a) above under the laws of more than one state; and
|
(c)
|
has acknowledged in writing that he is a Fiduciary with respect to the Plan.
|
(a)
|
the last day of each Plan Year (the “Annual Valuation Date”), and
|
(b)
|
every other business day during the Plan Year on which trading activity occurs or could occur with respect to the Employer Securities held by the Plan. The Plan Administrator shall interpret this Section as it deems necessary or advisable to provide for the orderly and equitable administration of the Plan.
|
(a)
|
Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Employer. These hours shall be credited to the Employee for the year or years in which the duties are performed.
|
(b)
|
Each hour for which an Employee is paid, or entitled to payment, by the Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or Leave of Absence. Notwithstanding the preceding sentence:
|
(1)
|
No more than 501 Hours of Service are required to be credited under this paragraph during which the Employee performs no duties (whether or not such period occurs in a single computation period);
|
(2)
|
An hour for which an Employee is directly or indirectly paid, or entitled to payment, on account of a period during which no duties are performed is not required to be credited to the Employee if such payment is made or due under a plan maintained solely for the purpose of complying with applicable worker's compensation or unemployment compensation or disability insurance laws; and
|
(3)
|
Hours of Service are not required to be credited for a payment that solely reimburses an Employee for medical or medically related expenses incurred by the Employee.
|
(c)
|
Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer. The same Hours of Service shall not be credited both under paragraph (a) or paragraph (b), as the case may be, and under this paragraph (c). These hours shall be credited to the Employee for the year or years to which the award or agreement pertains rather than the year in which the award, agreement or payment is made.
|
(d)
|
Hours of Service shall be determined on the basis of actual hours for which an Employee is paid, entitled to payment or for which back pay is awarded or agreed to.
|
(e)
|
In the case of an Employee who is absent from work for any period:
|
(1)
|
by reason of the pregnancy of the Employee;
|
(2)
|
by reason of the birth of a child of the Employee;
|
(3)
|
by reason of the placement of a child with the Employee in connection with the adoption of such child by such Employee; or
|
(4)
|
for purposes of caring for such child for a period beginning immediately following such birth or placement;
|
(f)
|
Hours of Service shall be aggregated for service with all Zions Employers, however, in no event shall duplicate credit be given for the same Hours of Service.
|
(g)
|
The Plan Administrator may use any records to determine Hours of Service that it considers an accurate reflection of the facts.
|
(h)
|
When crediting Hours of Service for Employees who are paid on an hourly basis the Plan Administrator shall use the “actual” method. For purposes of the Plan, “actual” method shall mean the determination of Hours of Service from records of hours worked and hours for which the Employer makes payment or for which payment is due from the Employer. When crediting Hours of Service for Employees who are not paid on an hourly basis, the Plan Administrator shall use the “salaried earnings” method. With respect to an Employee whose Compensation consists primarily of periodic salary payments, “salaried earnings” method shall mean the determination of Hours of Service from records showing payments made to the Employee or payments due to the Employee from the Employer. In applying the “salaried earnings” method, an Employee who has at least 435 hours or 870 hours shall be credited with 500 Hours of Service and 1,000 Hours of Service, respectively.
|
(a)
|
extended vacation, provided that persons under similar circumstances shall be treated alike;
|
(b)
|
Absence due to illness or accident while regular remuneration is paid;
|
(c)
|
Absence for military service or significant civilian service for the United States, provided that with respect to civilian service, the absent Employee returns to service with the Employer within 30 days of his release from the civilian service or any longer period during which his right to re-employment is protected by law and with respect to military service, the absent Employee returns to service within the period described in Section 3.12, or any longer period during which his right to re-employment is protected by law.
|
(a)
|
for Plan Years commencing prior to January 1, 2002, a Vesting Computation Period during which an Employee has completed at least one Hour of Service. For Plan Years commencing on or after January 1, 2002, “Year of Vesting Service” shall mean a Vesting Computation Period during which an Employee has completed at least 1,000 Hours of Service. Subject to Section 11.5 a Participant's Years of Vesting Service shall be determined based on all Vesting Computation Periods containing or beginning after his Employment Commencement Date or Re-employment Commencement Date, provided that service prior to the date an Employee has attained age 18 shall not be taken into account. Any individual who was a Leased Employee and who subsequently becomes an Eligible Employee shall be credited with all Years of Service as a Leased Employee for purposes of determining Years of Vesting Service. Effective January 1, 2006, except as otherwise provided in Section 3.13, the provisions of this subsection (a) shall no longer apply for purposes of determining Years of Vesting Service.
|
(b)
|
with respect to a Merged Employee for Plan Years commencing prior to the Merger Date, a calendar year during which the Merged Employee has completed at least one hour of service for the Merged Employer. For Plan Years commencing on or after the Merger Date, “Year of Vesting Service” shall mean a Vesting Computation Period during which the Merged Employee completes at least 1,000 Hours of Service. Effective January 1, 2006, except as otherwise provided in Section 3.13, the preceding sentence shall no longer apply and “Years of Vesting Service” after the Merger Date shall be credited to a Merged Employee as provided in Section 3.13. All creditable Years of Vesting Service determined under the above rules for a Merged Employee shall be credited under this Plan as of the Merged Employee’s Employment Commencement Date. For purposes of this Section 3.10(b):
|
(1)
|
“Merged Employee”
shall mean an Employee who immediately prior to his Employment Commencement Date, was employed by a Merged Employer.
|
(2)
|
“Merged Employer”
shall mean an entity that was acquired by (whether as a stock or asset acquisition) or merged into the Plan Sponsor or another Employer who has adopted this Plan.
|
(3)
|
“Merger Date”
shall mean the date designated in any agreement or contract of merger, sale or acquisition as the date on which the acquisition of the Merged Employer by the Plan Sponsor or Employer is considered complete.
|
(a)
|
Discount Corporation of New York:
Each Employee of Discount Corporation of New York (“Discount”) who, as of August 10, 1993, satisfied the Plan's minimum age and service requirements shall be eligible to participate in the Plan on August 11, 1993 (which shall be deemed a “Plan Entry Date” for this purpose) or on any subsequent Plan Entry Date if employed by the Employer or any member of the Affiliated Group who participate in the Plan on that date. All service of the Employee with Discount and any member of the affiliated Group shall be credited for purposes of the above participation rule. For purposes of benefit accrual, no prior service with Discount shall be taken into account.
|
(a)
|
“Qualified Military Service”
shall mean service by an Employee in the uniformed services of the United States (as defined in chapter 43 title 38 of the United States Code), provided:
|
(1)
|
the employee provides advance notice of the service to the Zions Employer, when such notice is practical;
|
(2)
|
the employee is not dishonorably discharged;
|
(3)
|
the employee is re-employed by the Zions Employer within 30 days following the completion of the service or any longer period during which his or her or her right to re-employment is protected by law; and
|
(4)
|
the cumulative length of the Employee’s absence from employment due to the service does not exceed five years.
|
(b)
|
An Employee’s Qualified Military Service shall be treated as service for the Employer for all purposes under the Plan. An Employee’s imputed Hours of Service during Qualified Military Service shall be:
|
(1)
|
the Hours of Service the Employee would have worked but for his or her or her Qualified Military Service; and
|
(2)
|
if the Hours of Service cannot reasonably be determined, the Hours of Service the Employee would have worked had he or she worked during his or her or her Qualified Military Service at his or her or her average rate during the 12 month period immediately preceding his or her or her Qualified Military Service or, if shorter, his or her or her entire period of employment preceding the Qualified Military Service.
|
(c)
|
Compensation (as defined in Section 2.11) shall include imputed compensation during an Employee’s Qualified Military Service. Imputed compensation shall be:
|
(1)
|
the compensation the Employee would have received but for his or her or her Qualified Military Service; or
|
(2)
|
if the compensation is not reasonably certain, the compensation the Employee would have received had he or she received compensation during his or her qualified Military Leave at his or her or her average rate during the 12 month period immediately preceding his or her or her Qualified Military Service, or, if shorter, his or her or her entire period of employment preceding his or her or her Qualified Military Service.
|
(d)
|
A Participant who returns to employment after any Qualified Military Service shall be entitled to make additional Elective Deferrals to the Plan up to the maximum amount of the Elective Deferrals the Participant would have been permitted to make based upon his or her or her imputed compensation during the Qualified Military Service, taking into account any other Elective Deferrals made by the Participant during the Qualified Military Service. The period during which the additional Elective Deferrals may be made shall commence on the date the Participant returns to employment and shall extend until the expiration of the lesser of (i) the period which is three times the length of the Participant’s Qualified Military Service or (ii) five years. Payment of Matching Contributions attributable to Elective Deferrals of imputed compensation during Qualified Military Service shall be made at the same time as other Matching Contributions, based on the time the Elective Deferrals are actually paid to the Plan. The Matching Contributions need not include earnings that would have accrued had the Participant continued performing his or her or her duties for the Employer during Qualified Military Service.
|
(e)
|
Elective Deferrals of a Participant’s imputed compensation during his or her or her Qualified Military Service shall be treated as Elective Deferrals and as K-Test Contributions with respect to the Plan Year to which the imputed compensation relates, if this Plan Year is not the same Plan Year in which the Elective Deferrals are received by the Plan. Any Matching Contributions based on Elective Deferrals of a Participant’s imputed compensation during his or her or her Qualified Military Service shall be treated as M-Test Contributions with respect to the Plan Year to which the Elective Deferrals relate, if this Plan Year is not the same Plan Year in which the Elective Deferrals are received by the Plan.
|
(f)
|
Repayment of any Participant loan from the Plan shall be suspended during Qualified Military Service and the loan repayment period shall be extended by the length of the Qualified Military Service. Interest shall continue to accrue on the loan during the suspension period at a rate equal to the lesser of the current rate on the loan or the maximum rate allowed by applicable law. Upon recommencing loan payments the additional accrued interest shall be taken into account in determining the total amount remaining and due on the loan.
|
(g)
|
Effective June 1, 2007, a Participant who is eligible under this Section 3.12 to make an Elective Deferral to the Plan upon return from Qualified Military Service may designate any portion thereof as a Roth Elective Deferral and may designate the Plan Year for which the Roth Elective Deferral is to be credited, which may include a Plan Year that is before the Plan Year in which the Roth Elective Deferral is actually made. In that event the Plan shall treat the Roth Elective Deferral as having been made in the Plan Year of Qualified Military Service to which the contribution relates (but not earlier than January 1, 2006), as designated by the Participant. A Participant may also identify the Plan Year of Qualified Military Service for which a Roth Elective Deferral is deemed made for other purposes as well, such as for entitlement to an Employer Matching Contribution, and the determination of the five-taxable-year period of participation rule. In the absence of any designation, for purposes of determining the first year of the five years of participation rule under Code §402A(d)(2)(B), the Roth Elective Deferral shall be treated as relating to the first year of Qualified Military Service for which the Participant could have made a Roth Elective Deferral under the Plan, but not earlier than January 1, 2006. Notwithstanding the foregoing, each Participant who may make an Elective Deferral to the Plan under this Section 3.12 and who makes an Elective Deferral shall be deemed to have made a Roth Elective Deferral to the Plan from his or her Elective Deferral contributions in the sum of $1.00, unless the Participant has specifically elected a larger Roth Elective Deferral contribution amount. The Roth Elective Deferral shall be deemed made to the Plan for the earliest possible Plan Year, according to the rules of this subsection.
|
(h)
|
If is determined at the time the Employee commences Qualified Military Service that the length of the service will be either (i) more than 179 days in duration or (ii) of indefinite duration and if the Employee is called to such Qualified Military Service because the Employee is a member of a military reserve unit ordered to active duty after September 11, 2001, then notwithstanding the provisions of Section 8.01, the Employee may elect to withdraw any amount in the Employee's Elective Deferral and Matching Contribution Accounts. Any such withdrawal must be made after the date of the order or call to active duty and prior to the end or close of the active duty period. The withdrawal shall also be deemed to be an Eligible Rollover Distribution under Section 11.04, except that it shall not be subject to any income tax withholding requirement that may otherwise apply under Code §72(t).
|
(i)
|
Effective for Plan Years commencing after December 31, 2008, an Employee who commences Qualified Military Service which will exceed 30 days in length may be deemed, if so elected by the Employee solely for the purpose of receiving a distribution from the Plan, to have incurred a Termination of Employment. If an Employee returns to employment after receiving a distribution from the Plan on account of an election made pursuant to this subsection, but the Employee has not satisfied the requirements of subsection (h) above, then the Employee may not make Elective Deferrals or Roth Elective Deferrals to the Plan until the expiration of 6 months from the date of the last distribution from the Plan made on account of this subsection.
|
(a)
|
In determining Years of Vesting Service for an Employee, the following shall apply:
|
(1)
|
An Employee’s Service taken into account for purposes of vesting shall be the time period beginning with the Employee’s Employment Commencement Date and ending on the date the Employee incurs a Termination of Employment.
|
(2)
|
An Employee who incurs a Termination of Employment by reason of resignation, discharge or retirement and who then performs an Hour of Service within 12 months of that date will be credited with Service for the period in which he was not employed. An Employee who is absent for any other reason and then resigns, is dis charged or retires and who performs an Hour of Service within 12 months of his initial absence will be credited with Service for the period in which he was not employed, provided the service is not counted under the first sentence of this subsection. An Employee who is absent from Service with the Employer for over 12 months shall receive no credit for any absence following the date the Employee incurs the Termination of Employment.
|
(b)
|
In determining an Employee’s Years of Vesting Service fractional years will be rounded to the nearest one twelfth of a year. Periods of Service will be based on full calendar months, crediting an Employee with a full month if the Employee works at least one Hour of Service during the month. An Employee with more than one period of Service will have all such periods aggregated and the Employee’s total Service will be used for purposes of determining Years of Vesting Service.
|
(c)
|
For the Plan Year commencing January 1, 2006 only, the Plan shall credit Vesting Service according to the following rules:
|
(1)
|
For each Employee of a Zions Employer who was employed by the Zions Employer on December 31, 2005, and continued to be employed on January 1, 2006, the Plan shall either apply the rules of this Section 3.13, treating January 1, 2006 as the Employment Commencement Date, or apply the previous vesting credit rules of this Plan without regard to this Section 3.13, crediting the Employee with Vesting Service credit according to the method that provides the greater credit.
|
(2)
|
For each Employee of a Zions Employer whose Employment Commencement Date was after January 1, 2006, but prior to July 24, 2006, the Plan shall either apply the rules of this Section 3.13, or apply the previous vesting credit rules of this Plan without regard to this Section 3.13, crediting the Employee with Vesting Service credit according to the method that provides the greater credit.
|
(3)
|
For each Employee of a Zions Employer whose Employment Commencement Date is after July 23, 2006, the Plan shall apply the rules of this Section 3.13 only.
|
(a)
|
attains age 21, and
|
(b)
|
is employed on the Entry Date.
|
(a)
|
Each Participant may elect to defer any percentage of the Participant's Compensation described in subsection (1) below, subject to a minimum of 1% of the Participant's Compensation per pay period. The maximum percentage amount shall be 50% of the Participant’s Compensation. Effective for Plan Years commencing on or after July 24, 2006, the maximum percentage amount shall be 80% of the Participant’s Compensation. The amount of the deferral shall be contingent on the Participant electing and authorizing the Elective Deferral amount through a Salary Deferral Agreement. The Salary Deferral Agreement and the Participant's authorization thereunder may be evidenced by a document executed by the Participant and filed with the Administrator in the manner prescribed for this purpose, which may include a Salary Deferral Agreement completed and executed by the Participant through any approved electronic means. The Salary Deferral Agreement shall be subject to the following rules:
|
(1)
|
The Salary Deferral Agreement shall apply to each payroll period during which it is in effect and has not been rescinded. The Salary Deferral Agreement shall be applicable to all forms of the Participant’s Annual Compensation, regardless of how paid or characterized, and effective June 1, 2007, shall designate Elective Deferrals as pre-tax Elective Deferrals, Roth Elective Deferrals or both, in the percentage specified. An Elective Deferral contribution to the Plan shall be treated as a Roth Elective Deferral only when so specifically designated by the Participant in advance of the date the Roth Elective Deferral is first made to the Plan.
|
(2)
|
The amount by which the Participant's Annual Compensation is reduced under the Salary Deferral Agreement may be changed (increased, decreased or ceased and effective June 1, 2007, change between pre-tax and Roth Elective Deferrals) by a Participant at any time during the Plan Year. A change shall be evidenced by a written document, by oral instructions directly from the Participant with written confirmation in accordance with rules and procedures established by the Administrator or through any electronic means or method approved by the Plan Administrator.
|
(3)
|
A Salary Deferral Agreement and or an amendment to a Salary Deferral Agreement shall be effective as soon as Administratively Feasible after the Salary Deferral Agreement or the amendment is executed, orally authorized or electronically completed by the Participant and received and confirmed by the Administrator.
|
(4)
|
The Administrator may amend or revoke a Salary Reduction Agreement with any Participant at any time if the Administrator determines that a revocation or amendment is necessary to ensure that the Participant's Elective Deferral for any Plan Year will not exceed any Plan limitations.
|
(5)
|
The Administrator may revoke its Salary Reduction Agreements with all Participants or amend its Salary Reduction Agreements with all Participants on a uniform basis if it determines that such action is necessary in order to comply with the terms of the Plan or any applicable law or regulation.
|
(b)
|
The Elective Deferral amounts designated by the Participant in the Salary Deferral Agreement shall be withheld and contributed to the Plan by the Employer without regard to Net Profits to the Participant's Elective Deferral Account. Unless otherwise approved by the Plan Administrator, Elective Deferrals made through payroll deductions shall be pursuant to the Salary Deferral Agreement executed by the Participant or orally authorized by the Participant and confirmed by the Plan Administrator or authorized by any other electronic means or method approved by the Plan Administrator.
|
(c)
|
Commencing January 1, 2002, and for all Plan Years thereafter an Employee who is eligible to make Elective Deferrals under this Plan and who attains age 50 before the close of the Plan Year shall be eligible to make catch-up contributions in accordance with, and subject to the limitations of, Code §414(v). Catch-up contributions shall not be taken into account for purposes of the provisions of the Plan implementing the required limitations of Code §§402(g) and 415. The Plan Administrator shall not treat catch up contributions as failing to satisfy any provisions of the Plan implementing the requirements of Code §§401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416, as applicable. Effective June 1, 2007, Catch-up contributions may consist of either pre-tax or Roth Elective Deferrals.
|
(a)
|
Contributions and withdrawals of Roth Elective Deferrals will be credited and debited solely to the Roth Elective Deferral Account maintained for each Participant. The Plan will maintain a record of the amount of Roth Elective Deferrals in each Participant’s Account. The Plan shall employ the same procedures set forth in Section 5.1 in determining when and how a Participant may elect to make or change an election of Roth Elective Deferrals, and may provide for designation by the Employee of pre-tax and Roth Elective Deferrals in the same Salary Deferral Agreement. For purposes of implementing this provision the term “Elective Deferrals” in Section 5.1 shall be interpreted to mean both pre-tax and Roth Elective Deferrals, as appropriate.
|
(b)
|
Gains, losses, and other credits or charges must be separately allocated on a reasonable and consistent basis to each Participant’s Roth Elective Deferral Account and to the Participant’s other Accounts under the Plan. For this purpose the Plan may apply the Account adjustment provisions of Section 6.3 to the Roth Elective Deferral Account.
|
(c)
|
No contributions other than Roth Elective Deferrals and properly attributable earnings shall be credited to each Participant’s Roth Elective Deferral Account.
|
(d)
|
Notwithstanding Section 11.4, a direct rollover of a distribution from the Roth Elective Deferral Account will only be made to another Roth elective deferral account under an applicable retirement plan described in Code §402A(e)(1) or to a Roth IRA described in Code §408A, and only to the extent the rollover is permitted under the rules of Code §402(c).
|
(e)
|
Notwithstanding Section 5.5, the Plan will accept a rollover contribution to the Roth Elective Deferral Account only if it is a direct rollover from another Roth elective deferral account under an applicable retirement plan described in Code §402A(e)(1) and only to the extent the rollover is permitted under the rules of Code §402(c). Effective for any distribution from the Plan first commenced after September 27, 2010, the Plan will also accept a rollover contribution to the In-plan Roth Rollover Account, provided that it is a direct rollover of amounts previously held in the Participant’s Account in the Plan (excluding amounts held in the Participant’s Roth Elective Deferral Account). The Plan will accept the rollover only if it is on account of a distribution that complies with all Plan distribution rules and is an Eligible Rollover Distribution within the meaning of Section 11.4. The Participant’s election to make an In-Plan Roth Rollover shall be irrevocable, once it has been accepted and so accounted for by the Plan.
|
(f)
|
The Plan will not provide for a direct rollover for distributions from a Participant’s Roth Elective Deferral Account if the amount of the distributions that are eligible rollover distributions are reasonably expected to total less than $200 during a year. In addition, any distribution from a Participant’s Roth Elective Deferral Account shall not be taken into account in determining whether distributions from a Participant’s other Accounts are reasonably expected to total less than $200 during a year. However, eligible rollover distributions from a Participant’s Roth Elective Deferral Account shall be taken into account in determining whether the total amount of the Participant’s Account balances under the Plan exceeds $1,000 for purposes of mandatory distributions from the Plan. Any provision of the Plan that allows a Participant to elect a direct rollover of only a portion of an eligible rollover distribution but only if the amount rolled over is at least $500 shall be applied by treating any amount distributed from the Participant’s Roth Elective Deferral Account as a separate distribution from any amount distributed from the Participant’s other Accounts in the Plan, even if the amounts are distributed at the same time.
|
(g)
|
In the case of any distribution of excess contributions under Section 5.12, a Highly Compensated Employee shall be permitted to designate the extent to which the excess amount is composed of pre-tax Elective Deferrals and Roth Elective Deferrals but only to the extent such types of deferrals were made for the year. If the Highly Compensated Employee does not designate which type of Elective Deferrals are to be distributed, the Plan will distribute pre-tax Elective Deferrals first.
|
(h)
|
In the case of any distribution to a Participant under Articles IX or XI that is other than a lump sum distribution, the Participant shall be permitted to designate the extent to which the distribution is composed of Roth Elective Deferrals and other contributions, but only to the extent the Participant’s Account includes Roth Elective Deferrals. If the Participant does not designate the composition of Roth Elective Deferrals in a distribution, the Plan will distribute Roth Elective Deferrals until the Participant’s Roth Elective Deferral Account is exhausted prior to distributing any other contributions.
|
(i)
|
For purposes of this Section 5.4A, a Roth Elective Deferral is an Elective Deferral that is:
|
(1)
|
Designated irrevocably by the Participant at the time of the cash or deferred election as a Roth Elective Deferral that is being made in lieu of all or a portion of any pre-tax Elective Deferrals the Participant is otherwise eligible to make under the Plan; and
|
(2)
|
Treated by the Employer as includible in the Participant's income at the time the Participant would have received that amount in cash if the Participant had not made a cash or deferred election.
|
(a)
|
The Participant provides adequate evidence to the Plan Administrator that the amount satisfies the requirements of Code §402(c) regarding amounts that may be rolled over;
|
(b)
|
If the amount is rolled over indirectly to this Plan through an individual retirement account, annuity, or bond, the amount does not include life insurance policies, amounts contributed (or deemed to have been contributed) by the Participant or amounts distributed from a Plan not described above; and
|
(c)
|
It is received by this Plan as a direct transfer pursuant to Code §402(e)(6) or rolled over after distribution to the Participant within 60 days following its distribution.
|
(a)
|
The total amount of a Participant's Elective Deferrals during any calendar year shall not exceed $11,000 which amount shall be adjusted annually, consistent with the provisions of Code §402(g) and thereafter indexed at the same time and in the same manner as the dollar limitation for defined benefit plans in Code §415(b)(1)(A). For this purpose a Participant's Elective Deferrals to this Plan plus the Participant's elective deferrals pursuant to any other Code §401(k) arrangement, elective deferrals under a simplified employee pension plan and salary reduction contributions to a tax-sheltered annuity, irrespective of whether the Employer or any member of an Affiliated Group to which the Employer belongs maintains the arrangement, plan or annuity, shall be aggregated.
|
(b)
|
The K-Test Average Contribution Percentage of Participants who are Highly Compensated Employees shall not exceed in any Plan Year the greater of:
|
(1)
|
The K-Test Average Contribution Percentage for the prior Plan Year of Participants who are Non-Highly Compensated Employees multiplied by 1.25; or
|
(2)
|
The lesser of the K-Test Average Contribution Percentage for the prior Plan Year of Participants who are Non-Highly Compensated Employees multiplied by two (2) or the K-Test Average Contribution Percentage for the prior Plan Year of Participants who are Non-Highly Compensated Employees plus two.
|
(c)
|
The M-Test Average Contribution Percentage for Participants who are Highly Compensated Employees shall not exceed in any Plan Year the greater of:
|
(1)
|
The M-Test Average Contribution Percentage for the prior Plan Year of Participants who are Non-Highly Compensated Employees multiplied by 1.25; or
|
(2)
|
The lesser of the M-Test Average Contribution Percentage for the prior Plan Year of Participants who are Non-Highly Compensated Employees multiplied by two (2) or the M-Test Average Contribution Percentage for the prior Plan Year of Participants who are Non-Highly Compensated Employees plus two.
|
(a)
|
Excess Deferrals: with respect to any calendar year, amounts identified as Excess Deferrals, whether determined by the Administrator or designated by a Participant in writing no later than March 1 following the end of the calendar year, in accordance with such procedures as the Plan Administrator shall specify, less any Excess K-Test Contributions previously distributed or recharacterized for the Plan Year beginning in the calendar year in which the Excess Deferral is made, pursuant to Section 5.12(b).
|
(b)
|
Excess K-Test Contributions: with respect to any Plan Year, the excess of the aggregate amount of K-Test Contributions actually made on behalf of Highly Compensated Employees for such Plan Year over the maximum amount of such contributions permitted under Section 5.10(b). The Excess K-Test Contributions of an individual Highly Compensated Employee shall be determined (i) by calculating the total dollar amount resulting from a reduction of the K-Test Contributions made on behalf of Highly Compensated Employees in order of the K-Test Contribution Percentages, beginning with the highest percentage, until the limitations of Section 5.10(b) are met, and (ii) by reducing the K-Test Contributions made on behalf of Highly Compensated Employees in order of the dollar amount of K-Test Contributions for each Highly Compensated Employee, beginning with the highest dollar amount, and subtracting such amounts from the total dollar amount determined in (i) above until the total dollar amount is exhausted. The Excess K-Test Contributions allocated to a Participant shall be reduced by any Excess Deferrals previously distributed for the calendar year ending with or within the Plan Year in which the Excess K-Test Contributions arose, pursuant to Section 5.12(a).
|
(c)
|
Excess M-Test Contributions: with respect to any Plan Year, the excess of the aggregate amount of M-Test Contributions actually made on behalf of Highly Compensated Employees for such Plan Year over the maximum amount of such contributions permitted under Section 5.10(c). Effective January 1, 1997, the Excess M-Test Contributions of an individual Highly Compensated Employee shall be determined (i) by calculating the total dollar amount resulting from a reduction of the M-Test Contributions made on behalf of Highly Compensated Employees in order of the M-Test Contribution Percentages, beginning with the highest percentage, until the limitations of Section 5.10(c) are met, and (ii) by reducing the M-Test Contributions made on behalf of Highly Compensated Employees in order of the dollar amount of M-Test Contributions for each Highly Compensated Employee, beginning with the highest dollar amount, and subtracting such amounts from the total dollar amount determined in (i) above until the total dollar amount is exhausted.
|
(a)
|
Excess Deferrals
: The Plan Administrator shall direct the Trustee to distribute to a Participant from his Participant Elective Deferral Account an amount equal to the Participant's Excess Deferral plus income, if any, allocable thereto. Such distribution shall be designated by the Plan Administrator as a distribution of an Excess Deferral and shall be made not earlier than the date on which the Trustee receives the Excess Deferral and not later than the first April 15 following the end of the calendar year in which the Excess Deferral is made.
|
(b)
|
Excess K-Test Contributions
: The Plan Administrator shall direct the Trustee to distribute to a Participant his Excess K-Test Contribution plus income, if any, allocable thereto. The distribution shall be designated by the Plan Administrator as a distribution of an excess contribution and shall be made any time during or after the Plan Year in which the excess contribution arose, but within 12 months after the end of the Plan Year.
|
(c)
|
Excess M-Test Contributions
: The Plan Administrator shall direct the Trustee to hold the excess M-Test Contribution Amount and shall use this Amount to reduce any future Matching Contribution obligation of the Employer to the Plan.
|
(d)
|
account balance attributable to Elective Deferrals and other amounts taken into account under the K-Test as of the beginning of the Plan Year, and
|
(e)
|
any additional amount of such contributions made for the Plan Year.
|
(a)
|
With respect to Elective Deferral contributions made pursuant to Section 5.1, an amount equal to the Participant's Elective Deferral since the previous Annual or Interim Valuation Date shall be allocated and credited to his Elective Deferral Account.
|
(b)
|
Matching Contributions made pursuant to Section 5.6, if any, shall be allocated on each Annual Valuation Date (or if the Employer makes Matching Contributions on a calendar quarter or other periodic basis, on the last day of each calendar quarter or other period) to each Participant's Account who satisfies the requirements of Section 6.4(a), in an amount equal to the Employer Matching Contribution percentage determined by the Employer for the Plan Year, but in no event less than the percentage required under Section 5.6. If the Employer makes a Matching Contribution to the Plan at any time during the Plan Year, any limit on the percentage amount shall not be determined by reference to Annual Compensation for the Plan Year, but by reference to Compensation paid only during the period to which the Matching Contribution relates. Effective January 1, 2006, and for all Plan Years thereafter the Employer Matching Contribution shall be allocated according to the total Elective Deferrals (and effective June 1, 2007, the aggregate of the Participant’s pre- tax Elective Deferrals and Roth Elective Deferrals) and the total Compensation of the Participant for the Plan Year without regard to when during the Plan Year the Participant’s Elective Deferral or the Employer’s Matching Contribution is made.
|
(c)
|
Employer Non-Elective Contributions made pursuant to Section 5.7 shall be allocated on each Annual Valuation Date to each Participant's Account who satisfies the requirements of Section 6.4(b). The Employer's Non-Elective Contribution shall be credited to the Accounts of eligible Participants in an amount equal to that percentage of each annual Employer Non-Elective Contribution to this Plan that is in the same proportion that each Participant's Annual Compensation for the Plan Year for which the Employer makes the Non-Elective Contribution bears to the total Annual Compensation of all Participants for the Plan Year. For purposes of this Section 6.2(c) only Compensation paid to the Employee from and after the date applicable to the Participant as provided in subsection 6.4(c) during the portion of the Plan Year during which the Employee is a Participant in the Plan shall be taken into account. At the time the Employer makes its Non-Elective Contribution the Employer shall designate to the Administrator the Plan Year for which the Non- Elective Contribution shall be deemed to have been made (which may be the current Plan Year or the immediately prior Plan Year, as the Employer deems appropriate). If the Employer makes no designation, the Employer's Non-Elective Contribution shall be deemed to have been made for the Plan Year that begins concurrent with or within the taxable year of the Employer for which the Employer claims a deduction under Code §404.
|
(d)
|
Forfeitures that the Employer elects to use to reduce or as the Employer’s Non-Elective Contribution for the Plan Year pursuant to Section 11.6 shall be allocated as of each Annual Valuation Date to the Account of each Participant who satisfies the requirements of Section 6.4(b). Subject to Section 5.7 such allocated amounts shall be credited to the Non-Elective Contribution Accounts of such Participants in the same manner provided for allocation of Employer Non-Elective Contributions in Section 6.2(c) above.
|
(e)
|
With respect to Rollover Contributions made pursuant to Section 5.5, an amount equal to the Participant's rollover contributions since the previous Annual or Interim Valuation Date shall be credited to the Participant's Rollover Contribution Account.
|
(f)
|
Contributions by the Employer of Employer Securities or of cash that is immediately used to purchase Employer Securities shall be allocated solely to the Employer Securities Account. All other contributions, whether by the Employer or any Participant, shall be allocated solely to the General Investments Account.
|
(a)
|
Each Account shall be charged with all forfeitures, withdrawals and distributions from the Account since the previous Annual or Interim Valuation Date. In making a forfeiture reduction under this Section 6.3(a) the Plan Administrator, to the extent possible, first must forfeit from a Participant's General Investments Account before making a forfeiture from his Employer Securities Account.
|
(b)
|
Each Account shall be charged with any administrative costs or expenses incurred and paid by the Plan that are allocable to the Account since the previous Annual or Interim Valuation Date. All administrative costs and expenses, to the extent possible, shall be paid from a Participant’s General Investments Account before being paid from his Employer Securities Account
|
(c)
|
Each Participant's General Investments Account that has a non-zero balance after the application of (a) and (b) above, shall be credited (or charged) with its proportionate share of the net investment income (or loss) and expenses since the previous Annual or Interim Valuation Date. The amount to be credited or charged to each Account shall be determined based on the ratio that: (i) the balance in the Account on the previous Annual or Interim Valuation Date less any forfeitures, withdrawals or distributions from the Account since that date bears to (ii) the total of such amounts determined for all Accounts. Notwithstanding the previous sentence, in the sole discretion of the Plan Administrator, the method of allocating the net investment income (or loss) of the General Investment Account may be adjusted to reflect the effect of cash flows into and out of such Accounts (such as contributions, payments on Participant loans, distributions, etc.) based on the length of time between the date of such cash flow and the current Annual or Interim Valuation Date. Any such adjustment pursuant to the previous sentence shall be made in a uniform and non-discriminatory manner among Participants and/or the types of Accounts.
|
(d)
|
Each Account shall be credited with the contributions allocated to it since the previous Annual or Interim Valuation Date, subject to the following rules:
|
(1)
|
The Employer Securities Account maintained for each Participant shall be credited with the Participant's allocable share of Employer Securities (including fractional shares) purchased and paid for by the Trust or contributed in kind to the Trust, with any forfeitures of Employer Securities and with any stock dividends on Employer Securities allocated to his Employer Securities Account. Employer Securities acquired with an Exempt Loan under Section 14.3 shall be allocated in accordance with that Section, subject however, to the provisions of this Section 6.3. Except as otherwise specifically provided in Section 14.3, the Plan Administrator will base allocations to the Participant's Employer Securities Account on dollar values ex pressed as shares of Employer Securities or on the basis of actual shares, assuming there is only a single class of Employer Securities.
|
(2)
|
The General Investments Account maintained for each Participant shall be credited with the Participant's allocable share of Elective Deferrals and any Employer Contribution not attributable to Employer Securities, according to the provisions of Section 6.2.
|
(e)
|
Cash dividends the Employer pays with respect to Employer Securities held by the Plan shall be allocated pro-rata to the Dividend Account of each Participant according to the number of Employer Securities in the Participant's Employer Securities Account as of the dividend date of record, less any Employer Securities allocated to or acquired for the Participant’s Employer Securities Account on or after the immediately preceding ex- dividend date. The Plan Administrator will not allocate to a Dividend Account any cash dividends the Employer directs the Trustee to apply to the payment of an Exempt Loan nor any cash dividends the Employer directs the Trustee to distribute directly to a Participant in accordance with Section 9.7.
|
(1)
|
The Participant shall have the right to elect, no less often than annually, to invest the allocable share of dividends in Employer Securities or withdraw as cash.
|
(2)
|
The initial period during which a Participant may exercise the annual election shall extend from April 15, 2003, to May 15, 2003, for all individuals who are Participants in the Plan on April 15, 2003. Commencing January 1, 2004, and until July 24, 2006 the annual election period shall extend from January 1 to January 31 for all individuals who are Participants in the Plan on January 1. For an Employee who becomes a Participant in the Plan on any day after April 15, 2003, during the 2003 Plan Year or after January 1 in any subsequent Plan Year until July 24, 2006 the annual election period shall commence on the Participant’s Entry Date and end on the one month anniversary thereof. Beginning July 24, 2006, Participants shall have the right to make a standing election whether to invest such Participant’s allocable share of dividends in Employer Securities or withdraw as cash.
|
(3)
|
If the Participant fails to make an election to withdraw his allocable share of dividends in cash, his share shall be invested automatically in Employer Securities.
|
(4)
|
The Participant may elect and revoke any prior election without limitation at any time and in accordance with procedures established by the Committee. The Participant shall indicate his election by any means acceptable to the Plan Sponsor, which may include electronic notice or written notification delivered or, if mailed, post- marked no later than the last day of the election period.
|
(5)
|
Dividends to be invested in Employer Securities shall be so invested as soon as Administratively Feasible following their receipt by the Plan. Withdrawal of any cash dividends must occur no later than 90 days after the close of the Plan Year in which the dividends were paid.
|
(6)
|
Until invested in Employer Securities or distributed in cash, dividends in a Dividend Account shall be held and invested as provided in Section 18.4.
|
(a)
|
The Administrator shall determine allocations of Matching Contributions on the basis of the Plan Year, unless the Employer makes its Matching Contributions during the Plan Year on a periodic basis, such as monthly or according to payroll periods, in which case the Matching Contribution shall be allocated during the Plan year on the same periodic basis as made. That is, in allocating Matching Contributions to a Participant's Account, the Administrator shall take into account only the Compensation paid the Participant during the specific period during the Plan Year to which the allocation applies and a valid, executed Salary Reduction Agreement is in effect and on file with the Administrator for the period, subject, however, to the maximum amount of Annual Compensation that may be taken into account under Code §401(a)(17). Matching Contributions, whether or not made on a periodic basis during the Plan Year, shall be allocated to Accounts of Participants without regard to any minimum Service or specific day employment requirement.
|
(b)
|
Except as otherwise provided in this Section 6.4, the Administrator shall determine allocations of Employer Non-Elective Contributions on the basis of the Plan Year. In allocating Employer Non-Elective Contributions to a Participant's Account, the Administrator shall take into account only Compensation paid the Employee from and after the date applicable to the Participant as provided in subsection (c) below. For any Plan Year Employer Non- Elective Contributions shall be allocated only to Accounts of Participants who complete at least 1,000 Hours of Service during the Plan Year and who are employed by the Employer on the last day of the Plan Year. The rules set forth in subsection (c) below shall also apply in determining when the Participant is eligible to receive an Employer Non- elective Contribution.
|
(c)
|
If an Employee becomes a Participant in the Plan prior to the first anniversary of his Employment Commencement Date, he shall not receive an allocation of Employer Non- Elective Contributions (regardless of the number of his Hours of Service or the amount of his Elective Deferrals) for any period prior to the earlier of January 1 or July 1 following the first anniversary of his Employment Commencement Date. From and after the applicable date the Participant shall be entitled to an allocation of Employer Non-Elective Contributions for the Plan Year, without regard to whether the Participant has been continuously employed from his Employment Commencement Date, provided the Participant first satisfies the Hours of Service and employment requirements of subsection (b) above.
|
(a)
|
the selling shareholder,
|
(b)
|
the selling shareholder's spouse, brothers or sisters (whether by the whole or half blood), ancestors or lineal descendants; or
|
(c)
|
any shareholder owning (as determined under Code §318(a)) more than 25% of any class or the value of any class of Employer Securities.
|
(a)
|
Each Qualified Participant may direct the investment into a Segregated Investment Account of up to 25% of the value of the Participant's Eligible Account within 90 days after the
Valuation Date
of each Plan Year (to the extent a direction amount exceeds the amount to which a prior direction under this Section 6.6 applies) during the Participant's Qualified Election Period. For the last Plan Year in the Participant's Qualified Election Period, “50%” shall be substituted for “25%” in the immediately preceding sentence. The Qualified Participant must make his direction in writing or in another form acceptable to the Plan Administrator, which may include any approved electronic means. The direction may be effective no later than 180 days after the close of the Plan Year to which the direction applies, and the direction must specify which, if any, of the investment options in the Segregated Investment Account the Participant selects. Effective January 1, 2004, a Qualified Participant may direct the investment of his or her Eligible Account as provided in this subsection at any time during the Plan Year. When given, the direction shall be effective immediately.
|
(b)
|
A Qualified Participant may choose one of the following alternative investment options:
|
(1)
|
The distribution of the portion of his Eligible Account covered by the election. The Administrator will direct the distribution within 90 days after the last day of the period during which the Qualified Participant may make the election. The provisions of this Plan applicable to a distribution of Employer Securities, including any applicable put option requirements of Article XXII, apply to this investment option. Effective January 1, 2004, this option shall no longer be available.
|
(2)
|
The liquidation and transfer of the portion of his Eligible Account covered by the election to the General Investment Account in the Plan. The Trustee will make the transfer no later than 90 days after the last day of the period during which the Qualified Participant may make the election. Effective January 1, 2004, the Trustee shall carry out all such investment directions and make all transfers as soon as Administratively Feasible.
|
(c)
|
The Participant's Segregated Investment Account shall alone receive all income it earns and bear all expense or loss it incurs.
|
(d)
|
For purposes of this Section 6.6 the following definitions apply:
|
(1)
|
“Eligible Account”
shall mean that portion of the Participant's total Account that consists of the Employer Securities Account.
|
(2)
|
“Qualified Participant”
means a Participant who has attained age 55 and who has completed at least 10 years of participation in the Plan (without regard to the Participant’s years of participation in a Predecessor Plan, but taking into account the Participant’s years of participation in the Prior Plan). A “year of participation” means a Plan Year in which the Participant was eligible for an allocation of Employer contributions, irrespective of whether the Employer actually contributed to the Plan for that Plan Year.
|
(3)
|
“Qualified Election Period”
means the six-Plan-Year period beginning with the Plan Year in which the Participant first becomes a Qualified Participant.
|
(e)
|
Effective January 1, 2004, the following additional rules shall apply in determining a Participant’s right to diversify the Employer Securities Account.
|
(1)
|
A Participant who has completed at least five Years of Vesting Service, regardless of age or the number of years of participation in the Plan, may direct diversification into the Segregated Investment Account of up to 100% of the Participant’s Employer Matching Contribution Account, except that portion in the Employer Securities Account attributable to Employer Non-Elective Contributions and dividends thereon. Effective January 1, 2007, the five Years of Vesting Service requirement shall no longer apply. A Participant who has completed three years of participation in the Plan, regardless of age, may direct diversification into the Segregated Investment Account of up to 100% of the Participant’s Employer Securities Account attributable to Employer Non-Elective Contributions and dividends thereon.
|
(2)
|
The Participant must make his direction in writing or in another form acceptable to the Plan Administrator, which may include any approved electronic means. The direction must specify which, if any, of the investment options in the Segregated Investment Account the Participant selects. The Participant may make his investment direction at any time during the Plan Year and when given, the direction shall be effective immediately.
|
(3)
|
The Trustee shall carry out all investment directions and make all transfers as soon as Administratively Feasible.
|
(4)
|
Amounts in the Participant’s Employer Matching Contribution Account that are diversified into the Participant’s Segregated Investment Account pursuant to this subsection (e) shall not be applied to reduce the amount available for diversification in the Eligible Account by a Qualified Participant under subsection (a).
|
(f)
|
The following rules shall apply to former Participants in the Amegy Bank 401(k) Savings Plan (“Amegy Participant”).
|
(1)
|
With respect to that portion of an Amegy Participant’s Employer Securities Account that consists of Employer Securities and dividends from such Employer Securities that were allocated to the Amegy Participant’s Employer Securities Account not later than as of December 31, 2005, such Amegy Participant may direct up to 100% of that portion of his/her Employer Securities Account into the General Investments Account.
|
(2)
|
That portion of an Amegy Participant’s Employer Securities Account that consists of Employer Securities and dividends from such Employer Securities that were allocated to the Amegy Participant’s Employer Securities Account as of January 1, 2006 or later, shall be subject to same rules as other participants as set forth in this Section 6.6.
|
(a)
|
“Annual Additions”
shall mean the sum of the following amounts allocated on behalf of a Participant for a Limitation Year:
|
(1)
|
Employer contributions; and
|
(2)
|
Employee contributions; and
|
(3)
|
Forfeitures available for reallocation, if applicable; and
|
(4)
|
Allocations under any simplified employee pension plans.
|
(b)
|
“Compensation”
for purposes of this Article VII (compliance with Code §415) and for purposes of compliance with any applicable non-discrimination test, including the determination of an Employee's status as a Highly Compensated Employee and the K-Test and M- Test procedures described in Section 5.10, shall mean and be determined as follows:
|
(1)
|
The term “Compensation” shall include:
|
(A)
|
The Participant's wages, salaries, fees for professional service and other amounts received (whether or not paid in cash) for personal services actually rendered in the course of employment with an Employer maintaining the plan (including, but not limited to, commissions paid to salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, reimbursements and expense allowances).
|
(B)
|
In the case of a Participant who is an employee within the meaning of Code §401(c)(1), the Participant's earned income as described in Code §401(c)(2).
|
(C)
|
Any amounts contributed by the Employer or received by the Participant pursuant to an unfunded, non-qualified plan of deferred compensation to the extent such amounts are includable in the gross income of the Participant for the Limitation Year.
|
(D)
|
Any amount contributed or deferred by the Employer at the election of the Participant and that is not includable in the gross income of the Participant by reason of Code §§125, 401(k), 403(b) or 457.
|
(E)
|
Elective amounts that are not includable in the gross income of the Employee by reason of Code §132(f)(4).
|
(F)
|
Payments of Post-Severance Compensation made to a Participant by the later of (i) 2~ months from the date of Termination of Employment, or (ii) the end of the Limitation Year for which the Employer is required to furnish the Participants a written statement under Code §§6041(d), 6051(a)(3) and 6052 or the last day of the Plan Year.
|
(2)
|
The term “Compensation” does not include items such as:
|
(A)
|
Except as provided in subparagraph (1)(D) above, any Employer contributions to a qualified retirement plan and any Employer contributions to any other retirement plan that receive special tax benefits to the extent the contributions are not includable in the gross income of the Participant for the taxable year in which made; and any distributions from any qualified retirement plan, regard less of whether the distributions are includable in the gross income of the Participant.
|
(B)
|
Employer contributions made on behalf of a Participant to a simplified employee pension described in Code §408(k) to the extent such contributions are deductible by the Employer under Code §219(b)(7).
|
(C)
|
Except as provided in subparagraph (1)(D) above, other forms of compensation that receive special tax benefits, such as premiums for group health insurance and group term life insurance (but only to the extent that the compensation is not includable in the gross income of the Participant).
|
(D)
|
Amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by a Participant either becomes freely transferable or is no longer subject to a substantial risk of forfeiture (see Code §83 and the regulations thereunder).
|
(E)
|
Amounts realized from the sale, exchange, or other disposition of stock acquired under a qualified stock option.
|
(F)
|
Compensation in excess of $200,000, or such greater amount as adjusted by the Secretary of the Treasury for increases in the cost of living in accordance with Code §401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year applies to determine the Compensation limit for the Limitation Year that begins with or within such calendar year.
|
(G)
|
Any payment to a Participant by the Employer after the Participant’s Termination of Employment that is not Post-Severance Compensation as defined herein, even if payment of the amount is made within the time period specified in 7.1(b)(1)(F) above.
|
(H)
|
For Limitation Years beginning after December 31, 2008, any differential wage payment, as defined in Code §3401(h)(2).
|
(3)
|
Compensation actually paid or made available to a Participant within the Limitation Year shall be the Compensation used for the purposes of applying the limitations of this Article and Code §415. In the case of a group of Employers that constitutes an Affiliated Group, all Employers shall apply this same rule.
|
(c)
|
“Defined Contribution Dollar Limitation” shall mean the lesser of:
|
(1)
|
$40,000, as adjusted for increases in the cost-of-living under Code §415(d), or
|
(2)
|
one hundred percent (100%) of the Participant's Compensation, as defined in this Section 7.1, for the Limitation Year. The Compensation limit referred to in this subsection 7.1(c)(2) shall not apply to any contribution for medical benefits after separation from service (effective January 1, 2002, severance from employment) (within the meaning of Code §401(h) or Code §419A(f)(2)) that is otherwise treated as an Annual Addition.
|
(d)
|
“Employer”
shall mean the Employer that adopts this Plan and, in the case of a group of employers that constitutes an Affiliated Group, all such employers shall be considered a single Employer for purposes of applying the limitations of this Article.
|
(e)
|
“Excess Amount”
shall mean the excess of the Participant's Annual Additions for the Limitation Year over the Maximum Permissible Amount for such Limitation Year.
|
(f)
|
“Individual Medical Benefit Account”
shall mean any separate account that is established for a Participant under a defined benefit plan and from which benefits described in Code §401(h) are payable solely to such Participant, his spouse or his dependents.
|
(g)
|
“Limitation Year”
shall mean the 12 consecutive month period specified in Article II.
|
(h)
|
“Maximum Permissible Amount”
shall mean, for a given Limitation Year, the Defined Contribution Dollar Limitation. If a short Limitation Year is created because of an amendment changing the Limitation Year to a different 12 consecutive month period, the Maxi mum Permissible Amount for such short Limitation Year shall not exceed the amount in (1) above multiplied by a fraction, the numerator of which is the number of months in the short Limitation Year (computed to the nearest whole month) and the denominator of which is 12.
|
(i)
|
“Post-Severance Compensation”
shall mean any amount received as regular pay after Termination of Employment if:
|
(1)
|
The payment is regular remuneration for services during the Participant's regular working hours, or remuneration for services outside the Participant's regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments; and
|
(2)
|
The payment would have been paid to the Participant prior to a Termination of Employment if the Participant had continued in employment with the Employer.
|
(a)
|
If the Employer maintains any other qualified cash or deferred arrangement (“401(k) Plan”) covering Participants in this Plan and if the Annual Additions to a Participant's Account in this Plan and the annual additions to the Participant's account in the 401(k) Plan would result in the allocation on an allocation date of this Plan that coincides with an allocation date of the 401(k) Plan of an Excess Amount, the Excess Amount attributed to this Plan shall be determined by the Plan Administrator on a uniform and non-discriminatory basis, considering the amount of elective deferrals and Employer contributions made to each Participant's account in the 401(k) Plan, and the anticipated allocation of the Employer Contribution to this Plan. The Plan Administrator shall coordinate its actions with those of the plan administrator of the 401(k) Plan to provide for the maximum possible allocation to all Participants in both plans, taking into account the provisions of the 401(k) Plan allowing for distribution of elective deferrals to reduce an Excess Amount. In this regard, the Plan Administrator, whenever possible, shall allow for the allocation and distribution of elective deferrals from the 401(k) Plan so as to eliminate or reduce the possibility of creating a suspense account under this Plan or under the 401(k) Plan. If, after distributing all amounts that may be distributed from the 401(k) Plan, there still remains an Excess Amount, the Plan Administrator will attribute the total Excess Amount to the 401(k) Plan.
|
(b)
|
If the Employer maintains another qualified defined contribution plan during any Limitation Year that covers Participants in this Plan and as a consequence of the requirements of Section 7.4 an Excess Amount is allocated to a Participant's Account in this Plan on an allocation date that coincides with an allocation date in the other plan, the total Excess Amount shall be deemed allocated to the other plan.
|
(a)
|
First, from the Participant's General Investment Account, in the following order:
|
(1)
|
Unmatched Participant Elective Deferrals;
|
(2)
|
Employer Matching Contributions (if any have been allocated to the General Investments Account);
|
(3)
|
Matched Participant Elective Deferrals;
|
(4)
|
Employer Non-Elective Contributions.
|
(b)
|
Second, from Employer Non-Elective Contributions to the Participant's Employer Securities Account.
|
(a)
|
A Participant may make in-service withdrawals from his Voluntary Contribution Account to the extent permitted in Section 8.4.
|
(b)
|
A Participant who has attained age 59½ may withdraw all or any portion of his Account, except any amount attributable to the Roth Elective Deferral Account or any amount in the Rollover Account that is attributable to Roth elective deferrals to another plan. A Participant who has attained age 59½ and has surpassed the five Plan Year period that includes the first Plan Year in which the Participant made Roth Elective Deferrals to the Plan (the “59 ½ and Five Year Rule”) may withdraw all or any portion of his Account attributable to the Roth Elective Deferral Account. A Participant may withdraw any amount in the Rollover Account that is attributable to Roth elective deferrals to another plan if the Participant has satisfied the 59 ½ and Five-Year Rule with respect to the other plan.
|
(c)
|
A Participant who suffers a Disability as defined in Section 2.13 may withdraw all or any portion of his Account without regard to the Participant's age or whether he has incurred a Termination of Employment.
|
(d)
|
A Participant may elect to withdraw an amount credited to his Elective Deferral Account without regard to the Participant's age (except any amount attributable to the Roth Elective Deferral Account or any amount in the Rollover Account that is attributable to Roth elective deferrals to another plan) but only if he obtains prior approval from the Plan Administrator, which approval shall be granted only upon a determination of Financial Hardship. However, notwithstanding the foregoing, if: (i) a Participant obtains prior approval from the Plan Administrator, granted only upon a determination of Financial Hardship and (ii) such Participant has satisfied the 59 ½ Year Rule with respect to this Plan; then such Participant may withdraw an amount from his Roth Elective Deferral Account; or (regardless of whether such Participant has satisfied the 59 ½ Year Rule with respect to this Plan) from a Rollover Account that is attributable to Roth elective deferrals to another plan if the Participant has satisfied the 59 ½ Year Rule with respect to the other plan. Any distribution pursuant to this subsection (d) shall be limited to an amount (aggregating all sources for the Financial Hardship distribution) not to exceed the amount determined by the Plan Administrator to satisfy the Financial Hardship distribution rules under Section 8.2 and 8.3. Such Participant who is eligible for the Financial Hardship distribution, may direct the amount that comes from each source that is eligible for distribution in accordance with this Section. In the case of a withdrawal due to Financial Hardship, the amount of the withdrawal shall be limited to the total amount in the Participant's Elective Deferral Account, including income allocable thereto as of December 31, 1988. A Participant shall be entitled to a withdrawal from his Participant Elective Deferral Account under this Plan only after receiving as a hardship withdrawal all amounts available first, from his Rollover Account and second, from his Voluntary Contribution Account. Upon granting approval, the Plan Administrator shall direct the Trustee to distribute the indicated portion of the Participant's Elective Deferral Account to the Participant.
|
(e)
|
In the event a Participant has previously made any Rollover Contribution to the Plan, the Participant shall, upon written notice to the Plan Administrator, be entitled to withdraw at any time, without regard to the Participant's age, any amount up to the balance of the Rollover Contributions held in his Rollover Contribution Account. Withdrawals shall have no effect upon any benefits provided under any other provisions of this Plan.
|
(f)
|
Whenever a withdrawal is permitted from more than one sub-account under this Section 8.1 the withdrawal shall be made (to the extent permitted under Code §72) in the following order: first, from the Participant Voluntary Contribution Account and second, from the Participant Elective Deferral Account. Withdrawals shall also be made from a Participant’s General Investments Account before being taken from his Employer Securities Account whenever possible.
|
(a)
|
The distribution is not in excess of the amount of the immediate and heavy financial need of the Participant, including amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution; and
|
(b)
|
Other resources of the Participant are not reasonably available to meet this need.
|
(a)
|
Expenses for medical care described in Code §213(d) incurred by the Participant, the Participant's spouse or any dependent of the Participant or expenses necessary for these persons to obtain such medical care;
|
(b)
|
Payment of tuition and related educational fees for the next 12 months of post-secondary education for the Participant, the Participant's spouse or any dependent of the Participant;
|
(c)
|
Costs directly related to purchase (excluding mortgage payments) a principal residence for the Participant; or
|
(d)
|
Payments necessary to prevent the eviction of the Participant from his principal residence or foreclosure of the mortgage on that residence.
|
(e)
|
Payments for burial or funeral expenses for the Participant's deceased parent, spouse, children or dependents (as defined in Code §152, without regard to Code §152(d)(1)(B)); or
|
(f)
|
Expenses for the repair of damage to the Participant's principal residence that would qualify for the casualty deduction under Code §165 (determined without regard to whether the loss exceeds 10% of adjusted gross income).
|
(a)
|
The Five Plan Year Period commences as of the first day of the Plan Year that includes the first day of the first taxable year of the Employee in which the Employee makes a Roth Elective Deferral to the Roth Elective Deferral Account under the Plan and ends as of the last day of the Plan Year in which five consecutive taxable years have been completed. For this purpose, the first taxable year in which an Employee makes a Roth Elective Deferral is the year in which the amount is includible in the employee's gross income.
|
(b)
|
A Roth Elective Deferral that is returned to the Employee as an Excess Deferral or an Excess K-Test Contribution under the provisions of Section 5.11 does not begin the consecutive taxable year period and does not result in commencement of the Five Plan Year Period.
|
(c)
|
A Roth Elective Deferral returned to an Employee as a permissible withdrawal under Section 5.13 does not begin the consecutive taxable year period and does not result in commencement of the Five Plan Year Period.
|
(d)
|
The Five Plan Year Period shall be determined separately for each Plan of the Employer in which the Employee participates.
|
(e)
|
If a direct rollover contribution of a distribution from a designated Roth account under another plan is made by the Employee to the Plan, the consecutive taxable year period and the commencement of the Five Plan Year Period begins on the first day of the Employee's taxable year in which the Employee first made a Roth contribution to the designated Roth account in the other plan, if earlier than the first taxable year in which a Roth Elective Deferral is made by the Employee to the Plan.
|
(f)
|
The beginning of the consecutive taxable year period and commencement of the Five Plan Year Period is not redetermined for any portion of an Employee's Roth Account in the Plan, even if the entire Roth Account is distributed during the Five Plan Year Period and the Employee subsequently makes additional Roth Elective Deferrals or rollovers of Roth deferrals from another plan to the Plan.
|
(g)
|
The rule in subsection (f) above applies if the Employee dies or the Roth Account is divided pursuant to a qualified domestic relations order. In either event, if a portion of the Roth Account is not payable to the Employee, but is payable to the Employee's Beneficiary or to an Alternate Payee, the age, death or disability of the Employee is used to determine whether the distribution is a Qualified Roth Distribution. However, if the Employee makes a rollover to this Plan of a Roth deferral from another plan that the Employee has received as an alternate payee or a spousal beneficiary, the Employee’s own age, disability or death shall be used to determine whether a subsequent withdrawal or distribution from the Plan is a Qualified Roth Distribution.
|
(a)
|
A single lump sum payment. The amount of the lump sum payment shall be equal to the entire Vested Interest of the Participant in his Account on the date payment is made.
|
(b)
|
Substantially equal monthly, quarterly or annual installments over any period not exceeding the life expectancy of the Participant or the Participant and his or her spouse, if longer, until the Participant's Vested Accrued Benefit has been fully distributed. Fractional share installment amounts of Employer Securities shall be withheld and accumulated until a whole share of Employer Securities can be distributed. Any fractional share remaining upon payment of the final installment shall be paid in cash.
|
(a)
|
the attainment by the Participant of age 65; or
|
(b)
|
the 10th anniversary of the Participant's Entry Date; or
|
(c)
|
the date the Participant has a Termination of Employment from the Employer.
|
(a)
|
Effective Date
. This Section and Section 10.4 will apply for purposes of determining required minimum distributions for all calendar years beginning with the Effective Date. Required minimum distributions for the 2002 calendar year under this Section and Section 10.4 will be determined as follows. If the total amount of 2002 required minimum distributions under the Plan made to a Participant or Beneficiary prior to the effective date of this Section equals or exceeds the required minimum distributions determined under this Section, then no additional distributions will be required to be made for the 2002 calendar year on or after such date to the Participant or Beneficiary. If the total amount of the 2002 calendar year required minimum distributions under the Plan made to the Participant or Beneficiary prior to the effective date of this Section is less than the amount determined under this Section, then required minimum distributions for the 2002 calendar year on and after such date will be determined so that the total amount of required minimum distributions for the 2002 calendar year made to the Participant or Beneficiary will be the amount determined under this Section.
|
(b)
|
Time and Manner of Distribution
.
|
(1)
|
Required Beginning Date
. The Participant's entire Vested Accrued Benefit will be distributed, or begin to be distributed, to the Participant no later than the participant's Required Beginning Date.
|
(2)
|
Death of Participant Before Distributions Begin
. If the Participant dies before distributions begin, the Participant's entire Vested Accrued Benefit will be distributed, or begin to be distributed, as provided in Section 10.4.
|
(3)
|
Forms of Distribution
. Unless the participant's interest has been distributed in the form of a single sum on or before the Required Beginning Date, as of the first Distribution Calendar Year distributions will be made in accordance with Section 9.5(c).
|
(c)
|
Required Minimum Distributions During Participant's Lifetime
.
|
(1)
|
Amount of Required Minimum Distribution For Each Distribution Calendar Year
. During the participant's lifetime, the minimum amount that will be distributed for each Distribution Calendar Year is the lesser of:
|
(A)
|
the quotient obtained by dividing the Participant's Account Balance by the distribution period in the Uniform Lifetime Table set forth in Treas. Reg. Section 1.401(a)(9)-9, using the Participant's age as of the Participant's birth day in the Distribution Calendar Year; or
|
(B)
|
if the Participant's sole Designated Beneficiary for the Distribution Calendar Year is the Participant's spouse, the quotient obtained by dividing the Participant's Account Balance by the number in the Joint and Last Survivor Table set forth in Treas. Reg. Section 1.401(a)(9)-9, using the Participant's and spouse's attained ages as of the participant's and spouse's birthdays in the Distribution Calendar Year.
|
(2)
|
Lifetime Required Minimum Distributions Continue Through Year of Participant's Death
. Required minimum distributions will be determined under this Section 9.5(c) beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar Year that includes the Participant's date of death.
|
(d)
|
Definitions
. For purposes of this Section 9.5 and Section 10.4 the following definitions shall apply.
|
(1)
|
“Designated Beneficiary”
shall mean the individual who is designated as the Beneficiary under Section 10.2 of the Plan and is the Designated Beneficiary under Code §1.401(a)(9)-4.
|
(2)
|
“Distribution Calendar Year”
shall mean a calendar year for which a minimum distribution is required. For distributions beginning before the Participant's death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year that contains the Participant's Required Beginning Date. For distributions beginning after the Participant's death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin under Section 10.4. The required minimum distribution for the Participant's first Distribution Calendar Year will be made on or before the Participant's Required Beginning Date. The required minimum distribution for other Distribution Calendar Years, including the required minimum distribution for the Distribution Calendar Year in which the Participant's Required Beginning Date occurs, will be made on or before December 31 of that Distribution Calendar Year.
|
(3)
|
“Life Expectancy”
shall mean Life Expectancy as computed by use of the Single Life Table in Treas. Reg.§1.401(a)(9)-9.
|
(4)
|
“Participant's Account Balance”
shall mean the balance in the Participant’s Account as of the last valuation date in the calendar year immediately preceding the Distribution Calendar Year (valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. The account balance for the valuation calendar year includes any amounts rolled over or transferred to the plan either in the valuation calendar year or in the Distribution Calendar Year if distributed or transferred in the valuation calendar year.
|
(5)
|
“Required Beginning Date”
shall mean, if a Participant is a more than five percent (5%) owner in the Plan Year ending in or with the calendar year in which the Participant attains age 70½, April 1st following that calendar year. For any other Participant the Required Beginning Date is April 1st following the close of the calendar year in which the Participant attains age 70½, or, if later, April 1st following the close of the calendar year in which the Participant has a Termination of Employment.
|
(6)
|
“Five percent owner”
shall have the meaning set forth in Reg. §1.401(a)(9)-1, Q&A-2(c).
|
(e)
|
Form of Benefit Payment
. If payment of the Participant's Accrued Benefit commences under this Section 9.5, it shall be distributed to the Participant (consistent with the Participant's election and the requirements of Section 9.3):
|
(1)
|
in the form of a cash lump sum payment of the Participant’s entire Accrued Benefit; or
|
(2)
|
in the form of minimum annual cash installment payments over a period not extending beyond the life expectancy of the Participant, or the joint life expectancy of the Participant and his Beneficiary.
|
(f)
|
Redetermination of Life Expectancy
. For purposes of determining the amount of any minimum annual cash installment payments the life expectancy of the Participant and his spouse, but not of his non-spouse Beneficiary, shall be redetermined annually, unless otherwise elected by the Participant. Notwithstanding the above, any distribution required under the incidental death benefit requirements of Code §401(a) shall be treated as a required distribution.
|
(g)
|
Temporary Suspension of Required Minimum Distributions
. A Participant may elect not to receive the required minimum distribution (or any portion thereof) attributable to the 2009 Distribution Calendar Year. The Participant election shall be made by notifying the Plan in writing (or by other acceptable electronic means) at any time prior to the latest possible date that the minimum required distribution would otherwise be made. Any required minimum distribution (or portion thereof) attributable to the 2009 Distribution Calendar Year which is made to a Participant shall be treated by the Plan as an Eligible Rollover Distribution, except that it shall not be subject to any income tax withholding requirement that may otherwise apply under Code §72(t).
|
(a)
|
If so elected by the Participant, distributions of benefits from the Plan may be made entirely in Employer Securities, valued at fair market value at the time of distribution, or, effective March 1, 2003, entirely in cash. If the Participant elects a distribution that is part cash and part Employer Securities, the distribution shall be consist only of the Employer Securities in the Employer Securities Account and the cash value of the General Investments Account at the time the payment is made. A Participant who elects a distribution method other than a lump sum may designate prior to payment of the first installment the amount of the first and each subsequent installment that will be Employer Securities and that will be cash. Any fractional security share to which a Participant or his Beneficiary is entitled shall be paid in cash. If the Participant makes no election, then the Participant’s Account shall be distributed in cash and in Employer Securities, according to the ratio of investment in the Participant’s Account in the General Investments and Employer Securities Accounts, respectively.
|
(b)
|
Notwithstanding the provisions of Section 9.7(a), if a Participant has elected under Section 6.3(e) to withdraw (rather than reinvest) the cash dividends on Employer Securities allocated or allocable to his Account, the Plan Administrator shall direct the Trustee to pay to the Participant in cash the cash dividends on Employer Securities so allocated or allocable to the Participant’s Employer Securities Account, irrespective of whether the Participant is fully vested in his Employer Securities Account. The Plan Administrator's direction must state whether the Trustee is to pay the cash dividend distributions currently, or within the 90-day period following the close of the Plan Year in which the Employer pays the dividends to the Trust. The Plan Administrator may also request the Employer to pay cash dividends on Employer Securities directly to Participants.
|
(a)
|
If the Participant incurs a Termination of Employment after attainment of Normal Retirement Age (age 65) or by reason of death or disability, distribution of his Accrued Benefit shall commence during but not later than the last day of the Plan Year in which the applicable event occurs.
|
(b)
|
If the Participant incurs a Termination of Employment for any reason not specified in (a), distribution of his Accrued Benefit shall commence as soon as Administratively Feasible during but not later than the last day of the Plan Year after the close of the 5th Plan Year following the Plan Year in which the Participant incurred the Termination of Employment. If the Participant resumes employment with the Employer on or before the last day of the 5th Plan Year following the Plan Year of his/her separation from Service (effective January 1, 2002, severance from employment), the mandatory distribution provisions of this paragraph (b) do not apply.
|
(a)
|
Death of Participant Before Distributions Begin
. If the Participant dies before distributions begin, the Participant's entire Vested Accrued Benefit will be distributed, or begin to be distributed no later than as follows:
|
(1)
|
If the Participant's surviving spouse is the Participant's sole Designated Beneficiary, then unless otherwise provided herein, distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70½, if later.
|
(2)
|
If the Participant's surviving spouse is not the Participant's sole Designated Beneficiary, then except as otherwise provided herein, distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died.
|
(3)
|
If there is no Designated Beneficiary as of September 30 of the year following the year of the Participant's death, the Participant's entire Vested Accrued Benefit will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant's death.
|
(4)
|
If the Participant's surviving spouse is the Participant's sole Designated Beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 10.4(a), other than subsection (a)(i), will apply as if the surviving spouse were the Participant.
|
(b)
|
Forms of Distribution
. Unless the participant's interest has been distributed in the form of a single sum on or before the Required Beginning Date, as of the first Distribution Calendar Year distributions will be made in accordance with Sections 10.4(e) and (f).
|
(c)
|
Beneficiaries’ Election of Five Year Rule
. Beneficiaries may elect on an individual basis whether the Five Year Rule or the Life Expectancy rule in Sections 10.4(a) and (f) applies to distributions after the death of a Participant who has a Designated Beneficiary. The election must be made no later than the earlier of September 30 of the calendar year in which distribution would be required to begin under Section 10.4(a) or by September 30 of the calendar year that contains the fifth anniversary of the Participant's (or, if applicable, surviving spouse's) death. If neither the Participant nor Beneficiary makes an election under this subsection, distributions will be made in accordance with Sections 10.4(a) and (f).
|
(d)
|
Transition Rule for Designated Beneficiary Receiving Distributions Under Five Year Rule to Elect Life Expectancy Distributions
. A Designated Beneficiary who is receiving payments under the Five Year Rule may make a new election to receive payments under the Life Expectancy rule until December 31, 2003, provided that all amounts that would have been required to be distributed under the Life Expectancy rule for all Distribution Calendar Years before 2004 are distributed by the earlier of December 31, 2003, or the end of the five year period.
|
(e)
|
Death On or After Date Distributions Begin
.
|
(1)
|
Participant Survived by Designated Beneficiary
. If the Participant dies on or after the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the longer of the remaining Life Expectancy of the Participant or the remaining Life Expectancy of the Participant's Designated Beneficiary, determined as follows:
|
(A)
|
The Participant's remaining Life Expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.
|
(B)
|
If the Participant's surviving spouse is the Participant's sole Designated Beneficiary, the remaining Life Expectancy of the surviving spouse is calculated for each Distribution Calendar Year after the year of the Participant's death using the surviving spouse's age as of the spouse's birthday in that year. For Distribution Calendar Years after the year of the surviving spouse's death, the remaining Life Expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse's birthday in the calendar year of the spouse's death, reduced by one for each subsequent calendar year.
|
(C)
|
If the Participant's surviving spouse is not the Participant's sole Designated Beneficiary, the Designated Beneficiary's remaining Life Expectancy is calculated using the age of the Beneficiary in the year following the year of the Participant's death, reduced by one for each subsequent year.
|
(2)
|
No Designated Beneficiary
. If the Participant dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Participant's death, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the Participant's remaining Life Expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.
|
(f)
|
Death Before Date Distributions Begin
.
|
(1)
|
Participant Survived by Designated Beneficiary
. If the Participant dies before the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the remaining Life Expectancy of the Participant's Designated Beneficiary, determined as provided in Section 10.4(e).
|
(2)
|
No Designated Beneficiary
. If the Participant dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the year of the Participant's death, distribution of the Participant's entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death.
|
(3)
|
Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin
. If the Participant dies before the date distributions begin, the Participant's surviving spouse is the Participant's sole Designated Beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under Section 10.4(a)(i), this Section 10.4(f) will apply as if the surviving spouse were the Participant.
|
(g)
|
Rollover of Death Benefit for Non-spouse Beneficiary after December 31, 2009.
|
(1)
|
If the Participant dies before his or her required beginning date, the required mini mum distribution for purposes of determining the amount eligible for rollover with respect to a non-spouse beneficiary shall be determined under the 5-year rule described in Code §401(a)(9)(B)(ii). Under this rule, no amount shall be a required minimum distribution for the year in which the Participant dies. The rule in Q&A-7(b) of Reg. §1.402(c)-2 (relating to distributions before an employee has attained age 70½) shall not apply to a non-spouse beneficiary.
|
(2)
|
Under the five-year rule as adopted by the Plan, no amount is required to be distributed to a non-spouse beneficiary until the fifth calendar year following the year of the Participant’s death. In that year, if no prior distribution has been made, the entire amount to which the beneficiary is entitled under the Plan must be distributed.
|
(3)
|
If the non-spouse beneficiary so elects, the Plan shall permit the non-spouse beneficiary to directly roll over the beneficiary's entire benefit until the end of the fourth calendar year following the year of death. On or after January 1 of the fifth year following the calendar year in which the Participant died, no amount payable to the non-spouse beneficiary under the Plan shall be eligible for rollover.
|
(4)
|
If a Participant dies on or after his or her required beginning date, within the meaning of Code §401(a)(9)(C), then for the year of the Participant’s death, the required minimum distribution not eligible for rollover shall be the same as the amount that would have applied if the Participant were still alive and had elected the direct rollover. The amount not eligible for rollover shall include all undistributed required minimum distributions for the year in which the direct rollover occurs and any prior year, including years before the Participant’s death.
|
(h)
|
Temporary Suspension of Beneficiary Distributions
. A Beneficiary receiving distributions from the Plan under an election made pursuant to subsection (c) may elect not to receive the distribution amount (or any portion thereof) that would otherwise be attributable to the 2009 Distribution Calendar Year. The Beneficiary's election shall be made by notifying the Plan in writing (or by other acceptable electronic means) at any time prior to the latest possible date that the distribution would otherwise be made. If a distribution (or portion thereof) otherwise attributable to the 2009 Distribution Calendar Year is suspended, then the five year period for payout of the Accrued Benefit to the Beneficiary shall be extended an additional year to take into account the suspension of payment.
|
(a)
|
One hundred percent (100%) of the balance in his Participant Elective Deferral Account and in his Employer Matching Contribution Account, as adjusted for any contributions or distributions since the preceding Valuation Date; and
|
(b)
|
One hundred percent (100%) of the balance in his Participant Rollover Contribution Account and in his Voluntary Contribution Account, if any, as adjusted for any contributions or distributions since the preceding Valuation Date; and
|
(c)
|
One hundred percent (100%) of the balance in his Dividend Account if any (whether cash or Employer Securities), as adjusted for any contributions or distributions since the preceding Valuation Date; and
|
(d)
|
His vested percentage of the balance in his Employer Non-Elective Contribution Account, as adjusted for any contributions or distributions since the preceding Valuation Date, according to the Participant's Years of Vesting Service, except as provided in subsection (e) below and for Employer Non-Elective Contributions made for Plan Years beginning before January 1, 2007 and consistent with the following schedule:
|
(e)
|
A Participant's Predecessor Plan Account (if any) shall be vested pursuant to the vesting rules set forth in the Predecessor Plan Account.
|
(a)
|
A single lump sum payment. The amount of the lump sum payment shall be equal to the Participant's Vested Interest in his or her Account on the date payment is made.
|
(b)
|
Substantially equal monthly, quarterly or annual installments over any period not exceeding the life expectancy of the Participant or the Participant and his or her spouse, if longer, until the Participant's Vested Accrued Benefit has been fully distributed. Fractional share installment amounts of Employer Securities shall be withheld and accumulated until a whole share of Employer Securities can be distributed. Any fractional share remaining upon payment of the final installment shall be paid in cash.
|
(a)
|
“Eligible Rollover Distribution”
shall mean any distribution of all or any portion of the balance to the credit in the Account of the Distributee, except that an Eligible Rollover Distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code §401(a)(9), and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). Any amount that is distributed on account of hardship (without regard to whether the hardship withdrawal is attributable to Elective Deferrals) shall not be an Eligible Rollover Distribution and the Distributee may not elect to have any portion of such a distribution paid directly to an eligible retirement plan.
|
(b)
|
“Eligible Retirement Plan”
shall mean an individual retirement account described in Code §408(a), an individual retirement annuity described in Code §408(b) (jointly or separately, an “IRA”), an annuity plan described in Code §403(a), a qualified trust described in Code §401(a), that accepts the Distributee's Eligible Rollover Distribution, an annuity contract described in Code §403(b) and an eligible plan under Code §457(b) that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and that agrees to separately account for amounts transferred into such plan from this Plan. This definition of Eligible Retirement Plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relation order, as defined in Code §414(p). However, in the case of an Eligible Rollover Distribution to the surviving spouse, an Eligible Retirement Plan is an IRA.
|
(c)
|
“Distributee”
shall mean an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code §414(p), are Distributees with regard to the interest of the spouse or former spouse. Effective for distributions first commencing on or after January 1, 2007, a “Distributee” shall also include any non-spouse beneficiary who is a designated beneficiary under the provisions of Section 10.2.
|
(d)
|
“Direct Rollover”
shall mean a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.
|
(a)
|
Forfeiture of the Participant’s non-vested interest in his or her Employer Non-Elective Contribution Account shall occur:
|
(1)
|
In the case of a Participant who receives a lump sum distribution of his or her Vested Interest on account of Termination of Employment, on the day the Participant receives the distribution.
|
(2)
|
In the case of a Participant who has a Vested Interest derived from Employer Contributions (which for this purpose shall include Elective Deferral Contributions) and does not receive a total distribution of such Vested Interest, on the last day of the Plan Year in which the Participant incurs five consecutive One Year Breaks in Service.
|
(3)
|
In the case of a Participant who has no Vested Interest derived from Employer Contributions (which for this purpose shall include Elective Deferral Contributions), regardless of the sub-account to which the Employer Contributions have been allocated, on the day the Participant incurs the Termination of Employment.
|
(b)
|
Amounts forfeited by terminated Participants from their Employer Non-Elective Contribution Accounts, if not used first to restore Accounts under Sections 11.10 and 23.11, shall be used to reduce the amount of the Employer’s Non-Elective Contribution otherwise made pursuant to Section 5.7 for the Plan Year. In the event the Employer does not make a Non-Elective Contribution for the Plan Year, then the amounts forfeited shall be used at the Employer's election:
|
(1)
|
to offset costs and expenses of Plan administration (to the extent and in the manner permitted under Section 14.6),
|
(2)
|
as the sole Employer Non-Elective Contribution for the Plan Year and allocated in accordance with Section 6.2(c),
|
(3)
|
to reduce the amount of the Employer’s Matching Contribution for the Plan year, or
|
(4)
|
any combination of the foregoing.
|
(c)
|
To the extent possible, the Plan Administrator must forfeit from a Participant’s General Investments Account before making a forfeiture from his or her Employer Securities Account.
|
(a)
|
the date on which the Participant incurs five consecutive One Year Breaks in Service after the date of distribution; or
|
(b)
|
the end of the five year period beginning with the date the Participant is re-employed by the Employer.
|
(a)
|
First, the amount, if any, to be credited to such types of Accounts for the Plan Year pursuant to Section 11.5;
|
(b)
|
Second, Employer contributions for the Plan Year, if any, that are not required to be credited to such types of Accounts for other Participants; and
|
(c)
|
Third, an additional Employer contribution for the Plan Year, regardless of whether the Employer has any Net Profits for the year.
|
(a)
|
60 days after the amendment is adopted;
|
(b)
|
60 days after the amendment becomes effective; or
|
(c)
|
60 days after the Participant is issued written notice of the amendment by the Employer or Plan Administrator.
|
(a)
|
with respect to the allocation or delegation;
|
(b)
|
with respect to establishing or implementing a procedure for allocation or delegation; or
|
(c)
|
by continuing the allocation or delegation.
|
(a)
|
if he participates knowingly in, or knowingly undertakes to conceal, an act or omission of such other Fiduciary knowing such act or omission is a breach;
|
(b)
|
if, by his failure to comply with Section 12.1 he has enabled such other Fiduciary to commit a breach;
|
(c)
|
if he has knowledge of a breach by such other Fiduciary, unless he makes reasonable efforts under the circumstances to remedy the breach.
|
(a)
|
to prepare an annual report, summary plan description and modifications thereto, and summary annual report;
|
(b)
|
to complete and file the various reports and tax forms with the appropriate government agencies as required by law;
|
(c)
|
to distribute to Plan Participants and/or their Beneficiaries the summary plan description and reports sufficient to inform such Participants or Beneficiaries of their Accrued Benefit and their Vested Accrued Benefit as required by law;
|
(d)
|
to determine annually, or more frequently if necessary, which Employees are eligible to participate in the Plan;
|
(e)
|
to determine the benefits to which Participants and their Beneficiaries are entitled and to approve or deny claims for benefits;
|
(f)
|
to provide Plan Participants with a written explanation of the effect of electing an optional form of benefit payment;
|
(g)
|
to retain copies of all documents or instruments under which the Plan operates in its own office, the principal place of business of the Plan Sponsor and such other place as the Secretary of Labor or his delegate may by regulation prescribe; to make all such documents and instruments governing the operation of the Plan available for inspection by Plan Participants and/or their Beneficiaries; and to furnish copies of such documents or instruments to Plan Participants and/or their Beneficiaries on request, charging only the cost thereof as prescribed by regulation of the Secretary of Labor or his delegate;
|
(h)
|
to interpret Plan provisions as needed and in this regard to have complete and total discretion in the interpretation of the Plan; and
|
(i)
|
to act as the Plan's agent for the service of legal process, unless another agent is designated by the Plan Sponsor and to act on behalf of the Plan in all matters in which the Plan is or may be a party.
|
(a)
|
The Trustee will use the proceeds of the loan, within a reasonable time after receipt, only for any or all of the following purposes: (i) to acquire Employer Securities, (ii) to repay such loan, or (iii) to repay a prior Exempt Loan. Except as provided under Article XXII, no Employer Security acquired with the proceeds of an Exempt Loan may be subject to a put, call or other option, or buy-sell or similar arrangement while held by and when distributed from this Plan, whether or not this Plan is then an employee stock ownership plan.
|
(b)
|
At the time the Exempt Loan is made the interest rate for the Exempt Loan must be reasonable and in combination, the rate of interest for the Exempt Loan and the price of the Employer Securities to be acquired with the Exempt Loan proceeds shall not be such that Plan assets may be drained off.
|
(c)
|
Any collateral the Trustee pledges to the creditor must consist only of the assets purchased by the borrowed funds and those assets the Trust used as collateral on the prior Exempt Loan repaid with the proceeds of the current Exempt Loan.
|
(d)
|
The creditor may have no recourse against the Trust under the Exempt Loan except with respect to such collateral given for the Exempt Loan, contributions (other than contributions of Employer Securities) that the Employer makes to the Trust to meet its obligations under the Exempt Loan, and earnings attributable to such collateral and the investment of such contributions. The payment made with respect to an Exempt Loan by the Plan during a Plan Year must not exceed an amount equal to the sum of such contributions and earnings received during or prior to the year less such payments in prior years. The Advisory Committee and the Trustee must account separately for such contributions and earnings in the books of account of the Plan until the Trust repays the Exempt Loan.
|
(e)
|
The Exempt Loan must provide for transfer of Plan assets upon default only upon and to the extent of the failure of the Plan to meet the payment schedule of the Exempt Loan.
|
(f)
|
The Trustee must add and maintain all assets acquired with the proceeds of an Exempt Loan in a Suspense Account. In withdrawing assets from the Suspense Account, the Trustee will apply the provisions of Treas. Reg. §§54.4975-7(b)(8) and (15) as if all securities in the Suspense Account were encumbered. Upon the payment of any portion of the loan, the Trustee will effect the release of assets in the Suspense Account from encumbrances. For each Plan Year during the duration of the Exempt Loan, the number of Employer Securities released must equal the number of encumbered Employer Securities held immediately before release for the current Plan Year multiplied by a fraction. The numerator of the fraction is the amount of principal and interest paid for the Plan Year. The denominator of the fraction is the sum of the numerator plus the principal and interest to be paid for all future Plan Years. The number of future Plan Years under the loan must be definitely ascertainable and must be determined without taking into account any possible extension or renewal periods. If the interest rate under the Exempt Loan is variable, the interest to be paid in future Plan Years must be computed by using the interest rate applicable as of the end of the Plan Year. If collateral includes more than one class of Employer Securities, the number of Employer Securities of each class to be released for a Plan Year must be determined by applying the same fraction to each such class. The Plan Administrator will allocate assets withdrawn from the Suspense Account to the Accounts of Participants who otherwise share in the allocation of the Employer's Contribution for the Plan Year for which the Trustee has paid the portion of the Exempt Loan resulting in the release of the assets. The Plan Administrator will make this allocation consistently as of each
Valuation Date
on the basis of non-monetary units, taking into account the relative Compensation of all such Participants for such Plan Year.
|
(g)
|
The loan must be for a specific term and may not be payable at the demand of any person except in the case of default.
|
(h)
|
Notwithstanding the fact this Plan ceases to be an employee stock ownership plan, Employer Securities acquired with the proceeds of an Exempt Loan will continue after the Trustee repays the loan to be subject to the provisions of Treas. Reg. §§54.4975-7(b)(4), (10), (11) and (12) relating to put, call or other options and to buy-sell or similar arrangements, except to the extent these regulations are inconsistent with Code §409(h).
|
(a)
|
With respect to the voting of Employer Securities that are not part of a registration-type class of securities (as defined in Code §409(e)(4)), a Participant (or Beneficiary) has the right to direct the Trustee regarding the voting of such Employer Securities allocated to his Employer Securities Account with respect to any corporate matter that involves the approval or disapproval of any corporate merger or consolidation, recapitalization, reclassification, liquidation, dissolution, sale of substantially all assets of a trade or business, or such similar transaction as the Treasury may prescribe in regulations.
|
(b)
|
With respect to Employer Securities allocated to the Participant's Employer Securities Account that are part of a registration type class of securities, a Participant's right to direct the Trustee to vote such Employer Securities shall extend to all corporate matters requiring a vote of stockholders. The Plan Administrator shall cause to be prepared and delivered to each Participant a notice of the stockholders' meeting with a descriptive statement of the items upon which the Participant may exercise his right to direct the Trustee's vote. Each Participant shall be given notice that if he fails to exercise his voting rights, the Trustee may elect to vote the Employer Securities allocated to the Participant's Account.
|
(a)
|
For purposes of crediting Hours of Service, all employees of all corporations or entities that are members of an Affiliated Group and all employees of any other entity required to be aggregated with the Employer pursuant to regulations under Code §414(o) shall be treated as employed by a single Employer for purposes of Article III (Service), Article IV (Eligibility), Article V (Contributions) and Article XI, (Vesting). Except as provided in Section 7.1, all employees of all corporations or entities that are members of an Affiliated Group and all employees of any other entity required to be aggregated with the Employer pursuant to regulations under Code §414(o) shall be treated as employed by a single Employer.
|
(b)
|
If the Employer is a member of an Affiliated Group and if such group maintains more than one qualified retirement plan that is integrated with Social Security, only a single integration level shall be applicable to each Participant who is a Participant in one or more integrated plans. The integration level for each Participant shall be prorated in each integrated plan in the ratio that the Annual Compensation received by the Participant from the member of the group maintaining the integrated plan bears to the Annual Compensation received by the Participant from all members of the group maintaining all such integrated plans.
|
(c)
|
If more than one Employer has adopted this Plan and if all such Employers are members of the same Affiliated Group:
|
(1)
|
The provisions of Articles XVI and XVII shall be applicable to each adopting Employer as an individual Employer;
|
(2)
|
The provisions of Section 15.7(a) through (c) shall not be applicable to such adopting Employers; and
|
(3)
|
The “effective date” for any adopting Employer who adopts this Plan on other than the Effective Date shall be the first day of the Plan Year in which such adopting Employer shall first elect to be covered by this Plan.
|
(a)
|
shall enlarge the duties or responsibilities of the Plan Administrator or Trustee without its consent; or
|
(b)
|
shall cause any part of the assets contributed to the Plan to be diverted to any use or purpose other than for the exclusive benefit of the Participants and their Beneficiaries (including the reasonable cost of administering the Plan) prior to the satisfaction of all liabilities (fixed and contingent) under the Plan to Participants and their Beneficiaries; or
|
(c)
|
shall reduce the vesting percentage of any Participant, Former Participant, or Beneficiary; or
|
(d)
|
shall reduce or restrict the Account Balance of any Participant, Former Participant or Beneficiary; or
|
(e)
|
shall eliminate an optional form of benefit, with respect to benefits attributable to service before the amendment.
|
(a)
|
is eligible for Retirement Benefits as provided in Article IX;
|
(b)
|
dies;
|
(c)
|
has a severance from employment;
|
(d)
|
attains the age of 59½;
|
(e)
|
incurs a Disability; or
|
(f)
|
incurs a Financial Hardship.
|
(a)
|
Subject to Section 18.6(e), no Participant shall direct investment into or out of Employer Securities in any Account. Effective January 1, 2007, this restriction shall apply only with respect to Employer Securities in the Employer Non-Elective Contribution Account.
|
(b)
|
Contributions to the Participant Elective Deferral Account shall be invested exclusively in the General Investments Account. Amounts in a Participant Elective Deferral Account as of the Effective Date, including earnings and dividends thereon, may not be transferred between the General Investments Account and Employer Securities Account.
|
(c)
|
Contributions to the Employer Matching Contribution Account shall be invested exclusively in the Employer Securities Account.
|
(d)
|
Contributions to the Participant Voluntary Contribution Account shall be invested exclusively in the Employer Securities Account.
|
(e)
|
Contributions to the Participant Rollover Account shall be invested exclusively in the General Investments Account. Amounts in the Participant Rollover Account as of the Effective Date, including earnings and dividends thereon, may not be transferred between the General Investments Account and Employer Securities Account.
|
(f)
|
Amounts in the Paysop Account as of the Effective Date, including earnings and dividends thereon, shall remain in the Employer Securities Account and may not be transferred between the General Investments Account and Employer Securities Account.
|
(g)
|
Contributions to the Employer Non-Elective Contribution Account shall be invested exclusively in the Employer Securities Account.
|
(h)
|
All restrictions in the foregoing subsections to investment direction into or out of Employer Securities or transfer of Employer Securities to or from the Employer Securities Account shall be subject to the dividend investment rules of Section 6.3(e) and the diversification provisions of Section 6.6.
|
(a)
|
Income, gains and losses from each investments Fund will be reinvested in the same Fund and credited only to the General Investments Accounts of those Participants who have a balance in such Fund, in a manner consistent with Section 6.3.
|
(b)
|
At least one Fund shall be a stable asset fund that invests in cash equivalent securities and contracts. For this purpose “cash equivalent securities and contracts” shall mean short term U. S. Government obligations, prime commercial paper, certificates of deposit, savings accounts in banks or savings and loan associations, guaranteed interest contracts and pooled funds that invest exclusively in some or all of the foregoing.
|
(c)
|
Each Participant shall be entitled to direct the portion of the contributions made to his/her General Investments Account that are to be invested in each of the investment funds available. Upon the occurrence of any event or decision of the Plan Administrator that results in the deletion of any of the investment funds, that replaces any such fund with another fund, or that adds a new investment fund, the Plan Administrator shall designate a default investment fund or funds into which contributions on behalf of a Participant shall be invested in the event no specific direction for investment is made by the Participant. The Plan Administrator shall designate a default investment fund for any Participant or Beneficiary (including any Beneficiary by virtue of a Qualified Domestic Relations Order) who does not provide for investment instructions with respect to his/her General Investments Account into any investment fund under this Section 18.6. Effective January 1, 2008, or as soon thereafter as the Plan Administrator shall have selected a “Qualified Default Investment Alternative,” as defined in DOL Reg. §2550.404c-5(e)) (“QDIA”), and for all Plan Years commencing after that date, the default investment fund shall be the designated QDIA. Upon selection of the QDIA the Plan Administrator shall notify each Employee in the Plan of the default investment option if an Employee fails to provide the Plan Administrator with investment instructions for his/her Account. The Notice shall be written in a manner calculated to be understood by the average Plan Participant and shall be provided to the Participant at least 30 days (or if alter, as soon as possible following the Employment Commencement Date) prior to the beginning of each Plan Year. The Notice shall include an explanation of:
|
(1)
|
the circumstances under which the Participant’s Account will be invested in a QDIA in the absence of any other investment election by the Employee,
|
(2)
|
the right of Participants and Beneficiaries to direct the investment of assets in their individual accounts, including a description of:
|
(A)
|
the QDIA and its investment objectives, risk and return characteristics (if applicable), and attendant fees and expenses;
|
(B)
|
the right of Participants and Beneficiaries on whose behalf assets are invested in a QDIA to direct the investment of those assets to any other investment alternative under the Plan, including a description of any applicable restrictions, fees or expenses in connection with a transfer; and
|
(C)
|
where Participants and Beneficiaries can obtain investment information concerning the other investment alternatives available under the Plan.
|
(d)
|
Each Participant shall have the right to change the portion of succeeding contributions to be invested in each Fund and the right to direct that the asset balance or any portion thereof in any Funds in his General Investments Account be liquidated and the proceeds thereof transferred to any other Fund. Changes in Fund investments pursuant to Participant direction shall be made effective as provided under procedures negotiated between the Plan and the Trustee (or custodian, if appointed by the Plan Administrator or Trustee), which procedures may include daily movement of General Investment Account moneys between Funds, provided valuation of the Funds is also conducted daily.
|
(e)
|
A Participant may not direct (except as provided in Section 6.3(e)) any investment into the Employer Securities Account or (except as provided in Section 6.6) the liquidation or sale of any Employer Securities in that Account. Effective January 1, 2007, a Participant may direct investment into the Employer Securities Account from any other sub-account in the Plan, with the exception of the Dividend Account, which shall continue to be subject to the rules in Section 18.4.
|
(f)
|
The Plan Administrator may establish reasonable rules regarding:
|
(1)
|
The number and types of Funds that shall be available to the General Investments Account.
|
(2)
|
The maximum number of Funds that may be utilized by an individual Participant or by the General Investments Account.
|
(3)
|
The minimum, maximum and incremental percentages of contributions that may be invested in a particular Fund.
|
(4)
|
The minimum, maximum and incremental percentages of the current balance in the General Investments Account in any Fund that may be transferred to another Fund.
|
(a)
|
“Determination Date”
shall mean, for any Plan Year subsequent to the first Plan Year, the last day of the preceding Plan Year. For the first Plan Year of the Plan the Determination Date shall mean the last day of that Plan Year.
|
(b)
|
“Five Percent Owner”
shall mean:
|
(1)
|
if the Employer is a corporation, any person who owns (or is considered as owning within the meaning of Code §318) more than 5% of the outstanding stock of the corporation or stock possessing more than 5% of the total combined voting power of all stock of the corporation; or
|
(2)
|
if the Employer is not a corporation, any person who owns more than 5% of the capital or profits interest in the Employer.
|
(c)
|
“Key Employee”
shall mean any Employee or former Employee (and any Beneficiary of the Employee) who at any time during the Plan Year that includes the Determination Date was:
|
(1)
|
an officer of the Employer having Top Heavy Compensation greater than $130,000 (as adjusted under Code §416(i)(1) for Plan Years beginning after December 31, 2002),
|
(2)
|
a Five Percent Owner of the Employer, or
|
(3)
|
a One Percent Owner of the Employer having annual compensation of more than $150,000.
|
(d)
|
“Non-Key Employee”
shall mean any Employee or Inactive Employee (and any Beneficiary of such Employee) who is not a Key Employee. Non-Key Employees include Employees who are Inactive Key Employees.
|
(e)
|
“One Percent Owner”
shall mean:
|
(1)
|
if the Employer is a corporation, any person who owns (or is considered as owning within the meaning of Code §318) more than 1% of the outstanding stock of the corporation or stock possessing more than 1% of the total combined voting power of all stock of the corporation; or
|
(2)
|
if the Employer is not a corporation, any person who owns more than 1% of the capital or profits interest in the Employer.
|
(f)
|
“Permissive Aggregation Group”
shall mean the Required Aggregation Group of plans plus any other plan or plans of the Employer that, when selected and considered by the Employer as a group with the Required Aggregation Group, would continue to satisfy the requirements of Code §§401(a)(4) and 410.
|
(g)
|
“Present Value”
shall mean the actuarial present value of an amount or series of amounts determined based on the Top-Heavy determination provisions of a defined benefit plan that is part of a Required Aggregation Group or Permissive Aggregation Group with this Plan.
|
(h)
|
“Required Aggregation Group”
shall mean:
|
(1)
|
each qualified plan of the Employer in which at least one Key Employee participates in the Plan Year containing the Determination Date or any of the four preceding plan years (regardless of whether the plan has terminated; and
|
(2)
|
any other qualified plan of the Employer that enables a plan described in subpara-graph (1) to meet the requirements of Code §§401(a)(4) or 410.
|
(i)
|
“Top Heavy Average Monthly Compensation”
shall mean 1/12th of the average of a Participant’s Top-Heavy Compensation during the five consecutive Plan Years (or the total number of such years of the Participant’s employment, if fewer than five) that produces the highest average, but taking into account only Top-Heavy Compensation for years that this Plan was Top-Heavy and any years preceding a year that this Plan was Top- Heavy.
|
(j)
|
“Top-Heavy Compensation”
shall have the same meaning as the term ‘Compensation’ defined in Section 7.1(b). Top Heavy Compensation includes all Compensation paid for the Limitation Year without regard to when the Participant commenced participation in the Plan.
|
(k)
|
“Top-Heavy Ratio”
shall mean and be determined as follows:
|
(1)
|
If the Employer maintains one or more defined contribution plans (including any simplified employee pension plan) and the Employer has not maintained any defined benefit plan which during the 5-year period ending on the Determination Date(s) has or has had Accrued benefits, the Top-Heavy Ratio for this Plan alone or for the Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of the account balances of all Key Employees as of the Determination Date(s) (including any part of any account balance distributed in the 1-year period ending on the Determination Date(s)) (5-year period ending on the Determination Date in the case of a distribution made for a reason other than severance from employment, death or disability and in determining whether the Plan is Top-Heavy for Plan Years beginning before January 1, 2002), and the denominator of which is the sum of all account balances (including any part of any account balance distributed in the 1-year period ending on the Determination Date(s)) (5-year period ending on the Determination Date in the case of a distribution made for a reason other than severance from employment, death or disability and in determining whether the Plan is Top-Heavy for Plan Years beginning before January 1, 2002), both computed in accordance with §416 of the Code and the regulations thereunder. Both the numerator and denominator of the Top-Heavy Ratio are increased to reflect any contribution not actually made as of the Determination Date, but which is required to be taken into account on that date under §416 of the Code and the regulations thereunder.
|
(2)
|
If the Employer maintains one or more defined contribution plans (including any simplified employee pension plan) and the Employer maintains or has maintained one or more defined benefit plans which during the 5-year period ending on the Determination Date(s) has or has had any accrued benefits, the Top-Heavy Ratio for any Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of account balances under the aggregated defined contribution plan or plans for all Key Employees, determined in accordance with (1) above, and the present value of accrued benefits under the aggregated defined benefit plan or plans for all Key Employees as of the Determination Date(s), and the denominator of which is the sum of the account balances under the aggregated defined contribution plan or plans for all Participants, determined in accordance with (1) above, and the present value of accrued benefits under the defined benefit plan or plans for all Participants as of the Determination Date(s), all determined in accordance with §416 of the Code and the regulations thereunder. The accrued benefits under a defined benefit plan in both the numerator and denominator of the Top-Heavy Ratio are increased for any distribution of an accrued benefit made in the 1-year period ending on the Determination Date (5-year period ending on the Determination Date in the case of a distribution made for a reason other than severance from employment, death or disability and in determining whether the Plan is Top-Heavy for Plan Years beginning before January 1, 2002).
|
(3)
|
For purposes of (1) and (2) above the value of account balances and the present value of accrued benefits will be determined as of the most recent Valuation Date that falls within or ends with the 12-month period ending on the Determination Date, except as provided in §416 of the Code and the regulations thereunder for the first and second plan years of a defined benefit plan. The account balances and accrued benefits of a Participant (1) who is not a Key Employee but who was a Key Employee in a prior year, or (2) who has not been credited with at least one Hour of Service with any Employer maintaining the Plan at any time during the 1-year period (5-year period in determining whether the Plan is Top-Heavy for Plan Years beginning before January 1, 2002) ending on the Determination Date will be disregarded. The calculation of the Top-Heavy Ratio, and the extent to which distributions, rollovers, and transfers are taken into account will be made in accordance with §416 of the Code and the regulations thereunder. Deductible Employee contributions will not be taken into account for purposes of computing the Top-Heavy Ratio. When aggregating plans the value of account balances and accrued benefits will be calculated with reference to the Determination Dates that fall within the same calendar year.
|
(l)
|
“Top-Heavy Valuation Date”
shall mean the date as of which the Present Value of accrued benefits under a defined benefit plan or account balances under a defined contribution plan, that is part of a Permissive Aggregation Group or Required Aggregation Group, is determined for calculating the Top-Heavy Ratio. For a defined benefit plan, the date shall be the same as the actuarial valuation date used for computing plan costs under Code §412, regardless of whether an actuarial valuation is performed that year. For a defined contribution plan, the date shall be the last day of the plan year.
|
(a)
|
if the Top-Heavy Ratio for this Plan exceeds 60% and this Plan is not part of any Required Aggregation Group or Permissive Aggregation Group of plans;
|
(b)
|
if this Plan is a part of a Required Aggregation Group of plans but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the Required Aggregation Group of plans exceeds 60%; or
|
(c)
|
if this Plan is a part of a Permissive Aggregation Group of plans and the Top-Heavy Ratio for the Permissive Aggregation Group exceeds 60%.
|
(a)
|
Except as otherwise provided below, the Employer contributions and forfeitures allocated on behalf of any Participant who is a Non-Key Employee shall not be less than the lesser of:
|
(1)
|
three percent of the Participant’s Top-Heavy Compensation; or
|
(2)
|
in the case where the Employer has no defined benefit plan that designates this Plan to satisfy Code §§401 and 416(c), the largest percentage of Employer contributions and forfeitures, as a percentage of the first $200,000 (or such larger amount as may be prescribed by the Secretary of the Treasury or his delegate), of the Key Employee’s Top-Heavy Compensation, allocated on behalf of any Key Employee for that year. In calculating this percentage all amounts contributed by the Employer to the Key Employee’s Elective Deferral Account pursuant to a Salary Reduction Agreement shall be treated as Employer contributions. The $200,000 amount shall be adjusted each Plan Year as provided in Code §401(a)(17)(B). For any period during which the Plan Year is not or was not coincident with the calendar year, the dollar adjustment in the Annual Compensation limit for the Plan Year shall be based on the amount in effect as of January 1st for the Plan Year beginning within that calendar year.
|
(b)
|
The minimum allocation shall be determined without regard to any Social Security contribution by the Employer. This minimum allocation shall be made even though, under other Plan provisions, the Participant would not otherwise be entitled to receive an allocation, or would have received a lesser allocation for the Plan Year because of:
|
(1)
|
the Participant’s failure to complete 1,000 Hours of Service (or any equivalent provided in the Plan);
|
(2)
|
the Participant’s failure to make mandatory employee contributions to the Plan;
|
(3)
|
Compensation less than a stated amount;
|
(4)
|
the Employer having no Net Profits; or
|
(5)
|
in the case of a plan qualified under Code §401(k), the Participant’s failure to make elective contributions to such plan.
|
(c)
|
The provisions in subsections (a) and (b) above shall not apply to any Participant who was not employed by the Employer on the last day of the Plan Year.
|
(d)
|
The minimum benefit requirement of this Section shall be met through contributions to this Plan regardless of whether the Employer maintains any other plan (including another plan that may consist solely of a cash or deferred arrangement that meets the requirements of Code §401(k)(12) and matching contributions with respect to which the requirements of Code §401(m)(11) are met).
|
(e)
|
Employer matching contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of Code §416(c)(2) and this Section. The preceding sentence shall apply with respect to matching contributions under the Plan or, if the Plan provides that the minimum contribution requirement shall be met in another plan, such other plan. Employer matching contributions that are used to satisfy the minimum contribution requirements shall be treated as matching contributions for purposes of determining M-Test Contributions under the Plan and the actual contribution percentage test and other requirements of Code §401(m).
|
Years of
Vesting Service
Less than 3
3 or more
|
Vesting
Percentage
0%
100%
|
|
|
(a)
|
the identity of the person or persons authorized to administer the loan program;
|
(b)
|
the procedure for applying for a loan;
|
(c)
|
the basis on which loans will be approved or denied;
|
(d)
|
limitations, if any, on the types and amounts of loans offered;
|
(e)
|
the procedure for determining a reasonable rate of interest;
|
(f)
|
the types of collateral that may secure a loan; and
|
(g)
|
the events constituting default and the steps to be taken to preserve plan assets in the event of a default.
|
(a)
|
Fifty percent of the Vested Interest in his Plan Accounts (including any Rollover Accounts, but excluding his Employer Securities Account, effective January 1, 2007, excluding only his Employer Non-Elective Contribution Account and his Dividend Account); or
|
(b)
|
$50,000, reduced by the excess (if any) of:
|
(1)
|
the highest outstanding balance of loans from the plan during the one-year period ending on the day before the date on which such loan was made, over
|
(2)
|
the outstanding balance of loans from the plan on the date on which such loan was made.
|
(a)
|
The Plan Administrator shall establish reasonable procedures to determine whether an order received by it or the Trustee is a QDRO and to administer distributions pursuant to said order. The procedures shall set forth all rules to be applied by the Plan for notice to affected parties, suspension of Account activity, including distributions, investment direction and participant loans, and payment of benefits based upon the QDRO or the failure of the Domestic Relations Order to be a QDRO.
|
(b)
|
The Plan Administrator shall within a reasonable time determine whether the order is a QDRO and shall notify the Participant, Former Participant or Beneficiary whose benefit is the subject of the order, of its determination. The Plan Administrator may designate a representative to carry out its duties under this Section 20.10.
|
(c)
|
Nothing in this Section 20.10 shall be deemed to allow payment under a QDRO to an Alternate Payee of any benefit prior to the first day of the month following the date the Participant or Former Participant whose benefits are subject to the QDRO terminates employment or attains age 50, unless (i) earlier distribution is specifically provided under the terms of the QDRO and (ii) if the value of the Alternate Payee's benefit exceeds $5,000, the Alternate Payee consents to any distribution occurring prior to the Participant's attainment of earliest retirement age.
|
(a)
|
“Alternate Payee”
shall mean any spouse, former spouse, child or other dependent of a Participant or Former Participant who is recognized by a QDRO as having a right to receive all, or a portion of, the benefits payable under this Plan with respect to the Participant or Former Participant.
|
(b)
|
“Domestic Relations Order”
shall mean any judgment, decree, or order (including approval of a property settlement agreement) that:
|
(1)
|
relates to the provision of child support, alimony payments, or marital property rights to a spouse, child, or other dependent of a Participant or Former Participant and
|
(2)
|
is made pursuant to a state domestic relations law (including a community property law).
|
(c)
|
“Qualified Domestic Relations Order”
shall mean any Domestic Relations Order that satisfies the criteria set forth in the QDRO procedures established by the Plan Administrator.
|
(a)
|
Each Participating Zions Employer shall be required to use the Trustee determined by the Plan Sponsor or Plan Administrator.
|
(b)
|
The Trustee may, but shall not be required to, commingle, hold and invest as one Trust Fund all contributions made by Participating Zions Employers, as well as all increments thereof. The assets of the Plan shall, on an ongoing basis, be available to pay benefits to all Participants and Beneficiaries under the Plan without regard to the Participating Zions Employer who contributed such assets.
|
(c)
|
the transfer of any Participant from or to Zions Employer participating in this Plan, whether he is an Employee of the Sponsoring Employer or a Participating Zions Employer, shall not affect the Participant's rights under the Plan, and the Participant's Accounts, as well as all accumulated service with the transferor or predecessor, shall continue to his credit.
|
(d)
|
Any expenses of the Trust and Plan that are to be paid by the Employer or borne by the Trust Fund, including funding of benefits, shall be paid by each Participating Zions Employer in the same proportion that the total amount of the Accounts standing to the credit of all Participants employed by such Zions Employer bears to the total of the Accounts standing to the credit of all Participants.
|
(a)
|
inquiry of any Beneficiary or Alternate Payee of the Inactive Participant whose names and addresses are known to the Plan Administrator;
or
|
(b)
|
use of a commercial locator service.
|
PLAN SPONSOR:
|
PLAN ADMINISTRATOR:
|
Zions Bancorporation
|
Zions Bancorporation
|
|
|
By:
/s/ Diana M. Andersen___________
|
By:
/s/ Diana M. Andersen___________
|
Name:
Diana M. Andersen ______________
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Name:
Diana M. Andersen ______________
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Title:
Executive VP & Corporate Benefits Director______________________________
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Title:
Executive VP & Corporate Benefits Director ______________________________
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1.
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I have reviewed this quarterly report on Form 10-Q of Zions Bancorporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Harris H. Simmons
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Harris H. Simmons, Chairman and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Zions Bancorporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Paul E. Burdiss
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Paul E. Burdiss, Executive Vice President and Chief Financial Officer
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/s/ Harris H. Simmons
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Name:
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Harris H. Simmons
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Title:
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Chairman and Chief Executive Officer
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/s/ Paul E. Burdiss
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Name:
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Paul E. Burdiss
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Title:
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Executive Vice President and Chief Financial Officer
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