-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I6BDSNT2o4mxCU2nEdhEVe2SEirQkcb1Zs4P2x7Qjegpa5BLsQ3/UftAO9Qfa3Ch EaN2preDVjDNpWw8tRNEBQ== 0000946275-99-000569.txt : 19991029 0000946275-99-000569.hdr.sgml : 19991029 ACCESSION NUMBER: 0000946275-99-000569 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19991028 EFFECTIVENESS DATE: 19991028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUN BANCORP INC /NJ/ CENTRAL INDEX KEY: 0001017793 STANDARD INDUSTRIAL CLASSIFICATION: COMMERCIAL BANKS, NEC [6029] IRS NUMBER: 521382541 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-89839 FILM NUMBER: 99736060 BUSINESS ADDRESS: STREET 1: 226 LANDIS AVENUE CITY: VINELAND STATE: NJ ZIP: 08360 BUSINESS PHONE: 6096917700 MAIL ADDRESS: STREET 1: 226 LANDIS AVE CITY: VINELAND STATE: NJ ZIP: 08360 S-8 1 FORM S-8 As filed with the Securities and Exchange Commission on October 28, 1999 Registration No. 333-______ - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------- Sun Bancorp, Inc. ---------------- (Exact Name of Registrant as Specified in Its Charter) New Jersey 52-1382541 - -------------------------------- ------------------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 226 Landis Avenue Vineland, New Jersey 08360 (609) 691-7700 ---------------- (Address of Principal Executive Offices) Sun National Bank 401(k) Plan ----------- (Full Title of the Plan) Richard Fisch, Esq. Evan M. Seigel, Esq. Malizia Spidi & Fisch, PC 1301 K Street, N.W. Suite 700 East Washington, D.C. 20005 (202) 434-4660 ---------------- (Name, Address and Telephone Number of Agent for Service)
CALCULATION OF REGISTRATION FEE ======================================================================================================================== Proposed Title of Proposed Maximum Amount of Securities To Amount To Maximum Offering Aggregate Offering Registration Be Registered(1) Be Registered(2) Price Per Share(3) Price(4) Fee ---------------- ---------------- ------------------ -------- --- Common Stock $1.00 par value 273,995 $12.44 $3,408,498 $947.56 ========================================================================================================================
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this registration statement also covers an indeterminate amount of interests to be offered or sold pursuant to the Sun National Bank 401(k) Plan (the "Plan"), as described herein. (2) Estimates the maximum number of shares expected to be issued under the Plan assuming that all employer and employee contributions to the Plan are used to purchase shares of Common Stock of Sun Bancorp, Inc. (the "Company"), together with an indeterminate number of shares which may be necessary to adjust the number of additional shares of Common Stock reserved for issuance pursuant to the Plan and being registered herein, as the result of a stock split, stock dividend, reclassification, recapitalization, or similar adjustment(s) of the Common Stock of the Company. (3) Estimated solely for the purpose of calculating the registration fee and calculated pursuant to Rule 457(c) based on the average of the high and low prices of the Common Stock reported in the Nasdaq National Market System on October 27, 1999. (4) Estimated based on (2) and (3) above. Under Rule 462 of the 1933 Act, the Registration Statement on Form S-8 shall be effective upon filing with the SEC. PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS Item 1. Plan Information. * - ------- Item 2. Registrant Information and Employee Plan Annual Information. * - ------- *This Registration Statement relates to the registration of 273,995 shares of Common Stock, $1.00 par value per share, of Sun Bancorp, Inc. (the "Company") reserved for issuance and delivery under the Sun National Bank 401(k) Plan (the "Plan"). Documents containing the information required by Part I of this Registration Statement will be sent or given to participants in the Plan as specified by Rule 428(b)(1). Such documents are not filed with the Securities and Exchange Commission (the "Commission") either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424, in reliance on Rule 428. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Certain Documents by Reference. - ------- The Company became subject to the informational requirements of the Securities Exchange Act of 1934 (the "1934 Act") on June 28, 1996 and, accordingly, files periodic reports and other information with the Commission. Reports, proxy statements and other information concerning the Company filed with the Commission may be inspected and copies may be obtained (at prescribed rates) at the Commission's Public Reference Section, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. The following documents filed by the Company are incorporated in this Registration Statement and the Prospectus constituting Part I of this Registration Statement: (1) The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998, as filed with the Commission; (2) The Company's Quarterly Report on Form 10-Q for the quarters ended June 30, 1999 and March 31, 1999, respectively, as filed with the Commission; (3) Current Report on Form 8-K/A (Date of Event: September 9, 1999), as filed with the Commission on September 24, 1999; (4) Current Report on Form 8-K (Date of Event: May 20, 1999), as filed with the Commission on May 21, 1999; (5) Current Report on Form 8-K (Date of Event: May 10, 1999), as filed with the Commission on May 17, 1999; (6) Current Report on Form 8-K/A (Date of Event: December 17, 1998), as filed with the Commission on January 15, 1999; and 1 (7) The Company's Registration Statement on Form 10-A, as filed with the Commission on June 28, 1996. All documents filed by the Company pursuant to Sections 13, 14, or 15(d) of the 1934 Act after the date hereof and prior to the termination of the offering of the shares of Common Stock shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date of filing of such documents. Item 4. Description of Securities. - ------- Not Applicable. Item 5. Interests of Named Experts and Counsel. - ------- Not Applicable. Item 6. Indemnification of Directors and Officers. - ------- Section 14A:3-5 of the New Jersey Business Corporation Act describes those circumstances under which directors, officers, employees and agents may be insured or indemnified against liability which they may incur in their capacities as such. Article VI of the Bylaws of the Company, require indemnification of directors, officers, employees or agents of the Company to the full extent permissible under New Jersey law. The registrant believes that these provisions assist the registrant in, among other things, attracting and retaining qualified persons to serve the registrant and its subsidiary. However, a result of such provisions could be to increase the expenses of the registrant and effectively reduce the ability of stockholders to sue on behalf of the registrant because certain suits could be barred or amounts that might otherwise be obtained on behalf of the registrant could be required to be repaid by the registrant to an indemnified party. Under a directors' and officers' liability insurance policy, directors and officers of the Company are insured against certain liabilities, including certain liabilities under the Securities Act of 1933. The Company may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Company or is or was serving at the request of the Company as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against any liability asserted against the person and incurred by the person in any such capacity or arising out of his status as such, whether or not the Company would have the power to indemnify the person against such liability under the provisions of the Articles of Incorporation or the Bylaws. Additionally, the Company has in force a directors and officers liability policy underwritten by Saint Paul Insurance Company with a $2 million aggregate limit of liability and an aggregate deductible of $50,000 per loss both for claims directly against officers and directors and for claims where the Company is required to indemnify directors and officers. 2 Insofar as indemnification for liabilities arising under the Securities Act of 1933 ("1933 Act") may be permitted to directors, officers, or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 1933 Act and is therefore unenforceable. Item 7. Exemption from Registration Claimed. - ------- Not Applicable. Item 8. Exhibits. - ------- For a list of all exhibits filed or included as part of this Registration Statement, see "Index to Exhibits" at the end of this Registration Statement. In lieu of an opinion of counsel concerning the Plan's compliance with the requirements of ERISA, the Company hereby undertakes that it has submitted the Plan and any amendment thereto to the Internal Revenue Service ("IRS") in a timely manner and will make all changes required by the IRS in order to qualify the Plan. Item 9. Undertakings. - ------- (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement; (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided however, that paragraphs (a)(1)(i) and (a)(1)(ii) do no apply if the Registration Statement is on Form S-3, Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 3 (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report, to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information. (d) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy expressed in the 1933 Act and will be governed by the final adjudication of such issue. 4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Vineland in the State of New Jersey, on the 28th day of October 1999. SUN BANCORP, INC. By:/s/ Philip W. Koebig, III -------------------------------------------- Philip W. Koebig, III President and Chief Executive Officer (Duly Authorized Representative) POWER OF ATTORNEY We, the undersigned directors and officers of Sun Bancorp, Inc., do hereby severally constitute and appoint Philip W. Koebig, III as our true and lawful attorney and agent, to do any and all things and acts in our names in the capacities indicated below and to execute any and all instruments for us and in our names in the capacities indicated below which said Philip W. Koebig, III may deem necessary or advisable to enable Sun Bancorp, Inc. to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission in connection with the Registration Statement on Form S-8 relating to the registrant, including specifically, but not limited to, power and authority to sign, for any of us in our names in the capacities indicated below, this Registration Statement and any and all amendments (including post-effective amendments) thereto; and we hereby ratify and confirm all that said Philip W. Koebig, III shall do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated.
/s/ Bernard A. Brown /s/ Philip W. Koebig, III - ---------------------------------- ----------------------------------------------- Bernard A. Brown Philip W. Koebig, III Chairman of the Board of Directors President, Chief Executive Officer and Director Date: October 28, 1999 Date: October 28, 1999 /s/ Adolph F. Calovi /s/ Sidney R. Brown - ---------------------------------- ----------------------------------------------- Adolph F. Calovi Sidney R. Brown Director Vice Chairman, Secretary and Treasurer Date: October 28, 1999 Date: October 28, 1999
/s/ Peter Galetto, Jr. - ---------------------------------- ----------------------------------------------- Peter Galetto, Jr. Anne E. Koons Director Director Date: October 28, 1999 Date: /s/ Robert F. Mack - ---------------------------------- ----------------------------------------------- Ike Brown Robert F. Mack Director Executive Vice President (Principal Financial and Accounting Officer) Date: Date: October 28, 1999 - ---------------------------------- Jeffrey S. Brown Director Date:
SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the plan administrator of the Sun National Bank 401(k) Plan has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Vineland, State of New Jersey, on this 28th day of October, 1999. Sun National Bank 401(k) Plan By /s/ Marjorie H. Hart ------------------------------------ Its Plan Administrator -------------------------------- As Plan Administrator on behalf of Sun National Bank INDEX TO EXHIBITS Exhibit Description - ------- ----------- 4.1 Summary Plan Description of the Plan 4.2 Financial Statements for the Plan for the plan years ending December 31, 1998 and 1997; supplemental schedules for the plan year ended December 31, 1998, and independent auditor's report 5.1 Favorable determination letter dated April 16, 1998, confirming that the Plan is qualified under Section 401 of the Internal Revenue Code of 1986, as amended 23.1 Consent of Deloitte & Touche LLP EX-4.1 2 EXHIBIT 4.1 SUN NATIONAL BANK 401 (K) PLAN SUMMARY PLAN DESCRIPTION TABLE OF CONTENTS INTRODUCTION TO YOUR PLAIN II GENERAL INFORMATION ABOUT YOUR PLAN 1. General Plan Information..............................................2 2. Employer Information..................................................2 3. Plan Administrator Information........................................2 4. Plan Trustee Information..............................................3 5. Service of Legal Process..............................................3 III PARTICIPATION IN YOUR PLAN 1. Eligibility Requirements..............................................3 2. Participation Requirements............................................4 3. Excluded Employees....................................................4 IV CONTRIBUTIONS TO YOUR PLAN 1. Employer Contributions to the Plan....................................4 2. Participant Salary Reduction Election.................................5 3. Your Share of Employer Contributions..................................6 4. Compensation..........................................................7 5. Forfeitures...........................................................8 6. Transfers From Qualified Plans (Rollovers)............................8 7. Directed Investments..................................................8 V BENEFITS UNDER YOUR PLAN 1. Distribution of Benefits Upon Normal Retirement.......................9 2. Distribution of Benefits Upon Late Retirement.........................9 3. Distribution of Benefits Upon Death...................................9 4. Distribution of Benefits Upon Disability.............................11 5. Distribution of Benefits Upon Termination of Employment..............11 6. Vesting in Your Plan.................................................11 7. Benefit Payment Options..............................................12 8. Hardship Distribution of Benefits....................................13 9. Treatment of Distributions From Your Plan............................15 10. Domestic Relations Order.............................................15 11. Pension Benefit Guaranty Corporation.................................16 VI SERVICE RULES 1. Year of Service......................................................16 2. Hour of Service......................................................17 3. 1-Year Break in Service..............................................17 VII YOUR PLAN'S "TOP HEAVY RULES" Explanation of "Top Heavy Rules...............................................17 VIII LOANS Loan Requirements.............................................................18 IX CLAIMS BY PARTICIPANTS AND BENEFICIARIES 1. The Claims Review Procedure.............................................20 X STATEMENT OF ERISA RIGHTS 1. Explanation of Your ERISA Rights........................................21 XI AMENDMENT AND TERMINATION OF YOUR PLAN 1. Amendment............................................................22 2. Termination..........................................................23 SUN NATIONAL BANK 401(K) PLAN SUMMARY PLAIN DESCRIPTION I INTRODUCTION TO YOUR PLAN Sun National Bank has amended your Profit Sharing Plan as of January 1, 1997. Sun National Bank continues to recognize the efforts you have made to its success. This amended Profit Sharing Plan is for the exclusive benefit of eligible employees and their beneficiaries. Your Plan is a "salary reduction plan." It is also called a "401(k) plan." Under this type of plan, you may choose to reduce your compensation and have these amounts contributed to this Plan on your behalf. The purpose of this Plan is to reward eligible employees for long and loyal service by providing them with retirement benefits. Between now and your retirement, your Employer intends to make contributions for you and other eligible employees. When you retire, you will be eligible to receive the value of the amounts which have accumulated in your account. Your Employer has the right to submit this Plan to the Internal Revenue Service for approval. The Internal Revenue Service will issue a "determination letter" to your Employer approving this Plan as a "qualified" retirement plan, if this Plan meets specific legal requirements. This Summary Plan Description is a brief description of your Plan and your rights, obligations, and benefits under that Plan. Some of the statements made in this Summary Plan Description are dependent upon this Plan being "qualified" under the provisions of the Internal Revenue Code. This Summary Plan Description is not meant to interpret, extend, or change the provisions of your Plan in any way. The provisions of your Plan may only be determined accurately by reading, the actual Plan document. A copy of your Plan is on file at your Employer's office and may be read by you, your beneficiaries, or your legal representatives at any reasonable time. If you have any questions regarding either your Plan or this Summary Plan Description, you should ask your Plan's Administrator. In the event of any discrepancy between this Summary Plan Description and the actual provisions of the Plan, the Plan will govern. II GENERAL INFORMATION ABOUT YOUR PLAN There is certain general information which you may need to know about your Plan. This information has been summarized for you in this section. 1. General Plan Information Sun National Bank 401(k) Plan is the name of your Plan. Your Employer has assigned Plan Number 001 to your Plan. The amended and restated provisions of your Plan become effective on January 1, 1997. Your Plan's records are maintained on a twelve-month period of time. This is known as the Plan Year. The Plan Year begins on January 1st and ends on December 31st. Certain valuations and distributions are made on the Anniversary Date of your Plan. This date is December 31st. The contributions made to your Plan will be held and invested by the Trustee of your Plan. Your Plan and Trust will be covered by the laws of the State of New Jersey. 2. Employer Information Your Employer's name, address and identification number are: Sun National Bank 226 Landis Avenue Vineland, New Jersey 08360 22-2458313 3. Plan Administrator Information The name, address and business telephone number of your Plan's Administrator are: Sun National Bank 226 Landis Avenue Vineland New Jersey 08360 (609) 691-7700 Your Plan's Administrator keeps the records for the Plan and is responsible for the administration of the Plan. The Administrator has discretionary authority to construe the terms of the Plan and make determinations on questions which may affect your eligibility for benefits. Your Plan's Administrator will also answer any questions you may have about your Plan. 2 4. Plan Trustee Information The name of your Plan's Trustee is: Tracey Heun Brennan & Company and Majorie Hart The principal place of business of your Plan's Trustee is: 2520 Highway 35, Suite 203 Manasquan, New Jersey 08736 Your Plan's Trustee has been designated to hold and invest Plan assets for the benefit of you and other Plan participants. The trust fund established by the Plan's Trustee will be the funding medium used for the accumulation of assets from which benefits will be distributed. 5. Service of Legal Process The name and address of your Plan's agent for service of legal process are: Sun National Bank 226 Landis Avenue Vineland, New Jersey 08360 Service of legal process may also be made upon the Trustee or Administrator. III PARTICIPATION IN YOUR PLAN Before you become a member or a "participant" in the Plan, there are certain eligibility and participation rules which you must meet. These rules are explained in this section. 1. Eligibility Requirements You will be eligible to participate in the Plan for purposes of your salary reduction elections when you have completed 90 days of service and have reached your 21st birthday. You will be eligible to participate in the Plan for purposes of your Employer's matching contribution and your Employer's discretionary contribution if you have completed one (1) Year of Service and have reached your 21st birthday. You should review the Article in this Summary entitled "SERVICE RULES" for a further explanation of these eligibility requirements. 3 2. Participation Requirements Once you have satisfied your Plan's eligibility requirements, your next step will be to actually become a member or a "participant" in the Plan. You will become a participant on a specified day of the Plan Year. This day is called the Effective Date of Participation. You will become a participant on the first day of the month coinciding with or next following the date you satisfy the eligibility requirements. 3. Excluded Employees There are certain employees of Sun National Bank who will not be eligible to participate in your Plan. Those employees are: (a) employees whose employment is governed by a collective bargaining agreement under which retirement benefits were the subject of good faith bargaining, unless such agreement expressly provides for participation in this Plan. (b) certain nonresident aliens who have no earned income from sources within the United States. IV CONTRIBUTIONS TO YOUR PLAN 1. Employer Contributions to the Plan Each year, your Employer will contribute to your Plan the following amounts: (a) The total amount of the salary reduction you elected to defer. (See the Section in this Article entitled "Participant Salary Reduction Election.") (b) A matching contribution equal to 50% of the amount of the salary reduction you elected to defer. In applying this matching percentage, however, only salary reductions up to 6% of your annual compensation will be considered. You will share in this matching contribution if you are actively employed during the Plan Year. (c) A discretionary amount determined each year by your Employer. You must complete a Year of Service during the Plan Year and be actively employed on the last day of the Plan Year to share in this contribution. 4 In determining your eligibility to share in contributions for the year, there are special rules which apply if your employment terminates due to your Retirement (Normal or Late), Total and Permanent Disability or death. In such cases, you will be eligible to share in the contributions made by your Employer in accordance with the following: If the reason your employment terminated is due to our Retirement (Normal or Late), Total and Permanent Disability or death, then you will be eligible to share in the contribution for the year without regard to whether you satisfied the requirements explained above. 2. Participant Salary Reduction Election As a participant, you may elect to defer up to 15% of your compensation each year instead of receiving that amount in cash. However, your total deferrals in any taxable year may not exceed a dollar limit which is set by law. The limit for 1996 is $9,500. This limit will be increased in future years for cost of living changes. The amount you elect to defer will be deducted from your pay in accordance with a procedure established by your Employer and Administrator. The procedure will require that you enter into a written salary reduction agreement after you satisfy the Plan's eligibility requirements. You will be permitted to modify your election during the Plan Year. However, changes to a salary reduction election are only permitted twice each year, prior to the first day of a Plan Year and the first day of the seventh month of a Plan Year. You are also permitted to revoke your election any time during the Plan Year. The amount you elect to defer, and any earnings on that amount, will not be subject to income tax until it is actually distributed to you. This money will, however, be subject to Social Security taxes at all times. You should also be aware that the annual dollar limit is an aggregate limit which applies to all deferrals you may make under this plan or other cash or deferred arrangements (including tax-sheltered 403(b) annuity contracts, simplified employee pensions or other 401(k) plans in which you may be participating). Generally, if your total deferrals under all cash or deferred arrangements for a calendar year exceed the annual dollar limit, the excess must be included in your income for the year. For this reason, it is desirable to request in writing that these excess deferrals be returned to you. If you fail to request such a return, you may be taxed a second time when the excess deferral is ultimately distributed from the Plan. You must decide which plan or arrangement you would like to have return the excess. If you decide that the excess should be distributed from this Plan, you should communicate this in writing, to the Administrator no later than the March 1st following the close of the calendar year in which such excess deferrals were made. If the entire dollar limit is exceeded in this Plan or any other plan maintained by the Employer, you will be deemed to have notified the 5 Administrator of the excess. The Administrator will then return the excess deferral and any earnings to you by April 15th. In the event you receive a hardship distribution from your deferrals to this Plan pursuant to your certification and agreement that certain conditions are satisfied or any other plan maintained by your Employer, you will not be allowed to make additional salary reductions for a period of twelve (12) months after you receive the distribution. Furthermore, the dollar limitation set by law with respect to your taxable year following the year in which you received the distribution, will be reduced by your salary reductions, if any, for the taxable year of the distribution. You will always be 100% vested in the amount you deferred. This means that you will always be entitled to all of the deferred amount. This money will, however, be affected by any investment gains or losses. If the Trustee invested this money and there was a gain, the balance in your account would increase. Of course, if there was a loss, the balance in your account would decrease. Your interest in this account cannot be forfeited for any reason. Distributions from your deferred account (including any offset of loans) are not permitted before age 59 1/2 EXCEPT in the event of: (a) death; (b) disability; (c) separation from service; or (d) reasons of proven financial hardship (See the Section in the Article entitled "Hardship Distribution of Benefits"). In addition, if you are a highly compensated employee (Generally owners, officers or individuals receiving wages in excess of certain amounts established by law), a distribution from your deferred account of certain excess contributions may be required to comply with the law. The Administrator will notify you when a distribution is required. 3. Your Share of Employer Contributions Your Employer will allocate the amount you elect to defer to an account maintained by the Trustee on your behalf. If you are eligible, your Employer will also allocate the matching contribution made to the Plan on your behalf. (See the Section in this Article entitled "Employer Contributions to the Plan.") Your Employer's discretionary contribution will be "allocated" or divided among participants eligible to share in the contribution for the Plan Year. Your share of the contribution 6 will depend upon how much compensation you received during the year and the compensation received by other eligible participants. The contribution will be allocated to your account in the same proportion that your compensation in excess of the Social Security Taxable Wage Base (also called "excess compensation") plus your compensation bears to the total "excess compensation" plus compensation of all eligible participants. However, the maximum amount which can be allocated to you in this first step is 5.7% of your "excess compensation" plus your compensation. If after the first step of the allocation process there still remains a portion of your Employer's contribution which has not yet been allocated, then the remainder will be allocated to you in the same proportion that your compensation bears to the total compensation of all participants. If your Employer maintains two or more plans providing for an allocation or benefit in excess of a portion of your compensation, then the allocation above may be adjusted. The Administrator will notify you if your allocation will be affected. For any short Plan Year, the Social Security Taxable Wage Base will be prorated. In addition to the Employer's contributions made to your account, your account will be credited annually with a share of the investment earnings or losses of the trust fund. You should also be aware that the law imposes certain limits on how much money may be allocated to your account for a year. These limits are extremely complex but generally no more than the lesser of $30,000 or 25% of your compensation may be allocated to you (excluding earnings or losses) in any year. The Administrator will inform you if these limits have affected you. 4. Compensation For the purposes of your Plan, compensation has a special meaning. Compensation is defined as your total compensation that is subject to income tax, that is, all of your compensation paid to you by your Employer during a Plan Year, but -- excluding your salary reduction contributions to any plan or arrangement maintained by your Employer. Your compensation will be recognized for benefit purposes from your date of entry into the Plan. The Plan, by law, cannot recognize compensation in excess of $150,000. This amount will be adjusted in future years for cost of living increases. It will also be applied to certain highly compensated employees and their family members as if they were a single participant. If you or a member of your family may be affected by this rule, ask your Administrator for further details. 7 For any short Plan Year, the adjusted $150,000 limit will be prorated based upon the number of full months in the short Plan Year. 5. Forfeitures Forfeitures are created when participants terminate employment before becoming entitled to their full benefits under the Plan. Your account may grow from the forfeitures of other participants. Forfeitures will be "allocated" or divided among participants eligible to share for a Plan Year. 6. Transfers From Qualified Plans (Rollovers) At the discretion of the Administrator, you may be permitted to deposit into your Plan distributions you have received from other plans. Such a deposit is called a "rollover" and may result in tax savings to you. You should consult qualified counsel to determine if a rollover is in your best interest. Your rollover will be placed in a separate account called a "participant's rollover account." The Administrator may establish rules for investment. You will always be 100% vested in your "rollover account." This means that you will always be entitled to all of your rollover contributions. Rollover contributions will be affected by any investment gains or losses. If the Trustee invested this money and there was a gain, the balance in your account would increase. Of course, if there were a loss from an investment, the balance in your account would decrease. 7. Directed Investments Your Employer has established procedures to permit you to direct the investment of contributions made by you or on your behalf to the Plan. These are called the "Participant Direction Procedures." You should request a copy of these Procedures from the Administrator. You need to follow these Procedures when you direct investments by giving instructions to the Administrator. You should review the information in these Procedures carefully before you give investment directions. In addition, the Procedures indicate how you can obtain other important information available from the Administrator on directed investments. The Plan is intended to be a plan described in Section 404(c) of the Employee Retirement Income Security Act of 1974. If the Plan complies with this Section, which it intends to do, then the fiduciaries of the Plan, including the Employer, the Administrator and the Trustee, will be relieved of any legal liability for any losses which are the direct and necessary result of the investment directions that you give. The Participant Direction Procedures must be followed in giving investment directions. If you fail to do so, then your investment directions need not be followed. You are not required to direct investments. If you choose not to direct investments, then the Trustee is responsible for investing your accounts in a prudent manner. 8 When you direct investments, your accounts are segregated for purposes of determining the gains, earnings or losses on these investments. Your account does not share in the investment performance for other Participants who have directed their own investments. In directing your investments, you should remember that the amount of your benefits under the Plan will depend in part upon your choice of investments which will include your Employer's stock. If you choose investments which produce gains and other earnings, your benefits will tend to increase in value over the period your investments perform accordingly. Conversely, if you choose investments that have losses, your benefits will tend to decrease in value over the period your investments perform accordingly. Losses can occur. There are no guarantees of performance, and neither the Employer, the Administrator, the Trustee, nor any of their representatives provide investment advice or insure or otherwise guarantee the value or performance of any investment you choose. You may direct the Trustee as to the investment of your entire interest in the Plan. V BENEFITS UNDER YOUR PLAN 1. Distribution of Benefits Upon Normal Retirement Your Normal Retirement Date is the first day of the month coinciding with or next following your Normal Retirement Age. You will attain your Normal Retirement Age when you reach your 65th birthday. At your Normal Retirement Age, you will be entitled to 100% of your account balance. Payment of your benefits will, at your election, begin as soon as practicable following your actual retirement but not prior to your Normal Retirement Date. If you continue working after your Normal Retirement Age, your benefits may not be deferred past the April 1st following the end of the year in which you attain age 70 1/2. 2. Distribution of Benefits Upon Late Retirement You may remain employed past your Plan's Normal Retirement Date and retire instead on your Late Retirement Date. Your Late Retirement Date is the first day of the month coinciding with or next following the date you choose to retire, after first having reached your Normal Retirement Date. On your Late Retirement Date, you will be entitled to 100% of your Account. Actual benefit payments will begin as soon as practicable following your Late Retirement Date. 3. Distribution of Benefits Upon Death Your beneficiary will be entitled to 100% of your account balance upon your death. If you are married at the time of your death, your spouse will be the beneficiary of 50% of the death benefit, unless you otherwise elect in writing on a form to be furnished to you by 9 the Administrator. IF YOU WISH TO DESIGNATE A BENEFICIARY OTHER THAN YOUR SPOUSE, HOWEVER, YOUR SPOUSE MUST IRREVOCABLY CONSENT TO WAIVE ANY RIGHT TO THE SPOUSE'S DEATH BENEFIT. YOUR SPOUSE'S CONSENT MUST BE IN WRITING, BE WITNESSED BY A NOTARY OR A PLAN REPRESENTATIVE AND ACKNOWLEDGE THE SPECIFIC NONSPOUSE BENEFICIARY. If no valid waiver is in effect, the death benefit payable to your spouse will be in the form of a survivor annuity, that is, periodic payments over the life of your spouse. Your spouse may direct that payments begin within a reasonable period of time after your death. The size of the monthly payments will depend on the value of your account at the time of your death. The spouse's death benefit may be distributed in an alternative method, such as a single lump sum or in installments, provided your spouse consents in writing to an alternative form. Generally, the period during, which you and your spouse may waive this survivor annuity begins as of the first day of the Plan Year in which you reach age 35 and ends when you die. The Administrator must provide you with a detailed explanation of the survivor annuity. This explanation must be given to you during, the period of time beginning on the first day of the Plan Year in which you will reach age 32 and ending on the first day of the Plan Year in which you reach age 35. It is, therefore, important that you inform the Administrator when you reach age 32 so that you may receive this information. If, however, (a) your spouse has validly waived any right to the death benefit in the manner outlined above, (b) your spouse cannot be located; or (c) you are not married at the time of your death, then your spouse's death benefit will be paid to the beneficiary of your own choosing in installments or as a single lump sum, as you or your beneficiary may elect. You may designate the beneficiary on a form to be supplied to you by the Administrator. If you change your designation, your spouse must again consent to the change. Also, since your death benefit is your entire account balance, you may, at any time, designate the beneficiary for amounts in excess of the spouse's death benefit without your spouse's consent. Under a special rule, you and your spouse may waive the survivor annuity form of payment any time before you turn age 35. However, any waiver will become invalid at the beginning of the Plan Year in which you turn age 35, and you and your spouse will be required to make another waiver. Regardless of the method of distribution selected, your entire death benefit must be paid to your beneficiaries within five years after your death. 10 Since your spouse has certain rights in the death benefit, you should immediately report any change in your marital status to the Administrator. 4. Distribution of Benefits Upon Disability Under your Plan, disability is defined as a physical or mental condition resulting from bodily injury, disease, or mental disorder which renders you incapable of continuing any gainful occupation with your Employer. This condition must constitute total disability under the federal Social Security Acts. If you become disabled while a participant, you will be entitled to 100% of your account balance. Payment of your disability benefits will be made to you as if you had retired. (See the Section in this Article entitled "Benefit Payment Options.") 5. Distribution of Benefits Upon Termination of Employment Your Plan is designed to encourage you to stay with your Employer until retirement. Payment of your account balance under your Plan is available upon your death, disability or retirement. If your employment terminates for reasons other than those listed above, you will be entitled to receive only your "vested percentage" of your account balance and the remainder of your account will be forfeited. Only contributions made by your Employer are subject to forfeiture. (See the Section in this Article entitled "Vesting in Your Plan.") If you so elect, the Administrator will direct the Trustee to distribute your vested benefit to you before the date it would normally be distributed (upon your death, disability or retirement). If your vested benefit under the Plan at the time of any prior distribution exceeded $3,500 or currently exceeds $3,500, you (and your spouse, if you are married) must give written consent before the distribution may be made. Also, if you want the distribution to be in a form other than an annuity payment, you and your spouse must first waive the annuity form of payment. (See the Section in this Article entitled "Benefit Payment Options" for a further explanation of how benefits are paid from the Plan.) If your vested benefit under the Plan at the time of any prior distribution did not exceed $3,500 and currently does not exceed $3,500, the Administrator will direct the Trustee to distribute your vested benefit to you before the date it would normally be distributed (upon your death, disability or retirement). This earlier distribution will be made within a reasonable time after you terminate employment. 6. Vesting in Your Plan Your "vested percentage" in your account is determined under the following schedule and is based on vesting Years of Service. You will always, however, be 100% vested upon your Normal Retirement Age. (See the Section in this Article entitled "Distribution of Benefits Upon Normal Retirement.") 11 Vesting Schedule Years of Service Percentage 1 25% 2 50% 3 75% 4 100% However, matching contributions attributable to either salary reduction amounts in excess of $9,500, or salary reduction amounts that are distributed in a corrective distribution, will be forfeited. Regardless of the vesting schedule above, you are always 100% vested in your salary reduction amounts contributed to the Plan. Your vested percentage will not be less than your vested percentage under the Plan before this amendment and restatement. Years of Service prior to the January 1, 1996, which is the Effective Date of your Plan, and Years of Service prior to the time you reached age 18 will not be counted for vesting purposes. Your vested benefit will normally be distributed to you or your beneficiary upon your death, disability, or retirement. 7. Benefit Payment Options There are various methods by which benefits may be distributed to you from your plan. The method depends on your marital status, as well as the elections you and your spouse make. All methods of distribution, however, have equivalent values. The rules under this Section apply to all distributions you will receive from the plan, whether by reason of retirement, termination, or any other event which may result in a distribution of benefits. If you are married on the date your benefits are to begin, you will automatically receive a joint and 50% survivor annuity, unless you otherwise elect. This means that if you die and are survived by a spouse, your spouse will receive a monthly benefit for the remainder of his life equal to 50% of the benefit you were receiving at the time of your death. You may elect joint and 75% or 100% survivor annuity instead of the standard joint and 50% survivor annuity. It should be noted that joint and survivor annuity may provide a lower monthly benefit than other forms of payment. You should consult qualified tax counsel before making such election. If you are not married on the date your benefits are to begin, you will automatically receive a life annuity, which means you will receive payments for as long as you live. You may, however, elect to waive these forms of payment, subject to the following rules. 12 When you are about to receive any distribution, the Administrator will explain the joint and survivor annuity or the life annuity to you in greater detail. You will be given the option of waiving the joint and survivor annuity or the life annuity form of payment during the 90 day period before the annuity is to begin. IF YOU ARE MARRIED, YOUR SPOUSE MUST IRREVOCABLY CONSENT IN WRITING TO THE WAIVER IN THE PRESENCE OF A NOTARY OR A PLAN REPRESENTATIVE. You may revoke any waiver. The Administrator will provide you with forms to make these elections. Since your spouse participates in these elections, you must immediately inform the Administrator of any change in your marital status. If you and your spouse elect not to take a joint and survivor annuity, or if you are not married when your benefits are scheduled to begin and have elected not to take a life annuity, you may elect an alternative form of payment. This payment may be made in one of the following methods: (a) a single lump-sum payment in cash; (b) the purchase of a different form of annuity. (c) installments over a period of not more than your assumed life expectancy (or your and your beneficiary's assumed life expectancies) determined at the time of distribution. You may also elect to have your life expectancy and the life expectancy of a designated beneficiary who is your spouse recalculated each year. You must make this election before the time that distributions are to begin. Failure to make this election will result in life expectancies not being recalculated. Regardless of the form of pavement you receive, its value to you will be the same value as each alternative form of payment. If you elect to delay the receive of benefits, there are other rules which generally require minimum payments to begin no later than the April 1st following the year in which you reach age 70 1/2. You should see the Administrator if you feel you may be affected by this rule. 8. Hardship Distribution of Benefits The Administrator may direct the Trustee to distribute up to 100% of your vested account balance in the event of immediate and heavy financial need. This hardship distribution is not in addition to your other benefits and will therefore reduce the value of the benefits you will receive at normal retirement. Withdrawal will be authorized only if the distribution is to be used for one of the following purposes: (a) The payment of expenses for medical care (described in Section 213(d) of the Internal Revenue Code) previously incurred by you or your dependent or necessary for you or your dependent to obtain medical care; 13 (b) The costs directly related to the purchase of your principal residence (excluding mortgage payments); (c) The payment of tuition, related educational fees, and room and board expenses for the next twelve (12) months of post-secondary education for yourself, your spouse or dependent; (d) The payment necessary to prevent your eviction from your principal residence or foreclosure on the mortgage of your principal residence. A distribution will be made from your account, but only if you certify and agree that all of the following conditions are satisfied: (a) The distribution is not in excess of the amount of your immediate and heavy financial need. The amount of your immediate and heavy financial need may include any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution; (b) You have obtained all distributions, other than hardship distributions, and all nontaxable (at the time of the loan) loans currently available under all plans maintained by your Employer; (c) That your elective contributions and employee contributions will be suspended for at least twelve (12) months after your receipt of the hardship distribution; and (d) That you will not make elective contributions for your taxable year immediately following the taxable year of the hardship distribution, except to the extent permitted by the Plan. In addition to these rules, there are restrictions placed on hardship distributions which are made from certain accounts. These accounts are generally the accounts which receive your salary reduction contributions and other Employer contributions which are used to satisfy special rules that apply to 401(k) plans. Any hardship distribution from these accounts will be limited, as of the date of distribution, to the balance of such accounts as of the end of the last Plan Year ending before July 1, 1989, plus your total salary reduction contributions after such date, reduced by the amount of any previous distributions made to you from these accounts. Ask your Administrator if you need further details. If you wish to receive a hardship distribution from the Plan in a single payment from your account, you (and your spouse, if you are married) must first waive the annuity form of payment. (See the Section in this Article entitled "Benefit Payment Options" for a further explanation of how benefits are paid from the Plan.) 14 9. Treatment of Distributions From Your Plan Whenever you receive a distribution from your Plan, it will normally be subject to income taxes. You may, however, reduce, or defer entirely, the tax due on your distribution through use of one of the following methods: (a) The rollover of all or a portion of the distribution to an Individual Retirement Account (IRA) or another qualified employer plan. This will result in no tax being due until you begin withdrawing funds from the IRA or other qualified employer plan. The rollover of the distribution, however, MUST be made within strict time frames (normally, within 60 days after you receive your distribution). Under certain circumstances all or a portion of a distribution may not qualify for this rollover treatment. In addition, most distributions will be subject to mandatory federal income tax withholding at a rate of 20%. This will reduce the amount you actually receive. For this reason, if you wish to rollover all or a portion of your distribution amount, the direct transfer option described in paragraph (b) below would be the better choice. (b) You may request for most distributions that a direct transfer of all or a portion of your distribution amount be made to either an Individual Retirement Account (IRA) or another qualified employer plan willing to accept the transfer. A direct transfer will result in no tax being due until you withdraw funds from the IRA or other qualified employer plan. Like the rollover, under certain circumstances all or a portion of the amount to be distributed may not qualify for this direct transfer, e.g., a distribution of less than $500 will not be eligible for a direct transfer. If you elect to actually receive the distribution rather than request a direct transfer, then in most cases 20% of the distribution amount will be withheld for federal income tax purposes. If you decide to directly transfer all or a portion of your distribution amount, you (and your spouse, if you are married) must first waive the annuity form of payment. (See the Section in this Article entitled "Benefit Payment Options" for a further explanation of this waiver requirement.) (c) The election of favorable income tax treatment under "10-year forward averaging," "5-year forward averaging" or, if you qualify, "capital gains" method of taxation. WHENEVER YOU RECEIVE A DISTRIBUTION, THE ADMINISTRATOR WILL DELIVER TO YOU A MORE DETAILED EXPLANATION OF THESE OPTIONS. HOWEVER, THE RULES WHICH DETERMINE WHETHER YOU QUALIFY FOR FAVORABLE TAX TREATMENT ARE VERY COMPLEX. YOU SHOULD CONSULT WITH QUALIFIED TAX COUNSEL BEFORE MAKING A CHOICE. 10. Domestic Relations Order As a general rule, your interest in your account, including your "vested interest," may not be alienated. This means that your interest may not be sold, used as collateral for a loan, given away or otherwise transferred. In addition, your creditors may not attach, garnish or otherwise interfere with your account. 15 There is an exception, however, to this general rule. The Administrator may be required by law to recognize obligations you incur as a result of court ordered child support or alimony payments. The Administrator must honor a "qualified domestic relations order." A "qualified domestic relations order" is defined as a decree or order issued by a court that obligates you to pay child support or alimony, or otherwise allocates a portion of your assets in the Plan to your spouse, former spouse, child or other dependent. If a qualified domestic relations order is received by the Administrator, all or a portion of your benefits may be used to satisfy the obligation. The Administrator will determine the validity of any domestic relations order received. 11. Pension Benefit Guaranty Corporation Benefits provided by your Plan are NOT insured by the Pension Benefit Guaranty Corporation (PBGC) under Title IV of the Employee Retirement Income Security Act of 1974 because the insurance provisions under ERISA are not applicable to your Plan. VI SERVICE RULES 1. Year of Service The term "Year of Service" is used in this Summary Plan Description and in your Plan. A Year of Service for eligibility purposes is defined as follows: You will have completed a Year of Service if, at the end of your first twelve consecutive months of employment with your Employer, you have been credited with 1000 Hours of Service. If you have not been credited with 1000 Hours of Service by the end of your first twelve consecutive months of employment, you will have completed a Year of Service at the end of any following Plan Year during which you were credited with 1000 Hours of Service. You will have completed a Year of Service for vesting purposes if you are credited with 1000 Hours of Service during a Plan Year, even if you were not employed on the first or last day of the Plan Year. You will have completed a Year of Service for purposes of sharing in Employer contributions if you are credited with 1000 Hours of Service during a Plan Year. For purposes of determining whether you have completed a Year of Service where the computation period is based upon a short Plan Year, your Administrator will notify you of the number of the Hours of Service that are required and the method of calculating a Year of Service. 16 2. Hour of Service You will be credited with an Hour of Service for: (a) each hour for which you are directly or indirectly compensated by your Employer for the performance of duties during the Plan Year; (b) each hour for which you are directly or indirectly compensated by your Employer for reasons other than performance of duties (such as vacation, holidays, sickness, disability, lay-off, military duty, jury duty or leave of absence during the Plan Year); and (c) each hour for back pay awarded or agreed to by your Employer. You will not be credited for the same Hours of Service both under (a) or (b), as the case may be, and under (c). 3. 1 -Year Break in Service A 1-Year Break in Service is a computation period during which you have not completed more than 500 Hours of Service with your Employer. A 1 -Year Break in Service does NOT occur, however, in the computation period in which you enter or leave the Plan for reasons of: (a) an authorized leave of absence; (b) certain maternity or paternity absences. The Administrator will be required to credit you with Hours of Service for a maternity or paternity absence. These are absences taken on account of pregnancy, birth, or adoption of your child. No more than 501 Hours of Service shall be credited for this purpose and these Hours of Service shall be credited solely to avoid your incurring a 1-Year Break in Service. The Administrator may require you to furnish proof that your absence qualifies as a maternity or paternity absence. VII YOUR PLAN'S "TOP HEAVY RULES" 1. Explanation of "Top Heavy Rules" A 401(k) Profit Sharing Plan that primarily benefits "key employees" is called a "top heavy plan." Key employees are certain owners or officers of your Employer. A Plan is a "top heavy plan" when more than 60% of the contributions or benefits have been allocated to key employees. 17 Each year, the Administrator is responsible for determining whether your Plan is a "top heavy plan." If your Plan becomes top heavy in any Plan Year, then non-key and key employees will be entitled to certain "top heavy minimum benefits," and other special rules will apply. Among, these top heavy rules are the following: (a) Your Employer may be required to make a contribution to your account in order to provide you with at least "top heavy minimum benefits." (b) If you are a participant in more than one Plan, you may not be entitled to "top heavy minimum benefits" under both Plans. VIII LOANS You may apply to the Administrator for a loan from the Plan. Your application must be in writing on forms which the Administrator will provide to you. The Administrator may also request that you provide additional information, such as financial statements, tax returns and credit reports. After considering your application, the Administrator may, in its discretion, determine that you qualify for the loan. The Administrator will inform the Trustee that you qualify. The Trustee may then review the Administrator's determination and make a loan to you if it is a prudent investment for the Plan. 1. Loan Requirements There are various rules and requirements that apply for any loan. These rules are outlined in this section. In addition, your Employer has established a written loan program which explains these requirements in more detail. You can request a copy of the loan program from the Administrator. Generally, the rules for loans include the following: (a) Loans must be made available to all participants and their beneficiaries on a uniform and non-discriminatory basis. (b) All loans must be adequately secured. You may use up to one-half (1/2) of your vested account balance under the Plan as security for the loan. If more security is required, your principal residence may be used, if permitted by State law. The Plan may also require that repayments on the loan obligation be by payroll deduction. (c) All loans must bear a reasonable rate of interest. The interest rate must be one a bank or other professional lender would charge for making a loan in a similar circumstance. (d) All loans must have a definite repayment period which provides for payments to be made not less frequently than quarterly, and for the loan to be amortized on a level basis over a reasonable period of time, not to exceed five (5) years. However, 18 if you use the loan to acquire your principal residence, you may repay the loan over a reasonable period of time that may be longer than five (5) years. (e) All loans will be considered a directed investment from your account under the Plan. All payments of principal and interest by you on a loan shall be credited to your account. (f) The amount the Plan may loan to you is limited by rules under the Internal Revenue Code. All loans, when added to the outstanding balance of all other loans from the Plan, will be limited to the lesser of: (1) $50,000 reduced by the excess, if any, of your highest outstanding balance of loans from the Plan during the one-year period prior to the date of the loan over your current outstanding balance of loans; or (2) 1/2 of your vested account balance. Also, no loan in an amount less than $1,000 will be made. (g) Your spouse must consent to any loan before it can be made if you use your vested interest as security for the loan. This rule only applies if the vested interest used as security exceeds $3,500. (h) If you fail to make payments when they are due under the loan, you will be considered to be "in default." The Trustee would then have authority to take all reasonable actions to collect the balance owing on the loan. This could include filing a lawsuit or foreclosing on the security for the loan. Under certain circumstances, a loan that is in default may be considered a distribution from the Plan, and could result in taxable income to you. In any event, your failure to repay a loan will reduce the benefit you would otherwise be entitled to from the Plan. IX CLAIMS BY PARTICIPANTS AND BENEFICIARIES Benefits will be paid to participants and their beneficiaries without the necessity of formal claims. You or your beneficiaries, however, may make a request for any Plan benefits to which you may be entitled. Any such request must be made in writing, and it should be made to the Administrator. (See the Article in this Summary entitled "GENERAL INFORMATION ABOUT YOUR PLAN.") Your request for Plan benefits shall be considered a claim for Plan benefits, and it will be subject to a full and fair review. If your claim is wholly or partially denied, the Administrator will furnish you with a written notice of this denial. This written notice must be provided to you within a reasonable period of time (generally 90 days) after the receipt of your claim by the Administrator. The written notice must contain the following information: 19 (a) the specific reason or reasons for the denial; (b) specific reference to those Plan provisions on which the denial is based; (c) a description of any additional information or material necessary to correct your claim and an explanation of why such material or information is necessary; and (d) appropriate information as to the steps to be taken if you or your beneficiary wishes to submit your claim for review. If notice of the denial of a claim is not furnished to you in accordance with the above within a reasonable period of time, your claim will be deemed denied. You will then be permitted to proceed to the review stage described in the following paragraphs. If your claim has been denied, and you wish to submit your claim for review, you must follow the Claims Review Procedure. 1. The Claims Review Procedure (a) Upon the denial of your claim for benefits, you may file your claim for review, in writing, with the Administrator. (b) YOU MUST FILE THE CLAIM FOR REVIEW NO LATER THAN 60 DAYS AFTER YOU HAVE RECEIVED WRITTEN NOTIFICATION OF THE DENIAL OF YOUR CLAIM FOR BENEFITS, OR IF NO WRITTEN DENIAL OF YOUR CLAIM WAS PROVIDED, NO LATER THAN 60 DAYS AFTER THE DEEMED DENIAL OF YOUR CLAIM. (c) You may review all pertinent documents relating to the denial of your claim and submit any issues and comments, in writing, to the Administrator. (d) Your claim for review must be given a full and fair review. If your claim is denied, the Administrator must provide you with written notice of this denial within 60 days after the Administrator's receipt of your written claim for review. There may be times when this 60 day period may be extended. This extension may only be made, however, where there are special circumstances which are communicated to you in writing within the 60 day period. If there is an extension, a decision shall be made as soon as possible, but not later than 120 days after receipt by the Administrator of your claim for review. (e) The Administrator's decision on your claim for review will be communicated to you in writing and will include specific references to the pertinent Plan provisions on which the decision was based. (f) If the Administrator's decision on review is not furnished to you within the time limitations described above, your claim will be deemed denied on review. 20 (g) If benefits are provided or administered by an insurance company, insurance service, or other similar organization which is subject to regulation under the insurance laws, the claims procedure relating to these benefits may provide for review. If so, that company, service, or organization will be the entity to which claims are addressed. If you have any questions regarding the proper person or entity to address claims, you should ask the Administrator. X STATEMENT OF ERISA RIGHTS 1. Explanation of Your ERISA Rights As a participant in this Plan you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974, also called ERISA. ERISA provides that all Plan participants are entitled to: (a) examine, without charge, all Plan documents, including: (1) insurance contracts; (2) collective bargaining agreements; and (3) copies of all documents filed by the Plan with the U.S. Department of Labor, such as detailed annual reports and Plan descriptions. This examination may take place at the Administrator's office and at other specified employment locations of the Employer. (See the Article in this Summary entitled "GENERAL INFORMATION ABOUT YOUR PLAN"); (b) obtain copies of all Plan documents and other Plan information upon written request to the Plan Administrator. The Administrator may make a reasonable charge for the copies; (c) receive a summary of the Plan's annual financial report. The Administrator is required by law to furnish each participant with a copy of this summary annual report; (d) obtain a statement telling you whether you have a right to receive a retirement benefit at Normal Retirement Age and, if so, what your benefits would be at Normal Retirement Age if you stop working under the Plan now. If you do not have a right to a retirement benefit, the statement will tell you how many years you have to work to get a right to a retirement benefit. THIS STATEMENT MUST BE REQUESTED IN WRITING AND IS NOT REQUIRED TO BE GIVEN MORE THAN ONCE A YEAR. The Plan must provide the statement free of charge. In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate your Plan, called 21 "fiduciaries" of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including your employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a pension benefit or exercising your rights under ERISA. If your claim for a retirement benefit is denied in whole, or in part, you must receive a written explanation of the reason for the denial. You have the right to have the Administrator review and reconsider your claim. (See the Article in this Summary entitled "CLAIMS BY PARTICIPANTS AND BENEFICIARIES.") Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the Plan and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Administrator to provide the materials and pay you up to $100.00 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court. If the Plan's fiduciaries misuse the Plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees if, for example, it finds your claim is frivolous. If you have any questions about this statement, or about your rights under ERISA, you should contact the nearest Regional Office of the U.S. Department of Labor's Pension and Welfare Benefits Administration. XI AMENDMENT AND TERMINATION OF YOUR PLAN 1. Amendment Your Employer has the right to amend your Plan at any time. In no event, however, will any amendment: (a) authorize or permit any part of the Plan assets to be used for purposes other than the exclusive benefit of participants or their beneficiaries; or (b) cause any reduction in the amount credited to your account. 22 2. Termination Your Employer has the right to terminate the Plan at any time. Upon termination, all amounts credited to your accounts will become 100% vested. A complete discontinuance of contributions by your Employer will constitute a termination. 23 EX-4.2 3 EXHIBIT 4.2 EXHIBIT 4.2 - -------------------------------------------------------------------------------- Sun National Bank 401(k) Plan Financial Statements as of and for the Years Ended December 31, 1998 and 1997, Supplemental Schedules as of and for the Year Ended December 31, 1998 and Independent Auditors' Report SUN NATIONAL BANK 401(k) PLAN TABLE OF CONTENTS - -------------------------------------------------------------------------------- Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998 AND 1997 AND FOR THE YEARS THEN ENDED: Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-7 SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1998 AND FOR THE YEAR THEN ENDED: Item 27a - Schedule of Assets Held for Investment Purposes 8 Item 27d - Schedule of Reportable Transactions 9 INDEPENDENT AUDITORS' REPORT To the Trustees and Participants of the Sun National Bank 401(k) Plan Vineland, New Jersey We have audited the accompanying statements of net assets available for benefits of the Sun National Bank 401(k) Plan as of December 31, 1998 and 1997, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1998 and 1997, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of (1) assets held for investment purposes as of December 31, 1998 and (2) reportable transactions for the year ended December 31, 1998 are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These schedules are the responsibility of the Plan's management. Such schedules have been subjected to the auditing procedures applied in our audit of the basic 1998 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. The schedule of assets held for investment purposes and the schedule of reportable transactions that accompany the Plan's financial statements do not disclose the historical cost of certain plan assets held by the Plan trustee and the historical cost of assets sold, respectively. Disclosure of this information is required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. /s/ Deloitte & Touche LLP July 14, 1999 SUN NATIONAL BANK 401(k) PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1998 AND 1997 - -------------------------------------------------------------------------------- 1998 1997 ASSETS: Investments, at fair value $ 2,920,975 $ 1,048,258 Participant loans receivable 21,389 3,576 ----------- ----------- Total assets 2,942,364 1,051,834 ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $ 2,942,364 $ 1,051,834 =========== =========== See notes to financial statements. -2- SUN NATIONAL BANK 401(k) PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEARS ENDED DECEMBER 31, 1998 AND 1997 - --------------------------------------------------------------------------------
1998 1997 ADDITIONS: Employer contributions $ 155,935 $ 87,717 Employee contributions 493,310 277,314 Rollover contributions and transfers in 1,390,615 31,936 Net (depreciation) appreciation in fair value of investments (73,393) 360,926 Investment income 216 40 Loan repayments 352 259 ----------- ----------- Total additions 1,967,035 758,192 ----------- ----------- DEDUCTIONS: Benefits paid to participants 72,331 59,975 Administrative expenses 4,174 8,454 ----------- ----------- Total deductions 76,505 68,429 ----------- ----------- INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 1,890,530 689,763 NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR 1,051,834 362,071 ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR $ 2,942,364 $ 1,051,834 =========== ===========
See notes to financial statements -3- SUN NATIONAL BANK 401(k) PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1998 AND 1997 - -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN The Sun National Bank 401(k) Plan is a defined contribution plan which was initiated on January 1, 1996. The following description of the Sun National Bank (the "Bank") 401(k) Plan (the "Plan") provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. a. General - The Plan is a defined contribution plan covering all full-time employees of the Bank who have 90 days of service and are age twenty-one or older. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). b. Contributions - Each year, participants may contribute up to 15 percent of pretax annual compensation, as defined in the Plan. Participants may also contribute amounts representing distributions from other qualified plans. The Bank contributes 50 percent of the first 6 percent of base compensation that a participant contributes to the Plan. Additional amounts may be contributed at the option of the Bank's board of directors. c. Participant Accounts - Each participant's account is credited with the participant's contribution and allocations of the Bank's contribution and, Plan earnings, and charged with an allocation of administrative expenses. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. d. Vesting - Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Bank's matching and discretionary contribution portion of their accounts plus actual earnings thereon is based on years of contribution service. A participant is 100 percent vested after four years of credited service. e. Investment Options - Upon enrollment in the Plan, a participant may direct employee contributions among available investment funds (see Note 6). Employer contributions are invested in Sun Bancorp, Inc. Stock. f. Participant Loans Receivable - Participants may borrow from their fund accounts up to a maximum equal to the lesser of $50,000 or 50 percent of their vested account balance. Loan transactions are treated as a transfer to the investment fund from the Participant Loans Receivable fund. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates as determined quarterly by the Plan administrator. g. Payment of Benefits - On termination of service due to death, disability or retirement, a participant will receive an amount equal to the value of the participant's vested interest in his or her account. h. Forfeited Accounts - At December 31, 1998, forfeited nonvested accounts totaled approximately $27,000. At December 31, 1997, there were no forfeited nonvested accounts. These accounts will be allocated to eligible participants. -4- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting - The accompanying financial statements have been prepared on the accrual basis of accounting. Valuation of Investments - The Plan's investments are stated at fair value. Investments are recorded by the Plan as of their trade dates. Recognition of Income - Dividends and interest are included in income when earned based on the term of the investments and the periods during which the investments are owned by the Plan. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expense during the reporting period. Actual results may differ from those estimates and assumptions. Financial Statement Presentation - The Plan has adopted Statement of Position 99-3, Accounting for and Reporting of Certain Defined Contribution Plan Investments and Other Disclosure Matters ("SOP 99-3"). As a result, the reclassification of the prior year financial statements have been made to eliminate the by fund disclosures. 3. TERMINATION OF THE PLAN Although it has not expressed any intent to do so, the Bank reserves the right, at any time, to discontinue permanently or temporarily its contributions to the Plan and to terminate its participation in the Plan. The interest of the members shall be nonforfeitable and fully vested in the event the Plan is terminated. 4. TAX STATUS The Bank has adopted a non-standardized defined contribution profit sharing plan provided by Nationwide Life Insurance Company and the Bank. The Internal Revenue Service has determined and informed the Bank by letter dated April 16, 1998, that the Plan is designed in accordance with applicable sections of the Internal Revenue Code. 5. PARTIES IN INTEREST Plan Administrator Sun National Bank Plan Trustee Benefits 21, Inc. Plan Custodian Nationwide Life Insurance Company 6. SUMMARY OF INVESTMENTS BY TYPE Upon enrollment in the Plan, a participant may select from any of the eight investment options as described by the Plan Custodian and summarized below. Nationwide invests the contributions consistent with the direction of the participants. Twentieth Century Ultra Investors Fund - The fund seeks capital growth over time by investing primarily in common stocks that are considered by management to have better-than-average prospects for appreciation. -5- Fidelity Magellan Fund - The fund invests primarily in common stocks and convertible securities, with a portion of its assets invested in debt securities of all types and qualities. Neuberger & Berman Guardian Fund - The fund is a growth and income fund and emphasizes investments in stocks of high quality, established companies. Fidelity Puritan Fund - The fund seeks income consistent with preservation of capital by investing in common stocks, preferred stocks and bonds, seeking to diversify in terms of both companies and industries. Fidelity Advisory High Yield Fund A - The fund seeks a combination of a high level of income and the potential for capital gains by investing in a diversified portfolio consisting primarily of high-yielding, fixed income and zero coupon securities, such as bonds, debentures and notes, convertible securities and preferred stock. Nationwide Money Market Fund - The fund provides as high a level of current income as is consistent with the preservation of capital and maintenance of liquidity. It invests in a diversified portfolio of high-quality money market instruments. Virtuoso 2 is a guaranteed return contract that provides an annual interest guarantee, based on the investment yield realized on Nationwide's General Account. The contract guarantees an interest rate for the first guarantee period and a minimum rate for the following guarantee period. Sun Bancorp, Inc. Stock - Contributions are invested in common stock of Sun Bancorp, Inc., the holding company of Sun National Bank. It should be noted that any forfeited funds (i.e., the non-vested portion of employer matched contributions for which a participant forfeits upon early withdrawal from the plan) are invested in the Virtuoso 2 account to be applied to future employer contributions at the discretion of the Plan Administrator. 7. INVESTMENTS The following presents investments that represent 5% or more of the Plan's net assets. December 31, ------------------------------- 1998 1997 Twentieth Century Ultra Investors Fund $ 432,180 $ 91,846 Fidelity Magellan Fund 441,058 136,466 Neuberger & Berman Guardian Fund 255,045 89,917 Sun Bancorp, Inc. Stock 1,418,385 590,267 Nationwide Money Market Fund 73,024 -6- The following presents detail of the net (depreciation) appreciation in fair value of investments. December 31, ---------------------------- 1998 1997 Twentieth Century Ultra Investors Fund $ 47,257 $ 19,386 Fidelity Magellan Fund 61,045 30,034 Neuberger & Berman Guardian Fund (312) 12,793 Fidelity Puritan Fund 8,841 7,842 Fidelity Advisory High Yield Fund A 106 2,232 Nationwide Money Market Fund 2,718 1,733 Sun Bancorp, Inc. stock (193,048) 286,906 -------- --------- $(73,393) $ 360,926 ======== ========= 8. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits according to the financial statements to Form 5500: December 31, 1998 Net assets available for benefits per the financial statements $2,942,364 Refunds payable (3,372) ---------- Net assets available for benefits per Form 5500 $2,938,992 ========== ****** -7- SUN NATIONAL BANK 401(k) PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1998 - --------------------------------------------------------------------------------
Fair Identity of Issue Description of Investment Cost Value *Nationwide Life Insurance Company Twentieth Century Ultra Investors Fund Not available $ 432,180 *Nationwide Life Insurance Company Fidelity Magellan Fund Not available 441,058 *Nationwide Life Insurance Company Neuberger & Berman Guardian Fund Not available 255,045 *Nationwide Life Insurance Company Fidelity Puritan Fund Not available 128,629 *Nationwide Life Insurance Company Fidelity Advisory High Yield Fund A Not available 125,592 *Nationwide Life Insurance Company Nationwide Money Market Fund Not available 115,214 *Nationwide Life Insurance Company Virtuosos 2 Not available 4,872 *Sun Bancorp, Inc. Common Stock Not available 1,418,385 Participant loans Loan rates ranged from 8.25% to 8.75% 0 21,389 ------------- ----------- Not available $ 2,942,364 ============= ===========
*Indicates party-in-interest to the Plan -8- SUN NATIONAL BANK 401(k) PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED DECEMBER 31, 1998 - -------------------------------------------------------------------------------- Single transactions of the same issue which exceed 5% of beginning total net assets
Description of Asset Identity of (include Interest Rate Party and Maturity in Case Number of Purchase Selling Cost of Net Gain Involved of Loan Transactions Price Price Asset (Loss) Nationwide Life Insurance Company Fidelity Advisory High Yield Fund A 1 $ 68,953 $ 68,953 Nationwide Life Insurance Company Fidelity Magellan Fund 1 55,656 55,656 Nationwide Life Insurance Company Fidelity Magellan Fund 1 111,142 111,142 Nationwide Life Insurance Company Neuberger & Berman Guardian Fund 1 76,108 76,108 Nationwide Life Insurance Company Twentieth Century Ultra Investors Fund 1 84,907 84,907 Nationwide Life Insurance Company Twentieth Century Ultra Investors Fund 1 182,272 182,272 Sun National Bank Sun National Bank Common Stock 1 592,662 592,662
Series of transactions of the same issue which exceed 5% of beginning total net assets
Description of Asset Identity of (include Interest Rate Party and Maturity in Case Number of Purchase Selling Cost of Net Gain Involved of Loan Transactions Price Price Asset (Loss) Nationwide Life Insurance Company Fidelity Advisory High Yield Fund A 149 $ 109,256 $ 109,256 Nationwide Life Insurance Company Fidelity Magellan Fund 172 252,505 252,505 Nationwide Life Insurance Company Fidelity Puritan Fund 49 85,903 85,903 Nationwide Life Insurance Company Neuberger & Berman Guardian Fund 58 184,733 184,733 Nationwide Life Insurance Company Twentieth Century Ultra Investors Fund 155 332,365 332,365 Sun National Bank Sun National Bank Common Stock 4 989,410 989,410
-9- EX-5.1 4 EXHIBIT 5.1 EXHIBIT 5.1 Favorable determination letter dated April 16, 1998, confirming that the Plan is qualified under Section 401 of the Internal Revenue Code of 1986, as amended INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY DISTRICT DIRECTOR P.O. BOX 2508 CINCINNATI, OH 45201 Employer Identification Number: 22-2458313 Date: April 16, 1998 DLN: 17007258248007 SUN NATIONAL BANK Person to Contact: C/O DAVID I. WADDINGTON CINDY PERRY THBC Contact Telephone Number: 2520 HWY 35 STE 203 (513) 241-5199 MANASQUAN, NJ 08736 Plan Name: 401K PLAN Plan Number: 001 Dear Applicant: We have made a favorable determination on your plan, identified above, based on the information supplied. Please keep this letter in your permanent records. Continued qualification of the plan under its present form will depend on its effect in operation. (See section 1.401-1(b)(3) of the Income Tax Regulations.) We will review the status of the plan in operation periodically. The enclosed document explains the significance of this favorable determination letter, points out some events that may affect the qualified status of your employee retirement plan, and provides information on the reporting requirements for your plan. It also describes some events that automatically nullify it. it is very important that you read the publication. This letter relates only to the status of your plan under the Internal Revenue Code. It is not a determination regarding the effect of other federal or local statutes. This determination letter is applicable for the amendment(s) executed on August 26, 1997. This determination letter is also applicable for the amendment(s) dated on March 16, 1998. This determination letter is applicable for the plan adopted on January 31, 1996. This plan has been mandatorily disaggregated, permissively aggregated, or restructured to satisfy the nondiscrimination requirements. This plan satisfies the nondiscrimination in amount requirement of section 1.401(a)(4)-1(b)(2) of the regulations on the basis of the design-based safe harbor described in the regulations. This plan satisfies the nondiscriminatory current availability requirements of section 1.401(a)(4)-4(b) of the regulations with respect to those benefits, rights and features that are currently available to all employees in the plan's coverage group. For this purpose, the plan's coverage group -2- SUN NATIONAL BANK consists of those employees treated as currently benefitting for purposes of demonstrating that the plan satisfies the minimum coverage requirements of section 410(b) of the Code. This letter considers the amendments required by the Tax Reform of 1986, except as otherwise specified in this letter. The information on the enclosed Publication 794 is an integral part of this determination. Please be sure to read and keep it with this letter. The requirement for employee benefits plans to file summary plan descriptions (SPD) with the U.S. Department of Labor was eliminated effective August 5, 1997. For more details, call 1-800-998-7542 for a free copy of the SPD card. We have sent a copy of this letter to your representative as indicated in the power of attorney. If you have questions concerning this matter, please contact the person whose name and telephone number are shown above. Sincerely yours, /s/ C. Ashley Bullard District Director Enclosures: Publication 794 Reporting & Disclosure Guide for Employee Benefit Plans EX-23.1 5 EXHBIT 23.1 EXHIBIT 23.1 Consent of Deloitte & Touche LLP INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Sun Bancorp, Inc. on Form S-8 of our report dated February 1, 1999, incorporated by reference in the Annual Report on Form 10-K of Sun Bancorp, Inc. for the year ended December 31, 1998. /s/ Deloitte & Touche LLP --------------------------------- Deloitte & Touche LLP October 26, 1999 Philadelphia, Pennsylvania -----END PRIVACY-ENHANCED MESSAGE-----