PROVIDENT FINANCIAL GROUP, INC. AND SUBSIDIARIES
EXHIBIT 10 - DEFERRED COMPENSATION PLAN
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PROVIDENT FINANCIAL GROUP, INC.
DEFERRED COMPENSATION PLAN
(As amended and restated effective as of January 1, 2001)
TABLE OF CONTENTS
ARTICLE 1 GENERAL 1
1.1 Effective Date 1
1.2 Shareholder Approval 1
1.3 Purpose 1
ARTICLE 2 DEFINITIONS AND USAGE 1
2.1 Definitions 1
2.2 Usage 4
2.3 Eligibility 4
ARTICLE 3 PARTICIPATION IN PLAN 4
3.1 Participation 4
3.2 Agreement Procedure 4
ARTICLE 4 AMOUNT OF BENEFIT IN PROVIDENT STOCK ACCOUNT 6
4.1 Benefit 6
4.2 Provident Stock Accounts 6
4.3 Deferred Amounts 6
4.4 Dividends 6
4.5 Earnings 7
4.6 Deferral of Bonus Payments 8
ARTICLE 5 PAYMENT OF BENEFIT IN PROVIDENT STOCK ACCOUNT 8
5.1 Payment; Possible Forfeiture 8
5.2 Amount of Payment 8
5.3 Form of Benefit Payments 9
5.5 Transfer to Self-Directed Account 9
ARTICLE 6 AMOUNT OF BENEFIT IN SELF-DIRECTED ACCOUNT 9
6.1 Benefit 9
6.2 Self-Directed Account 9
6.3 Deferred Amounts 10
6.4 Retirement Plan ESOP Credit 10
6.5 Retirement Plan Matching Credit. 10
6.6 Investment of Self-Directed Account 10
ARTICLE 7 PAYMENT OF BENEFIT IN SELF-DIRECTED ACCOUNT 10
7.1 Payment 11
7.2 Amount of Payment 11
7.3 Form of Benefit Payments 11
ARTICLE 8 DEATH OF PARTICIPANT 12
8.1 Commencement of Benefit Payments 12
8.2 Designation of Beneficiary 12
ARTICLE 9 HARDSHIP DISTRIBUTIONS 12
9.1 Distribution 12
9.2 Unforeseeable Emergency 12
ARTICLE 10 ADMINISTRATION 13
10.1 General 13
10.2 Administrative Rules 13
10.3 Duties 13
10.4 Fees 14
ARTICLE 11 CLAIMS PROCEDURE 14
11.1 General 14
11.2 Denials 14
11.3 Notice 14
11.4 Appeals Procedure 14
11.5 Review 15
ARTICLE 12 CHANGE IN CONTROL PROVISIONS 15
12.1 Change in Control 15
12.2 Contributions Upon a Change in Control 16
ARTICLE 13 MISCELLANEOUS PROVISIONS 16
13.1 Amendment and Termination 16
13.2 No Assignment 17
13.3 Successors and Assigns 17
13.4 Governing Law 17
13.5 No Guarantee of Employment 17
13.6 Severability 17
13.7 Notification of Addresses 17
13.8 Income Tax Payment 17
13.9 Bonding 18
ARTICLE 14 TRUST PROVISION 18
14.1 Trust 18
14.2 Payment of Benefits 18
14.3 Independent Trustee 18
14.4 Trustee Duties 18
14.5 Reversion to the Employer 18
ARTICLE 15 INDEMNIFICATION 19
ARTICLE 16 ARBITRATION 19
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PROVIDENT FINANCIAL GROUP, INC.
DEFERRED COMPENSATION PLAN
Amended and Restated as of January 1, 2001
PREAMBLE
WHEREAS, Provident Financial Group, Inc. ("Provident") recognizes the
unique qualifications of certain key management or highly compensated
employees of Provident and its subsidiaries and the valuable services
they provide and desires to establish an unfunded plan to provide an
incentive for eligible employees to defer compensation in a manner that
aligns their interests with those of the Provident's stockholders, and
WHEREAS, Provident has determined that the implementation of such a
plan will best serve its interest in retaining and motivating key
employees.
NOW, THEREFORE, Provident hereby amends and restates the amended and
restated Provident Bancorp, Inc. Deferred Compensation Plan in its
entirety as hereinafter provided:
ARTICLE 1
GENERAL
1.1 Effective Date. The provisions of the Plan were effective
originally as of May 1, 1993. The Plan was amended and restated
effective as of January 1, 1996. This amended and restated Plan shall
be effective as of January 1, 2001. The rights, if any, of any person
whose status as an employee of any Employer has terminated shall be
determined pursuant to the Plan as in effect on the date such employee
terminates, unless a subsequently adopted provision of the Plan is made
specifically applicable to such person.
1.2 Shareholder Approval. The Plan was approved by the Provident
shareholders on May 26, 1993.
1.3 Purpose. The Plan is intended to be an unfunded plan primarily for
the purpose of providing deferred compensation to a select group of
management or highly compensated employees, as such group is described
under Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA.
ARTICLE 2
DEFINITIONS AND USAGE
2.1 Definitions. Wherever used in the Plan, the following words and
phrases shall have the meaning set forth below unless the context
plainly requires a different meaning:
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(a)"Administrator" means the person or persons described in Article
10.
(b)"Agreement" means an Agreement For Deferral of Compensation
between Provident and an eligible employee in accordance with
Article 3.
(c)"Board" means the members of the Board of Directors of
Provident.
(d)"Benefit" means the benefit of a Participant as determined under
Article 4 or Article 6.
(e)"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(f) "Committee" means the Compensation Committee of the Board.
(g) "Common Share" means a share of common stock of Provident.
(h)"Compensation" means the total of all compensation, including
wages, salary, commissions, draws and bonuses, which is payable
as consideration for the employee's service during a Plan Year
prior to subtracting any Deferred Amounts.
(i)"Deferred Amount" means, for each calendar year, the amount of
Compensation deferred by an employee pursuant to Article 3. The
Deferred Amount for any calendar year shall be at least 5% and
shall not exceed 50% of the Participant's Compensation for the
year, excluding bonus, and/or at least 5% and not more than 50%
of the Participant's bonus for the year. Deferred Amounts may be
allocated to a Provident Stock Account under Article 4 or the
Participant's Self-Directed Account under Article 6 in such
proportions specified in the Agreement.
(j)"Disability" means permanent and total disability, mental or
physical, which prevents the Participant from discharging the
duties and obligations or from otherwise providing the services
for which Compensation is paid by Provident; provided, however,
that such disability shall not be deemed to commence or exist
until such time as the Committee shall determine in its sole
discretion, upon the basis of proof satisfactory to the
Committee, that the Participant has been thus disabled.
(k) "Employer" means Provident and any Subsidiary.
(l)"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
(m) "Exchange Act" means the Securities Exchange Act of 1934.
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(n)"Participant" means an eligible employee of an Employer who is
participating in the Plan in accordance with Article 3.
(o)"Plan" means this Provident Financial Group, Inc. Deferred
Compensation Plan.
(p)"Plan Year" means initially the period beginning on the
effective date and ending on December 31, 1993, and thereafter
means the calendar year.
(q)"Pre-Tax EPS" means, for each Plan Year, pre-tax earnings on
each Common Share, computed in accordance with generally accepted
accounting principles on a fully diluted basis for the fiscal
year of Provident that includes such Plan Year, prior to the
deduction of the amount computed pursuant to Section 4.5 for
earnings credited to Provident Stock Accounts for such Plan Year.
The Committee in its sole discretion may adjust Pre-Tax EPS to
take into account any unusual circumstances, including but not
limited to the cumulative effect of accounting changes, that may
impact the calculation of Pre-Tax EPS.
(r)"Provident" means Provident Financial Group, Inc. and any
successor thereto.
(s)"Provident Stock Accounts" means the accounts established on
behalf of the Participant as described in Section 4.2.
(t)"Retirement" shall mean separation from service on or after
attainment of age 65, or an earlier age if then eligible for
retirement benefits under any of Provident's retirement plans
qualified under Section 401(a) of the Code.
(u)"Retirement Plan" means the Provident Financial Group, Inc.
Retirement Plan.
(v)"Return on Equity" means, for each Plan Year, net income as a
percentage of the average balance of common shareholders' equity
as computed in accordance with generally accepted accounting
principles. The Committee in its sole discretion may adjust
Return on Equity to take into account any unusual circumstances,
including but not limited to the cumulative effect of accounting
changes, that may impact the calculation of Return on Equity.
(w)"Self-Directed Account" means the account established on behalf
of the Participant as described in Section 6.2.
(x)"Subsidiary" means any corporation, other than Provident, in an
unbroken chain of corporations beginning with Provident, if each
of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one or more of
the other corporations in such chain.
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(y)"Termination for Cause" means the termination of a Participant's
employment with any Employer, by written notice to the
Participant, specifying the event relied upon for such
termination, due to the Participant's: (i) serious, willful
misconduct in respect of his duties with any Employer, (ii)
conviction of a felony or perpetration of a common law fraud,
(iii) material failure to comply with applicable laws with
respect to the execution of any Employer's business operations,
(iv) theft, fraud, embezzlement, dishonesty or other conduct
which has resulted or is likely to result in material economic
damage to any Employer, or (v) failure to comply with
requirements of any Employer's drug and alcohol abuse policies,
if any.
(z)"Trust" means the trust described in Article 14.
(aa)"Trustee" means the trustee of the Trust.
2.2 Usage. Except where otherwise indicated by the context, any
masculine terminology used herein shall also include the feminine and
vice versa, and the definition of any term herein in the singular shall
also include the plural and vice versa.
2.3 Eligibility. An employee of any Employer who is a member of a
select group of management or highly compensated employees as such
group is described under Sections 201(2), 301(a)(3), and 401(a)(1) of
ERISA, shall be eligible to participate in the Plan at such time and
for such period as designated by the Committee. At no time shall the
number of persons for which one or more Accounts are maintained under
the Plan exceed 200.
ARTICLE 3
PARTICIPATION IN PLAN
3.1 Participation. Each eligible employee may become a Participant by
entering into an Agreement in the manner provided in Section 3.2. A
Participant shall continue as a Participant until his entire Benefit
has been paid.
3.2 Agreement Procedure.
(a)Terms of Agreement. The Employer, Provident and each Participant
shall execute an Agreement that shall set forth: (i) the Deferred
Amount for each Plan Year in the deferral period described in
Subsection (e), (ii) the allocation of the Deferred Amount
between the Provident Stock Account and the Self-Directed
Account, and (iii) the Participant's beneficiary for all Benefits
under the Plan in the event of the Participant's death. The
Agreement shall generally be revocable until the beginning of the
Plan Year to which it applies; provided that persons subject to
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Section 16 of the Exchange Act may choose to have the Agreement
be irrevocable when delivered to the Administrator.
(b)First Plan Year of the Plan. For the first Plan Year, an
eligible employee shall properly complete, execute and deliver
the Agreement to the Administrator no later than 30 days after
the later of (1) the date the Plan has been adopted by the Board
and (2) the effective date of the Plan. The Agreement completed
in accordance with this Subsection (b) shall be effective with
respect to Compensation payable after the date the Agreement is
delivered to the Administrator.
(c)Subsequent Plan Years. For any Plan Year (other than the first
Plan Year described in Subsection (b)) for which an employee is
eligible to participate in the Plan, the Agreement shall be
properly completed, executed and delivered to the Administrator
prior to the later of the first day of such Plan Year or 30 days
following designation of eligibility to participate by the
Committee. The Agreement completed in accordance with the
preceding sentence shall be effective with respect to
Compensation payable on and after the first day of the Plan Year
for which the Agreement is applicable. An eligible employee who
does not enter an Agreement to establish a Provident Stock
Account when eligible to participate in the Plan shall not be
permitted to establish a Provident Stock Account until the second
Plan Year thereafter, and at that time shall complete an
Agreement in accordance with this Section. Notwithstanding the
preceding sentence, the Committee, upon application by the
eligible employee, may permit such employee to establish a
Provident Stock Account in the Plan Year that immediately follows
the Plan Year in which the employee was eligible to participate.
An eligible employee who does not enter into an Agreement to
establish a Self-Directed Account when eligible to participate in
the Plan shall be permitted to have a Deferred Amount credited to
the Participant's Self-Directed Account for any subsequent Plan
Year and shall complete an Agreement in accordance with this
Section.
(d)Changes to Deferred Amount. For any Plan Year for which a
Participant desires to change his Deferred Amount for the next
succeeding deferral period (as described in Subsection (e)), the
Agreement shall be properly completed, executed and delivered to
the Administrator prior to the first day of the Plan Year for
which such Agreement shall first be effective. The Agreement
completed in accordance with this Subsection (d) shall be
effective with respect to Compensation payable on and after the
first day of the Plan Year for which the Agreement is first
applicable.
(e)Deferral Period. The Agreement to have Deferred Amounts credited
to a Provident Stock Account shall continue in effect for two
Plan Years, beginning with the Plan Year (or portion thereof) to
which the Agreement initially applies. Notwithstanding the
preceding sentence, the Committee in its sole discretion may
permit the two-Plan Year period during which a Deferral Amount is
effective to be reduced to a one-Plan Year period. In the event
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the Committee reduces the two-Plan Year period as described in
the preceding sentence, the Participant shall elect a new
Deferral Amount pursuant to Subsection (d). The Agreement to have
Deferred Amounts credited to the Participant's Self-Directed
Account shall be effective only for the Plan Year to which the
Agreement applies.
ARTICLE 4
AMOUNT OF BENEFIT IN PROVIDENT STOCK ACCOUNT
4.1 Benefit. The Benefit of a Participant electing to have Deferred
Amounts credited to a Provident Stock Account shall be the amounts
credited to such Participant's Provident Stock Accounts pursuant to
this Article 4. The payment of the Benefit (or portion thereof) to a
Participant shall be determined in accordance with Section 5.1. The
payment of the Benefit to the beneficiary of a deceased Participant
shall be determined in accordance with Article 8.
4.2 Provident Stock Accounts. The Administrator shall establish
separate Provident Stock Accounts for each Participant for each Plan
Year. The Provident Stock Account will reflect the Deferred Amount
credited to the Account for the Plan Year, dividends credited to that
Account, and earnings credited to that Account. All amounts which are
credited to a Provident Stock Account shall remain subject to the
claims of Provident's general creditors. A Participant shall not have
any interest or right in or to such Provident Stock Account at any
time. The Administrator shall have sole responsibility and authority
for determining the amount of a Participant's Provident Stock Account.
4.3 Deferred Amounts. The Deferred Amount attributable to each pay
period shall be credited to the Provident Stock Account based on a
transfer before the last day of the month in which the Compensation is
payable to the Participant. The Participant's Deferred Amount shall be
considered as if converted to Common Shares before the end of the month
following the month in which the Participant's Deferred Amount would
have been transferred. In converting the Deferred Amount to Common
Shares, the Deferred Amount shall be divided by the average cost of
Common Shares considered to be purchased with all Deferred Amounts that
month. In lieu of transferring the Deferred Amount, the Employer may
treat the transfer based on such number of Common Shares as shall equal
the total Deferred Amounts being paid in the form of Common Shares
divided by the average of the closing bid and ask prices of a Common
Share for the 20 trading days immediately preceding the date the
Deferred Amounts were otherwise to have been transferred. Such Common
Shares may be considered to have been transferred no later than the end
of the month following the month in which the Deferred Amounts would
have been transferred.
4.4 Dividends. An amount equal to the amount of any dividends paid on
Common Shares shall be credited to a Participant's Provident Stock
Account based on the number of shares credited to such Account and
shall be applied to the crediting of additional Common Shares before
the end of the month following the month in which the dividends were
paid.
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4.5 Earnings.
(a)General. As of the end of every Plan Year, each Provident Stock
Account shall be credited with earnings as determined under this
section; provided, however, that earnings shall not be credited
for a Provident Stock Account that contains a Deferred Amount
that has been re-deferred by the Participant under Article 5.
Each Provident Stock Account entitled to receive earnings shall
be credited with earnings based on the following schedule:
Percentage of Pre-Tax EPS to be
Return on Equity Credited to each Common Share
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10% and below 0%
11% 20%
12% 40%
13% 60%
14% 80%
15% 100%
16% 110%
17% 120%
18% 130%
19% 140%
20% 150%
21% 160%
22% 170%
23% 180%
24% 190%
25% and above 200%
Within 60 days after the end of each Plan Year, for purposes of
determining the amount of a Participant's Provident Stock
Account, such earnings determined under this Section shall be
credited to the Participant's Provident Stock Account. Such
earnings shall be converted to Common Shares before the end of
the month following the month in which the earnings were
credited. In converting the earnings to Common Shares, the
earnings shall be divided by the average cost of Common Shares
considered to be purchased with the earnings. In lieu of having
credited the earnings in cash, the Administrator may credit such
number of Common Shares as shall equal the earnings divided by
the average of the closing bid and ask prices of Common Shares
for the 20 trading days immediately following the end of the Plan
Year. Such Common Shares shall be considered to have been
credited no later than 60 days following the Plan Year end. In no
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event shall the amount of earnings that relates to a Deferred
Amount be less than zero.
(b)Separation from Employment. Notwithstanding the provisions of
Subsection (a), the amount of earnings for a Plan Year to be
credited to each Provident Stock Account of a Participant who
separates from employment with any Employer on account of death,
Disability, Retirement or any other reason shall be reduced by a
fraction, the numerator of which is 12 minus the number of months
the Participant was employed by any Employer during such Plan
Year and the denominator of which is 12. A Participant who has a
Termination for Cause shall have no earnings credited to any
Provident Stock Account for the Plan Year in which the
Participant separates from employment.
4.6 Deferral of Bonus Payments. All Deferred Amounts allocated by the
Participant to the Provident Stock Account and relating to the payment
of a bonus paid on or prior to March 1 of any year shall be credited to
a Provident Stock Account for the Plan Year to which said bonus payment
relates. Such Deferred Amounts shall receive the earnings credit, if
any, payable pursuant to Section 4.5(a) for such Plan Year.
ARTICLE 5
PAYMENT OF BENEFIT IN PROVIDENT STOCK ACCOUNT
5.1 Payment; Possible Forfeiture. The payment of a Participant's
Benefit credited to a Participant's Provident Stock Account shall be
made no later than 60 days after the end of the Plan Year in which the
earliest of the following events occurs:
(a)the Participant separates from employment with the Employer for
any reason,
(b)a Deferred Amount has been credited to a Participant's Provident
Stock Account for four Plan Years, and the Participant has
delivered an election in writing to withdraw all or part of such
Deferred amount to the Administrator no later than June 30 of
such fourth Plan Year, or
(c)the Participant experiences a hardship, as determined under
Article 9.
5.2 Amount of Payment.
(a)No Separation From Employment. A Participant who does not
separate from employment with the Employer during a Plan Year
shall receive the portion of his Benefit which the Participant
elects to withdraw under Section 5.1(b).
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(b)Separation From Employment. The Benefit of a Participant who
separates from employment with the Employer shall be equal to the
total amount credited to the Participant's Provident Stock
Account. Notwithstanding the preceding sentence, the Committee in
its sole discretion may cause to be forfeited the portion of a
Participant's Provident Stock Account attributable to earnings on
Deferred Amounts if the Participant experiences a Termination for
Cause.
(c)Hardship. A Participant who incurs a hardship as determined
under Article 9 shall be permitted to withdraw all or a portion
of his Benefit, payable in the form set forth in Section 5.3. A
Participant's withdrawal of all or a portion of his Benefit on
account of hardship shall not affect the Deferred Amount such
Participant has elected to contribute to the Plan for the Plan
Year in which such withdrawal occurs.
5.3 Form of Benefit Payments. A Participant's Benefit in a Provident
Stock Account, other than in the event of separation from employment
because of Retirement, shall be paid in the form of Common Shares;
provided however, that any fractional Common Shares credited to a
Participant's Provident Stock Account that are payable as a Benefit
shall be paid in cash.
5.4 Transfer to Self-Directed Account. All Deferred Amounts which have
been credited to a Participant's Provident Stock Account for four Plan
Years and which have not been withdrawn pursuant to Section 5.1 shall
be transferred automatically to the Participant's Self-Directed Account
and paid to the Participant pursuant to Article 7. In the event a
Participant separates from employment because of Retirement, such
Participant's Benefit in a Provident Stock Account shall be transferred
automatically to the Self-Directed Account and paid to the Participant
pursuant to Article 7.
ARTICLE 6
AMOUNT OF BENEFIT IN SELF-DIRECTED ACCOUNT
6.1 Benefit. The Benefit of a Participant electing to have Deferred
Amounts credited to a Self-Directed Account shall be the amounts
allocated to such Participant's Self-Directed Account pursuant to this
Article 6. The payment of the Benefit (or portion thereof) to a
Participant shall be determined in accordance with Section 7.1. The
payment of the Benefit to the beneficiary of a deceased Participant
shall be determined in accordance with Article 8.
6.2 Self-Directed Account. A Self-Directed Account may be established
for each Participant. The Self-Directed Account will reflect the
Deferred Amounts allocated to the Account for every Plan Year, the
Retirement Plan ESOP credit, the Retirement Plan matching credit, and
the investment results for the Account. All amounts which are allocated
to a Participant's Self-Directed Account shall remain subject to the
claims of Provident's general creditors. A Participant shall not have
any interest or right in or to such Self-Directed Account at any time.
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6.3 Deferred Amounts. The Deferred Amount otherwise permitted under
this Article 6 shall be reduced by the amount of any Before-Tax
Contributions made by the Participant to the Retirement Plan. The
Employer of the Participant shall be considered to have transferred the
Deferred Amount attributable to each pay period in the form of cash
before the last day of the month in which the Compensation is payable
to the Participant.
6.4 Retirement Plan ESOP Credit. The Employer shall also be considered
as having transferred to be credited to the Participant's Self-Directed
Account, an amount equal in value to the ESOP Contributions and
forfeitures that would have been allocated to the Participant under the
terms of the Retirement Plan if such Participant had not elected to
have the Deferred Amount credited to this Plan during the Plan Year.
Such amount shall be treated as having been transferred before the end
of the month following the month in which such ESOP Contributions and
forfeitures are allocated under the Retirement Plan. This section shall
apply to all Deferred Amounts, including Deferred Amounts credited to a
Provident Stock Account.
6.5 Retirement Plan Matching Credit. The Employer shall also be
considered as having transferred to be credited to the Participant's
Self-Directed Account, an amount equal in value to 25% of the
Participant's Matched Compensation (hereinafter defined) reduced by any
Matching Contributions allocated to the Matching Contributions Account
of the Participant under the terms of the Retirement Plan for the Plan
Year. Such amount shall be credited to the Participant's Self-Directed
Account before the end of the month following the end of the Plan Year
for which such Matching Contributions were allocated under the
Retirement Plan. For purposes of this Section, Matched Compensation
means the lesser of (1) the first 8% of the Participant's Compensation
credited to a Self-Directed Account for the Plan Year and (2) the
limitation in effect for the Plan Year under Section 402(g) of the
Code. Such amount shall be treated as transferred before the end of the
month following the month in which the Matched Compensation was payable
to the Participant. This section shall only apply to Deferred Amounts
credited to a Self-Directed Account.
6.6 Investment of Self-Directed Account. Each Participant shall have
the right to direct the investments of the Self-Directed Account, the
rate of return of which shall serve as the basis for crediting earnings
(or losses) hereunder, subject to the reasonable approval of the
Administrator. Each Participant shall be permitted to make changes to
prior investment choices at least monthly. The Administrator shall
determine the rate of return throughout each Plan Year for the
investments or investment funds so directed. For each Plan Year, the
Participant's Self-Directed Account shall be increased or decreased as
if it had earned the rate of return corresponding to the amount
determined by the Administrator as directed by the Participant for the
investments or investment funds. Such increase or decrease shall be
based on the varying balances of the Self-Directed Account throughout
the Plan Year and shall be credited monthly throughout the Plan Year.
ARTICLE 7
PAYMENT OF BENEFIT IN SELF-DIRECTED ACCOUNT
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7.1 Payment. The payment of a Participant's Benefit credited to a
Participant's Self-Directed Account shall be made no later than 60 days
after the end of the Plan Year in which the earliest of the following
events occurs:
(a)the Participant separates from employment with the Employer for
any reason,
(b)the Participant experiences a hardship, as determined under
Article 9, or
(c)the Participant delivers an election in writing to withdraw all
or part of such Account to the Administrator no later than June
30 of such Plan Year.
7.2 Amount of Payment.
(a)Separation From Employment. The Benefit of a Participant who
separates from employment with the Employer shall be equal to the
total amount credited to the Participant's Self-Directed Account.
(b)Hardship. A Participant who incurs a hardship as determined
under Article 9 shall be permitted to withdraw all or a portion
of his Benefit, payable in the form set forth in Section 7.3. A
Participant's withdrawal of all or a portion of his Benefit on
account of hardship shall not affect the Deferred Amount such
Participant has elected to contribute to the Plan for the Plan
Year in which such withdrawal occurs.
(c)Election to Withdraw. The Benefit paid to a Participant who
elects to withdraw all or a portion of the Self-Directed Account
shall be equal to the amount so elected.
7.3 Form of Benefit Payments. The Benefit in a Participant's
Self-Directed Account shall be paid in the form of cash in a single
lump sum or, at the election of the Participant, by distribution of the
investment assets of the type then serving as the basis for crediting
earnings to such Account; provided however, that if the separation from
service is due to Retirement, a Participant may elect to receive part
or all of such payment in up to 10 annual installments, in any
combination of these forms, with the amount to be distributed each year
determined by dividing the unpaid Benefit by the number of remaining
installments. An election shall not be effective unless made in writing
and provided to the Administrator no later than June 30 preceding the
December 31 as of which the amount becomes payable. A Participant may
change such election by delivering an election in writing to the
Administrator no later than June 30 preceding the Plan Year in which
such amount is payable.
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ARTICLE 8
DEATH OF PARTICIPANT
8.1 Commencement of Benefit Payments. If a Participant dies before
receiving the Benefit, then the Benefit otherwise payable with respect
to the Participant shall be paid to the Participant's beneficiary or
beneficiaries within 60 days following the date on which the
Administrator is notified of the Participant's death. In the
alternative, a Participant may elect that the Benefit otherwise payable
to the Participant shall be paid to the Participant's beneficiary or
beneficiaries in up to 10 annual installments with the amount to be
distributed each year determined by dividing the unpaid Benefit by the
number of remaining installments. Any Benefit in the Participant's
Provident Stock Accounts shall be paid in the form of Common Shares and
any Benefit in the Participant's Self-Directed Account shall be paid in
a single lump-sum cash payment, or at the election of the beneficiary,
by distribution of the investment assets of the type then serving as
the basis for crediting earnings to such Account.
8.2 Designation of Beneficiary. A Participant may, by written
instrument delivered to the Administrator during the Participant's
lifetime, designate one or more primary and contingent beneficiaries to
receive the Benefit which may be payable hereunder following the
Participant's death, and may designate the proportions in which such
beneficiaries are to receive such payments. A Participant may change
such designations from time to time, and the last written designation
filed with the Administrator prior to the Participant's death shall
control. If a Participant fails to specifically designate a
beneficiary, or if no designated beneficiary survives the Participant,
payment shall be made by the Administrator in the following order of
priority:
(a) to the Participant's surviving spouse, or if none,
(b) to the Participant's children, per stirpes, or if none,
(c) to the Participant's estate.
ARTICLE 9
HARDSHIP DISTRIBUTIONS
9.1 Distribution. Subject to the approval of the Administrator, a
Participant may withdraw all or a portion of his Benefit in the event
of a hardship. A request for a hardship distribution shall be made in
the form of a written application. A hardship distribution shall only
be made in the event of an unforeseeable emergency that would result in
severe financial hardship to the Participant if hardship distributions
were not permitted. Withdrawals of amounts because of an unforeseeable
emergency shall only be permitted to the extent reasonably needed to
satisfy the emergency need.
9.2 Unforeseeable Emergency. For purposes of this Article, an
unforeseeable emergency is defined as severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident
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of the Participant or a dependent of the Participant, loss of the
Participant's property due to casualty, or other similar extraordinary
and unforeseeable circumstances arising as a result of events beyond
the control of the Participant. The circumstances that will constitute
an unforeseeable emergency will depend upon the facts of each case,
but, in any case, payment may not be made to the extent that such
hardship is or may be relieved (i) through reimbursement or
compensation by insurance or otherwise, (ii) by liquidation of the
Participant's assets, to the extent the liquidation of such assets
would not itself cause severe financial hardship, or (iii) by cessation
of deferrals under the plan.
ARTICLE 10
ADMINISTRATION
10.1 General. The Administrator shall be the Compensation Committee of
the Board, or such other person or persons as designated by the Board.
Except as otherwise specifically provided in the Plan, the
Administrator shall be responsible for administration of the Plan. The
Administrator shall be the "named fiduciary" within the meaning of
Section 402(c)(2) of ERISA.
10.2 Administrative Rules. The Administrator may adopt such rules of
procedure as it deems desirable for the conduct of its affairs, except
to the extent that such rules conflict with the provisions of the Plan.
10.3 Duties. The Administrator shall have the following rights, powers
and duties:
(a)The decision of the Administrator in matters within its
jurisdiction shall be final, binding and conclusive upon
Provident and upon any other person affected by such decision,
subject to the claims procedure hereinafter set forth.
(b)The Administrator shall have the duty and authority to
interpret and construe the provisions of the Plan, to
determine eligibility for benefits, to decide any question
which may arise regarding the rights of employees,
Participants, and beneficiaries, and the amounts of their
respective interests, to adopt such rules and to exercise such
powers as the Administrator may deem necessary for the
administration of the Plan, and to exercise any other rights,
powers or privileges granted to the Administrator by the terms
of the Plan.
(c)The Administrator shall maintain full and complete records of
its decisions. Its records shall contain all relevant data
pertaining to the Participant and his rights and duties under
the Plan. The Administrator shall maintain the Account records
of all Participants.
(d)The Administrator shall cause the principal provisions of the
Plan to be communicated to the Participants, and a copy of the
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Plan and other documents shall be available at the principal
office of Provident for inspection by the Participants at
reasonable times determined by the Administrator.
(e)The Administrator shall periodically report to the Board with
respect to the status of the Plan.
10.4 Fees. No fee or compensation shall be paid to any person for
services as the Administrator.
ARTICLE 11
CLAIMS PROCEDURE
11.1 General. A Participant or beneficiary ("claimant") who believes
that his Benefit has not been paid in full shall file such objection on
the form prescribed for such purpose with the Administrator.
11.2 Denials. The Administrator shall review such filing and provide a
notice of the decision regarding such filing to the claimant within a
reasonable period of time after receipt of the notice by the
Administrator.
11.3 Notice. Any claimant whose objection to a payment of his Benefit
is denied shall be furnished written notice setting forth:
(a) the specific reason or reasons for the denial;
(b)specific reference to the pertinent provision of the Plan
upon which the denial is based;
(c)a description of any additional material or information
necessary for the claimant to perfect the objection; and
(d) an explanation of the claim review procedure under the Plan.
11.4 Appeals Procedure. In order that a claimant may appeal a denial of
his objection to the amount of his Benefit, the claimant or the
claimant's duly authorized representative may:
(a)request a review by written application to the Administrator,
or its designate, no later than 60 days after receipt by the
claimant of written notification of denial of his objection;
(b) review pertinent documents; and
(c) submit issues and comments in writing.
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11.5 Review. A decision on review of a denied objection shall be made
not later than 60 days after receipt of a request for review, unless
special circumstances require an extension of time for processing, in
which case a decision shall be rendered within a reasonable period of
time, but not later than 120 days after receipt of a request for
review. The decision on review shall be in writing and shall include
the specific reason(s) for the decision and the specific reference(s)
to the pertinent provisions of the Plan on which the decision is based.
ARTICLE 12
CHANGE IN CONTROL PROVISIONS
12.1 Change in Control.
(a)Impact of Event. In the event of a "Change in Control" as
defined in Subsection (b), (i) the contribution of Deferred
Amounts to the Plan shall terminate as of the effective date
of the Change in Control; (ii) a Participant's Provident Stock
Accounts shall be transferred automatically to a Self-Directed
Account as of the effective date of the Change in Control;
(iii) the Self-Directed Account shall be paid within 60 days
of the effective date of the Change in Control; (iv) earnings
shall be credited to a Participant's Provident Stock Accounts
pursuant to Article 4, in the Plan Year in which the Change in
Control occurs for the period the Plan is in existence during
such Plan Year prior to the effective date of the Change in
Control; and (v) the Trustee shall be responsible for
determining the identity of any person entitled to receive
benefits under the Plan and the amount of such benefits and
for completing the payment of benefits to any person entitled
to receive benefits under the Plan based on the records of the
Trustee prior to the Change in Control. Notwithstanding the
foregoing and anything else to the contrary herein, a
Participant may elect to receive part or all of any payment of
the Participant's Self-Directed Account payable upon the
occurrence of a Change in Control, in up to 10 annual
installments, with the amount to be distributed each year
determined by dividing the unpaid Benefit by the number of
remaining installments. An election shall not be effective
unless made in writing and provided to the Administrator no
later than six months preceding the effective date of the
Change in Control.
(b)Definition of "Change in Control". For purposes of Subsection
(a), a "Change in Control" means the occurrence of any of the
following:
(i) When any "person," as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), other than Provident or a
Subsidiary, any Employer's employee benefit plan (including
any trustee of such plan acting as trustee) or Carl H.
Lindner (or any member of his family), becomes the
"beneficial owner" (as defined in Rule 13d-3 under the
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Exchange Act), directly or indirectly of securities of
Provident representing 50% or more of the combined voting
power of Provident's then outstanding securities;
(ii) Any transaction or event relating to any Employer
required to be described pursuant to the requirements of
Item 6(e) of Schedule 14A of the Securities and Exchange
Commission under the Exchange Act (as in effect on the
effective date of this Plan), whether or not the Employer
is then subject to such reporting requirement;
(iii) When, during any period of two consecutive years during
the existence of the Plan, the individuals who, at the
beginning of such period, constitute the Board, cease for
any reason other than death to constitute at least a
two-thirds majority thereof; provided, however, that a
director who was not a director at the beginning of such
period shall be deemed to have satisfied the two-year
requirement if such director was elected by, or on the
recommendation of, at least two-thirds of the directors who
were directors at the beginning of such period (either
actually or by prior operation of this Subsection
(b)(iii));
(iv) The occurrence of a transaction requiring shareholder
approval for the acquisition of Provident by an entity
other than an Employer through purchase of assets, by
merger, or otherwise; or
(v) Any transaction or event that results in a change of
control of the Employer or a Subsidiary within the meaning
of 12 U.S.C. Section 1817, Change in Bank Control Act, or
12 C.F.R. Section 225.41(b) of the Rules and Regulations of
the Federal Reserve Board promulgated thereunder, as in
effect on the effective date of this Plan.
12.2 Contributions Upon a Change in Control. Upon a Change in Control,
the Employer shall, as soon as possible, but in no event longer than 30
days following the Change in Control, as defined herein, make an
irrevocable contribution to the Trust described in Article 14 in an
amount that is sufficient to pay each Participant or beneficiary the
benefits to which Participants or their beneficiaries would be entitled
pursuant to the terms of the Plan as of the date on which the Change in
Control occurred.
ARTICLE 13
MISCELLANEOUS PROVISIONS
13.1 Amendment and Termination. Provident reserves the right to amend
or terminate the Plan in any manner that it deems advisable, by a
resolution of the Board. Notwithstanding the preceding, no amendment or
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termination of the Plan (i) shall reduce or adversely affect the
Benefit of any Participant or beneficiary hereunder entitled to receive
a Benefit under the Plan, (ii) shall reduce or adversely affect the
right of any other Participant to receive upon his termination of
employment (other than on account of Termination for Cause) from an
Employer the Benefit he would have received if such termination had
occurred immediately prior to any such amendment or termination of the
Plan, (iii) shall modify the provisions of Articles 12 or 14 after a
Change in Control has occurred, except as necessary to comply with any
federal or state law, or (iv) shall modify the provisions of Section
14.3.
13.2 No Assignment. The Participant shall not have the power to pledge,
transfer, assign, anticipate, mortgage or otherwise encumber or dispose
of in advance any interest in amounts payable hereunder or any of the
payments provided for herein, nor shall any interest in amounts payable
hereunder or in any payments be subject to seizure for payments of any
debts, judgments, alimony or separate maintenance, or be reached or
transferred by operation of law in the event of bankruptcy, insolvency
or otherwise.
13.3 Successors and Assigns. The provisions of the Plan are binding
upon and inure to the benefit of any Employer, its successors and
assigns, and the Participant, his beneficiaries, heirs, legal
representatives and assigns.
13.4 Governing Law. The Plan shall be subject to and construed in
accordance with the laws of the State of Ohio to the extent not
preempted by the provisions of ERISA.
13.5 No Guarantee of Employment. Nothing contained in the Plan shall be
construed as a contract of employment or deemed to give any Participant
the right to be retained in the employ of any Employer or any equity or
other interest in the assets, business or affairs of an Employer. No
Participant hereunder shall have a security interest in assets of any
Employer used to make contributions or pay benefits.
13.6 Severability. If any provision of the Plan shall be held illegal
or invalid for any reason, such illegality or invalidity shall not
affect the remaining provisions of the Plan, but the Plan shall be
construed and enforced as if such illegal or invalid provision had
never been included herein.
13.7 Notification of Addresses. Each Participant and each beneficiary
shall file with the Administrator, from time to time, in writing, the
post office address of the Participant, the post office address of each
beneficiary, and each change of post office address. Any communication,
statement or notice addressed to the last post office address filed
with the Administrator (or if no such address was filed with the
Administrator, then to the last post office address of the Participant
or beneficiary as shown on Employer's records) shall be binding on the
Participant and each beneficiary for all purposes of the Plan and
neither the Administrator nor the Employer shall be obliged to search
for or ascertain the whereabouts of any Participant or beneficiary.
13.8 Income Tax Payment. No later than the date as of which an amount
received pursuant to this Plan first becomes includable in the gross
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income of an individual for Federal income tax purposes, the individual
shall pay to Provident, or make arrangements satisfactory to the
Committee regarding the payment of, any Federal, state, or local taxes
of any kind required by law to be withheld with respect to such amount.
The obligations of Provident under the Plan shall be conditional on
such payment or arrangements and Provident shall, to the extent
permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the individual.
13.9 Bonding. The Administrator and all agents and advisors employed by
it shall not be required to be bonded, except as otherwise required by
ERISA.
ARTICLE 14
TRUST PROVISION
14.1 Trust. The Employer shall establish a trust to be known as the
Provident Financial Group, Inc. Deferred Compensation Trust. The Trust
shall be established by the execution of a Trust Agreement with one or
more Trustees and is intended to be maintained as a "grantor trust"
under Section 677 of the Code. The assets of the Trust will be held,
invested and disposed of by the Trustee, in accordance with the terms
of the Trust, for the purpose of providing Benefits for the
Participants. Notwithstanding any provision of the Plan or the Trust to
the contrary, the assets of the Trust shall at all times be subject to
the claims of Provident's general creditors in the event of insolvency
or bankruptcy. In addition, the assets of the Trust shall at all times
be subject to the claims of the general creditors of any Employer in
the event of insolvency or bankruptcy in accordance with IRS Notice
2000-56.
14.2 Payment of Benefits. All Benefits under the Plan and expenses
chargeable tot he Plan, to the extent not paid directly by Provident,
shall be paid from the Trust. Notwithstanding the foregoing, Provident
shall pay any fees charged by the Trustee to act as a fiduciary of the
Trust.
14.3 Independent Trustee. The Trustee shall always be a bank that is
unrelated to any Employer with not less than $250 million unimpaired
capital and surplus.
14.4 Trustee Duties. The powers, duties and responsibilities of the
Trustee shall be as set forth in the Trust agreement and nothing
contained in the Plan, either expressly or by implication, shall impose
any additional powers, duties or responsibilities upon the Trustee.
14.5 Reversion to the Employer. Provident shall have no beneficial
interest in the Trust and no part of the Trust shall ever revert or be
repaid to Provident, directly or indirectly, except as otherwise
provided in Section 14.1 above or the Trust Agreement.
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ARTICLE 15
INDEMNIFICATION
Provident shall indemnify and hold harmless the members of the Board
and the members of the Committee from and against any and all
liabilities, costs, and expenses incurred by such persons as a result
of any act, or omission to act, in connection with the performance of
such persons' duties, responsibilities and obligations under this Plan,
other than such liabilities, costs and expenses as may result from the
negligence, gross negligence, bad faith, willful conduct or criminal
acts of such persons.
ARTICLE 16
ARBITRATION
Any action, dispute, claim or controversy of any kind arising out of,
pertaining to or in connection with this Plan, including, without
limitation, any decision on review of a denied objection pursuant to
Section 11.5 above, shall be resolved by binding arbitration according
to the Commercial Arbitration Rules of the American Arbitration
Association. If a Participant is successful in any such matter resolved
by binding arbitration, the Employer shall indemnify such Participant
for all legal fees and arbitration costs related to the matter.
The undersigned, pursuant to the approval of the Board on December 7,
2000, does herewith execute this Provident Financial Group, Inc.
Deferred Compensation Plan.
PROVIDENT FINANCIAL GROUP, INC.
BY:
----------------------
Robert L. Hoverson
ITS: President
