- An "Employer Contribution Account" maintained to record the amount of Employer Contributions, any net earnings or losses of the Trust Fund thereon and any distributions or forfeitures thereof allocated to a Participant in accordance with Article 4.
- A "Vested Employer Account" maintained to record the amount of Employer Contributions, if any, made on behalf of a Participant prior to January 1, 1998 which were, under the terms of the Plan in effect at such time, immediately nonforfeitable when contributed, and adjustments for net earnings or losses of the Trust Fund thereon and any distributions or forfeitures thereof allocated to a Participant in accordance with Article 4.
- A "Before-Tax Account" maintained to record the amount of Before-Tax Contributions, any net earnings or losses of the Trust Fund thereon and any distributions thereof allocated to a Participant in accordance with Article 4.
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- A "Matching Account" maintained to record the amount of Matching Employer Contributions and forfeitures, any net earnings or losses of the Trust Fund thereon and any distributions thereof allocated to a Participant in accordance with Article 4.
- A "Prior Plan Account" maintained to record the balance of any account under a Prior Plan, other than the McHenry Plan Account and the Heritage Plan Account, attributable to amounts other than after-tax contributions which is transferred to the Trust Fund, adjustments for net earnings or losses of the Trust Fund thereon and any distributions thereof allocated to a Participant in accordance with Article 4.
- A "Heritage Plan Account" maintained to record the balance of any contributions made on behalf of a Participant under the Heritage Plan, adjustments for net earnings or losses of the Trust Fund thereon and any distributions thereof allocated to a Participant in accordance with Article 4.
- A "McHenry Plan Account" maintained to record the balance of any discretionary employer contributions made on behalf of a Participant under the McHenry Plan, adjustments for net earnings or losses of the Trust Fund thereon and any distributions thereof allocated to a Participant in accordance with Article 4.
- An "After-Tax Account" maintained to record the balance of any account under a Prior Plan attributable to after-tax contributions which is transferred to the Trust Fund, adjustments for net earnings or losses of the Trust Fund thereon and any distributions thereof allocated to a Participant in accordance with Article 4.
- A "Rollover Account" maintained to record the balance of any Rollover Contribution pursuant to Section 3.6, any net earnings or losses of the Trust Fund thereon and any distributions thereof allocated to a Participant in accordance with Article 4. To the extent applicable to any Rollover Account, an after-tax sub-account shall be maintained as part of the Participant's Rollover Account to record the balance of any account under a Prior Plan or Rollover Contribution attributable to after-tax contributions, any net earnings or losses of the Trust Fund thereon and any distributions thereof allocated to a Participant in accordance with Article 4.
- A "Catch-Up Contribution Account," to record the amount of Catch-Up Contributions, any net earnings or losses of the Trust Fund thereon and any distributions thereof allocated to a Participant in accordance with Article 4.
Active Participant."Active Participant" means a Participant who, on a given date, is employed by the Employer as an Eligible Employee.
Actual Deferral Percentage andActual Deferral Percentage Test. "Actual Deferral Percentage" and "Actual Deferral Percentage Test" are described in Section 3.3.
Affiliate. "Affiliate" means any corporation or enterprise, other than the Company, which, as of a given date, is a member of the same controlled group of corporations, the same group of trades or businesses under common control or the same affiliated service group, determined in accordance with Sections 414(b), (c), (m) or (o) of the Code, as is the Company.
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For purposes of applying the limitations of Section 415 of the Code set forth in Article 4, "Affiliate" shall include any corporation or enterprise, other than the Company, which, as of a given date, is a member of the same controlled group of corporations or the same group of trades or businesses under common control, determined in accordance with Sections 414(b) or (c) of the Code as modified by Section 415(h) thereof, as is the Company.
Annual Addition. "Annual Addition" means for any Limitation Year, the sum of (a) all Before-Tax Contributions, Matching Employer Contributions, Employer Contributions, forfeitures and after-tax contributions allocated to the accounts of the Participant under this Plan; (b) any employer contributions, forfeitures and employee after-tax contributions allocated to such Participant under any other defined contribution plan maintained by an Employer or Affiliate; and (c) amounts allocated to an individual medical account as defined in Code Section 415(l)(2) and amounts attributable to post-retirement medical benefits allocated to an account described in Code Section 419A(d)(2) maintained by the Employer or an Affiliate.
Before-Tax Contributions. "Before-Tax Contributions" mean, with respect to a Participant, the contributions made on behalf of such Participant by the Employer as described in Section 3.2(a) and, with respect to the Employer, the sum of all such contributions made on behalf of all Participants.
Board of Directors. "Board of Directors" means the Board of Directors of the Company.
Catch-Up Contributions. "Catch-Up Contributions" means the contributions described in subsection 3.2(c).
Code. "Code" means the Internal Revenue Code of 1986, as from time to time amended.
Committee. "Committee" means the plan administrator and named fiduciary appointed pursuant to Section 8.1.
Company. The "Company" means First Midwest Bancorp, Inc., a corporation organized and existing under the laws of the State of Delaware.
Considered Compensation. A Participant's "Considered Compensation" for any Plan Year is his Total Compensation, excluding any severance or transitional pay, received from an Employer during such Plan Year paid while he was a Participant; provided, however, Considered Compensation shall not include any amount in excess of $225,000, as adjusted for increases in the cost of living in accordance with Code Section 401(a)(17)(B).
Defined Contribution Dollar Limitation. The "Defined Contribution Dollar Limitation" shall, for any Limitation Year, be equal to $45,000, as adjusted by the Secretary of the Treasury pursuant to Code Section 415(d) (prorated for any Limitation Year of less than 12 months).
Determination Date. A Participant's Determination Date is the Valuation Date coinciding with his termination of employment.
Early Retirement Date. A Participant's "Early Retirement Date" is the date on which he has completed at least 15 Years of Service and attained age 55. Notwithstanding the foregoing,
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with respect to any Participant who formerly participated in the Heritage Plan and was an employee of Heritage Bank Country Club Hills (f/n/a 1st Heritage Bank) on January 13, 1992, the effective date of its acquisition by Heritage Financial Services, "Early Retirement Date" means the date on which such Participant attains his 55th birthday and has completed five Years of Service. For purposes of Section 4.6, "Early Retirement Date" also includes a retirement date designated by an Employer in connection with the Participant's election to participate in a voluntary retirement program offered by the Participant's Employer. Retirement shall be considered as commencing on the day immediately following a Participant's last day of employment (or Authorized Leave of Absence, if later).
Eligible Employee. An "Eligible Employee" is any employee of the Employer or an Affiliate butexcluding any employee who is: (1) a Member of a Collective Bargaining Unit, (2) an individual providing services to the Employer in the capacity of, or who is or was designated by the Employer as, a Leased Employee or an independent contractor, or (3) reasonably expected to be a continuous employee for no longer than thirteen weeks, with such expectation based on (A) the fact that the employee is providing services during a break period from a post-secondary education institution at which the employee is enrolled or is expected to be enrolled or (B) such other facts that indicate such a limited continuous employment relationship.
Eligible Participant. An "Eligible Participant" is a Participant as defined in Section 4.6.
Eligibility Period. An "Eligibility Period" is a one-year period used for the purpose of determining when an employee is eligible to participate in the Plan. An employee's first Eligibility Period shall commence on the date on which he first completes an Hour of Service and subsequent Eligibility Periods shall commence on each anniversary thereof; provided, however, that subsequent Eligibility Periods shall commence on the first day of each Plan Year which begins after the date on which the Participant first completes an Hour of Service. Notwithstanding the foregoing, the initial Eligibility Period of a former employee who is reemployed after incurring one or more One-Year Breaks in Service and who is not eligible for immediate participation pursuant to Section 2.1(c) shall commence on the date on which he first performs duties for the Employer or an Affiliate after such One-Year Break in Service, and subsequent Eligibility Periods shall commence on the annive rsary thereof or on the first day of each Plan Year which begins after said date, as determined by applying the preceding sentence as if such date were the first date on which the Participant first completed an Hour of Service.
Employer. "Employer" means the Company or any such Affiliate thereof which adopts the Plan in accordance with Article 11.
Employer Contribution. "Employer Contribution" is the contribution referred to in Section 3.4.
Employment Commencement Date. An individual's "Employment Commencement Date" is the first date on which he performs duties for the Employer or an Affiliate as an employee; provided that in the case of an employee who returns to service following his Severance Date, the employee's "Employment Commencement Date" is the first date on which he performs duties for the Employer or an Affiliate as an employee following such Severance Date.
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Entry Date. January 1 and July 1 of each Plan Year shall be an "Entry Date."
ERISA. "ERISA" means the Employee Retirement Income Security Act of 1974, as from time to time amended.
Excess Tentative Contribution. "Excess Tentative Contribution" is the excess contribution described in Section 4.11(d).
Five-Percent Owner. "Five-Percent Owner" means a five-percent owner of the Employer or an Affiliate within the meaning of Section 414(i)(1) of the Code.
Heritage Fund."Heritage Fund" means the Fund established and maintained under Section 9.5(a)(iv) of the Plan.
Heritage Plan. "Heritage Plan" means the Heritage Financial Services Profit Sharing Plan as in effect on September 30, 1998, which was merged into this Plan effective October 1, 1998.
Highly Compensated Employee. "Highly Compensated Employee" means an employee of the Employer or an Affiliate who was a Participant eligible during the Plan Year to make Before-Tax Contributions and who:
- was a Five-Percent Owner at any time during the Plan Year; or
- received Section 415 Compensation in excess of $100,000 (as adjusted for increases in the cost of living by the Secretary of the Treasury) during the preceding Plan Year and was among the top 20% of the employees (disregarding those employees excludable under Code Section 415(q)(5)) when ranked on the basis of Section 415 Compensation paid for that year.
To the extent required by Code Section 414(q)(6), a former employee who was a Highly Compensated Employee when he or she separated from service with the Employer and all Affiliates or at any time after attaining age 55 shall be treated as a Highly Compensated Employee.
Hour of Service. An "Hour of Service" is:
- each hour for which an employee is paid or entitled to payment for the performance of duties for the Employer or an Affiliate;
- each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer or an Affiliate; and
- each hour for which an employee is paid or entitled to payment for a period during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity, layoff, jury duty, military duty, or leave of absence. In crediting Hours of Service pursuant to this subparagraph (c), all payments made or due shall be taken into account, whether such payments
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are made directly by the Employer or an Affiliate or indirectly (e.g., through a trust fund or insurer to which the Employer or an Affiliate makes payments, or otherwise), except that:
- no more than 501 such Hours of Service shall be credited for any continuous period during which the employee performs no duties;
- no such Hours of Service shall be credited if payments are made or due under a plan maintained solely for the purpose of complying with any workers' compensation, unemployment compensation or disability insurance laws; and
- no such Hours of Service shall be credited for payments which are made solely to reimburse the employee for medical or medically related expenses.
The Hours of Service, if any, for which an employee is credited for a period in which he performs no duties shall be computed and credited to computation periods in accordance with 29 C.F.R. 2530.200b-2 and other applicable regulations promulgated by the Secretary of Labor. For purposes of computing the Hours of Service to be credited to an employee for whom a record of hours worked is not maintained, an employee shall be credited with 45 Hours of Service for each week in which he completes at least one Hour of Service. In addition, an employee shall be credited with Hours of Service for each week the employee is on a leave of absence in accordance with Section 2.2.
Individual Beneficiary. "Individual Beneficiary" means a natural person designated by the Participant in accordance with Section 6.4 to receive all or any portion of the amounts remaining in the Participant's Accounts at the time of the Participant's death. "Individual Beneficiary" also means a natural person who is a beneficiary of a trust designated by the Participant in accordance with Section 6.4 to receive all or a portion of such amount, provided the trust requires that such amounts be paid to the beneficiary in the time and manner that this Plan would require that direct payments be made to an Individual Beneficiary.
Investment Options "Investment Options" mean the investment options to be maintained as set forth in Article 9.
Leased Employee. "Leased Employee" means any individual who is not an employee of the Employer or an Affiliate and who provides services for the Employer or an Affiliate if:
- such services are provided pursuant to an agreement between the Employer or an Affiliate and any other person;
- such individual has performed such services for the Employer or an Affiliate (or a related person within the meaning of Section 144(a)(3) of the Code) on a substantially full-time basis for a period of at least one year; and
- such services have been performed under the primary direction or control of the Employer or an Affiliate.
Contributions or benefits provided a Leased Employee by the leasing organization which are attributable to services performed for the Employer shall be treated as provided by the
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Employer. To the extent and for purposes required by Sections 414(n) and (o), a Leased Employee shall be deemed to be an Employee of the Employer, unless: (i) he or she is covered by a money purchase pension plan providing (1) a nonintegrated employer contribution rate of at least 10 percent of compensation, as defined in Code Section 415(c)(3), but including amounts contributed pursuant to a salary reduction agreement which are excludable from the Employee's gross income under Code Sections 125, 132(f)(4), 401(e)(3), 402(h) or 403(b), (2) immediate participation, and (3) full and immediate vesting; and (ii) Leased Employees do not constitute more than 20 percent of the Employer's nonhighly compensated workforce.
Limitation Year. "Limitation Year" means a 12-month period beginning January 1 and ending December 31.
Limited Participant. A "Limited Participant" is a current employee of the Employer or an Affiliate who has become eligible to participate in the Plan on a limited basis pursuant to Subsection 2.1(d)(i).
Matching Employer Contributions."Matching Employer Contributions" means the contributions described in Section 3.5.
McHenry Plan."McHenry Plan" means the McHenry State Bank Profit Sharing and Savings Plan & Trust, as in effect prior to its merger with this Plan effective December 31, 1997.
Member of a Collective Bargaining Unit. "Member of a Collective Bargaining Unit" means any employee who is included in a collective bargaining unit and whose terms and conditions of employment are covered by a collective bargaining agreement if there is evidence that retirement benefits were the subject of good-faith bargaining between representatives of such employee and the Employer, unless such collective bargaining agreement makes this Plan applicable to such employee.
Non-Highly Compensated Employee. "Non-Highly Compensated Employee" means, for any Plan Year, any employee of the Employer or Affiliate who (a) at any time during the Plan Year was a Participant and (b) was not a Highly Compensated Employee for such Plan Year.
Normal Retirement Date. A Participant's "Normal Retirement Date" shall be his 65th birthday.
One-Year Break in Service. A "One-Year Break in Service" is a one-year period, commencing on an employee's Severance Date, during which such employee does not perform duties for an Employer or an Affiliate. Solely for purposes of determining whether a One-Year Break in Service has occurred, absences shall be disregarded if the employee otherwise would normally have been credited with Hours of Service but for the employee's absence because of a maternity or paternity absence. No more than one year of absence on a single maternity or paternity absence shall be so disregarded. A maternity or paternity absence is an absence from work:
- by reason of the pregnancy of the employee;
- by reason of the birth of a child of the employee;
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- by reason of the placement of a child with the employee in connection with the adoption of such child by the employee; or
- for purposes of caring for such child for a period beginning immediately following such birth or placement.
Any employee requesting such credit shall promptly furnish the Committee such information as the Committee requires to show that the absence from work is a maternity or paternity absence and the number of days for which there was such an absence. No more than 501 hours shall be credited for a maternity or paternity absence. All such hours shall be credited in the Plan Year in which the absence begins if necessary to prevent a One-Year Break in Service in such Plan Year. If such hours are not necessary to prevent a One-Year Break in Service in such Plan Year, the hours shall be credited in the succeeding Plan Year if necessary to prevent a One-Year Break in Service in such Plan Year. In the event the Committee is unable to determine the hours which otherwise would normally have been credited for such absence, the employee shall be credited with 8 hours per day.
Participant. A "Participant" is (a) a current employee of the Employer or an Affiliate who has become eligible to participate in the Plan pursuant to Section 2.1(d)(ii) or (b) a former employee for whose benefit an Account in the Trust Fund is maintained. Notwithstanding the foregoing, an Eligible Employee who is not otherwise a Participant and who (i) makes a Rollover Contribution to the Plan pursuant to Section 3.6 and/or (ii) makes a Before-Tax Contribution to the Plan pursuant to Limited Participant status per Subsection 2.1(d)(i) shall also be treated as a Participant solely to the extent of such Rollover Contribution and/or Before-Tax Contribution until such time as the Eligible Employee has become eligible to participate in the Plan pursuant to Section 2.1(d)(ii).
Plan. "Plan" means the First Midwest Bancorp, Inc. Savings and Profit Sharing Plan as set forth herein and as from time to time amended.
Plan Year. A "Plan Year" is a 12-month period beginning on January 1 and ending on December 31. References to specific Plan Years are made herein by reference to the calendar year in which the Plan Year began. For example, the "2007 Plan Year" is the Plan Year beginning January 1, 2007.
Prior Plan. "Prior Plan" means a defined contribution plan maintained or previously maintained by an Employer from which accounts held for the benefit of individuals who have become Participants hereunder have been transferred to this Plan for the benefit of such Participants.
Provisional Annual Addition. "Provisional Annual Addition" is the amount described in Section 4.10.
Qualified Military Service. "Qualified Military Service" means the performance of duty on a voluntary or involuntary basis in the Uniformed Services of the United States by an Eligible Employee provided he/she is reemployed by the Employer or an Affiliate within the applicable time period specified in Chapter 43 of Title 38 of the United States Code (Employment and Reemployment Rights of Members of the Uniformed Services) and the total length of all such
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absences does not exceed the maximum specified by law for the retention of reemployment rights. The term "Uniformed Services of the United States" means the Armed Forces, the Army National Guard and the Air National Guard when engaged in active duty for training, inactive duty training, or full-time National Guard duty, or full-time duty in the commissioned corps of the Public Health Service.
Required Beginning Date. "Required Beginning Date" means:
- For a Participant whose 70th birthday occurs prior to July 1, 1998, and who is not a Five-Percent Owner as defined in Code Section 416(i)(1), the April 1 following the calendar year in which the Participant attains age 701/2;
- For a Participant whose 70th birthday occurs on or after July 1, 1998, and who is not a Five Percent Owner as defined in Code Section 416(i)(1), the April 1 following the later of the calendar year in which the Participant attains age 701/2 or the calendar year in which the Participant terminates employment; or
- For a Participant who is a Five-Percent Owner with respect to the Plan Year in which he attains age 701/2, the April 1 following the calendar year in which he attained age 701/2.
Rollover Contribution. A "Rollover Contribution" is (a) all or a portion of a distribution received by an Eligible Employee from another qualified plan which is eligible for tax-free rollover to a qualified plan and which is transferred by the Eligible Employee to this Plan within 60 days following his or her receipt thereof; (b) amounts transferred to this Plan from a conduit individual retirement account which has no assets other than assets (and the earnings thereon) which were (i) previously distributed to the Eligible Employee by another qualified plan as a rollover distribution, (ii) eligible for tax-free rollover to a qualified plan and (iii) deposited in such conduit individual retirement account within 60 days of receipt thereof; (c) amounts distributed to the Eligible Employee from a conduit individual retirement account meeting the requirements of the preceding clause (ii), and transferred by the Eligible Employee to this Plan within 60 days of receipt thereof; and (d) a direct rollover within the meaning of Code Section 401(a)(31) or all or a portion of an Eligible Rollover Distribution to this Plan by the trustee of another qualified plan.
Section 415 Compensation. "Section 415 Compensation" means, for a period, the Participant's compensation (as described in Treasury Regulation Section 1.415-2(d)(2)) paid during the period for personal services actually rendered in the course of employment with the Employer and all Affiliates, excluding deferred compensation and other amounts which receive special tax treatment (as described in Treasury Regulation Section 1.415-2(d)(3)), plus amounts excluded from the Participant's income for the period under Code Section 125, 132(f)(4), 402(g)(3) or 457.
Severance Date. An employee's "Severance Date" is the earlier of:
- the date on which he quits, retires, dies or is discharged; or
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- the first day following any one-year period during which he performed no duties for the Employer or an Affiliate, other than a period which is a period of a leave of absence described in Section 2.2.
Taxable Compensation. A Participant's "Taxable Compensation" for any Plan Year is his Total Compensation for such Plan Year less his Before-Tax Contribution and any contributions made at his election to a cafeteria plan as defined in Section 125 of the Code or for qualified transportation fringe benefits as defined in Section 132(f)(4) of the Code for such Plan Year.
Tentative Employer Contribution. "Tentative Employer Contribution" is the contribution described in Section 3.1.
Total Compensation. A Participant's "Total Compensation" for a period is the Participant's wages, salaries, fees, vacation pay, amounts excluded from the Participant's income for the period under Code Section 125, 132(f)(4), 402(g)(3) or 457, and other amounts paid to him for personal services actually rendered in the course of employment with the Company and all Affiliates, including, but not limited to, commissions, compensation for services on the basis of a percentage of profits, tips and performance bonuses, but specifically excluding hiring bonuses and stay bonuses and (in accordance with regulations prescribed by the Secretary of the Treasury) also excluding:
- Contributions (other than the Before-Tax Contributions and Catch-Up Contributions) made by the Employer to a plan of deferred compensation to the extent that such are not included in the gross income of the Participant in the year made; Employer contributions to simplified employee pension plans which are excluded from compensation by the Participant; and any distribution from any such plan other than an unfunded non-qualified plan;
- Amounts realized from the exercise of a non-qualified stock option or when restricted stock either becomes freely transferable or free from a substantial risk of forfeiture;
- Amounts realized from the disposition of stock acquired under a qualified stock option; and
- Other amounts which receive special tax benefits.
Trust. "Trust" or "Trust Fund" means the First Midwest Bancorp Savings and Profit Sharing Trust established in accordance with Article 9.
Trustee. "Trustee" means the Trustee or Trustees under the Trust referred to in Article 9.
Valuation Date. "Valuation Date" means any calendar day. The determination of the fair market value as of a Valuation Day of any assets of an Investment Option which are traded on an established market shall, if such Valuation Date is not a business day on which such assets are traded, be based on the fair market value of such assets on the next business day on which such assets are traded.
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Year of Service. A "Year of Service" is a unit of service credited to an employee pursuant to Sections 2.3 and 2.4, for purposes of determining the percentage of the balance in a Participant's Employer Contribution Account which is nonforfeitable. An employee who is reemployed shall retain service credited to him in his previous employment with the Employer or an Affiliate, except as otherwise provided in the Plan.
1.5 EGTRRA Compliance. This Plan reflects certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"). The provisions of the Plan relating to EGTRRA are intended to demonstrate good faith compliance with the requirements of EGTRRA and are to be construed in accordance with EGTRRA and guidance issued thereunder, including but not limited to IRS Notice 2001-57. Except as otherwise provided, the provisions of the Plan relating to EGTRRA shall be effective as of the first day of the 2002 Plan Year, and shall supercede other provisions of the Plan to the extent such provisions are inconsistent therewith. Notwithstanding any other provisions of the Plan to the contrary, the Committee shall have the full authority to administer the Plan on or after January 1, 2002 in any manner required or permitted by law, including EGTRRA, without the necessity of specific Plan provisions reflecting such administration, unless otherwise required by applicable law.
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ARTICLE 2
ELIGIBILITY AND PARTICIPATION
2.1 Eligibility Requirements.
- Every Participant on the effective date of the Plan as herein restated shall continue as such subject to the provisions of the Plan.
- Every Eligible Employee who accepted employment with the Employer in connection with the Company's acquisition of First of America Bank, Crystal Lake Office, which was effective September 4, 1998, shall commence participation in this Plan effective as of such date.
- Every Eligible Employee who is a participant in the Heritage Plan on September 30, 1998 shall continue participation in this Plan effective October 1, 1998.
- Every other Eligible Employee shall be eligible to participate, if he is then employed by the Employer, as follows:
- As of the January 1, April 1, July 1 or October 1 immediately following thelater of (A) the Eligible Employee's 30th day of continuous employment with the Company or an Affiliate or (B) his 21st birthday, an Eligible Employee may participate in the Plan for the limited purpose of making Before-Tax Contributions (as described in Section 3.2) and not for receiving Employer Contributions or Matching Employer Contributions (as described in Sections 3.4 and 3.5 respectively). An Eligible Employee who may participate in the Plan on such a limited basis shall be referred to as a "Limited Participant."
- As of the Entry Date coinciding with or next following thelater of (A) the end of the first Eligibility Period in which he completes 1,000 Hours of Service or (B) his 21st birthday, an Eligible Employee may participate in all features of the Plan as applicable to such Eligible Employee. Notwithstanding any other provision of this Plan, hours of service with Heritage Financial Services, Inc., First of America Bank, Crystal Lake Office, The Northern Trust Company, Higgins Road Office, CoVest Bancshares, Inc. ("CoVest"), The Elgin State Bank, Carpentersville Office and Bank Calumet, Inc., shall be deemed to be Hours of Service with the Employer under this Plan for purposes of this Section 2.1. Further notwithstanding any provision of this Plan, every Eligible Employee who was a participant in or was eligible to participate in the CoVest Banc Profit Sharing Plan on the date of the merger of CoVest with the Company shall become a Participant in the Plan on Janu ary 1, 2004.
- Any former employee of the Employer or an Affiliate who was a Participant or could have become a Participant under subsection (d) above had he been employed on a prior Entry Date, and is reemployed by the Employer as an Eligible Employee shall be eligible to participate immediately upon reemployment if, on the date of such reemployment, that employee:
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- has not incurred a One-Year Break in Service; or
- had a nonforfeitable right to any part of the balance in his Employer Contribution Account or Before-Tax Account on the date his most recent employment with the Employer and all Affiliates terminated (or would have had such right if he had been a Participant); or
- has attained age 21 and has incurred a One-Year Break in Service, but has not lost credit for service prior to such One-Year Break in Service pursuant to Section 2.4(b); or
- terminated his employment because of a maternity or paternity absence defined in Section 1.4, has attained age 21, and has incurred a One-Year Break in Service, but has not lost credit for services prior to such One-Year Break in Service pursuant to Section 2.4(c).
- Notwithstanding any provisions of this Plan to the contrary, any individual who was providing services to the Employer in the capacity of, or who was designated by the Employer as, an independent contractor or a Leased Employee, and who is subsequently re-classified as an Eligible Employee for the purposes of this Plan (regardless of whether such re-classification is retrospective or prospective), shall be eligible to participate in the Plan on a prospective basis only from the date of the re-classification and shall not have any retroactive claim for benefits.
2.2 Leaves of Absence. During the period that any Participant is granted a leave of absence, he shall share in Employer Contributions, forfeitures, and net earnings or losses of the Trust Fund in the same manner and subject to the same conditions as if he were not on leave of absence. Any leave of absence under this Section 2.2 must be granted in writing and pursuant to the Employer's established leave policy, which shall be administered in a uniform and nondiscriminatory manner to similarly situated employees.
2.3 Years of Service to be Credited.
- An employee shall be credited with One Year of Service for each full year in the period commencing on his Employment Commencement Date and ending on his Severance Date. An employee shall also be credited with 1/12 of a Year of Service for each full calendar month in such period for which he did not receive credit pursuant to the preceding sentence, including, if applicable, 1/12 of a Year of Service for the partial calendar month in which the employee's Employment Commencement Date and in which the employee's Severance Date occurred. Notwithstanding any other provision of this Plan, the following service shall be deemed to be service with the Employer for purposes of this Section 2.3: (i) with respect to any employee who commenced employment on or prior to September 4, 1998, service with First of America Bank, Crystal Lake Office; (ii) with respect to any employee who commenced employment with the Employer prior to October 1, 1998, service with Heritage Financial Services, Inc.; (iii) with respect to any employee who commenced employment with the Employer prior to July 1, 2003, service with The Northern Trust Company, Higgins Road Office; (iv) with respect to any employee who commenced employment with the Employer prior
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to January 1, 2004, service with CoVest Bancshares, Inc. and any of its affiliates; (v) with respect to any employee who commenced employment with the Employer prior to February 1, 2006, service with The Elgin State Bank, Carpentersville Office; and (iv) with respect to any employee who commenced employment with Employer prior to April 1, 2006, service with Bank Calumet, Inc.
- Notwithstanding Section 2.3(a) above, any Participant who, on September 30, 1998, had completed three (3) years of service under the Heritage Plan, shall be credited with Years of Service under this Section 2.3 equal to the greater of: (i) the Participant's Years of Service determined under Section 2.3(a) above; or (ii) the Participant's years of service calculated by crediting him with one Year of Service for each Plan Year during which he has completed at least 1,000 Hours of Service.
- An employee reemployed after his Severance Date but prior to a One-Year Break in Service shall be credited with 1/12 of a Year of Service for each calendar month or partial calendar month during the period from his Severance Date to the date of reemployment not otherwise credited pursuant to paragraph (a) above.
2.4 Years of Service to be Disregarded. A Participant shall be credited with all Years of Service, except that the following shall be disregarded:
- Years of Service for an Employer or Affiliate prior to the Employer's adoption of the Plan, except to the extent otherwise provided by the Employer when adopting the Plan;
- Years of Service prior to a One-Year Break in Service if the Employee fails to complete one Year of Service after such One-Year Break in Service;
- In the case of an employee whose nonforfeitable percentage of the balance of his Employer Contribution Account is 0%, the number of years and portions thereof in the period after the employee's Severance Date but before he next performs duties for the Employer or an Affiliate equals or exceeds the greater of 5 or the aggregate number of Years of Service and portions thereof before such One-Year Break in Service (excluding any years of Service previously disregarded); or
- In the case of an employee whose nonforfeitable percentage of the balance of his Employer Contribution Account is 0%, and who terminated his employment with the Employer and all Affiliates because of a maternity or paternity absence defined in Section 1.4, the number of years and portions thereof in the period after the employee's Severance Date but before he next performs duties for the Employer or an Affiliate equals or exceeds the greater of six or one plus the aggregate number of Years of Service and portions thereof before such One-Year Break in Service (excluding any Years of Service previously disregarded).
2.5 Leased Employees. To the extent required by Section 414(n) of the Code and the regulations thereunder, a Leased Employee shall be treated as an employee of the Employer or an Affiliate but shall not be eligible for any benefit under the Plan.
14
2.6 Qualified Military Service. Notwithstanding any provision of this Plan to the contrary, effective December 12, 1994, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Code Section 414(u).
15
ARTICLE 3
CONTRIBUTIONS BY EMPLOYER AND ROLLOVER CONTRIBUTIONS
3.1 Contributions to the Plan. Subject to the right reserved to the Company to alter, amend or discontinue this Plan and Trust, the Employer shall for each Plan Year contribute to the Plan for its Eligible Participants an amount equal to the sum of:
- the Employer Contribution;
- the Before Tax Contribution;
- the Matching Employer Contribution; and
- Catch-Up Contributions, as described in subsection 3.2(c) below.
Such sum, which is known as the "Tentative Employer Contribution," shall be reduced by an amount equal to the Excess Tentative Contribution (as provided in Section 4.11); provided that in no event shall the Tentative Employer Contribution, as reduced by the Excess Tentative Contribution, exceed the amount deductible by the Employer for said year for federal income tax purposes.
3.2 Before-Tax and Catch-Up Contributions.
- Subject to the provisions of Sections 3.1 and 3.3, each Participant may for each Plan Year elect to have the Employer make a Before-Tax Contribution on his or her behalf in an amount equal to not less than one percent (1%) and not more than the following percentages:
| | For Participants in Salary Grade 11 or lower: | |
45%
| |
| | | | | |
| | For Participants in Salary Grade 12 or greater: | |
15%
| |
| | | | | |
(rounded to the nearest dollar) of his or her Considered Compensation, excluding bonuses and any other payment of a similar nature. Such elections shall be made in whole percentages only (e.g., 5%, 20%) and are subject to change in accordance with procedures established by the Committee from time to time.
- The amount of the Before-Tax Contributions to be made pursuant to a Participant's election shall reduce the compensation otherwise payable to him by the Employer.
- All employees who are eligible to make elective deferrals under this Plan and who have attained age 50 before the close of the Plan Year shall be eligible to make catch-up contributions in accordance with, and subject to the limitations of, Code Section 414(v), herein
16
referred to as "Catch-Up Contributions." Such Catch-Up Contributions shall not be taken into account for purposes of the provisions of the Plan implementing the required limitations of Code Sections 402(g) and 415. The Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Code Sections 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416, as applicable, by reason of any such Catch-Up Contributions. Notwithstanding any provision of the Plan to the contrary, Catch-Up Contributions shall not be taken into account for purposes of Matching Employer Contributions under Section 3.5.
3.3 Limitations on Before-Tax Contributions and Matching Employer Contributions.
- In no event shall a Participant's Before-Tax Contributions during any calendar year exceed the dollar limitation in effect under Code Section 402(g) at the beginning of such calendar year. If a Participant's Before-Tax Contributions, together with any additional employer contributions to a qualified cash or deferred arrangement, any elective deferrals under a tax-sheltered annuity program or a simplified employee pension plan, exceed such dollar limitation for any calendar year, the Participant shall notify the Committee of the amount of such excess allocable to this Plan by March 1 of the following year, and such excess, and any earnings allocable thereto, may be distributed to the Participant by April 15 of such following year; provided, that, if such excess contributions were made to a plan or arrangement not maintained by the Employer or an Affiliate, the Participant must first notify the Committee of the amount of such excess al locable to this Plan by March 1 of the following year.
- Notwithstanding any other provision of this Plan to the contrary, the Before-Tax Contributions and Matching Employer Contributions for the Highly Compensated Employees for the Plan Year shall be reduced in accordance with the following provisions:
- The Before-Tax Contributions and Matching Employer Contributions of the Highly Compensated Employees shall be reduced if neither of the Actual Deferral Percentage tests set forth in (A) or (B) below is satisfied after taking into account the provisions of subsection (f):
- The 1.25 Test. The Actual Deferral Percentage of the Highly Compensated Employees is not more than the Actual Deferral Percentage of all other Eligible Participants multiplied by 1.25.
- The 2.0 Test. The Actual Deferral Percentage of the Highly Compensated Employees is not more than 2 percentage points greater than the Actual Deferral Percentage of all other Eligible Participants, and the Actual Deferral Percentage of the Highly Compensated Employees is not more than the Actual Deferral Percentage of all other Eligible Participants multiplied by 2.0.
- (A) As used in this subsection, "Actual Deferral Percentage" means:
- With respect to Non-Highly Compensated Employees, the average of the ratios of each Non-Highly Compensated Employee's Before-Tax Contributions and share of the Matching Employer Contribution with respect to theprior Plan Year to each such
17
Participant's Considered Compensation for such Plan Year (prior or current, as appropriate); and
- With respect to Highly Compensated Employees, the average of the ratios of each Highly Compensated Employee's Before-Tax Contributions and share of the Matching Employer Contribution with respect to thecurrent Plan Year, to each such Participant's Considered Compensation for such Plan Year.
- All Before-Tax Contributions and Matching Employer Contributions made under this Plan and all before-tax and matching contributions made under any other plan that is aggregated with this Plan for purposes of Code Sections 401(a)(4) and 410(b) shall be treated as made under a single plan. If any plan is permissively aggregated with this Plan for purposes of Code Section 401(k), the aggregated plans must also satisfy Code Sections 401(a)(4) and 410(b) as though they were a single plan. The Actual Deferral Percentage ratios of any Highly Compensated Employee will be determined by treating all plans subject to Code Section 401(k) under which the Highly Compensated Employee is eligible as a single plan.
- The sequence for determining the amount of such reductions shall begin with Highly Compensated Employees who elected to defer the greatest percentage of Considered Compensation, then the second greatest percentage amount, continuing until either Actual Deferral Percentage Test is satisfied. This process shall continue through the Before-Tax Contributions and Matching Employer Contribution until either Actual Deferral Percentage Test is satisfied.
- Once the total amount of reductions has been determined under 3.3(b)(iv) above, the Committee shall direct the Trustee to distribute as a refund to the appropriate Highly Compensated Employees an allocable portion of such reduction attributable to excess Before-Tax Contributions and to treat as forfeitures the appropriate amount of Matching Employer Contributions, together with the net earnings or losses allocable thereto. The sequence for determining and refunding a Highly Compensated Employee's allocable portion of excess Before-Tax Contributions shall begin with the Highly Compensated Employee who elected to defer the greatest dollar amount of Before-Tax Contributions. The Before-Tax Contributions of such Participant shall be reduced by the amount required to cause that Participant's Before-Tax Contributions to equal the dollar amount of the Before-Tax Contributions of the Highly Compensated Employee with the next highest dollar amount of Before-Tax Contributions. If the tot al amount distributed is less than the total excess contributions, this process shall continue until all excess Before-Tax Contributions are distributed and excess Matching Employer Contributions are forfeited. However, notwithstanding anything in the foregoing to the contrary, if a lesser reduction, when added to the total dollar amount previously reduced, would equal the total excess contributions, such lesser reduction shall be utilized. The Committee shall designate such distribution and forfeiture as a distribution of excess Before-Tax Contributions and forfeiture of excess Matching Employer Contributions, determine the amount of the allocable net earnings or losses to be distributed and forfeited in accordance with subsections 3.3(c) and 3.3(d) below, and cause such
18
distributions and forfeitures to occur prior to the end of the Plan Year following the Plan Year in which the excess Before-Tax Contributions and excess Matching Employer Contributions were made.
- Net earnings or losses to be refunded with the excess Before-Tax Contributions shall be equal to the net earnings or losses on such contributions for the Plan Year in which the contributions were made and, for Plan Years 2006 and 2007, for the period after the close of such Plan Year and through the day before the distributions (the "Gap Period"). The net earnings or losses allocable to excess Before-Tax Contributions for the Plan Year and the Gap Period shall be determined in the manner set forth in Article 4 and in all events in accordance with the provisions of Treasury Regulations Section 1.401(k)-2(b)(2).
- Net earnings or losses to be treated as forfeitures together with the Matching Employer Contributions shall be equal to the net earnings or losses on such contributions for the Plan Year in which the contributions were made. Net earnings or losses on Matching Employer Contributions shall be determined in the same manner as in subsection (c) above.
- Any Matching Employer Contribution treated as a forfeiture pursuant to subsection (b) above shall be used to reduce the Matching Employer Contribution in Section 3.5.
- For the purpose of avoiding the necessity of adjustments pursuant to this Section or Section 4.11, or to comply with any applicable law or regulation:
- The Committee may adopt such rules as it deems necessary or desirable to:
- impose limitations during a Plan Year on the percentage of Before-Tax Contributions elected by Participants pursuant to Section 3.2; or
- increase during a Plan Year the percentage of Considered Compensation with respect to which a Participant may elect a Before-Tax Contribution for the purpose of providing Participants with the opportunity to increase their Before-Tax Contributions within the limitations of this Section 3.3;
- The Employer may at its sole discretion make fully vested contributions to the Plan which will be allocated to the Before-Tax Accounts of one or more Participants who are Non-Highly Compensated Employees in such amounts as the Employer directs for the purpose of complying with the applicable limits on Before-Tax Contributions in the Code. Such contributions will not be taken into account in the allocation of Matching Employer Contributions.
- The amount of each Eligible Participant's Before-Tax Contribution as determined under this Section 3.3 is subject to the provisions of Sections 4.11 and 4.12.
3.4 Employer Contribution. Subject to the provisions of Section 3.1, each Employer shall pay to the Trustee for each Plan Year with respect to its Participants who are Eligible Participants for purposes of the allocation of the Employer Contribution pursuant to Section 4.9,
19
such amount as may be determined by its board of directors, based on guidelines established by the Board of Directors. The amount so determined shall be no greater than 15% of such Eligible Participants' Considered Compensation. Such amount paid to the Trustee pursuant to this Section 3.4 is known as the "Employer Contribution."
3.5 Matching Employer Contribution.
- Subject to the provisions of Section 3.1, each Employer shall pay to the Trustee as of the last day of the applicable calendar quarter an amount which shall be equal to $2 for each $1 of the Participant's Before-Tax Contributions that do not exceed 2% of the Participant's Considered Compensation (excluding Before-Tax Contributions made while a Limited Participant) made during the calendar quarter ending on March 31, June 30, September 30 or December 31, as appropriate on behalf of:
- Effective April 1, 2007, each Participant whose Before-Tax Contributions equal at least 2% of his or her Considered Compensation;
- each Participant employed by such Employer on the last day of the appropriate calendar quarter as of which the contribution is made; and
- each Participant who, prior to the appropriate last day of the calendar quarter, (A) retires on or after his Normal Retirement Date or Early Retirement Date, (B) dies, (C) is initially deemed totally and permanently disabled, (D) was employed at a Company branch located in Streator, Illinois and incurred his or her Severance Date during the last quarter of 2003 due to the sale of the Streator branches; or (E) as expressly provided in the terms of an agreement approved, or a resolution adopted, by the board of directors of an Employer in connection with the termination of the Employer's participation in the Plan during the calendar quarter, provided such agreement or resolution was authorized by the Board of Directors.
The Employer contributions made pursuant to this Section 3.5 shall be known as the "Matching Employer Contributions."
3.6 Rollover Contributions. A Participant or Eligible Employee may with the written consent of the Committee make a Rollover Contribution to the Trust Fund. The Committee may adopt such rules and limitations as it deems necessary or appropriate with respect to the approval of Rollover Contributions, including but not limited to the time period or periods during which such requests may be made and the frequency of such requests.
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ARTICLE 4
ACCOUNTING PROVISIONS AND ALLOCATIONS
4.1 Participant's Accounts.
- For each Participant there shall be maintained as appropriate a separate Employer Contribution Account, Vested Employer Account, Before-Tax Account, Matching Account, Prior Plan Account, Heritage Plan Account, McHenry Plan Account, After-Tax Account, Rollover Account, Trustee Transfer Account and Catch-Up Contribution Account. Each account shall be credited with the amount of contributions, interest and earnings of the Trust Fund allocated to such Account and shall be charged with all distributions, withdrawals and losses of the Trust Fund allocated to such Account.
4.2 Common Fund.
- The Trust Fund shall be a common fund divided into separate investment funds ("Funds") as provided in Section 9.5. Each Fund as may from time to time be established shall be a common fund in which each Participant and Beneficiary shall have an undivided interest in the respective assets of the Fund, provided that all Accounts segregated and all loans made pursuant to Section 6.7 shall together with the net earnings or losses of such Accounts or loans be accounted for separately and will not be included in any of the adjustments resulting from the application of this Section 4.2. Except as otherwise provided, the value of each Participant's Accounts in each Fund shall be measured by the proportion that the net credits to his Accounts bear to the total net credits to all Accounts as of the date such share is being determined. For purposes of allocation of the net earnings and losses and for the valuation of the Trust Fund, each Fund shall be considered separately. No Fund shall share in the net earnings or losses of any other, and no Fund shall be valued by taking into account any assets or distributions for any other.
- Each loan made pursuant to Section 6.7 shall be valued as of each Valuation Date. Any changes in value resulting from such valuation, together with any income or expenses attributable thereto, shall be credited or charged as of such Valuation Date to the Accounts of the Participant from which such loan was made.
- Except as provided in Subsection (e) below, the interest of each Participant and Beneficiary in the net earnings and losses and of the valuation of one or more of the Funds may be measured by the value of the shares or units of such Fund credited to the Participant's or Beneficiary's Accounts as of the date that such valuation is being determined. The value of a unit in each such Fund on any Valuation Date shall be the quotient obtained by dividing the sum of (i) the cash and (ii) the fair market value of all securities or property allocated to such Fund, less any charges and expenses accrued and properly chargeable to such Fund as of said Valuation Date, by the aggregate number of units credited to all Accounts with respect to such Fund. The Trustee will furnish to the Committee a report with respect to the fair market value of all securities and property held in any Fund as of each Valuation Date. To the extent that any assets of a Fund have been invested in one or more separate investment trusts, mutual funds, investment contracts or similar investment media, the net earnings and losses and
21
valuation attributable to such investments shall be determined in accordance with the procedures of such investment media.
- Notwithstanding any other provision of the Plan, effective with respect to the September 30, 1999 Valuation Date, dividends declared by the Company with respect to Company common stock held in the Investment Funds described in Sections 9.5(a)(ii) and 9.5(a)(iv) shall, for purposes of determining and allocating net earnings or losses under Sections 4.4 and 4.5, be deemed to have been paid to the Plan and held in the Trust as of the record date for such dividends as declared by the Company, regardless of the date such dividends are actually paid to the Plan and held in the Trust.
- Effective with respect to the September 30, 1999 Valuation Date, notwithstanding any other Plan provision, the assets of the Investment Funds described in Sections 9.5(a)(ii) and 9.5(a)(iv) shall be allocated to Participants' Accounts in shares and fractional shares of Company common stock and dividends receivable and cash, to the extent of such receivables or cash then in the Fund.
4.3 Allocation Procedure. As of each Valuation Date, the Committee shall, with respect to each Account:
- First, charge each Account for any withdrawals, loans or distributions made therefrom since the immediately preceding Valuation Date.
- Second, credit each Before-Tax Account with one-half of the Before-Tax Contributions made by the Participant since the immediately preceding Valuation Date.
- Third, credit each Rollover Contribution Account with the daily weighted average of the amount of any Rollover Contribution made by the Participant since the immediately preceding Valuation Date.
- Fourth, credit any Accounts segregated pursuant to Article 6 with one-half of the amount of any loan repayments made since the immediately preceding Valuation Date.
- Fifth, credit each Catch-Up Contribution Account with one-half of the Catch-Up Contributions made by the Participant since the immediately preceding Valuation Date.
- Sixth, credit or charge the respective Accounts with the net earnings or losses of each Fund allocable thereto in accordance with Section 4.5, or, in the case of Accounts segregated in accordance with Article 6, the net earnings or losses allocable thereto in accordance with Article 6.
- Seventh, credit each Before-Tax Account, Matching Account, Rollover Account, and Catch-Up Contribution Account, respectively, with the amount of Before-Tax Contributions, Matching Employer Contributions, Rollover Contributions, and Catch-Up Contributions, respectively, made since the immediately preceding Valuation Date and not already allocated in accordance with paragraphs (b), (c), (d) and (e) above.
22
- Eighth, credit any Accounts segregated pursuant to Article 6 with the amount of any loan repayments made since the immediately preceding Valuation Date and not already allocated in accordance with paragraph (f) above.
- Ninth, if the Valuation Date is the last day of the Plan Year, credit each Employer Contribution Account with the Employer Contribution allocable thereto in accordance with Section 4.9.
4.4 Determination of Value of Trust Fund and of Net Earnings or Losses. As of each Valuation Date the Trustee shall determine for the period then ended the sum of the net earnings or losses of the Trust Fund (excluding any gains and losses attributable to the Accounts and loans to Participants segregated pursuant to Article 6), which shall reflect accrued but unpaid interest, gains or losses realized from the sale, exchange or collection of assets, other income received, appreciation or depreciation in the fair market value of assets, administration expenses, taxes and other expenses paid and, subject to Section 4.2(d), dividends. Gains or losses realized and adjustments for appreciation or depreciation in fair market value shall be computed with respect to the difference between such value as of the date of purchase and the date of disposition.
4.5 Allocation of Net Earnings or Losses. As of each Valuation Date, the net earnings or losses of the Trust Fund or of each Fund established under Section 4.2 shall be allocated to the Accounts (excluding Accounts and loans to Participants segregated pursuant to Section 6.7) of all Participants (or beneficiaries of deceased Participants or an alternate payee under a qualified domestic relations order) having credits in the Trust Fund or Fund on the Valuation Date. Such allocation shall be in the ratio that (i) the net credits to each Account of each Participant on the preceding Valuation Date, plus in the case of the Before-Tax Account and Catch-Up Contribution Account, if applicable, one-half of any Before-Tax Contributions or Catch-Up Contributions, respectively, made to that Account since the preceding Valuation Date, or in the case of the Rollover Account, the weighted average daily balance of any Rollover Contribution made to that Account since the preceding Valuation Date, less in each case the total amount of any distributions and loans from such Account to such Participant since the preceding Valuation Date bears to (ii) the total net credits to all such Accounts of all Participants on the preceding Valuation Date, plus, in the case of the Before-Tax Accounts and the Catch-Up Contribution Account, one-half of the Before-Tax Contributions and the Catch-Up Contributions, respectively, made to such Accounts of all Participants, and in the case of the Rollover Accounts, the weighted average daily balances of any Rollover Contributions made to that Account since the preceding Valuation Date, less the total amount of distributions and loans from all such Accounts since the preceding Valuation Date.
4.6 Eligibility to Share in the Employer's Contributions.
- An Active Participant shall be eligible to share in Employer Contributions for the Plan Year as of the last day of which such Employer Contributions are being allocated if he is then employed by the Employer as an Eligible Employee and has completed 1,000 Hours of Service in such Plan Year. A Participant who, during a Plan Year, (i) retires on or after his Normal Retirement Date or Early Retirement Date, (ii) dies, (iii) is initially deemed totally and permanently disabled, (iv) was employed at a Company branch located in Streator, Illinois and incurred his Severance Date during the last quarter of 2003 due to the sale of the Streator
23
branches, or (v) as expressly provided in the terms of an agreement approved or a resolution adopted by the board of directors of an Employer in connection with the termination of the Employer's participation in the Plan during the Plan Year, provided such agreement or resolution was authorized by the Board of Directors, shall also be eligible to share in the Employer Contributions for said Plan Year. A Participant who is eligible to share in the Employer Contributions shall be known as an "Eligible Participant."
- Notwithstanding anything in the Plan to the contrary, if the Plan would otherwise fail to meet the requirements of Code Section 410(b) and the regulations thereunder because Employer Contributions have not been allocated to a sufficient number or percentage of Participants for a Plan Year, then the following rules will apply:
- The group of Participants eligible to share in the Employer Contribution for the Plan Year will be expanded to include the minimum number of Participants who would not otherwise be eligible as are necessary to satisfy the applicable test specified above. The specific Participants who will become eligible under the terms of this paragraph will be those who are actively employed on the last day of the Plan Year and, when compared to similarly situated Participants, have completed the greatest number of Hours of Service in the Plan Year.
- If after application of the previous paragraph, the applicable test is still not satisfied, then the group of Participants eligible to share in the Employer Contribution for the Plan Year will be further expanded to include the minimum number of former Participants who are (A) not employed on the last day of the Plan Year, (B) Non-Highly Compensated Employees and (C) are vested or partially vested in their Accounts, as are necessary to satisfy the applicable test. The specific former Participants who will become eligible under the terms of this paragraph will be those former Participants, when compared to similarly situated former Participants, who have completed the greatest number of Hours of Service in the Plan Year before terminating employment.
- Nothing in this Section will permit the reduction of a Participant's benefit. Therefore any amounts that have previously been allocated to Participants may not be reallocated to satisfy these requirements. In the event allocations to additional Participants or former Participants are required, the Employer will make an additional contribution equal to the amount such persons would have received had they been included in the allocations, even if it exceeds the amount which would be deductible under Code Section 404. Any adjustment to the allocations pursuant to this Section will be made by the 15th day of the tenth month after the end of the Plan Year and will be considered a retroactive amendment adopted by the last day of the Plan Year.
4.7 Allocation of Before-Tax Contributions and Catch-Up Contributions
(a) As of each Valuation Date, the Before-Tax Contributions made on behalf of each Participant since the prior Valuation Date shall be allocated to such Participant's Before-Tax Account.
24
(b) As of each Valuation Date, any Catch-Up Contributions made on behalf of each Participant since the prior Valuation Date shall be allocated to such Participant's Catch-Up Contribution Account.
4.8 Allocation of Matching Employer Contributions. As of the last day of each calendar quarter, the sum of the Matching Employer Contributions made on behalf of each Participant in accordance with Section 3.5 of the Plan shall be allocated to the Matching Account of each such Participant.
4.9 Allocation of Employer Contribution. As of the last day of each Plan Year, the Employer Contribution shall be allocated among the Employer Contribution Accounts of all Eligible Participants in the ratio that each such Participant's Considered Compensation for the Plan Year from that Employer bears to the total Considered Compensation of all such Eligible Participants from that Employer for the Plan Year.
4.10 Provisional Annual Addition. The sum of the amounts allocated to the Accounts of the Participants pursuant to Section 4.7(a), 4.8 and 4.9 for a Plan Year shall be known as the "Provisional Annual Addition" and shall be subject to the limitation on Annual Additions in Section 4.11.
4.11 Limitation on Annual Additions.
- For the purpose of complying with the restrictions on Annual Additions to defined contribution plans imposed by Code Section 415, for each Eligible Participant and each other Participant who has made Before-Tax Contributions during the Plan Year, there shall be computed a Maximum Annual Addition, which shall be the excess of the amount at (i) below over the amount at (ii) below.
- Except as permitted under Section 3.5(a)(ii) and Section 414(v) of the Code, if applicable, the amount shall be the lesser of:
- 100% of the Participant's Total Compensation for the Plan Year; or
- the Defined Contribution Dollar Limitation for the Plan Year.
- The amount of employer contributions, forfeitures and employee contributions allocated as of any day in the Limitation Year to such Participant's accounts under any other defined contribution plan maintained by the Employer or an Affiliate.
- If a short Limitation Year is created because of an amendment changing the Limitation Year to a different 12 consecutive month period, the Maximum Annual Addition will not exceed the Defined Contribution Dollar Limitation multiplied by the following fraction:
25
Number of months in the short Limitation Year
12
The limitation under (a) above shall not apply to any contribution for medical benefits within the meaning of Code Section 419A(f)(2) after separation from service which is otherwise treated as an Annual Addition, or any amount otherwise treated as an annual addition under Code Section 415(l)(2).
- If the Maximum Annual Addition for a Participant equals or exceeds the Provisional Annual Addition for that Participant, an amount equal to the Provisional Annual Addition shall be allocated to the Participant's respective Accounts.
- If the Provisional Annual Addition exceeds the Maximum Annual Addition for that Participant, the Provisional Annual Addition shall be reduced as set forth below until the Provisional Annual Addition as so reduced equals the Maximum Annual Addition for such Participant:
- first, the Tentative Employer Contribution allocable to such Participant's Employer Contribution Account shall be reduced;
- second, the amount of forfeiture allocable to the Participant's Matching Employer Account shall be reduced;
- third, the Before-Tax Contributions shall be reduced; and
- finally, the Matching Employer Contributions shall be reduced.
The Provisional Annual Addition remaining after such reductions shall be allocated to the Participant's respective Accounts.
- The "Excess Tentative Employer Contribution" is an amount equal to the sum of the reductions in the Tentative Employer Contribution allocable to the Accounts of Participants pursuant to subsections (d)(i), (iii) and (iv) above.
- Notwithstanding anything to the contrary in this Plan, any Before-Tax Contributions reduced in accordance with subsection (d) above shall be distributed to the Participant with allocable earnings in accordance with Treasury Regulation Section 1.415-6(b)(6)(iv).
- Contributions made under Section 3.3 shall be treated as Annual Additions for the Plan to which they relate instead of the Plan Year when they are actually made.
4.12 Special Limitation on Maximum Contribution. (Effective through the 1999 Plan Year)
- In the case of any Participant who is also a participant in a defined benefit plan maintained by the Employer or an Affiliate, the sum of the Defined Contribution Fraction and Defined Benefit Fraction as of the end of any Plan Year shall not exceed 1.0. In the event
26
that the sum of such Fractions would otherwise exceed 1.0, then the amount determined under Section 4.11(a)(i) or (ii), whichever is applicable, in determining the Maximum Annual Addition under Section 4.11(a) shall be equal to such applicable amount multiplied by the difference between 1.0 and the Defined Benefit Fraction.
- The "Defined Benefit Fraction" applicable to a Participant for any Limitation Year is a fraction, the numerator of which is the sum of the Projected Annual Benefit of the Participant under all of the defined benefit plans maintained or previously maintained by an Employer or Affiliate in which he participates (determined as of the close of the Limitation Year) and the denominator of which is the lesser of (i) the product of 1.25 multiplied by the maximum dollar limitation on a Participant's Projected Annual Benefit if the plan provided the maximum benefit allowable under Section 415(b) of the Internal Revenue Code for such Limitation Year, or (ii) the product of 1.4 multiplied by 100% of the Participant's Highest Average Compensation (as determined below).
- The "Defined Contribution Fraction" applicable to a Participant for any Limitation Year is a fraction, the numerator of which is the sum of the Participant's Annual Additions as of the close of such Limitation Year for that Limitation Year and for all prior Limitation Years under this Plan and all other defined contribution plans maintained by an Employer or Affiliate, and the denominator of which is the sum of the lesser of the following amounts (determined for such Limitation Year and for each prior Limitation Year of service with the Employer or any Affiliate regardless of whether a plan was in existence during those years): (i) the product of 1.25 multiplied by the Defined Contribution Dollar Limitation for the Limitation Year (determined without regard to the special dollar limitation for employee stock ownership plans), or (ii) the product of 1.4 multiplied by 25% of the Participant's Taxable Compensation for the Limitation Year.
- In accordance with regulations issued by the Secretary of the Treasury or his delegate pursuant to Section 1106(i)(4) of The Tax Reform Act of 1986, an amount shall be subtracted from the numerator of the Defined Contribution Fraction (not exceeding such numerator) so that the sum of the Defined Benefit Fraction and the Defined Contribution Fraction does not exceed 1.0 as of December 31, 1986. To the extent provided under applicable law and regulations, adjustments shall be made to the Defined Benefit Fraction or the Defined Contribution Fraction with respect to previous transition rules.
- (i)"Highest Average Compensation" means the average of a Participant's Taxable Compensation from the Employer and all Affiliates for the high three consecutive Limitation Years (determined as of the close of the Limitation Year) of employment with the Employer or any Affiliate (or the actual number of years of employment for those Participants who are employed for less than three consecutive years for which the Participant's Taxable Compensation is the highest).
- "Projected Annual Benefit" means the annual benefit a Participant would receive from employer contributions under a defined benefit plan, adjusted, in the case of any benefit payable in a form other than a single life annuity or a qualified joint and survivor annuity, to the actuarial equivalent of a single life annuity, assuming (A) the Participant continued employment until reaching the plan's normal retirement age (or his
27
current age, if later), (B) his compensation remained unchanged and (C) all other relevant factors used to determine benefits under the plan remained constant in the future.
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ARTICLE 5
AMOUNT OF PAYMENTS TO PARTICIPANTS
5.1 General Rule. Upon the retirement, disability, resignation or dismissal of a Participant, he, or in the event of his death, his beneficiary, shall be entitled to receive from his respective Accounts in the Trust Fund as of his Determination Date:
- An amount equal to the Participant's Before-Tax Account, Matching Account, and Catch-Up Contribution Account (if applicable) plus any of the Participant's contributions made to the Trust Fund but not allocated to the Participant's Before-Tax Account or Catch-Up Contribution Account as of his Determination Date; and
- An amount equal to his Prior Plan Account and After-Tax Account;
- An amount equal to his Rollover Account;
- An amount equal to his Vested Employer Account; and
- The nonforfeitable portion of the Participant's Employer Contribution Account, Heritage Plan Account and McHenry Plan Account determined as hereafter set forth.
All rights of Participants or of any other person or persons shall be subject to the provisions of Article 6 concerning the time and manner of making distributions.
Notwithstanding anything in this Plan to the contrary, the nonforfeitable portion of the Employer Contribution Account of any Participant whose employment terminates pursuant to the Participant's participation in a voluntary retirement program applicable to such Participant shall be equal to the greater of such percentage determined on the basis of the Participant's age and Years of Service as of the date of termination, or such percentage determined on the basis of the Participant's age as of the date of termination and Years of Service as of the date of termination increased by the number of additional years of Credited Service (as defined in the First Midwest Bancorp Consolidated Pension Plan), if any, with which such Participant is credited under the Pension Plan as a result of his participation in the voluntary retirement program.
5.2 Normal Retirement. Any Participant may retire on or after his Normal Retirement Date, at which date the forfeitable portion, if any, of his Employer Contribution Account, Heritage Plan Account, and McHenry Plan Account, shall become nonforfeitable. If the retirement of a Participant is deferred beyond his Normal Retirement Date, he shall continue in full participation in the Plan and Trust Fund.
5.3 Death. As of the date any Participant shall die while in the employ of the Employer or an Affiliate, the forfeitable portion, if any, of his Employer Contribution Account, Heritage Plan Account, and McHenry Plan Account shall become nonforfeitable, including forfeitures eligible to be restored pursuant to Section 5.7(c).
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5.4 Disability.
- As of the date any Participant shall be determined by the Committee to have become totally and permanently disabled because of physical or mental infirmity while in the employ of the Employer or an Affiliate and his employment shall have terminated, the forfeitable portion, if any, of his Employer Contribution Account, Heritage Plan Account and McHenry Plan Account shall become nonforfeitable, including forfeitures eligible to be restored pursuant to Section 5.7(c).
- A Participant shall be deemed totally and permanently disabled when, on the basis of qualified medical evidence, the Committee finds such Participant to be unable to satisfactorily perform his normal duties required of him by an Employer or Affiliate as a result of physical or mental infirmity, injury, or disease, either occupational or nonoccupational in cause; provided, however, that disability hereunder shall not include any disability incurred or resulting from the Participant's having engaged in a criminal enterprise, or any disability consisting of or resulting from the Participant's chronic alcoholism, addiction to narcotics or an intentionally self-inflicted injury.
5.5 Vesting. A Participant's interest in his Before-Tax Account, Catch-Up Contribution Account, Matching Account, Vested Employer Account, Prior Plan Account and After-Tax Account shall be nonforfeitable at all times. Except as otherwise provided in this Article 5, a Participant's nonforfeitable interest in his Employer Contribution Account, Heritage Plan Account and McHenry Plan Account at any point in time shall be determined under Section 5.6.
5.6 Resignation or Dismissal.
- If any Participant shall incur his Severance Date, other than by reason of death or disability or on or after his Normal Retirement Date or Early Retirement Date, there shall become nonforfeitable none, a portion, or all of his Employer Contribution Account computed as of his Determination Date in accordance with the following schedule, subject to Sections 2.3 and 2.4:
If His Years
of Service
Shall Have Been | The Nonforfeitable
Percentage of His Employer
Contribution Account Shall Be |
Less than 2
2 but less than 3
3 but less than 4
4 but less than 5
5 but less than 6
6 or more | 0%
20%
40%
60%
80%
100% |
If any Participant shall incur his Severance Date, other than by reason of death or disability or on or after his Normal Retirement Date or Early Retirement Date, there shall
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become nonforfeitable none, a portion, or all of his Heritage Plan Account computed as of his Determination Date in accordance with the following schedule, subject to Sections 2.3 and 2.4:
If His Years
of Service
Shall Have Been | The Nonforfeitable
Percentage of His Employer
Contribution Account Shall Be |
Less than 2
2 but less than 3
3 but less than 4
4 but less than 5
5 but less than 6
6 but less than 7
7 or more | 0%
20%
30%
40%
60%
80%
100% |
Any part of the Employer Contribution Account and Heritage Plan Account of such Participant which does not become nonforfeitable shall be treated as a forfeiture pursuant to Section 5.7.
- If any Participant shall incur his Severance Date, other than by reason of death or disability or on or after his Normal Retirement Date or Early Retirement Date, there shall become nonforfeitable none, a portion, or all of his McHenry Plan Account computed as of his Determination Date in accordance with the following schedule, subject to Sections 2.3 and 2.4:
If His Years
of Service
Shall Have Been | The Nonforfeitable
Percentage of His Employer
Contribution Account Shall Be |
Less than 2
2 but less than 3
3 but less than 4
4 but less than 5
5 or more | 0%
20%
30%
40%
100% |
Any part of the McHenry Plan Account of such Participant which does not become nonforfeitable shall be treated as a forfeiture pursuant to Section 5.7.
- If a Participant is employed at a Company branch located in Streator, Illinois and incurs his Severance Date on the day of the Company's sale of the Streator branches, then 100% of his Employer Contribution Account computed as of his Determination Date shall be nonforfeitable.
5.7 Treatment of Forfeitures.
- Upon termination of a Participant's employment with the Employer and all Affiliates, the nonvested portion of his Employer Contribution Account, Heritage Plan Account and McHenry Plan Account shall become a forfeiture pursuant to Section 5.6 as of the end of the Plan Year in which the termination of employment occurred if the Participant is not
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then reemployed by the Employer or an Affiliate. Forfeitures shall be used to reduce the Employer Contributions that would otherwise be paid by the Employer to the Plan pursuant to Section 3.4.
- If a Participant is reemployed by the Employer or an Affiliate without incurring 5 consecutive One-Year Breaks in Service, and before distribution of the nonforfeitable portion of his Employer Contribution Account, Heritage Plan Account and McHenry Plan Account, the amount of the forfeiture shall be restored to his Employer Contribution Account, Heritage Plan Account and McHenry Plan Account, as appropriate, as of the last day of the Plan Year in which he is reemployed.
- If the Participant is reemployed by the Employer or an Affiliate without incurring 5 consecutive One-Year Breaks in Service but after distribution of the nonforfeitable portion of his Employer Contribution Account, Heritage Plan Account and McHenry Plan Account, and if the Participant repays, the amount of the Employer Contribution Account, Heritage Plan Account and McHenry Plan Account distributed to him before the earlier of (i) the date which is 5 years after the first date on which the Participant is reemployed by the Employer or an Affiliate, or (ii) the date on which he incurs 5 consecutive One-Year Breaks in Service, then the amount of the forfeiture shall be restored to his Employer Contribution Account, Heritage Plan Account and McHenry Plan Account, as appropriate, as of the last day of the Plan Year in which such repayment is made.
- Notwithstanding the foregoing, if a Participant terminated his employment with the Employer and all Affiliates because of a maternity or paternity absence as defined in Section 1.4, then this Section 5.7 shall be read by substituting the word "six" for the number "five" as it appears in Subsections (b) and (c) above.
- Amounts restored to a Participant's Employer Contribution Account, Heritage Plan Account and McHenry Plan Account pursuant to paragraph (b) or (c) above shall be deducted from the forfeitures which otherwise would be allocable for the Plan Year in which such reemployment or repayment occurs or, to the extent such forfeitures are insufficient, shall require a supplemental contribution from the Employer.
