EXHIBIT 10(b)
- -------------
PEOPLES BANCORP INC. ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 1995
PEOPLES BANCORP INC.
RETIREMENT SAVINGS PLAN
Amended and Restated Effective January 1, 1996
PEOPLES BANCORP INC.
RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
- -----------------
I. DEFINITIONS 4
II. PARTICIPATION
2.01 Eligibility and Election to Participate 8
2.02 Reemployment 8
2.03 Employment After Normal Retirement Age 8
2.04 Designation of Beneficiary 9
III. CONTRIBUTIONS
3.01 Contribution of Participant Deferrals 9
3.02 Participant Nondeductible Contributions 10
3.03 Rollover Contributions 10
3.04 Employer Matching Contributions 10
3.05 Limitation of Participant Deferrals 11
3.06 Maximum Participant and Matching
Contributions for Highly-Compensated Employees 11
3.07 Combined Alternative Limitation on Participant
Deferrals and Employer Matching Contributions 12
IV. PARTICIPANT'S ACCOUNTS; ALLOCATIONS
4.01 Participant's Accounts 12
4.02 Allocation of Employer Matching Contributions 13
4.03 Allocation of Net Gains or Losses;
Crediting of Accounts 13
4.04 Limitation of Annual Additions 13
4.05 Limitation of Reversion of Contributions 15
V. INVESTMENT OF CONTRIBUTIONS AND VALUATION OF FUNDS
5.01 Investment Funds 16
5.02 Investment Fund Options 16
5.03 Qualifying Employer Securities 17
5.04 Valuation of Trust Fund 17
VI. WITHDRAWALS OF PARTICIPANT DEFERRALS WHILE EMPLOYED
6.01 Withdrawal of Employee Deferral Accounts 17
6.02 Hardship Withdrawals 17
6.03 Withdrawal of Nondeductible Contributions 18
6.04 Amount and Payment of Withdrawals 18
VII. AMOUNT AND DISTRIBUTION OF BENEFITS
7.01 Retirement Benefits 19
7.02 Death Benefits 19
7.03 Disability Benefits 19
7.04 Benefits Upon Termination of Employment 19
7.05 Distribution of Benefits 19
7.06 Timing of Distributions 20
VIII. DEFERRAL PLAN COMMITTEE
8.01 Appointment of Committee 21
8.02 Powers and Duties 21
8.03 Actions by the Committee 22
8.04 Interested Committee Members 22
8.05 Indemnification 22
8.06 Conclusiveness of Action 23
8.07 Payment of Expenses 23
8.08 Claims Procedure 23
IX. AMENDMENT TO THE PLAN
9.01 Right to Amend 24
X. TERMINATION OF THE PLAN
10.01 Right to Terminate 24
10.02 Plan Merger and Consolidation 24
10.03 Successor Employer 24
XI. TRUST AND THE TRUSTEE
11.01 Employer to Select Trustee 25
XII. TOP HEAVY PLAN PROVISIONS
12.01 Definitions 25
12.02 Top Heavy Status 26
12.03 Minimum Contributions 26
XIII. MISCELLANEOUS
13.01 Voluntary Plan 27
13.02 Designation of Dates 27
13.03 Non-alienation of Benefits 27
13.04 Participant Loans 27
13.05 Inability to Receive Benefits 29
13.06 Lost Participants 29
13.07 Limitation of Rights 29
13.08 Gender 29
13.09 Invalid Provision 29
13.10 One Plan 29
13.11 Governing Law 30
PEOPLES BANCORP INC.
RETIREMENT SAVINGS PLAN
Peoples Bancorp Inc. hereby adopts the following retirement
savings plan pursuant to Sections 401(a) and 401(k) of the Code,
effective January 1, 1996. The Plan is an amendment and
restatement of the Peoples Bancorp Inc. Retirement Savings Plan,
effective January 1, 1989 and effective December 31, 1985. The
Plan shall be for the exclusive benefit of the Participants and,
where applicable, the Beneficiaries of such Participants. It is
intended that this Plan, together with the Trust Agreement,
shall comply with the applicable provisions of the Internal
Revenue Code of 1986, as amended, and the Employee Retirement
Income Security Act of 1974, as amended.
ARTICLE I
DEFINITIONS
- -----------
Whenever used herein, the following words and phrases shall
have the meaning specified below. Additional words and phrases
may be defined in the text of the Plan.
"Accounts" means a Participant's Employee Deferral Account, his
Voluntary Contributions Account, his Rollover Account and his
Employer Matching Contributions Account.
"Affiliate" means any other employer which, together with the
Employer, is a member of a controlled group of corporations or
of a commonly controlled trade or business [as defined in Code
Sections 414(b) and (c) and as modified by Code Section 415(h)]
or of an affiliated service group [as defined in Code Section
414(m)] or other organization described in Code Section 414(o).
"Beneficiary" means the person, persons or entity designated by
a Participant pursuant to the terms of Section 2.04 to receive
the death benefit payable under the Plan.
"Break in Service" means a Period of Severance of one year.
"Code" means the Internal Revenue Code of 1986, as may be
amended from time to time.
"Committee" means the Deferral Plan Committee as described in
Article VIII.
"Compensation" means the total amount reflected on a
Participant's Form W-2 for the Plan Year, excluding any benefits
paid under this Plan, except Compensation shall include any
salary deferrals made by a Participant pursuant to Section 3.01.
Notwithstanding the preceding sentence, for purposes of
allocating the Employer's contribution under the Plan, for the
year in which a Participant begins or resumes participation in
the Plan, Compensation before his participation began or resumed
shall be disregarded. Effective for Plan Years beginning after
December 31, 1988, Compensation paid by the Employer during any
Plan Year in excess of $200,000 as adjusted under Code Section
401(a)(17) shall be excluded and effective for Plan Years
beginning after December 31, 1993, Compensation paid by the
Employer during any Plan Year in excess of $150,000 as adjusted
under Code Section 401(a)(17) shall be excluded. In determining
the Compensation of a Participant for purposes of the $200,000
or $150,000 limit, the family aggregation rules of Code Section
414(q)(6) will apply, except in applying such rules, the term
"family" will include only the Spouse of the Participant and any
lineal descendants of the Participant who have not attained age
19 before the close of the year. If, as a result of the
application of such rules, Compensation would exceed the
adjusted $200,000 or $150,000 limitation, then the limitation
will be prorated among the affected persons in proportion to
each such person's compensation as determined under this
paragraph prior to the application of this limitation.
"Effective Date" means, for this amended and restated Plan,
January 1, 1996, unless some other effective date is provided
for in any specific provision herein.
"Employee" means any person who, on or after the Effective
Date, is receiving remuneration for personal services rendered
to the Employer (or who would be receiving such remuneration
except for an authorized leave of absence). In addition, any
Leased Employee shall be treated as an Employee of the Employer.
However, contributions or benefits provided by the leasing
organization for any Leased Employee which are attributable to
services performed for the Employer shall be treated as provided
by the Employer. The preceding sentences shall not apply to any
Leased Employee of the Employer if (a) Leased Employees do not
constitute more than 20% of the Employer's
non-highly-compensated work force [as defined by reference to
Section 414(q) of the Code]; and (b) the Leased Employee is
covered by a money purchase pension plan maintained by the
leasing organization which provides (i) a nonintegrated employer
contribution rate for each participant of at least 10% of
compensation; (ii) full and immediate vesting; and (iii)
immediate participation for all employees of the leasing
organization (except for those individuals whose compensation is
less than $1,000 in each plan year during the four-year period
ending with the plan year).
"Employer" means Peoples Bancorp Inc., its Affiliates and any
successor business or organization which shall assume the
obligations of the Plan.
"Employment Commencement Date" means the date on which the
Employee first performs an Hour of Service for the Employer or
an Affiliate.
"Entry Date" means the first day of January, April, July and
October of each Plan Year.
"ERISA" means the Employee Retirement Income Security Act of
1974, as periodically amended.
"Family Member" means, with respect to any individual, such
individual's Spouse and lineal ascendants or descendants and the
spouses of such lineal ascendants or descendants.
"Highly-Compensated Employee" means a highly-compensated active
employee and a highly-compensated former employee. A
highly-compensated active employee includes any Employee who
performs service for the Employer or an Affiliate during the
determination year and who, during the look-back year (a)
received compensation in excess of $75,000 (as adjusted by the
Secretary of the Treasury); (b) received compensation in excess
of $50,000 (as adjusted by the Secretary of the Treasury) and
was a member of the top-paid group for such year; or (c) was an
officer of the Employer or an Affiliate and received
compensation during such year that is greater than 50% of the
dollar limitation in effect under Code Section 415(b)(1)(A).
The term Highly-Compensated Employee also includes (a)
Employees who are both described in the preceding paragraph if
the term "determination year" is substituted for the term
"look-back year" and one of the 100 Employees who received the
most compensation from the Employer or an Affiliate during the
determination year; and (b) Employees who are 5% owners at any
time during the look-back year or determination year. If no
officer has satisfied the compensation requirement of (c) in the
preceding paragraph during either a determination year or
look-back year, the highest paid officer for such year shall be
treated as a Highly-Compensated Employee. For this purpose, the
determination year shall be the Plan Year. The look-back year
shall be the 12-month period immediately preceding the
determination year.
A highly-compensated former Employee includes any Employee who
separated from service (or was deemed to have separated) prior
to the determination year, performs no service for the Employer
or an Affiliate during the determination year and was a
highly-compensated active employee for either the separation
year or any determination year ending on or after the Employee's
55th birthday. A separation year is the determination year the
Employee separates from service. If an Employee is, during a
determination year or look-back year, a Family Member of either
a 5% owner who is an active or former Employee or a
Highly-Compensated Employee who is one of the 10 most
highly-compensated employees ranked on the basis of compensation
paid by the Employer or its Affiliates during such year, then
the Family Member and the 5% owner or top-10 highly-compensated
employee shall be aggregated. In such case, the Family Member
and 5% owner or top-10 highly-compensated employee shall be
treated as a single Employee receiving compensation and Plan
contributions or benefits equal to the sum of such compensation
and contributions or benefits of the Family Member and 5% owner
or top-10 highly-compensated employee.
The determination of who is a Highly-Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group, the top 100 Employees, the
number of Employees treated as officers and the compensation
that is considered will be made in accordance with Code Section
414(q) and the regulations thereunder.
"Hour of Service" means:
(a) each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer or an
Affiliate. These hours shall be credited to the Employee for
the computation period or periods in which the duties are performed;
(b) each hour for which an Employee is paid, or entitled to
payment, by the Employer or an Affiliate on account of a period
of time during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty or leave of absence; and
(c) each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer or an
Affiliate. An Hour of Service credited under paragraph (a) or
(b) above will not be credited under this paragraph (c). These
hours shall be credited to the Employee for the computation
period or periods to which the award or agreement pertains
rather than the computation period in which the award, agreement
or payment is made.
"Inactive Participant" means a Participant whose employment
with the Employer or an Affiliate has continued but (a) whose
participation has been suspended as a result of making a
withdrawal pursuant to Section 6.02 hereof; or (b) who has
suspended his deferrals pursuant to Section 3.01(c) hereof.
"Investment Funds" means the investment funds as determined by
the Committee and described in Section 5.02 for the investment
of Participant Accounts pursuant to Participant directions.
"Leased Employee" means any person (other than an employee of
the recipient) who, pursuant to an agreement between the
recipient and any other person (leasing organization), has
performed services for the recipient [or for the recipient and
related persons determined in accordance with Code Sections
414(n) and 414(o)] on a substantially full-time basis for a
period of at least one year, and such services are of a type
historically performed by employees in the business field of the
recipient employer.
"Lower-Compensated Employee" means any Employee who is not a
Highly-Compensated Employee.
"Normal Retirement Age" means the Participant's 65th birthday;
provided, however, that this Plan shall not be interpreted to
require that a Participant retire prior to attaining any
specific age.
"Participant" means either (a) an Employee who is participating
in the Plan in accordance with Article II and for whom Accounts
are being maintained; or (b) a former Employee of the Employer
or an Affiliate for whom Accounts are being maintained.
"Period of Severance" means the time period between an
Employee's Severance from Service and the date on which he is
next credited with an Hour of Service.
"Plan" means the plan designated as the Peoples Bancorp Inc.
Retirement Savings Plan, as described in this document and as it
may be periodically amended.
"Plan Year" means the 12 months beginning on each January 1 and
ending each December 31. The Plan Year shall be the "Limitation
Year" for purposes of Code Section 415 and Section 4.04 of the
Plan.
"Projected Annual Benefit" means the annual benefit to which a
Participant would be entitled under all Employer sponsored
defined benefit plans, assuming that the Participant continues
employment until his normal retirement date, that the
Participant's Compensation continues until his normal retirement
date at the rate in effect during the current calendar year and
that all other factors relevant for determining benefits under
the Plan remain constant at the level in effect during the
current calendar year.
"Severance from Service" means the earliest of the date on
which an Employee either
(a) quits;
(b) retires;
(c) is discharged;
(d) dies; or
(e) is continuously absent (with or without pay) beyond (i) the
first anniversary of the first day of his approved absence; or
(ii) the expiration of his approved absence, whichever is longer.
An Employee will not be deemed to have incurred a Severance
from Service while in active service with the United States
armed forces and while his reemployment rights are protected by
law. If a Participant retires because of disability and
recovers before his normal retirement date but is not rehired by
the Employer or an Affiliate, he will be treated as having quit
(rather than retired) on the date his disability began.
"Spouse" or "Surviving Spouse" means an individual who is
legally married to the Participant, provided that an individual
who was formerly married to the Participant will be treated as
the Spouse or Surviving Spouse to the extent provided under a
qualified domestic relations order, as described in Code Section
414(p).
"Trust Agreement" means the agreement, and any amendments made
thereto, by and between the Employer and the Trustee for the
management, investment and disbursement of funds held in the
Trust Fund.
"Trust Fund" means the Employer's portion of the fund
established pursuant to the terms of the Trust Agreement, which
fund may be comprised of one or more Investment Funds.
"Trustee" means the bank, trust company and/or individual
designated by the Employer to hold and invest the Trust Fund and
to pay benefits and expenses as authorized by the Committee in
accordance with the terms and provisions of the agreement by and
between the Employer and such bank, trust company and/or
individual.
"Valuation Date" means each March 31, June 30, September 30 and
December 31, or more frequently if determined to be necessary by
the Committee.
"Year of Service" means each 12-month period between an
Employee's Employment Commencement Date and his Severance from
Service.
(a) Years of Service include an Employee's Period of Severance
if he is reemployed by the Employer or an Affiliate before a
Break in Service;
(b) except for determining eligibility to participate, periods
of service less than a full year will be aggregated; and
(c) any portion of a Year of Service which is less than a full
year will be stated as a fractional year with each full or
partial month equal to 1/12th of a year.
If a Participant is absent for maternity/paternity purposes and
that absence begins during Plan Years beginning after December
31, 1984, the 12-consecutive-month period beginning on the first
anniversary of the date the absence began will not be counted as
a Break in Service. For purposes of this section, an absence from
work for maternity/paternity purposes means an absence due to
(a) the pregnancy of the Employee;
(b) the birth of a child of the Employee;
(c) the placement of a child with the Employee in connection
with the adoption of such child by the Employee; or
(d) the caring for a child for a period beginning immediately
after birth or placement.
ARTICLE II
PARTICIPATION
- -------------
2.01. Eligibility and Election to Participate
---------------------------------------
Each individual who was a Participant in the Plan on the day
before the Effective Date shall remain a Participant in this
Plan on the Effective Date. Each Employee who is classified by
the Employer as a full-time employee who is not a Participant on
the Effective Date shall become a Participant in the Plan on the
Entry Date coincident with or next following his Employment
Commencement Date. Each Employee who is classified by the
Employer as a part-time employee who is not a Participant on the
Effective Date shall become a Participant in the Plan on the
Entry Date coincident with or next following the date as of
which he has been credited with 1,000 Hours of Service.
To be eligible to make Participant deferrals, a Participant
must complete an enrollment form and agree to make contributions
to the Plan, authorize the Employer to withhold such
contributions from his Compensation and pay the same to the
Trustee and designate a Beneficiary. An Employee who declines
to make Participant deferrals at the time when he is initially
eligible shall be a Participant for all other purposes of the
Plan and may elect to make Participant deferrals on the next
Entry Date thereafter, provided the Employee completes the
required form at least five days prior to such date.
2.02. Reemployment
------------
If a Participant whose employment has terminated is
subsequently reemployed, he shall be eligible to participate in
the Plan on the Entry Date following his reemployment.
2.03. Employment After Normal Retirement Age
--------------------------------------
A Participant who continues in the employ of the Employer after
his Normal Retirement Age shall continue to be a Participant for
all purposes of the Plan.
2.04. Designation of Beneficiary
--------------------------
(a) Each Participant shall designate a Beneficiary to receive
any death benefit payable under the Plan. In the event the
Participant dies before a distribution has occurred pursuant to
Section 7.01, 7.03 or 7.04, such distribution shall be paid to
the Participant's Surviving Spouse.
If there is no Surviving Spouse, or if the Surviving Spouse
consents to forego receipt of the distribution in accordance
with paragraph (b) below, distribution shall be made to any
person, persons or entity designated by the Participant as a
Beneficiary hereunder. If more than one Beneficiary is named,
the Participant may specify the sequence and/or proportion in
which payments must be made to each Beneficiary. In the absence
of such specification, payments shall be made in equal shares to
all named Beneficiaries. To the extent otherwise consistent
with this Plan, a Participant may change his Beneficiary from
time to time by written notice delivered to the Committee in the
manner prescribed by the Committee. If no Beneficiary has been
designated or if no designated Beneficiary is living at the time
of the Participant's death, payment of such death benefit, if
any, to the extent permitted by law, shall be made to the
surviving person or persons in the first of the following
classes of successive preference of Beneficiaries: (i)
Surviving Spouse; (ii) issue, then living, per stirpes; (iii)
executors or administrators. Any minor's share shall be paid to
such adult or adults as have been appointed legal guardian and
have assumed custody and support of such minor. Proof of death
satisfactory to the Committee must be furnished prior to the
payment of any death benefit under the Plan.
(b) If the Participant's Beneficiary under the Plan is someone
other than the Participant's Spouse, then such designation is
subject to the Spouse's consent. Spousal consent shall be valid
only if (i) it is made in writing on a form prescribed by the
Committee; (ii) the Spouse acknowledges the effect of the
consent; and (iii) the consent and acknowledgment are witnessed
by a Plan representative or a notary public. If the Participant
establishes to the satisfaction of the Committee that such
written consent may not be obtained because his Spouse cannot be
located, a designation of a Beneficiary other than his Spouse
will be deemed to have been made with spousal consent.
ARTICLE III
CONTRIBUTIONS
- -------------
3.01. Contribution of Participant Deferrals
-------------------------------------
(a) Effective January 1, 1987, each Participant may elect, by
entering into a salary reduction agreement with the Employer,
for each Plan Year to defer a portion of his Compensation, not
to exceed the lesser of (i) 15% of his Compensation; or (ii) the
maximum amount permitted under Section 402(g) of the Code,
taking into account elective deferrals made under other
qualified cash or deferred arrangements in which the Participant
participates. Such deferred amounts shall be contributed by the
Employer to the Participant's Employee Deferral Account.
(b) A Participant's election to make Participant deferrals
shall be effective for each payroll period during which an
effective salary reduction agreement is on file with the
Employer.
(c) A Participant's deferral percentage will remain in effect,
notwithstanding any change in his Compensation, until he elects
to change such percentage. A Participant may elect to increase,
decrease or cease his deferral percentage, as of the first
payroll period starting on or after the first day of a quarter
of the Plan Year, by submitting a salary reduction agreement at
least 15 days in advance of the first day of the quarter (or
such greater of lesser period as the Committee may establish for
purposes of administrative convenience).
A Participant who has elected a deferral percentage for a prior
portion of a Plan Year who fails to change such percentage on an
allowable date for a subsequent portion of a Plan Year shall be
deemed to have kept his prior deferral percentage in effect for
such subsequent portion of the Plan Year.
(d) Participant deferrals under this section shall be made by
payroll deductions authorized by the Participant and shall be
contributed to the Plan by the Employer. Participant deferrals
constitute Employer contributions under the Plan and are
intended to qualify as elective contributions under Code Section
401(k). Amounts allocated to a Participant's Employee Deferral
Account shall be fully vested in such Participant and
nonforfeitable at all times. The salary-deferral arrangement of
this Plan and any other plans of the Employer [which include a
cash or deferred arrangement under Section 401(k) of the Code
and which are considered one plan for purposes of Section
401(a)(4) or Section 401(b) of the Code] shall be treated as one
salary-deferral arrangement for purposes of applying the
provisions of this Article III.
(e) Effective January 1, 1987, in the event a Participant
notifies the Committee in writing by any March 1 that, with
respect to the previous calendar year, such Participant has made
elective Participant deferrals in excess of the maximum amount
permitted under Section 402(g)(5) of the Code for such calendar
year (taking into account for this purpose the aggregate salary
deferrals made by the Participant to all qualified cash or
deferred arrangements in which he participates), then the
Committee shall return to such Participant by the next following
April 15 the amount specified in such written notification of
his Participant deferral contributions to the Plan during the
previous calendar year, together with allocable earnings
thereon. To the extent that a Participant has made elective
Participant deferrals in excess of the maximum amount permitted
under Code Section 402(g)(5) to this Plan or any other plan
maintained by the Employer or an Affiliate, such Participant
shall be deemed to have notified the Committee of such excess
deferrals.
3.02. Participant Nondeductible Contributions
---------------------------------------
Each Participant may, if he so elects, contribute to the
Trustee of this Plan in any Plan Year amounts not in excess of
10% of the Compensation paid or accrued to the Participant by
the Employer during such Plan Year. All amounts contributed by
a Participant under this section shall be credited to his
Voluntary Contributions Account and shall be fully vested in the
Participant and nonforfeitable at all times. Contributions may
be in cash, by means of salary reductions or otherwise, in
accordance with such rules as the Committee may determine.
3.03. Rollover Contributions
----------------------
Subject to such restrictions as the Committee may apply or
affirmative refusal by the Committee to accept such rollovers,
an Employee may roll over a distribution from another qualified
pension or profit sharing plan; provided, however, that
notwithstanding any provision contained herein, no Employee
shall roll over more than a maximum amount of $500,000 in any
one particular Plan Year into any Investment Fund or Funds in
which investments are made in equity securities of the Employer.
Amounts so rolled over shall be credited to the Employee's
Rollover Account and shall be fully vested in such Employee and
nonforfeitable at all times. Amounts transferred directly from
another qualified pension or profit sharing plan shall be
treated hereunder as a rollover.
3.04. Employer Matching Contributions
-------------------------------
For each Plan Year, the Employer shall contribute an amount
equal to a percentage of the total amount of contributions
agreed to be made by it pursuant to salary reduction agreements
under Section 3.01 entered into between the Employer and
Participants for such Plan Year. The amount of this matching
contribution, if any, shall be determined in the discretion of
the Board of Directors.
Contributions made pursuant to this Section 3.04 shall be
allocated to the Employer Matching Contributions Account of
Participants who both (a) made Participant deferrals during the
Plan Year for which such matching contribution is made by the
Employer; and (b) are employed by the Employer or an Affiliate
on the last day of such Plan Year. Matching contributions shall
be allocated to each eligible Participant in the proportion
which the total Participant deferral contributions of such
Participant for the Plan Year bears to the total Participant
deferral contributions of all Participants who are eligible for
matching contributions for the Plan Year. Any amounts
contributed by the Employer pursuant to this paragraph shall be
paid on an annual basis to the Trustee.
3.05. Limitation of Participant Deferrals
-----------------------------------
(a) Notwithstanding Section 3.01, effective January 1, 1987,
the deferral percentages under Section 3.01 shall be modified as
provided in paragraph (c) if the requirements of paragraph (b)
are not satisfied.
(b) An actual deferral percentage shall be determined for each
Employee who is eligible to become a Participant. Such
percentage shall be his total Participant deferrals, divided by
his Compensation during the portion of the Plan Year during
which he was eligible to participate in the Plan. With respect
to Employees who are eligible to but make no deferrals under
this Plan for the year, such actual deferral percentage shall be
zero.
The average of the actual deferral percentages for all eligible
Employees who are Highly-Compensated Employees (High Average),
when compared to the average of the actual deferral percentages
for all eligible Employees who are Lower-Compensated Employees
(Low Average), must meet one of the following requirements:
(i) the High Average is no greater than the Low Average times
1.25; or
(ii) the excess of the High Average over the Low Average is
not greater than 2% and the High Average is no greater
than the Low Average times 2.0.
(c) The Committee shall make a determination as of the last day
of the Plan Year regarding the maximum Participant deferral
contribution which each Participant who is a Highly-Compensated
Employee may elect to defer, and any Participant who elected to
defer more than his maximum permissible Participant deferral
contribution shall be deemed to have elected to defer the
maximum permissible Participant deferral contribution as
determined by the Committee. For this purpose, all cash or
deferred arrangements under which a Highly-Compensated Employee
is eligible to participate shall be treated as a single
arrangement. If it is determined as of the end of the Plan Year
that any amounts withheld by the Employer for such Participant
exceed the amounts determined permissible by the Committee or,
if the amount of the Participant's Participant deferral
contribution would limit the contribution the Employer has
determined to make for its corresponding fiscal year, then the
excess amount or the portion of the Participant's Participant
deferral contribution which would so limit the Employer's
contribution, together with interest thereon (if any) for the
Plan Year, shall be returned by the Employer or the Trustee to
the Participant within 2 1/2 months after the end of the Plan
Year, but in no event later than the last day of the following
Plan Year.
For purposes of this paragraph (c), the amount of excess
contributions for a Highly-Compensated Employee will be
determined in the following manner. First, the actual deferral
ratio (ADR) of the Highly-Compensated Employee with the highest
ADR is reduced to the extent necessary to satisfy the actual
deferral percentage (ADP) test or cause such ratio to equal the
ADR of the Highly-Compensated Employee with the next highest
ratio. Second, this process is repeated until the ADP test is
satisfied. The amount of excess contributions for a
Highly-Compensated Employee is then equal to the total of
elective and other contributions taken into account for the ADP
test minus the product of the Employee's contribution ratio as
determined above and the Employee's Compensation. The Committee
shall have the right to limit or reduce the Participant deferral
contributions of Participants, as it determines necessary and in
any manner it determines, to ensure that the aggregate
allocation to the Employee Deferral Accounts of all Participants
will not exceed the amount permitted as a deduction by the
Employer pursuant to the Code and to ensure that, with respect
to any particular Participant, the amount credited to such
Participant's Employee Deferral Account for the Plan Year does
not exceed the amount permissible under Section 415 of the Code.
3.06. Maximum Participant and Matching Contributions for
Highly-Compensated Employees
--------------------------------------------------
(a) Effective January 1, 1987, the contribution percentage for
eligible Highly-Compensated Employees under this Plan shall not
exceed the greater of (i) 125% of such percentage for all other
eligible Employees; or (ii) the lesser of 200% of such
percentage for all other eligible Employees or the percentage
for all other eligible Employees plus two percentage points.
(b) For purposes of this section, the contribution percentage
for a specified group of Employees for a Plan Year shall be the
average of the ratios (calculated separately for each Employee
in such group) of (i) the sum of the Participant's nondeductible
contributions and the Employer matching contributions made under
the Plan on behalf of each such Employee for such Plan Year to
(ii) the Employee's compensation [within the meaning of Section
414(s) of the Code] for the portion of such Plan Year during
which he was eligible to participate in the Plan.
(c) Any Employee who is eligible to make a Participant deferral
contribution under the Plan shall be considered an "eligible
employee" for purposes of this section.
(d) The Plan shall not be treated as failing to meet the
requirements of this section for any Plan Year if, before the
close of the following Plan Year, the amount of the excess
aggregate contributions for such Plan Year and any income
allocable to such contributions is distributed. For this
purpose, income allocable to excess contributions shall include
only income for the Plan Year for which the excess aggregate
contributions were made. Any distribution of the excess
aggregate contributions for any Plan Year shall be made to
Highly-Compensated Employees on the basis of the respective
portions of such amounts attributable to each of such Employees.
For purposes of this section, the term "excess aggregate
contributions" shall mean, with respect to any Plan Year, the
excess of (i) the amount of the Participant nondeductible
contributions and Employer matching contributions actually made
by or on behalf of Highly-Compensated Employees for such Plan
Year over (ii) the maximum amount of such contributions
permitted under the contribution percentage requirement
described above (determined by reducing contributions made on
behalf of Highly-Compensated Employees in order of their
contribution percentages beginning with the highest of such
percentages).
3.07. Combined Alternative Limitation on Participant Deferrals
and Employer Matching Contributions
--------------------------------------------------------
Notwithstanding any provision of this Article III, effective
January 1, 1987, if, as of any Plan Year, both the High Average
specified in Section 3.05 (relating to actual deferral
percentages) and the contribution percentage for
Highly-Compensated Employees specified in Section 3.06 (relating
to actual contribution percentages) exceed the Low Average
specified in Section 3.05 and the contribution percentage for
Lower-Compensated Employees specified in Section 3.06 by more
than 25%, the Committee shall apply the aggregate alternative
limitation in accordance with Section 1.401(m)-2 of the Income
Tax Regulations. In the event the combined alternative
limitation is not satisfied for any given Plan Year, the
Employer shall direct the Committee to reduce the High Average
of Section 3.05 and/or the contribution percentage for
Highly-Compensated Employees of Section 3.06 as permitted by
Sections 3.05 and 3.06 hereof to the extent necessary to satisfy
the combined alternative limitation.
ARTICLE IV
PARTICIPANT'S ACCOUNTS; ALLOCATIONS
- -----------------------------------
4.01. Participant's Accounts
----------------------
The Committee shall maintain Accounts as follows for each
Participant in the Plan:
(a) an Employer Matching Contributions Account to record
(i) his share of the Employer matching contributions,
allocated under Section 3.03; and
(ii) his share of the net income, or net losses, resulting
from the investment thereof.
(b) an Employee Deferral Account to record
(i) the Participant's Participant deferrals made pursuant to
Section 3.01, minus any withdrawals; and
(ii) his share of the net income, or net losses, resulting
from the investment thereof.
(c) a Voluntary Contributions Account to record:
(i) his nondeductible contributions, minus any withdrawals; and
(ii) his share of the net income, or net losses, resulting
from the investment thereof.
(d) a Rollover Account to record
(i) the Participant's rollovers made pursuant to Section 3.03; and
(ii) his share of the net income, or net losses, resulting
from the investment thereof.
4.02. Allocation of Employer Matching Contributions
---------------------------------------------
Employer matching contributions made under Section 3.04 shall
be allocated to each Participant in accordance with the
provisions of Section 3.04.
4.03. Allocation of Net Gains or Losses; Crediting of Accounts
--------------------------------------------------------
As of each Valuation Date, the fair market value of the Trust
Fund shall be determined in accordance with Section 5.04. The
net increase or decrease in such values resulting from the
investment of the assets therein and from administrative
expenses charged to the Trust Fund, if any, pursuant to Section
8.07 shall be apportioned to each Participant's Employer
Matching Contributions Account and Rollover Account in
proportion to the value thereof as of the last preceding
Valuation Date. The net increase or decrease in the value of
the Trust Fund resulting from investment of the assets therein
and from administrative expenses charged to the Trust Fund, if
any, pursuant to Section 8.07 shall be apportioned to each
Participant's Employee Deferral Account in the ratio that the
sum of the value of such Participant's Employee Deferral Account
as of the preceding Valuation Date plus a weighted average of
any Participant deferrals made to such Employee Deferral Account
since the preceding Valuation Date less any withdrawals made
from such Employee Deferral Account since the preceding
Valuation Date bears to the total value of all Participants'
Employee Deferral Accounts as of the preceding Valuation Date
plus a weighted average of all Participant deferrals made to the
Plan since the preceding Valuation Date less any withdrawals
made from all Employee Deferral Accounts since the preceding
Valuation Date. The net increase or decrease in the value of
the Trust Fund resulting from investment of the assets therein
and from administrative expenses charged to the Trust Fund, if
any, pursuant to Section 8.07 shall be apportioned to each
Participant's Voluntary Contributions Account in the ratio that
the sum of the value of such Participant's Voluntary
Contributions Account as of the preceding Valuation Date plus a
weighted average of any Participant nondeductible contributions
made to such Voluntary Contributions Account since the preceding
Valuation Date less any withdrawals made from such Voluntary
Contributions Account since the preceding Valuation Date bears
to the total value of all Participants' Voluntary Contributions
Accounts as of the preceding Valuation Date plus a weighted
average of all Participant nondeductible contributions made to
the Plan since the preceding Valuation Date less any withdrawals
made from all Voluntary Contributions Accounts since the
preceding Valuation Date.
4.04. Limitation of Annual Additions
------------------------------
(a) Basic Limitation. Notwithstanding Sections 3.01 and 3.05
and subject to the provisions of paragraphs (b) and (c) below,
Annual Additions to each Participant's Account shall not exceed
the lesser of (i) $30,000 or such larger amount as may be
determined by the Secretary of the Treasury for Limitation Years
ending on or after January 1, 1988; or (ii) 25% of the
Participant's compensation for the Limitation Year.
For purposes of this Section 4.04, "compensation" shall mean
compensation as defined in Treasury Regulation Section
1.415-2(d) and shall include wages, salaries, fees for
professional services, percentage of profits, earned income in
the case of a self-employed Participant, disability payments,
paid or reimbursed moving expenses to the extent not deductible
by the Participant, medical reimbursement items and the value of
a non-qualified stock option to the extent includable in an
Employee's gross income upon making the election under Code
Section 83(b). Specifically excluded are salary deferral
contributions, contributions to the distributions from most
deferred compensation plans, amounts realized from the sale of a
non-qualified stock option or from the sale, exchange or other
disposition of stock acquired under a qualified stock option
plan and most amounts which receive special tax benefits. Also
for purposes of this section, "Annual Additions" means the sum
of the following amounts credited to a Participant's Account for
the Limitation Year under all defined contribution plans
maintained by the Employer:
(i) Employer contributions;
(ii) Forfeitures;
(iii) Employee contributions;
(iv) amounts allocated after March 31, 1984 to an individual
medical account, as defined in Code Section 415(l)(2),
which is part of a defined benefit plan maintained by the
Employer; and
(v) amounts derived from contributions paid or accrued after
December 31, 1985 in taxable years ending after such date
which are attributable to postretirement medical benefits
allocated to the separate account of a Key Employee [as
defined in Code Section 416(i)] under a welfare benefit fund
[as defined in Code Section 419(e)] maintained by the
Employer. The amounts described under this subparagraph (v)
shall not be subject to the 25% of compensation limit
provided in Section 4.04(a).
(b) Participation in Other Defined Contribution Plan. The
limitation of this Section 4.04 with respect to any Participant
who at any time has participated in any other qualified defined
contribution plan [as defined in Section 3(34) of ERISA and Code
Section 414(i)] maintained by the Employer will apply as if the
total contributions allocated under all such defined
contribution plans in which the Participant has participated
were allocated under one plan.
(c) Participation in this Plan and Defined Benefit Plan. If a
Participant has been a Participant in a qualified defined
benefit plan [as defined in Section 3(35) of ERISA and Code
Section 414(j)] maintained by the Employer, the sum of the
Participant's defined benefit plan fraction and defined
contribution plan fraction for any year shall not exceed one.
The defined benefit plan fraction is a fraction, the numerator
of which is the sum of the Participant's Projected Annual
Benefit under all defined benefit plans (whether or not
terminated) maintained by the Employer, and the denominator of
which is the lesser of (i) 1.25 times the dollar limitation of
Code Section 415(b)(1)(A) in effect for the limitation year; or
(ii) 1.4 times the Participant's average annual earnings for the
three consecutive years that produce the highest average.
The defined contribution plan fraction is a fraction, the
numerator of which is the sum of the Annual Additions to the
Participant's Accounts under all defined contribution plans
maintained by the Employer (whether or not terminated) for the
current and all prior years, and the denominator of which is the
sum of the lesser of the following amounts determined for such
years and for each prior Year of Service with the Employer: (i)
1.25 times the dollar limitation in effect under Code Section
415(c)(1)(A) for such year; or (ii) 1.4 times the amount which
may be taken into account under Code Section 415(c)(1)(B).
For any years in which the Plan is "top heavy" as defined in
Section 12.02, "1.0" shall be substituted for "1.25" in the
preceding two paragraphs.
As to each Participant, if, in any Limitation Year, the sum of
the defined benefit plan fraction and the defined contribution
plan fraction exceeds 1.0, the rate of benefit accruals under
this Plan will be reduced so that the sum of the fractions
equals 1.0.
(d) Adjustments. If the limitation described in this Section
4.04 is effective in limiting the amount to be allocated to the
Accounts of a Participant for a Plan Year, the annual
contributions hereunder will be reduced as necessary to bring
them within the limitation, as follows:
(i) first, amounts attributable to Participant nondeductible
contributions will be reduced. Such amounts will be
returned to the Participant;
(ii) second, amounts attributable to the Participant's
deferrals will be reduced. Such amounts will be returned
to the Participant as cash Compensation and will be subject
to all federal, state, municipal and/or county taxes and other
deductions which would apply to cash Compensation; and
(iii) third, the Employer matching contribution allocated to
the Participant's Employer Matching Contributions Account will
be reduced. The amount of the reduction will be credited to an
unallocated Employer Matching Contributions Account and will
reduce current or future Employer matching contributions.
(e) Members of Controlled Group. The determination of the
limitation on Annual Additions described in this Section 4.04
will be made considering the Employees of all members of a
controlled group of corporations or commonly controlled trades
or businesses [as defined in Code Sections 414(b) and (c) as
modified by Code Section 415(h)] or affiliated service groups
[as defined in Code Section 414(m)] of which the Employer is a
part as employed by a single employer. Such determination will
be made assuming the phrase "more than 50%" is substituted for
the phrase "at least 80%" each place it appears in Code Section
1563(a)(1).
4.05. Limitation of Reversion of Contributions
----------------------------------------
Except as provided in paragraphs (a) through (c) below,
contributions made under the Plan shall be held for the
exclusive benefit of Participants and their Beneficiaries and
may not revert to the Employer.
(a) In the case of a contribution which is made by the Employer
by a mistake of fact, such contribution shall be returned to the
Employer within one year after it is contributed to the Plan.
(b) In the case of a contribution conditioned on the Plan's
qualification under Code Section 401(a), if the Plan fails to
qualify initially, such contribution shall be returned to the
Employer within one year after the date that the Plan's
qualification is denied.
(c) In the case of a contribution conditioned upon its
deductibility under Code Section 404, to the extent the
deduction is disallowed, the amount disallowed shall be returned
to the Employer within one year after the disallowance.
ARTICLE V
INVESTMENT OF CONTRIBUTIONS AND VALUATION OF FUNDS
- --------------------------------------------------
5.01. Investment Funds
----------------
Each Participant will have his Employer Matching Contributions
Account, his Employee Deferral Account, his Voluntary
Contributions Account and his Rollover Account invested in the
Trust Fund.
5.02. Investment Fund Options
-----------------------
The Committee shall establish and maintain one or more
Investment Funds for the investment of Participant Accounts
under the Plan. Each sum credited to a Participant's Accounts
shall be invested in such Investment Funds by the Trustee
pursuant to directions received from the Participant. There
shall be six such Investment Funds, as hereinafter indicated:
(a) The Peoples Stock Fund shall be a common stock fund of the
Trustee which consists of a diversified portfolio of
high-quality common stocks. While awaiting investment in common
stocks, any cash held by the Trustee may be invested in common
or collective short-term investment funds of the Trustee.
(b) The Certificate of Deposit Fund shall be a fixed income
fund of the Plan which consists of investments in various
deposit instruments of The Peoples Banking and Trust Company or
The First National Bank of Southeastern Ohio, which bear a
reasonable interest rate. While awaiting investment into the
fixed income fund, any cash held by the Trustee may be invested
in common or collective short-term investment funds of the
Trustee.
(c) The Peoples Bancorp Stock Fund shall consist of common
shares of Peoples Bancorp Inc. While awaiting investment into
Peoples Bancorp Inc. common shares, any cash held by the Trustee
may be invested in common or collective short-term investment
funds of the Trustee.
(d) The Peoples Special Stock Fund shall be a common stock fund
which consists of a diversified portfolio of small company
common stocks and common stock mutual funds. While awaiting
investment in common stocks and/or common stock mutual funds,
any cash held by the Trustee may be invested in common or
collective short-term investment funds of the Trustee.
(e) The Acorn Fund shall be a common stock fund, managed by
Wanger Asset Management, L.P., which consists of a diversified
portfolio of common stocks of small and medium sized companies
in the United States and overseas. While awaiting investment in
Acorn Fund, any cash held by the Trustee may be invested in
common or collective short-term investment funds of the Trustee.
(f) The Vanguard S&P 500 Index Fund shall be a common stock
fund, managed by the Vanguard Group of Investment Companies,
which consists of a diversified portfolio of common stocks of
large companies in the United States. While awaiting investment
in the Vanguard S&P Index Fund, any cash held by the Trustee may
be invested in common or collective short-term investment funds
of the Trustee.
Each Participant will direct, at the time he elects to make
Participant deferrals, voluntary contributions and/or rollover
contributions, that contributions be invested in one or more of
the Investment Funds. If the Participant elects to have his
contributions invested in more than one such Investment Fund, he
shall designate the portion of contributions that will be
invested in each Investment Fund.
Any investment election given by a Participant for investment
of contributions will continue in effect until changed by the
Participant. A Participant may make or change an investment
election as of the first day of a quarter of the Plan Year by
submitting an instruction in a way prescribed by the Committee,
at least 15 days in advance (or such greater of lesser period as
the Committee may establish for purposes of administrative
convenience).
5.03. Qualifying Employer Securities
------------------------------
Notwithstanding any other provision of this Plan, the Plan is
authorized to invest and hold up to 100% of the Trust assets in
"qualifying employer securities" [as that term is defined in
Section 407(d)(5) of ERISA] and "bank deposits" [as that term is
defined in Section 4975(d)(4) of the Code]. The Plan may
purchase such common shares or other securities of the Employer
from the Employer or from any other source, and such common
shares or securities may be outstanding, newly issued or
treasury securities. All such purchases shall be made at fair
market values. If no common shares or other securities of the
Employer are available for purchase, the Plan may retain cash
uninvested or may invest all or any part thereof in any other
investment if such retention is prudent under all the facts and
circumstances then prevailing.
Each Participant may vote Employer securities, which are
entitled to vote and are allocated to the Accounts of such
Participant. The Trustee shall provide to each Participant
materials pertaining to the exercise of such rights containing
all of the information distributed to other shareholders of the
Employer. A Participant shall have the opportunity to exercise
any such rights within the same time period as other
shareholders of the Employer. In the exercise of voting
rights, votes representing fractional common shares and common
shares held in unallocated inventory shall be voted in the same
ratio for the election of Directors and for and against each
issue as the applicable vote directed by Participants with
respect to whole common shares .
Notwithstanding any other provision of this Plan, a Participant
who is entitled to a distribution from the Plan (other than a
hardship withdrawal or a withdrawal of his nondeductible
contributions) has a right to demand that his benefits be
distributed in the form of Employer securities to the extent his
Accounts reflect ownership of whole common shares or consist of
Employer securities.
5.04. Valuation of Trust Fund
-----------------------
As of each Valuation Date, the Trustee shall determine the
current market value of the net assets of the Trust Fund,
including the current market value of each Investment Fund
established by the Committee pursuant to Section 5.02.
ARTICLE VI
WITHDRAWALS OF PARTICIPANT DEFERRALS WHILE EMPLOYED
- ---------------------------------------------------
6.01. Withdrawal of Employee Deferral Accounts
----------------------------------------
Except as provided in Section 3.01(e) and Section 3.05, the
balance to the credit of a Participant in his Employee Deferral
Account shall not be distributable until the Participant's
retirement, death, disability, separation from service with the
Employer, termination of the Plan (provided a total distribution
is made and the Employer does not establish a successor plan),
the date of the sale by the Employer of all of its assets
(provided the affected Participant continues in the employ of
the corporation acquiring such assets) or the date of the sale
by the Employer of its interest in a subsidiary (provided the
affected Participant continues in the employ of the subsidiary),
except for any withdrawal distributions for hardship, if
permitted under Section 6.02 of the Plan. No portion of a
Participant's Employee Deferral Account shall be distributable
merely by reason of the completion of a stated period of
participation or the lapse of a fixed number of years.
6.02. Hardship Withdrawals
--------------------
Upon 15 days' written notice to the Committee and subject to
Committee approval, a Participant may withdraw all or a portion
of his Employee Deferral Account (excluding any earnings
credited thereto) as of the Valuation Date immediately preceding
his withdrawal request to the extent necessary to meet a
financial hardship. Requests for withdrawal pursuant to this
Section 6.02 may only be made once in a 12-month period. The
amount of any withdrawal under this section due to financial
hardship shall not be less than $500 nor in excess of the amount
necessary to meet such financial hardship plus any amounts
necessary to pay any federal, state or local income taxes
reasonably anticipated to result from the withdrawal. For
purposes of the Plan, a financial hardship shall include any of
the following events:
(a) expenses for medical care described in Code Section 213(d)
previously incurred by the Participant or his Spouse or
dependents (as defined in Code Section 152) or necessary for
these persons to obtain medical care described in Code Section
213(d);
(b) costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage payments);
(c) the payment of tuition and related educational fees for the
next 12 months of post-secondary education for the Participant,
his Spouse, children or dependents; or
(d) payments necessary to prevent the eviction of the
Participant from the Participant's principal residence or
foreclosure on the mortgage on that residence.
An application for withdrawal pursuant to this section may only
be approved by the Committee if a Participant either (a)
certifies that his financial need cannot be met by insurance,
reasonable liquidation of assets (not itself creating a
hardship), cessation of Participant deferrals, by other
distributions or nontaxable loans from plans maintained by the
Employer or by borrowing from commercial sources on reasonable
commercial terms; or (b) elects to (i) first obtain all other
distributions and all other nontaxable loans currently available
under the Plan and any other Plans maintained by the Employer;
(ii) suspend his Participant deferrals and contributions to this
Plan and all other plans maintained by the Employer for a period
of 12 months following his receipt of a hardship distribution
pursuant to this section; and (iii) have his Participant
deferrals to this Plan for his taxable year immediately
following the taxable year of the hardship distribution limited
to the applicable limit on Participant deferrals under Section
402(g) of the Code minus his Participant deferrals for the
taxable year of the hardship distribution.
6.03. Withdrawal of Nondeductible Contributions
-----------------------------------------
A Participant shall, upon 30 days' prior written notice to the
Committee, be entitled to withdraw at any time his entire
Voluntary Contributions Account, or any portion of such
Voluntary Contributions Account. Requests for withdrawal
pursuant to this Section 6.03 may only be made once in a
12-month period.
6.04. Amount and Payment of Withdrawals
---------------------------------
All withdrawals under Article VI shall be effective as of the
Valuation Date immediately preceding the date the Committee
receives a timely withdrawal request from the Participant. The
amount of such withdrawal shall be taken from the Participant's
Account as of such Valuation Date and paid to the Participant in
a single lump sum as soon as administratively possible.
ARTICLE VII
AMOUNT AND DISTRIBUTION OF BENEFITS
- -----------------------------------
7.01. Retirement Benefits
-------------------
The retirement benefit payable under the Plan in the case of a
Participant whose employment with the Employer is terminated on
or after his Normal Retirement Age shall be 100% of his Accounts
on the Valuation Date immediately following his termination of
employment if the termination of employment occurs after the
mid-point of any calendar quarter. If the Participant's
termination of employment occurs on or before the mid-point of a
calendar quarter, the benefit payable shall be 100% of the
Participant's Accounts on the Valuation Date immediately
preceding his termination of employment, plus any contributions
and earnings subsequently allocated to such Accounts and less
any subsequent distributions from and losses subsequently
allocated to such Accounts.
7.02. Death Benefits
--------------
The death benefit payable to a Beneficiary under the Plan in
the case of a Participant whose employment with the Employer is
terminated due to his death shall be 100% of his Accounts on the
Valuation Date immediately following the Participant's death if
the death occurs after the mid-point of any calendar quarter.
If the Participant's death occurs on or before the mid-point of
a calendar quarter, the benefit payable shall be 100% of the
Participant's Accounts on the Valuation Date immediately
preceding his death, plus any contributions and earnings
subsequently allocated to such Accounts and less any subsequent
distributions from and losses subsequently allocated to such
Accounts.
7.03. Disability Benefits
-------------------
The disability benefit payable under the Plan in the case of a
Participant who becomes totally and permanently disabled shall
be 100% of his Accounts on the Valuation Date immediately
following the date of his total and permanent disability if the
termination of employment occurs after the mid-point of any
calendar quarter. If the Participant's termination of
employment occurs on or before the mid-point of a calendar
quarter, the benefit payable shall be 100% of the Participant's
Accounts on the Valuation Date immediately preceding his
termination of employment, plus any contributions and earnings
subsequently allocated to such Accounts and less any subsequent
distributions from and losses subsequently allocated to such
Accounts. A Participant shall be deemed totally and permanently
disabled if the Participant qualifies for Social Security
disability benefits.
7.04. Benefits Upon Termination of Employment
---------------------------------------
The benefit payable under the Plan in the case of a Participant
whose employment with the Employer is terminated for any reason
other than retirement, death or disability shall be 100% of his
Accounts, as of the Valuation Date immediately following his
termination of employment if the termination of employment
occurs after the mid-point of any calendar quarter. If the
Participant's termination of employment occurs on or before the
mid-point of a calendar quarter, the benefit payable shall be
100% of the Participant's Accounts on the Valuation Date
immediately preceding his termination of employment, plus any
contributions and earnings subsequently allocated to such
Accounts and less any subsequent distributions from and losses
subsequently allocated to such Accounts.
7.05. Distribution of Benefits
------------------------
(a) At the time a Participant becomes entitled to receive any
amount because of his retirement, death, disability or
termination of employment, the Trustee, acting in accordance
with the written instructions of the Committee, shall either
make payment from the Trust Fund to such Participant or his
Beneficiary (i) in a lump sum; or (ii) in such periodic
installments as may be elected by the Participant or Beneficiary
over a time period not to exceed 10 years.
Effective January 1, 1993, if a Participant is entitled to a
distribution under this Section 7.05 which qualifies as an
Eligible Rollover Distribution and he (a) elects to have such
distribution paid directly to an Eligible Retirement Plan; and
(b) specifies the Eligible Retirement Plan to which such
distribution is to be paid (in a manner required by the Plan
Administrator), such distribution shall be made from the Plan in
the form of a direct trustee-to-trustee transfer to the Eligible
Retirement Plan so specified. The preceding sentence shall only
be applicable to the extent that a Participant's Eligible
Rollover Distribution would be includible in the Participant's
gross income if it were not transferred to an Eligible
Retirement Plan. For purposes of this paragraph, the term
"Eligible Rollover Distribution" shall have the meaning given to
such term under Section 401(a)(31)(C) of the Code and the term
"Eligible Retirement Plan" shall have the meaning given to such
term under Section 401(a)(31)(D) of the Code.
If a Participant's Accounts are to be distributed in other than
an immediate lump sum, minimum annual payments under the Plan
must be paid over one of the following periods (or a combination
thereof):
(i) a period certain not extending beyond the life expectancy
of the Participant; or
(ii) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
Beneficiary.
(b) If the Participant's Accounts are to be distributed in
other than a lump sum, then the amount to be distributed each
year must be at least an amount equal to the quotient obtained
by dividing the total amount of the Participant's Accounts by
the life expectancy of the Participant or joint and last
survivor expectancy of the Participant and designated
Beneficiary. If the Participant's Spouse is not the designated
Beneficiary, the method of distribution selected must assure
that at least 50% of the present value of the amount available
for distribution is paid within the life expectancy of the
Participant.
If the distribution of the Participant's Accounts has begun and
he dies before such Accounts have been distributed to him, the
remaining portion of such Accounts will be distributed at least
as rapidly as under the method of distribution being used prior
to the Participant's death.
Subject to the succeeding paragraph, if the Participant dies
before his distribution has begun, his Accounts shall be
distributed within five years of his death unless (i) a portion
of such Accounts is payable to or on behalf of a designated
Beneficiary; (ii) such portion will be distributed over the life
of such designated Beneficiary; and (iii) such distribution
begins not later than one year after the date of the
Participant's death (or such date as prescribed by the Secretary
of Treasury).
Notwithstanding the preceding paragraph, if the designated
Beneficiary is the Participant's Surviving Spouse, the date by
which the distribution must commence under (iii) in the
preceding paragraph shall be the date the Participant would have
attained age 70 1/2. If the Surviving Spouse dies before
distribution to said Spouse begins, this section shall apply as
if the Surviving Spouse were the Participant. Life expectancy
of a Surviving Spouse may be recalculated annually; however, in
the case of any other designated Beneficiary, such life
expectancy will be calculated at the time that payment first
commences without further calculations. In addition, any amount
paid to a child of the Participant will be treated as if it had
been paid to the Surviving Spouse if the amount becomes payable
to the Surviving Spouse when the child reaches the age of
majority.
7.06. Timing of Distributions
-----------------------
(a) Distributions under the Plan pursuant to this Article VII
will begin as soon as practicable, but, unless otherwise elected
by the Participant, not later than 60 days following the end of
the Plan Year in which the Participant attains age 65,
celebrates his tenth anniversary of participation in the Plan or
terminates employment, whichever is latest. In no event will
the entire interest of a Participant be distributed, or commence
to be distributed, later than April 1 following the year in
which the Participant attains age 70 1/2.
(b) Notwithstanding the previous paragraph, if a Participant
terminates service and the value of his Accounts does not exceed
$3,500 (and did not exceed $3,500 at the time of any prior
distribution), the Participant shall receive a distribution of
the value of his Accounts as soon as administratively feasible
following his termination of service. If a Participant
terminates service and the value of his Accounts exceeds $3,500
(or exceeded $3,500 at the time of any prior distribution), the
Participant may elect to receive a distribution of the value of
his Accounts as soon as administratively feasible following his
termination of service. For purposes of this paragraph, if the
value of a Participant's Accounts is zero, the Participant shall
be deemed to have received a distribution of such Accounts.
ARTICLE VIII
DEFERRAL PLAN COMMITTEE
- -----------------------
8.01. Appointment of Committee
------------------------
A Deferral Plan Committee consisting of not less than three
members nor more than five members shall be appointed by the
Board of Directors of the Employer to administer the Plan.
Vacancies in the Committee, which result from death, resignation
or otherwise, shall be filled from time to time by appointment
of a new Committee member by the Employer; and any member of the
Committee may be removed at any time at the discretion of the
Employer.
8.02. Powers and Duties
-----------------
(a) The Committee shall, in its discretion, have full power to
administer the Plan and to construe and apply all of its
provisions on behalf of the Employer. The Employer shall be the
Named Fiduciary within the meaning of Section 402(a) of ERISA
for purposes of Plan administration. The Committee may delegate
to any other person or organization any of its powers and duties
with respect to the operation of this Plan. The Committee's
powers and duties, unless properly delegated, shall include, but
shall not be limited to
(i) deciding questions relating to eligibility, continuity of
service and amount of benefits;
(ii) deciding disputes which may arise with regard to the
rights of Employees, Participants and their legal
representatives or Beneficiaries under the terms of the
Plan. Such decisions by the Committee shall be deemed
final in each case;
(iii) obtaining such information from the Employer with
respect to its Employees as shall be necessary to
determine the rights and benefits of such Employees
under the Plan. The Committee may rely conclusively
upon such information furnished by the Employer;
(iv) compiling and maintaining all records necessary for the
Plan;
(v) furnishing the Employer, upon request, such reports with
respect to the administration of the Plan as are
reasonable and appropriate;
(vi) authorizing the Trustee to make payment of all benefits
as they become payable under the Plan;
(vii) engaging such legal, administrative, actuarial,
investment, accounting, consulting and other professional
services as the Committee deems proper;
(viii) adopting rules and regulations for the administration
of the Plan not inconsistent with the Plan;
(ix) doing and performing such other actions as may be
provided for in other parts of this Plan.
(b) The Committee shall determine whether domestic relations
orders represent "qualified domestic relations orders" as that
term is defined in Code Section 414(p) or a successor provision.
If the Committee determines the order is a qualified domestic
relations order, it shall direct the manner and time of
distribution pursuant to the order. Prior to such
determination, the Committee shall promptly notify the
Participant affected with respect to the order and any payee
under the order of the receipt of the order. The Committee
shall send such notices to the address set forth in the order,
or if the address is not set forth therein, to the last known
address. Such notice shall state that the Committee is in the
process of determining whether the order is a qualified domestic
relations order and such notice shall also permit a reasonable
period under the circumstances for comment with respect to such
determination. During such period, the Committee shall cause
the amounts otherwise payable under the order to be segregated
in a separate account. After the determination is made, the
Committee shall notify the Participant and any payee under the
order of such determination. Any payee may designate a
representative for receipt of copies of notices sent to the
payee with respect to the order.
8.03. Actions by the Committee
------------------------
The Committee may act at a meeting, or in writing without a
meeting, by the vote or assent of a majority of its members.
The Committee shall appoint one of its members to act as a
secretary to record all action taken by it. The Committee shall
have authority to designate in writing one or more of its
members as the person(s) authorized to execute papers and
perform other ministerial duties on behalf of the Committee.
8.04. Interested Committee Members
----------------------------
No member of the Committee shall participate in any action of
the Committee on a matter in which such member has a specialized
individual interest as a Participant in the Plan. Such matters
shall be determined by a majority of the remainder of the
Committee.
8.05. Indemnification
---------------
The Employer shall indemnify and hold harmless any person who
is or was a member of the Committee or any person who is or was
an employee who performs or performed services with respect to
the Plan against all liabilities and all reasonable expenses
(including, without limitation, counsel fees and amounts paid in
settlement other than to the Employer) incurred or paid in
connection with any threatened or pending action, suit or
proceeding to which such person (or his executor, administrator
or other legal representative) may be made a party or in which
such person may otherwise be involved by reason of the fact that
he serves or has served as a member of the Committee or
otherwise performs or has performed services with respect to the
Plan; provided that (a) if such action, suit or proceeding shall
be prosecuted against such person (or his executor,
administrator or other legal representative) to final
determination on the merits or otherwise, it shall not be
finally adjudged in such action, suit or proceeding that such
person is liable for gross negligence or willful misconduct in
the performance of his duty to the Employer or the Plan in
relation to the matter or matters in respect of which
indemnification is claimed; or (b) if such action, suit or
proceeding shall be settled or otherwise terminated as against
such person (or his executor, administrator or other legal
representative) without a final determination, it shall be
determined that such person was not guilty of gross negligence
or willful misconduct in the performance of his duty to the
Employer or the Plan in relation to the matter or matters in
respect of which indemnification is claimed, such determination
to be made by a majority of the members of the Board of
Directors of the Employer or by independent counsel to whom the
question may be referred by the Board of Directors.
The Employer's obligations under this section may be satisfied
through the purchase of a policy or policies of insurance
providing equivalent protection.
8.06. Conclusiveness of Action
------------------------
Any action on matters within the discretion of the Committee
shall be conclusive, final and binding upon all Participants of
the Plan and upon all persons claiming any rights hereunder
including Beneficiaries.
8.07. Payment of Expenses
-------------------
The members of the Committee shall serve without compensation
for services as such. Notwithstanding the preceding sentence,
the Trust Fund shall reimburse the Committee and its members for
all necessary and proper expenses incurred in carrying out their
duties under the Plan. The compensation or fees of accountants,
counsel and other specialists may be paid directly by the
Employer or by the Trust Fund; and any other costs of
administering the Plan or Trust may be charged to the Trust;
and, at the discretion of the Employer, such costs may be
reimbursed by the Employer.
8.08. Claims Procedure
----------------
(a) A Participant or Beneficiary or the Employer acting on
behalf of such Participant or Beneficiary shall notify the
Committee of a claim for benefits under the Plan. Such request
shall be in writing to the Committee and shall set forth the
basis of such claim and shall authorize the Committee to conduct
such examinations as may be necessary for the Committee to
determine, in its discretion, the validity of the claim and to
take such steps as may be necessary to facilitate the payment of
benefits to which the Participant or Beneficiary may be entitled
under the terms of the Plan.
A decision by the Committee shall be made promptly and not
later than 90 days after the Committee's receipt of the claim of
benefits under the Plan, unless special circumstances require an
extension of the time for processing; in which case, a decision
shall be rendered as soon as possible, but not later than 180
days after the initial receipt of the claim for benefits.
(b) Whenever a claim for benefits by any Participant or
Beneficiary has been denied by the Committee, a written notice
prepared in a manner calculated to be understood by the
Participant or Beneficiary must be provided setting forth
(i) the specific reasons for the denial;
(ii) the specific reference to the pertinent Plan provisions
on which the denial is based;
(iii) a description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is
necessary; and
(iv) an explanation of the Plan's claim review procedure.
(c) Upon denial of his claim by the Committee, a Participant or
Beneficiary
(i) may request a review by a named fiduciary, other than the
Committee, upon written application to the Employer;
(ii) may review pertinent Plan documents; and
(iii) may submit issues and comments in writing to a named
fiduciary.
A Participant or Beneficiary shall have 60 days after receipt
by the claimant of written notification of a denial of a claim
to request a review of a denied claim.
A decision by a named fiduciary shall be made promptly and not
later than 60 days after the named fiduciary's receipt of a
request for review, unless special circumstances require an
extension of the time for processing; in which case, a decision
shall be rendered as soon as possible, but not later than 120
days after receipt of a request for review. The decision on
review by a named fiduciary shall be in writing and shall
include specific reasons for the decision, written in a manner
calculated to be understood by the claimant, and specific
references to the pertinent Plan provisions on which the
decision is based.
ARTICLE IX
AMENDMENT TO THE PLAN
- ---------------------
9.01. Right to Amend
--------------
The Employer shall have the right at any time, by an instrument
in writing, to modify, alter or amend this Plan in whole or in
part; provided, however, that no such amendment shall in any way
affect the vested rights of the Participants under this Plan.
The Board of Directors of the Employer, an executive committee
of the Board of Directors, or other committee of the Board of
Directors or any executive officer to which or whom the Board of
Directors delegates discretionary authority with respect to the
Plan, may exercise the Employer's right to amend the Plan. If
an amendment changes the vested rights provided in this Plan,
each Participant having not less than three Years of Service may
elect, during the period beginning when the amendment is adopted
and ending no earlier than the latest of (a) 60 days after the
amendment's adoption; (b) 60 days after the amendment's
effective date; or (c) 60 days after the Participant is issued a
written notice of the amendment, to have his vested rights
computed without regard to such amendment. No amendment shall
be made to this Plan which shall attempt to transfer any part of
the corpus or income of the Trust to purposes other than the
exclusive benefit of Participants and their Beneficiaries. No
amendment to the Plan shall eliminate or reduce an early
retirement benefit or eliminate an optional form of distribution.
ARTICLE X
TERMINATION OF THE PLAN
- -----------------------
10.01. Right to Terminate
------------------
The Employer shall have the right to terminate the Plan in
whole or in part at any time. The Board of Directors of the
Employer, an executive committee of the Board of Directors, or
other committee of the Board of Directors or any executive
officer to which or whom the Board of Directors delegates
discretionary authority with respect to the Plan, may exercise
the Employer's right to terminate the Plan. In the event of a
termination, partial termination or complete discontinuation of
contributions, each affected Participant shall be 100% vested in
the value of all his Accounts.
10.02. Plan Merger and Consolidation
-----------------------------
If the Plan is merged or consolidated with any other plan, or
if the assets or liabilities of the Plan are transferred to any
other plan, each Participant shall be entitled to a distribution
immediately after such merger, consolidation or transfer
(determined as if such plan then terminated) at least equal to
the distribution to which he would have been entitled had the
Plan terminated immediately prior to such merger, consolidation
or transfer.
10.03. Successor Employer
------------------
In the event of the dissolution, merger, consolidation or
reorganization of the Employer, provision may be made by which
the Plan and Trust will be continued by the successor; and, in
that event, such successor shall be substituted for the Employer
under the terms and provisions of this Trust Agreement upon the
filing in writing of its election to do so with the Trustee and
acceptance by the Trustee, and providing such successor meets
the requirements of the Code. The substitution of the successor
shall constitute an assumption of Plan liabilities by the
successor; and the successor shall have all of the powers,
duties and responsibilities of the Employer under the Plan.
ARTICLE XI
TRUST AND THE TRUSTEE
- ---------------------
11.01. Employer to Select Trustee
--------------------------
The Employer shall select a Trustee to hold and invest the
Trust Fund in accordance with the terms of a Trust Agreement.
The Trustee shall be a bank or trust company incorporated under
the laws of the United States or of any state and qualified to
operate as a trustee or a combination of such entities or an
individual. The Employer may, from time to time, change the
Trustee then serving under the Trust Agreement to another
Trustee or elect to terminate the Trust and hold the Plan assets
in any other method acceptable under ERISA.
The Trustee shall invest, manage, acquire and dispose of the
Plan's assets. However, the Employer may, in its sole
discretion, retain an investment manager [as defined in Section
3(38) of ERISA] to direct the manner in which some or all of the
Plan's assets are invested, managed, acquired or disposed of by
the Trustee. The Trustee shall be the Named Fiduciary within
the meaning of ERISA with respect to the investment, management
and control of the Trust Fund, unless such duties are delegated
to an investment manager or otherwise delegated under the terms
of the Trust Agreement. The Trust Agreement may include
provision for participation in a joint or associated Trust Fund
or pooled separate account for the purpose of pooling investment
experience.
ARTICLE XII
TOP HEAVY PLAN PROVISIONS
- -------------------------
12.01. Definitions
-----------
If the Plan is or becomes top heavy in any Plan Year, the
provisions of this Article XII will supersede any conflicting
provisions in the Plan. The following definitions and rules are
necessary to comply with related federal tax requirements:
(a) Key Employee: Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the
determination period was (i) an officer of the Employer if such
individual's annual compensation exceeds 50% of the dollar
limitation under Code Section 415(b)(1)(A); (ii) an owner (or an
individual who is considered an owner under Code Section 318) of
one of the ten largest interests in the Employer if such
individual's annual compensation exceeds the dollar limitation
under Code Section 415(c)(1)(A); (iii) a 5% owner of the
Employer; or (iv) a 1% owner of the Employer who has annual
compensation of more than $150,000. For purposes of this
section, annual compensation means compensation as defined in
Code Section 415(c)(3), but including amounts contributed by the
Employer pursuant to a salary reduction agreement which are
excludable from the Employee's gross income under Code Section
125, 402(a)(8), 402(h) or 403(b). The determination period is
the Plan Year containing the Determination Date and the four
preceding Plan Years. The determination of who is a Key
Employee will be made in accordance with Code Section 416(i)(1)
and the regulations thereunder.
(b) Non-Key Employee: Any Employee or former Employee of the
Employer who is not a Key Employee. The Beneficiary of a
Non-Key Employee will be treated as a Non-Key Employee, and the
Beneficiary of a former Non-Key Employee will be treated as a
former Non-Key Employee.
(c) Determination Date: For any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan Year. For
the first Plan Year, the last day of such Plan Year.
(d) Permissive Aggregation Group: The Required Aggregation
Group of plans plus any other plan or plans of the Employer
which, when considered as a group with the Required Aggregation
Group, would continue to satisfy the requirements of Code
Sections 401(a)(4) and 410.
(e) Required Aggregation Group: (i) Each qualified plan of the
Employer in which at least one Key Employee participates or
participated at any time during the determination period
(regardless of whether the Plan has terminated); and (ii) any
other qualified plan of the Employer which enables a plan
described in (i) to meet the requirements of Code Section
401(a)(4) or 410.
(f) Top Heavy Plan: The Plan, if it meets the requirements of
Section 12.02.
12.02. Top Heavy Status
----------------
This Plan, and any other plans aggregated with it, will become
top heavy pursuant to this Section 12.02, as of the
Determination Date, if the present value of accrued benefits for
Key Employees is more than 60% (90% in the case of "super top
heavy") of the sum of the present value of accrued benefits of
all Employees, excluding former Key Employees. In the case of
more than one plan which is to be aggregated, the present value
of the accrued benefits (including distributions for Key
Employees and all Employees) is first determined separately for
each plan as of each plan's determination date. The plans then
will be aggregated by adding the results of each plan as of the
determination dates for such plans that fall within the same
calendar year. The combined results will indicate whether the
plans are top heavy. For purposes of any plan that is
aggregated with this Plan, such computations shall be made, for
such plan, by using the interest rate and mortality assumptions
contained in such plan.
The Account balances and accrued benefits of a Participant who
has not performed services for the Employer maintaining the Plan
during the five-year period ending on the Determination Date
will be disregarded.
The present value of accrued benefits as of the Determination
Date for any individual is the sum of (a) the Account balance as
of the most recent Valuation Date occurring within a 12-month
period ending on the Determination Date; (b) an adjustment for
contributions due as of the Determination Date; and (c) the
aggregate distributions made with respect to such individual
under the Plan during the five-year period ending on the
Determination Date. For a profit sharing plan, the adjustment
in (b) is generally the amount of contributions actually made
after the Valuation Date but on or before the Determination Date.
In determining whether the Plan is top heavy, it must be
aggregated with each plan included in the Required Aggregation
Group. In addition, the Employer may aggregate plans included
in the Permissive Aggregation Group.
12.03. Minimum Contributions
---------------------
For each Plan Year in which the Plan is top heavy, each
Participant who is a Non-Key Employee (including those
Participants who did not complete 1,000 Hours of Service in the
Plan Year) must receive an annual allocation of contributions
(disregarding Social Security benefits) equal to at least 3% of
his Compensation; provided that, if the largest percentage of
Compensation allocated to a Key Employee for a Plan Year is less
than 3%, that largest percentage will be substituted for 3%.
For any year in which the Employer maintains a defined benefit
plan in addition to this Plan, the requirements of this
paragraph will be satisfied by providing each Non-Key Employee
with the 2% minimum annual benefit provided under the top heavy
provisions of the defined benefit plan. For any year in which
the Employer maintains another defined contribution plan in
addition to this Plan, the minimum benefit described in this
paragraph shall be provided by such other defined contribution
plan.
ARTICLE XIII
MISCELLANEOUS
- -------------
13.01. Voluntary Plan
--------------
The Plan is purely voluntary on the part of the Employer; and
neither the establishment of the Plan nor any amendment thereof
nor the creation of any fund or account nor the payment of any
benefits shall be construed as giving any person a legal or
equitable right against the Employer, the Trustee or the
Committee unless the same shall be specifically provided for in
this Plan or conferred by affirmative action of the Committee or
the Employer in accordance with the terms and provisions of this
Plan. Nor shall such actions be construed as giving any
Employee or Participant the right to be retained in the service
of the Employer. All Employees and/or Participants shall remain
subject to discharge to the same extent as though this Plan had
not been established.
13.02. Designation of Dates
--------------------
Whenever any date designated herein shall fall on a Saturday,
Sunday or holiday, the next succeeding day which is not a
Saturday, Sunday or holiday will be substituted therefor, except
that where a date is designated as the last day of a period and
such date falls on a Saturday, Sunday or holiday, the next
preceding day which is not a Saturday, Sunday or holiday shall
be substituted therefor.
13.03. Non-alienation of Benefits
--------------------------
Participants and their Beneficiaries shall be entitled to all
the benefits specifically set out under the terms of the Plan,
but said benefits or any of the property rights therein shall
not be assignable or distributable to any creditor or other
claimant of such Participant. A Participant shall not have the
right to anticipate, assign, pledge, accelerate or in any way
dispose of or encumber any of the monies or benefits or other
property which may be payable or become payable to such
Participant or his Beneficiary. The preceding sentence shall
also apply to the creation, assignment or recognition of a right
to any benefit payable with respect to a Participant pursuant to
a domestic relations order, unless such order is determined to
be a qualified domestic relations order, as defined in Code
Section 414(p) and determined pursuant to Section 8.02(b) of the
Plan.
13.04. Participant Loans
-----------------
The Committee shall direct the Trustee to loan a Participant or
Beneficiary an amount from his Accounts, on a reasonably
equivalent basis and in accordance with the following rules:
A Participant's loan, when added to the balance of any other
outstanding loans the Participant may have under this Plan or
any other qualified retirement plan maintained by the Employer
or an Affiliate, shall not exceed the lesser of
(a) $50,000 reduced to the extent of (i) the highest
outstanding loan balance of the Participant's loans outstanding
during the immediately prior 12-month period (ending the day
before the new loan is granted) over (ii) the total of all
outstanding loans the day the new loan is granted; or
(b) 50% of the Participant's Total Vested Account Balance.
For purposes of this section, "Total Vested Account Balance"
means the total dollar value as of the Valuation Date coinciding
with or immediately preceding the date of the loan, of the
vested portion of the Participant's Employer Matching
Contributions Account, Voluntary Contributions Account and
Employee Deferral Account.
In addition to such rules and regulations as the Committee may
adopt, all loans shall comply with the following terms and
conditions:
(a) all loans shall be subject to the approval of the Committee
or its agent;
(b) an application for a loan by a Participant shall be made in
writing to the Committee or its agent, whose action thereon
shall be final;
(c) in reviewing applications for loans, the Committee shall
apply nondiscriminatory criteria to determine whether to
approve or deny an applicant's request;
(d) the period of repayment for any loan shall be arrived at by
mutual agreement between the Committee or its agent and the
borrower, but all loans shall become due and payable upon
termination of employment and the period in no event shall
exceed five years, except that a ten-year repayment rule shall
apply to any loan used for the purpose of establishing or
preserving a home which is the Participant's principal residence;
(e) each loan shall be made at a reasonable rate of interest,
based upon prevailing interest rates for similar loans in the
surrounding business community in which the Plan is administered;
(f) each loan shall be treated as a separate investment of the
funds credited to such Participant's Accounts and the Committee
shall reduce such Participant's Accounts in any Investment Funds
as the Participant has so directed;
(g) payments by a Participant on any such loan shall be
credited to such Participant's Accounts in the various
Investment Funds in the same proportions as the Participant's
deferral contributions are made to such Investment Funds at the
time such loan payments are made;
(h) an amount equal to all unpaid loans to such Participant,
including accrued interest thereon, shall be deducted from the
amount otherwise distributable to any Participant or to a
Beneficiary of any such Participant pursuant to Article VII for
purposes of repayment of such loans;
(i) repayment of loans shall be by payroll deduction or other
approved method on a level amortization basis except that a
Participant may prepay the outstanding principal balance of his
loan at any time;
(j) the Committee will also notify the Participant that, to the
extent his loan is secured by the balance in his Employee
Deferral Account, no interest deduction is allowable;
(k) loans shall be made available to all Participants and
Beneficiaries on a reasonably equivalent basis;
(l) loans shall not be made available to Highly-Compensated
Employees in an amount greater than the amount made available to
other Employees;
(m) each loan shall be secured by the balance remaining in the
Participant's Accounts and/or by such other security usually and
customarily utilized in the banking industry as the Committee
may deem adequate;
(n) the Committee shall approve and deny loans on a
nondiscriminatory basis using criteria customary and usual in
the banking industry;
(o) no participant loan shall exceed the present value of the
Participant's Accounts;
(p) a Participant must obtain the consent of his or her Spouse,
if any, to use of his Accounts as security for the loan.
Spousal consent shall be obtained no earlier than the beginning
of the 90-day period that ends on the date on which the loan is
to be secured. The consent must be in writing, must acknowledge
the effect of the loan and must be witnessed by a Plan
representative or notary public. Such consent shall thereafter
be binding with respect to that loan. A new consent shall be
required if the Accounts are used for renegotiation, extension,
renewal or other revisions of the loan; and
(q) in the event of default, foreclosure on the note and
attachment of security will not occur until a distributable
event occurs in the Plan.
If a valid spousal consent has been obtained in accordance with
(q), then, notwithstanding any other provision of this Plan, the
portion of the Participant's Accounts used as a security
interest held by the Plan by reason of a loan outstanding to the
Participant shall be taken into account for purposes of
determining the amount of the Accounts payable at the time of
death or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the Participant's
Accounts (determined without regard to the preceding sentence)
are payable to the Surviving Spouse, then the Accounts shall be
adjusted by first reducing the Accounts by the amount of the
security used as repayment of the loan and then determining the
benefit payable to the Surviving Spouse.
13.05. Inability to Receive Benefits
-----------------------------
If the Committee receives evidence that (a) a person entitled
to receive any payment under the Plan is physically or mentally
incompetent to receive payment and to give a valid release
therefor; and (b) another person or an institution is then
maintaining or has custody of such person and no guardian,
committee or other representative of the estate of such person
has been duly appointed by a court of competent jurisdiction,
such payment may be made to such other person or institution
referred to in (b) above. The release to such other person or
institution shall be a valid and complete discharge for the
payment.
13.06. Lost Participants
-----------------
If the Committee is unable, after reasonable and diligent
effort, to locate a Participant or Beneficiary who is entitled
to payment under the Plan, the payment due such person shall
become a forfeiture (and applied to reduce Employer
contributions); provided, however, that if the Participant or
Beneficiary later files a claim for his benefit, it shall be
reinstated. Notification by certified or registered mail to the
last known address of the Participant or Beneficiary shall be
deemed a reasonable and diligent effort to locate such person.
13.07. Limitation of Rights
--------------------
Nothing in the Plan, expressed or implied, is intended or shall
be construed to confer upon or give to any person, firm or
association other than the Employer, the Participants and their
successors in interest any right, remedy or claim under or by
reason of this Plan.
13.08. Gender
------
Whenever used in this Plan, the masculine pronoun refers to
both men and women.
13.09. Invalid Provision
-----------------
In case any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not
affect the remaining parts of this Plan; but this Plan shall be
construed and enforced as if said illegal and invalid
provision(s) had never been inserted herein.
13.10. One Plan
--------
This Plan may be executed in any number of counterparts, each
of which shall be deemed an original; and said counterparts
shall constitute but one and the same instrument and may be
sufficiently evidenced by any one counterpart.
13.11. Governing Law
-------------
The Plan shall be governed by and construed in accordance with
the federal laws governing employee benefit plans qualified
under the Code and in accordance with the local laws of the
State of Ohio where such laws are not in conflict with the
aforementioned federal laws.
IN WITNESS WHEREOF, the undersigned has caused this Plan to be
executed by a duly authorized individual effective as of the
date first above written.
PEOPLES BANCORP INC.
By: /s/ LARRY HOLDREN
Larry Holden, Executive
Vice President - Personnel
Date: December 28, 1995