EXHIBIT 10.5
Employee Stock Ownership and Savings Plan of the Company (401K)
EXHIBIT 10.5
Profit Sharing/401(k) Savings Plan
The Company also maintains an employee stock ownership and
savings plan (the "Profit Sharing/Savings Plan"), which is
designed to provide discretionary contributions by the Company to
eligible employees' accounts based upon the profitability of the
Company and to provide a means of voluntary tax-free salary
deferral for employees pursuant to Section 401(k) of the Internal
Revenue Code. The profit sharing aspect of the Profit
Sharing/Savings Plan, which is incorporated into the
Company's ESOP, provides for discretionary contributions by the
Company in the form of the Company's common stock or cash which
will be used predominantly to purchase common stock of the
Company. The Company may, at its sole discretion, credit eligible
participants' accounts with cash or the Company's common stock of
up to three percent of the employee's annual compensation.
Eligibility requirements, vesting parameters, termination and
distribution rules are substantially identical to those of the
Pension Plan.
The Profit Sharing/Savings Plan also contains a 401(k) salary
deferral provision, which enables eligible employees to defer a
percentage of their annual compensation, not to exceed the
maximum amount permitted under the Internal Revenue Code. The
Company also matches, dollar-for-dollar, the amount deferred by
eligible employees, for a maximum matching contribution of three
percent of the participant's annual compensation. Participants
may direct their deferral compensation, including any matching
contributions, into several investment alternatives.
The Profit Sharing/401(k) Savings Plan, as amended, follows this
description.
MID AM, INC.
EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
TABLE OF CONTENTS
ARTICLE I DEFINITIONS ................................... 2
l.0l Acquired Employer ...................................... 2
1.02 Anniversary Date....................................... 2
1.03 Annual Compensation.................................... 2
1.04 Code................................................... 2
l.05 Company................................................ 2
1.06 Employee............................................... 3
1.07 Employer............................................... 3
1.08 Entry Date............................................. 3
1.09 ERISA.................................................. 3
1 l0 ESOP.................................................... 3
1.11 Hour of Service......................................... 3
1.12 Named Fiduciary..........................................4
1.13 Normal Retirement Age....................................4
1.14 Normal Retirement Date...................................4
l.15 Participant..............................................4
l.l6 Plan.....................................................5
1.17 Plan Administrator.......................................5
1.18 Plan Year................................................5
l.l9 Qualified Election.......................................5
1.20 Qualifying Employer Securities...........................5
1.21 Self-Employed Person.....................................5
1.22 Trustee..................................................5
1.23 Trust Fund...............................................5
1.24 Year of Service..........................................6
ARTICLE ELIGIBILITY...........................................7
2.01- Eligibility.............................................7
2.02 Eligibility Upon Re-Employment...........................7
2.03 Eligibility for Employees of an Acquired Employer........7
ARTICLE III CONTRIBUTIONS.....................................8
3.01 Employer Contributions...................................8
3.02 Rollover Contributions..................................10
ARTICLE IV ALLOCATIONS.......................................11
4.01 Participant Accounts....................................11
4.02 Annual Allocations......................................12
4.03 Annual Report to Participants ..........................12
ARTICLE V BENEFITS TO PARTICIPANTS ..........................13
5.0l Upon Retirement or Disability..........................13
5.02 Upon Death.............................................13
5.03 Upon Termination of Employment.........................14
5.04 Certification by Plan Administrator....................17
ARTICLE VI DISTRIBUTIONS....................................18
6.01 Method and Medium of Payment...........................18
6.02 Special ESOP Distribution Requirements ................21
6.03 Mandatory Commencement of Benefits ....................22
6.04 Distributions After Death of a Participant ............24
6.05 Right to Have Accounts Transferred ....................24
6.06 Distribution of Excess Deferrals ......................25
6.07 Restrictions on Distributions of Compensation Deferral
Contributions .........................................25
6.08 Loans to Participants .................................26
6.09 Cash Dividend Option ..................................27
6.10 Hardship Distributions ................................28
ARTICLE VII LIMITATION ON CONTRIBUTIONS AND BENEFITS .......29
7.01 Limitation of Benefits ................................29
ARTICLE VIII NONDISCRIMINATION REQUIREMENTS.................33
8.01 Definitions ...........................................33
8.02 Nondiscrimination Requirements for Compensation Deferral
Contributions .........................................38
8.03 Nondiscrimination Requirements for Matching Contributions
and Employee Contributions ............................41
ARTICLE IX TOP HEAVY PROVISIONS.............................45
9.01 Definitions ...........................................45
9.02 Determination of Top Heavy Status .....................46
9.03 Combination of Defined Benefit and Defined Contribution
Plan...................................................47
9.04 Minimum Contribution ..................................47
9.05 Minimum Vesting .......................................47
ARTICLE X AMENDMENT OR TERMINATION..........................49
10.01 Amendment.........................................49
10.02 Plan Termination or Discontinuance of
Contributions.....................................49
10.03 Merger, Consolidation or Transfer of Assets.......50
ARTICLE XI ADMINISTRATION....................................51
11.01 Plan Administrator................................51
11.02 Records and Reports...............................52
11.03 Claims Procedure..................................52
11.04 Participants' Right to Vote Employer Stock........53
ARTICLE XII EXEMPT LOAN.......................................54
12.01 Definition of Exempt Loan.........................54
12.02 Requirements for an Exempt Loan...................54
12.03 Right of First Refusal............................55
ARTICLE XIII TRUSTEE ..........................................56
13.01 Fiduciary Status..................................56
13.02 Establishment and Acceptance of Trust.............56
13.03 Trustee's General Powers..........................56
13.04 Payment of Compensation, Expenses and Taxes.......58
13.05 Accounting........................................58
13.06 Trustee's General Powers..........................58
13.07 Voting Employer Stock.............................58
13.08 Removal, Resignation and Appointment of Successor
Trustee...........................................59
13.09 Investment Manager................................59
13.10 Payment of Expenses...............................60
ARTICLE XIV INVESTMENT OF THE TRUST FUND ......................61
14.01 General Investment Fund ..........................61
14.02 Individual Investment Funds.......................62
14.03 Appraisal of Employer Stock ......................63
14.04 Diversification of Investments ...................63
ARTICLE XV MISCELLANEOUS ...................................65
15.01 Participant's Rights ..................................65
15.02 Assignment or Alienation of Benefits ..................65
15.03 Reversion of Funds to Employer ........................65
15.04 Third Party Immunity ..................................66
15.05 Delegation of Authority by Employer ...................66
15.06 Allocation of Responsibilities ........................67
15.07 Construction of Plan ..................................67
15.08 Gender and Number .....................................67
15.09 Headings ..............................................67
APPENDIX A LIST OF PARTICIPATING EMPLOYERS .................68
MID AM, INC.
EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
AS AMENDED AND RESTATED
THIS AGREEMENT, made and executed at Bowling Green, Ohio on the
17th day of September , 1993, to be effective July 1, 1989, by
and between MID AM, INC., a corporation organized and existing
under the laws of the State of Ohio (hereinafter referred to as
"Employer"), and MID AMERICAN NATIONAL BANK & TRUST COMPANY
(hereinafter referred to as "Trustee").
WITNESSETH:
WHEREAS, the Employer established the "Mid American National Bank
and Trust Company Profit Sharing Retirement Plan", which was
effective January 1, 1966 and which was changed to the "Mid Am,
Inc. Employee Stock Ownership and Savings Plan" (hereinafter
referred to as the "Plan") which became effective July 1, 1989;
and
WHEREAS, the Employer deems it necessary to amend the Plan to
comply with the Tax Reform Act of 1986 and make certain other
changes;
NOW, THEREFORE, in consideration of these premises and the mutual
covenants herein contained, it is mutually agreed by and between
the Employer and the Trustee, that the Plan and Trust shall read
as follows:
ARTICLE I
DEFINITIONS
1.01 Acquired Employer. "Acquired Employer" means any
organization, corporate or otherwise, which is acquired by
purchase, merger, consolidation or any other method.
1.02 Anniversary Date. "Anniversary Date" means the last day of
each Plan Year.
1.03 Annual Compensation. "Annual Compensation" means the total
wages, salary, bonuses, commissions, overtime pay and other extra
remunerations during the Plan Year received from the Employer but
excluding amounts received based on allocable contributions to
the Plan. Annual Compensation includes a Participant's voluntary
reductions in cash consideration made in accordance with
arrangements established by the Employer under Section 125 and
Section 401(k) of the Code.
A Participant's Annual Compensation in excess of $200,000 shall
be excluded for purposes of the Plan. This $200,000 limitation
will be adjusted at the same time and in the same manner as is
provided in Section 415(d) of the Code.
In determining the Annual Compensation of a Participant for
purposes of this limitation, the rules of Section 414(q)(6) of
the Code shall apply, except in applying such rules, the term
"family" shall 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 the adjusted $200,000 limitation is
exceeded, then the limitation shall be prorated among the
affected individuals in proportion to each such individual's
Annual Compensation as determined under this Section prior to the
application of this limitation.
1.04 Code. "Code" means the Internal Revenue Code of 1986, as
amended.
1.05 Company. "Company" means the Employer and any other
corporation which is a member of a controlled group of
corporations (as defined in Section 414(b) of the Code) which
includes the Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in
Section 414(c) of the Code) with the Employer; any organization
(whether or not incorporated) which is a member of an
affiliated service group (as defined in Section 414(m) of the
Code) which includes the Employer; and any other entity required
to be aggregated with the Employer pursuant to regulations under
Section 414(o) of the Code.
1.06 Employee. "Employee" means any person employed by the
Employer.
1.07 Employer. "Employer" means Mid Am, Inc. or any subsidiary,
affiliate or other facility of Mid Am, Inc. to which this Plan
has been extended, as listed in Appendix A hereof.
1.08 Entry Date. "Entry Date" means the date the Employee becomes
a Participant hereunder, pursuant to the eligibility requirements
of Section 2.01 hereof.
1.09 ERISA. "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
1.10 ESOP. "ESOP" means an Employee Stock Ownership Plan as
defined in Section 4975(e)(7) of the Code.
1.11 Hour of Service-~ice. "Hour of Service" means:
(a) Each hour for which an Employee is directly or indirectly
paid or entitled to payment by either the Company or the Employer
for the performance of duties;
(b) Each hour for which an Employee is directly or indirectly
paid, or entitled to payment, by either the Company or the
Employer for reasons (such as vacation, sickness, disability, or
similar leave of absence) other than for the performance of
duties, and for military leaves, Maternity/Paternity Leaves or
leaves for jury duty; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by either the
Company or the Employer provided that the same Hours of Service
which shall not be credited under this subsection (c) and
subsections (a) or (b) above, as the case may be.
Hours of Service computed hereunder shall be computed in
accordance with Section 2530.200 b-2 (b) and (c) of the
Department of Labor Regulations which is incorporated herein by
reference.
In no event shall more than 501 Hours of Service be credited for
any one , continuous period of absence during or for which the
employee receives payment for nonperformance of duties whether or
not such period occurs in a single computation period.
For purposes of this Section 1.11, a Maternity/Paternity Leave
means absence in accordance with the Employer's or Company's
pre-approved leave policy which may permit such leaves:
(a) by reason of the pregnancy of an individual,
(b) by reason of the birth of a child of an individual,
(c) by reason of the placement of a child with an individual in
connection with the adoption of such child by such individual, or
(d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
The Hours of Service credited under this paragraph shall be
credited:
(a) in the computation period in which the absence begins if the
crediting is necessary in order to give the Participants (501)
Hours, or
(b) in all other cases, in the following computation period.
If the number of hours which would have been credited cannot be
determined, such person shall receive credit for eight Hours of
Service per day of such absence.
For purposes of this Section 1.11, "computation period" shall
mean a 12 consecutive month period commencing on the date of an
Employee's first Hour of Service with either the Company or the
Employer, or any anniversary thereof.
1.12 Named Fiduciary. "Named Fiduciary" means a fiduciary named
in this document, or who, pursuant to a procedure specified in
the Plan, is identified as a Named Fiduciary.
1.13 Normal Retirement Age. "Normal Retirement Age" means age
sixty-five(65).
1.14 Normal Retirement Date. "Normal Retirement Date" means the
first day of the month coinciding with or next following the date
on which a Participant attains Normal Retirement Age.
1.15 Participant. "Participant" means an Employee who has
satisfied the eligibility requirements for participation in the
Plan.
1.16 Plan. "Plan" means the Mid Am, Inc. Employee Stock Ownership
and Savings Plan.
1.17 Plan Administrator. "Plan Administrator" means the Committee
appointed pursuant to Article XI hereof.
1.18 Plan Year. "Plan Year" means the 12-month period beginning
on January 1 and ending on the following December 31 of each
year.
1.19 Qualified Election. "Qualified Election" means a waiver of
the lump sum payment to the spouse in the event of death of the
Participant. The waiver must be in writing and must be consented
to by the Participant's spouse. The spouse's consent to a waiver
must be witnessed by a Plan representative or notary public and
must be limited to a benefit for a specific alternate beneficiary
(or a specific form of benefit). Notwithstanding this consent
requirement, if the Participant establishes to the satisfaction
of a Plan representative that such written consent may not be
obtained because there is no spouse or the spouse cannot be
located, a waiver will be deemed a Qualified Election. Any
consent necessary under this provision will not be valid with
respect to any other spouse. Additionally, a revocation of a
prior waiver may be made by a Participant without the consent of
the spouse at any time before the commencement of benefits. The
number of revocations shall not be limited. Any new waiver or
change of beneficiary will require a new spousal consent.
1.20 Qualifying Employer Securities. "Qualifying Employer
Securities" means an Employer security which is common stock
issued by the Employer having a combination of voting power and
dividend rights equal to or in excess of the class of Employer
common stock having the greatest voting power and the class of
Employer common stock having the greatest dividend rights.
1.21 Self-Employed Person. "Self-Employed Person" means a
self-employed individual who performs personal services for the
Employer and who owns an interest in the Employer.
1.22 Trustee. "Trustee" means Mid American National Bank & Trust
Company or its successor as appointed under the Plan, which shall
be a Named Fiduciary.
1.23 Trust Fund. "Trust Fund" means all assets of whatever kind
or nature held by the Trustee pursuant to the terms of the Plan.
1.24 Year of Service. For purposes of determining eligibility
to participate in the Plan in accordance with Section 2.01
hereof, "Year of Service" means the completed 12 consecutive
month period commencing on the date of an Employee's first Hour
of Service with either the Company or the Employer, or any
anniversary date thereof, during which such Employee is credited
with at least one thousand (1,000) Hours of Service.
For purposes of determining a Participant's nonforfeitable
interest pursuant to Section 5.03 hereof, "Year of Service" means
a Plan Year during which such Participant is credited with at
least 1,000 Hours of Service. For purposes of Section 5.03, a
Participant will be credited with a Year of Service if he
completes 1,000 Hours of Service during said period, even though
he is not employed for the full 12-month period.
Service of an Employee with the Armed Forces of the United States
shall be deemed to be service with the Employer for purposes of
Sections 2.01 and 5.03 hereof, provided the Employee returns to
active employment with the Employer within the prescribed time
limits during which he retains re-employment rights by law. If
such Employee does not return during such period, his employment
will be deemed to have been terminated when he entered the Armed
Forces.
An Employee who does not initially meet the eligibility
requirements of Section 2.01 and later becomes a Participant,
will have all Years of Service counted for Plan purposes, both
prior to and subsequent to becoming a Participant.
In the event a terminated Participant is re-hired, all Years of
Service with either the Company or the Employer shall be counted
for purposes of Sections 2.01 and 5.03 hereof.
Employees of an acquired employer shall be granted Years of
Service credit under the conditions and standards of this Section
1.24 for all service which they had with the acquired employer.
ARTICLE II
ELIGIBILITY
2.01 Eligibility
Each Employee who was a participant in the Mid American National
Bank and Trust Company Employee Stock Ownership Trust as of
January 1, 1989 shall continue to participate in the Plan as
amended and restated.
Each Employee shall participate in the Plan on the January 1 or
July 1 coinciding with or next following the date he meets all of
the following requirements:
(a) is credited with one (1) Year of Service;
(b) has attained age twenty-one (21); and
(c) is not a member of a collective bargaining unit unless the
agreement between the Employer and the union provides for
participation hereunder.
2.02 Eligibility Upon Re-Employment
A former Participant, or former Employee who met the eligibility
requirements of Section 2.01 for participation in the Plan at the
time he terminated employment, who is subsequently rehired shall
participate hereunder on the Entry Date coinciding with or next
following his re-employment by the Employer.
2.03 Eligibility for Employees of an Acquired Employer
Employees of an Acquired Employer will be eligible for this Plan
under the conditions of Article II as of such dates as determined
by any of the corporate officers. Such group of employees and
dates of entry shall be described in Appendix A of this Plan.
ARTICLE III
CONTRIBUTIONS
3.01 Employer Contributions
The Plan is designed to qualify as a profit sharing plan for
purposes of Sections 401(a), 402, 412 and 417 of the Code,
however, the Employer may make contributions to the Plan without
regard to current or accumulated earnings and profits for any
taxable year or years ending with or within such Plan Year.
Profit Sharing Contributions. Each year the Employer may make a
contribution to the Trust Fund in such amounts as it may
determine in its sole discretion, to be held and administered in
trust by the Trustee according to the terms and conditions of the
Plan. Employer contributions shall be paid in cash or shares of
Employer stock. Shares of Employer stock will be valued at their
then fair market value. To the extent that the Trust has
obligations arising from an extension of credit to the Trust
which is payable in cash within one year of the date of the
Employer's contribution is made, such contribution will be paid
to the Trust in cash. Any such contribution shall be allocated
in accordance with Section 4.02 hereof.
These contributions are intended to qualify an employee stock
ownership contributions under Section 4975(e)(7) of the Code and
the regulations thereunder, and are intended to be invested
primarily in Qualifying Employer Securities. At any time, up to
100 percent of the assets attributable to Profit Sharing
Contributions may be invested in Qualifying Employer Securities.
The Employer's Profit Sharing Contribution, if any, shall be made
to the Trustee in full within such time as may be permitted for
Federal Income Tax purposes to obtain a deduction for the
contribution by the Employer for such taxable year.
Compensation Deferral Contributions. Effective July 1, 1989, each
eligible Participant may elect to defer a percentage of his
Annual Compensation for each pay period that he remains a
Participant in accordance with procedures established by the Plan
Administrator. The Participant's election shall be made at such
time and in such manner as the Plan Administrator shall
determine. Said election shall remain in effect until revoked or
superseded by a subsequent election pursuant to procedures
established by the Plan Administrator.
Compensation Deferral Contributions shall not be considered as
income to the Participant for purposes of Section 61 of the Code.
Such contributions shall be deemed as those made by the Employer,
subject to the limitations of Section 7.01 hereof.
Except as provided herein, the Employer shall contribute to the
Plan on behalf of the Participant the full amount of the
Compensation Deferral Contribution authorized by said
Participant. In no event, however, shall a Participant's
Compensation Deferral Contributions to the Plan for any calendar
year exceed seven thousand dollars ($7,000) or such other amount
as may be allowable pursuant to Section 402(g)(5) of the Code.
The Employer shall automatically discontinue Compensation
Deferral Contributions for the remainder of the year on behalf of
a Participant who reaches this limitation. A Participant may
request a distribution of any Excess Deferrals (Compensation
Deferral Contributions in excess of the limitation) in accordance
with the provisions of Section 6.06 hereof in the event that his
Compensation Deferral Contributions to the Plan, when combined
with any amounts deferred under any plans or arrangements
described in Sections 401(k), 408(k) or 403(b) of the Code,
exceed the limit of Section 402(g) of the Code.
Contributions to a Participant's Compensation Deferral
Contributions Account must meet the nondiscrimination
requirements of Section 401(k) of the Code pursuant to Section
8.02 hereof.
Compensation Deferral Contributions shall be periodically
contributed by the Employer to the Trust Fund in accordance with
the Employer's established payroll procedures in a manner
uniformly applied to all Participants similarly situated.
Matching Contributions. Effective July 1, 1989, the Employer
shall contribute to the Trust Fund on behalf of each Participant
an amount equal to 50 percent of the first 6 percent of a
Participant's Compensation Deferral Contributions, to a maximum
of 3 percent of such Participant's Annual Compensation. Matching
Contributions for the period from July 1, 1989 through December
31, 1989 shall be based on Annual Compensation received during
that period. Effective January 1, 1992, the Employer shall
determine the Matching Contribution each Plan Year. The
discretionary Matching Contribution shall be communicated to
Participants prior to the beginning of each Plan Year.
Notwithstanding the above, Compensation Deferral Contributions
authorized by Participants employed by the Farmers Banking
Company that represent a one-time election to defer their July,
1989 cash bonus shall not be eligible for Employer Matching
Contributions.
Contributions to a Participant's Matching Contributions Account
must meet the nondiscrimination requirements of Section 401(m) of
the Code pursuant to Section 8.03 hereof.
Matching Contributions shall be periodically contributed by the
Employer to the Trust Fund in accordance with the Employer's
established payroll procedures in a manner uniformly applied to
all Participants similarly situated.
3.02 Rollover Contributions
The Trustee may accept transfers on behalf of a Participant from:
(a) a qualified pension or profit sharing plan maintained by a
former employer of the Participant;
(b) a previously qualified pension or profit sharing plan
maintained by the Employer;
(c) a "rollover" Individual Retirement Account as that term is
defined in Section 408(d)(3)(A)(ii) of the Code;
(d) a plan in which assets are held on behalf of an
Owner-Employee as defined in Section 401(c)(3) of the Code, which
satisfies the applicable requirements of Sections 401(a) and
401(d) of the Code and with respect thereto:
(1) the transferred funds shall be maintained in separate
accounts in the name of the respective Participants; and
(2) a Participant's interest in the separate account shall be
nonforfeitable; and
(3) the Trustee may not lend any portion of such separate account
to any Participant.
Rollover Contributions made pursuant to this Section 3.01 shall
be credited to the Participant's Rollover Contributions Account
and shall be at all times nonforfeitable.
Notwithstanding the above, no direct transfer may be made from a
plan maintained by the Company that is subject to the
requirements of Section 401(a)(11)(A) of the Code.
ARTICLE IV
ALLOCATIONS
4.01 Participant Accounts
Separate Accounts shall be maintained by the Trustee for each
Participant as follows:
(a) Profit Sharing Contributions Account. The amount of the
Employer's contribution to the Trust Fund pursuant to Section
3.01 hereof and allocated pursuant to Section 4.02(a) hereof,
together with such Participant's share of all income, gains and
accumulations therefrom, shall be credited and losses debited to
each Participant's Profit Sharing Contributions Account.
(b) Compensation Deferral Contributions Account. Compensation
Deferral Contributions authorized by each Participant and
contributed by the Employer pursuant to Section 3.01 hereof,
together with such Participant's share of all income, gains and
accumulations therefrom, shall be credited and losses debited to
each Participant's Compensation Deferral Contributions Account.
(c) Matching Contributions Account. Matching Contributions made
by the Employer pursuant to Section 3.01 hereof, together with
such Participant's share of all income, gains and accumulations
therefrom, shall be credited and losses debited to such
Participant's Matching Contributions Account.
(d) Prior Plan Account. Amounts transferred from a previous
qualified plan of the Employer, together with such Participant's
share of all forfeitures, income, gains and accumulations
therefrom, shall be credited and losses debited to each
Participant's Prior Plan Account.
(e) Rollover Contributions Account. Rollover Contributions made
by a Participant pursuant to Section 3.02 hereof, together with
such Participant's shares of all income, gains and accumulations
therefrom, shall be credited and losses debited to such
Participant's Rollover Contributions Account.
Said Profit Sharing Contributions Account, Compensation Deferral
Contributions Account, Matching Contributions Account, Prior Plan
Account and Rollover Contributions Account will sometimes
hereinafter be collectively referred to as "Accounts" .
4.02 Annual Allocations
(a) Employer Contributions.
Profit Sharing Contributions. Effective as of the last day of
each Plan Year, any amount contributed by the Employer pursuant
to Section 3.01 hereof shall be allocated and credited to the
Profit Sharing Contributions Account of each eligible
Participant. An allocation will be made only if the Participant
was employed on the last day of such Plan Year and was credited
with at least 1,000 Hours of Service during such Plan Year,
subject to the provisions of Section 8.04 hereof, except that any
Participant who became totally and permanently disabled, died or
retired during such Plan Year shall receive an allocation. Such
allocations shall be determined in the same proportion that such
Participant's Annual Compensation bears to the total Annual
Compensation of all Participants for such Plan Year.
Compensation Deferral Contributions. Compensation Deferral
Contributions made by the Employer on behalf of a Participant
shall be credited to said Participant's Compensation Deferral
Contributions Account.
Matching Contributions. Matching Contributions made by the
Employer on behalf of a Participant shall be credited to said
Participant's Matching Contributions Account.
(b) Investment Gain or Loss: Any net gain or net loss resulting
from the operation of the Investment Funds of the Trust for such
year, determined in accordance with Article XIV hereof, shall be
allocated by the Trustee to the respective Participant's Accounts
in proportion to the value of the respective interests in the
Investment Fund immediately preceding such revaluation.
(c) Allocation of Cash Dividends: Cash dividends on Employer
Stock allocated to a Participant's Account shall be credited to
the Participant's Account.
4.03 Annual Report to Participants
The Plan Administrator shall notify each Participant in writing
of the financial status of his Accounts as of the last day of
each Plan Year.
ARTICLE V
BENEFITS TO PARTICIPANTS
5.01 Upon Retirement or Disability
When a Participant retires (whether it be Early Retirement, at
Normal Retirement Date or after Normal Retirement Date) or
becomes totally and permanently disabled, the entire interest in
his Accounts, including the amount of any additional credit as
finally deternined, representing his participation and
contributions for the year in which his disability or retirement
occurred, shall become nonforfeitable and his participation
hereunder shall thereupon cease. The Plan Administrator, in
accordance with the provisions of Section 6.01 hereof, shall then
direct the Trustee to distribute to such Participant the entire
interest in his Accounts.
Normal Retirement. Each Participant's Accounts shall be
nonforfeitable upon the attainment of his Normal Retirement Age
and the Participant may retire on his Normal Retirement Date.
Late Retirement. A Participant who remains in the employment of
the Employer after his Normal Retirement Date shall continue to
participate hereunder. No distribution shall be made to the
Participant until his actual retirement, subject to the mandatory
commencement of benefit provisions of Section 6.02 hereof.
Early Retirement. A Participant may retire early at any time
after attaining age fifty-five (55).
Total and Permanent Disability. "Total and permanent disability"
means a physical or mental condition of a Participant resulting
from a bodily injury or disease or mental disorder which renders
him incapable of continuing in the employment of the Employer.
The total and permanent disability of any Participant shall be
deternined by the Plan Administrator, in accordance with uniform
principles consistently applied, upon the basis of such evidence
as the Plan Administrator deems necessary.
5.02 Upon Death
Upon the death of a Participant, the entire interest in the
Accounts of such Participant, including the amount of any
additional credit as finally determined, representing his
participation and contributions for the Plan Year in which his
death occurs, shall become nonforfeitable and the Plan
Administrator, in accordance with the provisions of Section 6.01
hereof, shall then direct the Trustee to distribute the entire
interest in his Accounts to such Participant's designated
beneficiary or beneficiaries, or if none, as provided in
this Section 5.02. The Plan Administrator may require such
proper proof of death and such evidence of the right of any
person to receive payment of the entire interest in the Accounts
of such deceased Participant as the Plan Administrator deems
desirable and the Plan Administrator's determination shall be
conclusive. Such distribution shall be made as soon as
administratively feasible following the Participant's death and
in accordance with the rules and procedures established by the
Plan Administrator.
All payments must be made to the spouse of the Participant in a
lump sum unless subject to a Qualified Election.
Each Participant, by written instrument delivered to the Plan
Administrator, shall have the unqualified right to designate and
from time to time change the beneficiary or beneficiaries to
receive in the event of his death the entire interest in his
Accounts.
In the event the Participant fails to designate a beneficiary or
beneficiaries, the entire interest in his Accounts shall be
distributed first to his spouse if then living, or second to his
estate.
5.03 Upon Termination of Employment
(a) Nonforfeitable Interest. Upon termination of a Participant's
employment for any reason other than retirement, total and
permanent disability or death, the Trustee shall, in accordance
with the provisions of Section 6.01 hereof and at the instruction
of the Plan Administrator, distribute to the Participant the
entire interest then constituting his Compensation Deferral
Contributions Account, Matching Contributions Account and
Rollover Contributions Account which are always nonforfeitable,
and the nonforfeitable interest in his Profit Sharing
Contributions Account, and Prior PLAN Account based on his
Years of Service determined in accordance with the applicable
schedule below:
For Participants hired before January 1, 1989
(Except Employees of First National Bank Northwest Ohio)
Years of Service Nonforfeitable Interest
Less than 1 0 percent
1 but less than 2 10 percent
2 but less than 3 20 percent
3 but less than 4 30 percent
4 but less than 5 40 percent
5 or more 100 percent
Normal Retirement Age 100 percent
For Participants hired on or after January 1, 1989 and
Employees of First National Bank Northwest Ohio
Years of Service Nonforfeitable Interest
Less than 5 0 percent
5 or more 100 percent
Normal Retirement Age 100 percent
In the event the nonforfeitable interest schedule is hereafter
amended, or the nonforfeitable interest schedule of an existing
plan is amended by the Plan, then any Participant who has
completed at least three Years of Service on the later of the
date the amendment is adopted, or the date the amendment is
effective may elect, in writing, beginning on the date the Plan
amendment is adopted and ending on the later of:
(1) his termination of employment,
(2) the date which is 60 days after the day the Plan amendment is
adopted,
(3) the date which is 60 days after the day the Plan amendment
becomes effective, or
(4) the date which is 60 days after the day the Participant is
issued written notice of the Plan amendment by the Plan
Administrator,
to have his nonforfeitable interest in his Accounts determined
without regard to such amendment by notifying the Plan
Administrator.
(b) Forfeiture.
(1) If a Participant terminates service, and the value of his
vested Accounts is not greater than $3,500, the Participant will
receive a distribution of the value of the entire vested portion
of his Accounts and the nonvested portion will be treated as a
forfeiture.
(2) If a Participant terminates service and elects to receive,
pursuant to Section 6.01 hereof, the vested portion of his
Accounts, the nonvested portion will be treated as a forfeiture.
If the Participant receives a distribution of less than the
entire vested portion of his Accounts, the part of the nonvested
portion that will be treated as a forfeiture is the total
nonvested portion multiplied by a fraction, the numerator of
which is the amount of the distribution and the denominator of
which is the total value of the vested Accounts.
(3) If a Participant receives a distribution pursuant to Section
6.01 hereof which is less than the value of the Participant's
Account, and resumes employment within the five consecutive Plan
Years following the Plan Year in which termination of employment
occurs, the Participant's Account will be restored to the amount
on the date of distribution if the Participant repays to the Plan
the full amount of the distribution.
(4) If a Participant does not receive a distribution pursuant to
Section 6.01 hereof, no forfeiture will occur until the
expiration of five consecutive Plan Years following the Plan Year
in which termination of employment occurs during which the
Participant is not re-employed.
Forfeitures shall be used to reduce the contribution due from the
Employer for the current Plan Year or the Plan Year following the
Plan Year in which the forfeiture occurs.
For purposes of this Section 5.03(b) if a Participant does not
have any nonforfeitable interest in his Accounts, he will be
deemed to have received a distribution of the entire vested
portion of his Accounts in accordance with the provisions of
subparagraph (2) above without having submitted any application
for benefits to the Plan Administrator. If such Participant
returns to active service with the Employer prior to the
expiration of five consecutive Plan Years following the Plan
Year in which his termination of employment occurred, said
Participant will be deemed to have paid back the distribution and
his Accounts will be restored as provided in subparagraph (3)
above.
(c) In the event that there is a Change in Control of the
Employer, the nonforfeitable interest of each Participant in his
Accounts pursuant to Section S.03(a) shall be 100 percent as of
the effective date of the Change in Control. For the purposes of
the Plan, any one or more of the following events shall
constitute a Change in Control: (i) the merger or consolidation
of Employer with or into any other corporation and Employer is
not the surviving corporation; (ii) in excess of 24.99 percent of
the outstanding common stock of Employer is owned, held or
controlled by an entity, person or group acting in concert with
the power to control the company as that term is defined in Rule
405 of the Securities Act of 1988; (iii) the sale or exchange of
in excess of 24.99 percent of the assets of Employer to any
entity, person or group acting in concert; (iv) the
recapitalization, reclassification of securities or
reorganization of Employer which has the effect of either subpart
(ii) or (iii) above; (v) the issuance by Employer of securities
in an amount in excess of 24.99 percent of the outstanding common
stock of Employer to any entity, person or group acting in
concert and intending to exercise control of Employer; or (vi)
the removal, termination or retirement of more than 50 percent of
the members of the Board of Directors during any consecutive
12-month period.
5.04 Certification by Plan Administrator
The Plan Administrator shall certify to the Trustee all pertinent
facts and information required to determine its proper action in
connection with retirement, disability, death and termination of
employment of Participants, and the Trustee may rely fully upon
information so certified and shall be fully protected in so
doing; but in the absence of appropriate certificates as to any
such facts or pertinent related facts, the Trustee may rely and
act upon other information which it reasonably believes to be
true.
ARTICLE VI
DISTRIBUTIONS
6.01 Method and Medium of Payment
The distribution of a Participant's nonforfeitable interest in
his Account shall be subject to the consent, in writing, of the
Participant and the Participant's spouse, if any. However, if the
value of the Participant's vested Account is not greater than
$3,500, the Plan Administrator shall require a distribution of
the value of the entire vested portion of the Participant's
Account. If a lump sum distribution is to be made after the
Annuity Starting Date, such distribution must be consented to in
writing by the Participant and the Participant's spouse, if any,
or where the Participant is dead, the surviving spouse,
regardless of the amount of the distribution.
(a) Definitions: The following definitions shall apply for
purposes of this Section 6.01:
(l) "Annuity Starting Date." Annuity Starting Date means the
first day of the first period for which an amount is payable as
an annuity, regardless of when or whether payment is actually
made. In the case of benefits not payable as an annuity, the
Annuity Starting Date is the date on which all events have
occurred which entitle the Participant to a benefit.
(2) "Election Period." Election Period means the period which
begins on the first day of the Plan Year in which the Participant
attains age 35 and ends on the date of the Participant's death.
If a Participant separates from service prior to the first day of
the Plan Year in which age 35 is attained, with respect to
benefits accrued prior to separation, the Election Period shall
begin on the date of separation.
(3) "Qualified Joint and Survivor Annuity." Qualified Joint and
Survivor Annuity means an annuity for the life of the Participant
with a survivor annuity for the life of the spouse which is not
less than 50 percent and not more than 100 percent of the amount
of the annuity which is payable during the joint lives of the
Participant and the spouse which is the actuarial equivalent of
the normal form of benefit, or if greater, any optional form of
benefit. A Qualified Joint and Survivor Annuity for a Participant
who is not married shall be an annuity for the life of such
Participant.
(b) Joint and Survivor Benefits
All Participants shall have their benefits distributed in the
form of an automatic joint and survivor annuity. This provision
shall apply to any Participant who:
(1) begins to receive payments under the Plan on or after Early
or Normal Retirement Age; or
(2) dies on or after Normal Retirement Age while still working
for the Employer; or
(3) separates from service on or after becoming vested in his
Account and thereafter dies before beginning to receive such
benefits.
The above provision is subject to a Qualified Election executed
during the Election Period.
Qualified Joint and Survivor Annuity: Unless an optional form of
benefit is selected within the Election Period pursuant to a
Qualified Election within the 90- day period ending on the date
benefit payments would commence, a Participant's vested Account
will be paid in the form of a Qualified Joint and Survivor
Annuity.
Qualified Pre-Retirement Survivor Annuity: Absent a Qualified
Election to the contrary, if a vested Participant dies, the
Participant's vested Account balance shall be applied toward the
purchase of an annuity for the life of the Participant's
surviving spouse, if any. The spouse of the deceased Participant
may elect to receive the full value of such Participant's Account
in a lump sum in lieu of the Qualified Pre-Retirement Survivor
Annuity.
The surviving spouse shall begin to receive payments immediately,
unless such surviving spouse elects a later date.
Failure to waive any joint and survivor annuity form of payment
will not result in a decrease in any Plan benefit with respect to
such Participant.
The Plan Administrator shall provide each Participant within the
applicable period, a written explanation of the Qualified
Pre-Retirement Survivor Annuity which shall contain the
following: 1) the terms and conditions of a Qualified
Pre-Retirement Survivor Annuity; 2) the Participant's right to
make and the effect of an election to waive this form of benefit;
3) the rights of the Participant's spouse; and 4) the right to
make, and the effect of, a revocation of a previous election to
waive the Qualified Pre-Retirement Survivor Annuity. In the case
of a Participant who enters the Plan after the first day of the
Plan Year in which the Participant attained age 32, the Plan
Administrator shall provide the required notice no later than the
close of the second Plan Year succeeding the entry of the
Participant in the Plan. For purposes of this notice, "applicable
period" means, with respect to a particular Participant, the
latest of the following:
(1) The period which begins with the first day of the Plan Year
in which the Participant attains age 32 and ending with the close
of the Plan Year preceding the Plan Year in which the Plan Year
in which the Participant attains age 35;
(2) a reasonable period after the Employee becomes a Participant;
(3) a reasonable period after this Section 6.01(b) no longer
applies to the Participant; or
(4) a reasonable period after the Participant's separation from
service in the case of a Participant who separates from service
before attaining age 35.
(c) Optional Forms of Benefit
Except as provided in paragraph ~b) above, the distribution of a
Participant's nonforfeitable interest in his Account shall be
made by the Trustee to such Participant or his beneficiaries upon
his retirement, disability, death or termination of employment,
as the case may be, in cash or in kind, or part in cash and part
in kind, in one or a combination of two or more of the following
methods as such Participant or beneficiary, subject to a
Qualified Election, may request:
(1) ln one sum, or
(2) in periodic distributions.
If any portion of a Participant's Account is to be distributed
pursuant to this Section 6.01 over a period of years, such
portion shall be distributed in substantially equal installments
over such number of years as shall not exceed:
(1) a period certain not extending beyond the life expectancy of
the Participant, or
(2) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated beneficiary.
6.02 Special ESOP Distribution Requirements
This Section 6.02 shall apply to distributions of a Participant's
Profit Sharing Contributions Account, and shall not act to
eliminate any form or time of distribution otherwise available
under the Plan.
(a) Time of Distribution. Notwithstanding any other provision of
this Plan, other than such provisions as require the consent of
the Participant and the Participant's spouse to a distribution
with a present value in excess of $3,500, a Participant may elect
to have the portion of his Profit Sharing contributions Account
attributable to Qualifying Securities acquired by the Plan after
December 31, 1986 distributed as follows:
(1) If the Participant separates from service by reason of the
attainment of Normal Retirement Age, death or disability, the
distribution of such portion of the Participant's Profit Sharing
Contributions Account will begin not later than one year after
the close of the Plan Year in which such event occurs unless the
Participant otherwise elects pursuant to Section 6.01 hereof.
(2) If the Participant separates from service for any reason
other than those enumerated in paragraph (1) above, and is not
re-employed by the Employer at the end of the fifth Plan Year
following the Plan Year of such separation from service,
distribution of such portion of the Participant's Profit sharing
Contributions Account will begin not later than one year after
the close of the fifth Plan Year following the Plan Year in which
the Participant separated from service unless the Participant
otherwise elects pursuant to Section 6.01 hereof.
(3) If the Participant separates from service for a reason other
than those described in paragraph (1) above, and is employed by
the Employer as of the last day of the fifth Plan Year following
the Plan Year of such separation from service, distribution to
the Participant, prior to any subsequent separation from service,
shall be in accordance with Section 6.01 hereof.
For purposes of this Section 6.02, Qualifying Employer Securities
shall not include any Employer securities acquired with the
proceeds of a loan described in Article XII hereof until the
close of the Plan Year in which such loan is repaid in full.
(b) Form of Distribution. Distribution may be made either in
whole shares of Employer stock or in cash as the Plan
Administrator shall decide, provided that any distribution in
cash shall only be made after a Participant has been offered the
right to receive such distribution in shares of Employer stock.
In the event the distribution is to be made in Employer stock,
any balance in a Participant's Account will be applied to
acquire for distribution the maximum number of whole shares of
Employer stock at the applicable value. Any fractional share
value unexpended balance will be distributed in cash. If the
Employer stock is not available for purchase by the Trustee, then
the Trustee shall hold such balance until Employer stock is
acquired and then make such distribution. The Trustee will make
distribution from the Trust only on instructions from the Plan
Administrator.
(c) Period for Payment. Distributions required under this Section
6.02 shall be made in substantially equal annual payments over a
period of five years unless the Participant otherwise elects
under the provisions of Section 6.01 hereof. In no event shall
such distribution period exceed the period permitted in Section
401(a)(9) of the Code.
(d) Determination of Amount Subject to Special Distribution and
Payment Requirements. The portion of a Participant's Profit
Sharing contributions Account attributable to Qualifying Employer
Securities which were acquired by the Plan after December 31,
1986, shall be determined by multiplying the number of shares of
such securities held in the Account by a fraction, the numerator
of which is the number of shares acquired by the Plan after
December 31, 1986 and allocated to Participant's Profit Sharing
Contributions Account (not to exceed the number of shares held by
the Plan on the date of distribution) and the denominator of
which is the total number of shares held by the Plan at the date
of the distribution.
6.03 Mandatory Commencement of Benefits
Distribution hereunder shall commence not later than the 60th day
after the end of the Plan Year in which the later of the
following events occurs:
(a) The Participant attains the earlier of: (1) age 65 or (2)
Normal Retirement Age;
(b) The tenth anniversary of the year in which the Participant
commences participation in the Plan; or
(c) The Participant terminates his employment with the Employer.
A Participant may elect to defer the commencement of distribution
hereunder to a date later than set forth above, provided,
however, that any such election must be made by submitting to the
Plan Administrator a written statement, signed by the
Participant, which written statement describes the method and
medium of distribution and the date on which such distribution
shall commence. If the Participant's entire interest is 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 Participant's entire interest
by the life expectancy of the Participant or joint and last
survivor expectancy of the Participant and designated
beneficiary. Life expectancy and joint and last survivor life
expectancy are computed by the use of the return multiples
contained in Section 1.729 of the Income Tax Regulations. For
purposes of this computation, a Participant's life expectancy may
be recalculated no more frequently than annually, however, the
life expectancy of a non-spouse beneficiary may not be
recalculated. If the Participant's spouse is not the designated
beneficiary, the method of distribution selected must assure that
more than 50 percent of the present value of the amount available for
distribution is paid within the life expectancy of the
Participant. All distributions must meet the minimum distribution
incidental benefit requirements in Section 1.401(a)(9)-2 of the
proposed regulations.
Anything above to the contrary notwithstanding, distributions of
a Participant's benefits must commence by April 1 of the calendar
year following the calendar year in which the Participant attains
age 70-1/2 in accordance with the minimum distribution
requirements of Section 401 (a)(9) of the Code. For purposes of
this minimum distribution, the Participant may elect prior to the
date of the first required distribution to have his life
expectancy and his spouse's life expectancy recalculated
annually. Such election shall be irrevocable once made, and shall
apply for all subsequent Plan Years. The Participant and his
spouse shall have the right to separately elect as to whether
each wants his life expectancy recalculated, and the election of
one shall not affect the election of the other. In the event that
either the Participant or his spouse fails to make an election,
his life expectancy shall be recalculated annually.
The mandatory commencement of distribution to a Participant or
beneficiary pursuant to this Section, shall not apply provided
(i)that prior to January 1, 1984, or such other date permitted by
law, a Participant (including Key Employees) who had an Account
balance under this Plan as of December 31, 1983 made a written
designation providing for the commencement of distributions at a
later date, and (ii)further providing for a method of
distribution of the benefit which satisfy the provisions of Code
Section 401(a)(9) as in effect prior to the enactment of the Tax
Equity and Fiscal Responsibility Act of 1982 (including rules
relating to incidental death benefits). Any written designation,
if made, shall be binding upon the Plan Administrator. In
addition, the mandatory commencement of distribution shall not
apply to any Participant who attained age 70-1/2 prior to January
1, 1988 and who was not a five percent owner at any time after he
attained age 66-1/2.
6.04 Distributions After Death of a Participant
If a Participant dies before any of his interest in the Plan has
been distributed, the Participant's interest shall be distributed
in one of the following methods:
(a) The entire interest of the Participant shall be distributed
no later than December 31 of the calendar year which contains the
fifth anniversary of the date of the Participant's death,
regardless of who is to receive the distribution.
(b) If the distribution is to be made to a designated
beneficiary, the distribution of a Participant's interest shall
commence not later than December 31 of the calendar year
immediately following the calendar year in which the Participant
died, and payments shall occur over a period not extending beyond
the life expectancy of such designated beneficiary. If
distribution is to be made to the Participant's surviving spouse,
distribution must commence on or before the later of:
(1) December 31 of the calendar year immediately following the
calendar year in which the Participant died, or (2) December 31
of the calendar year in which the Participant would have attained
age 701/2. Such distribution shall occur over a period not
extending beyond the life expectancy of such designated
beneficiary.
A Participant or his spouse or designated beneficiary, subject to
a Qualified Election, may elect the method of distribution
described in subparagraph (b) above. Such election must be made
no later than the earlier of: (1) the date which distribution
would have to occur according to the provisions of subparagraph
(a) above, or 2) the date which distribution would have to occur
according to the provisions of subparagraph (b) above. As of such
date, the election is irrevocable and shall apply for all
subsequent years and any subsequent beneficiaries. If no such
election is made, distribution shall be made in accordance with
subparagraph (a) above.
If the surviving spouse dies before the distributions to such
spouse begin, the payment of the Participant's interest shall be
made as of the surviving spouse were the Participant.
If distribution of the Participant's interest has begun at the
time of such Participant's death, distribution may be made for a
term certain at least as rapidly as under the method of
distribution used prior to the death of the Participant.
6.05 Right to Have Accounts Transferred
By notice to the Plan Administrator, a Participant entitled to a
distribution shall have the right to have the nonforfeitable
portion of his Accounts transferred to another
plan and trust which is qualified under Section 401(a) of the
Code and is a tax-exempt trust under the provisions of Section
501(a) of the Code or to an Individual Retirement Account as
provided under Section 408 of the Code. Notwithstanding the
preceding sentence, no such transfer may occur to another
qualified plan and trust maintained by the Company.
6.06 Distribution of Excess Deferrals
Notwithstanding any other provision of this Plan, Excess
Deferrals and income attributable thereto shall be distributed no
later than the April l5th following the calendar year in which
the Participant claims Excess Deferrals. The Participant's claim
must be in writing; must be submitted to the Plan Administrator
no later than March 1 of the calendar year following the calendar
year of the Excess Deferrals; must specify the amount of the
Participant's Excess Deferrals for the preceding calendar year;
and must be accompanied by a written statement of the Participant
that if such amounts are not distributed, the Excess Deferrals,
when added to amounts deferred under other plans or arrangements
described in Sections 401(k), 408(k) or 403(b) of the Code,
exceed the limit imposed on the Participant by Section 402(g)
of the Code for the calendar year in which the contributions were
made.
The Excess Deferrals distributed to a Participant with respect to
a calendar year shall be adjusted for income and, if there is a
loss allocable to the Excess Deferrals, shall in no event be less
than the lesser of the Participant's Compensation Deferral
Contributions Account under the Plan or the Participant's
Compensation Deferral Contributions for the calendar year.
For purposes of this Section 6.06, "Excess Deferrals" means the
amount of a Participant's Compensation Deferral Contributions to
this Plan which the Participant claims, pursuant to the procedure
outlined above, to be in excess of the amount allowable under
Section 402(g) of the Code.
6.07 Restrictions on Distributions of Compensation Deferral
Contributions
Compensation Deferral Contributions may not be distributed from
this Plan prior to the earlier of:
(a) retirement, separation from service, death or disability of
the Participant;
(b) attainment of age 59-1/2 by the Participant, if procedures
have been established by the Plan Administrator;
(c) termination of the Plan without establishment of a successor
plan;
(d) sale of substantially all of the assets of the Employer to an
entity that is not an affiliated employer; or
(e) upon the sale of a subsidiary of the Employer to an entity
that is not an affiliated employer, only Participants who are
employed by such subsidiary may receive a distribution of their
Compensation Deferral Contributions Account.
In addition, if procedures have been established by the Plan
Administrator, Compensation Deferral Contributions (excluding any
earnings thereon) may be distributed upon hardship of the
Participant determined in accordance with Section 401(k) of the
Code.
6.08 Loans to Participant
The Trustee has the power to make loans to Participants on a
uniform, nondiscriminatory basis in accordance with procedures
established by the Plan Administrator, from the assets of the
Trust upon the terms and conditions hereinafter set forth, and
upon the request of a Participant for a loan from the Trust.
(a) The total amount which any Participant can borrow under this
provision cannot exceed the lesser of 50 percent of the
Participant's vested Accounts or $50,000, reduced by the highest
outstanding balance of loans from the Plan to the Participant
during the one year period ending on the day before which such
loan is to be made.
(b) Each loan shall bear an interest at an annual rate
which, at the time of the loan, is comparable to the rate then
being charged by commercial banking institutions in
Bowling Green, Ohio for loans of a similar nature; or, if
applicable, the rate which at the time of the loan is in effect
at the Trustee's Commercial Loan Department.
(c) Each Participant who receives a loan hereunder shall also
receive a clear statement of the charges involved in each loan
transaction. The statement shall include the dollar amount and
the annual interest rate of the finance charge.
(d) Loans shall be repaid by the Participant in such manner as
the Trustee and the Participant shall determine, provided that
said loan shall be repaid in full within the earlier of five
years or the date of the Participant's retirement; provided,
however, that if the loan is to be used to acquire a dwelling
which is to be used within a reasonable time as the principal
residence of the Participant, the length of the loan shall be
comparable to the length of loans being granted by commercial
banking institutions in Bowling Green, Ohio for loans for a
similar purpose. The loan shall be amortized in level payments
over the term of the loan, with payments occurring not less
frequently than quarterly.
(e) All loans shall be evidenced by Promissory Notes and such
other documents which the Trustee may reasonably require under
the circumstances.
(f) The Trustee shall be entitled to exercise all legal and
equitable rights available to it in order to enforce the
collection of such unpaid loan balance.
(g) If any loan to a Participant is unpaid on the date that he,
or his beneficiary or estate, becomes entitled to receive
benefits from the Trust, such unpaid portion shall, as of that
date, become due and the amount thereof, together with any unpaid
interest thereon, shall be deducted from any benefits which he,
his beneficiary or his estate otherwise would have been entitled
to receive.
If procedures have been established by the Plan Administrator,
collateral to secure repayment of a loan may include real or
personal property. If real property is given as collateral, it
shall be pledged by a mortgage which shall be properly recorded.
If a loan is not repaid when due, the Plan Administrator shall
take all actions as are appropriate to collect the debt and such
actions shall include in each case in which real property has
been pledged, first foreclosing on the mortgage or taking the
property given as security and only secondarily shall the Plan
Administrator seek recovery from the Participant's Accounts.
The provisions of this Section 6.08 shall apply the same for
loans renewed, renegotiated, modified or extended as for new
loans.
6.09 Cash Dividend Option
Effective with the dividend paid on Employer stock as of
September 30, 1990, a Participant shall have the option to elect
to receive dividends in cash on Employer stock. This election
shall apply to all Participants who have a 100 percent
nonforfeitable interest in each of their Accounts pursuant to
Section 5.03.
Participants may elect to receive quarterly dividends in cash as
of the end of June and the end of December. Each June election
shall apply to the next following September 30 and December 31
quarterly dividends. Each December election shall apply to the
next following March 31 and June 30 quarterly dividends.
Participant elections shall be made in writing in accordance with
procedures and forms provided by the Plan administrator.
Employer dividends not elected in cash shall be reinvested in
additional shares of Employer stock.
6.10 Hardship Distributions
Distribution of Compensation Deferral Contributions may be made
to a Participant in the event of hardship. For purposes of this
Section, hardship is defined as an immediate and heavy financial
need of the employee where such employee lacks other available
resources. Hardship distributions are subject to the spousal
consent requirements contained in Sections 401(a)(11) and 417 of
the Code.
The following are the only financial needs considered immediate
and heavy:
Expenses incurred or necessary for medical care, described in
Section 213(d) of the Code, of the Participant, the Participant's
spouse or dependents; the purchase (excluding mortgage payments)
of a principal residence for the Participant; payment of tuition
and related educational fees for the next twelve (12) months of
post-secondary education for the Participant, the Participant's
spouse, children or dependents; or the need to prevent eviction
of the Participant from, or a foreclosure on, the mortgage of,
the Participant's principal residence.
A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Participant only if:
(a) compensation deferral contributions for the Participant's
taxable year immediately following the taxable year of the
hardship distribution shall be limited to the applicable limit
under Section 402(g) of the Code for such taxable year less the
amount of compensation deferral contributions for the taxable
year of the hardship distribution;
(b) the Participant has obtained all available distributions,
other than-hardship distributions, and all non-taxable loans
under this Plan and all other plans maintained by the Employer;
(c) the Participant shall not be permitted to make compensation
deferral contributions under this Plan and any other Plan of the
Employer for a period of 12 months after the receipt of the
hardship distribution; or
(d) the distribution is not in excess of the amount of an
immediate and heavy financial need.
ARTICLE VII
LIMITATION ON CONTRIBUTIONS AND BENEFITS
7.01 Limitation of Benefits
(a) Definitions: The following definitions shall apply for
purposes of this Section 7.01:
(1) "Annual Addition." Annual Addition means for each Plan Year
the sum of the following amounts credited to a Participant's
Accounts for the Limitation Year under all Defined Contribution
Plans maintained by the Employer:
(A) Employer contributions,
(B) Employee contributions,
(C) Forfeitures, and
(D) Any amounts allocated to an individual medical account (as
defined in Section 415(1)(2) of the Code) which is part of any
pension or annuity plan maintained by the Employer are treated as
Annual Additions to a Defined Contribution Plan. Amounts derived
from contributions paid or accrued after December 31, 1985 in
taxable years ending after such date which are attributable to
post retirement medical benefits allocated to the separate
account of a key employee (as defined in Section 419(d)(3) of the
Code) under a welfare benefit fund (as defined in Section 419(e)
of the Code) maintained by the Employer are treated as Annual
Additions to a Defined Contribution Plan. These amounts are
treated as Annual Additions but are not subject to the 25 percent
of Compensation limit.
The Annual Addition for any Limitation Year beginning prior to
January 1, 1987 shall not be recomputed to treat all Employee
contributions as an Annual Addition.
In the event that the Trust has obtained an Exempt Loan pursuant
to Article XII, the Annual Addition limitations shall be
determined with regard to the contributions used by the Trust to
pay the loan and not the allocation to the Profit Sharing
Contributions Account of each Participant based upon assets
withdrawn from the suspense account established in accordance
with the requirements for such Exempt Loan.
Rollover Contributions made by a Participant pursuant to
Section 3.02 hereof, shall not be taken into account in computing
Annual Additions.
(2) "Compensation." Compensation means a Participant's earned
income, wages, salaries, fees for professional and other amounts
received for personal services actually rendered in the course of
employment with the Employer maintaining the Plan (including, but
not limited to, commissions paid to salesmen, compensation for
services on the basis of a percentage of profits, commissions on
insurance premiums, tips and bonuses), but excluding the
following:
(A) Employer contributions to a loan of deferred
compensation which are not included in the Employee's gross
income for the taxable year in which contributed, Employee
contributions under a simplified employee pension plan to the
extent such contributions are deductible by the Employee or any
distributions from a plan of deferred compensation;
(B) amounts realized from the exercise of a nonqualified
stock option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(C) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(D) other amounts which received special tax benefits or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an annuity
described in Section 403(b) of the Code (whether or not the
amounts are actually excludible from the gross income of the
Employee).
(3) "Defined Contribution Plan." Defined Contribution Plan
means a pension plan or profit sharing plan which provides for an
individual account for each Participant and for benefits based
solely upon the amount contributed to the Participant's account
and any income, expenses, gains, losses and any forfeitures
of accounts of other Participants which may be allocated to such
Participant's account.
(4) "Limitation Year." Limitation Year means the Plan Year.
(b) Limitation on Annual Additions. Any other provision of this
Plan to the contrary notwithstanding, the maximum Annual Addition
to the Accounts of any Participant under the Plan and any other
Defined Contribution Plan maintained by the Employer or the
Company may not exceed the lesser of:
(1) $30,000 or, if greater, 1/4 of the defined benefit dollar
limitation set forth in Section 415(b)(1)(A) of the Code as
adjusted for the cost of living increases pursuant to Section
415(d) and in effect for the Limitation Year, or
(2) 25 percent of the Participant's Compensation for the
Limitation Year.
If, as the result of a reasonable error in estimating a
Participant's Annual Compensation, the allocation of forfeitures,
or under other limited facts and circumstances as may be provided
under the Regulations to Section 415 of the Code, the Annual
Addition exceeds the maximum under this and any other Defined
Contribution Plan maintained by the Employer, an amount
attributable to the Employer's contribution for the current Plan
Year necessary to reduce the Annual Addition to the maximum
Annual Addition shall be held in a separate account, and shall be
utilized to reduce the contribution of the Employer for the next
succeeding Plan Year and shall be accounted for accordingly by
the Trustee. Any such sums shall not share in the gains or losses
of the Trust Fund.
(c) Limitation of Benefits Under All Plans. Where an Employee is
a Participant under the Plan and a defined benefit plan
maintained by the Employer, the sum of the defined contribution
fraction and the defined benefit fraction for any Limitation Year
may not exceed 1.0 as computed under the terms and conditions as
set forth under Section 415(e) of the Code.
For purposes of computing the defined contribution fraction for
any Limitation Year, the numerator shall be the sum of the Annual
Addition to the Participant's Accounts during such Limitation
Year and for all prior Limitation Years, and the denominator
shall be the lesser of:
(1) the product of 1.25 multiplied by the maximum permissible
dollar amount under Section 415(c)(1)(A) of the Code for such
year and for all prior years or,
(2) the product of 1.4 multiplied by the maximum permissible
percentage of compensation contributed under Section 415(c)(1)(B)
of the Code for such year and for all prior years.
For purposes of computing the defined benefit plan fraction for
any Limitation Year, the numerator shall be the Participant's
projected annual benefit under the defined benefit plan as of the
end of the Limitation Year and the denominator shall be the
lesser of:
(1) the product of 1.25 multiplied by the maximum permissible
dollar amount of benefit in effect under Section 415(b)(1)(A) of
the Code for such year, or;
(2) the product of 1.4 multiplied by the maximum permissible
percentage of compensation limitation of the amount of benefit in
effect under Section 415(b)(1)(B) of the Code for such year.
If the Defined Contribution Plans and the defined benefit plans
in which an Employee is a Participant satisfy the requirements of
Section 415 of the Code in effect for all Limitation Years
beginning prior to January 1, 1987, where necessary, an amount
shall be subtracted from the numerator of the defined
contribution fraction (not to exceed such numerator) as
prescribed by the Secretary of the Treasury so that the sum of
the defined benefit plan fraction and the defined contribution
fraction computed under Section 415(e)(1) of the Code does not
exceed 1.0 for such Limitation Year.
ARTICLE VIII
NONDISCRIMINATION REQUIREMENTS
8.01 Definitions
The following definitions shall apply for purposes of this
Article VIII:
(1) "Actual Contribution Percentage. " Actual Contribution
Percentage means the average (expressed as a percentage) of the
Actual Contribution Ratios of the Participants in a group.
(2) "Actual Contribution Ratio." Actual Contribution Ratio means
the ratio (expressed as a percentage) of the Participant's
Employee Contributions and Matching Contributions to the Plan for
the Plan Year (and any other plan which is aggregated with ~ .
Plan for purposes of meeting the nondiscrimination requirements
of Section 401(m) of the Code) to the Participant's Compensation
for the Plan Year. The Actual Contribution Ratio of a Participant
who is eligible, but neither makes Employee Contributions nor
receives Matching Contributions is zero.
(3) "Actual Deferral Percentage." Actual Deferral Percentage
means the average (expressed as a percentage) of the Actual
Deferral Ratios of the Participants in a group.
(4) " Actual Deferral Ratio. " Actual Deferral Ratio means the
ratio (expressed as a percentage) of the Participant's Elective
Contributions for the Plan Year (under the Plan and any other
plan which is aggregated with the Plan for purposes of meeting
the nondiscrimination requirements of Section 401(k) of the Code)
to the Participant's Compensation for the Plan Year. At the
option of the Plan Administrator, Qualified Matching
Contributions and/or Qualified Nonelective Contributions may be
included for purposes of determining each Participant's Actual
Deferral Ratio. The Actual Deferral Ratio of a Participant who is
eligible but has no Elective Contributions, Qualified Matching
Contributions or Qualified Nonelective Contributions is zero.
(5) "Compensation." Compensation means compensation received from
the Employer during the Plan Year which is includible in gross
income for income tax purposes.
The Plan Administrator may elect to include in Compensation any
elective contributions made by such Participant that are not
includible in gross income under Section 125, 402(a)(8), 402(h)
or 403(b) of the Code. Such election shall be made on a uniform
and consistent basis with respect to all Participants and all
plans of the Employer for any particular Plan Year. In absence of
a specified election to the contrary, Compensation shall include
said elective contributions.
(6) "Elective Contributions." Elective Contributions means
Compensation Deferral Contributions and any other Employer
contributions made to the Plan, and any other plan which is
aggregated with the Plan for purposes of meeting the
nondiscrimination requirements of Section 401(k) of the Code,
that were subject to a cash or deferred arrangement.
(7) "Employee Contributions." Employee Contributions means any
contributions to the Plan (and any other plan which is aggregated
with the Plan for purposes of meeting the nondiscrimination
requirements of Section 401(m) of the Code) that are designated
or treated as after-tax Employee contributions and are allocated
to a separate account to which attributable earnings and losses
are allocated.
(8) "Excess Contributions." Excess Contributions means the excess
of: (1) the Elective Contributions, Qualified Matching
Contributions and/or Qualified Nonelective Contributions of a
Highly Compensated Employee or Family Group for such Plan Year,
over 2) the maximum amount of such contributions permitted under
the limits determined in accordance with Section 8.02 hereof.
(9) "Excess Aggregate Contributions." Excess Aggregate
Contributions means the excess of: (1) the Employee Contributions
and Matching Contributions actually made by or on behalf of a
Highly Compensated Employee or Family Group for such Plan Year,
over (2) the maximum amount of such contributions permitted under
the limits determined in accordance with Section 8.03 hereof.
(10) "Family Group." Family Group means a Highly Compensated
Employee and a Family Member (or Family Members) who are required
to be aggregated for purposes of the nondiscrimination test. If a
Participant is required to be aggregated with more than one
Highly Compensated Employee or Family Member, all Participants
who are members of such Family Groups shall be aggregated as one
Family Group.
(11) "Family Member." Family Member means a spouse and any lineal
ascendant or descendant of a Highly Compensated Employee who is a
5 percent owner or a Highly Compensated Employee who is one of
the top ten paid Highly Compensated Employees, including the
spouse of such lineal ascendant or descendent, as defined in
Section 414(1)(6)(B) of the Code.
(12) "Highly Compensated Employee." The term Highly Compensated
Employee includes highly compensated active Employees and highly
compensated former Employees.
An active Highly Compensated Employee includes any Employee who
performs service for the Employer during the determination year
and who during the look back year: (i) received Compensation from
the Employer in excess of $75,000 (as adjusted pursuant to
Section 415(d) of the Code); (ii) received Compensation from the
Employer in excess of $50,000 (as adjusted pursuant to Section
415(d) of the Code) and was a member of the top-paid group for
such year; or (iii) was an officer of the Employer and received
Compensation during such year is greater than 50 percent of the
dollar limitation in effect under Section 415(b)(1)(A) of the
Code. The term Highly Compensated Employee also includes: (i)
Employees who are both described in the preceding sentence if the
term "determination year" is substituted for the term "look back
year" and the Employee is one of the 100 Employees who received
the most Compensation from the Employer during the determination
year; and (ii) Employees who are 5 percent owners at any time
during the look back year or determination year.
If no officer has satisfied the Compensation requirement of (iii)
above 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 the purpose of determining who is highly compensated,
Compensation shall only include compensation received during the
determination year or look back year and shall have the meaning
provided such term by Plan Section 7.01(a)(2), but without regard
to reductions from Code Sections 125, 402(a)(8) and 402)h)(1)(B).
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 former Highly Compensated 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
during the determination year, and was an active Highly
Compensated Employee for either the separation year or any
determination year ending on or after the Employee's 55th
birthday.
If an Employee is, during a determination year or look back year,
a Family Member of either a 5 percent owner who is an active or
former Employee or a Highly Compensated Employee who is one of
the ten most Highly Compensated Employees ranked on the basis of
Compensation paid by the Employer during such year, then the
Family Member and the 5 percent owner or top ten 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 percent owner or top ten Highly
Compensated Employee. For purposes of this Section, Family Member
includes the spouse, lineal ascendant and descendants of the
Employee or former Employee and the spouses of such lineal
ascendant and descendants.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identify 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 Section 414(q) of
the Code and the regulations thereunder.
Before determining who are Highly Compensated Employees, Code
Sections 414(b), (c), (m), (n) and (o) shall first be applied.
The Employer may elect to make the look back year calculation for
a determination year on the basis of the calendar year ending
with or within the applicable determination year (or, in the case
of a determination year that is shorter than 12 months, the
calendar year ending with or within the 12-month period ending
with the end of the applicable determination year). In such case,
the Employer must make the determination year calculation for the
determination year on the basis of the period, if any, by which
the applicable determination year extends beyond such calendar
year (i.e., the lag period). If the applicable year for which the
determination is being made is the calendar year, the Employer
still may elect to make the calendar year calculation election.
In such case, the look back year calculation is made on the basis
of the calendar year determination year and, because there is no
lag period, a separate determination year calculation is not
required.
In making the determination year calculation on the basis of the
lag period, if any, the dollar amounts applicable under this Plan
Section 8.01(12)(i) & (ii) are to be adjusted by multiplying such
dollar amounts by a fraction, the numerator of which is the
number of calendar months that are included in the lag period and
the denominator of which is 12.
If the Employer elects to make the calendar year calculation
election with respect to one plan, entity, or arrangement, such
election must apply with respect to all plans, entities, and
arrangements of the Employer.
(13) "Matching Contributions." Matching Contributions means:
(a) an Employer contribution made to the Plan (or any plan
required to be aggregated with the Plan for purposes of the
nondiscrimination requirements of Section 401(m) of the Code) on
account of Employee Contributions to the Plan;
(b) an Employer contribution made to the Plan (or any plan
required to be aggregated with the Plan for purposes of the
nondiscrimination requirements of Section 401(m) of the Code) on
account of an Elective Contribution to the Plan; or
(c) a forfeiture allocable on the basis of Excess Aggregate
Contributions.
A contribution made by the Employer in order to meet the Top
Heavy minimum contribution requirements of Section 9.04 hereof
may not be treated as a Matching Contribution.
(14) "Non-Highly Compensated Employee." Non-Highly Compensated
Employee means any Employee who is neither a Highly Compensated
Employee nor a Family Member.
(15) "Qualified Matching Contribution." Qualified Matching
Contributions means Matching Contributions that are fully vested
at the time of contribution and are subject to the withdrawal
restrictions of Section 6.06 hereof.
(16) "Qualified Nonelective Contributions." Qualified Nonelective
Contributions means Employer contributions, other than Elective
Contributions and Matching Contributions, that are fully vested
at the time of contribution and are not subject to the withdrawal
restrictions of Section 6.06 hereof.
8.02 Nondiscrimination Requirements for Compensation Deferral
Contributions
(a) Actual Deferral Percentage Test. In no event shall the Actual
Deferral Percentage of Participants who are Highly Compensated
Employees exceed the Actual Deferral Percentage of the
Participants who are Non-Highly Compensated Employees by more
than the greater of:
(1) 125 percent of the Actual Deferral Percentage for
Participants who are Non-Highly Compensated Employees, or
(2) The lesser of 200 percent of the Actual Deferral Percentage
for Participants who are Non-Highly Compensated Employees or two
percentage points higher than the Actual Deferral Percentage for
Participants who are Non-Highly Compensated Employees.
In the event that a Highly Compensated Employee participates in a
plan (or a group of plans maintained by the Company) that is
subject to both the nondiscrimination requirements of Section
401(k) of the Code and the nondiscrimination requirements of
Section 401(m) of the Code, the sum of the Actual Deferral
Percentage and the Actual Contribution Percentage for the group
of Highly Compensated Employees may not exceed the sum of:
(1) 125 percent of:
(A) the Actual Deferral Percentage of the Group of Non-Highly
Compensated Employees; or
(B) the Actual Contribution Percentage of Non-Highly Compensated
Employees; plus
(2) the lesser of:
(A) 2 percent plus the lesser of (l)(a) or (l)(b) above; or
(B) 200 percent of the lesser of (l)(a) or (l)(b) above.
Alternatively, the sum of the Actual Deferral Percentage and the
Actual Contribution Percentage for the group of the Highly
Compensated Employees may not exceed the sum of:
(1) 125 percent of the lesser of:
(A) the Actual Deferral Percentage of the group of Non-Highly
Compensated Employees; or
(B) the Actual Contribution Percentage of Non-Highly Compensated
Employees; plus
(2) the lesser of:
(A) 2 percent plus the greater of (l)(a) or (l)(b) above; or
(B) 200 percent of the greater of (l)(a) or (l)(b) above.
Any alternative calculation provided by such final regulation
shall be incorporated in this Plan by reference and shall apply
when and as provided in those regulations.
To the extent that it is necessary, the Actual Deferral
Percentage or the Actual Contribution Percentage of the Highly
Compensated Employee group shall be reduced to comply with this
limitation.
(b) Excess Contributions. To the extent that it is necessary in
order to comply with the nondiscrimination requirements of
Section 401(k) of the Code, the Actual Deferral Ratio of
Participants who are Highly Compensated Employees shall be
reduced and the Employer shall distribute the amount of the
Excess Contributions, as well as income attributable thereto, to
Participants no later than the end of the Plan Year following the
Plan Year for which said Excess Contributions were made. The
Actual Deferral Ratios of Participants who are Highly Compensated
Employees shall be reduced in accordance with the following:
(1) Elective Contributions made on behalf of Participants who are
Highly Compensated Employees and who are receiving the highest
percentages of Elective Contributions as a percentage of
Compensation shall be reduced beginning with the highest of such
percentages until the percentage of Elective Contributions of
each such Highly Compensated Employee is equal.
(2) If any Excess Contributions remain after the above reduction,
Elective Contributions made on behalf of all Participants who are
Highly Compensated Employees shall be reduced on a pro rata
basis.
Income or loss attributable to Excess Contributions shall be
determined in the same proportion that the amount of the
Participant's Elective Contributions distributed bears to the
balance of his appropriate Account.
The distribution of Excess Contributions and income may be made
without the consent of the Participant or his spouse, and shall
be considered as income to the Participant for purposes of
Section 61 of the Code.
If the Plan provides for Employee Contributions, the Plan
Administrator may re-characterize Elective Deferrals as Employee
Contributions as an alternative to distributing Excess
Contributions, provided the following requirements are met:
(1) The amount of re-characterized Elective Contributions, when
combined with the Highly Compensated Employee's other Employee
Contributions, does not exceed any limit on Employee
Contributions to the Plan, including the nondiscrimination
restrictions provided in Plan Section 8.03.
(2) The re-characterized Elective Contributions must be
considered as Employee Contributions for the Plan Year in which
the Elective Contributions were made.
(c) Special Rules.
(1) The Actual Deferral Ratio of a Family Group is determined by
combining the Elective Contributions, and Qualified Matching
Contributions and Qualified Nonelective Contributions if
appropriate, and Compensation of all members of the Family Group.
Such Family Group shall be treated as one Participant for
purposes of the limitation described in Plan Section 8.02(a) and
(b). The determination and correction of Excess Contributions of
a Family Group whose Actual Deferral Ratio is determined under
these Family Aggregation Rules shall be accomplished by reducing
the Actual Deferral Ratio as required by Plan Section 8.02(b) and
allocating the Excess Contributions for the Family Group among
the Family Members in proportion to the Elective Contribution of
each Family Member that is combined to determine the Actual
Deferral Ratio. The Excess Contribution allocated to each Family
Member shall be distributed to each Family Member as described in
Plan Section 8.02(b).
(2) In the event that the Plan satisfies the requirements of
Section 410(b) of the Code only if aggregated with one or more
other plans, or if one or more other plans satisfy the
requirements of Section 410(b) of the Code only if aggregated
with the Plan, then this Section 8.02 shall be applied by
determining the Actual Deferral Ratios of all eligible
Participants as if all such plans were a single plan.
(3) For purposes of this Section 8.02, the Actual Deferral Ratio
for any Participant who is a Highly Compensated Employee for the
Plan Year and who is eligible for Elective Contributions under
two or more plans described in Section 401(a) of the Code or
arrangements described in Section 401(k) of the Code that are
maintained by the Company or the Employer shall be determined as
if all such contributions were made under a single plan.
8.03 Nondiscrimination Requirements for Matching Contributions
and Employee Contributions
(a) Actual Contribution Percentage Test. In no event shall the
Actual Contribution Percentage of Participants who are Highly
Compensated Employees exceed the Actual Contribution Percentage
of the Participants who are Non-Highly Compensated Employees by
more than the greater of:
(1) 125 percent of the Actual Contribution Percentage for
Participants who are Non-Highly Compensated Employees, or
(2) The lesser of 200 percent of the Actual Contribution
Percentage for Participants who Non-Highly Compensated Employees
or two percentage points higher than the Actual Contribution
Percentage for Participants who are Non-Highly Compensated
Employees.
In the event that a Highly Compensated Employee participates in
the Plan and a cash or deferred arrangement maintained by the
Employer that is subject to the nondiscrimination requirements of
Section 401(k) of the Code, the sum of the Actual Deferral
Percentage for the group of Highly Compensated Employees in the
Plan subject to Section 401(k) and the Actual Contribution
Percentage for Highly Compensated Employees under this Plan may
not exceed the sum of:
(1) 125 percent of the greater of:
(A) the Actual Deferral Percentage of the group of Non-Highly
Compensated Employees; or
(B) the Actual Contribution Percentage of Non-Highly Compensated
Employees; plus
(2) the lesser of:
(A) 2 percent of the lesser of (l)(a) or (l)(b) above; or
(B) 200 percent of the lesser of (l)(a) or (l)(b) above.
Alternatively, the sum of the Actual Deferral Percentage and the
Actual Contribution Percentage for the group of the Highly
Compensated Employees may not exceed the sum of:
(1) 125 percent of the lesser of:
(A) the Actual Deferral Percentage of the group of Non-Highly
Compensated Employees; or
(B) the Actual Contribution Percentage of Non-Highly Compensated
Employees; plus
(2) the lesser of:
(A) 2 percent of the greater of (l)(a) or (l)(b) above; or
(B) 200 percent of the greater of (l)(a) or (l)(b) above.
Any alternative calculation provided by such final regulation
shall be incorporated in this Plan by reference and shall apply
when as provided in those regulations.
To the extent that it is necessary, the Actual Deferral
Percentage or the Actual Contribution Percentage of the Highly
Compensated Employee group shall be reduced to comply with this
limitation.
(b) Excess Aggregate Contributions. To the extent that it is
necessary in order to comply with the nondiscrimination
requirements of Section 401(m) of the Code, the Actual
Contribution Ratio of Participants who are Highly Compensated
Employees shall be reduced and the Employer shall distribute the
amount of the vested Excess Aggregate Contributions, as well as
income attributable thereto, to Participants no later than the
end of the Plan Year following the Plan Year for which said
Excess Aggregate Contributions were made.
The Actual Contribution Ratios of Participants who are Highly
Compensated Employees shall be reduced in accordance with the
following:
(1) Employee Contributions made by Participants who are Highly
Compensated Employees and who are contributing the highest
percentage of Compensation shall be reduced beginning with the
highest of such percentages until the percentage of Employee
Contributions of each such Highly Compensated Employee is equal.
(2) If any Excess Aggregate Contributions remain after the above
reduction, then Employee Contributions made by all Participants
who are Highly Compensated Employees shall be reduced on a pro
rata basis.
(3) If any Excess Aggregate Contributions remain after the above
reduction, Matching Contributions made on behalf of Participants
who are Highly Compensated Employees and who are receiving the
highest percentages of Matching Contributions as a percentage of
Compensation shall be reduced beginning with the highest of such
percentages until the percentage of Matching Contributions of
each such Highly Compensated Employee is equal.
(4) If any Excess Aggregate Contributions remain after the above
reductions, Matching Contributions made on behalf of all
Participants who are Highly Compensated Employees shall be
reduced on a pro rata basis.
Income or loss attributable to Excess Aggregate Contributions
shall be determined in the same proportion that the amount of the
Participant's Employee Contributions or Matching Contributions
distributed bears to the balance of his appropriate Account.
The distribution of Excess Aggregate Contributions and income may
be made without the consent of the Participant or his spouse, and
shall be considered as income to the Participant, except to the
extent of Employee Contributions distributed, for purposes of
Section 61 of the Code.
(c) Special Rules.
(1) The Actual Contribution Ratio of a Family Group is determined
by combining the Employee Contributions, Matching Contributions
and Compensation of all members of the Family Group.
Such Family Group shall be treated as one Participant for
purposes of the limitation described in Plan Section 8.03(a and
b). The determination and correction of Excess Aggregate
Contributions of a Family Group whose Actual Contribution Ratio
is determined under these Family Aggregation Rules shall be
accomplished by reducing the Actual Contribution Ratio as
required by Plan Section 8.03(b) and allocating the Excess
Aggregate Contributions for the Family Group among the Family
Members in proportion to the Employee Contributions and Matching
Contributions of each Family Member that is combined to determine
the Actual Deferral Ratio. The Excess Aggregate Contribution
allocated to each Family Member shall be distributed to each
Family Member as described in Plan Section 8.03(b).
(2) In the event that the Plan satisfies the requirements of
Section 410(b) of the Code only if aggregated with one or more
other plans, or if one or more other plans satisfy the
requirements of Section 410(b) of the Code only if aggregated
with the Plan, then this Section 8.03 shall be applied by
determining the Actual Contribution Ratios of all eligible
Participants as if all such plans were a single plan.
(3) For purposes of this Section 8.03, the Actual Contribution
Ratio for any Participant who is a Highly Compensated Employee
for the Plan Year and who is eligible to make Employee
Contributions or to receive Matching Contributions to his account
under two or more plans described in Section 401(a) of the Code
or arrangements described in Section 401(k) of the Code that are
maintained by the Company or the Employer shall be determined as
if all such contributions were made under a single plan.
ARTICLE IX
TOP HEAVY PROVISIONS
9.01 Definitions
The following definitions shall apply for purposes of this
Article IX:
(a) "Aggregation Group." Aggregation Group shall mean the
following:
(1) Each plan of the Employer in which a Key Employee is a
Participant;
(2) Each other plan of the Employer (including a terminated plan
of the Employer if it was maintained within the last five (5)
years ending on the Determination Date for the Plan Year being
tested for Top Heavy status) that allows a plan covering a Key
Employee to meet qualification requirements under the coverage
rules of Section 410 or the anti-discrimination rules of Section
401(a)(4) of the Code;
(3) At the option of the Employer, any other Plan maintained by
the Employer as long as the expanded Aggregation Group including
such plan or plans continues to satisfy the coverage rules of
Section 410 and the antidiscrimination rules of Section 401(a)(4)
of the Code.
(b) "Determination Date." Determination Date shall mean the last
day of the Plan Year preceding the Plan Year which is being
tested for Top Heavy status. In the first Plan Year, the
Determination Date shall mean the last day of the Plan Year which
is being tested for Top Heavy status.
(c) "Key Employee." Key Employee means any Employee, former
Employee, or beneficiary of such Employees, who at any time
during the Plan Year or the four preceding Plan Years is:
(1) an officer having Annual Compensation from the Employer
greater than 50 percent of the Section 415(b)(1)(A) dollar limit
(as adjusted and in effect for that Plan Year);
(2) one of ten employees having Annual Compensation from the
Employer of more than the limitation in effect under Section
415(c)(1)(A) of the Code, and owning (or considered as owning
within the meaning of Section 318 of the Code) both more than an
.5 percent interest as well as one of the ten largest interests
in the Employer. However, if two Employees have the same
ownership interest in the Employer, the Employee having the
greater Annual Compensation shall be treated as having the larger
interest; (3) a 5 percent owner of the Employer; or
(4) a 1 percent owner of the Employer having an Annual
Compensation from the Employer of more than $l.
For purposes of determining the top ten owners, 5 percent owners,
or 1 percent owners, ownership is determined without regard to
the aggregation rules of Sections 414(b), (c) and (m) of the
Code.
(d) "Non-Key Employee." Non-Key Employee means any Employee who
is not a Key employee. Non-Key Employees include Employees who
are former Key Employees.
(e) "Valuation Date." Valuation Date means the last day of the
Plan year.
9.02 Determination of Top Heavy Status
The Plan will be considered Top Heavy if, as of the Determination
Date, the present value of cumulative accrued benefits under the
Plan for Key Employees exceeds 60 percent of the present value of
the cumulative accrued benefits under the Plan for all Employees.
In determining the ratio of accrued benefits for Key Employees to
all other Employees, the Plan Administrator shall use the
procedure as outlined in Section 416(g) of the Code which is
incorporated herein by reference. In determining whether the Plan
is considered Top Heavy, all plans within the Aggregation Group
will be utilized for the calculation. For this purpose, all
Employer Contributions, including Compensation Deferral
Contributions, and forfeitures shall be taken into account in
determining the contribution percentage made on behalf of any Key
Employee.
Solely for the purpose of determining if the Plan, or any other
plan included in the Aggregation Group is Top Heavy, the accrued
benefit of an Employee other than a Key Employee shall be
determined under:
(a) the method, if any, that uniformly applies for accrual
purposes under all plans maintained by the Employer or the
Company, or
(b) if there is no such method, as if such benefit accrued not
more rapidly than the slowest accrual rate permitted under the
fractional accrual rate of Section 41 l(b)(l)(C) of the Code.
The present value of cumulative accrued benefits of a Participant
who has not been credited with an Hour of Service for the
Employer maintaining the Plan during the five year period ending
on the Determination Date will be disregarded for purposes of
this Article IX.
9.03 Combination of Defined Benefit and Defined Contribution Plan
In the event the Plan is deemed to be Top Heavy, the defined
benefit and defined contribution fraction set forth in Section
7.01(c) will be calculated by substituting 1.0 for 1.25. If a
Non-Key Employee participates in this Plan and a defined benefit
plan which are both Top Heavy, the minimum contribution
requirement for this Plan and the minimum benefit requirement for
the defined benefit plan, pursuant to Section 416 of the Code,
will be satisfied if such Participant is provided with a
contribution to the Plan equal to 5 percent of Annual
Compensation.
9.04 Minimum Contribution
In the event that the Plan in aggregation with any other Defined
Contribution Plans of the Employer is determined to be Top Heavy,
the Participants who are Non-Key Employees will be eligible for a
minimum contribution for such Plan Year. This minimum
contribution, which shall be allocated to the Profit Sharing
Contributions Account of participants who are Non-Key Employees,
will be contributed to this Plan in an amount equal to 3 percent
of Annual Compensation or if less, the largest contribution
percentage of Annual Compensation provided on behalf of any Key
Employee. The minimum contribution required by this Section 9.04
shall be made on behalf of such Participants who are employed as
of the last day of the Plan Year regardless of the number of
Hours of Service credited to each Participant for such Plan Year,
regardless of such Participant's level of Annual Compensation and
regardless of whether such Participant is authorizing
Compensation Deferral Contributions to the Plan. If this minimum
contribution is provided by another Defined Contribution Plan of
the Employer, then this Section 9.04 will not apply to this Plan.
If part of this minimum contribution is provided by another
Defined Contribution Plan of the Employer, then the balance of
the minimum contribution shall be provided by this Plan.
Compensation Deferral Contributions of Non-Key Employees shall
not be considered as part of the minimum contribution required by
this Section 9.04.
9.05 Minimum Vesting
In the event the Plan is determined to be Top Heavy, each
Participant shall have a nonforfeitable interest in his Accounts
at least equal to the following schedule:
Years of Service Nonforfeitable Percentage
Less than 3 0 percent
3 or more 100 percent
Irrespective of this provision, the above schedule shall not
apply where the nonforfeitable interest in the Participant's
Accounts under Section 5.03 hereof would be greater.
ARTICLE X
AMENDMENT OR TERMINATION
10.01 Amendment
The Employer reserves the right, at any time and from time to
time, to amend in whole or in part either retroactively or
prospectively any or all of the provisions of the Plan without
the consent of any Participant or his beneficiaries hereunder.
Such amendment shall be stated in an instrument executed by the
Employer and the Trustee in the same manner and form as the Plan
and upon the execution thereof, the Plan shall be deemed to have
been amended in the manner therein set forth and the Employer,
the Trustee and all Participants and their beneficiaries
hereunder shall be bound thereby; provided, however, that no
amendment:
(a) shall authorize, cause or permit any part of the Trust Fund
(other than such part as is required to pay taxes and
administrative expenses) to be used or diverted to purposes other
than the exclusive benefit of the Participants, former
Participants or their beneficiaries or estates.;
(b) shall have the effect of vesting in the Employer any interest
in or control over any policies of insurance purchased hereunder
or over any part of the Trust Fund subject to the terms of this
Plan;
(c) shall affect the rights, duties or responsibilities of the
Trustee without its Consent; or
(d) shall have any retroactive effect so as to deprive any
Participant of his nonforfeitable interest already accrued, or
eliminate an optional form of benefit, except only that any
amendment may be made retroactive which is necessary to conform
the Plan to mandatory provisions of Federal or State law,
regulations or rulings.
Notwithstanding the foregoing, the Employer may unilaterally
amend the Plan without Trustee execution if the amendment does
not affect the rights, duties or responsibilities of the Trustee.
Such amendments, however, must be provided to the Trustee by the
Employer.
10.02 Plan Termination or Discontinuance of Contributions
The Employer shall have the right, at any time, to terminate the
Plan. Upon such termination, or any partial termination, the
entire interest of each affected Participant's Accounts shall
become nonforfeitable. Upon the discontinuance of the Employer's
contributions or suspension thereof on other than a temporary
basis, the entire interest of each affected Participant's
Accounts shall become nonforfeitable. Any unallocated funds
existing at the time of such termination or discontinuance shall
be allocated to the then affected Participants in the same manner
as Employer contributions under Section 4.02(a).
In the event the Employer terminates the Plan but does not
terminate the Trust Fund, the Trustee, in its sole discretion,
may either continue to maintain and administer the Trust Fund or
terminate the same. No termination of the Plan shall have the
effect of vesting in the Employer any interest in or control over
any part of the Trust Fund.
Distribution upon Plan termination shall be made in accordance
with the provisions of Article VI hereof.
10.03 Merger, Consolidation or Transfer of Assets
The Plan may be merged, consolidated or its assets or liabilities
transferred to any other plan provided each Participant would
receive a benefit immediately after such merger, consolidation or
transfer, if the successor plan then terminated, which is equal
to or greater than the benefit he would have received immediately
prior to such merger, consolidation or transfer if the Plan were
to have terminated on such date.
ARTICLE XI
ADMINISTRATION
11.01 Plan Administrator
The Employer shall appoint a Committee to administer the Plan.
The Committee shall be the Plan Administrator and each member of
such Committee shall be a Named Fiduciary. This Committee shall
consist of members who may be officers, other employees of the
Employer or any other individual. No member shall ever be
disqualified from exercising the powers and discretion herein
conferred by reason of the fact that such member is or may
thereafter be a Participant or entitled to benefits hereunder.
The members of the Committee shall serve at the pleasure of the
Employer. Any member may resign by delivering his written
resignation to the Employer and the Committee. Vacancies in the
Committee arising by resignation, death, removal or otherwise,
shall be filled by the Employer.
(a) Powers and Duties. The Committee shall administer the Plan in
accordance with its terms and shall have all powers necessary to
administer the Plan in accordance with the provisions set forth
in the Plan. The Committee shall interpret the Plan and shall
determine all questions arising in the administration,
interpretation and application of the Plan. Any such
determination by the Committee shall be conclusive and binding on
all persons, subject to the claims procedure as set forth in
Section ll.03 hereof.
(b) Organization and Operation of Committee. The Committee shall
act by a majority of its members at that time in office and such
action may be taken either by a vote at a meeting or taken in
writing by unanimous consent without a meeting.
The Committee may authorize any one or more of its members to
execute any document or documents on behalf of the Committee, in
which event the Committee shall notify the Trustee in writing of
such action and the name or names of its member or members so
designated. The Trustee thereafter shall accept and rely upon any
document executed by such member or members as representing
action by the Committee until the Committee shall file with the
Trustee a written revocation of such designation.
The Committee may adopt such by-laws and regulations as it deems
desirable for the conduct of its affairs, and may appoint such
accountant, counsel, specialists, and other persons as it deems
necessary or desirable in connection with the administration of
the Plan. The Committee shall be entitled to rely conclusively
upon, and shall be fully protected in any action taken by it in
good faith in relying upon, any opinions or reports which shall
be furnished to it by any such accountant, counsel or other
specialists.
(c) Payment of Expenses. The members of the Committee shall serve
without compensation for services as such, but all expenses of
the Committee shall be paid by the Employer. Such expense shall
include any expenses incident to the functioning of the
Committee, including but not limited to, fees of accountants,
legal counsel, investment counsel and other specialists, and
other costs of administering the Plan. At the option of the
Committee, reasonable and necessary expenses of administering the
Plan as described in this Section to include expenses incurred to
properly communicate the Plan to employees may be paid by the
Trustee from the Trust Fund. The Committee shall act as a prudent
buyer of services by securing engagement letters and itemized
billings.
(d) Limitation on Liability. It is intended to allocate to the
Committee only those responsibilities included in this Section
and the Employer shall indemnify each Committee member against
personal loss by reason of service as a Committee member. The
Committee shall have no responsibility for the custody or
management of the Trust Fund or for the evaluation of the
investment performance of such Trust Fund.
11.02 Records and Reports
The Committee shall keep a record of all its proceedings and
acts, and shall keep all such books of accounts, records and
other data as may be necessary for the proper administration of
the Plan. The Committee shall notify the Trustee and the Employer
of any action taken by it and, when required, shall notify any
other interested person or persons.
11.03 Claims Procedure
A claim for a Plan benefit shall be deemed filed when a written
communication is made by a Participant or beneficiary, or the
authorized representative of either, which is reasonably
calculated to bring the claim to the attention of the Plan
Administrator.
If a claim is wholly or partially denied, notice of such decision
shall be furnished to the claimant in writing within 90 days
after receipt of the claim by the Plan Administrator. Such notice
shall set forth, in a manner calculated to be understood by the
claimant: (1) the specific reason or reasons for the denial; (2)
specific reference to pertinent Plan provisions on which the
denial is based; (3) a description of any additional material or
information necessary to perfect the claim and an explanation of
why such material or information is necessary; and (4) an
explanation of the Plan's claim review procedure .
Within 90 days from the receipt of the note of denial, a claimant
may appeal such denial to the Plan Administrator for a full and
fair review. The review shall be instituted by the filing of a
written request for review by the claimant or his authorized
representative within the 90 day period stated above. A request
for review shall be deemed filed as of the date of receipt of
such written request by the Plan Administrator. The claimant or
his authorized representative shall have the right to review all
pertinent documents, may submit issues and comments in writing
and may do such other appropriate things as the Plan
Administrator may allow. The decision of the Plan Administrator
shall be made not later than 60 days after the receipt of the
request for review; unless special circumstances, such as the
need to hold a hearing, requires an extension of time, in which
case, a decision shall be rendered not later than 120 days after
the receipt of a request for review which decision shall be final
and binding on such claimant.
11.04 Participants' Right to Vote Employer Stock
Each Participant shall be entitled to direct the exercise of
voting rights with respect to the whole shares of stock allocated
to said Participant's Account. The Company shall provide to each
Participant materials pertaining to the exercise of such rights
containing all the information distributed to shareholders as
part of its distribution of such information to shareholders. A
Participant shall have the opportunity to exercise any such
rights within the same time period as shareholders of the
Company. In the exercise of voting rights, votes representing
fractional shares of stock and shares of stock 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
shares of stock.
ARTICLE XII
EXEMPT LOAN
12.01 Definition of Exempt Loan
An Exempt Loan is a direct loan of such, a purchase money
transaction, an assumption of the obligation of the Plan, or a
guarantee of the obligation of the Plan assumed in conjunction
with one of the above between the Plan and a party-in-interest as
defined in Section 3(14) of ERISA.
12.02 Requirements for an Exempt Loan
Any Exempt Loan entered into by the Plan shall meet the following
requirements:
(a) The loan shall primarily be for the benefit of Participants.
The rate of interest shall be reasonable and the net effect of
the rate of interest and the price of the securities to be
acquired with the loan shall be such that Plan assets would not
be depleted. The loan shall be made only upon such terms as would
result from arm's length negotiations between the Plan and
independent third parties.
(b) The proceeds received shall be used only to acquire Employer
securities, to repay the loan or to repay a prior Exempt Loan.
(c) The loan shall be made without recourse against the general
assets of the Plan. The collateral shall consist only of
securities acquired with the proceeds of the loan, or securities
acquired with proceeds of a prior Exempt Loan if the prior Exempt
Loan is being paid with proceeds of the current Exempt Loan.
There shall be no right of any lender to the Plan against assets
of the Plan other than collateral given for the loan,
contributions made to the Plan to meet the obligations of the
loan, and earnings attributable to collateral and investment of
the contributions made to meet the obligations of the loan. In
the event of default the amount of Employer stock transferred to
the lender in satisfaction of a default cannot exceed the amount
of such default. In the case of a default in favor of a
party-in-interest, the default shall only be to the extent of
current payments due.
(d) Payments made by the Plan to repay an Exempt Loan shall not
exceed an amount equal to contributions and earnings received
during or prior to the year minus such payments in prior years.
The Employer stock purchased with the proceeds of the loan shall
be held in a suspense account until the stock is released from
the suspense account and allocated to the Participants' Profit
Sharing Contributions Accounts. Stock released from the suspense
account must be equal to an amount calculated by multiplying
the amount of encumbered stock by the fraction of the principal
and interest paid for the Plan Year divided by the sum of the
principal and interest paid for the Plan Year plus principal and
interest for all future years.
(e) The Employer stock acquired with the proceeds of an Exempt
Loan shall not be subject to any option other than the option
provided for in Section 12.03 or a buy-sell or similar
arrangement when the stock is held by or distributed from the
Plan whether or not the Plan ceases to be an ESOP or the Exempt
Loan is fully repaid.
12.03 Right of First Refusal
Employer stock acquired with the assets of an Exempt Loan may be
subject to a right of first refusal in the Employer, or in the
Plan. The right of first refusal shall comply with the following
requirements:
(a) The selling price and other terms under the right of first
refusal must be not less favorable to the security holder than
the greater of the fair market value of the security as
determined under Article XIV, or the purchase price or other
terms offered by a third person pursuant to a good faith offer to
purchase.
(b) The right of first refusal must lapse no later than 14 days
after the security holder gives written notice to the Employer
than an offer by a third party to purchase the stock has been
received.
ARTICLE XIII
TRUSTEE
13.01 Fiduciary Status
The Trustee shall be a Named Fiduciary and agrees to accept the
duties and responsibilities attendant thereto.
13.02 Establishment and Acceptance of Trust
The Trustee shall receive any contributions paid to it. All
contributions so received together with the income therefrom
shall be held, managed and administered in the Trust pursuant to
the terms of the Plan. The Trustee hereby accepts the Trust
created hereunder and agrees to perform its duties under the
Plan.
13.03 Trustee's General Powers
The Trustee shall have the following powers and authority in the
administration of the Trust Fund:
(a) To primarily hold and invest in Qualifying Employer
Securities such that the Plan maintains its status as an Employee
Stock Ownership Plan, but subject to the Fiduciary requirements
of ERISA.
(b) To hold, sell, invest, reinvest, convey, exchange, mortgage,
pledge, option, lease for any term of years irrespective of the
period of any trust hereunder and with or without privilege or
option to purchase (including 99-year leases renewable forever),
or otherwise deal in and dispose of all or any part of the Trust
property, without order of court at public or private sale, for
cash or on credit, for such considerations and on such terms and
conditions as the Trustee, in its uncontrolled discretion, may
deem either necessary, advisable or expedient; and no purchaser,
mortgagee, pledgee, optionee, lessee or any other person or
persons dealing with the Trustee shall be required or permitted
to see the application of any purchase money or Trust Funds, or
be required to inquire into the power or authority of the Trustee
or into the validity, necessity, advisability or expediency of
any act of the Trustee.
(c) To vote upon any stocks, bonds or other securities; to give
general or special proxies or powers of attorney with or without
power of substitution; to exercise any conversion privileges,
subscription rights or other options, and to make any payments
incidental thereto; to oppose or to consent to, or otherwise
participate in corporate reorganizations or other changes
affecting corporate securities, and to delegate discretionary
powers and to pay any assessments or charges in connection
therewith; and generally to exercise any of the powers of an
owner with respect to stocks, bonds, securities or other property
held as part of the Trust Fund. Such powers shall be subject to
the voting rights granted Participants under Article XI.
(d) To cause any securities, real property or other tangible or
intangible property held as part of the Trust Fund to be
registered or titled in its own name or in the name of one or
more of its nominees, and to hold any investments to bearer form,
but the books and records of the Trustee shall at all times show
that all such investments are part of the Trust Fund.
(e) To borrow in a manner consistent with Article XII regarding
Exempt Loans.
(f) To borrow, for not more than 12 months, for the purpose of
the Trust, but not as described in Article XII, in any amount or
amounts, not exceeding in the aggregate 25 percent of the fair
market value of the Trust Fund as of the date of borrowing and
upon such terms and conditions as the Trustee shall deem
advisable; and, for any sum so borrowed, to issue promissory
notes as Trustee, and to secure the repayment thereof by pledging
all or any part of the Trust Fund; an no person lending money to
the Trustee shall be bound to see to the application of the money
lent or to inquire into the validity, expedience or propriety of
any such borrowing.
(g) To keep such portion of the Trust Fund in cash or cash
balances as the Trustee may, from time to time, deem to be in the
best interests of the Trust created hereby, without liability for
interest thereof.
(h) To accept and retain for such time as the Trustee may deem
advisable any securities or other property received or acquired
by it as Trustee hereunder, whether or not such securities or
other property would normally be purchased as investments
hereunder.
(i) To make, execute, acknowledge and deliver any and all
documents of transfer and conveyance and all other instruments
that may be necessary or appropriate to carry out the powers
herein granted.
(j) To settle, compromise or submit to arbitration any claims,
debts or damages due or owing to or from the Trust Fund, to
commence or defend suits or legal or administrative proceedings
and to represent the Trust Fund in all suits and legal and
administrative proceedings.
(k) To employ suitable agents, investment counsel and legal
counsel (who may be counsel for the Employer), and to pay their
reasonable expenses and compensation.
(l) To do all such acts, take all such proceedings and exercise
all such rights and privileges, although not specifically
mentioned herein, as the Trustee may deem necessary to administer
the Trust Fund and to carry out the purpose of this Trust.
13.04 Payment of Compensation, Expenses and Taxes
The Trustee shall be paid such reasonable compensation as shall
from time to time be agreed upon in writing by the Employer and
the Trustee. In the event that a Trustee is also an Employee of
the Employer, no compensation shall be payable for services as
Trustee. In addition, the Trustee shall be reimbursed for any
reasonable expenses, including legal counsel fees and investment
counsel fees, incurred in the administration of the Trust Fund.
Such compensation and expenses shall be paid by the Employer, but
until paid shall constitute a charge upon the Trust Fund. All
taxes of any and all kinds whatsoever that may be levied or
assessed under existing or future laws upon, or in respect of,
the Trust Fund or the income therefrom shall be paid from the
Trust Fund.
13.05 Accounting
The Trustee shall keep accurate and detailed accounts of all
investments, receipts, disbursements and other transactions
hereunder. All accounts, books and records relating to such
transactions shall be opened to inspection and audit at all
reasonable times by any person designated by the Plan
Administrator.
13.06 Trustee's General Powers
The Trustee shall discharge its duties with respect to the Plan
solely in the interest of the Participants and their
beneficiaries for the exclusive purpose of providing benefits to
Participants and their beneficiaries. The Trustee shall discharge
its duties with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man, acting in like
capacity and familiar with such matters, would use in the conduct
of an enterprise of a like character and with like aims. The
Trustee shall discharge its duties in accordance with the terms
and provisions of the Plan.
13.07 Voting Employer Stock
All unallocated Employer stock of each Participant shall be voted
by the Trustee in accordance with instructions received from the
Plan Administrator. The Trustee shall not exercise its power to
vote any Employer stock for which it has not received
instructions .
13.08 Removal, Resignation and Appointment of Successor Trustee
The Trustee may be removed by the Employer at any time upon 30
days' written notice to the Trustee and the Plan Administrator.
The Trustee may resign at any time upon 30 days' written notice
to the Employer and the Plan Administrator. Upon such removal or
resignation of the Trustee, the Employer shall appoint a
successor trustee or trustees who shall have the same powers and
duties as those conferred upon the Trustee hereunder. Upon
acceptance of such appointment by the successor trustee, the
Trustee shall assign, transfer and pay over to such successor the
funds and properties then constituting the Trust Fund. The
Trustee is authorized, however, to reserve such sum of money as
it may deem advisable for payment of its fees and expenses in
connection with the settlement of its account or otherwise, and
any balance of such reserve remaining after the payment of such
fees and expenses shall be paid over to the successor trustee.
13.09 Investment Manager
The investment powers conferred upon the Trustee shall be
exercised by the Trustee in its sole discretion; provided,
however, that the Plan Administrator may, at any time and from
time to time, appoint one or more:
(a) banks as defined in the Investment Advisors Act of 1940, or;
(b) persons registered as an Investment Advisor under said Act,
to act as Investment Manager(s) of all such portions of the Trust
assets as the Plan Administrator in its sole discretion shall
direct. In order to serve as Investment Manager, any such bank or
person must state in writing to the Plan Administrator and the
Trustee that it meets the requirements set forth in this Section
13.09 to be an Investment Manager and that it acknowledges that
it shall be a fiduciary with respect to this Trust during all
periods that it shall serve as such. During any period in which
an Investment Manager has been appointed and is serving with
respect to the Trust assets or any portion thereof, it shall have
all powers normally given to the Trustee under this Article XIII
with respect to the management, acquisition or disposition of any
asset of the Trust Fund, or such portion thereof and the Trustee
shall have no powers, duties or obligations with respect to the
investment, management, acquisition or disposition of such
assets. The Investment Manager shall be entitled to receive such
reasonable compensation and such reimbursement of his expenses on
such basis or in such amounts as may be agreed to or approved
from time to time by the Plan Administrator. Such compensation
and expenses shall be borne and paid from the Trust as a regular
charge and expenses thereof, unless otherwise paid by the
Employer. At any time, the Plan Administrator, by written notice
to the Investment Manager and the Trustee, may change that
portion of the Trust assets subject to management by the
Investment Manager. Any Investment Manager may resign at any time
y giving written notice to the Plan Administrator and the Trustee
of its intention to do so at least 30 days before such
resignation is to become effective, unless the Plan Administrator
shall accept as adequate a shorter notice. The Plan Administrator
may remove any Investment Manager by written notice delivered to
the Investment Manager and the Trustee at least 30 days before
such removal is to become effective unless the Investment Manager
shall accept as adequate a shorter notice. Unless the Plan
Administrator appoints a successor to an Investment Manager which
has resigned or been removed, or which is no longer managing a
portion of the Trust assets, the powers, duties and obligations
of the Trustee with respect to the portion of the Trust assets
formerly managed by the Investment Manager shall be automatically
restored.
13.10 Payment of Expenses
Pursuant to instructions of the Company, the Trustee shall pay
from the Trust Fund all reasonable and necessary expenses, taxes
and charges incurred on behalf of the Fund or the income thereof
in connection with the administration or operation of the Trust
Fund to the extent that such items are not otherwise paid. No
provision of this Plan shall be construed to provide for payment
to or the reimbursement of the Trustee (or any employee or agent
of the Trustee) with respect to any liability or expense
(including counsel fees) that may be incurred by the Trustee (or
any employee or agent) having been found to have breached any
responsibility it may have under the other provisions of this
Plan or any responsibility or prohibition imposed upon it by
ERISA.
ARTICLE XIV
INVESTMENT OF THE TRUST FUND
14.01 General Investment Fund
The Trustee shall have the right to combine the Accounts of the
Participants, except such portion of the Accounts as may have
been otherwise invested pursuant to this Article XIV, into a
general fund, hereinafter called the "General Investment Fund",
for the purpose of a general trust investment.
The Trustee shall invest and reinvest the principal and income of
the General Investment Fund, and shall keep it invested, without
distinction between principal and income, in any common or
preferred stocks, bonds, notes, mortgages, guaranteed dollar
amount or variable dollar amount annuities, or other securities,
including qualifying real estate or qualifying securities of the
Employer, real estate, shares of regulated investment companies,
common or collective trust funds, or in property of any kind or
nature, whether or not such investment be expressly authorized or
permitted by statutes, court decisions, regulations or other
restrictions of law prescribing investments or other actions by
fiduciaries, it being the intention that except as otherwise
restricted by the provisions of the succeeding paragraphs of this
Section 14.01, the Trustee shall be relieved from all
restrictions imposed by present or future laws on investments
which may be made by a Trustee; provided, however, the Trustee
may, in its discretion, pending investment, temporarily retain in
cash or cash balances, or in a savings account maintained by the
Trustee in any bank or financial institution, including any bank
serving as Trustee hereunder, and bearing a reasonable rate of
interest, or in short term government obligations or commercial
papers, such portion of the General Investment Fund as it may
deem advisable.
In acquiring, investing, reinvesting, exchanging, retaining,
selling and managing property for the General Investment Fund,
the Trustee shall act solely in the interests of the Participants
and beneficiaries of the Plan with the care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent
man acting in like capacity and familiar with such matters would
use in the conduct of an enterprise of a like character and with
like aims.
In directing or making such investments, the Trustee shall not be
restricted to securities or other property of the character
authorized or required by applicable law from time to time for
trust investment and shall permit the value of any qualifying
securities and qualifying real property of the Employer in the
General Investment Fund to exceed 10 percent of the fair market value
of the General Investment Fund.
The Trustee shall diversify the investments of the General
Investment Fund so as to minimize the risk of large losses,
unless under the circumstances it is clearly prudent not to do
so.
Any other provision of this Plan to the contrary notwithstanding,
the Trustee shall not engage in any prohibited transaction as
that term is defined in Section 406 of ERISA.
The Trustee shall revalue the assets of the General Investment
Fund at their fair market value as of the end of each Plan Year
and at such other time as the Plan Administrator may direct. The
Accounts of each Participant shall then be adjusted by
apportioning the General Investment Fund, including income, as
thus revalued, among Participants Accounts in proportion to the
value of their respective interests in the General Investment
Fund immediately preceding such revaluation.
14.02 Individual Investment Funds
In accordance with procedures established by the Plan
Administrator, the Trustee shall separately invest and reinvest
all or any part of each Participant's Compensation Deferral
Contributions Account, Matching Contributions Account and the
Prior Plan Account upon receipt of and in accordance with written
directions for investment by such Participant received through
the Plan Administrator. Such amounts shall be invested as
directed by the Participant, in increments of at least 10 percent, in
one or more of the Investment Funds. The Investment Funds shall
include, but are not limited to, the following:
(a) Money Market Fund
(b) Bond Fund
(c) Stock Fund
(d) Balanced Fund
The Trustee may, however, in its discretion, pending investment,
temporarily retain in cash or cash balance such portion of a
Participant's Accounts as it may deem advisable.
A Participant may change the investment of his Accounts by
providing the Plan Administrator with written instructions to be
effective as of January 1, April 1, July 1 or October 1 of any
Plan Year. Said instructions must be received by the Plan
Administrator at least 15 days prior to the effective date. The
Participant may elect to invest future contributions differently
than present account balances.
The Trustee shall revalue the assets of each Investment Fund at
their fair market value as of the end of each Plan Year and at
such other time as the Plan Administer may direct. The Accounts
of each Participant shall then be adjusted by apportioning the
Investment Fund, including income, as thus revalued, among
Participants' Accounts in proportion to the value of their
respective interests in the Investment Fund immediately preceding
such revaluation.
Participants who have a Prior Plan Account from the Mid Am Bank
Profit Sharing Plan shall have a one-time option to direct the
investment of this Prior Plan Account into shares of Cumulative
Convertible Preferred Stock Series A. This election is effective
May 1, 1992 and may be made by completing forms provided by the
Plan Administrator.
14.03 Appraisal of Employer Stock
Annually, as of the last day of the Plan Year, the Employer shall
have made an appraisal of the Employer stock by a person who
customarily makes such appraisals and who is independent of the
Plan or the Employer, but only if the Employer stock is not
traded on a recognized exchange. For all purposes except with
regard to a transaction between the Plan and a party-in-interest,
the value as of the most recent Anniversary Date shall be used.
For all transactions between the Plan and a party-in-interest as
that term is defined in Section 3(14) of ERISA, the value of the
Employer stock must be determined as of the date of the
transaction. In the event of such transaction, the Employer shall
have made an independent appraisal of the Employer stock as of
the date of the transaction by a person who customarily makes
such appraisals and who is independent of the plan or the
Employer.
14.04 Diversification of Investments
This Section 14.04 applies only to a Participant's Profit Sharing
Contributions Account.
(a) Definitions.
(1) "Qualified Participant" means a Participant who has attained
age 55 and who has completed at least ten years of participation
in the Plan.
(2) "Qualified Election Period" means the period of participation
after the Participant becomes a Qualified Participant.
(b) Election by Qualified Participants. Each Qualified
Participant shall be permitted to direct the Plan as to the
investment of 25 percent of the value of the Participant's Profit
Sharing Contributions Account during his Qualified Election
Period. A Qualified Participant who attains age 60 may direct the
Plan as to the investment of 50 percent of the value of his
Profit Sharing Contributions Account during his remaining
Qualified Election Period.
(c) Method of Directing Investment. The Participant's direction
shall be provided to the Plan Administrator in writing; shall be
effective no later than 180 days after the close of the Plan Year
to which the direction applies; and shall specify which, if any,
of the options set forth in subsection (d) below the Participant
selects.
(d) Investment Options.
(1) At the election of the Qualified Participant, the Plan shall
distribute (notwithstanding Section 409(d) of the Code) the
portion of the Participant's Profit Sharing Contributions Account
that is covered by the election within 90 days after the last day
of the period during which the election can be made. Such
distribution shall be subject to such requirements of the Plan
concerning put options as would otherwise apply to a distribution
of Qualifying Employer Securities from the Plan. This Section
14.04(d)(1) shall apply notwithstanding any other provision of
the Plan other than such provision as require the consent of the
Participant to a distribution with a present value in excess of
$3,500. If the Participant does not consent, such amount shall be
retained in this Plan.
(2) In lieu of distribution under Section 14.04(d)(1) hereof, the
Qualified Participant who has the right to receive a cash
distribution under Section 14.04(d)(1) hereof may direct the Plan
to transfer the portion of the Participant's Profit Sharing
Contributions Account that is covered by the election to another
qualified plan of the Employer which accepts such transfers,
provided that such Plan permits Employee-directed investment and
does not invest in Qualifying Employer Securities to a
substantial degree. Such transfer shall be made no later than 90
days after the 1st day of the period during which the election
can be made.
(3) In lieu of alternatives (1) and (2) of this Section 14.04(d),
the Participant shall be provided an opportunity to select among
at least three investment options to include, but not limited to,
a stock fund, a bond fund and a money market or cash equivalent
fund. The Participant's election shall be made in accordance with
rules and procedures established by the Committee with amounts
invested in one or more funds in increments of at least 10%.
ARTICLE XV
MISCELLANEOUS
15.01 Participant's Rights
Neither the establishment of the Plan, nor any modification
thereof, nor the creation of any fund or account, nor any
distributions hereunder, shall be construed as giving to any
Participant or other person any legal or equitable right against
the Employer, or any officer or Employee thereof, or the Trustee,
or the Plan Administrator except as herein provided. Under no
circumstances shall the terms of employment of any Participant be
modified or in any way affected thereby.
15.02 Assignment or Alienation of Benefits
No benefit or interest available hereunder will be subject to
assignment or alienation, either voluntarily or involuntarily.
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 or any domestic relations order entered before
January 1, 1985. For purposes of this Section 15.02, "Qualified
Domestic Relations Order" means any domestic relations order
which creates or recognizes the existence of an alternate payee's
right to, or assigns to an alternate payee the right to, receive
all or a portion of the benefits payable with respect to a
Participant, and which otherwise meets the requirements of
Section 414(p) of the Code.
As soon as practical after receipt of a domestic relations order,
the Plan Administrator shall determine whether it is a Qualified
Domestic Relations Order. If the domestic relations order is
determined to be a Qualified Domestic Relations Order, the Plan
Administrator shall be permitted, in accordance with rules and
regulations promulgated by the Internal Revenue Service and the
rules and regulations established by the Plan Administrator, to
direct the Trustee to make an immediate distribution to the
alternate payee (i) if the amount is less than $3,500, (ii) as
provided in any such Order, or (iii) as elected by the alternate
payee. Such distribution shall be permitted regardless of the age
or employment of the Participant and regardless of whether the
Participant is otherwise entitled to a distribution.
15.03 Reversion of Funds to Employer
All Employer contributions are conditioned upon their
deductibility pursuant to Section 404 of the Code. The Employer
shall not directly or indirectly receive any refund on
contributions made to the Trust Fund except in the following
circumstances:
(a) The contribution was made by reason of a mistake of fact,
(b) the deduction for such contribution is disallowed, or
(c) the initial qualification of the Plan is denied under the
Code.
Earnings attributable to any contribution subject to refund shall
not be refunded. The amount subject to refund shall be reduced by
any loss attributable thereto, and by any amount which would
cause the individual account of any Participant to be reduced to
less than the balance which would have been in the account had
the contribution subject to refund not been made. The return of
the contribution shall be made within one (1) year of the
mistaken payment, the disallowance of deduction (to be extent
disallowed) or the denial of qualification, as the case may be.
Except as provided above, under no circumstances shall any amount
of the principal or income of the Trust Fund be used for or
diverted to the Employer or be used for or diverted to purposes
other than the exclusive benefit of Participants, former
Participants, and their beneficiaries.
15.04 Third Party Immunity
No third party, including but not limited to life insurance
companies and regulated investment companies, shall be deemed to
be a party to the Plan for any purpose or to be responsible for
the validity of the Plan; nor shall such third party be required
to take cognizance of the Trustee or of the Plan Administrator
hereunder, nor shall such third party be responsible to see that
any action of the Trustee or the Plan Administrator is authorized
by the terms of the Plan. Any such third party shall be fully
discharged from any and all liability for any amount paid to the
Trustee or paid in accordance with the direction of the Trustee
or the Plan Administrator, as the case may be, or for any change
made or action taken by such third party upon such direction; and
no such third party shall be obligated to see to the distribution
or further application of any monies so paid by such third party.
15.05 Delegation of Authority by Employer
Whenever the Employer, under the terms of the Plan, is permitted
or required to do or perform any act or matter or thing, it shall
be done and performed by any officer thereunto duly authorized.
15.06 Allocation of Responsibilities
None of the allocated responsibilities or any other
responsibilities shall be shared by any two or more Named
Fiduciaries unless such sharing is provided by a specific
provision of the Plan. Whenever one Named Fiduciary is required
to follow the directions of another Named Fiduciary, the
responsibility shall be that of the Named Fiduciary giving the
directions.
15.07 Construction of Plan
To the extent not in conflict with the provisions of ERISA, all
questions of interpretation of the Plan shall be governed by the
laws of the State of Ohio.
15.08 Gender and Number
Wherever any words are used herein in the masculine gender, they
shall be construed as though they were also used in the feminine
gender in all cases where they would so apply, and wherever any
words are used herein in the singular form, they shall be
construed as though they were also used in the plural form in all
cases where they would so apply.
15.09 Headings
Headings of sections are for general information only, and the
Plan is not to be construed by reference thereto.
Executed at Bowling Green, Ohio, the day and year first above
written.
Mid Am, Inc.
Robin Wooddall by W. Granger Souder
Witness Senior Vice President/
General Counsel
Mid American National Bank & Trust
Company
Karen Simons by David E. Judy
Witness VP/TO
by J. Philip Ruyle SR VP/TO
APPENDIX A
LIST OF PARTICIPATING EMPLOYERS
EMPLOYER EFFECTIVE DATE
Mid Am, Inc. July 1, 1989
Mid American National Bank & Trust Company July 1, 1989
First National Bank Northwest Ohio July 1, 1989
Farmers Banking Company July 1, 1989
Citizens Building & Loan July 1, 1990
Mid Am Information Services, Inc. January 1, 1991
American Community Bank, NA October 31, 1992
(*merger of Farmers & Citizens)
Home Federal Savings January 1, 1993
Apollo Savings July 1, 1993
AmeriFirst March 19, 1993
(* merger of Home Federal & Apollo)