Lake City Bank
Deferred Compensation Plan
Master Plan Document
BEST PRACTICES SAMPLE FORM
(Use Only After Consulting With Tax And Legal Advisor)
Effective January 1, 2004
Copyright (C) 2003
By Clark Consulting, Inc.
Executive Benefits Practice
All Rights Reserved
Lake City Bank
Deferred Compensation Plan
Master Plan Document
TABLE OF CONTENTS
Page
ARTICLE 1 Definitions...............................................1
ARTICLE 2 Selection, Enrollment, Eligibility........................5
2.1 Selection by Committee....................................5
2.2 Enrollment Requirements...................................6
2.3 Eligibility; Commencement of Participation................6
2.4 Termination of Participation and/or Deferrals.............6
ARTICLE 3 Deferral Commitments/Vesting/Crediting/Taxes..............6
3.1 Minimum Deferrals.........................................6
3.2 Maximum Deferral..........................................6
3.3 Election to Defer; Effect of Election Form................7
3.4 Withholding and Crediting of Annual Deferral Amounts......7
3.5 Vesting...................................................7
3.6 401(k) Restoration Matching Amount........................7
3.7 Crediting/Debiting of Account Balances....................8
3.8 FICA and Other Taxes......................................9
ARTICLE 4 Deduction Limitation.....................................10
4.1 Deduction Limitation on Benefit Payments.................10
ARTICLE 5 In-Service Distribution; Unforeseeable Financial
Emergencies Withdrawal Election..........................10
5.1 In-Service Distribution..................................10
5.2 Other Benefits Take Precedence Over In-Service
Distributions............................................11
5.3 Withdrawal Payout/Suspensions for Unforeseeable
Financial Emergencies....................................11
ARTICLE 6 Retirement Benefit.......................................12
6.1 Retirement Benefit.......................................12
6.2 Retirement Benefit Election of Payment...................12
6.3 Timing of Retirement Distribution........................12
6.4 One-time Election to Change Retirement Distributions.....12
6.5 Failure to Make a Retirement Distributin Election........12
ARTICLE 7 Termination Benefit......................................12
7.1 Termination Benefit......................................12
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7.2 Payment of Termination Benefit...........................13
ARTICLE 8 Disability Waiver and Benefit............................13
8.1 Disability Waiver........................................13
8.2 Continued Eligibility; Disability Benefit................13
ARTICLE 9 Survivor Benefit.........................................14
9.1 Survivor Benefit.........................................14
9.2 Payment of Survivor Benefit..............................14
ARTICLE 10 Beneficiary Designation..................................14
10.1 Beneficiary..............................................14
10.2 Beneficiary Designation; Change of Beneficiary
Designation..............................................14
10.3 Acknowledgement..........................................15
10.4 No Beneficiary Designation...............................15
10.5 Doubt as to Beneficiary..................................15
10.6 Discharge of Obligations.................................15
ARTICLE 11 Leave of Absence.........................................15
11.1 Paid Leave of Absence....................................15
11.2 Unpaid Leave of Absence..................................15
ARTICLE 12 Termination, Amendment or Modification...................16
12.1 Termination..............................................16
12.2 Amendment................................................16
12.3 Plan Agreement...........................................17
12.4 Effect of Payment........................................17
ARTICLE 13 Administration...........................................17
13.1 Committee Duties.........................................17
13.2 Administration Upon Change In Control....................17
13.3 Agents...................................................17
13.4 Binding Effect of Decisions..............................17
13.5 Indemnity of Committee...................................18
13.6 Employer Information.....................................18
ARTICLE 14 Other Benefits and Agreements............................18
14.1 Coordination with Other Benefits.........................18
ARTICLE 15 Claims Procedures........................................18
15.1 Presentation of Claim....................................18
15.2 Notification of Decision.................................18
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15.3 Review of a Denied Claim.................................19
15.4 Decision on Review.......................................19
15.5 Legal Action.............................................20
ARTICLE 16 Trust....................................................20
16.1 Establishment of the Trust...............................20
16.2 Interrelationship of the Plan and the Trust..............20
16.3 Distributions From the Trust.............................20
ARTICLE 17 Miscellaneous............................................20
17.1 Status of Plan...........................................20
17.2 Unsecured General Creditor...............................20
17.3 Employer's Liability.....................................21
17.4 Nonassignability.........................................21
17.5 Not a Contract of Employment.............................21
17.6 Furnishing Information...................................21
17.7 Terms....................................................21
17.8 Captions.................................................21
17.9 Governing Law............................................21
17.10 Notice...................................................21
17.11 Successors...............................................22
17.12 Spouse's Interest........................................22
17.13 Validity.................................................22
17.14 Incompetent..............................................22
17.15 Court Order..............................................22
17.16 Distribution in the Event of Taxation....................23
17.17 Insurance................................................23
17.18 Legal Fees...............................................23
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Lake City Bank
Deferred Compensation Plan
Master Plan Document
LAKE CITY BANK
DEFERRED COMPENSATION PLAN
Effective January 1, 2004
Purpose
The purpose of this Plan is to provide specified benefits to a select
group of management or highly compensated Employees who contribute materially
to the continued growth, development and future business success of Lake City
Bank, an Indiana state bank with its main office in Warsaw, Indiana, and its
subsidiaries, if any, that sponsor this Plan. This Plan shall be unfunded for
tax purposes and for purposes of Title I of ERISA.
ARTICLE 1
Definitions
For the purposes of this Plan, unless otherwise clearly apparent from
the context, the following phrases or terms shall have the following indicated
meanings:
1.1 "401(k) Plan" shall mean the "Lake City Bank 401(k) Retirement Plan."
1.2 "401(k) Restoration Matching Account" shall mean (i) the sum of all
of a Participant's 401(k) Restoration Matching Amounts, plus (ii)
amounts credited (earnings, contributions, etc.) to the Participant's
401(k) Restoration Matching Account in accordance with this Plan,
less (iii) all distributions made to the Participant or his or her
Beneficiary pursuant to this Plan that relate to the Participant's
401(k) Restoration Matching Account, less amounts debited (deemed
losses, distributions, etc.) from the Participant's 401(k)
Restoration Matching Account in accordance with this Plan.
1.3 "401(k) Restoration Matching Amount" for any one Plan Year shall be
the amount determined in accordance with Section 3.6.
1.4 "Account Balance" shall mean, with respect to a Participant, a credit
on the records of the Employer equal to the sum of the Deferral
Account balance. The Account Balance, and each other specified
account balance, shall be a bookkeeping entry only and shall be
utilized solely as a device for the measurement and determination of
the amounts to be paid to a Participant, or his or her designated
Beneficiary, pursuant to this Plan.
1.5 "Annual Deferral Amount" shall mean that portion of a Participant's
Base Salary or Bonus that a Participant defers in accordance with
Article 3 for any one Plan Year. In the event of a Participant's
Retirement, Disability (if deferrals cease in accordance with Section
8.1), death or a Termination of Employment prior to the end of a Plan
Year, such year's Annual Deferral Amount shall be the actual amount
withheld prior to such event.
1.6 "Annual Installment Method" shall be an annual installment payment
over the number of years selected by the Participant in accordance
with this Plan, calculated as follows: (i) for the first annual
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installment, the Account Balance of the Participant shall be
calculated as of the close of business on or around the last business
day of the Plan Year in which the Participant Retires or is deemed to
have Retired in accordance with Section 8.2(c), as determined by the
Committee in its sole discretion, and (ii) for remaining annual
installments, the Account Balance of the Participant shall be
calculated on every applicable anniversary of the last business day
of the Plan Year in which the Participant Retires or is deemed to
have Retired in accordance with Section 8.2(c). Each annual
installment shall be calculated by multiplying this balance by a
fraction, the numerator of which is one and the denominator of which
is the remaining number of annual payments due the Participant. By
way of example, if the Participant elects a ten (10) year Annual
Installment Method, the first payment shall be 1/10 of the Account
Balance, calculated as described in this definition. The following
year, the payment shall be 1/9 of the Account Balance, calculated as
described in this definition.
1.7 "Bank" shall mean Lake City Bank, an Indiana state bank, and any
successor to all or substantially all of the Bank's assets or
business.
1.8 "Base Salary" shall mean the annual cash compensation relating to
services performed during any calendar year, excluding distributions
from nonqualified deferred compensation plans, bonuses, commissions,
overtime, fringe benefits, all compensation recognized or related to
any equity-based compensation (e.g., stock options, restricted stock,
stock grants, or stock appreciation rights), relocation expenses,
incentive payments, non-monetary awards, director fees and other
fees, and automobile and other allowances paid to a Participant for
employment services rendered (whether or not such allowances are
included in the Employee's gross income). Base Salary shall be
calculated before reduction for compensation voluntarily deferred or
contributed by the Participant pursuant to all qualified or
non-qualified plans of the Employer and shall be calculated to
include amounts not otherwise included in the Participant's gross
income under Code Sections 125, 402(e)(3), pursuant to plans
established by the Employer; provided, however, that all such amounts
will be included in compensation only to the extent that had there
been no such plan, the amount would have been payable in cash to the
Employee.
1.9 "Beneficiary" shall mean one or more persons, trusts, estates or
other entities, designated in accordance with Article 10, that are
entitled to receive benefits under this Plan upon the death of a
Participant.
1.10 "Beneficiary Designation Form" shall mean the form established from
time to time by the Committee that a Participant completes, signs and
returns to the Committee to designate one or more Beneficiaries.
1.11 "Board" shall mean the board of directors of the Bank.
1.12 "Bonus" shall mean any compensation, in addition to Base Salary,
earned by a Participant for services rendered during a Plan Year,
under the Employer's annual bonus, commission, and cash incentive
plans, excluding any equity-based compensation (e.g., stock options,
restricted stock, stock grants, or stock appreciation rights).
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1.13 "Change in Control" shall mean:
(a) The consummation of the acquisition by any "person" (as such
term is defined in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended ("1934 Act")) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated
under the 1934 Act) of fifty percent (50%) or more of the
combined voting power of the then outstanding voting
securities of Lakeland Financial Corporation (the
"Company"); or
(b) The individuals who, as of date hereof, are members of the
board of directors of the Company (the "Company Board")
cease for any reason to constitute a majority of the Company
Board, unless the election, or nomination for election by
the Company stockholders, of a new Company director was
approved by a vote of a majority of the Company Board, and
such new director shall, for purposes of this Plan, be
considered as a member of the Company Board; or
(c) Consummation by the Company of (i) a merger or consolidation
of the Company, if the Company stockholders immediately
before such merger or consolidation, do not, as a result of
such merger or consolidation, own directly or indirectly,
more than fifty percent (50%) of the combined voting power
of the then outstanding voting securities of the entity
resulting from such merger or consolidation, in
substantially the same proportion as their ownership of the
combined voting power of the voting securities of the
Company outstanding immediately before such merger or
consolidation or (ii) a complete liquidation or dissolution
or an agreement for the sale or other disposition of all or
substantially all of the assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because fifty percent (50%) or
more of the combined voting power of the then outstanding
securities of the Company is acquired by (i) a trustee or
other fiduciary holding securities under one or more
employee benefit plans maintained for employees of the
entity or (ii) any corporation which, immediately prior to
such acquisition, is owned directly or indirectly by the
stockholders of the Company in substantially the same
proportion as their ownership of stock of the Company
immediately prior to such acquisition.
1.14 "Claimant" shall have the meaning set forth in Section 15.1.
1.15 "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
1.16 "Committee" shall mean the committee described in Article 13.
1.17 "Deduction Limitation" shall mean the limitation on a benefit that
may otherwise be distributable pursuant to the provisions of this
Plan, as set forth in Article 4.
1.18 "Deferral Account" shall mean (i) the sum of all of a Participant's
Annual Deferral Amounts, plus (ii) amounts credited (earnings,
contributions, etc.) to the Participant's Deferral Account in
3
accordance with this Plan, plus (iii) any 401(k) Restoration Match
credited to Participant's Deferral Account, less (iv) all
distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to his or her Deferral Account,
less amounts debited (deemed losses, distributions, etc.) from the
Participant's Deferral Account in accordance with this Plan.
1.19 "Director" shall mean any member of the board of directors of the
Employer.
1.20 "Disability" or "Disabled" shall mean a determination that a
Participant is disabled made by either (i) the carrier of any
individual or group disability insurance policy, sponsored by the
Participant's Employer, or (ii) the Social Security Administration.
Upon request by the Employer, the Participant must submit proof of
the carrier's or Social Security Administration's determination.
1.21 "Disability Benefit" shall mean the benefit set forth in Article 8.
1.22 "Election Form" shall mean the form established from time to time by
the Committee that a Participant completes, signs and returns to the
Committee to make an election under the Plan.
1.23 "Employee" shall mean a person who is an employee of the Employer.
1.24 "Employer" shall mean the Bank and/or any of its subsidiaries (now in
existence or hereafter formed or acquired).
1.25 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
1.26 "In-Service Distribution" shall mean the distribution set
forth in Section 4.1.
1.27 "Participant" shall mean any Employee (i) who is selected to
participate in the Plan, (ii) who elects to participate in the Plan,
(iii) who signs a Plan Agreement, an Election Form and a Beneficiary
Designation Form, (iv) whose signed Plan Agreement, Election Form and
Beneficiary Designation Form are accepted by the Committee, (v) who
commences participation in the Plan, and (vi) whose Plan Agreement
has not terminated. A spouse or former spouse of a Participant shall
not be treated as a Participant in the Plan or have an account
balance under the Plan, even if he or she has an interest in the
Participant's benefits under the Plan as a result of applicable law
or property settlements resulting from legal separation or divorce.
1.28 "Plan" shall mean the Lake City Bank Deferred Compensation Plan,
which shall be evidenced by this instrument and by each Plan
Agreement, as they may be amended from time to time.
1.29 "Plan Agreement" shall mean a written agreement, as may be amended
from time to time, which is entered into by and between the Employer
and a Participant. Each Plan Agreement executed by a Participant and
the Employer shall provide for the entire benefit to which such
Participant is entitled under the Plan; should there be more than one
Plan Agreement, the Plan Agreement bearing the latest date of
acceptance by the Employer shall supersede all previous Plan
Agreements in their entirety and shall govern such entitlement. The
terms of any Plan Agreement may be different for any Participant, and
4
any Plan Agreement may provide additional benefits not set forth in
the Plan or limit the benefits otherwise provided under the Plan;
provided, however, that any such additional benefits or benefit
limitations must be agreed to by both the Employer and the
Participant.
1.30 "Plan Year" shall mean a period beginning on January 1 of each
calendar year and continuing through December 31 of such calendar
year.
1.31 "Retirement," "Retire(s)" or "Retired" shall mean, with respect to an
Employee, severance from employment from the Employer for any reason
(other than an approved leave of absence, death or Disability) upon
the attainment of age fifty-five (55) and after at least ten (10)
years of service.
1.32 "Retirement Benefit" shall mean the benefit set forth in
Article 6.
1.33 "Survivor Benefit" shall mean the benefit set forth in Article 9.
1.34 "Termination Benefit" shall mean the benefit set forth in Article 7.
1.35 "Termination of Employment" shall mean the severing of employment
with all Employers, voluntarily or involuntarily, for any reason
other than Retirement, Disability, death or an approved leave of
absence.
1.36 "Trust" shall mean one or more trusts established shall mean one
or more trusts established by the Bank in accordance with
Article 16.
1.37 "Unforeseeable Financial Emergency" shall mean a severe financial
hardship to the Participant resulting from a sudden and unexpected
illness or accident of the Participant, the Participant's spouse, or
a dependent (as defined in Section 152(a) of the Code) of the
Participant, loss of the Participant's property due to casualty, or
other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond the control of the Participant.
1.38 "Years of Service" shall mean the total number of full years in which
a Participant has been employed by one or more Employers. For
purposes of this definition, a year of employment shall be a 365 day
period (or 366 day period in the case of a leap year) that, for the
first year of employment, commences on the Employee's date of hiring
and that, for any subsequent year, commences on an anniversary of
that hiring date. The Committee shall make a determination as to
whether any partial year of employment shall be counted as a Year of
Service.
ARTICLE 2
Selection, Enrollment, Eligibility
2.1 Selection by Committee. Participation in the Plan shall be limited to
a select group of management and highly compensated Employees of the
Employer, as determined by the Committee in its sole discretion. From
that group, the Committee shall select, in its sole discretion,
Employees to participate in the Plan.
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2.2 Enrollment Requirements. As a condition to participation, each
selected Employee shall complete, execute and return to the Committee
a Plan Agreement, an Election Form and a Beneficiary Designation
Form, all within thirty (30) days after he or she is selected to
participate in the Plan. In addition, the Committee shall establish
from time to time such other enrollment requirements as it determines
in its sole discretion are necessary.
2.3 Eligibility; Commencement of Participation. Provided an Employee
selected to participate in the Plan has met all enrollment
requirements set forth in this Plan and required by the Committee,
including returning all required documents to the Committee within
the specified time period, that Employee shall commence participation
in the Plan on the first day of the month following the month in
which the Employee completes all enrollment requirements. If an
Employee fails to meet all such requirements within the period
required, in accordance with Section 2.2, that Employee shall not be
eligible to participate in the Plan until the first day of the Plan
Year following the delivery to and acceptance by the Committee of the
required documents.
2.4 Termination of Participation and/or Deferrals. If the Committee
determines in good faith that a Participant no longer qualifies as a
member of a select group of management or highly compensated
employees, as membership in such group is determined in accordance
with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee
shall have the right, in its sole discretion, to (i) terminate any
deferral election the Participant has made for the remainder of the
Plan Year in which the Participant's membership status changes, (ii)
prevent the Participant from making future deferral elections and/or
(iii) immediately distribute the Participant's Account Balance as a
Termination Benefit and terminate the Participant's participation in
the Plan.
ARTICLE 3
Deferral Commitments/Vesting/Crediting/Taxes
3.1 Minimum Deferrals.
(a) Minimum Annual Deferral Amount. For each Plan Year, a
Participant may elect to defer, as his or her Annual
Deferral Amount, Base Salary or Bonus in a minimum amount of
one thousand dollars ($1,000). If Participant elects less
than the stated minimum amount, or if Participant fails to
make an election, the amount deferred shall be zero.(a)
(b) Short Plan Year. Notwithstanding the foregoing, if a
Participant first becomes a Participant after the first day
of a Plan Year, the minimum Annual Deferral Amount shall be
an amount equal to the minimum set forth above, multiplied
by a fraction, the numerator of which is the number of
complete months remaining in the Plan Year and the
denominator of which is twelve (12).
3.2 Maximum Deferral.
(a) Maximum Annual Deferral Amount. For each Plan Year, a
Participant may elect to defer, as his or her Annual
Deferral Amount, Base Salary or Bonus up to the following
maximum percentages for each deferral elected:
6
Deferral Minimum Amount
------------------------------ ---------------------------
Base Salary 50%
Bonus 50%
(b) Short Plan Year. Notwithstanding the foregoing, if a
Participant first becomes a Participant after the first day
of a Plan Year, the maximum Annual Deferral Amount (i) with
respect to Base Salary shall be limited to the amount of
compensation not yet earned by the Participant as of the date
the Participant submits a Plan Agreement and Election Form to
the Committee for acceptance, and (ii) with respect to
Bonus, shall be limited to those amounts deemed eligible for
deferral, in the sole discretion of the Committee.
3.3 Election to Defer; Effect of Election Form.
(a) First Plan Year. In connection with a Participant's
commencement of participation in the Plan, the Participant
shall make an irrevocable deferral election for the Plan
Year in which the Participant commences participation in the
Plan, along with such other elections as the Committee deems
necessary or desirable under the Plan. For these elections
to be valid, the Election Form must be completed and signed
by the Participant, timely delivered to the Committee (in
accordance with Section 2.2 above), and accepted by the
Committee. Any such deferral election shall be applicable
only to services rendered subsequent to the deferral
election.
(b) Subsequent Plan Years. For each succeeding Plan Year, an
irrevocable deferral election for that Plan Year, and such
other elections as the Committee deems necessary or
desirable under the Plan, shall be made by timely delivering
a new Election Form to the Committee, in accordance with its
rules and procedures, before the end of the Plan Year
preceding the Plan Year for which the election is made. If
no such Election Form is timely delivered for a Plan Year,
the Annual Deferral Amount shall be zero for that Plan Year.
3.4 Withholding and Crediting of Annual Deferral Amounts. For each Plan
Year, the Base Salary portion of the Annual Deferral Amount shall be
withheld from each regularly scheduled Base Salary payroll in equal
amounts, as adjusted from time to time for increases and decreases in
Base Salary. The Bonus portion of the Annual Deferral Amount shall be
withheld at the time the Bonus is or otherwise would be paid to the
Participant, whether or not this occurs during the Plan Year itself.
Annual Deferral Amounts shall be credited to a Participant's Deferral
Account at the time such amounts would otherwise have been paid to
the Participant.
3.5 Vesting. A Participant shall at all times be 100% vested in his or
her Deferral Account, subject to the provisions of
3.6 401(k) Restoration Matching Amount. In the event any elective
deferrals under the 401(k) Plan are required to be returned to
Participant because of the nondiscrimination rules set forth in Code
Section 401(k), the amount determined to be returnable shall
immediately and directly be transferred to this Plan (subject to the
7
limits set forth herein), if the Participant shall have previously so
elected in writing on a form prescribed and filed with the
Administrator. To the extent elective deferrals are transferred to
this Plan from the 401(k) Plan, the actual amount which may be so
transferred shall be pro rated to exclude a percentage thereof which
the Administrator determines is allocable to a portion of the Plan
Year during which the individual was not a Participant in the Plan. A
Participant may revoke an election under this Section, prospectively
only, by filing a new form with the Administrator prior to the Plan
Year for which it is effective. 3.6 Any elective deferrals made by
Participant and transferred to this Plan under this Section 3.6 will
be credited to the 401(k) Restoration Matching Account, and will be
credited with a 401(k) Restoration Matching Amount on the same basis
as under the 401(k) Plan, but only to the extent that the elective
deferrals would have been matched if they had been contributed to the
401(k) Plan. In addition, the Bank shall also credit Participant with
an amount to the extent that Participant forfeits matching
contributions under the 401(k) Plan due to the application of the
nondiscrimination rules set forth in Code Sections 401(k) and 401(m),
respectfully.
(a) Vesting of 401(k) Restoration Matching Amount. Participant shall
be fully vested in each year's 401(k) Restoration Matching
Amount, subject to the following schedule:
Years of Service Percent Vested
------------------------------ -----------------------------
1 20%
2 40%
3 60%
4 80%
5 (after 500 hours) 100%
3.7 Crediting/Debiting of Account Balances. In accordance with, and
subject to, the rules and procedures that are established from time
to time by the Committee, in its sole discretion, amounts shall be
credited or debited to a Participant's Account Balance in accordance
with the following rules:
(a) Measurement Funds. Subject to the restrictions found in
Section 3.7(a)(i) below, the Participant may elect one or
more of the measurement funds selected by the Committee, in
its sole discretion, which are based on certain mutual funds
(the "Measurement Funds"), for the purpose of crediting or
debiting additional amounts to his or her Account Balance.
As necessary, the Committee may, in its sole discretion,
discontinue, substitute or add a Measurement Fund. Each such
action will take effect as of the first day of the first
calendar quarter that begins at least thirty (30) days after
the day on which the Committee gives Participants advance
written notice of such change.
(i) Election of Measurement Funds. Subject to the
restrictions found in this Section 3.7(a)(i), a
Participant, in connection with his or her initial
deferral election in accordance with Section
3.3(a) above, shall elect, on the Election Form,
one or more Measurement Fund(s)(as described in
Section 3.7(a) above) to be used to determine the
amounts to be credited or debited to his or her
Account Balance. If a Participant does not elect any
of the Measurement Funds as described in the
previous sentence, the Participant's Account Balance
8
shall automatically be allocated into the
lowest-risk Measurement Fund, as determined by the
Committee, in its sole discretion. Subject to the
restrictions found in Section 3.7(b) below, the
Participant may (but is not required to) elect, by
submitting an Election Form to the Committee that is
accepted by the Committee, to add or delete one or
more Measurement Fund(s) to be used to determine the
amounts to be credited or debited to his or her
Account Balance, or to change the portion of his or
her Account Balance allocated to each previously
or newly elected Measurement Fund. If an election is
made in accordance with the previous sentence, it
shall apply as of the first business day deemed
reasonably practicable by the Committee, in its sole
discretion, and shall continue thereafter for each
subsequent day in which the Participant participates
in the Plan, unless changed in accordance with the
previous sentence.
(b) Proportionate Allocation. In making any election described
in Section 3.7(a)(i) above, the Participant shall specify on
the Election Form, in increments of one percent (1%), the
percentage of his or her Account Balance to be allocated to
a Measurement Fund (as if the Participant was making an
investment in that Measurement Fund with that portion of his
or her Account Balance).
(c) Crediting or Debiting Method. The performance of each
Measurement Fund (either positive or negative) will be
determined by the Committee, in its sole discretion on a
daily basis based on the manner in which such Participant's
Account Balance has been hypothetically allocated among the
Measurement Funds by the Participant.
(d) No Actual Investment. Notwithstanding any other provision of
this plan that may be interpreted to the contrary, the
Measurement Funds are to be used for measurement purposes
only, and a Participant's election of any such Measurement
Fund, the allocation of his or her Account Balance thereto,
the calculation of additional amounts and the crediting or
debiting of such amounts to a Participant's Account Balance
shall not be considered or construed in any manner as an
actual investment of his or her Account Balance in any such
Measurement Fund. In the event that the Bank or the Trustee
(as that term is defined in the Trust), in its own discretion,
decides to invest funds in any or all of the investments on
which the Measurement Funds are based, no Participant shall
have any rights in or to such investments themselves. Without
limiting the foregoing, a Participant's Account Balance shall
at all times be a bookkeeping entry only and shall not
represent any investment made on his or her behalf by the
Bank or the Trust; the Participant shall at all times remain
an unsecured creditor of the Bank.
3.8 FICA and Other Taxes.
(a) Annual Deferral Amounts. For each Plan Year in which an
Annual Deferral Amount is being withheld from a Participant,
the Participant's Employer(s) shall withhold from that
portion of the Participant's Base Salary and/or Bonus
amounts that are not being deferred, in a manner determined
by the Employer(s), the Participant's share of FICA and
9
other employment taxes on such Annual Deferral Amount. If
necessary, the Committee may reduce the Annual Deferral
Amount in order to comply with this Section 3.8.
(b) Distributions. The Participant's Employer(s), or the trustee
of the Trust, shall withhold from any payments made to a
Participant under this Plan all federal, state and local
income, employment and other taxes required to be withheld
by the Employer(s), or the trustee of the Trust, in
connection with such payments, in amounts and in a manner to
be determined in the sole discretion of the Employer(s) and
the trustee of the Trust.
ARTICLE 4
Deduction Limitation
4.1 Deduction Limitation on Benefit Payments. If an Employer determines
in good faith prior to a Change in Control that there is a reasonable
likelihood that any compensation paid to a Participant for a taxable
year of the Employer would not be deductible by the Employer solely
by reason of the limitation under Code Section 162(m), then to the
extent deemed necessary by the Employer to ensure that the entire
amount of any distribution to the Participant pursuant to this Plan
prior to the Change in Control is deductible, the Employer may defer
all or any portion of a distribution under this Plan. Any amounts
deferred pursuant to this limitation shall continue to be
credited/debited with additional amounts in accordance with Section
3.7 above, even if such amount is being paid out in installments. The
amounts so deferred and amounts credited thereon shall be distributed
to the Participant or his or her Beneficiary (in the event of the
Participant's death) at the earliest possible date, as determined by
the Employer in good faith, on which the deductibility of
compensation paid or payable to the Participant for the taxable year
of the Employer during which the distribution is made will not be
limited by Section 162(m), or if earlier, the effective date of a
Change in Control. Notwithstanding anything to the contrary in this
Plan, the Deduction Limitation shall not apply to any distributions
made after a Change in Control.
ARTICLE 5
In-Service Distribution; Unforeseeable Financial Emergencies;
Withdrawal Election
5.1 In-Service Distribution. In connection with each election to defer an
Annual Deferral Amount, a Participant may irrevocably elect to
receive an In-Service Distribution from the Plan with respect to all
or a portion of the Annual Deferral Amount. The In-Service
Distribution shall be a lump sum payment in an amount that is equal
to the portion of the Annual Deferral Amount that the Participant
elected to have distributed as an In-Service Distribution, plus
amounts credited or debited in the manner provided in Section 3.7(c)
above on that amount, calculated as of the close of business on or
around the date on which the In-Service Distribution becomes payable,
as determined by the Committee in its sole discretion. Subject to the
other terms and conditions of this Plan, each In-Service Distribution
elected shall be paid out during a sixty (60) day period commencing
immediately after the first day of any Plan Year designated by the
Participant. The Plan Year designated by the Participant must be at
least three Plan Years after the end of the Plan Year in which the
Annual Deferral Amount is actually deferred. By way of example, if an
10
In-Service Distribution is elected for Annual Deferral Amounts that
are deferred in the Plan Year commencing January 1, 2004, the
In-Service Distribution would become payable during a sixty (60) day
period commencing January 1, 2008.
5.2 Other Benefits Take Precedence Over In-Service Distributions. Should
an event occur that triggers a benefit under Article 6, 7, 8 or 9,
any Annual Deferral Amount, plus amounts credited or debited thereon,
that is subject to an In-Service Distribution election under Section
5.1 shall not be paid in accordance with Section 5.1 but shall be
paid in accordance with the other applicable Article.
5.3 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies.
(a) If the Participant experiences an Unforeseeable Financial
Emergency, the Participant may petition the Committee to
suspend deferrals of Base Salary or Bonus required to be
made by such Participant, to the extent deemed necessary by
the Committee to satisfy the Unforeseeable Financial
Emergency. If suspension of deferrals is not sufficient to
satisfy the Participant's Unforeseeable Financial Emergency,
or if
(i) Reimbursement or compensation by insurance or otherwise;
or
(ii) Liquidation of Participant's assets (to the extent the
liquidation would not itself cause severe financial
hardship)
cannot satisfy the Participant's Unforeseeable Financial Emergency, then the
Participant may further petition the Committee to receive a partial or full
payout from the Plan. The Participant shall only receive a payout from the
Plan to the extent such payout is deemed necessary by the Committee to satisfy
the Participant's Unforeseeable Financial Emergency, plus an amount necessary
to pay taxes reasonably anticipated as a result of the distribution.
(b) The payout shall not exceed the lesser of (i) the
Participant's Account Balance, calculated as of the close of
business on or around the date on which the amount becomes
payable, as determined by the Committee in its sole
discretion, or (ii) the amount reasonably needed to satisfy
the Unforeseeable Financial Emergency, plus an amount
necessary to pay taxes reasonably anticipated as a result of
the distribution.
(c) If the Committee, in its sole discretion, approves a
Participant's petition for suspension, the Participant's
deferrals under this Plan shall be suspended as of the date
of such approval. If the Committee, in its sole discretion,
approves a Participant's petition for suspension and payout,
the Participant's deferrals under this Plan shall be
suspended as of the date of such approval and the
Participant shall receive a payout from the Plan within
sixty (60) days of the date of such approval.
11
ARTICLE 6
Retirement Benefit
6.1 Retirement Benefit. A Participant who Retires shall receive, as a
Retirement Benefit, his or her Account Balance, calculated as of the
close of business on or around the last business day of the Plan Year
in which the Participant Retires.
6.2 Retirement Benefit Election of Payment. A Participant, in connection
with his or her commencement of participation in the Plan, shall elect
on an Election Form to receive the Retirement Benefit in a lump sum or
pursuant to an Annual Installment Method of up to ten (10) years.
6.3 Timing of Retirement Distribution. If Participant is considered a
"key employee" (as defined in Section 416(i) of the Code), then any
distribution of Retirement amounts to Participant may only commence
six (6) months following Participant's Termination of Employment.
Otherwise, Retirement distributions shall commence no later than
sixty (60) days after the last day of the Plan Year in which the
Participant Retires. Remaining installments, if any, shall be paid no
later than sixty (60) days after each anniversary of the last day of
the Plan Year in which the Participant Retires.
6.4 One-time Election to Change Retirement Distributions. On a one-time
basis, a Participant may elect (i) an allowable alternative payout
period, or (ii) an alternative payout form by submitting a new
Election Form to the Committee. Any such election (i) must be on an
Election Form submitted to and accepted by the Committee in its sole
discretion at least twelve (12) months prior to the first scheduled
Retirement payment under this Section; (ii) must require that the
first payment with respect to which such election is made be deferred
for a period of not less than five (5) years from the date such
payment would otherwise have been made; and (iii) may not accelerate
the payment or shorten the payment stream in any way (For example, a
Participant may not elect to take a lump sum in lieu of
installments). The Election Form most recently accepted by the
Committee shall govern the payout of the Retirement Benefit.
6.5 Failure to Make a Retirement Distribution Election. If a Participant
does not make any election with respect to the payment of the
Retirement Benefit, then such benefit shall be payable in a lump sum.
The lump sum payment shall be made on the later of: (i) one-hundred
eighty (180) days after Participant's Termination of Employment (if
Participant is considered a "key employee," as defined in Section
416(i) of the Code), or if Participant is not a "key employee," then
sixty (60) days after Participant's Termination of Employment; or
(ii) the last day of the Plan Year in which the Participant Retires.
ARTICLE 7
Termination Benefit
7.1 Termination Benefit. A Participant who experiences a Termination of
Employment shall receive a Termination Benefit, which shall be equal
to the Participant's Account Balance, calculated as of the close of
business on or around the last business day of the Plan Year in which
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the Participant experiences a Termination of Employment, as
determined by the Committee in its sole discretion.
7.2 Payment of Termination Benefit. If Participant is considered a "key
employee" (as defined in Section 416(i) of the Code), then any
Termination Benefit payments to Participant may only commence six (6)
months following Participant's Termination of Employment. Otherwise,
the Termination Benefit shall be paid to the Participant in a lump
sum payment no later than sixty (60) days after the last day of the
Plan Year in which the Participant experiences the Termination of
Employment.
ARTICLE 8
Disability Waiver and Benefit
8.1 Disability Waiver.
(a) Waiver of Deferral. A Participant who is determined to be
suffering from a Disability shall continue to be eligible
for the benefits provided in Articles 3, 6, 7, 8 or 9 in
accordance with the provisions of those Articles. However,
such Disabled Participant shall be excused from fulfilling
his or her Annual Deferral Amount commitment that would
otherwise have been withheld during the remainder of the
Plan Year in which the Participant first suffers the
Disability. During the period of Disability, the Participant
shall not be allowed to make any additional deferral
elections.
(b) Deferral Following Disability. If a Participant returns to
employment with an Employer after a Disability ceases, the
Participant may elect to defer an Annual Deferral Amount for
the Plan Year following his or her return to employment or
service and for every Plan Year thereafter while a
Participant in the Plan; provided such deferral elections
are otherwise allowed and an Election Form is delivered to
and accepted by the Committee for each such election in
accordance with Section 3.3 above.
8.2 Continued Eligibility; Disability Benefit.
(a) Continued Eligibility. A Participant suffering a Disability
shall, for benefit purposes under this Plan, continue to be
considered to be employed, and shall be eligible for the
benefits provided for in Articles 3, 6, 7 or 9 in accordance
with the provisions of those Articles. Notwithstanding the
above, the Committee shall have the right to, in its sole
and absolute discretion and for purposes of this Plan only,
deem the Participant's employment to have terminated at any
time after such Participant is determined to be suffering a
Disability.
(b) Deemed Termination of Employment. If, in the Committee's
discretion, the Disabled Participant's employment has
terminated, and such Participant is not otherwise eligible to
Retire, the Participant shall be deemed to have experienced a
Termination of Employment for purposes of this Plan and will
receive a Disability Benefit. The Disability Benefit shall be
equal to his or her Account Balance, calculated as of the
13
close of business on or around the date on which the Disabled
Participant is deemed to have experienced a Termination of
Employment, as determined by the Committee in its sole
discretion. The Participant shall receive his or her
Disability Benefit in a lump sum payment no later than sixty
(60) days after the date on which the Committee deems the
Disabled Participant to have experienced a Termination of
Employment.
(c) Deemed Retirement. If, in the Committee's discretion, the
Disabled Participant's employment has terminated, and such
Participant is otherwise eligible to Retire, the Participant
shall be deemed to have Retired for purposes of this Plan and
will receive a Disability Benefit. The Disability Benefit
shall be equal to his or her Account Balance, calculated as
of the close of business on or around the date on which the
Participant is deemed to have Retired, as determined by the
Committee in its sole discretion. The Participant shall
receive his or her Disability Benefit in the same form in
which such Participant elected to receive his or her
Retirement Benefit. The lump sum payment shall be made, or
installment payments shall commence, no later than sixty (60)
days after the date on which the Disabled Participant is
deemed to have Retired. Remaining installments, if any, shall
be paid no later than sixty (60) days after each anniversary
of the date on which the Disabled Participant is deemed to
have Retired.
ARTICLE 9
Survivor Benefit
9.1 Survivor Benefit. The Participant's Beneficiary(ies) shall receive a
Survivor Benefit upon the Participant's death which will be equal to
the Participant's Account Balance, calculated as of the close of
business on or around the date of the Participant's death, as
selected by the Committee in its sole discretion, if the Participant
dies prior to (i) his or her Retirement, Termination of Employment or
Disability, or (ii) the complete distribution of his or her
Retirement Benefit or Disability Benefit, calculated as of the close
of business on or around the date of the Participant's death, as
selected by the Committee in its sole discretion.
9.2 Payment of Survivor Benefit. The Survivor Benefit shall be paid to
the Participant's Beneficiary(ies) in a lump sum payment no later
than sixty (60) days after the date on which the Committee is
provided with proof that is satisfactory to the Committee of the
Participant's death.
ARTICLE 10
Beneficiary Designation
10.1 Beneficiary. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as
contingent) to receive any benefits payable under the Plan to a
beneficiary upon the death of a Participant. The Beneficiary
designated under this Plan may be the same as or different from the
Beneficiary designation under any other plan of an Employer in which
the Participant participates.
10.2 Beneficiary Designation; Change of Beneficiary Designation. A
Participant shall designate his or her Beneficiary by completing and
14
signing the Beneficiary Designation Form, and returning it to the
Committee or its designated agent. A Participant shall have the right
to change a Beneficiary by completing, signing and otherwise
complying with the terms of the Beneficiary Designation Form and the
Committee's rules and procedures, as in effect from time to time.
Upon the acceptance by the Committee of a new Beneficiary Designation
Form, all Beneficiary designations previously filed shall be
canceled. The Committee shall be entitled to rely on the last
Beneficiary Designation Form filed by the Participant and accepted by
the Committee prior to his or her death.
10.3 Acknowledgment. No designation or change in designation of a
Beneficiary shall be effective until received and acknowledged in
writing by the Committee or its designated agent.
10.4 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided in Sections 10.1, 10.2 and 10.3 above or, if
all designated Beneficiaries predecease the Participant or die prior
to complete distribution of the Participant's benefits, then the
Participant's designated Beneficiary shall be deemed to be his or her
surviving spouse. If the Participant has no surviving spouse, the
benefits remaining under the Plan to be paid to a Beneficiary shall
be payable to the executor or personal representative of the
Participant's estate.
10.5 Doubt as to Beneficiary. If the Committee has any doubt as to the
proper Beneficiary to receive payments pursuant to this Plan, the
Committee shall have the right, exercisable in its discretion, to
cause the Participant's Employer to withhold such payments until this
matter is resolved to the Committee's satisfaction.
10.6 Discharge of Obligations. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and
the Committee from all further obligations under this Plan with
respect to the Participant, and that Participant's Plan Agreement
shall terminate upon such full payment of benefits.
ARTICLE 11
Leave of Absence
11.1 Paid Leave of Absence. If a Participant is authorized by the
Participant's Employer to take a paid leave of absence from the
employment of the Employer, (i) the Participant shall continue to be
considered eligible for the benefits provided in Articles 3, 5, 6, 7,
8 or 9 in accordance with the provisions of those Articles, and (ii)
the Annual Deferral Amount shall continue to be withheld during such
paid leave of absence in accordance with Section 3.3.
11.2 Unpaid Leave of Absence. If a Participant is authorized by the
Participant's Employer to take an unpaid leave of absence from the
employment of the Employer for any reason, such Participant shall
continue to be eligible for the benefits provided in Articles 3, 5,
6, 7, 8 or 9 in accordance with the provisions of those Articles.
However, the Participant shall be excused from fulfilling his or her
Annual Deferral Amount commitment that would otherwise have been
withheld during the remainder of the Plan Year in which the unpaid
leave of absence is taken. During the unpaid leave of absence, the
Participant shall not be allowed to make any additional deferral
elections. However, if the Participant returns to employment, the
15
Participant may elect to defer an Annual Deferral Amount for the Plan
Year following his or her return to employment and for every Plan
Year thereafter while a Participant in the Plan; provided such
deferral elections are otherwise allowed and an Election Form is
delivered to and accepted by the Committee for each such election in
accordance with Section 3.3 above.
ARTICLE 12
Termination, Amendment or Modification
12.1 Termination. Although the Employer anticipates that it will continue
the Plan for an indefinite period of time, there is no guarantee that
the Employer will continue the Plan or will not terminate the Plan at
any time in the future. Accordingly, the Employer reserves the right
to discontinue its sponsorship of the Plan and/or to terminate the
Plan at any time with respect to any or all of its participating
Employees, by action of its board of directors. Upon the termination
of the Plan with respect to the Employer, the Plan Agreements of the
affected Participants who are employed by that Employer, shall
terminate and their Account Balances shall be determined (i) as if
they had experienced a Termination of Employment on the date of Plan
termination; or (ii) if Plan termination occurs after the date upon
which a Participant was eligible to Retire, then with respect to that
Participant as if he or she had Retired on the date of Plan
termination. Such benefits shall be paid to the Participants as
follows: (i) prior to a Change in Control, if the Plan is terminated
with respect to all of its Participants, the Employer shall have the
right, in its sole discretion, and notwithstanding any elections made
by the Participant, to pay such benefits in a lump sum or pursuant to
an Annual Installment Method of up to ten (10) years, with amounts
credited and debited during the installment period as provided
herein; or (ii) prior to a Change in Control, if the Plan is
terminated with respect to less than all of its Participants, the
Employer shall be required to pay such benefits in a lump sum; or
(iii) after a Change in Control, if the Plan is terminated with
respect to some or all of its Participants, the Employer shall be
required to pay such benefits in a lump sum. The termination of the
Plan shall not adversely affect any Participant or Beneficiary who
has become entitled to the payment of any benefits under the Plan as
of the date of termination; provided, however, that the Employer
shall have the right to accelerate installment payments without a
premium or prepayment penalty by paying the Account Balance in a lump
sum or pursuant to an Annual Installment Method using fewer years
(provided that the present value of all payments that will have been
received by a Participant at any given point of time under the
different payment schedule shall equal or exceed the present value of
all payments that would have been received at that point in time
under the original payment schedule).
12.2 Amendment. The Employer may, at any time, amend or modify the Plan in
whole or in part by the action of the Board; provided, however, that:
(i) no amendment or modification shall be effective to decrease or
restrict the value of a Participant's Account Balance in existence at
the time the amendment or modification is made, calculated as if the
Participant had experienced a Termination of Employment as of the
effective date of the amendment or modification or, if the amendment
or modification occurs after the date upon which the Participant was
eligible to Retire, the Participant had Retired as of the effective
date of the amendment or modification, and (ii) no amendment or
modification of this Section 12.2 or Section 13.2 of the Plan shall
be effective. The amendment or modification of the Plan shall not
16
affect any Participant or Beneficiary who has become entitled to the
payment of benefits under the Plan as of the date of the amendment or
modification; provided, however, that the Employer shall have the
right to accelerate installment payments by paying the Account
Balance in a lump sum or pursuant to an Annual Installment Method
using fewer years (provided that the present value of all payments
that will have been received by a Participant at any given point of
time under the different payment schedule shall equal or exceed the
present value of all payments that would have been received at that
point in time under the original payment schedule).
12.3 Plan Agreement. Despite the provisions of Sections 12.1 and 12.2
above, if a Participant's Plan Agreement contains benefits or
limitations that are not in this Plan document, the Employer may only
amend or terminate such provisions with the written consent of the
Participant.
12.4 Effect of Payment. The full payment of the Participant's Account
Balance under Articles 3, 6, 7, 8 or 9 of the Plan shall completely
discharge all obligations to a Participant and his or her designated
Beneficiaries under this Plan and the Participant's Plan Agreement
shall terminate.
ARTICLE 13
Administration
13.1 Committee Duties. Except as otherwise provided in this Article 13
this Plan shall be administered by such committee as the Board shall
appoint. Members of the Committee may be Participants under this
Plan. The Committee shall also have the discretion and authority to
(i) make, amend, interpret, and enforce all appropriate rules and
regulations for the administration of this Plan and (ii) decide or
resolve any and all questions including interpretations of this Plan,
as may arise in connection with the Plan. Any individual serving on
the Committee who is a Participant shall not vote or act on any
matter relating solely to himself or herself. When making a
determination or calculation, the Committee shall be entitled to rely
on information furnished by a Participant or the Bank.
13.2 Administration Upon Change In Control. For purposes of this Plan, the
Committee shall be the "Administrator" at all times prior to the
occurrence of a Change in Control. Within thirty (30) days following
a Change in Control, an independent third party trustee shall be
appointed under the Trust and at all times prior to the distribution
of all Account Balances under the Plan, the Trust shall not be
terminated or modified and an independent third party trustee shall
be the trustee of the Trust.
13.3 Agents. In the administration of this Plan, the Committee may, from
time to time, employ agents and delegate to them such administrative
duties as it sees fit (including acting through a duly appointed
representative) and may from time to time consult with counsel who
may be counsel to the Employer.
13.4 Binding Effect of Decisions. The decision or action of the
Administrator with respect to any question arising out of or in
connection with the administration, interpretation and application of
the Plan and the rules and regulations promulgated hereunder shall be
final and conclusive and binding upon all persons having any interest
in the Plan.
17
13.5 Indemnity of Committee. All Employers shall indemnify and hold
harmless the members of the Committee, any Employee to whom the
duties of the Committee may be delegated, and the Administrator
against any and all claims, losses, damages, expenses or liabilities
arising from any action or failure to act with respect to this Plan,
except in the case of willful misconduct by the Committee, any of its
members, any such Employee or the Administrator.
13.6 Employer Information. To enable the Committee and/or Administrator to
perform its functions, the Bank and each Employer shall supply full
and timely information to the Committee and/or Administrator, as the
case may be, on all matters relating to the compensation of its
Participants, the date and circumstances of the Retirement,
Disability, death or Termination of Employment of its Participants,
and such other pertinent information as the Committee or
Administrator may reasonably require.
ARTICLE 14
Other Benefits and Agreements
14.1 Coordination with Other Benefits. The benefits provided for a
Participant and Participant's Beneficiary under the Plan are in
addition to any other benefits available to such Participant under
any other plan or program for employees of the Participant's
Employer. The Plan shall supplement and shall not supersede, modify
or amend any other such plan or program except as may otherwise be
expressly provided.
ARTICLE 15
Claims Procedures
15.1 Presentation of Claim. Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below
as a "Claimant") may deliver to the Committee a written claim for a
determination with respect to the amounts distributable to such
Claimant from the Plan. If such a claim relates to the contents of a
notice received by the Claimant, the claim must be made within sixty
(60) days after such notice was received by the Claimant. All other
claims must be made within 180 days of the date on which the event
that caused the claim to arise occurred. The claim must state with
particularity the determination desired by the Claimant.
15.2 Notification of Decision. The Committee shall consider a Claimant's
claim within a reasonable time, but no later than ninety (90) days
after receiving the claim. If the Committee determines that special
circumstances require an extension of time for processing the claim,
written notice of the extension shall be furnished to the Claimant
prior to the termination of the initial ninety (90) day period. In no
event shall such extension exceed a period of ninety (90) days from
the end of the initial period. The extension notice shall indicate
the special circumstances requiring an extension of time and the date
by which the Committee expects to render the benefit determination.
The Committee shall notify the Claimant in writing:
(a) that the Claimant's requested determination has been made,
and that the claim has been allowed in full; or
18
(b) that the Committee has reached a conclusion contrary, in
whole or in part, to the Claimant's requested determination,
and such notice must set forth in a manner calculated to be
understood by the Claimant:
(i) the specific reason(s) for the denial of the claim,
or any part of it;
(ii) specific reference(s) to pertinent provisions of
the Plan upon which such denial was based;
(iii) a description of any additional material or
information necessary for the Claimant to perfect
the claim, and an explanation of why such material
or information is necessary;
(iv) an explanation of the claim review procedure set
forth in Section 15.3 below; and
(v) a statement of the Claimant's right to bring a
civil action under ERISA Section 502(a)
following an adverse benefit determination on
review.
15.3 Review of a Denied Claim. On or before sixty (60) days after
receiving a notice from the Committee that a claim has been denied,
in whole or in part, a Claimant (or the Claimant's duly authorized
representative) may file with the Committee a written request for a
review of the denial of the claim. The Claimant (or the Claimant's
duly authorized representative):
(a) may, upon request and free of charge, have reasonable access
to, and copies of, all documents, records and other
information relevant to the claim for benefits;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole
discretion, may grant.
15.4 Decision on Review. The Committee shall render its decision on review
promptly, and no later than sixty (60) days after the Committee
receives the Claimant's written request for a review of the denial of
the claim. If the Committee determines that special circumstances
require an extension of time for processing the claim, written notice
of the extension shall be furnished to the Claimant prior to the
termination of the initial sixty (60) day period. In no event shall
such extension exceed a period of sixty (60) days from the end of the
initial period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date by which
the Committee expects to render the benefit determination. In
rendering its decision, the Committee shall take into account all
comments, documents, records and other information submitted by the
Claimant relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination. The decision must be written in a manner calculated to
be understood by the Claimant, and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon
which the decision was based;
19
(c) a statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to and copies
of, all documents, records and other information relevant
(as defined in applicable ERISA regulations) to the
Claimant's claim for benefits; and
(d) a statement of the Claimant's right to bring a civil action
under ERISA Section 502(a).
15.5 Legal Action. A Claimant's compliance with the foregoing provisions
of this Article 15 is a mandatory prerequisite to a Claimant's right
to commence any legal action with respect to any claim for benefits
under this Plan.
ARTICLE 16
Trust
16.1 Establishment of the Trust. In order to provide assets from which to
fulfill the obligations of the Participants and their beneficiaries
under the Plan, the Bank may establish a trust by a trust agreement
with a third party, the trustee, to which each Employer may, in its
discretion, contribute cash or other property, including securities
issued by the Bank, to provide for the benefit payments under the
Plan, (the "Trust").
16.2 Interrelationship of the Plan and the Trust. The provisions of the
Plan and the Plan Agreement shall govern the rights of a Participant
to receive distributions pursuant to the Plan. The provisions of the
Trust shall govern the rights of the Employers, Participants and the
creditors of the Employers to the assets transferred to the Trust.
Each Employer shall at all times remain liable to carry out its
obligations under the Plan.
16.3 Distributions From the Trust. Each Employer's obligations under the
Plan may be satisfied with Trust assets distributed pursuant to the
terms of the Trust, and any such distribution shall reduce the
Employer's obligations under this Plan.
ARTICLE 17
Miscellaneous
17.1 Status of Plan. The Plan is intended to be a plan that is not
qualified within the meaning of Code Section 401(a) and that "is
unfunded and is maintained by an employer primarily for the purpose
of providing deferred compensation for a select group of management
or highly compensated employees" within the meaning of ERISA Sections
201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and
interpreted to the extent possible in a manner consistent with that
intent.
17.2 Unsecured General Creditor. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable
rights, interests or claims in any property or assets of an Employer.
For purposes of the payment of benefits under this Plan, any and all
of an Employer's assets shall be, and remain, the general, unpledged
unrestricted assets of the Employer. An Employer's obligation under
the Plan shall be merely that of an unfunded and unsecured promise to
pay money in the future.
20
17.3 Employer's Liability. An Employer's liability for the payment of
benefits shall be defined only by the Plan and the Plan Agreement, as
entered into between the Employer and a Participant. An Employer
shall have no obligation to a Participant under the Plan except as
expressly provided in the Plan and his or her Plan Agreement.
17.4 Nonassignability. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate,
alienate or convey in advance of actual receipt, the amounts, if any,
payable hereunder, or any part thereof, which are, and all rights to
which are expressly declared to be, unassignable and
non-transferable. No part of the amounts payable shall, prior to
actual payment, be subject to seizure, attachment, garnishment or
sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other person, be
transferable by operation of law in the event of a Participant's or
any other person's bankruptcy or insolvency or be transferable to a
spouse as a result of a property settlement or otherwise.
17.5 Not a Contract of Employment. The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between
the Employer and the Participant. Such employment is hereby
acknowledged to be an "at will" employment relationship that can be
terminated at any time for any reason, or no reason, with or without
cause, and with or without notice, unless expressly provided in a
written employment agreement. Nothing in this Plan shall be deemed to
give a Participant the right to be retained in the service of the
Employer, or to interfere with the right of the Employer to
discipline or discharge the Participant at any time.
17.6 Furnishing Information. A Participant or his or her Beneficiary will
cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be
requested in order to facilitate the administration of the Plan and
the payments of benefits hereunder, including but not limited to
taking such physical examinations as the Committee may deem
necessary.
17.7 Terms. Whenever any words are used herein in the masculine, they
shall be construed as though they were in the feminine in all cases
where they would so apply; and whenever any words are used herein in
the singular or in the plural, they shall be construed as though they
were used in the plural or the singular, as the case may be, in all
cases where they would so apply.
17.8 Captions. The captions of the articles, sections and paragraphs of
this Plan are for convenience only and shall not control or affect
the meaning or construction of any of its provisions.
17.9 Governing Law. Subject to ERISA, the provisions of this Plan shall
be construed and interpreted according to the internal laws of the
State of Indiana without regard to its conflicts of laws principles.
17.10 Notice. Any notice or filing required or permitted to be given to the
Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the
address below:
21
Lake City Bank
202 E. Center Street
Warsaw, Indiana 46580
Attn: Chief Financial Officer
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
Any notice or filing required or permitted to be given to a
Participant under this Plan shall be sufficient if in writing and
hand-delivered, or sent by mail, to the last known address of the
Participant.
17.11 Successors. The provisions of this Plan shall bind and inure to the
benefit of the Participant's Employer and its successors and assigns
and the Participant and the Participant's designated Beneficiaries.
17.12 Spouse's Interest. The interest in the benefits hereunder of a spouse
of a Participant who has predeceased the Participant shall
automatically pass to the Participant and shall not be transferable
by such spouse in any manner, including but not limited to such
spouse's will, nor shall such interest pass under the laws of
intestate succession.
17.13 Validity. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but this Plan shall be construed
and enforced as if such illegal or invalid provision had never been
inserted herein.
17.14 Incompetent. If the Committee determines in its discretion that a
benefit under this Plan is to be paid to a minor, a person declared
incompetent or to a person incapable of handling the disposition of
that person's property, the Committee may direct payment of such
benefit to the guardian, legal representative or person having the
care and custody of such minor, incompetent or incapable person. The
Committee may require proof of minority, incompetence, incapacity or
guardianship, as it may deem appropriate prior to distribution of the
benefit. Any payment of a benefit shall be a payment for the account
of the Participant and the Participant's Beneficiary, as the case may
be, and shall be a complete discharge of any liability under the Plan
for such payment amount.
17.15 Court Order. The Committee is authorized to make any payments
directed by court order in any action in which the Plan or the
Committee has been named as a party. In addition, if a court
determines that a spouse or former spouse of a Participant has an
interest in the Participant's benefits under the Plan in connection
with a property settlement or otherwise, the Committee, in its sole
discretion, shall have the right, notwithstanding any election made
by a Participant, to immediately distribute the spouse's or former
spouse's interest in the Participant's benefits under the Plan to
that spouse or former spouse.
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17.16 Distribution in the Event of Taxation.
(a) In General. If, for any reason, all or any portion of a
Participant's benefits under this Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the
Committee before a Change in Control, or the trustee of the
Trust after a Change in Control, for a distribution of that
portion of his or her benefit that has become taxable. Upon
the grant of such a petition, which grant shall not be
unreasonably withheld (and, after a Change in Control, shall
be granted), a Participant's Employer shall distribute to the
Participant immediately available funds in an amount equal to
the taxable portion of his or her benefit (which amount shall
not exceed a Participant's unpaid Account Balance under the
Plan). If the petition is granted, the tax liability
distribution shall be made within ninety (90) days of the
date when the Participant's petition is granted. Such a
distribution shall affect and reduce the benefits to be paid
under this Plan.
(b) Trust. If the Trust terminates in accordance with its terms
and benefits are distributed from the Trust to a Participant
in accordance therewith, the Participant's benefits under
this Plan shall be reduced to the extent of such
distributions.
17.17 Insurance. The Employers, on their own behalf or on behalf of the
trustee of the Trust, and, in their sole discretion, may apply for
and procure insurance on the life of the Participant, in such amounts
and in such forms as the Trust may choose. The Employers or the
trustee of the Trust, as the case may be, shall be the sole owner and
beneficiary of any such insurance. The Participant shall have no
interest whatsoever in any such policy or policies, and at the
request of the Employers shall submit to medical examinations and
supply such information and execute such documents as may be required
by the insurance company or companies to whom the Employers have
applied for insurance.
17.18 Legal Fees. In the event of any dispute under the Plan, the party
which is successful on the merits pursuant to a legal judgment,
arbitration or settlement shall be entitled to recover from the other
party all of the prevailing party's costs of counsel, fees, and
expenses incurred.
IN WITNESS WHEREOF, the Bank has signed this Plan document as of
December 31, 2003.
LAKE CITY BANK, an Indiana state bank
/s/DAvid M. Findlay
By: David M. Findlay
-------------------------------------------------------------
Title: EVP & CFO
-------------------------------------------------------------
23
ACTION REQUIRED: MUST BE RETURNED BY DECEMBER 3, 2003
Participant
Election Form A
Deferred Compensation Plan
Name (Last, First, Middle Initial) Social Security Number
You may use this form to:
Indicate the amount of your Base Annual Salary, Annual Bonus (earned in
2004; paid in 2005), and Annual Bonus (earned in 2005; paid in 2006)
that you wish to defer during the 2004 Plan Year.
Elect an optional In-Service Distribution. (Note: If you choose not to
elect an In-Service Distribution or you elect to receive less than
100% of your Annual Deferral Amount as an In Service Distribution,
the remainder of your Annual Deferral Amount and any related
investment gains or losses will be paid to you along with the rest of
your vested Account Balance pursuant to the Plan.)
Allocate new deferrals among the available measurement fund options
Select the form of your Retirement Benefit payment.
BASE ANNUAL SALARY Please select all that apply; fill in the appropriate
DEFERRAL ELECTION blanks with whole percentages or whole dollars amounts.
[ ] I irrevocably elect to defer _____% or $_________ of my Base Annual Salary
earned in 2005 (maximum of 50% of Base Annual Salary).
[ ] I elect not to defer my 2005 Base Annual Salary.
OPTIONAL IN-SERVICE This election will include amounts from the Merit
DISTRIBUTION ELECTION Increase deferral, if elected. Fill in the appropriate
blanks with whole percentages or whole dollar amounts.
[ ] I irrevocably elect to receive a lump sum In-Service Distribution of my
2005 Base Annual Salary Deferral Amount and 2005 Merit Increase, as well
as any investment gains or losses attributable to such amounts, payable
within 60 days of January 1, _________ (must be 2009 or later).
Please state the percentage or dollar value of the Base Annual Salary
Deferral Amount (and any investment gains or losses) you would like to
receive as an In-Service Distribution: ____________% or $____________.
2004 ANNUAL BONUS Please select all that apply; fill in the appropriate
DEFERRAL ELECTION blanks with whole percentages or whole dollar amounts.
[ ] I irrevocably elect to defer _____% or $_________ of my 2004 Annual Bonus
payable in 2005 -or- I elect to defer _____% above $_______ of my 2004
Annual Bonus payable in 2005 (maximum of 100% above $0).
[ ] I elect not to defer my 2004 Annual Bonus payable in 2005.
OPTIONAL IN-SERVICE Fill in the appropriate blanks with whole percentages or
DISTRIBUTION ELECTION whole dollar amounts.
[ ] I irrevocably elect to receive a lump sum In-Service Distribution of my
2004 Annual Bonus Deferral Amount payable in 2005, as well as any investment
gains or losses attributable to such amounts, payable within 60 days of
January 1, _________ (must be 2009 or later).
Please state the percentage or dollar value of the 2004 Annual Bonus
Deferral Amount payable in 2005 (and any investment gains or losses) you
would like to receive as an In-Service Distribution:
____________% or $____________.
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2005 ANNUAL BONUS Please select all that apply; fill in the appropriate
DEFERRAL ELECTION blanks with whole percentages or whole dollar amounts.
[ ] I irrevocably elect to defer _____% or $_________ of my 2005 Annual Bonus
payable in 2006 -or- I elect to defer _____% above $_______ of my 2005
Annual Bonus payable in 2006 (maximum of 100% above $0).
[ ] I elect not to defer my 2005 Annual Bonus payable in 2006.
OPTIONAL IN-SERVICE Fill in the appropriate blanks with whole percentages
DISTRIBUTION ELECTION or whole dollar amounts.
[ ] I irrevocably elect to receive a lump sum In-Service Distribution of my
2005 Annual Bonus Deferral Amount payable in 2006, as well as any
investment gains or losses attributable to such amounts, payable within 60
days of January 1, _________ (must be 2010 or later).
Please state the percentage or dollar value of the 2005 Annual Bonus
Deferral Amount payable in 2006 (and any investment gains or losses) you
would like to receive as an In-Service Distribution:
____________% or $____________.
NEW DEFFERALS Please select in whole percentage increments; the total
ALLOCATION ELECTION must equal 100%.
I elect to allocate my new deferrals to the following Measurement Funds:
[ ] Travelers Money Market Fund _______% [ ] Smith Barney Large Cap Growth Port._______%
[ ] PIMCO Total Return Portfolio _______% [ ] Fidelity VIP Mid-Cap Portfolio _______%
[ ] Fidelity Equity Income Portfolio _______% [ ] Scudder VIT Small Cap Index Fund _______%
[ ] Fidelity VIP Contra Fund _______% [ ] Templeton International Securities _______%
[ ] Travelers Equity Index Portfolio _______%
RETIREMENT BENEFIT Please select lump sum or annual installments; fill in
DISTRIBUTION ELECTION the number of years, if necessary.
|X| I elect to receive a Retirement Benefit in the manner indicated below, to
the extent allowed by the Plan (select one payment option below). This
election will apply to all Retirement Benefits and replaces any similar
distribution elections previously made. This election can be modified
through a subsequent election if such election is made in accordance with
the Plan.
[ ] A lump sum payment
[ ] Annual payments for _____ years (up to 20 years).
ACKNOWLEDGED AND AGREED: ACCEPTED
Signature of Participant Date Signature of Committee Member Date
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