EXHIBIT 10.3
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
Effective January 10, 2002
Copyright (C) 2002
By Clark/Bardes Consulting - Compensation Resource Group,
A division of Clark/Bardes Consulting, Inc.
All Rights Reserved
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
Purpose 1
ARTICLE 1 Definitions....................................................................................1
ARTICLE 2 Selection, Enrollment, Eligibility............................................................10
2.1 Selection by Committee........................................................................10
2.2 Enrollment Requirements.......................................................................10
2.3 Eligibility; Commencement of Participation....................................................10
2.4 Termination of Participation and/or Deferrals.................................................10
ARTICLE 3 Deferral Commitments/Company Supplemental Contribution/Company Excess
Contribution/Supplemental Incentive Plan Amounts/Restricted Stock Amounts/Stock
Option Gain Amounts/Rollover Amounts/Vesting/Crediting/Taxes..................................10
3.1 Minimum Deferrals.............................................................................10
3.2 Maximum Deferral..............................................................................11
3.3 Election to Defer; Effect of Election Form....................................................12
3.4 Withholding and Crediting of Annual Deferral Amounts..........................................13
3.5 Rollover Amount...............................................................................13
3.6 Annual Company Contribution Amount............................................................14
3.7 Excess Contribution Amount....................................................................14
3.8 Annual Supplemental Incentive Plan Amount.....................................................14
3.9 Annual Restricted Stock Amount................................................................15
3.10 Annual Stock Option Gain Amount...............................................................15
3.11 Vesting.......................................................................................15
3.12 Crediting/Debiting of Account Balances........................................................16
3.13 FICA and Other Taxes..........................................................................19
ARTICLE 4 Short-Term Payout; Unforeseeable Financial Emergencies; Withdrawal Election...................19
4.1 Short-Term Payout.............................................................................19
4.2 Other Benefits Take Precedence Over Short-Term................................................20
4.3 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies.........................20
4.4 Withdrawal Election...........................................................................20
ARTICLE 5 Rollover Benefit..............................................................................21
5.1 Rollover Benefit..............................................................................21
-i-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
5.2 Other Benefits Take Precedence Over Rollover Benefit..........................................21
ARTICLE 6 Restricted Stock Benefit......................................................................21
6.1 Restricted Stock Benefit......................................................................21
6.2 Payment of Restricted Stock Benefit...........................................................22
6.3 Death Prior to Payment of Restricted Stock Benefit............................................22
ARTICLE 7 Retirement Benefit............................................................................22
7.1 Retirement Benefit............................................................................22
7.2 Payment of Retirement Benefit.................................................................22
7.3 Death Prior to Completion of Retirement Benefit...............................................22
ARTICLE 8 Pre-Retirement Survivor Benefit...............................................................23
8.1 Pre-Retirement Survivor Benefit...............................................................23
8.2 Payment of Pre-Retirement Survivor Benefit....................................................23
ARTICLE 9 Termination Benefit...........................................................................23
9.1 Termination Benefit...........................................................................23
9.2 Payment of Termination Benefit................................................................23
9.3 Death Prior to Completion of Termination Benefit..............................................23
ARTICLE 10 Covered Termination Benefit...................................................................24
10.1 Covered Termination Benefit...................................................................24
10.2 Payment of Covered Termination Benefit........................................................24
10.3 Death Prior to Payment of Covered Termination Benefit.........................................24
ARTICLE 11 Disability Waiver and Benefit.................................................................24
11.1 Disability Waiver.............................................................................24
11.2 Continued Eligibility; Disability Benefit.....................................................25
ARTICLE 12 Beneficiary Designation.......................................................................25
12.1 Beneficiary...................................................................................25
12.2 Beneficiary Designation; Change; Spousal Consent..............................................25
12.3 Acknowledgement...............................................................................25
12.4 No Beneficiary Designation....................................................................26
12.5 Doubt as to Beneficiary.......................................................................26
12.6 Discharge of Obligations......................................................................26
ARTICLE 13 Leave of Absence..............................................................................26
-ii-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
13.1 Paid Leave of Absence.........................................................................26
13.2 Unpaid Leave of Absence.......................................................................26
ARTICLE 14 Termination, Amendment or Modification........................................................26
14.1 Termination...................................................................................26
14.2 Amendment.....................................................................................27
14.3 Plan Agreement................................................................................27
14.4 Effect of Payment.............................................................................28
ARTICLE 15 Administration................................................................................28
15.1 Committee Duties..............................................................................28
15.2 Administration Upon Change In Control.........................................................28
15.3 Agents........................................................................................28
15.4 Binding Effect of Decisions...................................................................29
15.5 Indemnity of Committee........................................................................29
15.6 Employer Information..........................................................................29
ARTICLE 16 Other Benefits and Agreements.................................................................29
16.1 Coordination with Other Benefits..............................................................29
ARTICLE 17 Claims Procedures.............................................................................29
17.1 Presentation of Claim.........................................................................29
17.2 Notification of Decision......................................................................29
17.3 Review of a Denied Claim......................................................................30
17.4 Decision on Review............................................................................30
17.5 Legal Action..................................................................................30
ARTICLE 18 Trust.........................................................................................30
18.1 Establishment of the Trust....................................................................30
18.2 Interrelationship of the Plan and the Trust...................................................31
18.3 Distributions From the Trust..................................................................31
ARTICLE 19 Miscellaneous.................................................................................31
19.1 Status of Plan................................................................................31
19.2 Unsecured General Creditor....................................................................31
19.3 Employer's Liability..........................................................................31
19.4 Nonassignability..............................................................................31
19.5 Not a Contract of Employment..................................................................31
-iii-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
19.6 Furnishing Information........................................................................32
19.7 Terms.........................................................................................32
19.8 Captions......................................................................................32
19.9 Governing Law.................................................................................32
19.10 Notice........................................................................................32
19.11 Successors....................................................................................32
19.12 Spouse's Interest.............................................................................33
19.13 Validity......................................................................................33
19.14 Incompetent...................................................................................33
19.15 Court Order...................................................................................33
19.16 Distribution in the Event of Taxation.........................................................33
19.17 Insurance.....................................................................................33
19.18 Legal Fees To Enforce Rights After Change in Control..........................................34
APPENDIX A Measurement Funds.............................................................................35
-iv-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
AMCORE FINANCIAL, INC.
AMENDED AND RESTATED DEFERRED COMPENSATION PLAN
Effective January 10, 2002
Purpose
-------
The purpose of this Plan is to provide specified benefits to a select
group of management or highly compensated Employees and Directors who contribute
materially to the continued growth, development and future business success of
Amcore Financial, Inc., a Nevada corporation, 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. This Amended and Restated Deferred Compensation Plan
supercedes in its entirety the Amcore Financial, Inc. Restated Deferred
Compensation Plan (hereinafter, the "Predecessor Plan") for any and all
"participants" and "inactive participants" in the Predecessor Plan who are
currently employed by any Employer as of the effective date of this Plan;
provided, however, that all other "participants" and "inactive participants" in
the Predecessor Plan will continue to be participants in such Predecessor Plan,
and will have no rights under this Plan. Any and all balances accrued by such
actively employed "participants" and "inactive participants" under the
Predecessor Plan shall be subject to the terms and conditions of this Plan and
shall be referred to as the "Rollover Amount."
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 "Account Balance" shall mean, with respect to a Participant, a credit
on the records of the Employer equal to the sum of (i) the Deferral
Account balance, (ii) the Company Supplemental Contribution Account
balance, (iii) the Company Excess Contribution Account balance, (iv)
the Supplemental Incentive Plan Account balance, (v) the Restricted
Stock Account balance, and (vi) the Stock Option Gain 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.
1.2 "Annual Company Excess Contribution Amount" for any one Plan Year shall
be the amount determined in accordance with Section 3.7.
1.3 "Annual Company Supplemental Contribution Amount" shall mean, for any
one Plan Year, the amount determined in accordance with Section 3.6.
1.4 "Annual Deferral Amount" shall mean that portion of a Participant's
Base Annual Salary, Bonus and Director Fees 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
-1-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
11.1), 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.
1.5 "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: the vested Account Balance (excluding the
portion of the Participant's Account Balance that is subject to Article
6) shall be calculated as of the close of business on or around the
date on which a benefit payment hereunder is triggered due to the
Participant's Retirement, Termination of Employment, Covered
Termination, or the anniversary of such calculation date, as
applicable. The 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
vested Account Balance, calculated as described in this definition. The
following year, the payment shall be 1/9 of the vested Account Balance,
calculated as described in this definition. The first annual
installment payment shall be paid no later than sixty (60) days after
the date on which the first benefit payment hereunder is triggered due
to the Participant's Retirement, Termination of Employment or Covered
Termination, as applicable. Remaining installments shall be paid no
later than sixty (60) days after each anniversary of the date on which
the benefit payment was triggered. Shares of Stock that shall be
distributable from the Supplemental Incentive Plan Account, Stock
Option Gain Account, the Restricted Stock Account and the portion of
the Participant's Account Balance allocated to the Amcore Financial,
Inc. Stock Unit Fund shall be distributable in shares of actual Stock
in the same manner previously described. However, the Committee may, in
its sole discretion, (i) adjust the annual installments in order to
distribute of whole shares of actual Stock and/or (ii) accelerate
distribution of such actual shares of Stock by payment of a lump sum.
1.6 "Annual Supplemental Incentive Plan Amount" shall mean, with respect to
a Participant for any one Plan Year, the shares of Supplemental
Incentive Plan Stock deferred in accordance with Section 3.8 of this
Plan, calculated using the average of the high and low sales price of
Stock on the business day closest to the date such Supplemental
Incentive Plan Stock would otherwise vest, but for the election to
defer.
1.7 "Annual Restricted Stock Amount" shall mean, with respect to a
Participant for any one Plan Year, the shares of Restricted Stock
deferred in accordance with Section 3.9 of this Plan.
1.8 "Annual Stock Option Gain Amount" shall mean, with respect to a
Participant for any one Plan Year, the portion of Qualifying Gains
deferred with respect to an Eligible Stock Option exercise, in
accordance with Section 3.10 of this Plan.
1.9 "Base Annual Salary" shall mean the annual cash compensation relating
to services performed during any calendar year, whether or not paid in
such calendar year or included on the Federal Income Tax Form W-2 for
such calendar year, excluding bonuses, commissions, overtime, fringe
benefits, stock options, restricted stock, relocation expenses,
incentive payments, non-monetary awards, directors 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 Annual Salary shall be
calculated before reduction for
-2-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
compensation voluntarily deferred or contributed by the Participant
pursuant to all qualified or non-qualified plans of any Employer and
shall be calculated to include amounts not otherwise included in the
Participant's gross income under Code Sections 125, 402(e)(3), 402(h),
or 403(b) pursuant to plans established by any 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.
1.10 "Beneficiary" shall mean one or more persons, trusts, estates or other
entities, designated in accordance with Article 12, that are entitled
to receive benefits under this Plan upon the death of a Participant.
1.11 "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.
1.12 "Board" shall mean the board of directors of the Company.
1.13 "Bonus" shall mean any compensation, in addition to Base Annual Salary,
payable during the Plan Year to a Participant as an Employee under any
Employer's annual bonus plan, cash incentive plan, or any other
long-term or short-term incentive plan, excluding stock options,
restricted stock and Supplemental Incentive Plan Stock, which the
Committee, in its sole discretion, determines to be eligible for
deferral under this Plan.
1.14 "Change in Control" shall be deemed to occur if:
(a) The acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or
l4(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of Company securities immediately after which
such person is the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of fifteen percent
(15%) or more of either the then outstanding shares of common
stock of the Company or the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors, but excluding for this
purpose any such acquisition by the Company or any of its
subsidiaries, or any employee benefit plan (or related trust) of
the Company or its subsidiaries, or any corporation with respect
to which, following such acquisition, more than sixty percent
(60%) of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the
then outstanding voting securities of such corporation entitled
to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the common stock and voting
securities of the Company immediately prior to such acquisition
in substantially the same proportion as their ownership,
immediately prior to such acquisition, of the then outstanding
shares of common stock of the Company or the combined voting
power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors, as the
case may be; or
-3-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided that any individual becoming a
director subsequent to the date hereof, whose election, or
nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened election
contest, including, but not limited to, a consent solicitation,
relating to the election of the directors of the Company (as such
terms are used in Rule 14a-11 of Regulation l4A promulgated under
the Exchange Act); or
(c) There occurs (i) a reorganization, merger or consolidation of the
Company or any direct or indirect subsidiary of the Company, in
each case, with respect to which all or substantially all of the
individuals and entities who were the respective beneficial
owners of the common stock and voting securities of the Company
immediately prior to such reorganization, merger or consolidation
do not, following such reorganization, merger or consolidation,
beneficially own, directly or indirectly, more than sixty percent
(60%) of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors, as the case may be, of the ultimate parent corporation
of any corporation resulting from such reorganization, merger or
consolidation, or (ii) shareholder approval of a complete
liquidation or dissolution of the Company, or (iii) the sale or
other disposition of all or substantially all of the assets of
the Company.
1.15 "Claimant" shall have the meaning set forth in Section 17.1.
1.16 "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
1.17 "Committee" shall mean the committee described in Article 15.
1.18 "Company" shall mean Amcore Financial, Inc., a Nevada corporation, and
any successor to all or substantially all of the Company's assets or
business.
1.19 "Company Excess Contribution Account" shall mean (i) that portion of a
Participant's Rollover Amount which is represented by the Participant's
aggregate "excess contributions" described in Section 3.4 of the
Predecessor Plan, as well as any "company interest contributions"
described in Section 3.2 of the Predecessor Plan which are specifically
attributable to such excess contributions accumulated under the
Predecessor Plan, plus (ii) the sum of all of a Participant's Annual
Company Excess Contribution Amounts, plus (iii) amounts credited in
accordance with all the applicable crediting and debiting provisions of
this Plan that relate to the Participant's Company Excess Contribution
Account, less (iv) all distributions made to the Participant or his or
her Beneficiary pursuant to this Plan that relate to the Participant's
Company Excess Contribution Account.
1.20 "Company Supplemental Contribution Account" shall mean (i) that portion
of a Participant's Rollover Amount which is represented by the
Participant's aggregate "supplemental contributions" described in
Section 3.3 of the Predecessor Plan, as well as any "company interest
-4-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
contributions" described in Section 3.2 of the Predecessor Plan which
are specifically attributable to such supplemental contributions
accumulated under the Predecessor Plan, plus (ii) the sum of the
Participant's Annual Company Supplemental Contribution Amounts, plus
(iii) amounts credited or debited in accordance with all the applicable
crediting and debiting provisions of this Plan that relate to the
Participant's Company Supplemental Contribution Account, less (iv) all
distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to the Participant's Company
Supplemental Contribution Account.
1.21 "Covered Termination" shall be defined solely for purposes of Article
10 and shall mean the termination of a Participant's employment with
the Company and all other Employers within two (2) years following a
Change in Control as a result of the Participant's resignation for good
reason or a termination by the Participant's Employer without cause.
For purposes of this definition, the phrase "resignation for good
reason" shall mean a Participant's resignation following (i) a
diminution in the Participant's status, title, position or
responsibilities, or an assignment to the Participant of duties
inconsistent with the Participant's status, title or position, for
reasons other than for cause or (ii) a material reduction in the
Participant's aggregate annualized compensation rate solely as a result
of a change adopted unilaterally by the Company or Employer. For
purposes of this definition, the phrase "termination without cause"
shall mean an involuntary termination of the Participant's employment
by Participant's Employer other than by reason of the Participant's (i)
willful and continued failure to perform the duties of his position
after receiving notice of such failure and being given reasonable
opportunity to cure such failure; (ii) willful misconduct which is
demonstrably and materially injurious to the Employer; (iii) conviction
of a felony; or (iv) material breach of applicable federal or state
securities laws, regulations or licensing requirements or the
applicable rules or regulations of any self-regulatory body. No act or
failure to act on the part of a Participant shall be considered
"willful" unless it is done or omitted to be done in bad faith or
without reasonable belief that the action or omission was in the best
interest of the Employer. No termination shall be considered a
termination for cause, for purposes of this definition, unless it is
effected by a written notice to the Participant stating in detail the
grounds constituting cause.
1.22 "Covered Termination Benefit" shall mean the benefit set forth in
Article 10.
1.23 "Deduction Limitation" shall mean the following described limitation on
a benefit that may otherwise be distributable pursuant to the
provisions of this Plan. Except as otherwise provided, this limitation
shall be applied to all distributions that are "subject to the
Deduction Limitation" under this Plan. 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 3.12 below, 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
-5-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
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.
1.24 "Deferral Account" shall mean (i) that portion of a Participant's
Rollover Amount which is represented by the Participant's aggregate
"deferred compensation" described in Section 3.1 of the Predecessor
Plan, as well as any "company interest contributions" described in
Section 3.2 of the Predecessor Plan which are specifically attributable
to such compensation deferrals accumulated under the Predecessor Plan,
plus (ii) the sum of all of a Participant's Annual Deferral Amounts,
plus (iii) amounts credited in accordance with all the applicable
crediting and debiting provisions of this Plan that relate to the
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.
1.25 "Director" shall mean any member of the board of directors of any
Employer.
1.26 "Director Fees" shall mean the annual fees paid by any Employer,
including retainer fees and meetings fees, as compensation for serving
on the board of directors.
1.27 "Disability" shall mean a period of disability during which a
Participant qualifies for permanent disability benefits under the
Participant's Employer's long-term disability plan, or, if a
Participant does not participate in such a plan, a period of disability
during which the Participant would have qualified for permanent
disability benefits under such a plan had the Participant been a
participant in such a plan, as determined in the sole discretion of the
Committee. If the Participant's Employer does not sponsor such a plan,
or discontinues to sponsor such a plan, Disability shall be determined
by the Committee in its sole discretion.
1.28 "Disability Benefit" shall mean the benefit set forth in Article 11.
1.29 "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.
1.30 "Eligible Stock Option" shall mean one or more non-qualified stock
option(s) selected by the Committee in its sole discretion and
exercisable under a plan or arrangement of any Employer permitting a
Participant under this Plan to defer gain with respect to such option.
1.31 "Employee" shall mean a person who is an employee of any Employer.
1.32 "Employer(s)" shall mean the Company and/or any of its subsidiaries
(now in existence or hereafter formed or acquired) that have been
selected by the Board to participate in the Plan and have adopted the
Plan as a sponsor.
1.33 "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
1.34 "First Plan Year" shall mean the period beginning January 10, 2002 and
ending December 31, 2002.
-6-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
1.35 "401(k) Plan" shall be that certain Amcore Financial Security Plan
adopted by the Company, as amended from time to time.
1.36 "Participant" shall mean any Employee or Director (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.
1.37 "Plan" shall mean the Company's Deferred Compensation Plan, which shall
be evidenced by this instrument and by each Plan Agreement, as they may
be amended from time to time.
1.38 "Plan Agreement" shall mean a written agreement, as may be amended from
time to time, which is entered into by and between an Employer and a
Participant. Each Plan Agreement executed by a Participant and the
Participant's 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 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. Other than as
provided for in the previous sentence, if there is any conflict between
the terms of a Participant's Plan Agreement and this Plan document, the
Plan document shall be controlling with respect to such Participant.
1.39 "Plan Year" shall, except for the First Plan Year, mean a period
beginning on January 1 of each calendar year and continuing through
December 31 of such calendar year.
1.40 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
Article 8.
1.41 "Qualifying Gain" shall mean the incremental value inuring to a
Participant upon the exercise of an Eligible Stock Option, using a
Stock-for-Stock payment method, during any Plan Year. Such incremental
value shall be deliverable to the Participant in the form of additional
shares of Stock and shall be computed as follows: (i) the total fair
market value of the shares of Stock held/acquired as a result of the
exercise of an Eligible Stock Option using a Stock-for-Stock payment
method, minus (ii) the total exercise price. For example, assume a
Participant elects to exercise an Eligible Stock Option to purchase
1,000 shares of Stock at an exercise price of $20 per share (i.e., a
total exercise price of $20,000), when the Stock has a current fair
market value of $25 per share (i.e., a total current fair market value
of $25,000) and elects to defer one hundred (100) percent of the
Qualifying Gain (i.e., $5,000). Using the Stock-for-Stock payment
method, the Participant would deliver 800 shares of Stock (worth
$20,000 at exercise) to exercise the Eligible Stock Option and would
receive, in return, 800 shares of Stock (worth $20,000 at exercise)
plus a Qualifying Gain, in the form of an unfunded and unsecured
promise by the
-7-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
Company for 200 additional shares of Stock in the future (worth $5,000
at exercise). The number of additional shares of Stock deliverable to
the Participant in the future as a result of the Qualifying Gain shall
be fixed and determined as of the date of the exercise of the Eligible
Stock Option using the average of the high and low sales price of the
Stock on the business day closest to the date of such exercise.
1.42 "Restricted Stock" shall mean unvested shares of restricted stock
awarded to the Participant under any Amcore Financial, Inc. stock
incentive plan and designated by the Committee, in its sole discretion,
for deferral under this Plan.
1.43 "Restricted Stock Account" shall mean the aggregate value, measured on
any given date, of (i) the number of shares of Restricted Stock
deferred by a Participant as a result of all Annual Restricted Stock
Amounts, plus (ii) the number of additional shares credited as a result
of deemed reinvestment of dividends in accordance with all the
applicable crediting provisions of the Amcore Financial, Inc. Stock
Unit Fund that relate to the Participant's Restricted Stock Account,
less (iii) the number of shares previously distributed to the
Participant or his or her Beneficiary from the Participant's Restricted
Stock Account pursuant to this Plan, subject in each case to any
adjustments to the number of such shares determined by the Committee
with respect to the Amcore Financial, Inc. Stock Unit Fund pursuant to
Section 3.12(e). This portion of the Participant's Account Balance
shall only be distributable in actual shares of Stock.
1.44 "Restricted Stock Benefit" shall mean the benefit set forth in Article
6.
1.45 "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an
Employee, severance from employment from all Employers for any reason
other than a leave of absence, death or Disability on or after the
earlier of the attainment of (a) age sixty-five (65) or (b) age
fifty-five (55) with ten (10) Years of Service; and shall mean with
respect to a Director who is not an Employee, severance of his or her
directorships with all Employers on or after the earlier of the
attainment of (a) age sixty-five (65) or (b) age fifty-five (55) with
ten (10) Years of Service. If a Participant is both an Employee and a
Director, Retirement shall not occur until he or she Retires as both an
Employee and a Director, which Retirement shall be deemed to be a
Retirement as a Director; provided, however, that such a Participant
may elect, at least three years prior to Retirement and in accordance
with the policies and procedures established by the Committee, to
Retire for purposes of this Plan at the time he or she Retires as an
Employee, which Retirement shall be deemed to be a Retirement as an
Employee.
1.46 "Retirement Benefit" shall mean the benefit set forth in Article 7.
1.47 "Rollover Amount" means the amount determined in accordance with
Section 3.5.
1.48 "Short-Term Payout" shall mean the payout set forth in Section 4.1.
1.49 "Stock" shall mean Amcore Financial, Inc. common stock, $0.22 par
value, or any other equity securities of the Company designated by the
Committee.
1.50 "Stock Option Gain Account" shall mean the aggregate value, measured on
any give date, of (i) the number of shares of Stock deferred by a
Participant as a result of all Annual Stock Option Gain Amounts, plus
(ii) the number of additional shares credited as a result of deemed
-8-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
reinvestment of dividends in accordance with all the applicable
crediting provisions of the Amcore Financial, Inc. Stock Unit Fund that
relate to the Participant's Stock Option Gain Account, less (iii) the
number of such shares previously distributed to the Participant or his
Beneficiary from the Participant's Stock Option Gain Account pursuant
to this Plan, subject in each case to any adjustments to the number of
such shares determined by the Committee with respect to the Amcore
Financial, Inc. Stock Unit Fund pursuant to Section 3.12(e). This
portion of the Participant's Account Balance shall only be
distributable in actual shares of Stock.
1.51 "Supplemental Incentive Plan Account" shall mean the aggregate value,
measured on any given date, of (i) the number of shares of Stock
deferred by a Participant as a result of all Annual Supplemental
Incentive Plan Amounts, plus (ii) the number of additional shares
credited as a result of deemed reinvestment of dividends in accordance
with all the applicable crediting provisions of the Amcore Financial,
Inc. Stock Unit Fund that relate to the Participant's Supplemental
Incentive Plan Account, less (iii) the number of shares of Supplemental
Incentive Plan Stock previously distributed to the Participant or his
or her Beneficiary from the Participant's Supplemental Incentive Plan
Account pursuant to this Plan, subject in each case to any adjustments
to the number of such shares determined by the Committee with respect
to the Amcore Financial, Inc. Stock Unit Fund pursuant to Section
3.12(e). This portion of the Participant's Account Balance shall only
be distributable in actual shares of Stock.
1.52 "Supplemental Incentive Plan Stock" shall mean unvested shares of Stock
awarded to the Participant under the Amcore Financial, Inc.
Supplemental Incentive Plan and designated by the Committee, in its
sole discretion, for deferral under this Plan.
1.53 "Termination Benefit" shall mean the benefit set forth in Article 9.
1.54 "Termination of Employment" shall mean the severing of employment with
all Employers, or service as a Director of all Employers, voluntarily
or involuntarily, for any reason other than Retirement, Disability,
death or an authorized leave of absence. If a Participant is both an
Employee and a Director, a Termination of Employment shall occur only
upon the termination of the last position held; provided, however, that
such a Participant may elect, at least three years before Termination
of Employment and in accordance with the policies and procedures
established by the Committee, to be treated for purposes of this Plan
as having experienced a Termination of Employment at the time he or she
ceases employment with an Employer as an Employee.
1.55 "Trust" shall mean one or more trusts established pursuant to that
certain Master Trust Agreement, dated as of ________, 2002 between the
Company and the trustee named therein, as amended from time to time.
1.56 "Unforeseeable Financial Emergency" shall mean an unanticipated
emergency that is caused by an event beyond the control of the
Participant that would result in severe financial hardship to the
Participant resulting from (i) a sudden and unexpected illness or
accident of the Participant or a dependent of the Participant, (ii) a
loss of the Participant's property due to casualty, or (iii) such other
extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant, all as determined in the
sole discretion of the Committee.
-9-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
1.57 "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 and
Directors of the Employers, as determined by the Committee in its sole
discretion. From that group, the Committee shall select, in its sole
discretion, Employees and Directors to participate in the Plan.
2.2 Enrollment Requirements. As a condition to participation, each selected
Employee or Director 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 or
Director 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 or Director shall commence
participation in the Plan on the first day of the month following the
month in which the Employee or Director completes all enrollment
requirements. If an Employee or a Director fails to meet all such
requirements within the period required, in accordance with Section
2.2, that Employee or Director 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)
distribute the Participant's vested Account Balance as a Termination
Benefit on a date deemed appropriate by the Committee in its sole
discretion, restrict such Participant's ability to reallocate his or
her Account Balance among the various Measurement Funds as deemed
appropriate by the Committee in its sole discretion, and terminate the
Participant's participation in the Plan.
-10-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
ARTICLE 3
Deferral Commitments/Company Supplemental Contribution/Company Excess
Contribution/Supplemental Incentive Plan Amounts/Restricted Stock Amounts
/Stock Option Gain Amounts/Rollover Amounts/Vesting/Crediting/Taxes
-------------------------------------------------------------------
3.1 Minimum Deferrals.
(a) Annual Deferral Amount. For each Plan Year, a Participant may elect to
defer, as his or her Annual Deferral Amount, an aggregate minimum of
$1,500 of Base Annual Salary, Bonus and/or Director Fees. If an
election is made for less than the stated minimum amounts, or if no
election is made, the amount deferred shall be zero.
(b) Supplemental Incentive Plan Amount. For each grant of Supplemental
Incentive Plan Stock, a Participant may elect to defer, as his or her
Annual Supplemental Incentive Plan Amount, Supplemental Incentive Plan
Stock in the following minimum amount:
----------------------------------------------------------------
Deferral Minimum Percentage
----------------------------------------------------------------
Supplemental Incentive Plan Stock 0%
----------------------------------------------------------------
If no election is made, the amount deferred shall be zero.
(c) Annual Restricted Stock Amount. For each grant of Restricted Stock, a
Participant may elect to defer, as his or her Annual Restricted Stock
Amount, Restricted Stock in the following minimum amount:
----------------------------------------------------------------
Deferral Minimum Percentage
----------------------------------------------------------------
Restricted Stock 0%
----------------------------------------------------------------
If no election is made, the amount deferred shall be zero.
(d) Annual Stock Option Gain Amount. For each Eligible Stock Option, a
Participant may elect to defer, as his or her Annual Stock Option Gain
Amount, the following minimum percentage of Qualifying Gain with
respect to exercise of the Eligible Stock Option:
----------------------------------------------------------------
Deferral Minimum Percentage
----------------------------------------------------------------
Qualifying Gain 0%
----------------------------------------------------------------
If no election is made, the amount deferred shall be zero.
(e) Short Plan Year. Notwithstanding the foregoing, if a Participant first
becomes a Participant after the first day of a Plan Year, or in the
case of the first Plan Year of the Plan itself, 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 12.
3.2 Maximum Deferral.
-11-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
(a) Base Annual Salary, Bonus and Director Fees. For each Plan Year, a
Participant may elect to defer, as his or her Annual Deferral Amount,
Base Annual Salary, Bonus and/or Director Fees up to the following
maximum percentages for each deferral elected:
----------------------------------------------------------------
Deferral Maximum Amount
----------------------------------------------------------------
Base Annual Salary 90%
----------------------------------------------------------------
Bonus 100%
----------------------------------------------------------------
Director Fees 100%
----------------------------------------------------------------
(b) Annual Supplemental Incentive Plan Amount. For each Plan Year, a
Participant who is an Employee may elect to defer, as his or her
Annual Supplemental Incentive Plan Amount, Supplemental Incentive Plan
Stock in the following maximum percentage:
----------------------------------------------------------------
Deferral Maximum Percentage
----------------------------------------------------------------
Supplemental Incentive Plan Stock 100%
----------------------------------------------------------------
(c) Annual Restricted Stock Amount. For each Plan Year, a Participant who
is an Employee may elect to defer, as his or her Annual Restricted
Stock Amount, Restricted Stock in the following maximum percentage:
----------------------------------------------------------------
Deferral Maximum Percentage
----------------------------------------------------------------
Restricted Stock 100%
----------------------------------------------------------------
(d) Annual Stock Option Gain Amount. For each Eligible Stock Option, a
Participant may elect to defer, as his or her Annual Stock Option Gain
Amount, Qualifying Gain up to the following maximum percentage with
respect to exercise of the Eligible Stock Option:
----------------------------------------------------------------
Deferral Maximum Percentage
----------------------------------------------------------------
Qualifying Gain 100%
----------------------------------------------------------------
Annual Stock Option Gain Amounts may be limited by other terms or
conditions set forth in the stock option plan or agreement under which
such options are granted.
(e) 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 Annual 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 and Director Fees shall be limited to those amounts
deemed eligible for deferral, in the sole discretion of the Committee.
-12-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
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.
(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 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, a new Election Form. If no such
Election Form is timely delivered for a Plan Year, the Annual Deferral
Amount shall be zero for that Plan Year.
(c) Supplemental Incentive Plan Stock Deferral. For an election to defer
Supplemental Incentive Plan Stock to be valid: (i) a separate
irrevocable Election Form must be completed and signed by the
Participant with respect to such Supplemental Incentive Plan Stock;
and (ii) such Election Form must be timely delivered to the Committee
and accepted by the Committee at least six (6) months prior to the
date such Supplemental Incentive Plan Stock vests under the terms of
the Amcore Financial, Inc. Supplemental Incentive Plan.
(d) Stock Option Deferral. For an election to defer gain upon an Eligible
Stock Option exercise to be valid: (i) a separate Election Form must
be completed and signed by the Participant with respect to the
Eligible Stock Option; (ii) the Election Form must be timely delivered
to the Committee and accepted by the Committee at least six (6) months
prior to the date the Participant elects to exercise the Eligible
Stock Option; (iii) the Eligible Stock Option must be exercised using
an actual Stock-for-Stock payment method; and (iv) the Stock actually
or constructively delivered by the Participant to exercise the
Eligible Stock Option must have been owned by the Participant during
the entire six (6) month period prior to its delivery.
(e) Restricted Stock Deferral. For an election to defer Restricted Stock
to be valid: (i) a separate irrevocable Election Form must be
completed and signed by the Participant, with respect to such
Restricted Stock; and (ii) such Election Form must be timely delivered
to the Committee and accepted by the Committee at least six (6) months
prior to the date such Restricted Stock vests.
3.4 Withholding and Crediting of Annual Deferral Amounts. For each Plan
Year, the Base Annual Salary portion of the Annual Deferral Amount
shall be withheld from each regularly scheduled Base Annual Salary
payroll in equal amounts, as adjusted from time to time for increases
and decreases in Base Annual Salary. The Bonus and/or Director Fees
portion of the
-13-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
Annual Deferral Amount shall be withheld at the time the Bonus or
Director Fees are 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
as soon as administratively feasible following the date on in which
such amounts would otherwise have been paid to the Participant.
3.5 Rollover Amount. With respect to Participants who participated in the
Predecessor Plan and who are active Employees as of the effective date
of this Plan, an amount equal to their "Account" as set forth in such
Predecessor Plan, valued as of February 1, 2002, shall be the Rollover
Amount. The Rollover Amount shall be comprised of elective deferrals,
company interest contributions, supplemental contributions and excess
contributions accumulated under the Predecessor Plan pursuant to
Sections 3.1, 3.2, 3.3 and 3.4 of the Predecessor Plan, and shall
retain their character as elective deferrals, company interest
contributions, supplemental contributions and excess contributions
under this Plan. Such Rollover Amount shall be credited to the
Participant's Deferral Account, Company Supplemental Contribution
Account and Company Excess Contribution Account as applicable, under
this Plan on the effective date of this Plan and shall be subject to
the terms and conditions of this Plan. Any Participant with a Rollover
Amount shall have no right to demand distribution of such amounts other
than as specifically provided for herein.
3.6 Annual Company Supplemental Contribution Amount.
(a) For each Plan Year, an Employer may be required to credit amounts to a
Participant's Company Supplemental Contribution Account in accordance
with employment or other agreements entered into between the
Participant and the Employer. Such amounts shall be credited on the
date or dates prescribed by such agreements.
(b) For each Plan Year, an Employer, in its sole discretion, may, but is
not required to, credit any amount it desires to any Participant's
Company Supplemental Contribution Account under this Plan, which
amount shall be for that Participant the Annual Company Supplemental
Contribution Amount for that Plan Year. The amount so credited to a
Participant may be smaller or larger than the amount credited to any
other Participant, and the amount credited to any Participant for a
Plan Year may be zero, even though one or more other Participants
receive an Annual Company Supplemental Contribution Amount for that
Plan Year. The Annual Company Supplemental Contribution Amount
described in this Section 3.6(b), if any, shall be credited to the
Participant's Company Supplemental Contribution Account on a date or
dates to be determined by the Committee in its sole discretion.
3.7 Company Excess Contribution Amount. For each Plan Year during which a
Participant (i) has compensation in excess of the limitations set forth
in Section 401(a)(17) of the Code and (ii) participates in an
Employer's 401(k) Plan, the Employer in its sole discretion may, but is
not required to, credit such Participant's Company Excess Contribution
Account under this Plan with an amount equal to the sum of all Employee
and Employer matching contributions that were precluded from being
contributed to the 401(k) Plan on behalf of such Participant during the
Plan Year due to 401(a)(17) limitations. The amount so credited to a
Participant under this Plan shall
-14-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
be for that Participant the Company Excess Contribution Amount for
that Plan Year and shall be credited to the Participant's Company
Excess Contribution Account on a date or dates to be determined by the
Committee in its sole discretion. A Participant's Company Excess
Contribution Amount may be smaller or larger than the amount credited
to any other Participant, and the amount credited to any Participant
for a Plan Year may be zero, even though one or more other
Participants receive a Company Excess Contribution Amount for that
Plan Year.
3.8 Annual Supplemental Incentive Plan Amount. Subject to any terms and
conditions imposed by the Committee, Participants may elect to defer,
under the Plan, Supplemental Incentive Plan Stock, which amount shall
be for that Participant the Annual Supplemental Incentive Plan Amount
for that Plan Year. The portion of any Supplemental Incentive Plan
Stock deferred shall be reflected on the books of the Company on a date
to be determined by the Committee, in its sole discretion, as an
unfunded, unsecured promise to deliver to the Participant a specific
number of actual shares of Stock in the future. Such shares of Stock
would otherwise have been delivered to the Participant, pursuant to the
terms of the Amcore Financial, Inc. Supplemental Incentive Plan, but
for the Participant's election to defer.
3.9 Annual Restricted Stock Amount. Subject to any terms and conditions
imposed by the Committee, Participants may elect to defer, under the
Plan, Restricted Stock, which amount shall be for that Participant the
Annual Restricted Stock Amount for that Plan Year; provided, however,
that the Annual Restricted Stock Amount for the 2002 Plan Year shall
automatically include a mandatory deferral of all Restricted Stock
granted to the Participant during the 2000 and 2001 calendar year. The
portion of any Restricted Stock deferred shall be reflected on the
books of the Company on a date to be determined by the Committee, in
its sole discretion, as an unfunded, unsecured promise to deliver to
the Participant a specific number of actual shares of Stock in the
future.
3.10 Annual Stock Option Gain Amount. Subject to any terms and conditions
imposed by the Committee, Participants may elect to defer, under the
Plan, all or some portion of Qualifying Gains attributable to an
Eligible Stock Option exercise, which amount shall be for that
Participant the Annual Stock Option Gain Amount for that Plan Year. The
portion of any Qualifying Gains shall be reflected on the books of the
Company as an unfunded, unsecured promise to deliver to the Participant
a specific number of actual shares of Stock in the future. Such shares
of Stock would otherwise have been delivered to the Participant,
pursuant to the Eligible Stock Option exercise, but for the
Participant's election to defer.
3.11 Vesting.
(a) A Participant shall at all times be 100% vested in his or her Deferral
Account, Supplemental Incentive Plan Account and Stock Option Gain
Account.
(b) A Participant shall be vested in each grant of Restricted Stock
individually deferred into his or her Restricted Stock Account in
accordance with (i) the terms of the Amcore Financial, Inc. stock
incentive plan, or (ii) if not addressed in the stock incentive plan,
the vesting schedule declared by the Committee, in its sole
discretion, and set forth in his or her Restricted Stock Election
Form.
-15-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
(c) A Participant shall be vested in his or her Company Excess
Contribution Account only to the extent that the Participant would be
vested in such amounts under the provisions of the 401(k) Plan.
(d) A Participant shall be vested in his or her Company Supplemental
Contribution Account in accordance with the vesting schedule(s) set
forth in his or her Plan Agreement, employment agreement or any other
agreement entered into between the Participant and his or her
Employer. If not addressed in such agreements, a Participant shall
vest in his or her Company Supplemental Contribution Account in
accordance with the schedule declared by the Committee, in its sole
discretion.
(e) Notwithstanding anything to the contrary contained in this Section
3.11, in the event of a Change in Control or the Participant's
Retirement, death while employed by an Employer or in the service of
an Employer as a Director, or Disability, a Participant's Company
Supplemental Contribution Account and Company Excess Contribution
Account shall immediately become 100% vested (if it is not already
vested in accordance with the above vesting schedules).
(f) Notwithstanding subsection 3.11(e) above, the vesting schedule for a
Participant's Company Supplemental Contribution Account and Company
Excess Contribution Account shall not be accelerated to the extent
that the Committee determines that such acceleration would cause the
deduction limitations of Section 280G of the Code to become effective.
In the event that all of a Participant's Company Supplemental
Contribution Account and/or Company Excess Contribution Account is not
vested pursuant to such a determination, the Participant may request
independent verification of the Committee's calculations with respect
to the application of Section 280G. In such case, the Committee must
provide to the Participant within 15 business days of such a request
an opinion from a nationally recognized accounting firm selected by
the Participant (the "Accounting Firm"). The opinion shall state the
Accounting Firm's opinion that any limitation in the vested percentage
hereunder is necessary to avoid the limits of Section 280G and contain
supporting calculations. The cost of such opinion shall be paid for by
the Company.
(g) Section 3.11(f) shall not prevent the acceleration of the vesting
schedule applicable to a Participant's Supplemental Contribution
Account and/or Company Excess Contribution Account if such Participant
is entitled to a "gross-up" payment, to eliminate the effect of the
Code section 4999 excise tax, pursuant to a Transitional Compensation
Agreement or other agreement entered into between such Participant and
the Employer.
3.12 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 Sections 2.4
and 3.12(e), the Participant may elect one or more of the measurement
funds listed at Appendix A (the
-16-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
"Measurement Funds"), based on certain mutual 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 calendar quarter that
follows by thirty (30) days the day on which the Committee gives
Participants advance written notice of such change.
(b) Election of Measurement Funds. Subject to the restrictions found in
Sections 2.4 and 3.12(e), a Participant, in connection with his or her
initial deferral election in accordance with Section (e)(a) above,
shall elect, on the Election Form, one or more Measurement Fund(s) (as
described in Section 3.12(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 shall
automatically be allocated into (i) the Measurement Fund which is
based on a money market fund, or (ii) its closest equivalent, as
determined by the Committee, in its sole discretion. Subject to the
restrictions found in Sections 2.4 and 3.12(e), 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.
(c) Proportionate Allocation. In making any election described in Section
3.12(b) 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).
(d) Crediting or Debiting Method. The performance of each elected
Measurement Fund (either positive or negative) will be determined by
the Committee, in its reasonable discretion, based on the performance
of the Measurement Funds themselves. A Participant's Account Balance
shall be credited or debited on a daily basis based on the performance
of each Measurement Fund selected by the Participant, such performance
being determined by the Committee in its sole discretion.
(e) Amcore Financial, Inc. Stock Unit Fund.
(i) A Participant's Supplemental Incentive Plan Account, Restricted
Stock Account and Stock Option Gain Account shall be
automatically allocated to the Amcore Financial, Inc. Stock Unit
Fund as the Measurement Fund. Participants may not select any
other Measurement Fund to be used to determine the amounts to be
credited or debited to their Supplemental Incentive Plan Account,
Restricted
-17-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
Stock Account or Stock Option Gain Account. Furthermore, no other
portion of the Participant's Account Balance can be either
initially allocated or re-allocated to the Amcore Financial, Inc.
Stock Unit Fund.
(ii) Any stock dividends, cash dividends or other non-cash dividends
that would have been payable on the Stock credited to a
Participant's Account Balance shall be credited to the
Participant's Account Balance in the form of additional shares of
Stock and shall automatically and irrevocably be deemed to be
re-invested in the Amcore Financial, Inc. Stock Unit Fund until
such amounts are distributed to the Participant. The number of
shares credited to the Participant for a particular stock
dividend shall be equal to (a) the number of shares of Stock
credited to the Participant's Account Balance as of the payment
date for such dividend in respect of each share of Stock,
multiplied by (b) the number of additional shares of Stock
actually paid as a dividend in respect of each share of Stock.
The number of shares credited to the Participant for a particular
cash dividend or other non-cash dividend shall be equal to (a)
the number of shares of Stock credited to the Participant's
Account Balance as of the payment date for such dividend in
respect of each share of Stock, multiplied by (b) the fair market
value of the dividend, divided by (c) the "fair market value" of
the Stock on the payment date for such dividend.
(iii) The number of shares of Stock credited to the Participant's
Account Balance may be adjusted by the Committee, in its sole
discretion, to prevent dilution or enlargement of Participants'
rights with respect to the portion of his or her Account Balance
allocated to the Amcore Financial, Inc. Stock Unit Fund, in the
event of any reorganization, reclassification, stock split, or
other unusual corporate transaction or event which affects the
value of the Stock, provided that any such adjustment shall be
made taking into account any crediting of shares of Stock to the
Participant under Section 3.12(e)(ii) above in connection with
such transaction or event.
(iv) For purposes of this Section 3.12(e), "fair market value" shall
mean for any day the average of the high and low sales price or,
in the event that no such sale takes place on such day, the
average of the reported closing bid and asked prices, in either
case as reported on the principal national securities exchange on
which the Stock is listed or admitted to trading or, if not
listed or admitted to trading on any national securities
exchange, on the Nasdaq Stock Market's National Market, or if the
Stock is not quoted on such National Market System, the average
of the high and low prices on each such day in the
over-the-counter market as reported by Nasdaq or, if high and low
prices for the Stock on each such day shall not have been
reported through Nasdaq, the average of the high and low prices
for such day as furnished by any New York Stock Exchange member
firm regularly making a market in the Stock selected for such
purpose by the Committee, or, if the Stock is not publicly
traded, the fair market value of the Stock as determined in good
faith by the Committee.
-18-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
(f) Fixed Rate Measurement Fund. Subject to the restrictions found in
Sections 2.4 and 3.12(e), Participants may allocate or re-allocate any
portion of their Account Balance to the Fixed Rate Measurement Fund,
at any time. The rate of interest that shall be credited to the Fixed
Rate Measurement Fund for a given Plan Year shall be determined by the
Committee, in its sole discretion, prior to the beginning of such Plan
Year. The rate of interest credited on amounts allocated to the Fixed
Rate Measurement Fund shall be credited and compounded on a daily
basis to a Participant's Account Balance.
(g) 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 to 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 Company or the Trustee (as
that term is defined in the Trust), in its own discretion, decides to
invest funds in any or all of 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 Company or the Trust; the Participant shall at all times
remain an unsecured creditor of the Company.
3.13 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 Annual Salary and Bonus that is not being deferred,
in a manner determined by the Employer(s), the Participant's share of
FICA and 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 3.13.
(b) Restricted Stock Account, Company Excess Contribution Account and
Company Supplemental Contribution Account. When a participant becomes
vested in a portion of his or her Restricted Stock Account, Company
Excess Contribution Account or Company Supplemental Contribution
Account, the Participant's Employer(s) shall withhold from the
Participant's Base Annual Salary and/or Bonus that is not deferred, in
a manner determined by the Employer(s), the Participant's share of
FICA and other employment taxes. If necessary, the Committee may
reduce the vested portion of the Participant's Restricted Stock
Account, Company Excess Contribution Account or Company Supplemental
Contribution Amount, as applicable, in order to comply with this
Section 3.13.
(c) Annual Supplemental Incentive Plan Amounts and Annual Stock Option
Gain Amounts. For each Plan Year in which an Annual Supplemental
Incentive Plan Amount or Annual Stock Option Gain Amount is being
first withheld from a Participant, the Participant's Employer(s) shall
withhold from that portion of the Participant's Base
-19-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
Annual Salary, Bonus, Supplemental Incentive Plan Stock, Qualifying
Gains and Restricted Stock that are not being deferred, in a manner
determined by the Employer(s), the Participant's share of FICA and
other employment taxes on such Annual Stock Option Gain Amount or
Annual Supplemental Incentive Plan Amount. If necessary, the Committee
may reduce the Annual Stock Option Gain Amount or Annual Supplemental
Incentive Plan Amount in order to comply with this Section 3.13.
(d) 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
Short-Term Payout; Unforeseeable Financial Emergencies;
-------------------------------------------------------
Withdrawal Election
-------------------
4.1 Short-Term Payout. In connection with each election to defer an Annual
Deferral Amount, a Participant may irrevocably elect to receive a
future "Short-Term Payout" from the Plan with respect to all or a
portion of such Annual Deferral Amount. Subject to the Deduction
Limitation, the Short-Term Payout shall be a lump sum payment in an
amount that is equal to the portion of the Annual Deferral Amount the
Participant elected to have distributed as a Short-Term Payout plus
amounts credited or debited in the manner provided in Section 3.12
above on that amount, determined at the time that the Short-Term Payout
becomes payable. Subject to the Deduction Limitation and the other
terms and conditions of this Plan, each Short-Term Payout 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 (3) Plan
Years after the end of the Plan Year in which the Annual Deferral
Amount is actually deferred. By way of example, if a five year
Short-Term Payout is elected for Annual Deferral Amounts that are
deferred in the Plan Year commencing January 1, 2003, the three year
Short-Term Payout would become payable during a sixty (60) day period
commencing January 1, 2007. With respect to each Short-Term Payout, the
Participant may change his or her election one time only to an
allowable alternative payout date by submitting a new Election Form to
the Committee, provided that (i) any such Election Form is submitted at
least thirteen (13) months prior to the Participant's original
distribution date, (ii) the new distribution date being selected is
later than the original distribution date, and (iii) the Election Form
is accepted by the Committee, in its sole discretion, at least thirteen
(13) months prior to the Participant's original distribution date.
4.2 Other Benefits Take Precedence Over Short-Term. Should an event occur
that triggers a benefit under Article 7, 8, 9, 10 or 11, any Annual
Deferral Amount, plus amounts credited or debited thereon, that is
subject to a Short-Term Payout election under Section 4.1 shall not be
paid in accordance with Section 4.1 but shall be paid in accordance
with the other applicable Article.
-20-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
4.3 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies.
If the Participant experiences an Unforeseeable Financial Emergency,
the Participant may petition the Committee to (i) suspend any deferrals
required to be made by a Participant and/or (ii) receive a partial or
full payout from the Plan. The payout shall not exceed the lesser of
the Participant's vested Account Balance, excluding the portion of the
Account Balance allocated to the Amcore Financial, Inc. Stock Unit
Fund, calculated as if such Participant were receiving a Termination
Benefit, or the amount reasonably needed to satisfy the Unforeseeable
Financial Emergency. If, subject to the sole discretion of the
Committee, the petition for a suspension and/or payout is approved,
suspension shall take effect upon the date of approval and any payout
shall be made within sixty (60) days of the date of approval. The
payment of any amount under this Section 4.3 shall not be subject to
the Deduction Limitation.
4.4 Withdrawal Election. A Participant (or, after a Participant's death,
his or her Beneficiary) may elect, at any time, to withdraw all of his
or her vested Account Balance, excluding the portion of the Account
Balance allocate to the Amcore Financial, Inc. Stock Unit Fund.
Furthermore, a Participant may elect, at any time, to withdraw a
portion of his or her vested Account Balance, excluding the portion of
the Account Balance allocated to the Amcore Financial, Inc. Stock Unit
Fund, provided such portion is equal to or greater than $25,000. In all
events, the Participant's vested Account Balance shall be calculated as
if there had occurred a Termination of Employment as of the day of the
election, less a withdrawal penalty equal to 10% of the amount
withdrawn (the net amount shall be referred to as the "Withdrawal
Amount"). This election can be made at any time, before or after
Retirement, Disability, death or Termination of Employment, and whether
or not the Participant (or Beneficiary) is in the process of being paid
pursuant to an installment payment schedule. The Participant (or his or
her Beneficiary) shall make this election by giving the Committee
advance written notice of the election in a form determined from time
to time by the Committee. The Participant (or his or her Beneficiary)
shall be paid the Withdrawal Amount within sixty (60) days of his or
her election. Once the Withdrawal Amount is paid, the Participant's
participation in the Plan shall be suspended for the remainder of the
Plan Year in which the withdrawal is elected and for one (1) full Plan
Year thereafter. The payment of this Withdrawal Amount shall not be
subject to the Deduction Limitation.
ARTICLE 5
Rollover Benefit
----------------
5.1 Rollover Benefit. Upon commencement of participation in this Plan, a
Participant with a Rollover Amount who was not considered to be an
"inactive participant" under the Predecessor Plan shall irrevocably
elect, on an Election Form, the manner in which his or her Rollover
Amount shall be distributed along with any amounts credited or debited
on such amount pursuant to Section 3.12 above. Accordingly, such
Participant may irrevocably elect to have his or her Rollover Amount,
plus amounts credited or debited on such amount, distributed (i) along
with the rest of his or her vested Account Balance pursuant to the
provisions of this Plan, or (ii) along with the rest of his or her
vested Account Balance pursuant to the provisions of this Plan, except
-21-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
that any "Education Accounts" and "Fixed Period Accounts" rolled over
from the Predecessor Plan shall be distributed in the manner previously
elected by the Participant under the Predecessor Plan, or (iii) in a
lump sum on an earlier date which is at least thirteen (13) months from
the effective date of this Plan (i.e., March 1, 2003), as specified by
the Participant in such irrevocable election. If a Participant does not
submit an Election Form to the Committee by the deadline selected by
the Committee, his or her Rollover Amount, plus amounts credited or
debited on such amount, shall be distributed along with the rest of his
or her vested Account Balance pursuant to the provisions of this Plan.
5.2 Other Benefits Take Precedence Over Rollover Benefit. Should an event
occur that triggers a benefit under Article 7, 8, 9, 10 or 11, any
Rollover Amount, plus amounts credited or debited thereon, that is
subject to distribution 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.
ARTICLE 6
Restricted Stock Benefit
------------------------
6.1 Restricted Stock Benefit. Subject to the Deduction Limitation, a
Participant who is required to defer Restricted Stock granted during
the 2000 and 2001 calendar years pursuant to Section 3.9 shall receive,
as a Restricted Stock Benefit, that portion of his or her Restricted
Stock Account comprised of such mandatory deferrals of Restricted
Stock.
6.2 Payment of Restricted Stock Benefit. In connection with his or her
commencement of participation in the Plan, a Participant shall
irrevocably elect on an Election Form to receive the Restricted Stock
Benefit (i) on January 1st of the Plan Year designated by the
participant, which must be January 1, 2008 or later, or (ii) upon the
Participant's Termination of Employment or Retirement. Despite the
foregoing, if (y) a Participant Retires or experiences a Termination of
Employment prior to January 1, 2008, such Participant shall
automatically receive his or her Restricted Stock Benefit on January 1,
2008, and (z) if the Participant Retires or experiences a Termination
of Employment after January 1, 2008 but before the distribution date
designated by the Participant in accordance with the previous sentence,
the Participant will automatically receive his or her Restricted Stock
Benefit upon his or her Retirement or Termination of Employment. The
Restricted Stock Benefit shall be paid in lump sum payment within sixty
(60) days of the date the Participant becomes entitled to payment of
the Restricted Stock Benefit in accordance with this Section 6.2. Any
payment made shall be subject to the Deduction Limitation.
6.3 Death Prior to Payment of Restricted Stock Benefit. If a Participant
dies prior to the date on which the Participant becomes entitled to
payment of his or her Restricted Stock Benefit in accordance with
Section 6.2 above, the Participant's Beneficiary shall receive the
Participant's Restricted Stock Benefit in a lump sum payment no later
than sixty (60) days after the Committee is provided with proof that is
satisfactory to the Committee of the Participant's death. Any payment
made shall be subject to the Deduction Limitation.
-22-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
ARTICLE 7
Retirement Benefit
------------------
7.1 Retirement Benefit. Subject to the Deduction Limitation, a Participant
who Retires shall receive, as a Retirement Benefit, his or her vested
Account Balance, excluding the portion of the Participant's Account
Balance that is subject to Article 6.
7.2 Payment of Retirement Benefit. 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 15 years. The
Participant may change his or her election to an allowable alternative
payout period by submitting a new Election Form to the Committee,
provided that any such Election Form is submitted to and accepted by
the Committee in its sole discretion at least thirteen (13) months
prior to the Participant's Retirement. The Election Form most recently
accepted by the Committee shall govern the payout of the Retirement
Benefit. If a Participant does not make any election with respect to
the payment of the Retirement Benefit, or if the Participant's Account
Balance on the date of the Participant's Retirement is less than
$50,000, then such benefit shall be payable in a lump sum. The lump sum
payment shall be made, or installment payments shall commence, no later
than sixty (60) days after the date on which the Participant Retires.
Any payment made shall be subject to the Deduction Limitation.
7.3 Death Prior to Completion of Retirement Benefit. If a Participant dies
after Retirement but before the Retirement Benefit is paid in full, the
Participant's Beneficiary shall receive a lump sum payment that is
equal to the Participant's unpaid remaining vested Account Balance,
excluding the portion of the Participant's Account Balance that is
subject to Article 6, no later than sixty (60) days after the Committee
is provided with proof that is satisfactory to the Committee of the
Participant's death. Any payment made shall be subject to the Deduction
Limitation.
ARTICLE 8
Pre-Retirement Survivor Benefit
-------------------------------
8.1 Pre-Retirement Survivor Benefit. Subject to the Deduction Limitation,
the Participant's Beneficiary shall receive a Pre-Retirement Survivor
Benefit equal to the Participant's vested Account Balance, excluding
the portion of the Participant's Account Balance that is subject to
Article 6, if the Participant dies before he or she Retires,
experiences a Termination of Employment or suffers a Disability.
8.2 Payment of Pre-Retirement Survivor Benefit. The Pre-Retirement Survivor
Benefit shall be paid to the Participant's Beneficiary in a lump sum
payment no later than sixty (60) days after the Committee is provided
with proof that is satisfactory to the Committee of the Participant's
death. Any payment made shall be subject to the Deduction Limitation.
-23-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
ARTICLE 9
Termination Benefit
-------------------
9.1 Termination Benefit. Subject to the Deduction Limitation, the
Participant shall receive a Termination Benefit, which shall be equal
to the Participant's vested Account Balance, excluding the portion of
the Participant's Account Balance that is subject to Article 6, if a
Participant experiences a Termination of Employment other than a
Covered Termination prior to his or her Retirement, death or
Disability.
9.2 Payment of Termination Benefit. If the Participant's vested Account
Balance at the time of his or her Termination of Employment is less
than $50,000, payment of his or her Termination Benefit shall be paid
in a lump sum. If his or her vested Account Balance at such time is
equal to or greater than $50,000, the Committee, in its sole
discretion, may cause the Termination Benefit to be paid in a lump sum
or pursuant to an Annual Installment Method of 5 years. The lump sum
payment shall be made, or installment payments shall commence, no later
than sixty (60) days after the date on which the Participant
experiences the Termination of Employment. Any payment made shall be
subject to the Deduction Limitation.
9.3 Death Prior to Completion of Termination Benefit. If a Participant dies
after his or her Termination of Employment but before the Termination
Benefit is paid in full, the Participant's Beneficiary shall receive a
lump sum payment that is equal to the Participant's unpaid remaining
vested Account Balance, excluding the portion of the Participant's
Account Balance that is subject to Article 6, no later than sixty (60)
days after the Committee is provided with proof that is satisfactory to
the Committee of the Participant's death. Any payment made shall be
subject to the Deduction Limitation.
ARTICLE 10
Covered Termination Benefit
---------------------------
10.1 Covered Termination Benefit. Subject to the Deduction Limitation, the
Participant will receive a Covered Termination Benefit, which shall be
equal to the Participant's vested Account Balance, excluding the
portion of the Participant's Account Balance that is subject to Article
6, if a Covered Termination occurs prior to the Participant's
Termination of Employment, Retirement, death or Disability.
10.2 Payment of Covered Termination Benefit. A Participant, in connection
with his or her commencement of participation in the Plan, shall
irrevocably elect on an Election Form whether to receive his or her
Covered Termination Benefit in a lump sum or pursuant to an Annual
Installment Method for five (5) years. If a Participant does not make
any election with respect to the payment of the Covered Termination
Benefit, then such Participant's vested Account Balance shall be paid
to the Participant in a lump sum. The lump sum payment shall be made,
or installments shall commence, no later than sixty (60) days after the
Participant's Covered Termination.
-24-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
10.3 Death Prior to Payment of Covered Termination Benefit. If a Participant
dies after his or her Covered Termination but before the Covered
Termination Benefit is paid in full, the Participant's Beneficiary
shall receive the Participant's Covered Termination Benefit in a lump
sum payment no later than sixty (60) days after the Committee is
provided with proof that is satisfactory to the Committee of the
Participant's death. Any payment made shall be subject to the Deduction
Limitation.
ARTICLE 11
Disability Waiver and Benefit
-----------------------------
11.1 Disability Waiver.
(a) Waiver of Deferral. A Participant who is determined by the Committee
to be suffering from a Disability shall be (i) excused from fulfilling
that portion of the Annual Deferral Amount commitment that would
otherwise have been withheld from a Participant's Base Annual Salary,
Bonus and/or Director Fees for the Plan Year during which the
Participant first suffers a Disability and (ii) excused from
fulfilling any existing unvested Supplemental Incentive Plan Stock,
unvested Restricted Stock or unexercised Eligible Stock Option
commitments. During the period of Disability, the Participant shall
not be allowed to make any additional deferral elections, but will
continue to be considered a Participant for all other purposes of this
Plan.
(b) Return to Work. If a Participant returns to employment, or service as
a Director, with an Employer after a Disability ceases, the
Participant may elect to defer an Annual Deferral Amount, Annual
Supplemental Incentive Amount, Annual Stock Option Gain Amount and
Annual Restricted Stock 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 (e)
above.
11.2 Continued Eligibility; Disability Benefit. A Participant suffering a
Disability shall, for benefit purposes under this Plan, continue to be
considered to be employed, or in the service of an Employer as a
Director, and shall be eligible for the benefits provided for in
Articles 4, 5, 6, 7, 8, 9 or 10 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, and must in the case of a Participant who is otherwise
eligible to Retire, deem the Participant to have experienced a
Termination of Employment, or in the case of a Participant who is
eligible to Retire, deem the Participant to have Retired, at any time
(or in the case of a Participant who is eligible to Retire, as soon as
practicable) after such Participant is determined to be suffering a
Disability, in which case the Participant shall receive a Disability
Benefit equal to his or her vested Account Balance, excluding the
portion of the Participant's Account Balance that is subject to Article
6, at the time of the Committee's determination; provided, however,
that should the Participant otherwise have been eligible to Retire, he
or she shall be paid in accordance with Article 7. The Disability
Benefit shall be paid in a lump sum within sixty (60)
-25-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
days of the Committee's exercise of such right. Any payment made shall
be subject to the Deduction Limitation.
ARTICLE 12
Beneficiary Designation
-----------------------
12.1 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.
12.2 Beneficiary Designation; Change; Spousal Consent. A Participant shall
designate his or her Beneficiary by completing and 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. If the Participant names
someone other than his or her spouse as a Beneficiary and if the
Committee requires that a spousal consent be obtained with respect to
such Participant, a spousal consent, in the form designated by the
Committee, must be signed by that Participant's spouse and returned to
the Committee. 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.
12.3 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.
12.4 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided in Sections 12.1, 12.2 and 12.3 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.
12.5 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.
12.6 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.
-26-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
ARTICLE 13
Leave of Absence
----------------
13.1 Paid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take a paid leave of absence
from the employment of the Employer, the Participant shall continue to
be considered employed by the Employer and the Annual Deferral Amount,
Annual Supplemental Incentive Plan Amount, Annual Stock Option Gain
Amount and Annual Restricted Stock Amount shall continue to be withheld
during such paid leave of absence in accordance with Section (e).
13.2 Unpaid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take an unpaid leave of
absence from the employment of the Employer, the Participant shall
continue to be considered employed by the Employer and the Participant
shall be excused from making deferrals until the earlier of the date
the leave of absence expires or the Participant returns to a paid
employment status. Upon such expiration or return, deferrals shall
resume for the remaining portion of the Plan Year in which the
expiration or return occurs, based on the deferral election, if any,
made for that Plan Year. If no election was made for that Plan Year, no
deferral shall be withheld.
ARTICLE 14
Termination, Amendment or Modification
--------------------------------------
14.1 Termination. Although each Employer anticipates that it will continue
the Plan for an indefinite period of time, there is no guarantee that
any Employer will continue the Plan or will not terminate the Plan at
any time in the future. Accordingly, each 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
and Directors, by action of its board of directors. Moreover, upon a
Change in Control, the Plan shall automatically be terminated with
respect to all Participants. Upon the termination of the Plan with
respect to any Employer, the Plan Agreements of the affected
Participants who are employed by that Employer, or in the service of
that Employer as Directors, shall terminate and their vested Account
Balances, 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, an 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 15 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, an Employer shall be
required to pay such benefits in a lump sum; or (iii) after a Change in
Control, 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
-27-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
have the right to accelerate installment payments without a premium or
prepayment penalty by paying the vested 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).
14.2 Amendment. Any Employer may, at any time, amend or modify the Plan in
whole or in part with respect to that Employer by the action of its
board of directors; provided, however, that: (i) no amendment or
modification shall be effective to decrease or restrict the value of a
Participant's vested 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
14.2 or Section 15.2 of the Plan shall be effective. The amendment or
modification of the Plan shall not 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 vested 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).
14.3 Plan Agreement. Despite the provisions of Sections 14.1 and 14.2 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 consent of the Participant.
14.4 Effect of Payment. The full payment of the applicable benefit under
Articles 4, 5, 6, 7, 8, 9, 10 or 11 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 15
Administration
--------------
15.1 Committee Duties. Except as otherwise provided in this Article 15, this
Plan shall be administered by a Committee which shall consist of the
Board, or 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 Company.
-28-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
15.2 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. Upon and after the occurrence of a
Change in Control, the "Administrator" shall be an independent third
party selected by the Trustee and approved by the individual who,
immediately prior to such event, was the Company's Chief Executive
Officer or, if not so identified, the Company's highest ranking officer
(the "Ex-CEO"). The Administrator shall have the discretionary power to
determine all questions arising in connection with the administration
of the Plan and the interpretation of the Plan and Trust including, but
not limited to benefit entitlement determinations; provided, however,
upon and after the occurrence of a Change in Control, the Administrator
shall have no power to direct the investment of Plan or Trust assets or
select any investment manager or custodial firm for the Plan or Trust.
Upon and after the occurrence of a Change in Control, the Company must:
(1) pay all reasonable administrative expenses and fees of the
Administrator; (2) indemnify the Administrator against any costs,
expenses and liabilities including, without limitation, attorney's fees
and expenses arising in connection with the performance of the
Administrator hereunder, except with respect to matters resulting from
the gross negligence or willful misconduct of the Administrator or its
employees or agents; and (3) supply full and timely information to the
Administrator on all matters relating to the Plan, the Trust, the
Participants and their Beneficiaries, the Account Balances of the
Participants, the date and circumstances of the Retirement, Disability,
death or Termination of Employment of the Participants, and such other
pertinent information as the Administrator may reasonably require. Upon
and after a Change in Control, the Administrator may be terminated (and
a replacement appointed) by the Trustee only with the approval of the
Ex-CEO. Upon and after a Change in Control, the Administrator may not
be terminated by the Company.
15.3 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 any Employer.
15.4 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.
15.5 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.
15.6 Employer Information. To enable the Committee and/or Administrator to
perform its functions, the Company 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
-29-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
of Employment of its Participants, and such other pertinent
information as the Committee or Administrator may reasonably require.
ARTICLE 16
Other Benefits and Agreements
-----------------------------
16.1 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 17
Claims Procedures
-----------------
17.1 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.
17.2 Notification of Decision. The Committee shall consider a Claimant's
claim within a reasonable time, and 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
(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; and
(iv) an explanation of the claim review procedure set forth in
Section 17.3 below.
17.3 Review of a Denied Claim. Within 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
-30-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
representative) may file with the Committee a written request for a
review of the denial of the claim. Thereafter, but not later than
thirty (30) days after the review procedure began, the Claimant (or
the Claimant's duly authorized representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole
discretion, may grant.
17.4 Decision on Review. The Committee shall render its decision on review
promptly, and not later than sixty (60) days after the filing of a
written request for review of the denial, unless a hearing is held or
other special circumstances require additional time, in which case the
Committee's decision must be rendered within 120 days after such date.
Such 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; and
(c) such other matters as the Committee deems relevant.
17.5 Legal Action. A Claimant's compliance with the foregoing provisions of
this Article 17 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 18
Trust
-----
18.1 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 Company 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 Company, to provide for the benefit payments under the
Plan.
18.2 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.
18.3 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.
-31-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
ARTICLE 19
Miscellaneous
-------------
19.1 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.
19.2 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.
19.3 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.
19.4 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.
19.5 Not a Contract of Employment. The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between any
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 any Employer, either as an
Employee or a Director, or to interfere with the right of any Employer
to discipline or discharge the Participant at any time.
19.6 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.
-32-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
19.7 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.
19.8 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.
19.9 Governing Law. Subject to ERISA, the provisions of this Plan shall be
construed and interpreted according to the internal laws of the State
of Illinois without regard to its conflicts of laws principles.
19.10 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:
James S. Waddell
-------------------------------------------------------
Executive Vice President & Chief Administrative Officer
-------------------------------------------------------
Amcore Financial, Inc.
-------------------------------------------------------
501 Seventh Street
-------------------------------------------------------
P.O. Box 1537
-------------------------------------------------------
Rockford, Illinois 61104
-------------------------------------------------------
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.
19.11 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.
19.12 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.
19.13 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.
19.14 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
-33-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
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.
19.15 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.
19.16 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 vested Account Balance under the Plan). If
the petition is granted, the tax liability distribution shall be
made within 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.
19.17 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.
19.18 Legal Fees To Enforce Rights After Change in Control. The Company and
each Employer is aware that upon the occurrence of a Change in Control,
the Board or the board of directors of a Participant's Employer (which
might then be composed of new members) or a shareholder of the Company
or the Participant's Employer, or of any successor corporation might
then cause or attempt to cause the Company, the Participant's Employer
or such successor to refuse to comply with its obligations under the
Plan and might cause or attempt to cause the Company or the
-34-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
Participant's Employer to institute, or may institute, litigation
seeking to deny Participants the benefits intended under the Plan. In
these circumstances, the purpose of the Plan could be frustrated.
Accordingly, if, following a Change in Control, it should appear to any
Participant that the Company, the Participant's Employer or any
successor corporation has failed to comply with any of its obligations
under the Plan or any agreement thereunder or, if the Company, such
Employer or any other person takes any action to declare the Plan void
or unenforceable or institutes any litigation or other legal action
designed to deny, diminish or to recover from any Participant the
benefits intended to be provided, then the Company and the
Participant's Employer irrevocably authorize such Participant to retain
counsel of his or her choice at the expense of the Company and the
Participant's Employer (who shall be jointly and severally liable) to
represent such Participant in connection with the initiation or defense
of any litigation or other legal action, whether by or against the
Company, the Participant's Employer or any director, officer,
shareholder or other person affiliated with the Company, the
Participant's Employer or any successor thereto in any jurisdiction.
IN WITNESS WHEREOF, the Company has signed this Plan document as of __________,
2001.
"Company"
Amcore Financial, Inc., a Nevada corporation
By: __________________________________
Title: _______________________________
-35-
Amcore Financial, Inc.
Amended and Restated Deferred Compensation Plan
Master Plan Document
- --------------------------------------------------------------------------------
APPENDIX A
Measurement Funds
PIMCO Innovation Fund
Vintage Government Assets Fund
Vintage Bond Fund
Vintage Equity Fund
Gabelli Westwood Equity Fund
American Funds Growth Fund
PBGH Midcap Value Fund
Aetna Small Company Fund
RS Diversified Growth Fund
Putnam International Growth Fund
Amcore Fixed Rate Measurement Fund
Amcore Financial, Inc. Stock Unit Fund (available only for deferrals of
Supplemental Incentive Plan Stock, Restricted Stock and Qualifying Gains with
respect to the exercise of Eligible Stock Options)
-36-