EXHIBIT (10)(1)
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FIRST NATIONAL BANK IN MANITOWOC
401(k) PROFIT SHARING PLAN
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Restated effective January 1, 2003
Prepared by:
Matthew J. Flanary, Esq.
Davis & Kuelthau, s.c.
111 East Kilbourn Avenue
Milwaukee, WI 53202
Tel. No. (414) 225-1489
Fax No. (414) 278-3689
FIRST NATIONAL BANK IN MANITOWOC
401(k) PROFIT SHARING PLAN
TABLE OF CONTENTS
Article I Definitions and Construction.................................................................. 1-1
1.1 Definitions................................................................................... 1-1
1.2 Construction.................................................................................. 1-8
Article II Eligibility and Participation................................................................. 2-1
2.1 Eligible Employees............................................................................ 2-1
2.2 Commencement of Participation................................................................. 2-1
2.3 Termination of Participation.................................................................. 2-1
2.4 Reemployment.................................................................................. 2-2
Article III Contributions and Allocations................................................................. 3-1
3.1 Employer Contributions........................................................................ 3-1
3.2 Participant Contributions..................................................................... 3-2
3.3 Matching Contributions........................................................................ 3-4
3.4 Timing of Contributions....................................................................... 3-4
3.5 Allocation of Forfeitures..................................................................... 3-4
3.6 Rollovers from Other Employee Benefit Plans................................................... 3-4
3.7 Return of Contributions....................................................................... 3-5
3.8 Contribution and Allocation Restrictions...................................................... 3-5
Article IV Valuation and Accounting...................................................................... 4-1
4.1 Valuation and Accounting...................................................................... 4-1
4.2 Acquisition Loan Accounts..................................................................... 4-1
4.3 Valuation of Qualifying Employer Securities................................................... 4-1
Article V Contribution and Allocation Restrictions...................................................... 5-1
5.1 Annual Addition Limitation.................................................................... 5-1
5.2 Top-Heavy Restrictions........................................................................ 5-2
5.3 Actual Deferral Percentage Test............................................................... 5-2
5.4 Actual Contribution Percentage Test........................................................... 5-5
5.5 Separate Testing.............................................................................. 5-7
5.6 Limitation if Shareholder Elect(s) Gain Deferral.............................................. 5-7
Article VI Vesting....................................................................................... 6-1
6.1 Vesting....................................................................................... 6-1
6.2 Forfeitures................................................................................... 6-1
6.3 Reinstatement................................................................................. 6-2
Article VII Distributions................................................................................. 7-1
7.1 Payment of Retirement Benefits................................................................ 7-1
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7.2 Form and Method of Payment.................................................................... 7-2
7.3 Death Benefits................................................................................ 7-4
7.4 Required Lifetime Distributions............................................................... 7-5
7.5 In-Service Withdrawals........................................................................ 7-6
7.6 Hardship Distributions........................................................................ 7-7
7.7 Right of First Refusal........................................................................ 7-8
7.8 Put Option.................................................................................... 7-9
7.9 Qualified Domestic Relations Orders.......................................................... 7-11
7.10 Elective Deferrals and Safe Harbor Contributions............................................. 7-11
Article VIII Administration of the Plan................................................................... 8-12
8.1 Designation of Administrator................................................................. 8-12
8.2 Administration and Interpretation............................................................ 8-12
8.3 Administrator's Duties....................................................................... 8-12
8.4 Authority.................................................................................... 8-12
8.5 Maintenance of Accounts and Reports.......................................................... 8-12
8.6 Examination of Financial Statements and Audits................................................ 8-2
8.7 Agent for Service of Process.................................................................. 8-2
8.8 Bond ..................................................................................... 8-2
8.9 Compensation and Expenses..................................................................... 8-2
8.10 Limitation of Authority....................................................................... 8-2
8.11 Limitations on Liability...................................................................... 8-2
8.12 404(c) Compliance............................................................................. 8-3
Article IX Administration of the Trust................................................................... 9-1
9.1 Appointment of Trustee........................................................................ 9-1
9.2 Authorization for Trust Agreement............................................................. 9-1
9.3 Participant Direction of Investment of Account................................................ 9-1
9.4 Funding Policy................................................................................ 9-1
9.5 Diversification of Investments................................................................ 9-1
9.6 Voting Rights................................................................................. 9-2
Article X Claims Procedure............................................................................. 10-1
10.1 Application for Benefits..................................................................... 10-1
10.2 Review of Denied Claim....................................................................... 10-1
Article XI Amendment and Termination.................................................................... 11-1
11.1 Amendment or Restatement..................................................................... 11-1
11.2 Termination and Discontinuance of Contributions.............................................. 11-1
11.3 Merger, Consolidation or Transfer of Assets and Liabilities.................................. 11-2
11.4 Successor Employer........................................................................... 11-2
Article XII General Provisions........................................................................... 12-1
12.1 Limitation on Liability...................................................................... 12-1
12.2 Indemnification.............................................................................. 12-1
12.3 Compliance with ERISA........................................................................ 12-1
12.4 Nonalienation of Benefits.................................................................... 12-1
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12.5 Employment Not Guaranteed by Plan............................................................ 12-1
12.6 Facility of Payment.......................................................................... 12-1
12.7 Location of Participant or Beneficiary Unknown............................................... 12-2
12.8 Offset .................................................................................... 12-2
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INTRODUCTION
Effective March 16, 1987, First Manitowoc Bancorp (the "Bank") adopted
the First National Bank in Manitowoc 401(k) Profit Sharing Plan (this "Plan") to
allow its employees (and employees of certain related organizations) to make
additional pre-tax contributions toward their own retirement savings. As
established, the Plan was intended to be a 401(k)-profit sharing plan and the
Bank received a favorable determination letter from the Internal Revenue Service
to confirm this status on December 1997. Effective February ___, 2002, the Bank
merged the First National Bank in Manitowoc Money Purchase Plan (the "Money
Purchase Plan") with and into this Plan. Individual accounts from the Money
Purchase Plan have been carried forward into the "Money Purchase Plan Accounts"
referenced in Section 1.1(a) below.
Effective January 1, 2003, the Bank amended the Plan document in the
form of this document. As amended, the Plan is intended to be a "stock bonus
plan" that is also: (1) an employee stock ownership plan (or "ESOP"), within the
meaning of Section 4975(e)(7)(A) of the Internal Revenue Code of 1986, as
amended (the "Code"); and (2) a qualified cash or deferred arrangement (or
"CODA") within the meaning of Code Section 401(k)(2). The Plan shall be
administered, interpreted and applied in a manner designed to reflect these
intentions.
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ARTICLE I
Definitions and Construction
1.1 Definitions. Unless a different meaning is clearly required by
the context, the following words, when used in this Plan, shall have the
meaning(s) set forth below.
(a) Account. One or more individual account(s) maintained
to record each Participant's benefits under the Plan and his or her interest in
the Trust. Consistent with the terms of this document, a Participant may have
one or more of the following sub-accounts in his or her name under this Plan:
- an Elective Contribution Account;
- a Matching Contribution Account;
- an Employer Contribution Account;
- a Money Purchase Plan Account;
- a Prior Plan Account; and
- a Rollover Account
(b) Administrator. The Administrator (sometimes referred
to herein as the "Plan Administrator") shall be the named fiduciary who shall
control and manage the operation and administration of the Plan. As of the
Effective Date of this restatement, the Administrator shall be the Bank, acting
by its board of directors or any delegate(s) duly authorized by the Bank's board
of directors.
(c) Acquisition Loan. A loan (or other extension of
credit) used by the Trust to finance the acquisition of Qualifying Employer
Securities, which loan may constitute an extension of credit to the Trust from a
party in interest (as defined in ERISA). An Acquisition Loan must satisfy all of
the requirements of the Code and ERISA, including Code Section 4975 (including
Treasury Regulation Section 54.4975-7) and ERISA Section 408(b)(3).
Additionally, an Acquisition Loan must be approved, in writing, by the Bank's
Compensation, Pension and Retirement Committee or by the Bank's Board of
Directors.
(d) Bank. First Manitowoc Bancorp and any successor which
adopts the Plan. The Bank's board of directors, or its delegate(s), shall act on
behalf of the Bank for purposes of this Plan.
(e) Break in Service. A Plan Year during which a
Participant is not credited with more than 1 Hour of Service with an Employer.
With respect to any Plan Year that is less than 12 consecutive months, the
determination period shall be the 12 consecutive month period beginning on the
first day of such Plan Year.
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(f) Code. The Internal Revenue Code of 1986, as amended
from time to time, and as interpreted by applicable regulations and rulings.
(g) Compensation. An Employee's wages for federal income
tax withholding purposes, as defined under Code Section 3401(a), plus all other
payments to an Employee in the course of the Employer's trade or business, for
which the Employer must furnish the Employee a written statement under Code
Sections 6041, 6051 and 6052, but determined without regard to any rules that
limit the remuneration included in wages based on the nature or location of the
employment or services performed (such as the exception for agricultural labor
in Code Section 3401(a)(2)).
Notwithstanding the preceding (or any other Plan
provision(s) to the contrary), Compensation shall include "elective
contributions." For purposes of this provision, "elective contributions" are
amounts excludible from the Employee's gross income under Code Sections 125,
402(e)(3), 402(h)(2), 403(b), 408(p) or 457 (and for Plan Years beginning on or
after January 1, 2001, Code Section 132(f)(4)), and contributed by an Employer,
at the Employee's election, to a cafeteria plan, a 401(k) arrangement, a SARSEP,
a tax-sheltered annuity, a SIMPLE plan, a Code Section 457 plan or, for Plan
Years beginning on or after January 1, 2001, a qualified transportation fringe
benefit plan.
The annual Compensation of each Employee taken into
account for determining all benefits provided under the Plan for any Plan Year
shall not exceed the adjusted annual compensation limit provided in Code Section
401(a)(17), which adjustments shall be made annually by the Secretary to reflect
increases in the cost-of-living at the same time and in the same manner as
adjustments under Section 415(d), except that the base period shall be the
calendar quarter beginning July 1, 2001, and any increase which is not a
multiple of $5,000 shall be rounded to the next lowest multiple of $5,000. The
annual Compensation limit for the Plan Year beginning January 1, 2002, is
$200,000. If Compensation is determined for a period of time that contains fewer
than 12 consecutive months, the annual compensation limit shall be applied on a
pro rata basis. For Plan Years beginning before January 1, 2002, the annual
Compensation limit was calculated according to the then-current provisions of
Code Section 401(a)(17).
(h) Disability. A Participant will be considered to have
a Disability if the Participant terminates employment with each Employer under
circumstances that entitle the Participant to receive long term disability
benefits under the disability provisions of the First National Bank in Manitowoc
Employee Benefit Plan (the "LTD Plan") or, for a Participant who does not also
participate in the LTD Plan, under circumstances that would entitle the
Participant to LTD Plan benefits if the individual did participate in the LTD
Plan. The Administrator shall determine whether an individual who does not
participate in the LTD Plan satisfies the requirements of the LTD Plan. The
Administrator shall determine the date that a disability is deemed to have
occurred. The Administrator may require a Participant to submit to a physical
examination in order to confirm a Disability. The Administrator shall apply the
terms of this provision in a nondiscriminatory manner.
(i) Disqualified Person. An Employer, an owner (either
direct or indirect) of 50% or more of the voting power or total value of all
classes of stock entitled to vote, an officer
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or director of an Employer, a holder of 10% or more of an Employer's shares and
any other person defined as a "disqualified person" in Code Section 4975(e)(2).
(j) Effective Date. The Effective Date of this Plan is
March 16, 1987. Except as otherwise noted in this document, the Effective Date
of this restatement is January 1, 2003.
(k) Employee. A person who is employed by the an Employer
or who is a Leased Employee who is deemed to be an employee of the an Employer
under applicable Code provisions.
(l) Employer. The Bank and any "participating employer"
that adopts this Plan and whose participation in this Plan is approved, in
writing, by the Bank shall be considered an Employer under this Plan. As of the
Effective Date of this restatement, each of the following organizations is a
participating employer: (i) First National Bank in Manitowoc; and (ii) the
Insurance Center of Manitowoc, Inc. Each of the preceding "participating
employers" is also a member of the same controlled group that includes the Bank.
(m) ERISA. The Employee Retirement Income Security Act of
1974, as amended from time to time, and as interpreted by applicable regulations
and rulings.
(n) Highly Compensated Employee (or "HCE").
(i) Plan Years On and After January 1, 1997. An
Employee who performs services for an Employer or any other employer (a "related
company") required to be aggregated with an Employer under Code Sections 414(b),
(c), (m), or (o) and who: [a] was a 5% owner of an Employer or any related
company at any time during the current or immediately preceding Plan Year; or
[b] received Compensation from an Employer or a related company in excess of
$80,000 (as adjusted pursuant to Code Section 414(q)(1), which adjustments shall
be made by the Secretary at the same time and in the same manner as under Code
Section 415(d), except that the base period shall be the calendar quarter ending
September 30, 1996) in the immediately preceding Plan Year. A Highly Compensated
Employee shall also include any individual who was a highly compensated active
employee for either the year in which he or she separated from service or any
year ending on of after the individual's 55th birthday. For purposes of applying
this standard to the Plan Year beginning on January 1, 1997, the preceding
definition shall be treated as having been in effect during the Plan Year that
commenced on January 1, 1996.
(ii) Plan Years Before January 1, 1997. Any
Employee who performs services for an Employer or a related company during the
determination year and who, during the look-back year: [a] received compensation
from an Employer or a related company in excess of $75,000 (as adjusted pursuant
to Section 415(d) of the Code); [b] received compensation from an Employer or
related company in excess of $50,000 (as adjusted pursuant to Section 415(d) of
the Code) and was a member of the top-paid group for such year; or [c] was an
officer of an Employer or related company and received compensation during such
year that is greater than 50 percent of the dollar limitation in effect under
Section 415(b)(1)(A) of the Code. The term Highly Compensated Employee also
includes: [i] Employees who are both described in the
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preceding sentence if the term "determination year" is substituted for the term
"look-back year" and the Employee is one of the 100 Employees who received the
most compensation from an Employer during the determination year; and [ii]
Employees who are Five Percent Owners at any time during the look-back year or
determination year. If no officer has satisfied the compensation requirement of
subparagraph [c] above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a Highly Compensated
Employee. For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year. A highly compensated former Employee includes any Employee
who separated from service (or was deemed to have separated) prior to the
determination year, performs no service for an Employer or related company
during the determination year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a family
member of either a Five Percent Owner who is an active or former Employee or a
Highly Compensated Employee who is one of the 10 most highly compensated
Employees ranked on the basis of compensation paid by an Employer or related
company during such year, then the family member and the Five Percent Owner or
top-ten highly compensated Employee shall be aggregated. In such case, the
family member and Five Percent Owner or top-ten highly compensated Employee
shall be treated as a single Employee receiving compensation and Plan
contributions or benefits equal to the sum of such compensation and
contributions or benefits of the family member and Five Percent Owner or top-ten
highly compensated Employee. For purposes of this Section, family members
includes the spouse, lineal ascendants and descendants of the Employee or former
Employee and the spouses of such lineal ascendants and descendants. The
determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group,
the top 100 Employees, the number of Employees treated as officers and the
compensation that is considered, will be made in accordance with Section 414(q)
of the Code and the regulations thereunder.
(o) Hour of Service. For Employees whose actual hours of
employment are tracked by an Employer, an Hour of Service shall equal:
(i) Each hour for which an Employee is paid, or
entitled to payment for the performance of service for an Employer.
(ii) Each hour for which an Employee is paid, or
entitled to payment by an Employer on account of a period of time during which
no duties are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty, or leave of absence. No more than
1 Hour of Service will be credited under this Section (ii) for any single
continuous period (whether or not such period occurs in a single Plan Year or
other computation period). Hours under this Section (ii) will be calculated and
credited pursuant to Section 2530.200b-2 of the Department of Labor Regulations,
which is incorporated herein by this reference, and shall govern the
determination of an individual's Hours of Service.
(iii) Each hour for which back pay, regardless of
any mitigation of damages, is either awarded or agreed to by an Employer,
provided that the same Hours of Service will not be credited under Section (i)
or Section (ii), as the case may be, and under this Section (iii).
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(iv) Hours of Service will be credited to each
Employee for the computation period in which the duties are performed or would
have been performed or, in the case of Section (iii) above, for the computation
period or periods to which the award or agreement pertains rather than the
computation period in which the award, agreement or payment is made.
(v) Solely for purposes of determining whether a
Break in Service has occurred for participation and vesting purposes, an
individual who is absent from work for maternity or paternity reasons shall
receive credit for the Hours of Service which would otherwise have been credited
to such Employee but for such absence or, in any case in which such Hours of
Service cannot be determined, eight Hours of Service per day of such absence.
For purposes of this paragraph, an absence from work for maternity or paternity
reasons means an absence: [a] by reason of the pregnancy of the Employee; [b] by
reason of a birth of a child of the Employee; [c] by reason of the placement of
a child with the Employee in connection with the adoption of such child by the
Employee; or [d] for purposes of caring for such child for a period immediately
following such birth or placement. The Plan shall credit Hours of Service
pursuant to this paragraph first to the Plan Year in which the absence begins to
the extent necessary to prevent a Break in Service in that Plan Year, then to
the Plan Year following the Plan Year in which the absence begins. No more than
1 hour will be credited under this Section. The Plan shall not award Hours of
Service pursuant to this Section unless the Employee involved provides the
Administrator such information as the Administrator reasonably requires to
establish the purpose of the absence as consistent with this paragraph and to
establish the number of days in the absence.
(vi) Hours of Service shall be credited for
employment with other members of an affiliated service group (under Code Section
414(m)), a controlled group of corporations (under Code Section 414(b)), a group
of trades or businesses under common control (under Code Section 414(c)) of
which an Employer is a member, any other entity required to be aggregated with
the Bank pursuant to Code Section 414(o) and for services performed as a Leased
Employee.
(vii) To the extent consistent with guidelines
adopted by the Bank and applicable Code and ERISA provisions, Hours of Service
shall be granted or credited based upon the preceding principles, applied the
periods before a particular Employer adopted (or agreed to be a "participating
employer") under this Plan.
Employees whose actual hours of employment are not
tracked by an Employer (i.e., exempt employees) shall receive: 10 Hours of
Service for a daily equivalency; 45 Hours of Service for a weekly equivalency;
95 Hours of Service for a semimonthly equivalency; or 190 Hours of Service for a
monthly equivalency. An Employee's equivalency period shall equal the unit or
period for which the employee receives a paycheck.
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(p) Income. The income or loss allocable to an Account.
(q) Key Employee.
(i) Plan Years On and After January 1, 2002. Any
Employee or former Employee and the beneficiaries of such Employee who, pursuant
to Code Section 416(i), during the Plan Year, is or was: [a] an officer of an
Employer who received compensation (as defined in Code Section 414(q)(7)) in
excess of 50% of the dollar limitation under Code Section 415(b)(1)(A); [b] a 5%
owner of an Employer; or [c] a 1% owner of an Employer who received compensation
(as defined in Code Section 414(q)(7)) of more than $150,000, as adjusted by the
Internal Revenue Service.
(ii) Plan Years Before January 1, 2002. Any
Employee or former Employee and the beneficiaries of such Employee who, pursuant
to Code Section 416(i), during the Plan Year involved or any of the four
immediately preceding Plan Years, is or was: [a] an officer of an Employer who
received compensation (as defined in Code Section 414(q)(7)) in excess of 50% of
the dollar limitation under Code Section 415(b)(1)(A); [b] an owner (or
considered an owner under Code Section 318) of one of the ten largest interests
in an Employer who received compensation (as defined in Code Section 414(q)(7))
in excess of 100% of the dollar limitation under Code Section 415(c)(1)(A); [c]
a 5% owner of an Employer; or [d] a 1% owner of an Employer who received
compensation (as defined in Code Section 414(q)(7)) of more than $150,000, as
adjusted by the Internal Revenue Service.
(r) Leased Employee. Any person (other than an Employee
of an Employer who, pursuant to an agreement between that Employer and any other
person (the "leasing organization"), has performed services for an Employer (or
for that Employer and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full-time basis for a period of at least one year,
and such services are performed under the Employer's direction or control.
Notwithstanding this general rule, a Leased Employee shall not be considered an
Employee of an Employer if: (i) the Leased Employee is covered by a money
purchase pension plan providing: [a] a non-integrated employer contribution rate
of at least 10% of Compensation; [b] immediate participation; and [c] full and
immediate vesting; and (ii) all Leased Employees do not constitute more than 20%
of the Employer's non-Highly Compensated Employees.
(s) Normal Retirement Date. A Participant's 65th
birthday.
(t) Participant. Any individual who has satisfied the
eligibility and participation requirements of the Plan as provided in Article 2
below. Where appropriate, the term "Participant" also includes some or all of
the following individuals for whom an Account exists which has not been
distributed or forfeited in total: (i) former Participants who are no longer
eligible to participate in the Plan; (ii) beneficiaries of a Participant; and
(iii) alternate payees, as defined in Code Section 414(p)(8), of a Participant
or former Participant.
(u) Plan. The First National Bank in Manitowoc 401(k)
Profit Sharing Plan, as set forth herein and as amended from time to time.
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(v) Plan Year. The period beginning on each January 1 and
ending on the following December 31.
(w) Qualifying Employer Securities. Common stock of an
Employer with a combination of voting power and dividend rights equal to the
class of common stock with the highest dividend rights and that class of common
stock with the greatest voting power or noncallable preferred stock of an
Employer if convertible at any time into common stock as previously described at
a reasonable conversion price. Unless specifically approved by the Bank's Board
of Directors, the Plan shall not hold more than twenty percent (20%) of the
outstanding stock of the Bank or any other Employer.
(x) Top-Heavy. Effective for Plan Years beginning on or
after January 1, 2002, this Plan is Top-Heavy if the "top-heavy ratio" for this
Plan exceeds 60% and this Plan is not part of any "top-heavy group." Generally,
the Plan will be Top-Heavy for any Plan Year, if, as of the determination date,
the accumulations in the Accounts of Key Employees exceed 60% of its
accumulations in the Accounts of all Participants. To determine if the Plan is
Top-Heavy, the Administrator shall: (i) include in each Participant's Account
distributions made with respect to the Participant during the Plan Year
containing the "determination date" and the one-year period ending on the
determination date; and (ii) exclude from the calculation: [a] the Account of
any Participant who has not been a Key Employee at any time during the Plan Year
containing the determination date and the preceding Plan Year; and [b] the
Account of any individual who did not complete at least one Hour of Service
during the immediately preceding year. For purposes of this Section, the
following words shall be defined as set forth herein. Determination Date. For
the first Plan Year, the determination date is the is the last day of that Plan
Year. For any other Plan Year, the determination date is the last day of the
immediately preceding Plan Year. For Plan Years beginning before January 1,
2002, the preceding and following standards were applied by utilizing a
five-year look-back period consistent with the then-applicable provisions of
Code Section 416(g).
(i) Top-Heavy Group. The Plan is part of a
Top-Heavy Group if by aggregating plans of an Employer which cover a Key
Employee and any other plan which enables a plan covering that Key Employee to
meet the qualification requirements under the coverage or anti-discrimination
rules contained in the Code it is determined that the sum of: [a] the present
value of the accumulated accrued benefits for Key Employees under all defined
benefit plans included in the group; and [b] the sum of the account balances of
Key Employees under all defined contribution plans included in the group,
exceeds 60% of the same amount determined for all Participants under all plans
included in the group.
(A) Required Aggregation Group. In
determining a Top-Heavy Group hereunder, each plan of an Employer in which a Key
Employee is a participant in the Plan Year containing the determination date or
the preceding year, and each other plan of an Employer which enables any plan in
which a Key Employee participates to meet the requirements of Code Sections
401(a)(4) or 410, will be required to be aggregated. Such group shall be known
as a Required Aggregation Group. In the case of a Required Aggregation Group,
each plan in the group will be considered a Top-Heavy Plan if the Required
Aggregation Group is a Top-Heavy Group. No plan in the Required Aggregation
Group will be considered a Top-Heavy Plan if the required Aggregation Group is
not a Top-Heavy Group.
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(B) Permissive Aggregation Group. The
Bank may also include any other plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a whole, would
continue to satisfy the provisions of Code Section 401(a)(4) and 410. Such group
shall be known as a Permissive Aggregation Group. In the case of a Permissive
Aggregation Group, only a plan that is part of the Required Aggregation Group
will be considered a Top-Heavy Plan if the Permissive Aggregation Group is a
Top-Heavy Group. No plan in the Permissive Aggregation Group will be considered
a Top-Heavy Plan if the Permissive Aggregation Group is not a Top-Heavy Group.
(ii) Top-Heavy Ratio. The Administrator shall
determine the Top-Heavy Ratio in accordance with Code Section 416(g).
(y) Trust. The assets of the Plan held in trust by the
Trustee. [Note: a separate Trust Agreement will be prepared when the Plan
document is closer to being finalized]
(z) Trustee. The person, persons or entity holding the
assets of the Plan in trust.
(aa) Valuation Date. The day or days of each Plan Year
when the Administrator values the assets of the Trust pursuant to Article 4.
Notwithstanding any language in the Plan to the contrary, the last day each Plan
year shall be a Valuation Date.
(bb) Year of Service. Any Plan Year during which the
Employee completes at least 1 Hour of Service after the Employee attains age
eighteen (18). With respect to any Plan Year that is less than 12 consecutive
calendar months, an Employee shall be credited with a Year of Service if he or
she completes 1 Hour of Service during the 12 consecutive month period ending on
the last day of such short Plan Year. If an Employer maintains the plan of a
predecessor employer, service of an Employee with the predecessor employer is
credited as service with the Employer under this Plan.
1.2 Construction. Except to the extent preempted by the ERISA, the
laws of the State of Wisconsin shall govern the construction and application of
the Plan. Words used in the masculine gender shall include the feminine and
words in the singular shall include the plural, as appropriate. If any provision
of the Code or ERISA render any provisions of this Plan unenforceable, such
provision shall be of no force and effect only to the extent required by such
law.
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ARTICLE II
Eligibility and Participation
2.1 Eligible Employees. An Employee will be eligible to
participate in the Plan only after he or she has satisfied the age and service
requirements provided in Section (a) below and only while he or she is not a
member of an "excluded group," as described in Section (b) below.
(a) Age and Service Requirements. An Employee shall be
eligible to participate in the Plan after the Employee has attained age 18 and
completed at least one Hour of Service with one or more Employer(s) as of any
date that is at least six (6) months after the date that the individual first
completes one Hour of Service with any Employer.
(b) Excluded or Reclassified Employees. Notwithstanding
any other provision in the Plan to the contrary, an individual who is providing
services for an Employer in one (or more) of the following categories shall not
be entitled to participate in this Plan or to receive benefits hereunder wholly
or partially as a result of such services:
(i) Independent Contractor. A person who is
classified by the Employer as an independent contractor, as evidenced by the
Employer's failure to withhold taxes from the person's compensation, even if the
individual is otherwise determined to be the Employer's common law employee.
(ii) Contractor's Employee. A person working for
a business that provides goods or services (including temporary employee
services) to the Employer whom the Employer does not regard as its own common
law employee, as evidenced by the Employer's failure to withhold taxes from the
person's compensation, even if the individual is otherwise determined to be the
Employer's common law employee.
(iii) Waived Participation. A person to whom the
Employer did not extend the opportunity of participating in this Plan and/or an
individual who agreed orally or in writing that he or she would not be eligible
to receive benefits hereunder whether or not this Plan was expressly identified
in that agreement.
2.2 Commencement of Participation. An Employee who meets the
eligibility requirements provided in Section 2.1 above shall become a
Participant in the Plan on the same date that the Employee satisfies such
eligibility requirements.
2.3 Termination of Participation. An individual shall cease to be
a Participant in the Plan on the date that his or her employment with each
Employer terminates or, if earlier, the date that he or she is a member of an
excluded group, as defined in Section 2.1 above. If an individual terminates his
or her participation in the Plan because he or she becomes a member of an
excluded group, as defined in Section 2.1 above, the individual shall resume
participation in the Plan:
(a) immediately upon again becoming a member of an
eligible class of Employees if he or she again becomes a member of such class
before incurring five consecutive Breaks in Service; or
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(b) in accordance with the rules provided in Sections 2.1
and 2.2 above if he or she again becomes a member of an eligible class of
Employees after he or she incurs five consecutive Breaks in Service.
2.4 Reemployment. If a Participant terminates his or her
employment with each Employer (and his or her participation in the Plan) and he
or she subsequently resumes employment with an Employer, he or she shall
participate in the Plan in accordance with the following rules.
(a) No Break in Service. If the former Participant
resumes employment with an Employer before he or she incurs a Break in Service,
the rehired Employee shall participate in the Plan immediately upon reemployment
with such Employer.
(b) After a Break in Service-Vested Benefits. If the
former Participant had vested rights in his or her Account and he or she
subsequently resumes employment with an Employer after incurring a Break in
Service, the rehired Employee shall participate in the Plan immediately upon
reemployment with such Employer.
(c) After a Break in Service-No Vested Benefits. The
rehired Employee shall participate in the Plan immediately upon reemployment
with an Employer if the former Participant had no vested rights in his or her
Account and he or she subsequently resumes employment with an Employer before
incurring a period of Breaks in Service equaling or exceeding the greater of:
(i) five consecutive years; or (ii) the number of Years of Service the former
Participant completed prior to the Break in Service. The rehired Employee shall
be treated as a new Employee who must again satisfy the eligibility and
participation requirements provided in Sections 2.1 and 2.2 above if the former
Participant had no vested rights in his or her Account and he or she
subsequently resumes employment with an Employer after incurring a period of
Breaks in Service equaling or exceeding the greater of: (i) five consecutive
years; or (ii) the number of Years of Service the former Participant completed
prior to the Break in Service. A Participant shall not be credited with any
Years of Service that are disregarded under this Section because those Years of
Service were completed before a Break in Service.
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ARTICLE III
Contributions and Allocations
3.1 Employer Contributions.
(a) Amount. For each Plan Year, each Employer shall make
a contribution of cash or other property to the Trust in such amount, if any, as
determined by the Bank. The Bank's determination of the amount of its
contribution, if any, for each Plan Year shall be binding and conclusive upon
all Employers, Participants, the Trustee and the Administrator. The amount of
the contribution or the allocation of such contribution, if any, shall not be
subject to change as a result of a subsequent audit by the Internal Revenue
Service ("IRS") or as a result of any subsequent adjustment of the Bank's
records. The Trustee shall have no right or duty to inquire into the amount of
the Bank's contribution or the method used in determining the amount of such
contribution or the allocation thereof. The Trustee shall be accountable only
for funds it actually receives.
(b) Allocation.
(i) No Acquisition Loan. As of the last day of
each Plan Year when there is no Acquisition Loan and following the allocation of
income pursuant to Article 4, the Administrator shall allocate the Employer
contribution, if any, to each Participant who is employed by an Employer on the
last day of that Plan Year in the same proportion that the Participant's total
Compensation for the Plan Year bears to the total Compensation of all
Participants who are employed by an Employer on the last day of that Plan Year.
An individual will, however, be deemed to have been employed on the last day of
the Plan Year if he or she terminates his or her employment with all Employers
prior to the last day of the Plan Year because of his or her death, Disability
or attainment of his or her Normal Retirement Date. If the application of this
last day requirement causes the Plan to fail to satisfy Code Sections 401(a)(26)
and 410(b), the excluded Participants shall, to the extent necessary to satisfy
such limitations, be eligible to receive an allocation of the contribution
beginning with Participants who terminated employment with each Employer prior
to the last day of the Plan Year after completing 501 or more Hours of Service
beginning with Participants who completed the greatest number of Hours of
Service in the Plan Year and continuing in order of Participants with the
greatest number of Hours of Service down to 501 Hours of Service.
(ii) Acquisition Loan. Notwithstanding Section
(i) or any other Plan provision(s) to the contrary, Employer contributions used
to repay an Acquisition Loan shall be allocated according to pursuant to the
rules provided in Section 4.2 below.
(c) Suspension or Reduction of Contributions.
Notwithstanding any other provision(s) of the Plan to the contrary, the Bank may
suspend, reduce or eliminate Employer contributions at any time.
(d) Top-Heavy Contributions. Notwithstanding any other
provision(s) to the contrary, if the Plan is Top-Heavy for a particular Plan
Year, the Employer contributions for a Plan Year allocated on behalf of any
Participant who is not a Key Employee, and who is
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employed by an Employer on the last day of such Plan Year (without regard to the
number of Hours of Service he or she accumulated during such Plan Year), shall
not be less than the top-heavy contribution. The "top-heavy contribution" is a
contribution equaling (when combined with contributions on behalf of such
Participant to this and other defined contribution plans maintained by the
Employer and qualified pursuant to Code Section 401(a)) the lesser of: (i) 3% of
the Participant's Compensation for such Plan Year; or (ii) the same percentage
of the Participant's Compensation for such year as the highest percentage of a
Key Employee's Compensation that the allocation of contributions to that Key
Employee's Account totals for such Plan Year. The provisions in this Section
shall not, however, apply to any Participant who is covered under any other
qualified plan(s) of the Employer if the minimum allocation or benefit
requirement applicable to top-heavy plans is met in the other plan(s).
3.2 Participant Contributions. Participants may make elective
contributions to this Plan, as set forth.
(a) Amount. For each Plan Year, a Participant may direct
his or her Employer to make "elective contributions" on his or her behalf
directly to the Trust. The Employer shall make elective contributions on behalf
of a Participant in lieu of the Employer's payment of an equal amount to the
Participant as direct remuneration for the Plan Year; provided the Participant
elects to defer such amounts prior to the date such amounts become currently
available to the Participant. Such amounts may be contributed to the Plan only
if such amounts would have been received by the Participant, but for the
Participant's election, on or before 2-1/2 months following the end of the Plan
Year. A Participant may so elect only as to amounts becoming currently available
after the cash or deferred arrangement of this Plan is adopted and effective. A
Participant's elective contributions must equal at least 2% of the Participant's
Compensation for each payroll period when the election is in plan. Further,
except to the extent permitted under Code Section 414(v), a Participant's
elective contributions for each calendar year may not exceed, the limit of Code
Section 402(g) as adjusted annually for increases in the cost of living by the
Secretary of the Treasury or his or her delegate and as in effect for such
calendar year. All Participants who are eligible to make elective deferrals
under this Plan and who have attained age 50 before the close of the Plan Year
shall be eligible to make catch-up contributions in accordance with, and subject
to the limitations of, section 414(v) of the Code. Such catch-up contributions
shall not be taken into account for purposes of the provisions of the Plan
implementing the required limitations of sections 402(g) and 415 of the Code.
The Plan shall not be treated as failing to satisfy the provisions of the Plan
implementing the requirements of section 401(k)(3), 401(k)(11), 401(k)(12),
410(b), or 416 of the Code, as applicable, by reason of the making of such
catch-up contributions. All Participants who are eligible to make elective
deferrals under this Plan and who have attained age 50 before the close of the
Plan Year shall be eligible to make catch-up contributions in accordance with,
and subject to the limitations of, section 414(v) of the Code. Such catch-up
contributions shall not be taken into account for purposes of the provisions of
the Plan implementing the required limitations of sections 402(g) and 415 of the
Code. The Plan shall not be treated as failing to satisfy the provisions of the
Plan implementing the requirements of section 401(k)(3), 401(k)(11), 401(k)(12),
410(b), or 416 of the Code, as applicable, by reason of the making of such
catch-up contributions.
(b) Allocation. As of each Valuation Date (but no later
than the last day of each calendar month and following the allocation of income
pursuant to Article 4), the
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Administrator shall allocate the elective contributions for the year to the
Elective Contribution Accounts of the Participants for whom such contributions
were made.
(c) Enrollment. Participants may enroll to make elective
contributions, discontinue making all elective deferrals or change the level of
his or her elective deferrals as of the first day of any calendar quarter. A
Participant shall enroll by filing with the Administrator a written election (on
a form acceptable to the Administrator) directing the Participant's Employer to
make elective contributions. The Participant must file the written election with
the Administrator within a reasonable time as determined by the Administrator
prior to the effective date. Once filed, a Participant's written election
authorizing elective contributions will remain in effect until later amended or
discontinued in accordance with the provisions of paragraphs (d) and (e) below.
(d) Discontinue Elective Contributions. A Participant may
revoke his or her election to make elective contributions pursuant to rules
prescribed by the Administrator.
(e) Increase or Decrease in Elective Contributions. A
Participant may increase or decrease the amount of his or her elective
contributions as of the first day of any calendar quarter or as otherwise
allowed by the Administrator.
(f) Return of Excess Elective Contributions. If a
Participant notifies the Administrator in writing by the March 1 following the
close of a calendar year, or by the April 15 following such March 1 the Company
designates on behalf of the Participant with respect to elective contributions
under the Plan and any other Plans of Company, that the Participant has made
excess elective contributions for that year, the Administrator shall distribute
to the Participant the amount of the excess elective contributions allocable to
the Plan (plus, or minus any Income or loss allocable thereto up to the close of
the calendar year). Such distribution shall occur by the April 15 immediately
following the close of the calendar year in which the excess elective
contributions were contributed to the Plan. The amount of "excess elective
contributions" for any calendar year shall equal (1) the sum of amounts
contributed to the Plan as elective contributions on behalf of the Participant
plus amounts deferred by the Participant pursuant to other arrangements
described in Code sections 401(k), 408(k) and 403(b) (the "total elective
contributions") minus (2) the greater of the limit of Code section 402(g), as
adjusted: [a] for Code section 414(v); and [b] such annual increases in the cost
of living by the Secretary of the Treasury or his or her delegate from time to
time. The Participant's written notification must contain a statement to the
effect that, if such excess elective contributions were not distributed, the
Participant's total elective contributions would exceed the limit specified in
Code section 402(g) for the calendar year in which such elective contributions
were made. Income allocable to excess elective contributions shall be determined
(1) under any reasonable method used for allocating Income to all Participants'
Accounts as applied consistently to all Participants for the Plan Year or (2) by
multiplying Income allocable to the Participant's Elective Contribution Account
for the calendar year by a fraction, the numerator of which is such
Participant's excess elective contributions for the year and the denominator is
the Participant's Account balance attributable to elective contributions as of
the beginning of the calendar year plus the Participant's elective contributions
for the calendar year.
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3.3 Matching Contributions. For each Plan Year (or such shorter
period as established by the Bank), each Employer may make a matching
contribution of cash or other property to the Trust in such amount or according
to such formula, if any, as determined by the Bank.
(a) Amount. The amount of the matching contribution, if
any, shall equal the amount or percentage of Compensation determined by the Bank
to match all or part of the elective contributions made to the Plan by such
Employer's Participants during the Plan Year (or other period) in question. The
Bank's determination of the amount of its contribution, if any, for each Plan
Year shall be binding and conclusive upon all Employers, Participants, the
Trustee and the Administrator. The amount of the contribution or the allocation
of such contribution, if any, shall not be subject to change as a result of a
subsequent audit by the Internal Revenue Service ("IRS") or as a result of any
subsequent adjustment of the Bank's records. The Trustee shall have no right or
duty to inquire into the amount of the Bank's contribution or the method used in
determining the amount of such contribution or the allocation thereof. The
Trustee shall be accountable only for funds it actually receives.
(b) Suspension or Reduction of Contributions.
Notwithstanding any other provision(s) of the Plan to the contrary, the Bank may
suspend, reduce or eliminate matching contributions at any time.
3.4 Timing of Contributions. Each Employer shall pay its
contributions, including Participant Contributions within Section 3.2 above, to
the Trust within the time required by law. Participant Contributions shall be
deposited into the Trust as soon as administratively feasible, but in no event
later than the 15th day of the calendar month after the Participant would have
otherwise received such compensation. Employer Contributions under Section 3.1,
if any, shall be paid to the Trust within the time prescribed by law, including
extensions, for the filing of the Employer's federal income tax return for such
year or within such other period as provided in Code Section 404.
3.5 Allocation of Forfeitures. As of the last day of each Plan
Year and following the allocation of Income pursuant to Article 4, the
Administrator shall allocate Forfeitures, if any, to the Employer Contribution
Accounts of qualifying Participants as if such Forfeitures were additional
employer contributions pursuant to Section 3.1(a) above.
3.6 Rollovers from Other Employee Benefit Plans. Any employee of
an Employer who is a member of an eligible class of employees pursuant to
Section 2.1 above and who participated in another retirement plan and trust
qualified pursuant to Code Sections 401(a) and 501(a) ("qualified plan") may
deposit in the Trust Fund any portion of an eligible rollover distribution paid
from another qualified plan in a direct rollover or which he or she received
personally (either directly from such plan or as a rollover from an individual
retirement account or annuity) provided that amounts not paid in a direct
rollover must be deposited in the Plan within 60 days following receipt of such
amounts. Before accepting such a rollover, the Administrator shall require such
Participant's consent (and spousal consent, if necessary) and may require such
documentation and information as it deems necessary. An employee who rolled over
amounts pursuant to this Section, or on whose behalf such a rollover occurred,
shall always remain 100% vested in such rolled over amounts and the income
thereon. Immediately
3-4
upon receipt the Administrator shall allocate amounts rolled over by, or on
behalf of, a Participant to his or her Rollover Account. If an individual who
rolled over amounts to the Trust pursuant to this Section, or on whose behalf
such a rollover occurred, does not otherwise qualify to become a Participant, he
or she shall, nonetheless, constitute a Participant only in relation to such
rolled over amounts and the income thereon.
3.7 Return of Contributions. The Trustee shall return
contributions made to the Plan in the following circumstances:
(a) Each Employer and the Plan hereby condition all
Employer contributions to the Plan upon their deductibility by the Employer
under Code Section 404. Any portion of any such contribution for which a
deduction is disallowed shall be returned by the Trustee to the Employer within
one year after the disallowance (or as permitted or required by the Code or
ERISA). Earnings attributable to the nondeductible contribution may not be
returned; any losses attributable thereto shall, however, reduce the amount
returned to the Employer.
(b) In the event that all or part of any Employer
contribution is paid to the Trust due to a mistake of fact, the Trustee shall,
upon request by the Employer, return the mistaken portion of such contribution
to the Employer within one year after the contribution was originally paid to
the Trust. Earnings attributable to the nondeductible contribution may not be
returned; any losses attributable thereto shall, however, reduce the amount
returned to the Employer.
(c) The Employer and the Plan condition all Employer
contributions to this Plan upon the initial qualification of the restated Plan
pursuant to Code Section 401(a). If the IRS determines that the Plan fails to
satisfy the requirements of Code Section 401(a), the Trustee shall return all
Plan and Trust assets to the Employer within one year after the date of such
determination, provided that the Employer previously requested a favorable
determination letter from the IRS and that such request was made within the time
prescribed by law.
3.8 Contribution and Allocation Restrictions. All contributions
and allocations provided for in this Article 3 are subject to the limitations
and restrictions set forth in Article 5 below.
3.9 Dividend Reallocations. Consistent with Code section
404(k)(2)(A)(iii) and IRS Notice 2002-2, Participants in this Plan shall be
allowed a reasonable opportunity to reinvest any dividends paid on stock
allocated to their account in Qualifying Employer Securities or to receive the
dividend as a cash distribution of the dividend. Once a Participant makes an
election with respect to such dividend amount, that election will carry forward
to all future dividends unless subsequently changed, in writing, by the
Participant (which each Participant shall be allowed to do at least once per
year effective on the first day of that Plan Year). Any stock acquired with such
dividends shall be fully and immediately vested, notwithstanding any contrary
provision in Article VI to the contrary.
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ARTICLE IV
Valuation and Accounting
4.1 Valuation and Accounting. As of each Valuation Date, the
Administrator shall determine the value of each Participant's Account in
accordance with the income accounting method(s) applicable to each investment
vehicle in which the assets of the Account are invested.
4.2 Acquisition Loan Accounts. Notwithstanding any provision(s) in
this Plan to the contrary, the Trustee shall maintain a separate suspense
account to hold all Qualifying Employer Securities acquired with the proceeds of
an Acquisition Loan.
(a) Release From Encumbrance. At the time of the
Acquisition Loan, the Administrator shall inform the Trustee how to release
Qualifying Employer Securities from this suspense account. The method used to
release Qualifying Employer Securities from the suspense account must be
permissible under Treasury regulation Section 54.4975-7(b)(8)(i) or (ii). The
Trustee shall release and withdraw Qualifying Employer Securities from the
suspense account in accordance with these instructions as of the last day of
each Plan Year. The Trustee shall then allocate the released Qualifying Employer
Securities (in whole shares) to the Participants' Accounts (subject to the
limitations set forth in Article 5 of this Plan) in the same proportion that
each Participant would have shared in the Employer's contribution for such year
had the contribution been allocated in accordance with Article 3.
(b) Income. The Trustee shall allocate the income, if
any, received with respect to Qualifying Employer Securities in the suspense
account as income of the Plan except to the extent that such income is used to
repay the Acquisition Loan, or is collateral for the Acquisition Loan. If the
Plan receives dividends with respect to Qualifying Employer Securities while
Qualifying Employer Securities are still held in the suspense account and while
the Plan remains obligated to make payments on an Acquisition Loan, the Trustee
shall allocate such dividends according to the following rules.
(i) Suspense Account. Dividends attributable to
Qualifying Employer Securities that are held in the suspense account shall be
used to make payments on the Acquisition Loan at such time or in such Plan Year
as determined by the Administrator, in accordance with applicable requirements.
The Trustee shall release and withdraw Qualifying Employer Securities from the
suspense account with a fair market value equal to such dividends. The Trustee
shall then allocate the released Qualifying Employer Securities (in whole
shares) to the Participants' Accounts in the same manner as an Employer
contribution under Section 3.1 above.
(ii) Allocated Shares. Dividends attributable to
Qualifying Employer Securities that have been allocated to Participants'
Accounts shall be allocated to such Participant's Accounts based upon the number
of shares then held in such Account(s).
4.3 Valuation of Qualifying Employer Securities. All Qualifying
Employer Securities shall be valued using the fair market value of the shares,
as determined in good faith and based on all relevant factors for determining
the fair market value of securities on the date of valuation.
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In the case of a transaction between the Plan and a Disqualified Person, the
date of valuation shall be the date of the transaction. For purposes of Articles
6 and 7, the value of a Participant's Account shall be determined as of the
Valuation Date coincident with or immediately preceding the date the
distribution occurs or commences. If the Administrator determines that valuing
the Participant's Account as of the immediately preceding Valuation Date would
significantly jeopardize the interests of the Plan and its Participants because,
due to subsequent market fluctuations or other developments, that valuation
would inaccurately reflect the value of the Participant's Account as of the date
distribution occurs or commences, the Administrator may, in its discretion,
value the Participant's Account as of a date closer to the date the distribution
occurs or commences. To the extent that Qualifying Employer Securities are not
readily tradable on an established securities market, the fair market value of
such shares for purposes of this Section 4.3 shall be determined by an
independent appraiser who satisfies the requirements of Treasury Regulation
Section 401(a)(28)(C).
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ARTICLE V
Contribution and Allocation Restrictions
5.1 Annual Addition Limitation.
(a) General Limitations.
(i) Plan Years On and After January 1, 2002.
Except to the extent permitted under Code section 414(v), the annual addition
that may be contributed or allocated to a Participant's Account under the Plan
for any limitation year (which shall be the Plan Year) shall not exceed the
lesser of [a] $40,000, as adjusted for increases in the cost-of-living under
Code section 415(d), or [b] 100 percent of the Participant's compensation,
within the meaning of section 415(c)(3) of the Code, for the limitation year.
The compensation limit referred to in (b) shall not apply to any contribution
for medical benefits after separation from service (within the meaning of
section 401(h) or section 419A(f)(2) of the Code) which is otherwise treated as
an annual addition.
(ii) Plan Years Before January 1, 2002. The
annual addition to a Participant's Account for any Plan Year shall not exceed
the lesser of: (i) $30,000, as adjusted by the Secretary of the Treasury,
pursuant to Code Section 415(d); or (ii) 25% of the Compensation paid or made
available to the Participant in such year. For the Plan Year beginning January
1, 2001, the adjusted amount under Section 5.1(a)(ii)[a] is $35,000. For Plan
Years beginning prior to January 1, 1995, the limitations provided in Section
5.1(a)(ii)[a] should read as follows: "$30,000 or, if greater, one quarter of
the dollar limitation in effect under Code Section 415(b)(1)(A)."
(b) Annual Additions. For purposes of this Section 5.1,
"annual additions" include all contributions and Forfeitures, if any, allocated
to a Participant's Account for any year (except as excluded below) and allocated
to his or her benefit pursuant to all other defined contribution plans
maintained by an Employer for the Plan Year, including employee contributions.
Annual Additions, however, shall include only the lesser of the amount of the
Employer contribution, if any, used to repay an Acquisition Loan or the fair
market value of the shares of stock that are allocated to a Participant's
Account as a result of the repayment of such loan. Contributions allocated to
any individual accounts which are part of a pension or annuity plan under Code
Sections 415(l) and 419A(d)(2) shall be treated as annual additions to a defined
contribution plan.
(c) Acquisition Loans. Annual additions do not include
the proceeds of an Acquisition Loan that are used to purchase Qualifying
Employer Securities held in a suspense account.
(d) Reallocation. If, due to a reasonable error in the
estimation of compensation or salary deferrals or the allocation of forfeitures,
this Plan exceed the limitations provided in this Section 5.1, then the
Administrator shall reallocate all annual additions that exceed the limitations
provided in this Section 5.1 as follows, provided that all of the
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Participant's contributions under any other Qualified Plan(s) maintained by the
Employer shall be adjusted before any adjustment is made under this Plan:
(i) Other Participants. The Administrator shall
first reallocate the excess annual additions to the Accounts of Participants who
have not exceeded the limits provided in this Section 5.1. If the reallocation
causes the limits stated above to be exceeded with respect to each Participant
for the limitation year, then these amounts shall be held unallocated in a
suspense account and reallocated to Participants' Accounts in the next (or
succeeding, if necessary) limitation year before the allocation of Employer
contributions.
(ii) Reduce Employer Contribution. If the excess
annual additions have not been corrected through the reallocation contemplated
under clause (i) above, then the excess annual additions may be used to reduce
the Employer contribution, if any, for the next (or succeeding, if necessary)
Plan Year for the Participant who incurred the excess amounts, provided the
Participant is covered by the Plan at the end of such limitation year. If the
Participant is no longer covered by the Plan as of the end of the limitation
year, the excess amounts shall be held unallocated in a suspense account and
reallocated in the next limitation year to all remaining Participants in the
Plan as a reduction of such Participants' Employer contributions.
(iii) All Participants. If the excess annual
additions have not been corrected through the processes contemplated in clauses
(i) and/or (ii) above, then the excess annual additions may be held unallocated
in a suspense account for the limitation year and reallocated in the next (or
succeeding, if necessary) limitation year to all Participants in the Plan. The
excess amount must be used to reduce Employer contributions for the next (and
succeeding, if necessary) limitation years. Excess amounts may not be
distributed to Participants or former Participants. Any excess amount held in a
suspense account shall not share in Income. If the Plan terminates before the
allocation of such excess, the excess shall revert to the Employer, to the
extent that it may not be allocated to any Participant's Account.
(iv) Return of Contributions. If the excess
annual additions have not been corrected under the processes contemplated in the
preceding clauses, then the excess annual additions shall be returned to the
Employer, to the extent permitted under Section 3.7 above.
5.2 Top-Heavy Restrictions. Annually, as of each determination
date, the Administrator shall apply the tests recited in Code Section 416 to
determine if the Plan is Top-Heavy. If the Plan is or becomes Top-Heavy in any
Plan Year, the Top-Heavy contribution and allocation provisions in Article 3
above will supersede any conflicting provisions in the Plan; the Plan already
utilizes a vesting schedule that complies with the Top-Heavy Requirements.
5.3 Actual Deferral Percentage Test. Effective for any Plan Year
in which participants may make elective contributions to this Plan, the Plan
shall satisfy either the requirements of this Section 5.3(a) or (b).
(a) Safe Harbor Contributions. This Plan may, at the
Bank's discretion, elect to be a 401(k) safe harbor plan for any particular Plan
Year(s). During such years, the Plan will meet the safe harbor requirements by
making contributions to all eligible employees regardless
5-2
of hours of service or employment on the last day of the Plan Year.
Notwithstanding anything in this Plan document to the contrary during such Plan
Years, each Employer shall make a safe harbor non-elective contribution in an
amount equal to at least 3% of each Participant's Compensation, without regard
to whether the Participant makes any elective deferrals to this Plan. The safe
harbor non-elective contributions shall be credited to the Participant's Account
for the Plan Year with respect to which the contributions made and, for purposes
of Article 4, shall be credited as of the Valuation Date coincident with or
immediately following the date such contribution is received by the Trustee or
as soon as administratively practicable after such contribution is received by
the Trustee. If, pursuant to this Section 5.3(a) an Employer makes a safe harbor
non-elective contribution, it shall be fully vested at all times and
non-forfeitable. Such contributions shall not be distributable to Participants
or beneficiaries earlier than: (i) the Participant's separation from service,
death or disability; (ii) termination of the Plan without establishment or
maintenance of another defined contribution plan; (iii) disposition by the
Employer of substantially all the assets used by the Employer; or (iv) the date
on which the Participant attains age 59-1/2. At least 30 days, but not more than
90 days, before the beginning of the Plan Year, the Employer will provide each
eligible Employee a comprehensive notice of the Employee's rights and
obligations under the Plan, written in a manner calculated to be understood by
the average Employee. If an Employee becomes eligible after the 90th day, before
the beginning of the Plan Year and does not receive the notice for that reason,
the notice must be provided no more than 90 days before the Employee does become
eligible to participate in the Plan, but not later than the date that the
Employee actually becomes eligible to participate in the Plan.
(b) The ADP Test. For any Plan Year in which the Bank
elects to not utilize the safe harbor provisions of Section 5.3(a) above, the
Plan shall satisfy the Actual Deferral Percentage (the "ADP") test as set forth
herein. As such, the ADP for the participants who are Highly Compensated
Employees may not exceed the greater of : (i) 1.25 times the ADP for all
Participants who are not HCEs, determined as of the prior Plan Year; or (ii) the
lesser of [a] 2 times the ADP of Participants who are not HCEs or [b] the ADP of
Participants who are not HCEs plus 2 percentage points. For purposes of applying
the preceding standards (except for the 2001 Plan Year, which utilized the
"current year" method), this Plan shall utilize the "prior year" method of
comparing the HCE's ADP for a particular Plan Year to the ADP of non-HCEs,
determined as of the preceding Plan Year. The Administrator shall determine the
Participants' deferral percentages consistent with Code Section 401(k)(3) and
applicable Treasury Regulations, which the Plan incorporates by reference. The
Bank and each Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of qualified nonelective
contributions or qualified matching contributions, if any, used in such test.
(i) ADP Defined. For each Plan Year, the
Administrator shall determine the "ADP" for the Participants who are HCEs and
all other Participants as follows: [a] The ADP for a group of Participants shall
equal the average of the ratios, calculated separately for each Participant in
the group, of [I] the allocations of elective contributions and qualified
nonelective contributions or qualified matching contributions (to the extent not
taken into account for purposes of the actual contribution percentage test), not
including income, which the Administrator determines for a Plan Year to [II] the
Participant's Compensation for that Plan Year. The ADP of a Participant who
makes no elective contributions is zero. Excess elective contributions of
non-HCEs, determined pursuant to Section 3.2, are not taken into account or
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purposes of ADP testing. [b] The "ADP" for any Participant who is an HCE and
eligible to have elective contributions allocated to his or her account pursuant
to two or more plans or arrangements described in Code Section 401(k) and
maintained by an Employer shall be determined as if all such contributions were
made pursuant to a single arrangement.
(ii) Excess Contributions. If, for any Plan Year,
the aggregate amount of contributions to the Accounts of Participants who are
HCEs exceeds the maximum amount permitted in paragraph (b) above, the
Administrator may distribute such excess amount plus or minus any Income or loss
allocable to such excess amount to some or all of the Participants who are HCEs
(determined by reducing contributions made on behalf of Participants who are
HCEs beginning with the HCE with the largest amount of deferrals and continuing
in descending order until all the excess contributions have been allocated --
for purposes of this Section, the "largest amount" is determined after the
distribution of any excess contributions) during the period beginning on the
first day following the close of the Plan Year in which the excess contributions
arose and ending on the date that is 2-1/2 months from the close of such Plan
Year, and in all events shall distribute such Amount no later than the close of
the following Plan Year. In relation to a Participant who is an HCE for whom the
Administrator determines his or her ADP pursuant to the family aggregation
rules, which applied prior to the Plan Year commencing January 1, 1997, the
Administrator shall allocate any such excess contributions-plus or minus any
income or loss-among the family members in proportion to the elective
contributions of each family member combined to determine the Participant's ADP.
The Administrator shall calculate any excess pursuant to this Section after
determining the amount of excess elective contributions pursuant to Article 3.
For purposes of this Section, "Excess Contributions" shall mean, with respect to
any Plan Year, the excess of: [a] the aggregate amount of employer contributions
actually taken into account in computing the ADP of HCE's for such Plan Year;
over [b] the maximum amount of such contributions permitted by the ADP test
(determined by hypothetically reducing contributions made on behalf of HCE's in
order of the ADP's, beginning with the highest such percentage).
Income allocable to excess contributions
shall be determined: [a] under any reasonable method used of allocating income
to all Participants' Accounts as applied consistently to all Participants for
the Plan Year; or [b] by multiplying income allocable to the Participant's
elective contributions (and qualified nonelective contributions and qualified
matching contributions, if any) for the Plan Year by a fraction, the numerator
of which equals the Participant's Account balance attributable to elective
contributions (and qualified nonelective contributions and qualified matching
contributions, if any) as of the beginning of the Plan Year plus the
Participant's elective contributions (and qualified nonelective contributions
and qualified matching contributions, if any) for the Plan Year. The Plan may
distribute excess contributions (and Income) without regard to consent otherwise
required for Plan distributions.
To the extent required by applicable
nondiscrimination regulations, any matching contribution relating to an HCE's
excess elective contribution which the Administrator distribute to the HCE in
accordance with this paragraph shall be declared a Forfeiture as of the end of
the Plan year in which the excess elective contribution is distributed (even if
the Participant is vested in such matching contribution) except to the extent
that the matching contribution is an excess aggregate contribution which is
distributed to the Participant who is an HCE in accordance with Section 5.4
below.
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5.4 Actual Contribution Percentage Test.
(a) Applying The Test. Effective for Plan Years beginning
on or after January 1, 1987, the actual contribution percentage (the "ACP") for
Participants who are highly compensated employees ("HCEs") may not exceed the
greater of: (i) 1.25 times the ACP for all Participants who are not HCEs; or
(ii) the lesser of [a] 2 times the ACP of Participants who are not HCEs or [b]
the ACP of Participants who are not HCEs plus 2 percentage points. For purposes
of applying the preceding standards (except for the 2001 Plan Year, which
utilized the "current year" method), this Plan shall utilize the "prior year"
method of comparing the HCE's ACP for a particular Plan Year to the ACP of
non-HCEs, determined as of the preceding Plan Year. Additionally, for Plan Years
beginning on or after January 1, 1989, but before January 1, 2002, the
Administrator shall adjust the limit described in (ii) above in accordance with
Section 1.401(m)-2 of the Treasury Regulations to avoid multiple use of that
limit for any Participant who is an HCE in violation of Code Section 401(m)(9).
Multiple use does not occur if the sum of the ADP and ACP for HCEs does not
exceed the aggregate limit. The aggregate limit is the greater of (i) or (ii)
below:
(i) The aggregate limit is:
[a] 1.25 times the greater of:
[I] The ADP for all Participants who
are not HCEs; or
[II] The ACP for all Participants who
are not HCEs;
Plus
[b] The lesser of [I] or [II] above, plus
2 percent (provided this number does not exceed 2 times the lesser of [I] or
[II]).
(i) The aggregate limit is:
[a] 1.25 times the lesser of:
[I] The ADP for non-HCEs; or
[II] The ACP for non-HCEs;
Plus
[b] The greater of [I] or [II] above, plus
2 percent (provided this number does not exceed 2 times the greater of either
[I] or [II]).
If multiple use occurs, such multiple use shall be corrected
by reducing the ACP of HCEs who are eligible in both the cash or deferred
arrangement and the Plan subject to Code
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Section 401(m) in accordance with Section 5.4(c) below.
The Administrator shall determine the Participants'
contribution percentages consistent with Code Section 401(m)(3) and applicable
Treasury regulations, which the Plan incorporates by reference. The Bank and
each Employer shall maintain records sufficient to demonstrate satisfaction of
the ACP test and the amount of qualified nonelective contributions and qualified
matching contributions, if any, used in such test.
(b) ACP Defined. For each Plan Year, the Administrator
shall determine the "ACP" for the Participants who are HCEs and all other
Participants as follows:
(i) The "ACP" for a group of HCEs shall equal
the average of the ratios, calculated separately for each Participant in the
group, of [a] the allocations of matching contributions (to the extent not taken
into account for purposes of the ADP test) (not including income) for a Plan
Year ("Year 1") to [b] the Participant's compensation for Year 1. The "ACP" for
a group of non-HCEs shall equal the average of the ratios, calculated separately
for each Participant in the group, of [a] the allocations of matching
contributions (to the extent not taken into account for purposes of the ADP
test) (not including Income) for the Plan Year immediately preceding Year 1 to
[b] the Participant's compensation for the same Plan Year. Qualified nonelective
contributions or qualified matching contributions, if any, (to the extent not
taken into account for purposes of the ADP test) may be taken into account for
purposes of calculating the ACP for Participants.
(ii) "Compensation" for purposes of this
paragraph shall be determined: [a] by the Administrator in a manner which
satisfies Code Section 414(s); [b] for the Plan Year or the calendar year ending
within the Plan Year; and [c] by limiting the period taken into account to that
portion of the Plan Year or calendar year in which the employee was a
Participant, all as applied uniformly to determine the compensation of every
Participant for that Plan Year.
(iii) For Plan Years beginning before January 1,
1997, the ACP of a Participant who is a 5% owner pursuant to Code Section 414(q)
or one of the top-ten paid HCEs, the compensation and matching contributions
shall include the compensation and matching contributions for the Plan Year of
family members as defined in Code Section 414(q)(6). Family members, with
respect to such HCEs, shall be disregarded as separate employees in determining
the ACP both for Participants who are non-HCEs and for Participants who are
HCEs.
(iv) The "ACP" for any highly compensated
Participant who is an HCE and eligible to have matching contributions, if any,
allocated to his account pursuant to two or more plans or arrangements described
in Code Section 401(m) and maintained by an Employer shall be determined as if
all such matching were made pursuant to a single arrangement.
(c) Excess Aggregate Contributions. If, for any Plan
Year, the aggregate amount of contributions to the Matching Contributions
Accounts, if any, of Participants who are HCEs exceeds the maximum amount
permitted in Section (a) above ("excess aggregate contributions"), the
Administrator shall distribute such excess amount plus or minus any income
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or loss allocable to such excess amount to some or all of the Participants who
are HCEs. For Plan Years beginning on or after 1997, such corrective
distributions shall be made by reducing contributions made on behalf of
Participants who are HCEs in order of the Participants who received the largest
contributions. For Plan Years beginning before January 1, 1997, such corrective
distributions shall be made by reducing contributions made on behalf of
Participants who are HCEs in order of the ACPs, beginning with the highest of
such percentages. The Administrator shall distribute the vested portion of such
excess amount to each affected Participant plus or minus any Income or loss
allocable to the vested portion of such excess amount during the period
beginning on the first day following the close of the Plan Year in which the
excess contributions arose and ending on the date that is 2-1/2 months from the
close of the Plan Year and, in no event, later than the close of the following
Plan Year. The nonvested portion of such excess amount, plus or minus any Income
or loss allocable to such nonvested portion, shall be forfeited from each
affected Participant's Matching Contribution Account as of the last day of the
Plan Year in which the vested portion of such excess amount is distributed. The
Administrator shall calculate any excess pursuant to this Section (c) after
determining the amount of excess elective deferrals pursuant to Article 3 and
the amount of contributions in excess of the ADP test pursuant to Section 5.3.
Income allocable to excess aggregate contributions shall be
determined (i) under any reasonable method used for allocating income to all
Participants' Accounts as applied consistently to all Participants for the Plan
Year or (ii) by multiplying income allocated to the Participant's matching
contributions for the Plan Year by a fraction, the numerator of which equals the
Participant's excess aggregate contributions for the year and the denominator of
which equals the Participant's Account balance attributable to matching
contributions (and qualified matching contributions, if any) as of the beginning
of the Plan Year and qualified matching contributions, if any, for the Plan
Year. The Plan may distribute excess aggregate contributions (and income)
without regard to consent otherwise required for Plan distributions.
5.5 Separate Testing. For Plan Years beginning on or after January
1, 1999, the requirements of Sections 5.3 and 5.4 may be applied separately to
the following groups of employees: (a) all employees who have not attained age
21 and accrued a "Year of eligibility service"; and (b) all other employees. The
application of this Section shall be in accordance with all Code requirements.
5.6 Limitation if Shareholder Elect(s) Gain Deferral. If an
Employer shareholder or former shareholder sells Qualifying Employer Securities
to the Trust and that shareholder elects (with the consent of the Employer)
nonrecognition of any gain associated with that sale, in accordance with Code
Section 1042, no portion of that Qualifying Employer Securities may be allocated
during the nonallocation period to the Account of (or be allocated directly or
indirectly under any plan of the Employer for the benefit of): (a) any
individual who makes an election under Code Section 1042 with respect to any
Qualifying Employer Securities sold to the Plan; or (b) such individual's
spouse, brothers or sisters (whether by whole or half blood), ancestors or
lineal descendants (except as to certain lineal descendants, to the extent
permitted under Code Section 409(n)(3)(A)) or any other person who bears a
relationship to him that is described in Code Section 267(b). The "nonallocation
period" is the period beginning on the date of the sale and ending on the later
of the date that is 10 years from the date of that sale or the date of the
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Plan allocation attributable to the final payment of any loan obligation
incurred by the Plan in connection with that sale.
No portion of the Qualifying Employer Securities
purchased in any transaction to which Code Section 1042 applies (or any
dividends or other income attributable thereto) may thereafter be allocated to
the Account of any Participant owning (as determined under Code Section 318(a)
(without regard to Code Section 318(a)(2)(B)(i)), during the entire one-year
period preceding the date of purchase or as of the date such Qualifying Employer
Securities is allocated, more than 25% of any class of outstanding stock of the
Employer or of the total value of any class of outstanding stock of the
Employer.
5-8
ARTICLE VI
Vesting
6.1 Vesting. A Participant's interest in his or her Elective
Contribution, Matching Contribution, Money Purchase Pension, Prior Plan and
Rollover Account(s), if any, shall be fully vested and nonforfeitable at all
times. A Participant's interest in his or her Employer Contribution Account, if
any, shall vest in accordance with the following rules.
(a) Retirement, Death or Disability. A Participant's
interest in his or her Account shall be fully vested and nonforfeitable if his
or her Employment terminates on or after his or her Normal Retirement Date or
due to his or her death or Disability.
(b) Other Termination of Employment. If a Participant
terminates Employment in a manner that is not described in Section 6.1(a) above,
his or her interest in his or her Employer Contribution Account, if any, shall
vest, and be nonforfeitable, in relation to his or her Years of Service as
follows:
Years of Service Vested Percentage
- ---------------- -----------------
Fewer than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
(c) Change in Vesting Schedule. In no event shall a
change in the Plan's vesting schedule reduce a Participant's vested and
nonforfeitable interest in his or her Account. Upon a change in the Plan's
vesting schedule, a Participant who has accumulated at least three Years of
Service may elect to determine the vested interest in his or her Account
pursuant to either the revised vesting schedule or the vesting schedule without
regard to such change. Such election shall be made during an election period
which shall commence with the date the amendment is adopted or deemed to be made
and shall end 60 days after the latest of the date the amendment is adopted,
become effective, or the date the Participant is issued written notice of the
amendment by the Bank or the Administrator.
6.2 Forfeitures. The nonvested portion of a Participant's Account
shall constitute a Forfeiture (be "forfeited") as of the earlier of the date the
Participant receives a distribution from his or her Account following the
termination of his or her Employment or the date the Participant incurs 5
consecutive one-year Breaks in Service. The Administrator shall reallocate a
Forfeiture pursuant to Article 3 as of the end of the Plan Year in which the
Forfeiture occurs.
6-1
6.3 Reinstatement.
(a) Five or More Consecutive One-Year Breaks in Service.
If a former Participant resumes participation in the Plan after experiencing at
least five consecutive one-year Breaks in Service, such Participant shall retain
no right to any previously forfeited portion of his or her Account. Such
employee's Years of Service prior to his or her Breaks in Service shall affect
the vesting of his or her Account balance accruing after reinstatement only if
his or her Account was at least partially vested at the time he or she incurred
a Break in Service or, upon his or her reinstatement, the number of his or her
Years of Service prior to the Break equals or exceeds the number of his or her
consecutive one-year Breaks in Service. Such Participant's Years of Service
after his or her Breaks in Service shall be disregarded for the purpose of
vesting his or her Account balance that accrued prior to such Breaks in Service.
Separate Accounts shall be maintained for the Participant's pre-break Account
balance and post-break Account balance.
(b) Before Five Consecutive One-Year Breaks in Service.
If a former Participant resumes participation in the Plan before experiencing
five consecutive one-year Breaks in Service, the Administrator shall aggregate
the Participant's Years of Service completed prior to his or her Break in
Service with his or her Years of Service completed following his or her
reinstatement to determine his or her vested interest in both allocations made
to his or her Account after reinstatement and any portion of his or her Account
originating prior to such Break in Service. The Administrator shall restore any
previously forfeited portion of such a reinstated Participant's Account only if
the Participant repays to the Plan the full amount of the distribution. The
Participant must repay the full amount of the distribution prior to the end of
the five-year period commencing on the Participant's date of reinstatement. Any
amount so restored shall not constitute an annual addition pursuant to Section
5.1.
(c) Disregarded Years of Service. For purpose of this
Section, the Years of Service the Participant completed prior to his or her
Break in Service shall not include any Years of Service disregarded pursuant to
this Section by reason of prior Breaks in Service.
6-2
ARTICLE VII
Distributions
7.1 Payment of Retirement Benefits. A Participant's retirement
benefits shall not be distributed before the Participant terminates his or her
employment with each Employer, unless specifically authorized elsewhere in the
Plan. A distribution of death benefits shall be made in accordance with Section
7.3 below.
(a) Small Accounts. A Participant's account shall be
distributed in a single lump sum distribution if the Participant's vested
Account has a value of $5,000 or less prior to the commencement of distributions
or at the time of any prior distribution. A Participant will be deemed to have
received an immediate distribution of his or her Account if the vested Account
has a value of $0. Accounts subject to this Section shall be distributed as soon
as administratively feasible following the end of the Plan Year in which the
Participant's employment with each Employer terminates. Unless a Participant
elects to receive such a distribution in a direct rollover, within 30 days after
he or she is notified of his or her right to make such an election, his or her
Account shall be distributed directly to the Participant.
(b) Large Accounts. A Participant's vested Account shall
be distributed in accordance with the rules in this Section (b) if that Account
is not subject to mandatory distribution rules provided in Section (a) above.
(i) Retirement Before Age 65. Unless a
participant consents, in writing, to an earlier or later distribution, his or
her vested Account shall be distributed between the 1st and the 60th day of the
Plan Year immediately after the Plan Year in which the Participant attains his
Normal Retirement Date.
(A) Early Distributions. If a person
terminates for any reason other than death, Disability, or the attainment of his
or her Normal Retirement Date, the distribution will commence, subject to the
Participant's consent, no later than the end of the sixth year following the
Plan Year in which such termination occurred.
(B) Deferred Distributions.
Alternatively, a Participant may elect to defer the distribution of his or her
vested Account to his or her "required beginning date," as defined in Section
7.4 below.
(ii) Retirement After Age 65. If a Participant
terminates his or her employment with each Employer on or after his or her
Normal Retirement Date, death or Disability and the Participant does not elect
to further defer the receipt of his or her vested Account, that Account shall be
distributed as soon as administratively feasible during the second quarter of
the Plan Year after the Plan Year in which the Participant terminated his or her
employment with each Employer. Notwithstanding the above, a Participant may
elect to defer the distribution of his or her vested Account to his or her
"required beginning date," as defined in Section 7.4 below.
7-1
(c) Qualifying Employer Securities Acquired with an
Acquisition Loan. Notwithstanding the other provisions of this Sections 7.1(a)
and/or (b)(i) to the contrary, the Trustee may determine that a Participant's
Account, for purposes of making any distribution hereunder, should not be
considered to include Qualifying Employer Securities that were purchased with
the proceeds of an Acquisition Loan until the close of the Plan Year in which
such loan is repaid in full.
7.2 Form and Method of Payment.
(a) Form of Payment. Subject to other contrary provisions
in this Plan, a Participant may elect, in writing, to receive a distribution of
his Account in the form of whole shares of Qualifying Employer Securities
(fractional shares shall be paid in cash), unless the Employer's by-laws
restrict ownership of substantially all such stock to active employees of the
Employer and the Plan. In the absence of an election to receive Qualifying
Employer Securities, a Participant's vested Account shall be distributed to him
or her in cash or Qualifying Employer Securities, as determined by the
Administrator.
(b) Method of Payment.
(i) Benefit Format. Distribution of a
Participant's Account shall occur consistent with the following:
(A) Married Participants. Unless a
Participant elections an optional form of benefit pursuant to paragraph (C)
below, the Administrator shall distribute the Account of a Participant married
at the time of the commencement of distributions in the form of a qualified
joint and survivor annuity contract. "Qualified joint and survivor annuity
contract" means a nontransferable annuity contract which provides an annuity for
the life of the Participant with a survivor annuity for the life of this spouse
equal to 50-percent of the monthly benefit payable during the joint lives of the
Participant and his spouse and which is purchased from a legal reserve life
insurance company with the balance in the Participant's Account.
(B) Unmarried Participants. Unless a
Participant elects an optional form of benefit pursuant to paragraph (C) below,
the Administrator shall distribute the Account of a Participant not married at
the commencement of distributions in the form of a life annuity contract. "Life
annuity contract" means a nontransferable annuity contract which provides a
monthly benefit for the life of the Participant and which is purchased from a
legal reserve life insurance company with the balance in the Participant's
Account.
(C) Optional Benefit Forms. In lieu of
the normal form of benefit required by paragraphs (A) and (B) above, a
Participant may elect distribution of his Account in one of the following forms
upon satisfying the requirements of paragraph (c) below: [a] A single lump sum;
[b] A nontransferable annuity contract providing for payment over a period no
longer than the life (or lives) of the employee and a designated beneficiary or
a period not extending beyond the life expectancy of the employee or the life
expectancy of the employee and a designated beneficiary; or [c] In equal
monthly, quarterly, semi-annual or annual installments, as adjusted to reflect
Income allocated to the Participant's Account subsequent to the commencement of
payments.
7-2
(ii) Election Period for Optional Benefit Form. A
Participant may elect to receive an optional form of benefit, and may revoke any
such election at any time within the 90-day period immediately preceding the
date his Account becomes payable. Such election shall be writing on forms
approved by, and filed with, the Administrator and shall: (A) clearly indicate
the particular payment option selected by the Participant and the alternate
beneficiary; and (B) shall contain the consent of the Participant's spouse, if
any. Such spousal consent shall be in writing, witnessed by a Plan
representative or notary public and filed with the Administrator. A Participant
may revoke any payment option selected during the election period by filing a
subsequent written election, with spousal consent if necessary, prior to the end
of the election period.
(iii) Benefit Information. Not less than 30 days
and not more than 90 days prior to the date a married Participant's Account
becomes payable (or such other time as allowed by law), the Administrator shall
furnish the Participant with information concerning the qualified joint and
survivor annuity benefit form and his right to request optional benefit forms
from the Plan. Such information shall contain a written explanation of: (A) the
terms and conditions of the qualified joint and survivor annuity; (B) the
Participant's right to request an optional benefit form and the material
features and relative financial values of the optional forms of benefit; (C) the
necessity for the Participant's spouse to consent to the election of an optional
benefit form; (D) the Participant's right to revoke an election of an optional
benefit form and the effect of such revocation; and (E) a Participant's right to
a direct rollover.
(iv) Stock or Cash. Distribution of a
Participant's vested Account which is not subject to Section 7.1(a) above and
which is attributable to Qualifying Employer Securities acquired after January
1, 2003 may, notwithstanding any election available under the Plan, be made in
substantially equal periodic payments (not less frequently than annually) over
the greater of not more than: (i) five years; or (ii) in the case of a
Participant whose vested Account contains Qualifying Employer Securities Stock
worth more than $500,000 (as adjusted by the Secretary of the Treasury), five
years plus one additional year for each $100,000 (as adjusted by the Secretary
of the Treasury) or fraction thereof by which the value of the Qualifying
Employer Securities exceed $500,000 (as adjusted by the Secretary of the
Treasury).
(c) Eligible Rollover Distributions.
(i) Direct Rollover Election. Notwithstanding
any provision of the Plan to the contrary that would otherwise limit a
distributee's election under this Section, a distributee may elect, at the time
and in the manner prescribed by the Administrator, to have any portion of an
eligible rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover; provided, however, that if a
Participant elects a direct rollover as to only a portion of his distributable
Account, the amount to be paid in a direct rollover must equal at least $500.
(ii) Definitions.
(A) Eligible Rollover Distribution. An
eligible rollover distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a
7-3
series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Section 401(a)(9)
of the Code; and the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to company securities). For Plan years beginning on
and after January 1, 2001, an eligible rollover distribution shall not include
any hardship distribution.
(B) Eligible Retirement Plan. An
eligible retirement plan is an individual retirement account described in
Section 408(a) of the Code, an individual retirement annuity described in
Section 408(b) of the Code, an individual retirement annuity described in
Section 403(a) of the Code, or a qualified trust described in Section 401(a) of
the Code, that accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual retirement account or
individual retirement annuity.
(C) Distributee. A distributee includes
an Employee or former Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order, as
defined in Section 414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(D) Direct Rollover. A direct rollover
is a payment by the Plan to the eligible retirement plan specified by the
distributee.
7.3 Death Benefits. If a Participant dies before he or she has
received a distribution of his or her entire vested Account, the remainder of
such Account shall be distributed to the beneficiary designation, if any, in
effect on the date of the Participant's death. If no such designation exists,
the Account shall be distributed directly to the Participant's surviving spouse
or, if none, to his or her issue per stirpes or, if none, to his or her next of
kin determined pursuant to the laws of the State of Wisconsin that would apply
if the Participant had died unmarried and intestate. All distributions under
this Section shall be made available to the beneficiary within a reasonable time
after the end of the Plan Year in which occurred the Participant's death and in
no event later than the earliest date benefits would be payable to the
Participant if his or her employment terminated on the date of his or her death
for a reason other than death.
(a) Beneficiary Designation. Each Participant may
designate, in writing, on forms approved by and filed with the Administrator,
one or more beneficiaries (and, if desired, contingent beneficiaries) to receive
his or her death benefits, if any, under this Plan. The beneficiary of 100% of
the Account of a Participant who is married at the time of his death shall be
his surviving spouse, unless his spouse consents to the designation of an
alternative beneficiary or the spouse cannot be located. Such a spousal consent
shall be made in writing, acknowledging the effect of such election and
witnessed by a Plan representative or notary public. Any change in, or
revocation of, a Participant's designated beneficiary shall again require
spousal consent unless the earlier consent of the spouse expressly permitted
subsequent designations by the Participant without further spousal consent.
7-4
(b) Death On or Before Required Beginning Date. The Plan
shall distribute the Account of a Participant who dies on or before his
"required beginning date," as defined in Section 7.4 below, in accordance with
this Section (b).
(i) General. Distributions shall extend no
longer than the end of the calendar year that contains the fifth anniversary of
the Participant's death, except to the extent that paragraph (ii) or (iii) below
applies. For either paragraph (ii) or (iii) to apply, the Participant must have
so elected before his or her death or his or her designated beneficiary must
have so elected no later than the earlier of December 31 of the calendar year in
which distributions otherwise must commence or December 31 of the calendar year
containing the fifth anniversary of the Participant's death.
(ii) Nonspouse Beneficiary. If any portion of the
Participant's Account is payable to a designated beneficiary who is not the
Participant's surviving spouse, distribution shall commence no later than
December 31 of the calendar year following the date of the Participant's death
and shall extend over a period no longer than the life of such beneficiary or
over a period certain not extending beyond the life expectancy of such
beneficiary determined using the attained age (or ages) in the calendar year
distributions must commence and as reduced by one during each subsequent year.
(iii) Spouse as Beneficiary. If any portion of a
Participant's Account is payable to the Participant's surviving spouse,
distributions to such spouse shall commence no later than December 31 of the
calendar year in which the Participant would have attained age 70-1/2 and shall
extend over a period no longer than the life of such spouse or over a period
certain not extending beyond the life expectancy of such spouse as determined
using the spouse's attained age in the first distribution calendar year and
reduced by one in each year thereafter. The Participant's surviving spouse may
elect instead to recalculate life expectancy, provided the election is
irrevocable and made prior to the initial distribution date. If the
Participant's spouse dies before the commencement of distributions, the
Administrator shall apply this Section as if the spouse were the Participant.
(c) Death After Required Beginning Date. If a Participant
dies on or after his or her "required beginning date," as defined in Section 7.4
below, any remaining portion of his or her vested Account shall be distributed
at least as rapidly as required by the method of distribution in effect on the
date of his or her death.
7.4 Required Lifetime Distributions. Notwithstanding any other
provisions of this Plan to the contrary, each Participant's entire Account shall
be distributed in accordance with the requirements of Code Section 401(a)(9),
which the Plan hereby incorporates by reference. The following provisions of
this Section 7.4 summarize those rules.
(a) Required Beginning Date. Distribution of a
Participant's Account shall commence no later than his or her "required
beginning date." A Participant's required beginning date shall be April 1 of the
calendar year immediately following the calendar year when the Participant
attains (or would have attained) age 70-1/2, unless the participant is not a 5%
owner of an Employer, in which case the required beginning date will be the
later of this date or April 1 of the calendar year after the participant
terminates his or her employment with all Employers.
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For purposes of this Section, a Participant is a 5% owner if he or she is a 5%
owner within the meaning of Code Section 416(i) at any time during the Plan Year
ending with or within the calendar year in which the Participant attains age
66-1/2 or any subsequent Plan Year. Once distributions for the Plan have begun
to a 5-percent owner, such distributions shall continue, even if the Participant
ceases to be a 5-percent owner in a subsequent year.
(b) Limits on Distribution Periods. Installment payments
of a Participant's Account shall occur over a period of time calculated as of
the calendar year immediately preceding the calendar year which contains the
Participant's required beginning date (the "first distribution calendar year").
The time period for payment of installments shall be no longer than:
(i) The Participant's life or life expectancy
determined using the Participant's attained age as of the first distribution
calendar year, if the Participant has not designated a beneficiary; or
(ii) If the Participant has designated a
beneficiary, the life or joint and last survivor expectancy of the Participant
and the designated beneficiary determined using the attained ages of the
Participant and the designated beneficiary as of the first distribution calendar
year.
(c) Amount Required to be Distributed. The required
distribution paid each calendar year beginning with the first distribution
calendar year shall not equal less than the quotient obtained upon dividing the
Participant's Account by the lesser of (i) the applicable life expectancy or
(ii), if the beneficiary is not the Participant's spouse, the applicable minimum
distribution incidental benefit divisor determined from the table recited in
Q&A-4 of proposed regulation Section 1.401(a)(9)-2. The "applicable life
expectancy" is the life expectancy (or joint and last survivor expectancy)
calculated using the attained age of the Participant (or designated beneficiary)
as of the Participant's (or designated beneficiary's) birthday in the first
distribution calendar year reduced by one in each year thereafter. If the
Participant's benefit is distributed in the form of an annuity purchased from an
insurance company, distributions thereunder shall be made in accordance with the
requirements of Code Section 401(a)(9). The Participant may elect to recalculate
his life expectancy and/or that of his spouse, provided such election is
irrevocable and is made prior to the Participant's required distribution date.
A Participant's Account is determined as of the last
Valuation Date in the calendar year immediately preceding the calendar year for
which a distribution is required, adjusted as follows: increased by the amount
of any contributions or Forfeitures, if any, allocated to the Account as of
dates in such calendar year after the Valuation Date and decreased by
distributions made in such calendar year after the Valuation Date.
7.5 In-Service Withdrawals.
(a) Age 59-1/2. On or after attaining age 59-1/2, a
Participant may withdraw all or any portion of his or her Elective Contribution
Account by submitting a written request for such a withdrawal to the
Administrator.
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(b) Age 65. On or after attaining age 65, a Participant
may withdraw all or any portion of his or her Employer Contribution Account by
submitting a written request for such a withdrawal to the administrator.
(c) 2 Year Rule. A Participant may withdraw all or any
portion of his or her vested Employer Contribution Account that has been
allocated to the Participant's Account for at least two (2) complete Plan Years,
by submitting a written request for such a withdrawal to the Administrator.
(d) 5 Year Rule. A Participant may withdraw all or any
portion of his or her vested Employer Contribution Account, by submitting a
written request for such a withdrawal to the Administrator at any time after the
Participant has Participated in the Plan for at least five (5) complete Plan
Years.
(e) Rollover and After-Tax Accounts. A Participant may
withdraw all or any portion of his or her Rollover Account and/or After-Tax
Account at any time by submitting a written request for such a withdrawal to the
Administrator.
7.6 Hardship Distributions. A Participant may withdraw any portion
of his Elective Contributions Account upon appropriate notice to the
Administrator if the withdrawal results from a "hardship." A withdrawal will be
deemed to result from a "hardship" if the distribution:
(a) Is for the purpose of:
(i) The payment of medical expenses described in
Code Section 213(d) incurred by the Participant, his spouse or dependents or
necessary for these persons to obtain medical care described in Code Section
213(d);
(ii) Costs directly related to the purchase
(excluding mortgage payments) of a principal residence for the Participant;
(iii) The payment of tuition and related
educational fees for the next 12 months of post-secondary education for the
Participant, his spouse or dependents;
(iv) The need to prevent the eviction from, or
mortgage foreclosure of, the Participant's principal residence; or
(v) Any other purpose specified by the Internal
Revenue Service as a deemed immediate and heavy financial need.
(b) Satisfies all of the following:
(i) The distribution does not exceed the amount
of the financial need, including any amount necessary to pay taxes or penalties
reasonably anticipated to result from the distribution;
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(ii) The Participant has obtained all
distributions (other than hardship withdrawals) and all nontaxable loans
currently available pursuant to this Plan or any other plan maintained by the
Employer;
(iii) The Participant cannot make elective
contributions and employee after-tax contributions pursuant to this Plan or any
other qualified or nonqualified plan of deferred compensation (excluding health
or welfare plans) maintained by the Employer for at least 6 months after receipt
of the withdrawn amount; and
(iv) The Participant's elective contributions
made in the calendar year immediately following the calendar year in which the
withdrawal is received do not exceed the limit of Code section 402(g) (as
adjusted) in effect for such calendar year, less the Participant's elective
contributions made in the calendar year in which the withdrawal was received.
7.7 Right of First Refusal. All Qualifying Employer Securities
that are distributed to Participants, former Participants, or beneficiaries of
Participants or former Participants, shall be subject to the transfer
restrictions set forth in this Section.
(a) General Restriction. No such Qualifying Employer
Securities may be offered, sold, pledged, bequeathed, given, hypothecated or
otherwise disposed of by the Participant, or beneficiary of the Participant
whether for value or not, unless the shares have first been offered for sale to
the Bank under the provisions of Sections (b) and (c) below. Any attempt to
dispose of such securities without regard to this restriction shall be deemed to
be an offer to the Bank under the terms set forth in Sections (b) and (c), and
in such a case the date of the offer shall be deemed to be the date on which the
Bank receives actual notice of the attempted disposition.
(b) Price of Securities Offered. The Qualifying Employer
Securities offered to the Bank pursuant to this Section shall be offered at
their fair market value. The Bank shall advise the offeror of the fair market
value of the Qualifying Employer Securities as determined by the Bank in good
faith and based on all relevant factors for determining the fair market value of
the Qualifying Employer Securities on the date of valuation. The date of
valuation shall be the Valuation Date immediately preceding the date of
acceptance of the offer, including any interim Valuation Date determined by the
Administrator; provided, however, that the date of valuation with respect to a
transaction between the Plan and a Participant who is a Disqualified Person on
the date of such transaction shall be the date of the transaction. The Bank's
determination shall be deemed, for purposes of this Section, to be fair market
value unless the offeror presents to the Bank written evidence of a bona fide
current offer from any person to purchase such Qualifying Employer Securities at
a higher price or on more favorable terms than those otherwise offered by the
Bank under this Section. If such written evidence is submitted, the price
designated therein shall be deemed the fair market value of the securities for
purposes of this Section, and the Bank may elect, but shall not be required, to
purchase at such higher price or upon such terms.
(c) Method of Sale to Bank. The offer shall be in writing
and shall provide that if accepted, in whole or in part, the purchaser shall
have the right to pay the purchase price,
7-8
plus interest on the unpaid balance at the rate current in Milwaukee, Wisconsin
on the date of sale for prime commercial loans, in equal installments over a
period not to exceed five years from the date of sale.
(d) Expiration of Offer. The Bank shall have 14 days
following receipt of an offer under this Section to accept or reject the offer
as to all or any part of the Qualifying Employer Securities offered. Mailing of
notice of acceptance to the address listed on the stock transfer books of the
Bank for the Qualifying Employer Securities offered or for any shares of the
Bank owned by the offeror shall constitute acceptance as of the date of postmark
of such notice. Qualifying Employer Securities not accepted by the end of the
14-day period may be sold or otherwise disposed of by the offeror.
Notwithstanding the preceding sentence, if, pursuant to Section (b), the offeror
has submitted written evidence of a bona fide offer to purchase the Qualifying
Employer Securities at a higher price or on more favorable terms than otherwise
offered by the Bank under this Section, and the Bank has not elected, within 14
days of the offer and submission of such evidence, to purchase the Qualifying
Employer Securities at such higher price or on such terms, then the offeror may
sell such securities only at a price not less than, and terms no less favorable
to the seller than, the price and terms specified in the written evidence
submitted; if the offeror attempts to sell the Qualifying Employer Securities at
a lower price or on less favorable terms, then the provisions of this Section
again apply as if no offer under this Section was ever made, and any such
attempted sale shall be void.
(e) Restriction to Continue. These restrictions shall be
perpetual to the extent allowed by law; provided, however, that these
restrictions will not apply for any period during which the Qualifying Employer
Securities subject thereto are publicly traded. All owners of Qualifying
Employer Securities distributed from the Trust Fund pursuant to the Plan shall
take such Qualifying Employer Securities subject to the restrictions contained
in this Section.
(f) Certificates to Contain Legend. Certificates for
shares distributed pursuant to the Plan shall contain a statement showing the
existence of these restrictions.
(g) Closing. Closing shall occur on a date specified by
the Bank, but not more than 30 days after the offer is accepted. The first
annual installment is due on closing.
(h) Bank Authority. For purposes of this Section, the
Bank's President and/or its Compensation, Pension and Retirement Committee may
act on behalf of the Bank.
7.8 Put Option. Qualifying Employer Securities that are
distributed to a Participant, former Participant or the beneficiaries of a
Participant or former Participant or to a donee of such a person is subject to
the put option provisions in this Section if the Qualifying Employer Securities
are not publicly traded on an established securities market when it is
distributed or is subject to trading limitations under any federal or state
securities laws, or any agreement which would make the Qualifying Employer
Securities not as freely tradable as securities not subject to such
restrictions, or are publicly traded without restriction but cease to be so
traded.
(a) General Rule. Qualifying Employer Securities that are
subject to this Section shall be subject to a 15-month option to sell any or all
shares of such Qualifying
7-9
Employer Securities to the Employer, exercisable only by the persons set forth
in Section (i) and (ii) above in accordance with the provisions set forth in
this Section.
(b) Exercise of Option. The 15-month option to sell
created by this Section is exercisable only by giving written notice to the
Employer of the number of shares of Qualifying Employer Securities to be sold
under the option.
(c) Terms of Option. Unless extended as provided below,
the option shall expire at 12:00 midnight in Manitowoc, Wisconsin on the day
after the expiration of a 15-month period which begins on the date of the
distribution of the Qualifying Employer Securities. The option price shall be
the fair market value of the Qualifying Employer Securities, as determined in
good faith and based on all relevant factors for determining the fair market
value of the Qualifying Employer Securities on the date of valuation, by the
Trustee. The date of valuation shall be the Valuation Date immediately preceding
the date of exercise of the option, including any interim Valuation Date
determined by the Administrator; provided, however, that the date of valuation
with respect to a transaction between the Plan and a Participant who is a
Disqualified Person on the date of such transaction shall be the date of the
transaction. If the distribution was a distribution of the Participant's entire
vested interest in his Account at the election of the purchaser, the option
price may be paid, together with interest on the unpaid balance at the rate
current in Manitowoc, Wisconsin on the date of the sale for prime commercial
loans, in equal annual installments over a period not to exceed five years from
the date on which the option is exercised. In the event the Qualifying Employer
Securities subject to the option was acquired by the Plan with the proceeds of
an Acquisition Loan, however, the repayment period may be extended to not later
than the earlier of ten years from exercise of the option or the date the loan
is entirely repaid. Any other terms of sale shall be determined by agreement
between the purchaser and the holder of the option. The holder of the option
shall in any event be provided with adequate security for the payment of any
amounts deferred beyond 30 days from the exercise of the put option.
(d) Obligation to Purchase Limited. The Employer shall
not be required to purchase under this put option to the extent that, at the
time the option is exercised, the purchase would be prohibited by applicable
federal or state law. If a distributes is unable to exercise his option because
the Employer is prohibited by applicable federal or state law from honoring the
option, then the period during which the option is exercisable shall be extended
beyond 15 months for the number of days during which the Employer was prohibited
by applicable federal or state law from purchasing. However, the Employer shall
not restrict payment under a put option by the provisions of a loan or any other
arrangement including the articles of incorporation of the Employer, unless so
required by applicable state law.
Under no circumstances shall the Trustee be bound to
purchase under this put option. If, however, a purchase by the Trustee would not
be then prohibited by law, and would not in the opinion of the Trustee, violate
any fiduciary obligation imposed upon it then the Trustee may, at the discretion
of the Administrator, select to assume the rights and obligations of the
Employer at the time that the put option is exercised.
(e) Nontransferability. The put option granted in this
Section may not be transferred or assigned.
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(f) Certain Arrangements Barred. Neither the Employer nor
the Trustee shall enter into any arrangements involving the Plan which would
provide for the issuance of put options by the Plan other than as specified in
this Section. The Plan shall not be obligated to acquire Qualifying Employer
Securities from any particular security holder at an indefinite time upon the
occurrence of an event such as the death of the holder.
(g) Notice of Grant of Certain Put Options. If a put
option is granted because Qualifying Employer Securities were publicly traded
without restriction when distributed but ceased to be so traded within 15 months
after distribution and if the Employer does not actually give notice to any
distributes who is entitled to receive a put option for the remainder of the
15-month period which began on the date of distribution with ten days after the
date on which the Qualifying Employer Securities ceased to be so traded, then
the period during which the option is exercisable shall be extended by the
number of days between such tenth day and the date on which notice is actually
given.
(h) Closing. Closing shall occur on a date specified by
the Employer or Trustee, but not more than 30 days after the option is
exercised. The first annual installment is due on closing.
(i) Bank Authority. For purposes of this Section, the
Bank's President and/or its Compensation, Pension and Retirement Committee may
act on behalf of the Bank.
7.9 Qualified Domestic Relations Orders. Upon receipt of a
domestic relations order issued by a court of competent jurisdiction with
respect to a Participant's interest in the Plan, the Administrator shall
determine whether such domestic relations order constitutes a qualified domestic
relations order (as defined in Code Section 414(p)(1), a "QDRO"). The
Administrator shall establish reasonable procedures to determine the qualified
status of a domestic relations order and to administer distributions mandated by
a QDRO. If the Administrator determines that the domestic relations order is a
QDRO, an alternate payee as defined in Code Section 414(p)(8) may receive
distributions in a single lump sum commencing as if the Participant's had
terminated as described in Section 7.1. Distributions made pursuant to this
Section may occur without regard to the age or the employment status of the
Participant. Except as provided by this Section, a distribution pursuant to a
QDRO shall not include any type of benefit or payment option not otherwise
payable by the Plan. If the Administrator has notice that a QDRO is being or may
be sought but has not received the QDRO, the Administrator shall not, unless
requested in writing by the Participant or beneficiary, as appropriate, delay
payment of a benefit to a Participant or beneficiary which would otherwise be
due. If the Administrator has determined that an order is not a QDRO and all
comment and appeal periods have expired, the Administrator shall not, unless
requested in writing by the Participant or beneficiary, as appropriate, delay
payment to a Participant or beneficiary which otherwise would be due even if the
Administrator has notice that the party claiming to be an alternate payee or the
Participant is attempting to correct any deficiencies in the order.
7.10 Elective Deferrals and Safe Harbor Contributions.
Notwithstanding any other provision in this Plan to the contrary, elective
contributions made by a Participant pursuant to Section 3.2 of this Plan and
safe harbor elections made to this Plan under Section under 5.3(a), may not be
distributed to a Participant or beneficiary earlier than: (a) the Participant's
separation
7-11
from service, death or disability; (b) the termination of the Plan without the
establishment or maintenance of another defined contribution plan; (c) the
disposition by the Employer of substantially all the assets used by the
Employer; or (d) the date on which the Participant attained age 59-1/2.
ARTICLE VIII
Administration of the Plan
8.1 Designation of Administrator. The Bank, acting through its
President or its other delegate(s), shall be the Plan Administrator. Any person
or entity serving as the Administrator may resign at any time by filing a
written notice of resignation with the Bank and may be removed at any time by
the Bank. In the event of a vacancy in the office of the Administrator, the Bank
shall appoint a successor or successors.
8.2 Administration and Interpretation. The Administrator shall
administer the Plan in accordance with its terms and shall have all powers
necessary to effectuate the provisions of the Plan. The Administrator shall have
the exclusive right to interpret the Plan, shall determine all questions arising
in the administration, interpretation and application of the Plan documents, to
resolve ambiguities, inconsistencies and omissions related thereto, and shall,
from time to time, formulate and issue such rules and regulations as may be
necessary for the purpose of administering the Plan. Any interpretation,
determination, rule or regulation issued by the Administrator shall be
conclusive and binding on all persons. In any review of such an interpretation,
determination, rule or regulation, the Administrator's decision shall be given
deference and shall be set aside by a reviewing tribunal only in the event the
Administrator acted in an arbitrary and capricious manner.
8.3 Administrator's Duties. The Administrator and all fiduciaries
of this Plan or the Trust shall discharge their duties with respect to the Plan
and Trust solely in the interest of the Participants and beneficiaries, for the
exclusive purpose of providing benefits to Participants and their beneficiaries
and deferring reasonable expenses of administering the Plan and Trust with care,
skill, prudence and diligence under the circumstances then prevailing that a
prudent man acting in a like capacity and familiar with such matters would use
and in accordance with the Plan and Trust documents and instruments, insofar as
such documents and instruments are consistent with the provisions of ERISA and
any acts amendatory thereto. In addition, the Trustee shall discharge its
fiduciary duties by diversifying the investments of the Plan so as to minimize
the risk of large losses, unless under the circumstances it is clearly prudent
not to do so.
8.4 Authority. The Administrator shall have the authority to give
to the Trustee, in writing, any other notice or direction permitted by the terms
of the Plan, and the Trustee shall be entitled to rely upon such writing until
such time as the Administrator shall file a written revocation of the notice or
direction with the Trustee.
8.5 Maintenance of Accounts and Reports. The Administrator shall
maintain accounts showing the fiscal transactions of the Plan and such books and
records as may be necessary to comply with ERISA, governmental regulations
issued thereunder and other
7-12
applicable law. The Administrator shall timely file or cause to be timely filed,
all annual reports, financial and other statements as may be required of the
Administrator by any federal or state statute, agency or authority. The
Administrator shall timely furnish or cause to be furnished, all such reports,
statements and other documents as may be required by any federal or state
statute, agency or authority to be furnished by the Administrator to any
Participant, beneficiary or interested party.
8.6 Examination of Financial Statements and Audits. The
Administrator shall, if required by law or deemed necessary by the
Administrator, engage an independent and qualified public accountant to conduct
an examination of any financial statements of the Plan and the Trust and any
other books and records of the Plan and shall, if required by law, engage such
accountant to form an opinion as to whether the financial statement and
schedules required to be included in the annual report required by Section 103
of ERISA are presented fairly in conformity with generally accepted accounting
principles applied on a basis consistent with that of the preceding year. The
opinion of the accountant need not be expressed with respect to the most recent
annual statement of assets and liabilities of a common or collective trust
maintained by a bank or similar institution, or of a separate trust maintained
by a bank or a similar institution as a Trustee, so long as such annual
statement is certified by the bank or similar institution as accurate and is
made a part of the annual report submitted under Section 103 of ERISA.
8.7 Agent for Service of Process. The Administrator shall have the
authority to accept service of process on behalf of the Plan.
8.8 Bond. The Administrator shall give such bond as may be
required by ERISA.
8.9 Compensation and Expenses. The expenses incurred by the
Administrator in the proper administration of the Plan shall be paid from the
Trust Fund, unless one or more Employer(s) elects to pay such expenses directly.
An Administrator who is an Employee of an Employer, however, shall not receive
any fee or compensation for services as Administrator.
8.10 Limitation of Authority. The Administrator shall not add to,
subtract from or modify any of the terms of the Plan, change or add to any
benefits prescribed by the Plan, or waive or fail to apply any Plan requirement
for benefit eligibility.
8.11 Limitations on Liability. To the extent that a fiduciary may
be relieved of liability under Section 410(a) of ERISA for a breach of any
responsibility, obligation or duty imposed by Title 1, Part 4 of ERISA, no
fiduciary shall be liable for any action or failure to act hereunder, except for
bad faith, willful misconduct or gross negligence. To the extent that a
fiduciary may be relieved of liability under Section 410(a) of ERISA for a
breach of another fiduciary of any responsibility, obligation or duty imposed by
Title 1, Part 4 of ERISA, no fiduciary shall be personally liable for a breach
committed by any other fiduciary, unless the fiduciary: (a) knowingly
participated in or knowingly concealed a breach by such other fiduciary; (b) by
his failure to comply with the fiduciary duties set out in Section 9.01, has
enabled such other fiduciary to commit a breach; or (c) has failed to make
reasonable efforts under the circumstances to remedy the breach of another
fiduciary of which he has knowledge. To the same extent, no fiduciary shall be
personally liable for the acts or omissions of any attorney or
8-2
agent employed by a fiduciary hereunder, if such attorney or agent shall have
been selected with reasonable care.
8.12 404(c) Compliance. No Plan fiduciary (including the
Administrator and Trustee) is liable for any loss or for any breach resulting
from a Participant's direction of the investment of any part of his/her directed
Account to the extent that the Participant's exercise of his or her right to
direct the investment of his or her Account satisfies the requirements of ERISA
Section 404(c).
8-3
ARTICLE IX
Administration of the Trust
9.1 Appointment of Trustee. The Bank shall appoint one or more
Trustees to receive and hold in trust all contributions, and income, paid into
the Trust. The Bank may remove the Trustee or the Trustee may resign and a
successor trustee shall be appointed all pursuant to the requirements and
procedure recited in the Trust agreement.
9.2 Authorization for Trust Agreement. The Bank hereby authorizes
and directs each of its officers to enter into an agreement with the Trustee to
provide for the administration of the Trust. Said officers shall also have the
right at any time, and from time to time, to amend the Trust Agreement on the
Bank's behalf.
9.3 Participant Direction of Investment of Account. The Bank may,
upon written request of a Participant and in accordance with its uniform and
nondiscriminatory rules, authorize Participants to direct the investment of all
or part of their Account in such funds as the Bank may select. Participants may
choose to invest their Accounts among the available investment vehicles in any
whole percentage of at least 1%. Elections shall be made and verified in a
manner prescribed by the Administrator. Once filed, a Participant's verified
election will remain in effect until amended or discontinued pursuant to this
paragraph. A Participant may change his or her investment election as of any
Valuation Date (except that transfers of Qualifying Employer Securities will
only be processed as of a date determined by the Administrator based upon the
availability of Qualifying Employer Securities and the practical implications of
implementing that election); provided that the Administrator receives the
Participant's verified written election at least 15 days prior to such effective
date. If a Participant fails to direct the investment of all or any portion of
his or her Account, such amount shall be invested in the fund(s) uniformly
designated by the Administrator. A Participant's directions hereunder shall bind
the Trustee unless and until the Bank amends or revokes the authorization for
investment direction by Participants. If the Trustee acts at the direction of a
Participant, the Bank, its board of directors, officers and employees, the
Administrator and the Trustee shall not be liable or responsible for any loss
resulting to the Trust or to any Account for any breach of fiduciary
responsibility by reason of any act done pursuant to the direction of the
Participants.
9.4 Funding Policy. The Trustee shall invest the Trust for the
exclusive benefit of Participants and their beneficiaries in any combination of
corporate stocks, including bonds, instruments of indebtedness, insurance
contracts (if otherwise allowed), government securities, bank deposits and the
Trustee's common trust funds or pooled investment funds, if any, as the Trustee
deems appropriate for the Plan and consistent with applicable law.
9.5 Diversification of Investments. A Participant who has attained
age 55 and completed at least 10 years of participation in the Plan may elect in
each of the Plan Years during his qualified election period to withdraw the
value of a specified number of shares of Company Stock allocated to his Account
pursuant to the following:
(a) Amount Eligible for Withdrawal. In each of the first
five Plan Years of the Participant's qualified election period, the Participant
may withdraw the value of (i) up to 25
9-1
percent of the total number of shares of Company Stock that has been allocated
to his Account as of the prior Valuation Date, less (ii) the number of shares of
Company Stock that the Participant previously elected to withdraw, if any. In
the last Plan Year of the Participant's qualified election period, "50 percent"
shall be substituted for "25 percent" in the preceding sentence in determining
the amount the Participant may withdraw.
(b) Qualified Election Period. A Participant's "qualified
election period" is the six consecutive Plan Years commencing on the first day
of the Plan Year in which the Participant attains age 55 and has completed at
least 10 years of participation in the Plan.
(c) Withdrawal Procedure. A Participant must make an
election to withdraw in accordance with this section, in writing, within the
90-day period following the close of each Plan Year during his qualified
election period. The Administrator shall distribute the amount designated by the
Participant's election within 90 days after the date the Participant's election
is filed with the Administrator. Such distribution shall be made in accordance
with the methods of distribution available under Article 7 as if the Participant
had terminated his Employment.
9.6 Voting Rights. Each Participant and, in the case of a deceased
Participant, the deceased Participant's beneficiary shall direct the Trustee how
to vote any Company stock allocated to his Account. The Administrator shall
direct the Trustee how to vote any Company stock not allocated to a
Participant's Account, any stock allocated to the Account of a Participant but
to which voting instructions are not received from the Participant and all
shares on matters not voted pursuant to the preceding sentence.
9-2
ARTICLE X
Claims Procedure
10.1 Application for Benefits. If an Employee, Participant,
beneficiary or other person shall make a claim for benefits under the Plan, the
claim shall be referred to the Administrator for resolution. Within 30 days
after receipt of a claim, the Administrator shall render a written decision
concerning the merits of the request. If the claim is denied, the written
decision shall set forth: (a) the specific reason or reasons for the denial; (b)
specific reference to pertinent Plan provisions on which the denial is based;
(c) a description of any additional material or information; and (d) an
explanation of the Plan's claim review procedure. If a claimant is not furnished
a written decision containing such information within 30 days, the claim shall
be deemed denied and automatically proceed to the review stage.
10.2 Review of Denied Claim. The claimant may file a written
request with the Administrator for review of the decision rendered under Section
10.1 above within 60 days after receiving the written decision denying the claim
or, if no written decision is rendered, within 90 days after filing the claim.
The claimant may review pertinent Plan documents prior to such request and
submit written issues and comments. The Administrator shall render a written
decision within 30 days after receipt of the request for review, setting forth
the specific reasons for the decision in language calculated to be understood by
the claimant, with specific reference to the pertinent Plan provisions on which
the decision is based.
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ARTICLE XI
Amendment and Termination
11.1 Amendment or Restatement. The Bank reserves the right to amend
the Plan in every respect at any time, either before or after termination
hereof, or from time to time (and retroactively if deemed necessary or
appropriate to conform with governmental regulations or other policies),
provided, however, that no such amendment shall be effective: (a) which shall
attempt to divert the assets held by the Trustee to purposes other than for the
exclusive benefit of the Participants or their beneficiaries (prior to
satisfaction of all liabilities of the Plan with respect to such Participants
and beneficiaries); (b) which shall increase or decrease the duties of the
Trustee without the Trustee's consent; or (c) to the extent that the amendment
has the effect of decreasing a Participant's accrued benefit. Notwithstanding
the preceding sentence, a Participant's Account balance may be reduced to the
extent permitted under Section 412(c)(8) of the Code. For purposes of this
paragraph, a Plan amendment which has the effect of decreasing a Participant's
Account balance or eliminating an optional form of benefit, with respect to
benefits attributable to service before the amendment, shall be treated as
reducing an accrued benefit. If the Plan's vesting schedule is amended, or the
Plan is otherwise amended in any way that directly or indirectly affects the
computation of the Participant's nonforfeitable interest in his or her Account,
each Participant with at least three Years of Service may elect, within a
reasonable period after the adoption of the amendment or change, to have his or
her nonforfeitable percentage calculated under the Plan without regard to such
change or amendment. The period during which the election may be made shall
commence with the date such amendment is adopted or deemed to be made and shall
end on the latest of: (a) 60 days after the amendment is adopted; (b) 60 days
after the amendment becomes effective; or (c) 60 days after the Participant is
issued a written notice of the amendment by the Bank or the Administrator. If
the Plan's vesting schedule is amended, or the Plan is otherwise amended in any
way that directly or indirectly affects the vesting schedule, then such
amendment shall not be effective to the extent that it would otherwise cause the
nonforfeitable percentage of the accrued benefit derived from employer
contributions (determined as of the later of the date such amendment is adopted
or the date such amendment becomes effective) of any Employee who is a
Participant in the Plan to be less than such nonforfeitable percentage computed
under the Plan without regard to such amendment.
11.2 Termination and Discontinuance of Contributions. The Bank
reserves the right to terminate this Plan or to discontinue or suspend
contributions thereto at any time; the Bank shall provide the Trustee with
written notice of such action. Upon such termination, discontinuance or
suspension, further contributions to the Trust shall cease until further action
by the Bank. Upon termination of the Plan, the Accounts of each Participant or
beneficiary shall be fully vested and non-forfeitable and those Accounts shall
be distributed in a manner which is consistent with and satisfies the
requirements provided in Article 7 above. The termination of the Plan shall not
result if the reduction of any benefit protected by Code Section 411(d)(6)
except as permitted pursuant to applicable Treasury regulations.
Upon termination of the Plan with respect to a group of
Participants which constitutes a partial termination of the Plan, the Trustee
shall allocate and segregate for the benefit of the Participants then or
theretofore employed by an Employer with respect to which
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the Plan is being terminated, a proportionate interest of the Trust assets for
such Participants. Distribution of the Accounts of each such Participant or his
or her beneficiary shall be made in the same manner as provided above.
In the event of a full or partial termination of the Plan, an
Employer's liability to pay Plan benefits be strictly limited to the assets of
the Trust. No one shall have any claim against an Employer to provide any or all
Plan benefits regardless of the sufficiency of the Trust's assets, except as
otherwise required by law.
11.3 Merger, Consolidation or Transfer of Assets and Liabilities.
In the event of a merger or consolidation with or transfer of assets or
liabilities to any other plan, each Participant shall, if such plan then
terminates, receive a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit the Participant would
have been entitled to receive immediately before the merger, consolidation or
transfer, assuming that this Plan had then terminated.
11.4 Successor Employer. Any successor to the business of an
Employer may, with the written consent of the Bank, continue the Plan and Trust.
Such successor shall succeed to all the rights, powers and duties of such
Employer. The employment of any Employee of the Employer who continues in the
employ of the successor shall not be deemed to have been terminated or severed
for any purpose of the Plan.
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ARTICLE XII
General Provisions
12.1 Limitation on Liability. In no event shall an Employer,
Administrator or any employee, officer or director of an Employer or
Administrator incur any liability for any act or failure to act unless such act
or failure to act constitutes a lack of good faith, willful misconduct or gross
negligence with respect to the Plan or Trust.
12.2 Indemnification. The Trust shall indemnify the Administrator
and any employee, officer or director of an Employer against all liabilities
arising by reason of any act or failure to act unless such act or failure to act
is due to such person's own gross negligence or willful misconduct or lack of
good faith in the performance of his duties to the Plan or Trust. Such
indemnification shall include, but not be limited to, expenses reasonably
incurred in the defense of any claim, including attorney and legal fees, and
amounts paid in any settlement or compromise; provided, however, that
indemnification shall not occur to the extent that it is not permitted by
applicable law. If Trust assets are insufficient or indemnification is not
permitted by applicable law, the Employer shall indemnify such person.
Indemnification shall not be deemed the exclusive remedy of any person entitled
to indemnification pursuant to this Section. The indemnification provided
hereunder shall continue as to a person who has ceased acting as a director,
officer, member, agent or employee of the Administrator or as an officer,
director or employee of the Employer, and such person's rights shall inure to
the benefit of his heirs and representatives.
12.3 Compliance with ERISA. Notwithstanding any other provisions of
this Plan, a fiduciary or other person shall not be relieved of any
responsibility or liability for any responsibility, obligation or duty imposed
upon such person pursuant to ERISA.
12.4 Nonalienation of Benefits. Except with respect to any in any
indebtedness owing to the Trust or payments required pursuant to a qualified
domestic relations order as defined by the Code, or as otherwise permitted by
law, benefits payable by the Plan shall not be subject to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, charge,
garnishment, execution or levy, either voluntary or involuntary. Any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or
otherwise dispose of any right to Plan benefits shall be void.
12.5 Employment Not Guaranteed by Plan. The establishment of this
Plan, its amendments and the granting of a benefit pursuant to the Plan shall
not give any Participant the right to continued employment with an Employer, or
limit the right of the Employer to dismiss or impose penalties upon the
Participant or modify the terms of employment of any Participant.
12.6 Facility of Payment. If a Participant's duly qualified
guardian or legal representative makes claim for any amount owing to the
Participant, the Trustee shall pay the amount to which the Participant is
entitled to such guardian or legal representative. In the event a distribution
is to be made to a minor, the Administrator may direct that such distribution be
paid to the legal guardian, or if none, to a parent of such minor or an adult
with whom the beneficiary maintains his residence, or to the custodian for such
beneficiary under the Uniform Gift to Minors Act if permitted by the laws of the
state in which the beneficiary resides. Any
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payment made pursuant to this Section in good faith shall be a payment for the
Account of the Participant and shall be a complete discharge from any liability
of the Trust or the Trustee.
12.7 Location of Participant or Beneficiary Unknown. If the
Administrator is unable to pay benefits from the Plan to any Participant or
beneficiary due to the Administrator's inability to locate such Participant or
beneficiary, after forwarding a registered letter, return receipt requested, to
the last known address of such Participant or beneficiary and after further
diligent effort, the amount to be distributed shall be treated as a forfeiture
which shall be allocated to Participants as an additional Employer contribution
on the last day of such Plan Year. If the Participant or beneficiary is located
subsequent to the allocation of the forfeiture, the forfeited amount should be
restored, first from forfeitures, if any, then income and last, as an additional
Employer contribution. In the event a Participant or beneficiary cannot be
located upon termination of the Plan, any amount payable to such Participant or
beneficiary shall be transferred at the earliest possible date to the state of
the Participant's or beneficiaries last known address pursuant to the terms of
that State's abandoned property law. Upon such transfer, the Employer,
Administrator and Trustee shall have no further liability for the amount so
transferred.
12.8 Offset. In the event any payment is made by the Trustee to any
individual who is not entitled to such payment, the Trustee shall have the right
to reduce future payments due to such individual by the amount of any such
erroneous payment. This right of offset however, shall not limit the rights of
the Trustee to recover such overpayments in any other manner.
Military Leave. In the event that any obligation of
an Employer under this Plan conflicts with the current requirements of Code
Section 414(u) or ERISA, such Employee shall be entitled to any additional
rights provided under such laws.
IN WITNESS that the foregoing Plan has been duly adopted and is
currently in effect on the terms stated herein, this instrument has been
executed this 11th day of February, 2003.
FIRST MANITOWOC BANCORP
/s/ Thomas J. Bare
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Thomas J. Bare
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